Along with the health care reform came changes related to student loans and college grants. President Obama has proposed to increase the budget for College Grants. This increased budget would make additional 260,000 students eligible for Pell Grants. It feels like it is a perfect time to take advantage of the new changes and receive higher education.
I believe we are living in a time period now, where going to college, receiving certification, or improving our professional skill sets makes the most sense. It is during recessions where people should gather steam and strength that will be needed to prosper during next economic booms. These booms are coming. Every slowdown is followed by lots of economic activities later on. Why not prepare for these great economic times right now, by taking advantage of what our federal government has to offer and in particular college grants.
My theory is backed by recent studies showing more and more students applying for college and our education field is already booming. Students want to gain higher education in order to be more competitive. All sounds great, but there is still one small problem. College education costs money. Should you pay for your education costs with out of pocket money? Or is it best to take out a student loan and hope it will pay itself off sometimes in the future? All these questions are valid and students have to answer these questions on their own, but in case they need an advice I have one for them: Pell Grants.
Pell grants always existed and students were applying for them using the FAFSA application. Unfortunately, not a day goes by where I find out how many college applicants are not aware of the free money programs. That is why I want to talk about college grants and especially it’s most important component the Pell Grant. My goal in the paragraphs below is to explain what Pell Grants are. Walk students through the application process, and show them who is eligible and how to apply. I will also post tips and tricks showing you how to boost your chances in order to receive the maximum award or close to it.
Some of you may be asking why am I concentrating on the Pell Grants only. The answer is simple. This is the biggest grant the federal government is providing in all the education programs. The biggest being, each year the most money is allocated to this award. In 2009-2010 academic year the average award was $3,611 with the maximum being $5,350. On top of this the president’s proposal would raise the maximum Pell Grant award by $200, to $5,550 for the 2010-11 academic year. Moreover, this increased budget would make additional 260,000 students eligible for this very program. As you can see the Pell Grant program is the program going forward and this is the award students should be eager to know everything about.
So what are these Pell Grants? Pell Grants are the heart of government education programs. A Federal Pell Grant happens to be also the foundation for free financial aid. This great award was formerly known by a name of Basic Educational Opportunity Grants (BEOGs). It was named after U.S. Senator Claiborne Pell of Rhode Island. This is your first sugar daddy when it comes to free money for college. Other types of financial aid and other government programs should be treated as supplements to Pell Grants.
Free pell grants provide need based awards to low income students. The idea is to promote access to post secondary education. The financial need itself is determined by the U.S. Department of Education using a standard formula. This formula was established by the US Congress. It takes all your financial data from the application form and calculates the award for the applicant.
As with most of the programs this award does not have to be repaid. Besides the fact this program carries the most money, it is also the first grant you will be considered for when you submit your college financial aid application (FAFSA). It is known that about 5,400 institutions participate in Pell Grants.
Who is eligible? These grants are awarded usually only to undergraduate and vocational students who do not have a bachelor’s degree. In rare occasions these grants are given to students enrolled in a post-baccalaureate teacher certification programs. In order to be eligible students must be enrolled or accepted for enrollment before they apply. Students may not receive these awards from more than one school at a time.
What determines the award amount? The award amount for this grant depends on: student’s expected family contribution, cost of attendance, student’s enrollment status, whether the student attends for a full year or less. Student’s expected family contribution or the EFC is the number that is used to determine your eligibility for federal financial aid. This number results from the financial information you provided in your FAFSA application. Your EFC is reported to you on your Student Aid Report (SAR).
The above describes what Pell Grants are and how they work. Now that you know how this grant functions, let’s take a look at some of the tips and tricks that could help you become eligible and receive more money.
My first tip is dedicated to those who are still undecided about this great deal, or do not believe they can be awarded anything. Do not assume anything negative. Those negative assumptions are a testament to the fact billions of dollars goes unclaimed each year. Complete the application even if you believe you are not eligible. Very often students do not apply, because they incorrectly assume Pell Grants are for poor students only. The truth is students with income and assets could qualify for this award, but may simply receive less money. Moreover, the FAFSA application opens the doors to all kinds of federal and state aid. In case Pell Grants are not applicable does not necessary mean there are no other programs where students will get lucky and receive free money with the same application.
Another great tip related to this program has to do with the date you apply. Make sure to apply on New Year’s Day. Need based financial aid is distributed on first come first serve basis. Therefore you have to file as soon as possible. The minute you welcome the New Year submit your application. This is a very valuable strategy and I reassure you, you are not going to be alone doing this.
The next trick concentrates on your income and personal assets. The EFC calculator takes into account how much money you have and how much in personal assets you posses. Here is a little tip showing you how to legally bypass this. The way EFC calculator values assets between you and your parents is this: student contributions are assessed at 20%, parent’s contributions are assessed at about 6%, grandparents and others are accessed at 0%. More weight is put on students then parents, and students with assets and income are penalized. The trick is to store your assets with someone other than yourself. You’ll have to do a good research on this issue and use your own knowledge on how to go about this, but it’s possible to shift the asset assessment in order to be assessed at a lower than 20% rate.
Another important task is to get an early estimate of your expected family contribution. Estimate your EFC before your go to college. The best time is around your high school junior year. You will have an upfront idea of what you might pay. Once you know your EFC you can find colleges within your price range and it will help you select your overall financial aid and Pell Grants strategy.