The purpose of college financial aid is to help every qualified student pay the growing cost of a higher education. The time required to process a financial aid application is lengthy. Experts recommend that students apply for financial aid at the college or university of their choice even before they actually know whether or not they have received acceptance at that school. There are several reasons for this, particularly the fact that many financial aid officers give away their grant allotment on a first-come, first-served basis. Many colleges and universities also offer more grants and private scholarships to college freshman and sophomores and then tack on more student loans later in their college career.

Every prospective college student, that is an eligilble non-citizen, must fill out a Free Application for Federal Student Aid (FAFSA). This financial aid application can be requested from any college financial aid office, from the FAFSA website (http://www.fafsa.gov), or you can now complete a FAFSA online. The FAFSA will require both the student's and their parent's financial information. Since you will be required to fill out a FAFSA every year, you should learn how to do so properly. Most college students are familiar with the FAFSA and you should not hesitate to seek help.

Once the financial aid application has been processed, students will receive a Studen Aid Report (SAR). The SAR is a summary of you application. Make sure that all of the information is correct. If there are any mistakes, make corrections and send them back as soon as possible. Even minor errors can change your financial aid eligibility. Your SAR will be forwarded to the schools of your choice. Those school's will use the information in your SAR to determine your financial need and extend a financial aid offer. Your SAR will also tell you what the Estimated Family Contribution (EFC)amount is. The EFC is the amount of money that parents are estimated to pay. This is also determined by the information you provide in the FAFSA aplpication.

The financial aid offered by your perspective college or university may list different resources and may include a combination of scholarships, grants, Work-Study awards, student loans, and parent loans. Students are not obligated to accept the package as a whole and are free to accept part of the package (like a scholarship) or to decline another part (like a student loan).

There are two major categories of financial aid - aid that does not require repayment (scholarships and grants) and aid that does (loans). Most student loans require repayment beginning six months after the student leaves college or graduates. Parent loans and certain student loans, as well, require repayment while the student is in college. Scholarships, grants, work-study awards, and fellowships do not require repayment.

For a student to be eligible for financial aid, he or she is required to:

• Be admitted or enrolled as at least a half-time student
• Be working towards a degree or certification
• Be a U.S. citizen or eligible non-citizen
• Maintain satisfactory academic progress
• Register for the Selective Service, if required
• Not have an outstanding federal educational loan that is in default
• Have financial need (except for Unsubsidized Stafford Loans).

Types of Financial Aid 

Scholarships
In general, scholarships are awarded for academic accomplishment and of financial need. Students may also receive a specialized recruitment scholarship based on athletic, musical, or other special skills. College financial aid office and admissions personnel will determine a student's eligibility for these scholarships. Some students may qualify for several scholarships. The best scholarships to receive are multi-year awards. Multi-year scholarships are guaranteed for more than one school year as long as the student remains in good academic standing. Some multi-year scholarships can be guaranteed for a student's entire college career.

Although most scholarships and grants are awarded by college financial aid officers, there are other types of scholarships and grants available to students. In seeking financial support for college, many students overlook the many national Hispanic organizations offering scholarships. There are several major organizations which include the HSF (Hispanic Scholarship Fund), LULAC (the League of United Latin American Citizens), the American GI Forum, TACHE (Texas Association of Chicanos in Higher Education), HACU (Hispanic Association of Colleges and Universities), and others. NHSF, the largest of these organizations, awards more than $3 million in scholarships to thousands of Hispanic students annually. (See the "Scholarships" chapter of this booklet.) High school guidance counselors can also be of great help in identifying scholarship opportunities.

Grants
Grants, which usually come from state or federal monies, are much like scholarships, but are usually awarded on a one-time basis often based on economic need. Grants can be renewed every year as long as students remain eligible and funds remain available. The largest provider of college grants for low-income students is the federal government.

Work Study Awards
Work-Study is another popular way of financing a college education. Many students work while attending college. Under the Federal Work Study Program, which is funded jointly by the federal government and the school, students can gain valuable experience while working either on campus or in qualifying positions off campus. Work-Study jobs are scheduled so as not to conflict with a student's schoolwork during the regular academic year. By law, no student works more than 20 hours a week under the Work Study program. Students sometimes qualify to work longer hours during summers or between semesters.

Work-Study jobs offer an opportunity for students to learn administrative work in a college office, service in a community-based organization, or other types of work that match a student's interest and enrich the learning experience. Federal Work-Study awards are based on financial need. A student's eligibility for Work-Study must be determined by the college financial aid office.

Student and Parent Loans
There are two main groups of loans: subsidized and unsubsidized. Subsidized loan programs include the Federal Stafford and Federal Perkins Loan Program. These are government sponsored loan programs that are offered at favorable terms. For these loans, no interest accrues while a student is in school and do not have to be repaid until six months after a student has graduated. The six month grace period allows students some time to find a job or return to school with having to make loan payments.

Unsubsidized loan programs do not require students to establish financial need. Unsibsidized loans accrue interest while the student is in school and may carry a higher interest rate. Because the interest accrues while in school, the repayment amount will be higher. Unsubsidized loan programs include the Federal Unsubsidized Stafford Loan for students and the Federal PLUS Loan for parents, available to parents of dependent undergraduate students.

If students think there was a mistake made in the financial aid package received, they have the right to ask for a reconsideration, especially if family circumstances have changed or if they can provide the financial aid office with additional information that was not initially presented.

Other Financial Aid You May Have to Repay
There are some grants or fellowships for college students that require repayment unless certain conditions are met. Some schools offer "forgivable" loans designed to encourage students to perform well and finish their education. If they do, their loans are "forgiven." If they don't perform up to academic standards or if they drop out of college, they must pay back the funds they borrowed. Students will always be informed of their responsibilities in these cases and will be required to sign a written contract stipulating the terms of their acceptance of most awards. These grants or scholarships, which may be restricted to students studying certain fields, are not as readily available as other types of grants and scholarships.