The average annual tuition at a public four-year institution for the 2008-09 academic year was $6,585, a 6.4 percent year-over-year increase, according to the College Board, a non-profit association that provides assistance to those pursuing a college education.
Fortunately for those students hoping to go to college but are not certain how to pay for it, there is more than $143 billion in financial aid available.
Financial Aid Opportunities
There are two primary types of federal student aid programs available to college students through the U.S. Department of Education: loans and grants.
Federal Education Loans
Federal education loans offer college students financial assistance with reasonable interest rates, convenient repayment options and tax-deductable interest.
Federal Perkins Loans - These loans are made through participating schools to undergraduate, graduate and professional degree students who demonstrate a financial need. In order to qualify for a Federal Perkins Loan, a student must be enrolled in school on an at least part-time basis.
Stafford Loans - These loans are available to assist undergraduate, graduate and professional degree students who are enrolled as at least half-time students. Students who demonstrate a financial need can receive a subsidized Stafford Loan, for which the U.S. Department of Education will pay the accrued interest during certain periods. Any student regardless of financial need can receive an unsubsidized Stafford Loan.
PLUS Loans - These loans are available to parents who help pay the cost of education for their dependent undergraduate children. Graduate and professional degree students are able to obtain PLUS Loans to help pay for their own education.
Federal Education Grants
The U.S. Department of Education also makes available several education grants to help college students pay for their education. Unlike loans, grants do not have to be repaid.
Federal Pell Grant - Typically awarded only to undergraduate students, Federal Pell Grant amounts depend on a student's financial need as well as the overall costs to attend school, the student's status as a full-time or part-time student and the student's plans to attend school for a full academic year or less.
Academic Competiveness Grant - Made available to first- or second-year undergraduate students who also are a Federal Pell Grant recipient, the Academic Competitiveness Grant is awarded based on the completion of a rigorous secondary school program of study.
The National Science and Mathematics Access to Retain Talent (SMART) Grant - The National SMART Grant is available to third- and fourth-year undergraduate students who are majoring in life, physical, or computer sciences; mathematics; engineering; technology; or a foreign language critical to national security.
Teacher Education Assistance for College and Higher Education (TEACH) Grant - The TEACH Grant provides financial aid to students who intend to teach in a public or private elementary or secondary school that serves students from low-income families.
Federal Supplemental Education Opportunity Grant (FSEOG) - The FSEOG is available to undergraduate students who demonstrate exception financial need. Students who are Pell Grant recipients with the lowest expected family contributions are considered first for FSEOGs.