Federal Pell Grants
Pell Grants provide money to help undergraduate students (those who have
not earned a Bachelor's Degree) pay for their education. For many students,
Pell Grants provide a “foundation” of financial aid to which aid from other
Federal and non-federal sources may be added. Unlike loans, grants do not
have to be paid back. Although not everyone qualifies for these need-based
grants, all students should apply. Funding is determined annually by Congress.
For the award year beginning July 1, 2008 and ending June 30, 2009, fulltime
Federal Pell Grant awards range from $400 to $4,731. If you are eligible,
the actual amount of your Pell Grant will be based on your cost of education,
the number of hours enrolled and the Federal Pell Grant program regulations.
Federal Supplemental Educational
Opportunity Grants (FSEOG)
FSEOG provides money to first year undergraduate students who demonstrate
exceptional need. FSEOG funds do not have to be repaid. Funds are awarded
to students based on financial need and the availability of funds to the School.
Federal Work-Study (FWS)
This program provides on or off-campus jobs. Wages are paid jointly from
Federal and institutional or agency funds. Students must demonstrate financial
need for Federal Work-Study jobs.
Academic Competitiveness Grant
The maximum grant award for a first academic year eligible undergraduate
student is $750; the maximum award for a second academic year eligible
undergraduate student is $1,300.
ACG Requirements
To receive an ACG, a student must:
• receive a Federal Pell Grant during the same award year;
• be a U.S. citizen;
• be a first- or second-year full-time undergraduate student in an eligible program;
• provide an academic transcript that documents completion of a rigorous
secondary school program of study; and:
• if a first-year student–have completed secondary school after Jan. 1, 2006, or
• if a second-year student–have completed secondary school after Jan. 1, 2005,
and have at least a 3.0 grade point average as of the end of the first academic
year of undergraduate study.
Federal Stafford Loans (Subsidized and Unsubsidized)
These are low-interest loans with a fixed rate (the maximum is
8.25%). Full-time students attending a full academic year may
be eligible to borrow up to $3,500 the first academic year and
$4,500 the second academic year under the subsidized
Stafford loan program. The amount of the loan will be affected
by the number of credit hours enrolled and number of weeks
attending, but may not exceed these maximum levels. The
amount of the subsidized loan will depend on the results of the
Federal family need analysis. Those students who are ineligible
or have limited eligibility for the subsidized loan may apply for
the unsubsidized loan. Dependent students may borrow from
the unsubsidized Stafford loan program up to an additional
$2,000 per academic year. Independent students may borrow
from the unsubsidized Stafford loan program up to an
additional $6,000 per academic year.
Repayment for the subsidized loan begins six months after
students graduate, leave School or drop below half-time status.
Interest is not charged until the borrower enters repayment. The
unsubsidized loan requires interest to be charged once the loan
is disbursed and the borrower has the option of making interest
payments at that time or adding the interest to the principal
(capitalized) and begin repayment of both interest and principal
after the six-month grace period expires. Borrowers have up to
ten years to repay.
The documents that are required (but not limited to) for verification are,
as follows:
1. The parents' (if applicable) and student's signed Federal tax forms
(for the appropriate tax year).
2. A completed and signed verification worksheet.
The student will be notified when selected for verification; a deadline for providing the required documents is given at that time. Upon completion
of the verification process, the student will be notified if any of the student's
financial aid has been affected.
What is the Private Loan Program?
Private loans (not sponsored by a government agency) are
offered by banks or other financial institutions to parents
and students. These loans provide supplemental funding
when other financial aid does not cover costs. Private loans
can help bridge the financing gap for School expenses,
generally at much lower interest rates than credit cards.
Eligibility for the private loan is determined by the lending
institution.
The interest rate on a private loan is usually 1 to 10 percent
above the prime interest rate. Interest begins accruing when
the loan is disbursed. Some private loans defer repayment
until the student leaves School; for others repayment begins
45 days after the first disbursement of the loan. Monthly
payments vary but may be as low as $50 per month with
repayment terms up to 15 years.
What is the Institutional Loan Program?
The Institutional Loan Program (ILP) was created for students attending the
Schools of High-Tech Institute, Inc. / TCI Education, Inc. The ILP provides an
affordable payment program worked out in accordance with individual financial
circumstances as reflected in the financial information submitted to the
School. The objective of the ILP is to provide students with either an alternative
to Federal Financial Aid programs or an additional source of funding for tuition,
books and supplies. The loans have no associated fees and carry a 0 to 18
percent interest rate depending upon the length of the loan.
Failure to submit ILP payments within the requested time period may result in
termination of the financing agreement, with the balance due immediately.
Education tax incentives
There are several tax benefits for families who are paying for or will be
paying for School. The benefits are in the form of tax credits, deductibility
of education loan interest and penalty-free IRA withdrawals.
- Hope Scholarship & Lifetime Learning Credit
The Hope Scholarship and Lifetime Learning Credits are tax credits for
taxpayers that pay tuition and related expenses. A tax credit reduces the
Federal income tax owed thus increasing a refund or reducing the tax
amount owed to the Federal Government.
Deductibility of Education Loan Interest
»Reduces the adjusted gross income (above the line deductions)
»Limitation: Hope Credit - up to $1650 per eligible student and Lifetime Learning Credit - up to $2000 per tax return.
»To preserve deductibility, parents (rather than dependent students should borrow the money and pay the interest.
»A taxpayer claimed as a dependent by another taxpayer is not eligible for the deduction.
Tuition and Fees deduction
The Tuition and Fees deduction can reduce the amount of your income tax by up to $4000.00 for qualified expenses paid during the year for yourself, your spouse, or a dependent
No Penalty for IRA Withdrawals
Beginning January 1, 1998, a taxpayer may make a withdrawal
from an Individual Retirement Account (IRA) to pay
tuition for the taxpayer, the taxpayer's spouse, or the child or
grandchild of the taxpayer or taxpayer's spouse. The taxpayer
will not be subject to the 10% early withdrawal tax that
applies when amounts are withdrawn from an Individual
Retirement Account before the account holder reaches
age 59 1⁄2. This applies to distributions that are not more
than your qualified higher education expenses.
As early as your junior year in high school, start exploring all of your financial aid options that may be available from federal and state sources. Learn more about private grants and scholarships for which you may be eligible to apply. Talk to your parents, too. Financial aid may be available through their employers or their labor unions.
Generally speaking, your amount of financial aid is calculated by subtracting your family's expected contribution from your college costs. You don't have to be from a low-income family to qualify for financial aid, but you do have to demonstrate financial need.
Your expected family contribution is determined based on criteria defined by the Federal Government using the information on your financial forms.
One of the first things the Federal Government looks at is your dependency status. Whether you are an independent or a dependent student affects the amount of aid you may receive. If you're dependent, your parents' ability to help out is considered. If you're independent, you'll be evaluated based on your income and your income only. Unless you are married. Then spousal income will also affect eligbility.
To determine if you are dependent or independent, answer the following questions:
| YES / NO | Were you born before January 1, 1987? |
|---|---|
| YES / NO | At the beginning of the 2008-2009 school year, will you be working on a master's or doctorate program (such as an MA, MBA, MD, JD, PhD, EdD, or graduate certificate, etc.)? |
| YES / NO | As of today, are you married? (Answer "Yes" if you are separated but not divorced.) |
| YES / NO | Do you have children who receive more than half their support from you? |
| YES / NO | Do you have dependents (other than your children or your spouse) who live with you and who receive more than half of their support from you, now and through June 30, 2009? |
| YES / NO | Are (a) both of your parents deceased, or (b) are you (or were you until the age of 18) a ward/dependent of the court? |
| YES / NO | Are you currently serving on active duty in the U.S. Armed Forces for purposes other than training? Are you a veteran of the U.S. Armed Forces? |
If you answered “no” to every question, you are a dependent student.
Dependent students need to include their financial information on their FAFSA. These things will be considered when calculating your expected family contribution:
You should file your FAFSA as early as possible after January 1. If you file it before then, it will just be returned.
Yes, you must reapply each year to continue to receive financial aid.
You will need your, your parents' (if you're a dependent) and your spouse's (if you're married):
The Hope Scholarship is a tax credit, not a scholarship. Tax credits are subtracted from the tax your family owes, instead of subtracting them from taxable income like a tax deduction. Your family must file a federal tax return and owe taxes to get this tax credit. If your family owes less in taxes than the maximum amount of the Hope tax credit for which your family is eligible, you can only take the credit for the amount you owe in taxes. Your family may claim a tax credit up to $1,650. The Hope Scholarship is available for degree programs only.
The exact amount of the Hope credit depends on your family's income, the amount of qualified tuition and fees paid, and the amount of certain scholarships and allowances subtracted from tuition. The total credit is also based on how many eligible dependents are in your family.
The Lifetime Learning Credit is a tax credit available to individuals who file a tax return and owe taxes. This means the amount of the credit is subtracted from the taxes your family owes. If your family owes less in taxes than the maximum amount of the Lifetime Learning tax credit for which your family is eligible, you can only take the credit for the amount you owe in taxes. The Lifetime Learning Credit is available for both degree and non-degree education.
Your family may claim a tax credit of up to $2,000 per tax year (as of January 1, 2003) for the taxpayer, taxpayer's spouse, or any eligible dependents for an unlimited number of tax years. You may claim up to 20% of $10,000 of eligible expenses for expenses paid during the tax year.
The actual amount of the credit depends on your family's income, the amount of qualified tuition and fees paid, and the amount of certain scholarships and allowances subtracted from tuition.
Deductibility of Loan Interest
Student loan interest paid after December 31, 1997 is deductible providing that the borrower is still in the first 60 months of repayment. This deductibility reduces the adjusted gross income a taxpayer reports. Under law, up to $2,500 in education loan interest paid can be deducted. A taxpayer claimed as a dependent by another taxpayer is not eligible for the deduction.
Penalty-Free IRA Withdrawals
A taxpayer may make a withdrawal from an Individual Retirement Account (IRA) to pay tuition for the taxpayer, the taxpayer's spouse, or the child or grandchild of the taxpayer or the taxpayer's spouse. The taxpayer will not be subject to the 10% early withdrawal tax that applies when amounts are withdrawn from an IRA before the account holder reaches age 59 1/2.
