How will the Economic Stimulus Package Help Adults Return to School?
According to The American Recovery and Reinvestment Act, signed into effect in 2009, the stimulus provides an additional $17 billion in funds for the Federal Pell Grant Program, increasing the maximum award from $4,731 to $5,350 in 2009 and to $5,550 in 2010. (A $200 million increase in the Federal Work Study Program is included.) The maximum Pell grant for 2011-12 and 2012-13 award year was $5,550. (Maximum Pell Grant amounts can change each academic year and are dependent upon federal funding. For the 2013-14 year the Pell Grant maximum award is $5,645. For 2014–15 (July 1, 2014 to June 30, 2015) it will be $5,730. )
Amount awarded is determined by individual financial need, cost of education (COA), whether enrollment is full or part-time, and with sessions spanning the full academic year or less.
Further help is made available through the new American Opportunity Tax Credit (which replaces and expands the Hope Scholarship Tax Credit for two years). This new tax credit will cover up to $2,500 of college tuition and other related expenses (including books and supplies) each year for the first four years of college. The credit also makes forty percent of costs refundable to lower-income individuals who do not owe taxes. It is now available to taxpayers with a higher level of income, beginning to phase-out at $80,000 ($160,000 for married couples filing jointly). For information on current tax benefits and deductions, see the IRS publication, Tax Benefits for Education.
To be eligible for Pell Grant and other federal funding, you need to fill out the Free Application for Federal Student Aid (the FAFSA) application each year.
I Doubt I Qualify for Aid. Should I Still Apply?
Yes, you should! Never assume you don’t qualify for financial aid. Many adult students believe they don’t qualify and miss out on many sources of aid, including grants and low interest loans that are offered regardless of grade point average, financial need, or credit history. Most federal and state aid programs don’t have age limits, although some scholarship programs might. The largest portion of financial aid comes from the federal and state governments, then colleges and universities, and private sources of aid such as community and professional organizations.
Most financial aid comes in the form of scholarships or grants, student loans, federal work study, or tax credits. Many large companies have tuition assistance programs. A complete overview on financial aid is located in the Financial Aid section.
In general, to be eligible for federal financial aid, you must:
- Be a U.S. citizen or an eligible noncitizen
- Have a valid Social Security number
- Possess a high school diploma or GED (or recognized equivalent)
- Demonstrate financial need (except for the unsubsized Stafford Loan program)
- Be accepted or enrolled as a student in an eligible degree or certificate program
- Register for at least half-time study (6 credit hours)
- Maintain good academic standing or satisfactory academic progress
- Not be in default on a federal student loan, or owe for an overpayment on a federal grant
- If a male between the ages of 18 to 25, be registered with the Selective Service
- Not be convicted for possession or sale of illegal drugs while receiving federal aid
- Complete the Free Application for Federal Student Aid (FAFSA).
| COA (Cost of Attendance) | -EFC (Expected Family Contribution) | = Financial Need |
Based on estimated financial need, the financial aid office will prepare a financial aid or “award” package. The FAO applies available resources to try to meet your financial need. However, the school is not obligated to meet your financial need, and may be unable to do so dependent upon the types of aid available. This aid may include federal and state grants, scholarships, loans, and federal work study. Grants (i.e., the Federal Pell Grant and the Supplemental Educational Opportunity Grant) and scholarships do not have to be repaid. Loans, such as Federal Subsidized or Unsubsidized Stafford loans, must be repaid.
Why is the EFC on the SAR Different from the EFC of the School?
Your EFC is generally calculated using one or two methodologies: the Federal Methodology (explained above), and the Institutional Methodology. The Institutional Methodology determines eligibility for institutional grant programs. Universities may use this methodology and/or the federal methodology to determine eligibility for grants or other private funds. One difference between the two formulas is the federal methodology does not consider home equity in assets calculation.
Types of Financial Aid
The majority of financial aid comes from the federal government, in the form of grants, federal work-study, and subsidized and unsubidized student loans.
– Pell Grants do not need to be repaid, and are awarded to undergraduate students on the basis of need. For 2005-2006, awards range from $400 to $4,310 per academic year. This program is designed to assist the
neediest of undergraduate students earning their first baccalaureate or four-year professional degree.
– Federal Supplemental Educational Opportunity Grants (FSEOG) do not need to be repaid, and are awarded to undergraduate students who have exceptional financial need.
– The Federal Work Study Program offers part-time employment in the public and private sector to undergraduate and graduate students with financial need. The federal program pays up to 75 percent of student wages, with the employer paying the balance.
of funds.
– Federal Stafford subsidized or unsubsidized student loans are available to students who have remaining financial need. These loans need to be repaid. For federal stafford subsidized loans, the government subsidizes or pays the interest up to the time of loan repayment. With federal stafford unsubsidized loans, students must pay all the interest incurred.
– The Perkins Loan Program is available to both undergraduate and graduate stud For more information about federal financial aid programs and student eligibility, see the Department of Education Student Guide.
In addition to the federal government, students receive financial aid from state higher education agencies, colleges and universities, and outside scholarship sources.
A scholarship is a free grant awarded based on any number of criteria, including financial need, academic or athletic achievement, talent, community or public service, nationality or religion. Scholarships are often funded by educational institutions, community and professional organizations, and non-profit foundations.
For more information on the many types of aid available, see the Financial Aid section.
What if I Received an Outside Scholarship? Should I Tell the School?
If you receive any financial aid or scholarship from other sources, you must report it to the financial aid office to adjust your financial aid package. Some school policies use the scholarships to reduce the self-help (student loans, federal work study) part of the package, while other schools replace grants instead of loans.
What if My Financial Circumstances Change?
Special circumstances that may adjust your estimated EFC and qualify you for more aid is the death of or divorce from a spouse, loss of employment or other income, extraordinary medical expenses, and expenses for dependent child care. If you quit your job to return to school, the financial aid office may modify your application information to reflect current year finances.
Check with your financial aid administrator if any of these conditions apply to you. However, you will need to provide adequate proof to support any adjustments.
When Will I Receive My Financial Aid?
Colleges usually disburse financial aid awards at the beginning of each semester. Funds may first be used to pay your tuition and other expenses, and the balance remitted to you by check.
Do I Have to Re-apply for Financial Aid Every Year?
For continued eligibility, you must re-apply every academic year. After the first year, you will receive a FAFSA Renewal Application that includes information from the previous year’s FAFSA. You must also maintain satisfactory academic progress (i.e., complete a certain number of credits and earn a minimum GPA). Dependent upon your circumstances, you may be awarded more or less financial aid.
How Do I Compare Financial Aid Awards From Different Schools?
To determine the best award package, calculate the amount of aid that remains after paying a school’s tuition and fees instead of just considering the total aid amount. A good award package allows a generous portion of grant aid with a reasonable level of self-help which are renewable. You can also use the tools in our Financial Aid section.
Can I Get Financial Aid for Distance Education?
If taking distance or online classes as part of a program at a traditional, regionally accredited institution, you will be assisted by the Federal and state financial aid received for the full program. If it’s an online only program offered by a traditional institution, you may be eligible for federal assistance.
Until recently, the U.S. Department of Education, through the Distance Education Demonstration Program, was testing funding for distance education among carefully selected participating institutions. To prevent abuse and fraud in student aid programs, the Department initiated the 50 percent rule, which required colleges to provide at least half of their courses on campus instead of online to receive Federal financial aid.
However, according to a recently passed Congressional Bill, the 50 percent rule has been eliminated, and colleges and universities no longer need to follow this guideline to receive financial aid. They can continue to increase their offering of online programs, and when enrolled in a regionally accredited program you will be eligible for aid from all Federal Title IV programs (including the Federal Pell Grant, the Federal Supplemental Educational Opportunity Grant (FSEOG), and the Federal Stafford Loan Program.)
Always ask about your financial aid options before you sign up for distance education programs. For additional questions about distance education, please see the Online Education Gets Accolades and How Do Employers View Online Degrees?
Is Financial Aid Available for a Second Degree?
Many colleges restrict eligibility for their financial aid programs to the first bachelor’s degree, while others will waive the restrictions if the student is seeking a second degree in preparation for a career change and/or the second degree program is different from the degree program previously completed. Contact the financial aid office of the school you are interested in for information regarding their policy.
Are There Tuition Free Programs for Seniors?
Yes, if you are over 60 years old, many community colleges and state collegs and universities offer free or reduced tution to residents over 60. For an example see Connecticut’s Board of Governors for Higher Education site regarding tuition waivers at public colleges and universities for seniors.
Can I Get Financial Aid for Non-Degree Programs or Courses?
Generally, courses for personal development or other programs that do not work toward a degree are not eligible for financial aid. You must be admitted into an accredited college or university degree program. You can attend full or part-time. voluntary and portable to other participating employers.
What if I Receive Financial Aid, Then Withdraw from Classes?
Before enrolling try to get an estimate on how much financial aid you will receive. There are many resources on the Internet to help you determine your EFC (Expected Family Contribution) or input your FAFSA (Free Application for Federal Student Aid) information to get an estimate of the financial aid award.
Also be sure to ask about the college’s refund procedures. Some adult students enroll and then find that they are not able to balance college with career and family responsibilities. Some schools may not refund tuition and it may be difficult getting out of student loans. Consult your financial aid office before withdrawing from classes. You may also have to repay a percentage of grant aid received for the term in which you are withdrawing. Most financial aid programs require an enrollment of at least six credits. Withdrawals also can appear on your college transcript so it is best to keep them at a minimum.
Additional questions to ask are the terms of the programs in the financial aid award package, and the requirements for the renewal of the aid.
– Federal Stafford subsidized or unsubsidized loans are aid that must be paid back, and are offered to students who show additional financial need. With subsidized loans, the government subsidizes or pays the interest for the the loan (up to the time of repayment). Federal unsubsidized loans require the student to be responsible for all loan interest accrued.
– The Perkins Loan Program is offered to both undergraduate and graduate students demonstrating need at a low interest rate, with loans given at a first come, first served rate so apply early.
– The Federal Work Study Program provides part-time employment opportunities to undergraduate and graduate students who demonstrate financial need. The funds provide up to 75 percent of the student’s earnings, with the balance paid by the employer.
In addition to the federal government, students receive financial aid from state higher education agencies, colleges and universities, and outside scholarship sources.
State Aid & Worker Retraining Programs
To investigate educational grants available from your state, simply call or visit the Web site of your state’s department of education. Many states have special agencies or foundations that assist adult learners (i.e. California’s Capture the Dream, and Delaware Governor’s Education Grant for Unemployed Adults). States also may offer aid for specific majors, i.e. those pursuing education in nursing, teaching, or other fields, as well as reduced tuition for seniors.
If you have recently lost your job, or are a dislocated worker, ask about worker retraining programs. State retraining grants are provided through The U.S. Department of Labor one stop career centers and The Workforce Investment Act (WIA). To apply, contact a service representative in your area (located through one stop career centers).
Private foundations and other nonprofit organizations award grants for career retraining as well (for example, the Engelberg Foundation, Knight Foundation, Morgan Chase Foundation, Newhouse Foundation, Robbins Foundation, SBC Foundation, Schwartz Foundation, Wachovia Foundation, and the Walmart Foundation). Assitance may also be available from your employer with a tuition assistance program.
College and University Awards
Most colleges and universities offer awards to incoming or transferring students. Many of these grants can be substantial, and cover a large part of tuition. The biggest awards are often offered from major universities with large endowments, however smaller colleges can also provide generous financial aid, so research them when selecting a school. Awards can be academic, need, or talent based, and competition is high. As applications need to be submitted early in the year, the sooner you apply the better. Colleges also may offer special scholarships to adult students or single parents (as well as other school specific scholarship opportunities); check their financial aid office or Website for information (i.e., the Iowa State University Adult Student Scholarship Fund, Minnesota State University Re-entry Scholarships, and the Penn State Osher Foundation Re-entry Scholarship.)
Scholarships
A scholarship is a free grant awarded based on any number of criteria, including financial need, academic or athletic achievement, talent, community or public service, nationality or religion. Scholarships are often funded by educational institutions, large corporations, community and professional organizations or associations, and non-profit foundations. Most scholarships can be categorized as:
- Merit-based. Usually based on academic, artistic, athletic or other accomplishments, as well as volunteer activities and community service. Most merit-based scholarships award academic achievement or high GPA or standardized test scores. Artistic or talent awards are given to students excelling in art, creative writing, dance, music, and theatre. Athletic scholarships are awarded to students who exemplify exceptional exceptional skill in sports.
- Need-based. Generally based on the recipient’s financial profile. Students must complete the Free Application for Federal Student Aid (FAFSA) to be eligible for need-based federal awards such as the Pell Grant. State funding and private scholarships based on financial need also may require the completion of the FAFSA, which determines through federal methodology the student’s expected family contribution (EFC), or how much they will be expected to pay toward education. If the cost of attendance at the school is greater than the individual’s EFC, the student is considered to have financial need.
- Student-specific. These awards are based on student gender, race, religion, and many other criteria. Minority scholarships are the most common among these awards.
- Career – major specific. Colleges grant these scholarships to individuals who are pursuing a specific profession or career. The largest awards are often awarded to students who seek careers in areas of high demand such as nursing or teaching. Many schools grant future nurses full scholarships toward the cost of education, especially if the student seeks to work in high-need communities. Other awards are available for popular majors such as accounting, business, computer science, engineering, and finance.
- College-specific. These scholarships are awarded by individual colleges and universities to eligible applicants based on academic and personal achievement. The candidates are often awarded full or a reduced rate of tuition toward the cost of the university.
How Do I Search for Scholarships? Are There Grants for Adults Returning to School?
Searching and applying for scholarships requires effort and is not easy, but well worth your while. Several free scholarship searches are available on the Internet. Additional sources of private aid and grants can be found in the Financial Aid section. Included are sources for returning adults. It may be helpful to compose a personal profile of academic information, goals, interests, special talents, extracurricular activities, and achievements that could qualify you for awards.
The amount of scholarships you receive is often related to your major, so choose wisely. There are many state and federal grants, loan forgiveness programs, and scholarship awards given to students majoring in fields in high demand. For example, future educators can receive up to $4,000 from the federal government through the Teacher Education Assistance for College and Higher Education, or TEACH grant, and individual states offer financial aid to teachers and child care workers, fire and emergency medical technicians, students in the nursing and health care industry, public defenders, and those seeking training in other popular fields.
If you know your chosen major, check the college financial aid office to learn if there are grants or other awards available. Professional associations and organizations also offer aid in certain areas of study. Your school’s college alumni association may have aid available for students still in college, and you don’t need to be a member to apply.
What if I Received an Outside Scholarship? Should I Tell the School?
If you receive any financial aid or scholarship from other sources, you must report it to the financial aid office to adjust your financial aid package. Some school policies use the scholarships to reduce the self-help (student loans, federal work study) part of the package, while other schools replace grants instead of loans.
Employer Tuition Assistance
These programs are usually administered through your work’s human resources department or are part of an employees benefits package. In addition to reimbursing college tuition and the cost of books, they can provide the opportunity to integrate desirable educational credentials with future career plans. More, students who receive TAP assistance from an employer can can receive $5,250 of those benefits tax free each year (IRS Publication 970, Employer-Provided Educational Assistance).
Most Fortune 1000 companies offer some type of TAP benefit. About half of all major corporations provide 100 percent pre-pay, or reimbursement programs for college tuition. Other companies put a “cap”, or ceiling on the total amount for annual eligibility. However, those funds are still useful as they range from $5,000 to $8,000 (many college degrees can cost $20,000 – $40,000+). Usually, TAP programs also include the costs for books. For more information, see Will Your Employer Pay Your Tuition?
Do I Have to Re-apply for Financial Aid Every Year?
For continued eligibility, you must re-apply every academic year. After the first year, you will receive a FAFSA Renewal Application that includes information from the previous year’s FAFSA. You must also maintain satisfactory academic progress (i.e., complete a certain number of credits and earn a minimum GPA). Dependent upon your circumstances, you may be awarded more or less financial aid.
Do Grades or Grade Point Average (GPA) Help Determine Eligibility for Financial Aid?
While a student’s grades do not determine eligibility for financial aid, recipients need to meet and maintain satisfactory academic progress (SAP) toward their degree or credential objective (generally a “C” average or a 2.0 GPA). A high GPA and grade levels, however, are integral when competing for institutional or scholarship programs awarded on academic merit.
How Can I Work and Go Back to School?
If you need to stop working to go back to school, you need to ask for a professional judgment or special circumstances review to adjust your income from the last tax year to the estimated award year (see below, What if My Financial Circumstances Change?). If you want to continue working, check into employer tuition assistance through your company’s human resources department. Married couples may alternate their education, with one returning to school while the other remains employed, planning to return at another time. If a more flexible schedule is needed, you might consider online classes or other distance learning.
Are There Tuition Free Programs for Seniors?
Yes, if you are over 60 years old, many community colleges and state colleges and universities offer free or reduced tuition. (For an example, see Connecticut’s Board of Governors for Higher Education regarding tuition waivers at public colleges and universities for seniors). Classes may be offered only on a “as space available” basis, and there may be income limits depending on policy, while the student pays for textbooks and other fees. States that offer tuition free waivers at public colleges include Alabama, California, Connecticut, Kansas , Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, North Carolina, Ohio, Oklahoma, Rhode Island, South Dakota, Texas, Vermont, Virgina, and Washington D.C. Statewide tuition waiver policies may differ for each public college (community, state, or university) so you need to inquire at your state higher education agency or school of choice.
Is Financial Aid Available for a Second Bachelor’s Degree?
Many colleges restrict eligibility for their financial aid programs to the first bachelor’s (undergraduate) degree, while others will waive the restrictions if the student is seeking a second degree in preparation for a career change and/or the second degree program is different from the degree program previously completed.
You should still submit the FAFSA (Free Application for Federal Student Aid) because even though you may not be eligible for the Federal Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG), you may qualify for educational loans (i.e., the Federal Perkins or Stafford Loan program) and/or the Federal Work-Study Program. There is a cap/limit on the total amount you can borrow, so if you have previous loans, contact the financial aid office to determine eligibility options.
There are many scholarship and grant programs available for a second bachelor’s degree or job retraining (for example, state retraining grants are provided through The U.S. Department of Labor one stop career centers). Private foundations and other nonprofit organizations award grants for career retraining.
Educational tax credits may be of benefit (the American Opportunity Credit and the Lifetime Learning credit), as well as tuition and student loan interest deductions (see IRS Publication 970, Tax Benefits of Education.)
What if My Financial Circumstances Change?
Special circumstances that may adjust your estimated EFC and qualify you for more aid is the death or divorce from a spouse, loss of employment or other income, unusually high medical expenses, and expenses for child or other dependent care (i.e., care for a family member or parent). If you quit your job to return to school, the financial aid office may modify your application information to reflect current year finances.
Check with your financial aid administrator if any of these conditions apply to you and ask about a professional judgment review (also termed a financial aid appeal or special circumstances review.) Administrators have the authority to make adjustments on a individual case basis when needed by special circumstances.However, adequate proof will need to be provided to support any adjustments (i.e., a notice for unemployment insurance benefits or other documentation).
Can I Get Financial Aid for Non-Degree Programs or Courses?
Generally, courses for personal development or other programs that do not work toward a degree are not eligible for financial aid. You must be admitted into an accredited college or university degree program. You can attend full or part-time.
When Will I Receive My Financial Aid?
Colleges usually disburse financial aid awards at the beginning of each semester. Funds may first be used to pay your tuition and other expenses, and the balance remitted to you by check.
How Do I Compare Financial Aid Awards From Different Schools?
To determine the best award package, calculate the amount of aid that remains after paying a school’s tuition and fees instead of just considering the total aid amount. A good award package allows a generous portion of grant aid with a reasonable level of self-help which are renewable. You can also use the tools in our Financial Aid section.
When is Income Too High for Need-Based Aid?
Federal financial aid is determined on more than one basis, with no set income limit. Many factors may have a significant impact on your EFC (Expected Family Contribution), i.e., the number of family members enrolled in college. Financial need is not considered to receive a Federal unsubsidized Stafford Loan, and the American Opportunity credit is available to individual with incomes up to $90,000 (single filers) and $180,000 (married filing joint). You can get an estimate of your eligibility and EFC with a financial aid calculator.
Can I Get Financial Aid for Distance Education?
If taking distance or online classes as part of a program at a traditional, regionally accredited institution, you will be assisted by the Federal and state financial aid received for the full program. If it’s an online only program offered by a traditional institution, you may be eligible for federal assistance.
Until recently, the U.S. Department of Education, through the Distance Education Demonstration Program, was testing funding for distance education among carefully selected participating institutions. To prevent abuse and fraud in student aid programs, the Department initiated the 50 percent rule, which required colleges to provide at least half of their courses on campus instead of online to receive federal financial aid.
However, the 50 percent rule has been eliminated, and colleges and universities no longer need to follow this guideline to receive financial aid. They can continue to increase their offering of online programs, and when enrolled in a regionally accredited program you will be eligible for aid from all Federal Title IV programs (including the Federal Pell Grant, the Federal Supplemental Educational Opportunity Grant (FSEOG), and the Federal Stafford Loan Program.)
Always ask about your financial aid options before you sign up for distance education programs. For additional questions about distance education, please see the Online Education Gets Accolades and How Do Employers View Online Degrees?
What if I Receive Financial Aid, Then Withdraw from Classes?
Before enrolling try to get an estimate on how much financial aid you will receive. There are many resources on the Internet to help you determine your EFC (Expected Family Contribution) or input your FAFSA (Free Application for Federal Student Aid) information to get an estimate of your financial aid award.
Also be sure to ask about the college’s refund procedures. Some adult students enroll and then find that they are not able to balance college with career and family responsibilities. Some schools may not refund tuition and it may be difficult getting out of student loans. Consult your financial aid office before withdrawing from classes. You may also have to repay a percentage of grant aid received for the term in which you are withdrawing. Most financial aid programs require an enrollment of at least six credits. Withdrawals also can appear on your college transcript.
Additional questions to ask are the terms of the programs in the financial aid award package, and the requirements for the renewal of the aid.
Can I Attend Part-time, or Do I Have to Go Full-time to Get Financial Aid?
There is no minimum course load; you can register for as many or as few classes as you like. Part-time students are also eligible for financial aid (however, the amount awarded depends upon the number of units being taken.)
How Do I Apply?
Your first step in applying for aid is to complete the Free Application for Federal Student Aid (FAFSA). Submit the FAFSA form as soon as possible on or after January 1. (Don’t wait until you complete your tax return, but use estimates of income.) Any errors can be corrected later, and most states need to receive the FAFSA by March 1 to qualify for state aid.
The application can’t be submitted before January 1, because the need analysis methodology for financial aid uses the income and tax information from the most recent tax year (the base year) to judge eligibility for need-based financial aid for the upcoming academic year (the award year). Since the base year ends December 31, a a financial aid application can’t be submitted until January 1.
You can complete a paper application of the FAFSA or file electronically through the Internet. You can a get the paper FAFSA from the financial aid office at a local college, your local public library, or by calling 1-800-4-FED-AID. Filing on the Internet is the quickest way to get the FAFSA processed, and provides a helpful check for errors in completion. You will need to provide information regarding household size, income and assets. Follow directions carefully (if corrections are needed it can cause delays.)
If you choose the paper FAFSA, be sure to make copies and obtain a dated receipt for proof of mailing. If you need help, you do not need to pay someone to help you complete the FAFSA. The online FAFSA will guide you through each step of the application process. Help also be available from your school (contact your financial aid administrator), or you can call the Federal Student Aid Information Center at 1-(800)4-FED-AID (1-800-433-3243).
Be sure to find out if the colleges you select use the CSS (College Scholarship Services) Financial Aid PROFILE in addition to the FAFSA. By completing one online form, you can apply for non-federal financial aid from nearly 400 colleges and scholarship programs.
For additional information on obtaining and completing the FAFSA, as well as helpful calculators and worksheets, visit our Financial Aid section.
What Happens After I File the FAFSA (the Free Application for Federal Student Aid)?
The FAFSA will be processed by the U. S. Department of Education within approximately four weeks, and a Student Aid Report (SAR) will be mailed to you. This same information is also sent to the colleges you listed on the FAFSA. The SAR will contain the information from your application, and if there are no errors or questions, will provide your Expected Family Contribution (EFC), or what you will be expected to pay toward your education. You can estimate your EFC by using the many free calculators available on the Internet.
