Free money is best! Money from grants and scholarships is the favorite source of financial aid for most students because it does not have to be repaid. This form of aid is either based on your financial circumstances (Need-Based Aid), your academic ability (Merit Aid) or your athletic, musical or artistic ability (Performance Aid). In some instances, grants and scholarships can also be awarded based on characteristics specific to certain groups. For example, there is money available to help Native Americans and children of other special groups attend school.
Scholarships and grants may be from public sources - usually federal and/or state government - or from private sources, such as the school you attend. While most public aid is need-based, private aid can be either merit-based or need-based or a combination of the two.
Federal Pell Grants
Pell Grants are the foundation of federal financial aid and are awarded to undergraduate students who have not earned a bachelor's or professional degree, except for those with a degree who are enrolled in some teacher certification programs. Other eligibility and terms are:
- Pell Grant eligibility is based on financial need as determined by the federal government.
- The maximum Pell Grant award for the 2007-2008 award year (July 1, 2007 to June 30, 2008) is $4,310. Congress may change the maximum amount each year.
- Federal Pell Grant applications are available at your school's financial office.
- In addition to financial need, other eligibility factors include costs of the school, full-time versus part-time enrollment status, and expected length of enrollment period.
Other general eligibility requirements for all federal aid include:
- Being a U.S. citizen or "eligible non-citizen"
- Having a valid Social Security Number (SSN)
- Demonstrated academic qualification to include: having a high school diploma or a "General Education Development Certificate (GED)", or passing an approved ability-to-benefit (ATB) test which can be administered by the school, or completing a high school education in a home school setting approved under state law
- Being enrolled or accepted for enrollment as a "regular student" working toward a degree or certificate inn an "eligible program"
Other legal requirements include:
- Certifying that you will use federal student aid for educational purposes
- Certifying that you are not in "default" on a federal student loan or owe money on a federal grant as a result of having received grant funds for which you were not eligible
- Complying with Selective Service registration requirements if you are required to do so
- Certifying you are not ineligible to receive federal aid because you have been convicted under federal or state last for selling or possessing illegal drugs
- Demonstrating you may be eligible for limited amounts of federal student aid even though you are incarcerated
Federal Supplemental Educational Opportunities Grants (FSEOG)
FSEOG is for undergraduate students with exceptional financial need. Eligibility and terms include:
- Application for FSEOG is through the Financial Aid Office at the school
- Those receiving the FSEOG grants will be Pell Grant recipients with the lowest expected family contribution (EFC)
- Eligibility amounts range from $100 to $4,000 per year
Academic Competitiveness Grants
An Academic Competitiveness Grant (ACG) may provide up to $750 for the first year of undergraduate study or up to $1,300 for the second year of undergraduate study, for full-time students who have completed a "rigorous high school program."
Eligibility requirements include:
- Being a U.S. citizen
- Being a Pell Grant recipient
- Being enrolled in the first or second academic year of a program of study at a two or four-year degree school
- Having completed a "rigorous secondary school program of study" after January 1, 2006
- If a first year student, not having been previously enrolled in an undergraduate program
- If a second-year student, having at least a cumulative grade point average of 3.0 on a 4.0 scale for the first academic year
"Rigorous Secondary School Program of Study" is determined by the state or local education agency and approved by the U.S. Secretary of Education.
The National Science & Mathematics Access to Retain Talent Grant (National SMART Grant)
SMART Grants are available in amounts up to $4000 during the third and fourth years of undergraduate study for students majoring in science, mathematics, technology or engineering. Students majoring in a foreign language determined to be critical to national security may be eligible as well.
Eligibility requirements for third and fourth year student include:
- Being a U.S. citizen
- Being a Pell Grant recipient
- Being enrolled full-time in a degree program
- Majoring in physical, life or computer science, engineering, mathematics, technology or certain foreign languages
- Having at least a 3.0 grade point average on a 4.0 scale
State Grants
Each year, the State Student Assistance Commission of Indiana (SSACI) awards nearly $200 million in education grant to over 50,000 students. SSACI administers a number of programs as follows:
- Frank O'Bannon Grant
- Hoosier Scholar Award
- Twenty-first Century Scholars Program
- Twenty-first Century Scholars GEAR UP Scholarship
- SSACI Nursing Scholarship
- Minority Teacher/Special Education Services Scholarship
- Robert C. Byrd Honors Scholarship
- Summer State Work Study Program
- Indiana National Guard Supplemental Grant
- Part-Time Grant Program
- Child of Certain Veterans and Public Safety Officers Supplemental Grant Program
The FAFSA is the basic application for several SSACI grants. In order to be eligible, the federal processor must receive the completed FAFSA by March 10th. For this reason, March 10th is the primary FAFSA filing deadline in Indiana.
State Student Assistance Commission of Indiana (SSACI)
SSACI General Eligibility Requirements (GERS) for full-time grants and scholarships include:
- The applicant must show financial need according to program rules.
- The applicant's FAFSA must be received by the federal processor by March 10th of each year and have any errors corrected by June 10th.
- If the applicant is a dependent student, the applicant and his/her parents must be legal residents of Indiana and remain legal residents during the academic year.
- The applicant must be an undergraduate student working on an associate or first bachelor degree.
- The applicant must maintain satisfactory academic progress.
- The applicant may not be in default on a loan or owe an overpayment on a SSACI grant.
- The applicant must meet the enrollment requirements of the applicable school.
- Amounts of SSACI grants may vary based on the level of state funding.
Private Grants and Scholarships
Grants and scholarships are awarded for a wide variety of reasons. Some are based on academic achievement (merit-based) while others are targeted to specific groups of students such as:
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Ethnicity |
Religious affiliation |
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Athletic ability |
College major |
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Community involvement |
Minority status |
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Disability |
International Study |
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Military service |
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Scholarships
Virtually all reputable scholarship searches are offered at no cost to the student and his/her family. Unfortunately, there are many disreputable scholarship services. Any offer to find financial aid in return for a payment should be viewed as suspect. Often the "aid" turns out to be a loan that the student and family could have easily obtained through their school.
Scholarships Offered by Colleges and Universities
Many colleges and universities, both public and private, offer scholarships based on merit, field of study, athletic ability, financial need, ethnicity to name only a few. Most school websites offer examples of scholarships funded by the school, often from the school's endowment. According to Independent Colleges of Indiana (ICI) over $400 million in institutional aid was provided during the 2006-2007 school year.
Other sources of scholarships include:
- Companies
- Community Organizations
- Church Groups
- Professional organizations
- Dollars For Scholars is one Indiana organization helping students pay for school
Common Scholarship Scams
Fraudulent scholarships can take many forms; some of the most common types are presented here. If you receive an offer that uses one of these tactics, be suspicious. If you believe the offer is a scam, report it. Sometimes, a scam persists for years before people catch on to it. Even when people realize they have been cheated, few are determined enough to try to take advantage of guarantees or file a complaint.
Scholarships that Never Materialize
Many scams encourage you to send them money up front but provide little or nothing in exchange. Usually victims write off the expense, thinking that they simply did not win the scholarship.
Scholarships for Profit
This scam looks just like a real scholarship program, but requires an application fee. The typical scam receives 5,000 to 10,000 applications and charges fees of $5 to $35. These scams can afford to pay out a $1,000 scholarship or two and still pocket a hefty profit - if they happen to award any scholarships at all. Your odds of winning a scholarship from such scams are less than your chances of striking it rich in the lottery.
The Advance-Fee Loan
This scam offers you an unusually low-interest educational loan, with the requirement that you pay a fee before you receive the loan. When you pay the money, the promised loan never materializes. Real educational loans deduct the fees from the disbursement check. They never require an up-front fee when you submit the application. If the loan is not issued by a bank or other recognized lender, it is probably a scam. Show the offer to your local bank manager to get their advice.
The Scholarship Prize
This scam tells you that you have won a college scholarship worth thousands of dollars, but requires that you pay a "disbursement" or "redemption" fee or the taxes before they can release your prize. If someone says you have won a prize and you do not remember entering the contest or submitting an application, be suspicious.
The Guaranteed Scholarship Search Service
Beware of scholarship matching services that guarantee you will win a scholarship or they will refund your money. They may simply pocket your money and disappear, or if they do send you a report of matching scholarships, you will find it extremely difficult to qualify for a refund.
Investment Required for Federal Loans
Insurance companies and brokerage firms sometimes offer free financial aid seminars that are actually sales pitches for insurance, annuity and investment products. When a sales pitch implies that purchasing such a product is a prerequisite to receiving federal student aid, it violates federal regulations and state insurance laws.
Free Seminar
You may receive a letter advertising a free financial aid seminar or "interviews" for financial assistance. Sometimes the seminars do provide some useful information, but often they are cleverly disguised sales pitches for financial aid consulting services (e.g., maximize your eligibility for financial aid), investment products, scholarship matching services and overpriced student loans.