Federal Student Grants

Paying for college is expensive and most students borrow money to pay for tuition and expenses. Although student loans are readily available to just about anyone with a high school diploma, loans have to be repaid with interest over a number of years.

However, there are grants available to pay for college expenses that don't have to be repaid. Grants are free money, so it makes sense to find out if you qualify for a grant program.

To determine a student’s eligibility for financial aid and grants, the first step students have to take is to complete and submit a Free Application for Federal Student Aid (FAFSA) for the college they plan to attend.

Here's how the FAFSA works and how it can be used to receive grants to pay for college expenses.

FAFSA is the official form that all students use to apply to the federal government for financial aid. Colleges use this form to determine if a student is qualified for need-based grants, subsidized federal loans, unsubsidized federal loans or work-study programs.

This form asks for information about the student’s and their parent’s income and assets. The objective is to calculate an Expected Family Contribution (EFC), which is the government’s estimate of the amount of college expenses the family should be able to pay by themselves.

As a result of a FAFSA application, the student will receive an award letter stating which grants, student loans or work-study programs the student is eligible to receive. For students who have demonstrated a clear need for financial aid, the Pell Grant is the most frequent award.

Students must submit a new FAFSA application for each year they are in college. Financial situations change each year and students may be awarded either more or less financial aid as a result of any changes. A Pell Grant is one of the most frequent awards to help low-income families pay for college.

​Read More​: College Grants for Students Over 50 Years Old

The Pell Grant is the largest grant program funded by the U.S. Department of Education. It is a need-based financial aid program designed to help low-income families pay for college expenses. Colleges use the information provided on the student’s FAFSA application to determine the amount of the Pell award. Students must submit a FAFSA annually in order to continue to receive Pell Grant funds.

The current maximum award per year for a Pell Grant is ​$6,495​ and does not have to be repaid. Students can receive up to ​150 percent​ of their annual award each year if they attend summer semesters in order to complete their degree requirements sooner.

Students must meet the following requirements to be eligible:

• Be enrolled in undergraduate classes and demonstrate a financial need
• Not have yet earned a bachelors or graduate degree
• Can be enrolled in a post-baccalaureate certification program for teachers

Students whose parents have been killed in Iraq or Afghanistan could be eligible for higher Pell Grant awards.

If a student has already received a bachelor's degree, they are not eligible for another Pell Grant to pursue another degree. In addition, a student can only receive a Pell Grant for one college at a time.

The financial effect of a Pell Grant depends on which college a student attends. For a student who commutes to attend a community college, a Pell Grant may represent nearly half the cost of their college expenses. Conversely, a Pell Grant might not have very much financial impact on the costs of attending a four-year college and living in a dormitory.

​Read More​: How to Get Grants for Living Expenses

Colleges use the Expected Family Contribution to determine the amount of financial aid a student needs. They use the information submitted by the student on their FAFSA application to determine the amount of need. This calculation considers the parents’ income, investments, amount of other assets, the number of people in the family and whether any other family members are attending college.

The amount of need is calculated by taking the school's total cost of attendance – which includes tuition, fees and living expenses – and subtracting the student’s EFC.

For example, suppose a school's total cost of attendance is ​$24,000​, and the student’s EFC is ​$6,000.​ This student would qualify for up to ​$18,000 ($24,000 less $6,000)​ in need-based aid that could include a combination of federal Pell Grants, direct subsidized loans and participation in a work-study program.

​Read More​: List of Different Types of Grant

In addition to the Pell Grant, you may be eligible for these other grant programs:

​Teacher Education Access for College and Higher Education (TEACH) Grants​ - Students who are on a career path to becoming a teacher are eligible for these grants. This program awards up to ​$4,000​ per year, even if the student does not qualify for need-based financial aid. This grant does not have to be repaid if the student works for at least four years in an elementary or secondary school within eight years after graduation.

​Federal Supplemental Education Opportunity Grant (FSEOG)​ - These grants are available to undergraduate students who have exceptional financial needs. The awards range from ​$100 to $4,000​. FSEOG grants are usually awarded to students who are already receiving Pell Grants. Not all colleges participate in the FSEOG program and the availability of funds is limited.

​The Iraq and Afghanistan Service Grant​ - You'll be eligible for this grant if you meet the following requirements:

• One of your parents or guardians died while serving in the military in Afghanistan or Iraq after September 11, 2001
• You were younger than 24 at the time of their death.
• You can demonstrate a clear financial need.

The current maximum award for this grant program is ​$5,983.34.​

There are numerous federal programs available to help students pay for college expenses. The subsidized and unsubsidized student loans are convenient and easy to obtain, but may saddle the student with a substantial amount of loan payments for a number of years.

The Pell Grant program is one of the best ways to get free money for college, so every student should submit a FAFSA to find out if they qualify.