Free Money for College! October 29, 2009

Ian Welham on how to get grants to pay for college.

It is no secret that college is expensive and many New Jersey families especially in today’s economy worry about how they are going to pay for their child’s college education. The best kind of money for college is of course free money. But how do you become the lucky recipient? It may be easier than you think; you need to begin applying for state and federal grants!

Many times when we hear about “free money” for college we think of scholarships. But in reality scholarships only make up about 3% of student aid while grants make up a whopping 40%, and loans make up the difference. With 40% of today’s college tuitions being paid for by grants, it is a very viable option.

There are a few things you need to know about college grants before you begin applying. The first is the best news: grants, unlike loans, do not need to be paid back! Also, grants are based largely on need and are usually given out on a first come, first serve basis. So needless to say, it is imperative for you to apply as soon as possible to claim your piece of the college pie.

Now you might be saying to yourself, this all sounds great but which grant can I apply for? Here is a breakdown of the four types of college grants:

1. Federal Pell Grant. This college grant is listed first because it is the largest. These grants range in dollar amounts from hundreds to thousands and are again based on need. All eligible colleges receive a fixed amount of Pell Grant money to distribute to students; but unfortunately, when it’s gone, it’s gone—so it is important to apply as early as possible. Another plus is students receiving Pell Grants who are majoring in math, science or social science maybe eligible for the Academic Competiveness Grant. This grant ranges from $750 your first year up to $1,300 for the second. Another bonus for math and science majors is the National Smart Grant which can range up to $4,000 a year for the third and fourth year of study, not bad at all!
2. Federal Supplemental Education Opportunity Grant. These college grants are again based on financial need and can range from $100- $4,000. Students need to apply for this grant through their financial aid offices. Even if you think your income is too high to qualify for these kinds of grants, take the time to discuss your individual situation with the financial aid office. There are many variables that go into calculating your need, including parent assets, the number in your family and the number of children in college and more.
3. State Grants. Most states offer their own free money program but mostly all are still based on financial need. These college grants tend to have more restrictions. For example sometimes more money is given to students who study a certain major. Also, sometimes states will put a restriction on the state grant if a family’s income is too high. NJ residents should always check with their higher education commission website for more details.
4. Institutional Grants (also known as Merit Aid). These grants come from the colleges themselves and may be distributed when state and federal aid cannot cover the high cost, or to discount the tuition price for a desired candidate. Students can increase their chances for merit aid by applying to schools that would be interested in their academic portfolio, or other special skills.