What is financial aid?
- Financial aid is money given to students and their families to help them pay for college. It comes in two basic forms: money you are given and don’t have to pay back (i.e. grants and scholarships) and money you borrow and have to pay back (i.e. loans). Financial aid can come from many places, including governments, colleges and universities, companies and nonprofit organizations.
What are the most common sources of financial aid?
- Federal aid
- Federal Pell grants: These are grants given to students in financial need and in good academic standing. Students do not have to pay back the grants, and students may renew the grants as long as they remain eligible for them.
- Federal work-study jobs: These are on- or off-campus jobs at which students work and earn money to help pay for their education.
- Federal Perkins loans: These are low-interest loans the federal government offers to students in financial need. The government pays the interest on these loans while students are in school, and students must start to repay the loans nine months after graduating or leaving school.
- Federal unsubsidized direct loans: These are loans the federal government offers to students regardless of financial need. The government does not pay the interest on these loans, and students must start to repay the loans six months after graduating or leaving school.
- Federal subsidized direct loans: These are loans the federal government offers to students in financial need. The government pays the interest on these loans while students are in school, and students must start to repay the loans six months after graduating or leaving school.
- State aid
- Michigan Alternative Student Loan Program (MI-LOAN): These are loans the state offers to students and their families with good credit.
- Tuition Incentive Program (TIP): This is an award the state gives to eligible students to pay tuition and fees for the first two years of school at participating public and private institutions in Michigan. Students must have been covered by Medicaid for 24 months out of a 36-consecutive-month period to receive the award.
- Michigan Indian Tuition Waiver (MITW): This is an award the state gives to eligible students to offset tuition at public institutions in Michigan. Students must be ¼ or more Native American and be a member of a federally recognized tribe to be eligible for the award.
- Michigan Competitive Scholarship: This is an award the state gives to students with merit and in financial need based on their ACT scores to offset tuition at public and private institutions in Michigan. Students must take the ACT by December of their senior year of high school to be considered for the award.
- Scholarships: These come from a variety of sources—colleges and universities, professional organizations, companies, nonprofit groups, religious groups and anonymous donors. Some are offered to students in financial need. Some are offered to students with specific interests or career aspirations. Some are offered to students with specific traits, such as being a minority, being the member of a particular religion or group or being the first person in their family to go to college. Students do not have to pay back these awards, but they often must fill out an application and complete other requirements, such as an essay, to be considered for these awards. Check out the 2010-11 Community Scholarship Initiative scholarship listing for a comprehensive list of scholarships for high-school seniors and undergraduates.
How does a student get financial aid?
- Students and their parents should fill out the Free Application for Federal Student Aid (FAFSA) after Jan. 1 of their senior year of high school. The federal government uses the information from this form to determine how much money families will be expected to contribute toward college expenses. Colleges and universities also use the information to create ‘financial aid packages’ to help you pay the rest of the tuition and fees. Financial aid packages typically include a combination of loans, work-study, grants and scholarships. Apply for a PIN number and check out the government’s checklist of documents you’ll need before you get started.
- Students should find out if they are eligible for the Tuition Incentive Program (TIP). They should talk to their high-school counselors or call 1-888-447-2687 to find out of they are eligible and then, if they are eligible, fill out the application. Check out the state’s TIP fact sheet or Muskegon Opportunity’s TIP pamphlet in English or Spanish for more information.
- Students should search for scholarships either by looking through information in their counselor’s office or by using credible Web search sites, such as the Michigan College Access Portal, FinAid! or fastweb. They also should apply to the Community Foundation for Muskegon County for one of hundreds of scholarships available locally. Students then should fill out applications and fulfill the requirements of any scholarships they can get. (Black or Latino students who are enrolled in a Michigan college or university might want to consider applying to the Imagine Fund for one of three scholarship programs available.)
- Students should beware of any service that asks them to pay to fill out the FAFSA or to search for scholarships.