How Financial Aid for Part-Time Students Works

Graduating from college can help you achieve the American dream. Armed with a four-year degree, you can land a better job and earn a higher salary [source: Funding Education Beyond High School]. Unfortunately, everyone can't afford a college education, which today can cost upwards of $35,000 a year [source: CollegeBoard]. Fortunately, a number of financial aid programs are available, both from the government and private organizations, to assist students who need help paying for college.

But what if you can only go to college part-time? Just because you can't go to college full-time due to family or work obligations doesn't mean you have to give up on the college dream. Many of the same types of financial aid -- loans, grants, scholarships and work-study programs -- that are available to full-time students are also accessible to part-time students.

However, some restrictions and stipulations apply. Often, students must be enrolled at least half-time (which for many colleges works out to a minimum of six credit hours per term) to qualify for certain loans, grants and other financial-aid programs. They also need to be doing well academically and must demonstrate financial need. Part-time students who are granted financial aid typically won't get as much money as students enrolled full-time. How much they do get depends on the number of credit hours for which they are enrolled.

In this article, you'll learn what financial aid options are available for part-time students, and find some helpful links to get you started on the application process.

Government Financial-Aid Programs

The government doles out much of the financial aid students receive through Federal Student Aid (FAFSA), an office of the U.S. Department of Education. More than 13 million students apply for federal student aid each year, and the government awards more than $75 billion annually [source: Federal Student Aid]

Federal programs are based on a student's demonstrated financial need, which is calculated by subtracting the amount the family can afford to pay from the cost of attendance (tuition, fees, room and board). This formula puts part-time students at a slight disadvantage. Because they pay less for classes and may not require room and board, their need is typically lower than that of a full-time student. However, part-time students can still qualify for many loans, grants and work-study programs. Some grant programs will even accept students who are enrolled less than half-time, but usually the award will only be a percentage of the original amount [source: University of Cincinnati].

Three main types of government financial aid are available:

Loans (must eventually be repaid):

Federal loans have fixed interest rates set by the government. Direct loans (Stafford) come straight from the government. Subsidized direct loans are based on a student's need. The government pays the interest for as long as the student is enrolled at least half-time. Unsubsidized direct loans don't have to do with a student's financial need, but the borrower must pay the interest.
Federal Family Education Loans (FFELs) come from private financial organizations, but are guaranteed by the U.S. government.

Grants (do not have to be repaid):

Pell Grant -- Awarded primarily to undergraduate students. Eligibility is based on the student's financial need. The maximum amount of the grant varies from year to year (for the 2010-11 school year, the maximum was $5,550) [source: Federal Student Aid]
Federal Supplemental Educational Opportunity Grants (FSEOG) -- Given to students who demonstrate exceptional need
Academic Competitiveness Grant (ACG) -- Awarded based on financial need to first-time freshmen and sophomores who are enrolled in eligible undergraduate programs
National Science and Mathematics Access to Retain Talent (SMART) Grant -- Awarded based on financial need to juniors or seniors who are enrolled in science, math, technology, or foreign language programs
State grants -- Grants of various amounts given out on a state-by-state basis
The Federal Work-Study program -- Provides federally subsidized jobs for both full-time and part-time students to help pay for college

Other Sources of Financial Aid

Government programs aren't the only source of financial aid for college. Schools and private organizations also offer programs to help part-time students afford higher education.

Scholarships and awards. Many colleges and universities have their own scholarships and special awards. Corporations, associations and foundations have also established scholarship programs to reward deserving students. Scholarships are awarded for academics, athletics, disabilities, essays and many other qualifications. A number of these programs are available to part-time students who demonstrate financial need or merit in a particular area. Part-time students are usually required to enroll in a minimum number of hours per term (which can vary based on the scholarship). Interested students can search for scholarships online to find out which ones are available to part-timers.
Private loans. If students can't find the right government loan, grant or scholarship, they can look into getting a private loan through a bank or other lending institution. These consumer loans can be used to pay for tuition, room and board, books and other college expenses. Unlike federal student loans, the interest rates on private loans are variable, which means they can go up. Private loans also typically require a credit check and co-signer. However, they usually have higher borrowing limits than government loans.
Employer reimbursement. Some companies will pay all or part of tuition costs for their employees. The company benefits from increasing the knowledge and skills of its employees. Sometimes colleges will allow students who are being reimbursed to defer their tuition payments until they receive payment from their employer.

Lots More Information

Sources

About.com. "Federal Student Aid Primer."http://usgovinfo.about.com/od/moneymatters/a/studentaid.htm. Accessed Jan. 11, 2010.
CollegeBoard. "2009-10 College Prices."http://www.collegeboard.com/student/pay/add-it-up/4494.html. Accessed Jan. 14, 2010.
Federal Student Aid. "About Federal Student Aid."http://federalstudentaid.ed.gov/about/index.html. Accessed Jan. 11, 2010.
Federal Student Aid. "Federal Pell Grant." http://studentaid.ed.gov/PORTALSWebApp/students/English/PellGrants.jsp. Accessed Jan. 11, 2010.
Federal Student Aid. "Funding Education Beyond High School. http://studentaid.ed.gov/students/attachments/siteresources/FundingEduBeyondHighSchool_0910.pdf. Accessed Jan. 12, 2010.
LeClaire, Jennifer. "Part-Time? No Problem!" Fastweb.http://www.fastweb.com/college-jobs-internships/articles/917-part-time-no-problem. Accessed Jan. 13, 2010.
Simple Tuition. "Understanding Private Student Loans." http://www.simpletuition.com/studentloans_com/private_student_loans. Accessed Jan. 14, 2010.
Western New England College. "Financial Aid Part-Time Study." http://www1.wnec.edu/adultlearning/index.cfm?selection=doc.6322. Accessed Jan. 11, 2010