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How Federal Supplemental Educational Opportunity Grants Work

FSEOG: The Program
Because grants are given on a first-come, first-served basis, it's a good idea to turn an FSEOG grant application in as soon as possible.
Because grants are given on a first-come, first-served basis, it's a good idea to turn an FSEOG grant application in as soon as possible.

The FSEOG program is funded jointly by the U.S. Department of Education and participating schools. About 4,000 institutions take part, ranging from universities to dance academies. Schools contribute one dollar for every three government dollars. The amount varies from year to year, depending on the Department of Education's annual budget, the schools' request for funds and the number of schools that participate. The Department allocated $757 million for FSEOGs for 2009. When combined with the schools' contribution, total funds came to almost $960 million [source: U.S. Department of Education].

Each school's share is based on its students' need, as determined by the Department of Education. The school's financial aid office decides how much money each applicant receives. Applicants are prioritized according to greatest need -- "exceptional need" is the term used. Students who have a Pell Grant and exceptional need have highest priority. The maximum amount is $4,000, but $200 to $400 is more typical.

To be eligible, applicants must be United States citizens (or qualified non-citizens) who have a high school diploma or GED. They must be undergraduates, enrolled at least part-time in an accredited degree- or certificate-granting program.

To stay eligible, students must meet basic academic requirements set by the Higher Education Act. Generally, that includes maintaining a 2.0 grade point average and completing the course of study within one-and-a-half times the standard time frame -- three years for a two-year degree, for example.

Schools have an incentive to award the grant, because those that don't use their entire allocation may receive less money the next year. Too often, however, the money runs out before applications do. Due to the funding process described above, each school's allocation is limited and variable. Grants are given on a first-come, first-served basis. Students who apply late, even those in extreme need, may find their school's share already spent.

Also, not every school participates in the program. Students may have to choose between a school they'd rather attend and one that might award them a grant.

The application process can be another hurdle in getting an FSEOG. The government has taken steps to streamline the process and does some of the numbers crunching. Yet, as the next section explains, applying for an FSEOG involves paperwork -- and patience.