1. An Overview of Federal Student Aid

2.  Federal Student Aid (FSA) is provided by the US Department of Education and helps students pay for expenses at post-secondary institutions  FSA covers expenses such as tuition, room and board, books and supplies, transportation, computers, and dependent care  There is more than $150BN worth of FSA available to qualifying students  FSA is granted to students that meet basic eligibility requirements  FSA falls into one of three categories: grants, loans, or work-study  The FAFSA (Free Application for Federal Student Aid) must be completed in order to qualify for FSA (~22MM FAFSAs are submitted each year)  The FAFSA is available beginning January 1 st of the year that the student plans to enroll in school  Visit www.fafsa.gov to fill out the FAFSA form and begin the financial aid process.www.fafsa.gov What is Federal Student Aid?

3.  A high school diploma or a General Educational Development (GED) certificate  A valid social security number  Must be a US citizen or eligible non-citizen  Must meet satisfactory academic progress requirements  Compliance with Selective Service registration  Must be enrolled or accepted as a student and be on the path to a degree or certificate in an eligible program Prerequisites to Receiving Federal Student Aid

4.  Grants : Funds that are not required to be repaid  Loans : Funds that are borrowed from the school and must be paid back with interest  Work-Study: Funds that a student earns by working part-time while attending school Types of Federal Student Aid

5.  Federal Pell Grants: Available almost exclusively to undergraduates (UG’s)  Federal Supplemental Educational Opportunity Grant (FSEOG): Available to UG’s that have a very low estimated financial contribution (EFC)  Teacher Education Assistance for College and Higher Education Grant (TEACH): For UG’s, post baccalaureates, and graduate students that are willing to teach full-time in designated teacher shortage areas for four (4) years after graduation  Iraq and Afghanistan Service Grant: Available to non Pell-eligible students whose parent/guardian died as a result of military service in Iraq or Afghanistan after the events of 9/11; and who, at the time of death, were younger than 24 years of age and/or enrolled at least part-time at an institution of higher education Federal Grant Programs

6.  A federal loan is supported by the federal government and allows students to borrow money to help pay for school  Benefits of a federal loan include: low-fixed interest rates, income- based repayment plans, cancellations for certain employment, and deferment options  There are two (2) types of federal loan programs: The Federal Perkins Loan Program and The Direct Loan Program  A private student loan is a non-federal loan issued by a lender such as a bank or a credit union and commonly requires a credit check Federal vs. Private Loans

7.  Federal Perkins loans are low interest loans that help need-based undergraduate and graduate students finance the cost of post-secondary education  School is the lender; approximately 1700 schools participate  Interest rate = 5%  Amount received depends on financial need, amount of other aid, and availability of funds at school  Repaying a Federal Perkins Loan begins after the grace period has expired. The grace period begins on the day that the student graduates and lasts for nine (9) months  During the grace period, the student does not pay principal and is not charged interest. If a student is attending school less than half-time (typically defined as less than six (6) credit hours), his/her grace period may be affected  A student has up to ten (10) years to repay a Federal Perkins loan Federal Perkins Loan Program

8. The Direct Loan Program is the largest federal student loan program available with four (4) types of direct loans:  Direct Subsidized Loan (DSL): For UG’s; US Department of Education pays interest while borrower is in school and during grace and/or deferment periods; student must be attending at least half-time and have financial need. IR = 6.8%  Direct Unsubsidized Loan (DUL): For UG’s and graduate students; borrower is responsible for all interest; student must be enrolled at least half-time; financial need is not required; US Department of Education is the lender. IR = 6.8%  Direct PLUS Loan (DPL) : For parents of dependent UG’s and also graduate and professional students; student must be enrolled at least half-time; financial need is not required. Borrower is responsible for all interest; US Department of Education is the lender; graduate student/parent cannot have a negative credit history. IR = 7.9%  Direct Consolidation Loan (DCL): Allows student or parent to combine multiple federal education loans into one loan with one (1) monthly payment Direct Loan Program

9.  Lender is the US Department of Education  Direct loans have a fixed interest rate that varies depending on the loan type  Amount that can be borrowed varies based on whether the student is enrolled in an undergraduate or graduate program  The grace period is six (6) months for DSL’s and DUL’s. DPL’s do not have a grace period, but can defer for up to six (6) months  On average, students have between 10 - 30 years to repay a loan  Must be enrolled at least half-time (typically defined as six (6) credit hours) to qualify  To take out a Direct Loan, student must complete a Master Promissory Note (MPN). This is a legally binding agreement to repay loan Direct Loan Program (cont.)

10.  Federal Work-Study (FWS) provides part-time employment for undergraduate and graduate students with financial need, thus allowing them to earn money to help pay education expenses  FWS encourages community service and work related to the recipient’s area of study  Undergraduate students are paid by the hour and will receive at least federal minimum wage  The amount earned cannot exceed the FWS award amount  FWS employment may be on-campus or off-campus  When assigning work hours, the student’s employer or financial aid administrator will consider award amount, class schedule, and academic progress Federal Work-Study Program