Financial Aid: Explained

School will be starting back next month and it’s important to understand the basics of paying for your education. In 2014-15, about two-thirds of full-time students paid for college with the help of financial aid in the form of grants and scholarships, but sometime the process can be difficult to navigate. Below is a helpful guide explaining a few aspects regarding student financial aid, but it is recommended to do additional research and visit your financial aid office at school.


The Free Application for Federal Student Aid (FAFSA) is a form that can be prepared annually by current and prospective college students (undergraduate and graduate) in the United States to determine their eligibility for student financial aid.

Beginning with the 2017-2018 academic year, the FAFSA is made available to the public on October 1 and is recommended that students fill it out as soon as possible.

Types of Aid

Hope Scholarship

In Georgia, HOPE Scholarships are merit-based awards — independent of family income — and available to all students from Georgia pursuing an undergraduate degree. They pay for tuition at any in-state two- or four-year college or university and most fees. The tuition award amount is determined annually by the Georgia Student Finance Commission as a “per credit hour rate” which is published on their website.

All HOPE programs require students to meet basic requirements. An eligible student must:

  1. Meet HOPE’s U.S. citizenship or eligible non-citizen requirements
  2. Be a legal resident of Georgia
  3. Be in compliance with Selective Service registration requirements
  4. Be in good standing on all student loans or other financial aid programs
  5. Be in compliance with the Georgia Drug-Free Postsecondary Education Act of 1990
  6. Not have exceeded the maximum award limits for any HOPE program.
  7. Graduate from a HOPE-eligible high school with a minimum 3.0 grade point average. OR graduate from an ineligible high school, complete a home study program in Georgia, or earn a GED and score in the national composite 75th percentile or higher on the SAT or ACT prior to completion of 30 semester or 45 quarter hours of college degree-level coursework
  8. Be enrolled as a degree-seeking student at a public or private HOPE-eligible college or university in Georgia.

Once awarded a HOPE, you’ll continue to receive the aid each year — there’s no need to reapply. But in order to maintain a HOPE Scholarship, you’ll have to:

  1. Not have exceeded the maximum award limits for any HOPE program
  2. Keep up a 3.0 grade point average in college.
  3. Practice continuous enrollment aimed at earning a degree. Taking a break of two or more semesters will leave you ineligible.

HOPE Scholarship eligibility lasts until you receive a bachelor’s degree — Eligibility also ends after students take 127 credit hours — and all credit hours attempted count, even if student drops the course part way through.

Students who lose their HOPE Scholarships for not maintaining a 3.0 average can reapply if their GPA has returned to that level after the 30th, 60th or 90th credit hour attempted. However, if your cumulative average is still under 3.0 after you’ve attempted your 90th hour, you’ll be permanently ineligible for the HOPE program.

Zell Miller Scholarship

Zell Miller Scholarship pays full standard tuition for students who earned a 3.7 GPA (un-weighted) for all academic high school classes and earned at least a 1200 in one sitting on the Math and Verbal section of the SAT or at least a 26 on the ACT. Students who are Valedictorian or Salutatorian of their class are automatically eligible for Zell Miller Scholarship.

To maintain the Zell Miller Scholarship, you must have a 3.3 minimum GPA at 30 attempted hours, 60 attempted hours, 90 attempted hours and at the end of every Spring semester.

Federal Pell Grants

You’re eligible for a Pell Grant if you have financial need. The U.S. Department of Education determines your financial need by taking the information you supply when applying for a Pell Grant (for example, your family income) and plugging it into a standard formula to produce a number called the Expected Family Contribution (EFC). The EFC is then compared to the expected cost of attending your college (tuition and fees, room and board, books, and supplies) to determine the financial aid for which you’re eligible.

The maximum Pell Grant for the 2017-18 award year is $5,920. The amount of the grant depends on your financial need and other factors, including the amount of time you attend college (whether a full academic year or less, and whether you attend full-time or part-time). You cannot receive Pell Grant funds from more than one college at a time.

Federal Supplemental Educational Opportunity Grants

A Federal Supplemental Educational Opportunity Grant (FSEOG) is for undergraduates with exceptional financial need — that is, students with the lowest EFCs — and gives priority to students who receive Federal Pell Grants. The FSEOG program is administered directly by the financial aid office at each participating school.

To get an FSEOG, you must fill out the FAFSA so your college can determine how much financial need you have and will award FSEOGs to students that have the most need. The FSEOG does not need to be repaid, except under certain circumstances. You can receive between $100 and $4,000 a year, depending on your financial need, when you apply, the amount of other aid you get, and the availability of funds at your school.

Federal Direct (Stafford) Loan Program 

Direct Stafford Loans are the most common federal student loans. Available to undergraduate, graduate, and professional students, these education loans are originated by the federal government and feature fixed interest rates, a 1.069% origination fee and various repayment options. There are two types of Direct Stafford Loans:

Subsidized Stafford Loans are available to undergraduate students who demonstrate financial need. The government pays the interest on these loans while the student is in school, six months after leaving school and during a period deferment.

Unsubsidized Stafford Loans are available to undergraduate and graduate students with or without financial need. You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods. If you choose not to pay the interest while you are in school and during grace periods and deferment periods, your interest will accumulate and will be added to the principal amount of your loan.

Federal Direct Loan (PLUS) Program

PLUS loans are federal loans that graduate or professional students and parents of dependent undergraduate students can use to help pay for college or career school. The U.S Department of Education is your lender and you must not have an adverse credit history.

If you are eligible for a Direct PLUS Loan, you will be required to sign a Direct PLUS Loan Master Promissory Note, agreeing to the terms of the loan. Those who haven’t previously received a PLUS loan will also be required to complete entrance counseling. There will also be a loan fee.

Along with those types of aid, depending on your university, there are also Student Employment Work Study, Graduate Assistantships, and public/private scholarships.

Tips for Paying off Student Loan Debt

Be strategic

Tactics like creating a budget and sticking to it, paying on time, and understanding which loans are best to pay off first are just a few strategic ways to help pay off your loans.

Refinancing your loan

Refinancing involves repaying an older debt by taking on a new loan, with fresh terms. It is done to allow a borrower to obtain a better interest term and rate. Make sure you research lenders and choose the one best for you.

Avoid repayment programs

Almost all federal student loan repayment programs are geared toward decreasing payments by lengthening the term of the loan. This means it’ll take longer to pay off student loans. It’s generally advised to avoid these types of programs.

Set up automatic payments

Setting up automatic payments ensures you never forget to pay for the month. It also takes any indecision out of the equation and makes it harder for you to change your mind too.

Take full advantage of tax deductions and credits

If you’re paying off student loans, you’re likely eligible for the student loan interest deduction on your federal taxes. If your modified adjusted gross income (MAGI) is less than $80,000, there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education.

Tax credits can be even more valuable than tax deductions. An education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return.