Generally, the first step in applying for financial aid is completing the Free Application for Federal Student Aid (FAFSA). The schools you listed on the FAFSA will take that information and use it to calculate the financial aid you’re eligible for. Your financial aid awards may vary from school to school based on a number of factors including: your Expected Family Contribution (EFC), the number of credits you will take each term, your cost of attendance (COA) at each school, your eligibility for state and institutional aid at each school, and your year in school. Keep in mind that many schools have a priority deadline, so the sooner you apply each year, the better. Here are 5 things that will help you better understand how financial aid is awarded:
Secretary Arne Duncan sat down recently to answer questions he received via social media, email and mail. Zack wanted to know if Arne thought the rising cost of college would keep Americans from a post-secondary education.
Arne says that college is the best investment one can make, and explains how the Obama Administration is working to keep the cost of college low, as well as it’s unprecedented investment in Pell Grants, and making repayment options easier.
However, Arne says keeping college costs low is a shared responsibility. States need to invest in education, and colleges and universities need to help keep tuition low and build cultures around college completion.
Arne also answers Jason’s question about Pell Grants, explaining that Pell Grants are the best investment we can make for a young person’s future and for a strong economy.
Watch the video:
Click here for an alternate version of the video with an accessible player.
Cross-posted from the White House Blog.
Chances are you know someone who wouldn’t have gone to college without the help of a Pell Grant. Since 1972, more than 60 million Americans have received financial assistance to earn their degree.
As President Obama said in a message commemorating the 40th anniversary of the enactment of this program:
Forty years ago, our Nation codified a commitment to bringing higher education within reach for every American by creating the Basic Educational Opportunity Grant—later renamed the Federal Pell Grant after Senator Claiborne Pell, to honor his efforts in creating the program. On this anniversary, we reflect on four decades of progress toward fulfilling that fundamental promise and rededicate ourselves to making college affordable for all.
Federal Pell Grants have helped millions of Americans achieve their fullest potential by not only opening the doors to college, but also providing students the financial support necessary to complete their studies and prosper in today’s economy. That is why my Administration has prioritized Pell Grants as a source of funding they can count on each and every year. We have provided resources to support a 50 percent increase in Pell Grant recipients, giving college access to millions of additional students across our country; aggressively raised the maximum Pell Grant award to keep pace with rising costs; and strengthened the Pell Grant Program by cutting banks out of Federal student lending and delivering financial aid directly to students. By continuing to provide grants that extend educational opportunity to students, we make critical investments both in their personal success and in America’s success in the 21st century.
As we mark the 40th Anniversary of the Federal Pell Grant Program, we also celebrate the individuals and organizations who have worked to widen the circle of opportunity for countless Americans through higher education. Today and tomorrow, let us recommit to empowering the next generation with the tools and resources they need to achieve their dreams. I am confident that, through programs like Pell Grants, our Nation will reach our goal of once again leading the world in college completion by the year 2020.
Senator Claiborne Pell, the chief sponsor of the program, liked to say, ‘Any student with the talent, desire, and drive, should be able to pursue higher education.’ Because of his commitment and vision, millions of students from poor and working class backgrounds received the economic lifeline they need to earn a college degree. The Pell Grant program has literally transformed millions of lives.
In today’s global economy that’s more important than ever. High school graduation is no longer a path leading to a good paying job. College, or other postsecondary training, has never been more important to finding meaningful and substantial employment.
More students than ever are relying on Pell grants, and if we are to reach our goal of out-innovating, out-educating and out-building the rest of the world, we need to continue our investment in Pell.
Arne Duncan is the US Secretary of Education
This op-ed appeared in today’s edition of Politico.
Last month, I had the honor of giving the commencement address at Howard University. I was filled with hope and inspiration looking out at the faces of all those young people, often the first in their family to attend college.
Those students and their families worked hard, sacrificed and saved to go to Howard. And for many of them, getting a degree would not have been possible without the help of Pell Grants and low-interest federal student loans.
These students and parents understand that a post-secondary education is the ticket to economic success in America. But while it’s never been more important to have a degree, a certificate or an industry-recognized credential — it’s also never been more expensive.
Since 1995, college costs across the country have increased almost five times faster than median household income. As a result, students and their families are taking on more and more debt. Borrowing to pay for college used to be the exception, now it’s the rule.
About two-thirds of college graduates borrow to go to school, and on average they’re graduating with more than $26,000 in debt. In an economy still recovering from the worst downturn since the Great Depression, getting a job is hard enough, but paying back those loans is daunting.
To make matters worse, a policy change is coming at the end of this month that will make getting out of debt more expensive for more than 7 million young Americans next year: Without congressional action, the interest rate on Stafford loans will double from 3.4 percent to 6.8 percent, starting July 1.
Based on the average loan amount, doubling the Stafford loan interest rate will add more than $1,000 in total costs for borrowers. For students who borrow heavily to go to college, it could cost even more. Only Congress can keep these interest rates from doubling. And yet Congress has so far failed to deliver.
While I appreciate that some congressional Republicans have recently indicated they’re now willing to work with the administration to find a solution, the debate so far has been largely divided along party lines and made no progress.
Americans are tired of political fights in Washington. It’s time to stop talking and start doing. People want Congress to put politics aside and come together to produce real results that make a difference. And you can count college students at the top of that list. I am optimistic that both parties can — and should — find common ground to reach a bipartisan compromise.
President Barack Obama has traveled to colleges and universities across the country, urging Congress do its part to keep college affordable by stopping student loan interest rates from doubling this July. With so many students struggling to both make ends meet and afford the skyrocketing price of a college degree, now is not the right time to heap more costs on them.
All of us share responsibility for making college affordable and keeping the middle-class dream alive. Parents need to be smart consumers, and students need to finish on time or even early.
Colleges and universities need to be efficient and productive in delivering educational value to students. Graduating students ready for success should be as important to professors as research and publishing. Institutions should ensure that keeping costs down does not take a back seat to the expensive amenities outside the classroom. Where it makes sense, they should offer lower-cost options such as online learning.
States must do their part to make higher education a higher priority in their budgets. Last year, 40 states cut higher education spending — the single most significant factor in tuition increases.
The Obama administration is working everyday to do its part. But we need Congress to step up and help. Over the past two years, we’ve worked with Congress to dramatically boost Pell grant funding by passing the Recovery Act. We’ve also eliminated billions of dollars in wasteful taxpayer subsidies to banks, plowing the savings into aid for low-income college students.
We’re helping students better manage their debt after graduation with programs like income-based repayment, loan consolidation and public service loan forgiveness. And we’re proposing to double the number of work-study jobs and make the American Opportunity Tax Credit permanent, which would provide $2,500 annually for working families to pay for college. We’re also calling for new incentives for states and institutions to keep college costs from escalating.
We took all of these steps because the president and I believe education is a public good. College should not be reserved only for those who can afford it. Investing in education is the best investment America can make to bolster its competitiveness in a knowledge-based, global economy. If we don’t invest today, we will lose tomorrow.
Now, America can take another simple step forward and keep the interest rate on Stafford loans at 3.4 percent — but only if Congress does its job and comes together around a fair and responsible way to pay for it.
In 2007, a Democratic-controlled Congress and a Republican president came together to lower interest rates on these loans because it was the right thing to do. That Congress did not put politics ahead of students and neither should today’s. Let’s do the right thing for America’s students — and for our nation’s economy.
Arne Duncan is the secretary of education.
Secretary Duncan travelled to the Minneapolis area last Friday to host two town hall meetings with teachers, parents, students, and national, state and local leaders. Arne started the day speaking with students at South High School in Minneapolis about the importance of higher education and college affordability. “College isn’t just for the rich or someone else,” he said. “We need to raise expectations so all students know college is within their reach.”
The Obama Administration has taken extraordinary steps to make it easier for students to get financial aid and understand the true cost of college, including:
Duncan also announced the launch of the @FAFSA Twitter account, and explained how important it is that students fill out the FAFSA. For many students who think that higher education is out of reach, the FAFSA will explain many of available aid and loans that can help a student pay for college.
Click here to get started on the 2012 FAFSA.
“What college you go to may be one of the least important decisions in your life,” said Vice President Joe Biden yesterday in Ohio. “It’s deciding to go that is the most,” he said.
Secretary Duncan joined Biden at Lincoln High School in Gahanna, Ohio yesterday to speak to students and parents about the importance of college and college affordability, and to answer questions from the audience. “The jobs of the future are going to require some type of higher education,” Duncan said, explaining that it could be college, community college, trade school, or technical or vocational training.
The Vice President and Secretary Duncan described the steps that the Obama Administration is taking to ensure that college stays within reach of the middle class, including:
- Increasing the maximum size of Pell Grants by $800 to $5,550.
- Increasing the number of students who receive Pell Grants from 6.1 million in 2008 to over 9 million today.
- Enacting a tuition tax credit worth up to $10,000 over 4 years.
- Ensuring that future graduates won’t have to spend more than 10% of their discretionary income on student loan payments.
Duncan also explained that ED has simplified the FAFSA form, making it easier for students to apply for aid in the first place.
While Vice President Biden encouraged the students in attendance to commit to higher education, Secretary Duncan said that the next step is finishing. “Whatever it takes to get you across the finish line,” he said.
Arne sat down last week to answer a couple of questions and comments he received on his Facebook page. Ginger and Adriana wrote about thanking great teachers, and Arne encouraged others to take time and thank their teachers. “Whether you graduated last year, whether you are still in school, or whether you are 50 years out of high school,” he said, “it is never too late to go back and say thank you.”
Jamie left a comment for Arne that described the stress associated with having significant college debt. Duncan noted that on the front end the Obama administration has taken big steps in increasing Pell Grants, including doubling funding for Pell Grants within the last couple of years. For those in repayment, the Administration recently announced a pay-as-you-earn program, which could reduce loan payments by hundreds per month for those who qualify. Duncan explained that college can’t be for the wealthy only, and that while the Obama administration has made tremendous progress, “there is a lot of hard work ahead of us.”
Click here for an alternate version of the video with an accessible player.
Ed. Note: Assistant Secretary for Postsecondary Education Eduardo Ochoa recently spoke to the American Student Association of Community Colleges and affirmed the Obama administration’s commitment to providing college aid to low-income students by preserving the maximum Pell Grant at $5,550.
Amber Mullins, a community college student in Tampa, Fla., submitted the following post to explain why Pell Grants are so important to students like her.
As a single mother of two and a student at Hillsborough Community College in Tampa, Fla., I am extremely grateful for community colleges and the role they play in our society. I am attending Hillsborough in their business administration program, trying to develop lifelong career skills that will allow me to support my two children and me.
This opportunity is only possible because of the Pell Grant Program. At last week’s American Student Association of Community Colleges’ (ASACC) National Student Advocacy Conference in Washington D.C., we spent two days discussing the importance of the Pell Grant to millions of students like me. This small investment (we also learned that education receives less than 3 percent of the federal budget) in students will pay great dividends over time by keeping America at the forefront of economic and workforce competitiveness. Some in Congress are proposing to cut the maximum Pell Grant, which would be detrimental to me and millions of other students. It would also likely extend the time it will take for me to complete my education. The reason it will take longer to complete my degree is that without that money, I will have to work longer hours at a part-time job, to support my family instead of focusing on my degree.
One of of the highlights of the ASACC conference was a speech by Assistant Secretary for Postsecondary Education Eduardo Ochoa. He spoke to more than 375 students about the priorities of the U.S. Department of Education and President Obama. We were excited to hear that the number-one short-term goal in higher education of the Department of Education and President Obama was the same as that of ASACC: Maintain the Pell Grant maximum award at $5,550 for Fiscal Year 2012.
The conference not only taught students about the issues facing America’s education system, but provided us with the opportunity to visit the offices of our representatives and senators to share our stories. By telling my story of how the Pell Grant has transformed my college experience and has given me new opportunities, I believe I told the story of so many more just like myself who have benefited from this important program.
Amber Mullins is a student at Hillsborough Community College in Tampa, Fla. and vice president of communications for the American Student Association of Community Colleges. The views reflected here are her own.