The cost of a college education is skyrocketing. In fact, the price of four years at a state university is expected to grow at a rate of greater than 5% annually. Parents and students are searching for ways to make education more affordable by cutting costs and seeking all available forms of financial aid. The average student manages to reduce the bill by about 40% by taking advantage of financial aid programs. One of the most popular types of student financial aid is the student grant or educational grant.



Educational grants do not have to be repaid. There are two kinds of federal student grant programs: Pell Grants, occasionally called Basic Educational Opportunity Grants, which are need based, and Federal Supplemental Opportunity Grants (FSEOG), which are based on extraordinary need. The federal government has determined a formula which yields a number called an EFC, or Expected Family Contribution. This number is used to determine eligibility for both varieties of grants and the amount of grant money to be dispersed.

A Pell Grant is a primary source of financial aid, and students receiving them may be considered for other federal and non federal assistance as well. Pell Grants are paid out at least once per term and can be as much as $4310 annually (effective July, 2007), depending on a student's EFC, cost of tuition, and whether the student attends school half-time or full-time. The US Department of Education guarantees that participating schools will receive sufficient funding to give Pell Grants to all eligible students.

An FSEOG, as the name implies, is meant to supplement other forms of financial assistance. In contrast with Pell Grants, FSEOG's are not guaranteed for all eligible students. This type of grant is based on availability at each individual school, and once the money is depleted, no more grants are awarded. Once again, eligibility is determined using the Expected Family Contribution, with lower EFC's taking precedence over higher ones. Like Pell Grants, FSEOG money is paid at least at least once per term and can either be deposited directly into one's bank account or paid directly to the student by the school's financial aid office, normally by check.

The president has proposed raising the maximum Pell Grant award to $4600 annually by the year 2009, which would be the largest increase in thirty years. While this plan would help students eligible for Pell Grants to keep up with rising tuition costs, it could hurt students with the lowest EFC's. The president's proposal calls for the elimination of FSEOG's to offset the increase in Pell Grant award money. Ultimately, low EFC students would receive more money from the plan which would be implemented in increments of $200 per year, but the neediest students could see their federal assistance reduced initially.

Whatever the proposed changes to federal student grant policy, grants will continue to level the playing field for needy students who would otherwise be forced to work full-time while attending school, and possibly accumulate excessive student loan debt. If you think you might be eligible for educational assistance in the form of a student grant, contact the financial aid office at your school. College is expensive, but it is much more affordable if you take advantage of federal student grants.