A grant is a financial award that does not have to be repaid. In general, grants must pay for the direct costs of school, such as tuition and fees, first. Thereafter, a student can use excess funds for living expenses.
The Federal Pell Grant is one of the best-known options. Students whose family income is less than $50,000 per year are eligible, with a maximum award of $6,195 for the 2019-2020 school year. To be eligible for a Pell Grant, you’ll have to fill out a Free Application for Federal Student Aid (FAFSA).
You are not eligible for a Pell Grant if:
- You are currently incarcerated or are involuntarily civilly committed for a sexual offense.
- You have defaulted on a federal student loan, which means that you have not made payments for 270 days (or 330, if payments aren’t monthly). Students who rehabilitate their loans by beginning a payment plan and making payments can still get the Pell Grant.
- You have received a full-time Pell Grant for more than 12 semesters.
- You are an undocumented immigrant.*
Part-time students are generally eligible for Pell Grants. The total award may be prorated to the number of course hours in which a student is enrolled.
The Oklahoma Tuition Aid Grant (OTAG) is a similar program for Oklahoma residents who attend eligible Oklahoma schools. This is a need-based grant, so the total award depends on a student’s family income. SNU students are eligible for an award of $1,300. Students must complete a FAFSA by December 1 of the year preceding enrollment to qualify for OTAG.
While OTAG and Pell are popular options, there are dozens of other grants. Students who complete the FAFSA may also be eligible for the Federal Supplemental Educational Opportunity Grant. Local organizations, national associations, and private corporations may also offer grants. If you’re a member of an organization or part of a special interest group, consider beginning your grant search there.
A loan is a financial award that must be repaid. Although it’s possible to get a private loan from a bank or credit union, most students begin their loan search through the federal government, which offers a number of loans. Students with demonstrated financial need are eligible for federally subsidized loans.
Subsidized loans are loans that the federal government subsidizes so that they do not accrue interest while the student is in school. Unsubsidized loans do accrue interest, which means you may accumulate more debt. Unlike grants and scholarships, there are usually no limitations on how you spend the loan funds. The money is awarded directly to your student account. After you’ve paid for tuition and related direct educational expenses, you’ll be able to use additional funds as you see fit.
To begin your search for a federal loan, complete the FAFSA. You’ll receive information about which subsidized and unsubsidized loans you might be eligible for. Because subsidized loans are more affordable, only accept an unsubsidized loan when subsidized loans are insufficient to pay the total costs.
Federal loans offer many benefits, including a fixed interest rate that can prevent your debt from ballooning. Though interest rates vary from loan to loan and year to year, interest rates for the 2019-2020 school year range from 4.53% to 7.08%.
To be eligible for a federal loan, you must:
- Be a U.S. citizen or eligible non-citizen; undocumented immigrants cannot get loans.*
- Meet certain financial need criteria to be eligible for subsidized loans.
- Meet certain academic requirements, such as being on track to complete your degree.
- Not be currently in default on student loans. If you are, you need to make payment arrangements before you can pursue additional loans. It is possible to cure student loan defaults, so students who think they may owe money should contact the Financial Aid Office for help addressing past-due loans.
- Not be incarcerated. Students with serious criminal records may have limited or no access to certain federal loans.
Federal loans are the superior option for most students. However, some students may not meet the eligibility requirements. Others may need more funds to cover tuition and other costs. If you hit the federal loan limit, you will also be unable to get more loans, even if you otherwise qualify.
Some students may be interested in using their loans to fund a second degree. As long as you otherwise meet financial aid requirements, you should be able to fund multiple degrees.
If federal loans don’t meet your financial needs or you are ineligible for such loans, you may be able to apply for a private loan. These loans function more like traditional loans. You’ll apply directly through a bank or credit union, and the award will be based on your credit, income, and similar criteria. These loans offer less favorable interest rates and terms, so max out your federal loan options before pursuing a private loan. Then research each loan provider to get the best possible terms.