Roughly 45 million students have been feeling the financial burden of student loans across the country. Seeking alternative sources of income to meet the sometimes aggressive repayment schedules is a smart financial move for anyone. What can an alternative source of income look like? One good example comes in the form of a scholarship or grant.
With the increasing prevalence of student loans across America, it's no wonder that many people need a bit of help paying them off. Situations change, and just because someone was approved for a loan before their freshman year, doesn’t mean they are still financially capable of paying it off. Thankfully, there are many organizations which recognize this ongoing problem and provide a helping hand to students in need.
Grants to Pay Off Student Loans
Once you start looking, you may be surprised at the number of available grants for student loans. For anyone researching their options, there are two main categories to explore: federal grants and state-sponsored grants.
The main federal grant for students is called the Federal Pell Grant. This grant is available for undergraduates, up to a maximum of $5,550 per academic year (this maximum amount varies yearly). The Pell Grant is open to U.S. citizens with a valid social security number. Importantly, it is not awarded to students who have already defaulted on their student loan.
Another federal program providing grants is the Federal Supplemental College Educational Opportunity Grants (FSEOG). Unlike the Pell Grant, the FSEOG is only open to undergraduates demonstrating severe financial need. The grant is passed out on a campus-by-campus basis, through the institution's financial aid department. Not every college participates, but for those that do, they each have their own application deadlines. Apply early, as it can influence the size of the final grant.
The federal government also hands out a number of more specialized grants, under programs like the Teacher Education Assistance Grant for College and Higher Education (TEACH), and the Iraq-Afghanistan Service Grants. The TEACH grant is open to students enrolled in certain educational programs who intend to become a teacher. They must sign a commitment to service before approval. The Iraq-Afghanistan grants are only open for students who lost a parent during military service in either the Iraq or Afghanistan missions.
State Funded Grants
Another excellent option for students seeking alternative methods to pay off student loans, there are quite a few state-funded grants available countrywide. Unlike grants provided federally, each state-based program might require a separate application. Many are based strictly on financial need. However, there are some programs based on other criteria, like academic merit. Some common requirements for state-based programs are:
- High school graduate
- U.S. citizen
- Enrolled in a participating institution
- Resident of the state in which you are applying
- Academic achievement
- Financial need
State-funded programs are likely available in every state. From Alabama to Washington, there are state-funded grants to pay off student loans. Not all programs were created equal, but in some states students may qualify for upwards of $8,000 per year in financial assistance. That can have a substantial economic impact.
It’s not easy meeting student loan payments, especially for people locked into loans which require them in-school instead of post-graduation. It’s important to mention that nearly all of the grant programs above reset at the beginning of each academic year. Any assistance can be beneficial, even programs like FSEOG, which might only provide $100 per academic year. For some, that may just be the boost they need to continue making their monthly payments.