This document provides an overview of federal student aid available to students in the United States. It discusses the different types of federal student aid including grants, loans, and work-study. It outlines eligibility requirements and explains the FAFSA application process. It also describes various federal student loan programs like Direct Loans, Perkins Loans, and PLUS Loans. The document provides details on interest rates, loan limits, grace periods and repayment terms for each loan type.

1. An Overview of Federal Student Aid

2. What is Federal Student Aid?
 Federal Student Aid (FSA) is provided by the US Department of Education and
helps students pay for expenses at post-secondary institutions
 FSA covers expenses such as tuition, room and board, books and supplies,
transportation, computers, and dependent care
 There is more than $150BN worth of FSA available to qualifying students
 FSA is granted to students that meet basic eligibility requirements
 FSA falls into one of three categories: grants, loans, or work-study
 The FAFSA (Free Application for Federal Student Aid) must be completed in
order to qualify for FSA (~22MM FAFSAs are submitted each year)
 The FAFSA is available beginning January 1st of the year that the student plans
to enroll in school
 Visit www.fafsa.gov to fill out the FAFSA form and begin the financial aid
process.

3. Prerequisites to Receiving Federal
Student Aid
 A high school diploma or a General Educational Development
(GED) certificate
 A valid social security number
 Must be a US citizen or eligible non-citizen
 Must meet satisfactory academic progress requirements
 Compliance with Selective Service registration
 Must be enrolled or accepted as a student and be on the path
to a degree or certificate in an eligible program

4. Types of Federal Student Aid
 Grants: Funds that are not required to be repaid
 Loans: Funds that are borrowed from the school and must be paid
back with interest
 Work-Study: Funds that a student earns by working part-time while
attending school

5. Federal Grant Programs
 Federal Pell Grants: Available almost exclusively to undergraduates (UG’s)
 Federal Supplemental Educational Opportunity Grant (FSEOG): Available to UG’s
that have a very low estimated financial contribution (EFC)
 Teacher Education Assistance for College and Higher Education Grant (TEACH):
For UG’s, post baccalaureates, and graduate students that are willing to teach
full-time in designated teacher shortage areas for four (4) years after graduation
 Iraq and Afghanistan Service Grant: Available to non Pell-eligible students whose
parent/guardian died as a result of military service in Iraq or Afghanistan after the
events of 9/11; and who, at the time of death, were younger than 24 years of
age and/or enrolled at least part-time at an institution of higher education

6. Federal vs. Private Loans
 A federal loan is supported by the federal government and allows
students to borrow money to help pay for school
 Benefits of a federal loan include: low-fixed interest rates, incomebased repayment plans, cancellations for certain employment, and
deferment options
 There are two (2) types of federal loan programs: The Federal
Perkins Loan Program and The Direct Loan Program
 A private student loan is a non-federal loan issued by a lender such
as a bank or a credit union and commonly requires a credit check

7. Federal Perkins Loan Program
 Federal Perkins loans are low interest loans that help need-based undergraduate
and graduate students finance the cost of post-secondary education
 School is the lender; approximately 1700 schools participate
 Interest rate = 5%
 Amount received depends on financial need, amount of other aid, and
availability of funds at school
 Repaying a Federal Perkins Loan begins after the grace period has expired. The
grace period begins on the day that the student graduates and lasts for nine (9)
months
 During the grace period, the student does not pay principal and is not charged
interest. If a student is attending school less than half-time (typically defined as
less than six (6) credit hours), his/her grace period may be affected
 A student has up to ten (10) years to repay a Federal Perkins loan

8. Direct Loan Program
The Direct Loan Program is the largest federal student loan program available with
four (4) types of direct loans:
 Direct Subsidized Loan (DSL): For UG’s; US Department of Education pays interest
while borrower is in school and during grace and/or deferment periods; student
must be attending at least half-time and have financial need. IR = 6.8%
 Direct Unsubsidized Loan (DUL): For UG’s and graduate students; borrower is
responsible for all interest; student must be enrolled at least half-time; financial
need is not required; US Department of Education is the lender. IR = 6.8%
 Direct PLUS Loan (DPL): For parents of dependent UG’s and also graduate and
professional students; student must be enrolled at least half-time; financial need
is not required. Borrower is responsible for all interest; US Department of
Education is the lender; graduate student/parent cannot have a negative credit
history. IR = 7.9%
 Direct Consolidation Loan (DCL): Allows student or parent to combine multiple
federal education loans into one loan with one (1) monthly payment

9. Direct Loan Program (cont.)
 Lender is the US Department of Education
 Direct loans have a fixed interest rate that varies depending on the loan type
 Amount that can be borrowed varies based on whether the student is
enrolled in an undergraduate or graduate program
 The grace period is six (6) months for DSL’s and DUL’s. DPL’s do not have a
grace period, but can defer for up to six (6) months
 On average, students have between 10 - 30 years to repay a loan
 Must be enrolled at least half-time (typically defined as six (6) credit hours) to
qualify
 To take out a Direct Loan, student must complete a Master Promissory Note
(MPN). This is a legally binding agreement to repay loan

10. Federal Work-Study Program
 Federal Work-Study (FWS) provides part-time employment for
undergraduate and graduate students with financial need, thus allowing
them to earn money to help pay education expenses
 FWS encourages community service and work related to the recipient’s
area of study
 Undergraduate students are paid by the hour and will receive at least
federal minimum wage
 The amount earned cannot exceed the FWS award amount
 FWS employment may be on-campus or off-campus
 When assigning work hours, the student’s employer or financial aid
administrator will consider award amount, class schedule, and academic
progress

11. What is PrepTalk?
PrepTalk is a new virtual webcasting tool designed for the
college admission process. Through PrepTalk, colleges
can communicate with prospective students in a live
setting.
Why was PrepTalk created?
 On average, colleges visit 500 high schools a year, yet there are 27,000+ high schools
in the United States
 75% of students would speak with a college representative via webcam, but currently
only 20% are doing so
 A college education is the second largest investment a family will make (next to a
home), but its often difficult for parents to get direct interaction with college reps
 Demonstrated interest is an increasingly important factor – more than 50% of colleges
rank it as being of considerable or moderate importance in the decision making
process
How do I learn more about PrepTalk events?
Visit www.preptalk.tv to learn more about participating colleges and upcoming
webcasts on PrepTalk!