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Student loans and grants explained

Looking for college cash? Here’s the scoop on what’s available.

Federal Pell Grant
A Federal Pell Grant is a need-based award for undergraduate students to help meet the cost of higher education. It does not require repayment. Aid from additional sources, such as loans and work-study jobs, may also be obtained by students with significant need who receive Pell Grants.

Federal Supplemental Educational Opportunity Grant (FSEOG)
The FSEOG provides additional assistance to undergraduate students with exceptional financial need. Funds generally are given to students with the most need.

How much are the grants?
The maximum grant is $4,000. The amount you may receive will be based on your financial need, how much FSEOG money your college obtains and how much aid you are awarded from other sources.

Work-Study
This program provides jobs for students who need financial aid.

What is the pay?
Your earnings will not be less than the federal minimum wage. What you are paid may vary with the nature of your job and the level of skill the job requires. The maximum number of hours you can work will be determined by your school according to your financial need.

Will my work-study job be located on campus?
It can be on or off campus, but a work-study job must always be for a public or private nonprofit organization.

Perkins Loan
This is a low-interest loan to help you pay for your education after high school.

How much can I borrow?

Your award is based on your financial need, the Perkins Loan money available at your school and how much aid is awarded to you from other sources. Loans for undergraduates are available for up to $4,000 per year. You must start repaying this loan nine months after you graduate, leave school or drop below half-time status.

Federal Stafford Loan
Stafford Loans come in two types. The subsidized Stafford Loan is need-based, and the interest is paid by the federal government as long as you attend school at least half time. The government also pays the interest on a subsidized loan for the six-month grace period after you graduate and for the length of any deferment.

The unsubsidized Stafford Loan is not need-based, and the government does not pay any of the interest.

The interest rate on both Stafford loans is variable but has a cap of 8.25 percent. Repayment usually begins six months after you leave school or stop attending at least half time.

Federal PLUS (Parent Loans for Dependent Undergraduate Students)
Parents of dependent undergraduate students may use a federal PLUS loan. This loan is not based on financial need. However, a good credit history is required. The interest rate is variable and has a cap of 9 percent.

How much can they borrow?
A federal PLUS loan may be used to cover the entire cost of attendance less any other financial aid the student receives. Repayment begins within 60 days after the loan has been fully dispersed.

This article was provided by Fifth Third Bank, on the Web at www.53.com.

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