There is probably no more important choice in a young person’s life than their decision about whether to attend college after completing high school. It is likely to be a major factor in determining their eventual career opportunities, earning potential, and job satisfaction and security – all of which contribute to a greater sense of lifelong happiness and fulfillment.
However, not every student is in a position to pay for a post-secondary education and so they have to seek out resources for financial assistance. The largest provider of student financial aid in our country is Federal Student Aid, a part of the U.S. Department of Education.
Federal Student Aid provides more than $150 billion dollars in federal grants, loans and work-study funds to more than 13 million students each year so they can attend college or career school. Part of their mission is to make students and their families aware of these aid programs, and the process to apply for and receive funds from them.
In order to initiate the process, a Free Application for Federal Student Aid (better known as FAFSA) must be completed.
It is free to complete and submit a FAFSA application. In addition to providing direct access to the largest source of federal financial aid, your FAFSA information might also be used by individual states and colleges to determine your eligibility for their assistance as well. Plus, some private financial providers might also use your FAFSA data to determine whether you qualify for their aid programs.
As a result, any student who is interested in attending college or a career school and needs financial help to pay for it, must consider submitting a FAFSA application.
The U.S. Department of Education offers two types of low-interest loans to eligible students to help them cover the cost of education at a four-year college or university, community college, or trade, career or technical school.
One type of loan is called a direct subsidized loan; the other is called a direct unsubsidized loan. The type of loan you may qualify for is based on your financial need.
A direct subsidized loan offers funds to undergraduate students who have established financial need. A direct unsubsidized loan is available to both undergraduate and graduate students, and there is no requirement to demonstrate financial need.
In a direct subsidized loan, the U.S. Department of Education will pay the interest while you’re in school and for the first six months after you leave school. In a direct unsubsidized loan, the student is responsible for paying the interest from the loan’s inception.
To receive either type of loan, you must be enrolled at least half-time at a school that participates in the direct loan program.
Scholarships and grants are sources of financial aid that don’t have to be repaid. Because of this, they are frequently called “gift aid” because they are essentially free. Scholarships are generally merit-based, while grants are usually need-based.
Scholarships and grants can originate from a variety of sources – the federal government, state government, your college or career school, or a private or non-profit organization. The most common grant available from the federal government is called a Pell Grant.
It is up to each student to conduct their own research to discover which scholarships and grants they are eligible for, and to make sure that all application deadlines are met.
The federal government also offers a Work-Study program that provides part-time jobs to both undergraduate and graduate students with financial need.
The jobs can be either on campus or off campus. Campus jobs usually mean working for the school; off campus jobs are usually through a private non-profit organization or a public agency. The program encourages community service work and whenever possible, the jobs are related to the student’s course of study.
The Federal Work-Study Program is administered by participating schools so a student must check with their school’s financial aid office to determine if it is available through your school.
Typically, the 12th grade is the time when students begin the process to apply for college admission. It is also when they should apply for federal student aid by submitting their FAFSA.
Throughout this process, both students and parents have important tasks to accomplish in order to successfully achieve their goals.
To help everyone stay on track, here is an excellent checklist that both students and parents can utilize to ensure that nothing is forgotten or overlooked during this crucial time in a young adult’s life.
United Capital Financial Advisers, LLC (“United Capital”) is an affiliate of Goldman Sachs & Co. LLC and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization. United Capital does not provide legal, tax, or accounting advice. Clients should obtain their own independent legal, tax, or accounting advice based on their particular circumstances.
Goldman Sachs does not provide accounting, tax, or legal advice unless explicitly agreed in writing between you and Goldman Sachs. Nothing communicated to you, including within this document, should be considered tax advice. We have made no representations with respect to the tax consequences of the transactions contemplated herein. We understand that you have obtained, or will obtain, independent tax advice with respect to the transactions contemplated herein. Notwithstanding anything in this document to the contrary, and except as required to enable compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the U.S. federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.