Financial aid
Encyclopedia
Student financial aid in the United States is funding intended to help students pay education expenses including tuition
and fees, room and board
, books and supplies, etc. for education at a college
, university
, or private school
. General governmental funding for public education
is not called financial aid, which refers to awards to specific individual students. Certain governments, e.g., Nordic countries, provide student benefit
. A scholarship
is sometimes used as a synonym for a financial aid award, although grants and student loans are also components of financial aid packages from students' intended colleges.
The United States government and all U.S. state governments provide merit- and need-based student aid including grants, work-study, and loans. As of 2010 there are nine federal and 605 state student aid programs and many of the nearly 7,000 post-secondary institutions provide merit aid. Major federal grants include the Pell Grant
s, Federal SEOG Grants, Federal Work-Study Program
, federal Stafford Loan
s (in subsidized and unsubsidized forms), state student incentive grants and Federal PLUS Loan
s. Federal Perkins Loans are made by participating schools per annual appropriations from the U.S. Department of Education. Federal Stafford Loans and Federal PLUS Loans are made by the U.S. Department of Education. As of April 2010, Congress voted to eliminate the Federal Family Education Loan Program (FFELP) which had allowed private lenders to make student loans guaranteed by the federal government.
State governments also typically provide some types of need- and non-need-based aid, consisting of grants, loans, work-study programs, tuition waivers, and scholarships. Individual colleges and universities may provide grants and need- and merit-based scholarships. Students requiring financial aid beyond what is offered by their institution may consider a private (alternative) education loan, available from most large lending institutions. Typically, education loans obtained through the federal government have lower interest rates than private education loans. Institutions may also offer their own student financial assistance, in the form of need- or merit-based aid, as well as endowed scholarships (with varying need and/or merit-based criteria). Some institutions may only require the FAFSA; some may also require a need-based analysis document, such as the CSS/Profile, to apply for such funds to apply a more stringent need analysis for the rationalization of institutional funds.
Students are expected to received about $168 billion to help fund their college educations during the 2009–2010 academic year. Student aid is awarded as grants and scholarships, low-interest, government-subsidized loans, and education tax benefits, and nearly everyone is eligible for some of it.
In the U.S. to apply for most student aid, a student must first complete the Free Application for Federal Student Aid (FAFSA) by submitting the application electronically to the U.S. Department of Education's using the Department of Education's website, mailing a paper form or, as the law also authorizes, by getting professional assistance from a fee-based preparer. A student's aid application (FAFSA) may be submitted to the Department of Education as early as January 1 before the summer or fall when the student enrolls and must be re-submitted with updated income, asset, and dependency information each year. The Department of Education processes each request and tells a student how much the federal government expects their family to contribute toward paying for college — the Expected Family Contribution
(EFC). However, an EFC is not necessarily how much a student will pay for college — aid can reduce an individual's cost. Then, the post-secondary institutions to which a student applies, determine how much federal, state, and college-specific aid a student will receive. An individual's student aid award is likely to vary from institution to institution.
Most student aid is federal aid — people's tax dollars working for students. Students received more than $109.7 billion in federal aid during the 2008–2009 academic year. Most federal student aid is awarded as grants and low-interest loans. Grant programs include the Pell Grant, and the TEACH Grant. Grants are "free money" — they don't have to be repaid as long as a student meets their obligations.
The federal loan programs include the Federal Direct Subsidized and Federal Direct Unsubsidized Loans, the Perkins Loan, and the Parent PLUS Loan and Graduate PLUS. Unlike with federal grants, a borrower must repay the loan amount and any interest. Federal loans offer lower interest rates and better repayment terms than private student loans from banks and other financial institutions.
Students (or their parents/guardians) can take advantage of education tax benefits to ease the financial burden of attending college. Education tax benefits added up to more than $6.8 billion in 2008–2009. Education benefit programs include the American Opportunity Tax Credit and the Lifetime Learning Tax Credit. These programs reduce a student's (or his or her parents'/guardians') taxable income while the student attends college.
In addition to federal student aid, students may be eligible for state-based aid. States provide students more than $10.2 billion of aid every year. Each state aid program is different. Usually, a student must reside and attend college in the state providing his/her aid. In some cases, a student can spend state aid on colleges in neighboring states.
Most aid is provided on a first-come, first-served basis so it is essential that students prepare and submit their aid applications in as close to January 1 as possible. The aid "window" stays open 18 months in case student's financial circumstances change and require adjustment to their aid application.
The application — approximately 130 questions each year — considers household size, income, assets, the number in college and other financial factors to determine a student's aid eligibility and an expected family contribution
(EFC). Institutions use EFC to guide their decision about how much need-based financial aid to award a student. The EFC also takes into consideration any participation in college savings or pre-paid tuition plans. In the past, financial aid officers weighed pre-paid tuition plans more heavily than other 529 college savings plans when determining a student’s eligibility. In February 2006, Congress passed legislation to treat both types evenly.
Athletic scholarships are a form of merit aid that take athletic talent into account.
While providing financial information to the government is a reasonable expectation to calculate a student’s financial need, it does not necessarily follow that colleges should have access to this information. Providing that information to schools may be problematic because schools learn about students’ other sources of funding and may adjust their financial aid packages accordingly. There is an asymmetric information problem since schools have full knowledge of their customers' ability to pay while students and their families have little information about costs that colleges face to provide their services. That is, when planning for the next academic year, a school will know its current and projected costs as well as each student’s ability to pay after receiving state and federal grants. According to the Center for College Affordability and Productivity (CCAP), “If the federal or state authorities increase financial support per student, the institution has the opportunity to capture part or all of that increased ability to pay by reducing institutional grants and/or raising their charges for tuition, fees, room, or board.” Importantly, it also notes that “the exception to this general pattern is modest aid targeted at only low-income students, like the Pell grant.” The center uses data about net proceeds (tuition plus room, board and other fees) as a percentage of median income to show that financial aid practices have not been effective in decreasing prices in an effort to increase access. Net proceeds at public four-year institutions rose from 15% to 20% of median income from 1987 to 2008. In that same time, productivity has declined in the form of lighter teaching loads for professors and increased expenditures on administrative staff.
As defined in The Higher Education Opportunity Act of 2008, the net price calculator’s purpose is:
The law defines estimated net price as the difference between an institution’s average total Price of Attendance (the sum of tuition and fees, room and board, books and supplies, and other expenses including personal expenses and transportation for a first-time, full-time undergraduate students who receive aid) and the institution’s median need- and merit-based grant aid awarded.
Elise Miller, program director for the U.S. Department of Education's Integrated Postsecondary Education Data System (IPEDS) stated the idea behind the requirement: "We just want to break down the myth of sticker price and get beyond it. This is to give students some indication that they will not [necessarily] be paying that full price."
The template was developed based on the suggestions of the an IPEDS’ Technical Review Panel (TRP), which met on January 27-28, 2009, and included 58 individuals representing federal and state governments, post-secondary institutions from all sectors, association representatives, and template contractors. Mary Sapp, Ph.D., assistant vice president for planning and institutional research at the University of Miami, served as the panel’s chair. She described the mandate’s goal as “to provide prospective and current undergraduate students with some insight into the difference between an institution’s sticker price and the price they will end up paying.”
To meet the requirement, post-secondary institutions may choose between a basic template developed by the U.S. Department of Education or an alternative net price calculator that offers at least the minimum elements the law requires.
became the first university in the United States to eliminate loans from its financial aid packages. Since then, many other schools have followed in eliminating some or all loans from their financial aid programs. Many of these programs are aimed at students whose parents earn less than a certain income — the figures vary by college or university. These new initiatives were designed to attract more students and applicants from lower socioeconomic backgrounds, reduce student debt loads, and provide the offering institutions with an advantage over their rivals in attracting commitments from accepted students. This is an attractive way for students to relieve the amount of debt they are in after college.
As of March 25, 2008, the list of colleges and universities offering such no-loan financial aid packages includes the following:
, for students attending a university, although proposed policies to change such subsidies have engendered considerable debate in places, such as Canada, the United Kingdom, Germany, the Netherlands and Scandinavian countries. The heavy reliance on private subsidies, as in the United States, is not as widespread, although this may be changing.
In Germany, the main source of financial aid is provided by the Bundesausbildungsförderungsgesetz
, colloquially known as BAFöG.
and may be illegal under antritrust laws.
Tuition
Tuition payments, known primarily as tuition in American English and as tuition fees in British English, Canadian English, Australian English, New Zealand English and Indian English, refers to a fee charged for educational instruction during higher education.Tuition payments are charged by...
and fees, room and board
Room and board
Room and board describes a situation where, in exchange for money, labor or other considerations, a person is provided with a place to live as well as meals on a comprehensive basis...
, books and supplies, etc. for education at a college
College
A college is an educational institution or a constituent part of an educational institution. Usage varies in English-speaking nations...
, university
University
A university is an institution of higher education and research, which grants academic degrees in a variety of subjects. A university is an organisation that provides both undergraduate education and postgraduate education...
, or private school
Private school
Private schools, also known as independent schools or nonstate schools, are not administered by local, state or national governments; thus, they retain the right to select their students and are funded in whole or in part by charging their students' tuition, rather than relying on mandatory...
. General governmental funding for public education
Public education
State schools, also known in the United States and Canada as public schools,In much of the Commonwealth, including Australia, New Zealand, South Africa, and the United Kingdom, the terms 'public education', 'public school' and 'independent school' are used for private schools, that is, schools...
is not called financial aid, which refers to awards to specific individual students. Certain governments, e.g., Nordic countries, provide student benefit
Student benefit
Student benefits are transfer payments that are given to students for purposes of full-time study, and require progress in studies, or obtaining academic credits. Student benefits are found in countries where education is free of charge, e.g. Finland and Sweden...
. A scholarship
Scholarship
A scholarship is an award of financial aid for a student to further education. Scholarships are awarded on various criteria usually reflecting the values and purposes of the donor or founder of the award.-Types:...
is sometimes used as a synonym for a financial aid award, although grants and student loans are also components of financial aid packages from students' intended colleges.
The United States government and all U.S. state governments provide merit- and need-based student aid including grants, work-study, and loans. As of 2010 there are nine federal and 605 state student aid programs and many of the nearly 7,000 post-secondary institutions provide merit aid. Major federal grants include the Pell Grant
Pell Grant
A Pell Grant is money the federal government provides for students who need it to pay for college. Federal Pell Grants are limited to students with financial need, who have not earned their first bachelor's degree or who are not enrolled in certain post-baccalaureate programs, through participating...
s, Federal SEOG Grants, Federal Work-Study Program
Federal Work-Study Program
The Federal Work Study program is a federally-funded program in the United States that assists students with the costs of post-secondary education. The Federal Work Study Program helps students earn financial funding through a part-time work program...
, federal Stafford Loan
Stafford loan
A Stafford Loan is a student loan offered to eligible students enrolled in accredited American institutions of higher education to help finance their education...
s (in subsidized and unsubsidized forms), state student incentive grants and Federal PLUS Loan
PLUS loan
A PLUS Loan is a student loan offered to parents of students enrolled at least half time in eligible programs at participating and eligible post-secondary institutions or graduate and professional students at participating and eligible postsecondary institutions.-Similarities with Stafford and...
s. Federal Perkins Loans are made by participating schools per annual appropriations from the U.S. Department of Education. Federal Stafford Loans and Federal PLUS Loans are made by the U.S. Department of Education. As of April 2010, Congress voted to eliminate the Federal Family Education Loan Program (FFELP) which had allowed private lenders to make student loans guaranteed by the federal government.
State governments also typically provide some types of need- and non-need-based aid, consisting of grants, loans, work-study programs, tuition waivers, and scholarships. Individual colleges and universities may provide grants and need- and merit-based scholarships. Students requiring financial aid beyond what is offered by their institution may consider a private (alternative) education loan, available from most large lending institutions. Typically, education loans obtained through the federal government have lower interest rates than private education loans. Institutions may also offer their own student financial assistance, in the form of need- or merit-based aid, as well as endowed scholarships (with varying need and/or merit-based criteria). Some institutions may only require the FAFSA; some may also require a need-based analysis document, such as the CSS/Profile, to apply for such funds to apply a more stringent need analysis for the rationalization of institutional funds.
Types of financial aid and application process
Financial aid may be classified into two types based on the criteria through which the financial aid is awarded: merit-based or need-based.Students are expected to received about $168 billion to help fund their college educations during the 2009–2010 academic year. Student aid is awarded as grants and scholarships, low-interest, government-subsidized loans, and education tax benefits, and nearly everyone is eligible for some of it.
In the U.S. to apply for most student aid, a student must first complete the Free Application for Federal Student Aid (FAFSA) by submitting the application electronically to the U.S. Department of Education's using the Department of Education's website, mailing a paper form or, as the law also authorizes, by getting professional assistance from a fee-based preparer. A student's aid application (FAFSA) may be submitted to the Department of Education as early as January 1 before the summer or fall when the student enrolls and must be re-submitted with updated income, asset, and dependency information each year. The Department of Education processes each request and tells a student how much the federal government expects their family to contribute toward paying for college — the Expected Family Contribution
Expected Family Contribution
Expected Family Contribution is a term used in the college financial aid process in the United States. It is an estimate of the parents' and/or student's ability to contribute to post-secondary education expenses. Generally speaking, the lower the EFC the higher the financial aid award from the...
(EFC). However, an EFC is not necessarily how much a student will pay for college — aid can reduce an individual's cost. Then, the post-secondary institutions to which a student applies, determine how much federal, state, and college-specific aid a student will receive. An individual's student aid award is likely to vary from institution to institution.
Most student aid is federal aid — people's tax dollars working for students. Students received more than $109.7 billion in federal aid during the 2008–2009 academic year. Most federal student aid is awarded as grants and low-interest loans. Grant programs include the Pell Grant, and the TEACH Grant. Grants are "free money" — they don't have to be repaid as long as a student meets their obligations.
The federal loan programs include the Federal Direct Subsidized and Federal Direct Unsubsidized Loans, the Perkins Loan, and the Parent PLUS Loan and Graduate PLUS. Unlike with federal grants, a borrower must repay the loan amount and any interest. Federal loans offer lower interest rates and better repayment terms than private student loans from banks and other financial institutions.
Students (or their parents/guardians) can take advantage of education tax benefits to ease the financial burden of attending college. Education tax benefits added up to more than $6.8 billion in 2008–2009. Education benefit programs include the American Opportunity Tax Credit and the Lifetime Learning Tax Credit. These programs reduce a student's (or his or her parents'/guardians') taxable income while the student attends college.
In addition to federal student aid, students may be eligible for state-based aid. States provide students more than $10.2 billion of aid every year. Each state aid program is different. Usually, a student must reside and attend college in the state providing his/her aid. In some cases, a student can spend state aid on colleges in neighboring states.
Most aid is provided on a first-come, first-served basis so it is essential that students prepare and submit their aid applications in as close to January 1 as possible. The aid "window" stays open 18 months in case student's financial circumstances change and require adjustment to their aid application.
The application — approximately 130 questions each year — considers household size, income, assets, the number in college and other financial factors to determine a student's aid eligibility and an expected family contribution
Expected Family Contribution
Expected Family Contribution is a term used in the college financial aid process in the United States. It is an estimate of the parents' and/or student's ability to contribute to post-secondary education expenses. Generally speaking, the lower the EFC the higher the financial aid award from the...
(EFC). Institutions use EFC to guide their decision about how much need-based financial aid to award a student. The EFC also takes into consideration any participation in college savings or pre-paid tuition plans. In the past, financial aid officers weighed pre-paid tuition plans more heavily than other 529 college savings plans when determining a student’s eligibility. In February 2006, Congress passed legislation to treat both types evenly.
Merit-based aid
Merit-based grants or scholarships include scholarships awarded by the college or university and those awarded by outside organizations. Merit-based scholarships are typically awarded for outstanding academic achievements and maximum SAT or ACT scores, although some merit scholarships can be awarded for special talents, leadership potential and other personal characteristics. Scholarships may be given because of group affiliation (such as YMCA, Boys Club, etc.). Merit scholarships are sometimes awarded without regard for the financial need of the applicant. At many colleges, every admitted student is automatically considered for merit scholarships. At other institutions, a separate application process is required. Scholarships do not need to be repaid as long as all requirements are met.Athletic scholarships are a form of merit aid that take athletic talent into account.
Need-based aid
Need-based financial aid is awarded on the basis of the financial need of the student. The Free Application for Federal Student Aid application (FAFSA) is generally used for determining federal, state, and institutional need-based aid eligibility. At private institutions, a supplemental application may be necessary for institutional need-based aid.While providing financial information to the government is a reasonable expectation to calculate a student’s financial need, it does not necessarily follow that colleges should have access to this information. Providing that information to schools may be problematic because schools learn about students’ other sources of funding and may adjust their financial aid packages accordingly. There is an asymmetric information problem since schools have full knowledge of their customers' ability to pay while students and their families have little information about costs that colleges face to provide their services. That is, when planning for the next academic year, a school will know its current and projected costs as well as each student’s ability to pay after receiving state and federal grants. According to the Center for College Affordability and Productivity (CCAP), “If the federal or state authorities increase financial support per student, the institution has the opportunity to capture part or all of that increased ability to pay by reducing institutional grants and/or raising their charges for tuition, fees, room, or board.” Importantly, it also notes that “the exception to this general pattern is modest aid targeted at only low-income students, like the Pell grant.” The center uses data about net proceeds (tuition plus room, board and other fees) as a percentage of median income to show that financial aid practices have not been effective in decreasing prices in an effort to increase access. Net proceeds at public four-year institutions rose from 15% to 20% of median income from 1987 to 2008. In that same time, productivity has declined in the form of lighter teaching loads for professors and increased expenditures on administrative staff.
College cost net price calculators
Post-secondary institutions post a Cost of Attendance or Price of Attendance, also known as a "sticker price." However, that price is not how much an institution will cost an individual student. To make higher education costs more transparent before a student actually applies to college, federal law requires all post-secondary institutions receiving Title IV funds (federal funds for student aid) to post net price calculators on their websites by October 29, 2011.As defined in The Higher Education Opportunity Act of 2008, the net price calculator’s purpose is:
“…to help current and prospective students, families, and other consumers estimate the individual net price of an institution of higher education for a student. The [net price] calculator shall be developed in a manner that enables current and prospective students, families, and consumers to determine an estimate of a current or prospective student’s individual net price at a particular institution.”
The law defines estimated net price as the difference between an institution’s average total Price of Attendance (the sum of tuition and fees, room and board, books and supplies, and other expenses including personal expenses and transportation for a first-time, full-time undergraduate students who receive aid) and the institution’s median need- and merit-based grant aid awarded.
Elise Miller, program director for the U.S. Department of Education's Integrated Postsecondary Education Data System (IPEDS) stated the idea behind the requirement: "We just want to break down the myth of sticker price and get beyond it. This is to give students some indication that they will not [necessarily] be paying that full price."
The template was developed based on the suggestions of the an IPEDS’ Technical Review Panel (TRP), which met on January 27-28, 2009, and included 58 individuals representing federal and state governments, post-secondary institutions from all sectors, association representatives, and template contractors. Mary Sapp, Ph.D., assistant vice president for planning and institutional research at the University of Miami, served as the panel’s chair. She described the mandate’s goal as “to provide prospective and current undergraduate students with some insight into the difference between an institution’s sticker price and the price they will end up paying.”
To meet the requirement, post-secondary institutions may choose between a basic template developed by the U.S. Department of Education or an alternative net price calculator that offers at least the minimum elements the law requires.
No-loan financial aid
In 2001, Princeton UniversityPrinceton University
Princeton University is a private research university located in Princeton, New Jersey, United States. The school is one of the eight universities of the Ivy League, and is one of the nine Colonial Colleges founded before the American Revolution....
became the first university in the United States to eliminate loans from its financial aid packages. Since then, many other schools have followed in eliminating some or all loans from their financial aid programs. Many of these programs are aimed at students whose parents earn less than a certain income — the figures vary by college or university. These new initiatives were designed to attract more students and applicants from lower socioeconomic backgrounds, reduce student debt loads, and provide the offering institutions with an advantage over their rivals in attracting commitments from accepted students. This is an attractive way for students to relieve the amount of debt they are in after college.
As of March 25, 2008, the list of colleges and universities offering such no-loan financial aid packages includes the following:
| Post-secondary institution | No-loan financial aid for families meeting these eligibility requirements: |
|---|---|
| Amherst College Amherst College Amherst College is a private liberal arts college located in Amherst, Massachusetts, United States. Amherst is an exclusively undergraduate four-year institution and enrolled 1,744 students in the fall of 2009... |
No max income |
| Arizona State University Arizona State University Arizona State University is a public research university located in the Phoenix Metropolitan Area of the State of Arizona... |
Arizona Arizona Arizona ; is a state located in the southwestern region of the United States. It is also part of the western United States and the mountain west. The capital and largest city is Phoenix... residents with family income of up to $60,000 |
| Bowdoin College Bowdoin College Bowdoin College , founded in 1794, is an elite private liberal arts college located in the coastal Maine town of Brunswick, Maine. As of 2011, U.S. News and World Report ranks Bowdoin 6th among liberal arts colleges in the United States. At times, it was ranked as high as 4th in the country. It is... |
No max income |
| Brown University Brown University Brown University is a private, Ivy League university located in Providence, Rhode Island, United States. Founded in 1764 prior to American independence from the British Empire as the College in the English Colony of Rhode Island and Providence Plantations early in the reign of King George III ,... |
Family income below $100,000 |
| Caltech | Annual income below $60,000 |
| Claremont McKenna College Claremont McKenna College Claremont McKenna College is a private, coeducational liberal arts college and a member of the Claremont Colleges located in Claremont, California. The campus is located east of Downtown Los Angeles... |
No max income |
| Colby College Colby College Colby College is a private liberal arts college located on Mayflower Hill in Waterville, Maine. Founded in 1813, it is the 12th-oldest independent liberal arts college in the United States... |
No max income; all students |
| Columbia University Columbia University Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the... |
No max income |
| Cornell University Cornell University Cornell University is an Ivy League university located in Ithaca, New York, United States. It is a private land-grant university, receiving annual funding from the State of New York for certain educational missions... |
Annual income below $75,000 |
| Dartmouth College Dartmouth College Dartmouth College is a private, Ivy League university in Hanover, New Hampshire, United States. The institution comprises a liberal arts college, Dartmouth Medical School, Thayer School of Engineering, and the Tuck School of Business, as well as 19 graduate programs in the arts and sciences... |
Annual income below $75,000 |
| Davidson College Davidson College Davidson College is a private liberal arts college in Davidson, North Carolina. The college has graduated 23 Rhodes Scholars and is consistently ranked in the top ten liberal arts colleges in the country by U.S. News and World Report magazine, although it has recently dropped to 11th in U.S. News... |
No max income |
| Duke University Duke University Duke University is a private research university located in Durham, North Carolina, United States. Founded by Methodists and Quakers in the present day town of Trinity in 1838, the school moved to Durham in 1892. In 1924, tobacco industrialist James B... |
Annual income below $40,000 |
| Emory University Emory University Emory University is a private research university in metropolitan Atlanta, located in the Druid Hills section of unincorporated DeKalb County, Georgia, United States. The university was founded as Emory College in 1836 in Oxford, Georgia by a small group of Methodists and was named in honor of... |
Annual income below $100,000 |
| Haverford College Haverford College Haverford College is a private, coeducational liberal arts college located in Haverford, Pennsylvania, United States, a suburb of Philadelphia... |
First-year students with financial need |
| Harvard University Harvard University Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country... |
No max income |
| Lafayette College Lafayette College Lafayette College is a private coeducational liberal arts and engineering college located in Easton, Pennsylvania, USA. The school, founded in 1826 by James Madison Porter,son of General Andrew Porter of Norristown and citizens of Easton, first began holding classes in 1832... |
Annual income below $50,000 |
| Lehigh University Lehigh University Lehigh University is a private, co-educational university located in Bethlehem, Pennsylvania, in the Lehigh Valley region of the United States. It was established in 1865 by Asa Packer as a four-year technical school, but has grown to include studies in a wide variety of disciplines... |
Annual income below $50,000 |
| MIT | Annual income below $75,000 |
| University of Maryland, College Park University of Maryland, College Park The University of Maryland, College Park is a top-ranked public research university located in the city of College Park in Prince George's County, Maryland, just outside Washington, D.C... |
Maryland resident with 0 EFC |
| Michigan State University Michigan State University Michigan State University is a public research university in East Lansing, Michigan, USA. Founded in 1855, it was the pioneer land-grant institution and served as a model for future land-grant colleges in the United States under the 1862 Morrill Act.MSU pioneered the studies of packaging,... |
Michigan Michigan Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake".... resident with family incomes at or below the federal poverty line |
| Northwestern University Northwestern University Northwestern University is a private research university in Evanston and Chicago, Illinois, USA. Northwestern has eleven undergraduate, graduate, and professional schools offering 124 undergraduate degrees and 145 graduate and professional degrees.... |
Family income lower than approx. $55,000 |
| North Carolina State University North Carolina State University North Carolina State University at Raleigh is a public, coeducational, extensive research university located in Raleigh, North Carolina, United States. Commonly known as NC State, the university is part of the University of North Carolina system and is a land, sea, and space grant institution... |
Income less than 150% of the poverty line. Requires the family to have "limited assets," regardless of state residency. |
| University of Chicago University of Chicago The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890... |
Students who demonstrate financial need and whose annual family income totals $75,000 or less |
| UNC Chapel Hill | 200% of federal poverty line ($24,000 to $37,000) |
| University of Pennsylvania University of Pennsylvania The University of Pennsylvania is a private, Ivy League university located in Philadelphia, Pennsylvania, United States. Penn is the fourth-oldest institution of higher education in the United States,Penn is the fourth-oldest using the founding dates claimed by each institution... |
No max income |
| Pomona College Pomona College Pomona College is a private, residential, liberal arts college in Claremont, California. Founded in 1887 in Pomona, California by a group of Congregationalists, the college moved to Claremont in 1889 to the site of a hotel, retaining its name. The school enrolls 1,548 students.The founding member... |
No max income |
| Princeton University Princeton University Princeton University is a private research university located in Princeton, New Jersey, United States. The school is one of the eight universities of the Ivy League, and is one of the nine Colonial Colleges founded before the American Revolution.... |
No max income |
| Rice University Rice University William Marsh Rice University, commonly referred to as Rice University or Rice, is a private research university located on a heavily wooded campus in Houston, Texas, United States... |
Annual income below $80,000 |
| Stanford University Stanford University The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San... |
Annual income below $60,000 |
| Swarthmore College Swarthmore College Swarthmore College is a private, independent, liberal arts college in the United States with an enrollment of about 1,500 students. The college is located in the borough of Swarthmore, Pennsylvania, 11 miles southwest of Philadelphia.... |
Anyone with financial need |
| Tufts University Tufts University Tufts University is a private research university located in Medford/Somerville, near Boston, Massachusetts. It is organized into ten schools, including two undergraduate programs and eight graduate divisions, on four campuses in Massachusetts and on the eastern border of France... |
Annual income below $40,000 |
| Vanderbilt University Vanderbilt University Vanderbilt University is a private research university located in Nashville, Tennessee, United States. Founded in 1873, the university is named for shipping and rail magnate "Commodore" Cornelius Vanderbilt, who provided Vanderbilt its initial $1 million endowment despite having never been to the... |
No max income |
| Vassar College Vassar College Vassar College is a private, coeducational liberal arts college in the town of Poughkeepsie, New York, in the United States. The Vassar campus comprises over and more than 100 buildings, including four National Historic Landmarks, ranging in style from Collegiate Gothic to International,... |
Annual income below $60,000 |
| University of Virginia University of Virginia The University of Virginia is a public research university located in Charlottesville, Virginia, United States, founded by Thomas Jefferson... |
200% of federal poverty line ($24,000 to $37,000) |
| Washington and Lee University Washington and Lee University Washington and Lee University is a private liberal arts college in Lexington, Virginia, United States.The classical school from which Washington and Lee descended was established in 1749 as Augusta Academy, about north of its present location. In 1776 it was renamed Liberty Hall in a burst of... |
No max income |
| Washington University in St. Louis Washington University in St. Louis Washington University in St. Louis is a private research university located in suburban St. Louis, Missouri. Founded in 1853, and named for George Washington, the university has students and faculty from all fifty U.S. states and more than 110 nations... |
Annual Income below $60,000 |
| Wellesley College | $60,000 |
| Wesleyan University Wesleyan University Wesleyan University is a private liberal arts college founded in 1831 and located in Middletown, Connecticut. According to the Carnegie Foundation for the Advancement of Teaching, Wesleyan is the only Baccalaureate College in the nation that emphasizes undergraduate instruction in the arts and... |
$40,000 |
| College of William and Mary College of William and Mary The College of William & Mary in Virginia is a public research university located in Williamsburg, Virginia, United States... |
$40,000 (VA residents only) |
| Williams College Williams College Williams College is a private liberal arts college located in Williamstown, Massachusetts, United States. It was established in 1793 with funds from the estate of Ephraim Williams. Originally a men's college, Williams became co-educational in 1970. Fraternities were also phased out during this... |
No max income |
| Yale University Yale University Yale University is a private, Ivy League university located in New Haven, Connecticut, United States. Founded in 1701 in the Colony of Connecticut, the university is the third-oldest institution of higher education in the United States... |
No max income |
Loan cap
Some universities have opted to have a "loan cap" program, which is a maximum loan — either per year or for the four years combined — designed to reduce the cost of attendance for low-income and middle-class students. The following schools have a loan cap program:| School | Loan cap for students meeting these eligibility requirements: |
|---|---|
| Brown University Brown University Brown University is a private, Ivy League university located in Providence, Rhode Island, United States. Founded in 1764 prior to American independence from the British Empire as the College in the English Colony of Rhode Island and Providence Plantations early in the reign of King George III ,... |
Family earning less than about $125,000: Caps total loans to $3,000 per year. Family earning up to $150,000: Caps total loans to $4,000 per year. Family earning up to $150,000: Caps total loans to $5,000 per year. |
| University of Chicago University of Chicago The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890... |
"Those whose families make between $60,000 and $75,000 will have 50% of their loans replaced." |
| Cornell University Cornell University Cornell University is an Ivy League university located in Ithaca, New York, United States. It is a private land-grant university, receiving annual funding from the State of New York for certain educational missions... |
Undergraduates with family incomes less than $120,000 will have loans limited to $3,000 per year. |
| Duke University Duke University Duke University is a private research university located in Durham, North Carolina, United States. Founded by Methodists and Quakers in the present day town of Trinity in 1838, the school moved to Durham in 1892. In 1924, tobacco industrialist James B... |
Undergraduate students with family income between $40,000 and $100,000 will have their loans limited on a graduated basis ($1,000 to $4,000 per year) and loans "frozen" at the freshman level. |
| Emory University Emory University Emory University is a private research university in metropolitan Atlanta, located in the Druid Hills section of unincorporated DeKalb County, Georgia, United States. The university was founded as Emory College in 1836 in Oxford, Georgia by a small group of Methodists and was named in honor of... |
"Annual assessed incomes of $50,000 to $100,000 who demonstrate need for financial aid. The program caps total need-based loans at $15,000, assuming on-time progression toward graduation with up to eight semesters of study." |
| Grinnell College Grinnell College Grinnell College is a private liberal arts college in Grinnell, Iowa, U.S. known for its strong tradition of social activism. It was founded in 1846, when a group of pioneer New England Congregationalists established the Trustees of Iowa College.... |
"Beginning in the 2008-09 academic year, need-based loans for all eligible students will be capped at $2,000 per year." |
| University of Maryland, College Park University of Maryland, College Park The University of Maryland, College Park is a top-ranked public research university located in the city of College Park in Prince George's County, Maryland, just outside Washington, D.C... |
Students with need-based financial aid will have their loans capped at $15,900 for their four years of attendance. |
| Middlebury College Middlebury College Middlebury College is a private liberal arts college located in Middlebury, Vermont, USA. Founded in 1800, it is one of the oldest liberal arts colleges in the United States. Drawing 2,400 undergraduates from all 50 United States and over 70 countries, Middlebury offers 44 majors in the arts,... |
Family income below $40,000: $1,500 per year; family income $40,000 to $80,000: $2,500 per year; family income above $80,000: $3,500 per year. |
| Rice University Rice University William Marsh Rice University, commonly referred to as Rice University or Rice, is a private research university located on a heavily wooded campus in Houston, Texas, United States... |
Students with a family income below $60,000 will not have loans. Families with incomes over $60,000 will have their loans capped at about $14,500. |
| University of Virginia University of Virginia The University of Virginia is a public research university located in Charlottesville, Virginia, United States, founded by Thomas Jefferson... |
200% of federal poverty line ($24,000 to $37,000). Need-based loans are capped at 25% of the in-state cost of attendance, regardless of state residency. |
Outside the United States
Many national governments provide student financial assistance subsidies, i.e., student benefitStudent benefit
Student benefits are transfer payments that are given to students for purposes of full-time study, and require progress in studies, or obtaining academic credits. Student benefits are found in countries where education is free of charge, e.g. Finland and Sweden...
, for students attending a university, although proposed policies to change such subsidies have engendered considerable debate in places, such as Canada, the United Kingdom, Germany, the Netherlands and Scandinavian countries. The heavy reliance on private subsidies, as in the United States, is not as widespread, although this may be changing.
In Germany, the main source of financial aid is provided by the Bundesausbildungsförderungsgesetz
Bundesausbildungsförderungsgesetz
The Bundesausbildungsförderungsgesetz is the Federal Education and Trainings Assistance Act for university students in Germany. The law, which regulates student loans in the country, is often referred to by students who simply say they receive "BAföG".- See also :* Student loan* Student loans in...
, colloquially known as BAFöG.
Antitrust problems
Many schools use a financial aid system that requires applicant families to reveal confidential income information to charge as much money as the families can pay. This is evidence of market powerMarket power
In economics, market power is the ability of a firm to alter the market price of a good or service. In perfectly competitive markets, market participants have no market power. A firm with market power can raise prices without losing its customers to competitors...
and may be illegal under antritrust laws.
External links
- Federal Student Aid. U.S. Department of Education.
- Expand Student Financing and Supports. Center for Law and Social Policy.