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Federal Financial Aid for Low-Income Students

Updated on September 16, 2011
Financial Aid info for Non-Traditional Students
Financial Aid info for Non-Traditional Students

There are many sites that talk about financial aid, but on this site, I will give you the straight dope about financial aid for low income students.

In reality, it's all the same, but there are special concerns for students or prospective students who live from paycheck to paychek or adult students with kids and a household to support.

Most of the people am I addressing here in this hub will be adult students (non-traditional students) who are trying to change their lives by getting an education or job training. However, any student who needs financial aid might be able to benefit from reading this hub.

Basic Financial Aid Facts

I will go over the basics first, and then I will get down to the nitty-gritty for low income students.

All forms of federal financial aid starts with the Free Application for Federal Student Aid (FAFSA). You must first complete the FAFSA to be considered for any form of federal money for school.

It is important to complete the form correctly, because if you do not, you will be selected for verification.

Depending on the type of mistake you make on the form, various government agencies will require your school to verify all sorts of information, so you should try really hard to get it right the first time.

The federal government also randomly selects a small percentage of all financial aid files to be verified, so if this happens to you, you gotta roll with the punches and submit the necessary paper work to your school.

Financial aid consists of two categories, loans and grants. The amount of student aid money you receive is basically dependent upon three things:

1) Your grade level (Freshman, Sophomore, Junior, Senior)

2) Whether you are an independent or dependent student

3) Your expected family contribution (EFC)

Expected Family Contribution (EFC) is most important
Expected Family Contribution (EFC) is most important

Pell Grant and SEOG Grant

As far as grants go, there is the Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG).

The Pell Grant is by far the biggest program. The maximum amounts change from aid year to aid year, but the current maximums are as follows:

Pell Grant = $5,550
FSEOG Grant = $100 - $4,000

The amount of Pell Grant money has steadily increased over the years, and the FSEOG Grant award amount ranges based on student need - most students will not receive the FSEOG, because it is reserved for students with the greatest need.

Financial Aid Money for School
Financial Aid Money for School

Stafford Loans & Perkins Loans

As for student loans, there is the Stafford Loan and the Perkins Loan. The Stafford Loan is the largest of the two programs. Stafford Loans are either subsidized or unsubsidized.

The difference between the two types of Stafford is the interest - with Subsidized Stafford Loans, the federal government will pay the interest while you're in school, with Unsubsidized Stafford Loans, you will pay the interest.

The maximum amounts for each loan program depend on your college level and dependency status:

Dependent Undergraduate Students

  • Freshman = $3500 (Subsidized) $2000 (Unsubsidized) $5500 Total
  • Sophomore = $4500 (Subsidized) $2000 (Unsubsidized) $6500 Total
  • Junior = $5500 (Subsidized) $1500 (Unsubsidized) $7000 Total
  • Senior = $5500 (Subsidized) $1500 (Unsubsidized) $7000 Total

Independent Undergraduate Students

  • Freshman = $3500 (Subsidized) $6000 (Unsubsidized) $9500 Total
  • Sophomore = $4500 (Subsidized) $6000 (Unsubsidized) $10500 Total
  • Junior = $5500 (Subsidized) $7000 (Unsubsidized) $12500 Total
  • Senior = $5500 (Subsidized) $7000 (Unsubsidized) $12500 Total

The Perkins Loan is a smaller loan program, and it is distributed at the school level, unlike Stafford loans, once the Perkins money has been depleted from your school for the year, they cannot award any more money until the following year.

The amount of Perkins Loan money you receive ranges depending on your level of need, you can borrow up to $5,000 per year.

Non-Traditional Students Have Special Financial Concerns
Non-Traditional Students Have Special Financial Concerns

Special Info for Low Income Students

If you are an adult student, struggling to go to school and keep the bills paid until you graduate, the most important thing you need to understand is the amount of money you receive to live off of and go to school is largely dependent on the school you attend and your expected family contribution (EFC).

What is your EFC, you ask? Well, it is a very important calculation, and the more you know about this final number, the more alert you will be and you will not have tolerance for predatory schools.

After you complete your Free Application for Federal Student Aid (FAFSA) on the web, you will immediately receive a Student Aid Report (SAR). That SAR will list your EFC.

To break it down for you, the EFC is equal to the amount of money the federal government has determined that you should have to pay for school - the closer to zero that amount is, the less the amount of money you should have to pay for school.

If your EFC is Zero (0), you should recieve enough money to live off of (very modestly, of course) after your classes are paid for.

If you are currently a student, and it isn't working out this way for you, chances are high that you are attending a scam school - you need to get away from them as soon as possible or you will end handing all of your financial aid money to the school, and you'll probably end up with a degree not worth the paper its printed on.

If you have low income, and you are considering going to school to better your future, check out this hub on How to Spot a Scam School before you enroll, so you don't get caught up in their B.S.

Also, you might be interested in Two-Year Job Training and Educational Programs that will help you get into a high-paying career in a little less than two years, so that you can get out of the low income lifestyle as soon as possible.

Whatever you decide,

Good Luck!

Always Stay on top of your Financial Aid File
Always Stay on top of your Financial Aid File


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    • Zinjenzo profile image

      Zinjenzo 5 years ago from Boston, MA

      Great and detailed information here! I love how you break down the grant and loan programs. I recommend students/parents/family use the FAFSA4Caster at to get a sense of their EFC even before they consider colleges. Also, did you know that 30% of students at many excellent schools are selected for verification? You are right that sometimes it's because of an error and other times it's the luck of the draw.

      As for independent students, I get many students who think that just because they get their own apartment, or their parents don't pay for things, they are independent students. Independent students do need more money to attend college and often get great financial aid packages. However, for the FAFSA, independent means over 24 years old, married, having children or a ward of the court/state (as in a youth in foster care).

      Thanks for a great blog! Voted up and useful!

    • profile image

      Unknown 6 years ago

      What if your a bussines owner but you're making low income. Is there a light percentage you qualify for financial aid?