How Federal Financial Aid Organizations Work

Campus-based Aid

Work-study jobs include working at your school's cafeteria.
Work-study jobs include working at your school's cafeteria.©

Three federal programs fall under the umbrella of campus-based aid, which means that the financial aid office at a particular school is responsible for administering the program. Each participating college only gets so much money for these programs, so once it's all awarded, the school can't hand any more out. This is when it helps to get your federal student aid application in as early as possible. You should also pay close attention to your college's application deadlines for these programs, because they may be different from the deadline for the federal application.

The first of these aid programs is the Federal Supplemental Educational Opportunity Grant (FSEOG), which we explored on the previous page. The second program is the Federal Work-Study (FWS) Program. Undergraduate and graduate students in this program receive a set amount of money and work part-time jobs to pay for their school expenses. Undergrads can work hourly jobs either for their school or for a community service position. Schools may also have jobs available with private for-profit employers for students who are studying in those companies' fields of business. Under the FWS program, students will earn at least minimum wage, but some jobs may pay more. They may also not work more hours than their FWS award is worth.

The third campus-based aid program is the Federal Perkins Loan. These loans are designated solely for students with extreme financial need, and they're attractive because of their low 5 percent interest rate. Undergraduates can borrow up to $5,500 a year, with a total cap at $27,500. Graduate students can borrow up to $8,000 a year. A graduate student's total undergrad and graduate Perkins Loan will max out at $60,000. As long as you're attending school half-time, you don't need to worry about repaying this loan right away. Once you graduate, you get a nine-month grace period before the repayment process kicks in.

Each individual school administers the Federal Perkins Loan, but if you don't qualify for one of those, there are other types of loans from which to choose. We'll take a look at those options next.