Pursuing a college degree can turn out to be a huge undertaking. The commitment can take a significant amount of time and effort. In addition to that, college is expensive! The average student spends a whopping $35,551 on education expenses each year. Many students don’t have that kind of cash lying around. This is why federal education grants are so important. Grants are beneficial because they typically don’t need to be paid back. Students that want to reduce how much they spend on college can benefit from various opportunities. In addition to that, grants can reduce a student’s need to rack up too much debt. Receiving financial aid isn’t a complicated process either. To get started, you need to know what’s available!
Federal Education Grants Can Help Pay for Your Degree
If you’re a student currently pursuing your degree or you’re thinking about it in the future, then you need to know about federal education grants. These grants are a form of financial aid available to college students. You will find that there are grants awarded for different reasons. Some are based on your financial status and others are merit-based. Regardless of what type of grant you’re able to qualify for, they all serve the same purpose– to reduce your out-of-pocket education expenses. A few federal education grants available are:
- TEACH Grant: Students that promise to work in certain teaching jobs after graduation can be eligible for this federal grant.
- Pell Grant: Qualifying undergraduate students can receive this popular grant.
- Federal Supplemental Educational Opportunity Grant (FSEOG): This federal grant is another example of a grant awarded based on financial status. Students in an exceptional low-income situation can receive this opportunity.
Teacher Education Assistance for College and Higher Education (TEACH) Grant
The TEACH Grant provides financial relief to students pursuing careers in teaching. Students that agree to work in high-demand fields like math or science, as well as in low-income areas, can get this grant. In addition to that commitment, recipients need to ensure they stay in good academic standing while in school. Finally, this financial aid opportunity offers up to $4,000 per school year!
The Pell Grant
Federal Pell Grants can provide a qualifying student up to $7,395, as of the 2023 – 2024 school year. However, the amount of financial aid you can get is dependent on a few factors. This includes:
- Current Financial Status
- Status of Enrollment (Full or Half-Time)
- The Cost of Education at Your School
Pell Grants are awarded to undergraduate students based on their financial need. Being an undergraduate student means that you have not obtained a bachelor’s degree or higher. The amount of assistance you’re able to receive from this opportunity can be credited towards your education costs, such as tuition and books!
Federal Supplemental Educational Opportunity Grant (FSEOG)
Federal Supplemental Educational Opportunity Grants (FSEOG) provide additional aid to undergraduate students dealing with exceptional financial hardship. Students that can qualify for this grant are likely also eligible for the Pell Grant. However, the Pell Grant alone may not be enough funding. This is why the FSEOG offers funds that range anywhere from $100 – $4,000 each year. Again, the award amount is depending on individual circumstances.
Tax Opportunities for Education Savings
Several tax breaks are available to help students save money on education expenses. These credits can be claimed on federal income tax returns and can help offset educational costs. Two tax credits to keep in mind when filing include:
Lifetime Learning Credit (LLC)
The Lifetime Learning Credit (LLC) offers an opportunity for some students to claim up to $2,000 each year! Furthermore, students have the ability to claim this as many years as they are in school. There is no limit. In addition to that, all types of students can take advantage of this tax break. This includes students enrolled in undergraduate, graduate, and professional degree programs. However, the credit is only eligible for education expenses incurred while enrolled at qualifying schools.
American Opportunity Tax Credit (AOTC)
The American Opportunity Tax Credit (AOTC) can allow certain students to get back up to $2,500 per year! Unlike the Lifetime Learning Credit, there is a limit to how many years a student can claim this. Eligible students can only use this tax credit for their first four years of college. Qualifying education expenses include tuition, books, and other school supplies. Eligible students can get up to 100% back of their initial $2,000 in expenses. From then on, the return is up to 25% of the following $2,000 worth of qualifying costs.
What Else is There to Know About Financial Aid?
How do I apply for financial aid?
The first step towards applying for any federal education grant is submitting a Free Application for Federal Student Aid (FAFSA). This process can be done online at the FAFSA website. This application automatically puts you out there to receive various financial aid opportunities that you qualify for. In order to remain eligible each year, you need to complete a FAFSA prior to each new school year! A good rule of thumb is to do so as soon as possible to ensure you don’t miss any deadlines.
Do grants ever need to be repaid?
The reason grants are such a valuable resource to students is because they typically don’t require repayment! This means that they are essentially a gift. Students that are eligible for financial aid can significantly reduce how much of their own money they need to spend on school. However, there are some circumstances where a student would need to pay back their grant money. Let’s use the TEACH Grant as an example. To refresh your memory, students can get funds from the TEACH Grant if they commit to working in certain teaching fields after graduation. The commitment obligates the student to work in an agreed upon position for at least four years. In addition to that, the obligation needs to be fulfilled within eight years of graduation. If a student fails to meet their commitment, they are required to pay back their grant with interest.
Let’s Summarize
Student financial aid can be a lifesaver for low-income individuals who are looking to further their education. There are many options available to help students pay for college! Some federal education grants are based on a student’s financial situation. Meanwhile, others are awarded based on a student’s commitment to a future career path. In order to benefit from grant funds, you need to fill out a Free Application for Federal Student Aid (FAFSA) each year! To increase your chances of receiving the most aid possible, you want to ensure you’re aware of any deadlines or funding limits. Paying your way through school can be stressful! However, financial aid opportunities may be able to lighten your load so that you can focus on your degree.