As the cost of postsecondary education goes up, you’ll likely need to apply for financial aid to help you pay for college, such as student loans. Financial analysts recommend all college-bound students use the Free Application for Federal Student Aid (FAFSA) to figure out how much financial aid they can get and for which aid they qualify. In many cases, students qualify for more financial aid than expected.
The FAFSA uses information about your (and your family’s) assets to create a number called the expected family contribution (EFC). Then, this number is subtracted from the cost of attendance (COA) for each school to which you applied and were accepted. The difference creates your FAFSA score, which schools use to offer need-based financial assistance from both grant programs and student loans.
The federal government offers several forms of financial aid, which schools disburse in different amounts. You can use the annual federal guidelines to determine the maximum amount of aid for which you qualify.
Federal Sources of Financial Aid per Year
Federal financial aid programs are provided through the U.S. Department of Education (DOE). Congress votes on how much money each program receives every year, and what the minimum and maximum amounts of financial support can be.
- Pell Grant: This is a need-based award that is, essentially, “free money,” so you do not have to pay it back. For the 2019–20 academic year, individual students can receive a maximum of $6,195.
Pell Grants are disbursed per semester if your school uses the semester system. For example, if you receive $2,000 total in Pell Grants for the year, you will get $1,000 per semester.
The amount you receive is adjustable based on your specific needs, so you may receive less than this amount. As long as you qualify, you can take out 100% of your award every year for six years, totaling 600% of the Pell Grant amount you qualify for. Thanks to Year-Round Pell, you can also take out another 50% to pay for a summer semester, so you could qualify to take out 150% of your award for one year.
- FSEOG: Federal money goes to participating colleges and universities for the Federal Supplementary Education Opportunity Grant (FSEOG), which can give you between $100 and $4,000 per year, depending on your financial need. Not all schools participate in this program.
Like the Pell Grant, this award is split per semester. For example, if you receive $300 for the year, you will get $150 per semester.
- TEACH grant: The Teacher Education Assistance for College and Higher Education (TEACH) grant provides financial aid to needy students who specifically want to become educators when they graduate from college. There are different amounts awarded to different education levels.
- Undergraduates can receive up to $16,000 toward their degree. This is $4,000 per year or $2,000 per semester.
- Graduate students can receive up to $8,000 to continue their education. For a two-year master’s degree, this is $4,000 per year or $2,000 per semester.
This grant has specific rules about working in certain fields and following certain classwork paths to become a certified teacher upon graduation. If you do not meet these standards, your grant will be revoked, and you may have to pay some or all of it back.
- Student loans: There are several loan programs provided by the federal government, including:
- Direct subsidized loans
- Direct unsubsidized loans
- Direct PLUS loans, both for graduate students and parents with dependent undergraduates
- Direct consolidation loans
Loan amounts vary based on several factors, like:
- Whether you are a dependent or independent undergraduate student
- Whether you are a graduate or professional student
- Whether you have defaulted on student loan payments in the past
- Whether you have a significant financial need, qualifying you for subsidized loans
How much you can take out also depends on your academic year in school. Here are the current amounts set by the federal government:
- Undergraduate first year: Dependent undergraduates (18 to 24 years old, typically) can take out $5,500 total in student loans, of which $3,500 can be subsidized loans. Independent undergraduates can take out $9,500, with $3,500 of that total in subsidized loans. This is $2,750 per semester or $4,750 per semester, with $1,750 in subsidized loans.
- Undergraduate second year: Dependent undergrads can take out $6,500 total ($3,250 per semester), of which $4,500 ($2,250 per semester) can be subsidized. Independent undergrads can take out $10,500 ($5,250 per semester), with $4,500 of that being subsidized loans.
- Undergraduate third year, fourth year, and remaining years: Dependent students can take out $7,500 ($3,750 per semester), of which $5,500 ($2,750 per semester) can be subsidized loans. Independent undergraduates can take out $12,500 ($6,250 per semester), with $5,500 of that being subsidized loans.
- Graduate/professional first year: Graduate and professional, trade, or continuing education students can take out up to $20,500 ($10,250 per semester), all in unsubsidized loans.
- Graduate/professional second year: Students can take out another $20,500 in their second year, all in unsubsidized loans.
- Graduate/professional further years: If a graduate or professional student continues for another year to obtain their degree, they can take out another $20,500 in unsubsidized loans.
There are lifetime student loan maximums. Dependent undergraduate students who attend school to receive a bachelor’s degree can take on a maximum of $31,000 in student loan debt, with $23,000 of that amount in subsidized loans.
Independent undergraduates can take out $57,500 total, of which $23,000 can be in subsidized loans.
Graduate and professional students can take out $138,500 total in student loans, of which $65,000 total can be in undergraduate loans.
You may also qualify for the federal work-study program, which helps you find a job, either on or off-campus, and pays you upfront so you can apply the income to your education costs. The amount you receive through this program varies by school.
How to Get the Most Financial Aid per Semester
Federal financial aid is calculated a little differently by each school, but they all use your FAFSA number to determine your specific financial need. You should always provide accurate and truthful information on your FAFSA. Lying about income or moving money around can cause you to lose your award and be barred from receiving federal financial aid for the rest of your education.
There are several ways to get enough financial aid to cover the cost of your post-secondary education, either from the federal government, your state government, and/or your school.
- Find merit-based scholarships to apply for, both through your college and from nonprofits or for-profits.
- Complete your FAFSA information early since some money is first-come, first served.
- Research other sources of income, like private student loans.
Need-based aid and federal student loans are the major sources of monetary support for students all over the United States, but they are not the only options to help you get through school. You could qualify for state-based grants and scholarships, which also use the FAFSA to determine your eligibility. Hobbies, good grades, and many other skills can help you qualify for merit-based scholarships through your college or from businesses outside your institution.
Many students also benefit from taking out private student loans. Once you have figured out how much money a college or university can offer you, you can take out private student loans from a bank, credit card company, or other source to help you pay for your schooling and cost of living.