Financial aid is money in the form of loans, grants and employment that is available to students to help pay the cost of attending a college, university or vocational/technical school. Financial aid comes from the federal government, which is the largest provider of aid, as well as state governments, school, and a variety of other public and private sources.
There are two main types of aid:
- MERIT-BASED AID is given to students who have a special characteristic, skill, talent or ability. A scholarship is an example of merit-based aid. Merit-based aid is usually a gift that does not have to be paid back, although a student who receives merit money may have to promise to teach or perform some other service when they complete school.
- NEED-BASED AID is given to students who can show they need financial assistance to pursue a college education by completing the FAFSA. Most financial aid is awarded on the basis of need.
There are three kinds of need-based aid:
Grants are gifts that do not have to be paid back. Federal programs include the Federal Pell Grant and Federal Supplemental Educational Opportunity Grant (FESEOG). The Pell grant annual awards will range from $300 to $2775 (subject to change year to year), and is prorated according to enrollment status. Less than half time students may be eligible for the Pell Grant. The FSEOG program is designed to help student with exceptional financial need. Exceptional need is determined by expected family contribution found on the Student Aid Report (EFC=0). The Financial Aid Office determines the amount of the grant.
Loans are borrowed money that have to be paid back over a period of time, usually after the student leaves school. Federal loan programs include the Federal Perkins Loan and the Federal Direct Loan. Direct loans are funded directly from the Department of Education which include the subsidized, unsubsidized and the Parent Plus loan.
Work-Study is money that students earn by working a part-time job up to 20 hours per week. Funds used to pay the major portion of a work-study student's earnings come from the Federal Work-Study Program or the New Mexico Work-Study Program.