Grants: Free Money
As we mentioned on the previous page, not all of the financial aid the government provides needs to be repaid. This type of aid is called a grant. The federal government offers six types of grants.
The Teacher Education Assistance for College and Higher Education Grant (TEACH Grant) is a $4,000 annual grant awarded to students who intend to become teachers. One of the caveats of this grant is that once you've graduated, you must teach in a public or private elementary or secondary school that serves low-income families for at least four academic years. If you don't do this within eight years of completing your degree, the government will convert the grant into a Stafford Loan, and you'll have to repay it.
A Federal Pell Grant is mainly for undergraduates who are working on their first degree. The amount you can receive depends on your level of financial need, how much your school costs and your student status. In 2010-2011, the maximum amount awarded is $5,550.
The Federal Supplemental Educational Opportunity Grant (FSEOG) is a grant program for Pell Grant recipients, but these students must demonstrate an extreme financial need. This grant ranges from $100 to $4,000 annually, and the amount you receive depends not just on how badly you need the money, but also on when you apply and the funding available at your school.
Pell Grant recipients who have completed what the government calls a "rigorous secondary school program of study" may also qualify for an Academic Competitiveness Grant (ACG). By "rigorous," the government means you've earned a more advanced high school diploma or completed a minimum amount of coursework. The ACG is a two-year grant, and you can get up to $750 for the first year of college and up to $1,300 for the second year.
Third or fourth year Pell Grant recipients who are in a non-major liberal arts program or majoring in physical, life or computer sciences, mathematics, technology, engineering or a critical foreign language can apply for a National Science and Mathematics Access to Retain Talent Grant (National SMART Grant). The SMART Grant provides up to $4,000 per year.
Individual colleges can also make institutional grants to students based on academic achievement. These grants, also called merit awards or merit scholarships, vary by school and may or may not be awarded based on financial need.
Organizations may also offer other types of aid, which we'll look at next.