Federal Student Aid
Federal Student Aid ( FSA ), an office of the U.S. Department of Education, is the largest provider of student financial aid in the United States. Federal Student Aid provides financial aid to students in the form of grants, loans, and work-study funds. The FSA is a Performance-Based Organization and was the first PBO established in the US government.
Federal Student Aid is also responsible for the development, distribution, and processing of the Free Application for Federal Student Aid (FAFSA), the primary qualification form used for all federal student aid distribution programs, as well as many state, regional, and private. student assistance programs. Federal Student Aid personnel process approximately 22 million FAFSAs each year. Additionally, Federal Student Aid is responsible for enforcing the financial aid rules and regulations required by the Higher Education Act of 1965 and the U.S. Department of Education, and for managing the outstanding federal student loan portfolio.
Mission
Federal Student Aid’s primary mission is to ensure that all eligible Americans have access to federal financial aid (grants, loans, and work-study programs) for post-secondary education. Programs managed by Federal Student Aid are the nation’s largest source of student financial aid: In the 2010-11 school year alone, Federal Student Aid provided approximately $144 billion in new aid to approximately 15 million postsecondary students and their families. A staff of 1,200 is located in 10 cities in addition to its Washington DC headquarters. In 2021, U.S. Secretary of Education Miguel Cardona appointed Richard Cordray, the former (and first) chief of the U.S. Consumer Financial Protection Bureau (CFPB), to the post of chief operating officer of Federal Student Aid. [2]Mr. Cordray said he would work to “…create more avenues for education…not be burdened with insurmountable debt.” As of September 2020, the program had 5.5 million people in default for $122 billion. The Federal Reserve Bank of New York is at least 90% delinquent – mostly in the federal program – reporting that 20% of all student debt. [3]
Federal Student Aid oversees $864 billion in outstanding student loans while ensuring that all partners in the student aid community—schools, service providers, and guarantee agencies—work fairly, honestly, and efficiently. Another important role the organization performs is to ensure that students and their families are aware that financial aid is available and is an important first step towards education beyond high school. Federal Student Aid distributes a large number of publications, both print and online, and manages several customer call centers. Most of these services are also available in Spanish.
The Federal Student Aid team is committed to making education beyond high school more accessible to all Americans, regardless of socioeconomic status.
Student Aid
Federal Student Aid provides financial assistance to students enrolled in eligible programs at participating post-secondary schools (accredited four-year or two-year public or private institutions, career schools, or trade schools) to cover the costs of education, including tuition and fees, room and board, books, supplies, and transportation. Most federal aid is need-based. The three most common types of aid are grants, loans, and work-study funds.
Grants are a type of financial aid that does not need to be repaid. Generally, grants are for undergraduate students and the amount of grant depends on need, cost of attendance, and enrollment.
- Federal Pell Grants are designed for low- and middle-income undergraduates. Pell Grants for the 2011-2012 school year range from $555 to $5,550.
- The Iraq & Afghanistan Service Grant is awarded to students who are not eligible for the Grant and only because of the program’s need requirements, the 2001 maximum award is $5,500 for the 2011-2012 academic year.
- Teaching Assistance for College and Higher Education (teach) Grant is awarded to undergraduate, postbaccalaureate, or graduate students who are taking the course required to become a primary or secondary teacher. Recipients of this grant must agree to serve as full-time teachers in a high-need field at a public or private elementary or secondary school serving low-income students for at least four academic years. The maximum award for the 2011-2012 academic year is $4000.
Loans are money borrowed that must be repaid-with interest. Both undergraduate and graduate students can borrow money. Parents can also borrow money to pay for dependent undergraduates’ education costs.
- Federal Stafford Loans are given to students and PLUS Loans to parents through the William D. Ford Federal Direct Loan (Direct Loan) Program: Eligible students and parents borrow directly from the federal government at participating schools. Direct Loans include Direct Stafford Loans, Direct PLUS Loans, and Direct Consolidation Loans.
- Federal Family Education Loan (FFEL) Program: Until July 1, 2010, the majority of federal loans were made through private loans with federally guaranteed funds. FFEL loans include FFEL Stafford Loans, FFEL PLUS Loans, and FFEL Consolidation Loans. The FFEL Program was terminated on 1 July 2010 under the provisions of the Healthcare and Education Reconciliation Act 2010. All new Stafford, PLUS, and consolidation loans are now managed through the Direct Loan Program.
Campus-Based Aid includes the types of aid that schools are responsible for administering on behalf of the federal government.
- Federal Perkins Loans are low-interest loans made using federal funds through a school’s financial aid office. Undergraduate and graduate students with exceptional financial needs are eligible for Federal Perkins Loans.
- Federal Additional Educational Opportunity Grant (FSEOG) Federal Student Aid is a program that provides funding through schools, which in turn offer scholarships to students. FSEOG grants range from $100 to $4,000 in the 2011-2012 school year.
- The Federal Work-Study Program provides part-time jobs to undergraduate and graduate students in financial need, allowing them to earn money to help pay for their education expenses.
