The Federal Pell Grant Program
This program forms the foundation of the financial aid package, and must be applied for before other types of financial assistance can be awarded. The maximum amount of such funds are available only to students enrolled in 12 or more credit hours each semester. Students enrolled less than full time may be eligible for reduced funding. Only undergraduate students are eligible for the Pell Grant.
Federal Supplemental Educational Opportunity Grant Program (FSEOG)
This program is available to students who are Pell Grant eligible. Funding for this program is limited and awards will be made on a priority deadline basis, according to need. The priority deadline is March 1st of each year. Only undergraduate students are eligible for the FSEOG.
Federal Stafford Loan Program
Legislation passed by the U.S. House of Representatives and the U.S. Senate eliminated the FFEL program. Since the Fall 2010 semester, Harris-Stowe State University has participated exclusively with the William D. Ford Federal Direct Lending Program (DL). The major difference between the DL and FFEL programs is the source of the loan funds students borrow. The U.S. Department of Education funds the DL program, and private lenders funded the FFEL program. Annual loan limits, maximum loan eligibility and interest rates are the same in both programs for students. However, parent borrowers will have a lower interest rate in the Federal Direct Parent program.
There are two types of Federal Direct Loans for students. Direct-subsidized loans are offered to students on the basis of financial need as determined by the Free Application for Federal Student Aid (FAFSA). The federal government does not charge interest on these loans while borrowers are enrolled at least half-time (six credit hours), during a six-month grace period following graduation, and during periods of deferment.
The direct-unsubsidized loans are not need-based loans and interest is charged throughout the life of the loan. Students can choose to make monthly interest payments or allow interest to capitalize. If interest is capitalized, it is added to the principal balance of the loan and the Department of Education charges interest on the new principal amount. This option increases the total amount repaid over the life of the loan.
This loan program enables dependent students to borrow up to $3,500 during their freshman year, up to $4,500 during their sophomore year, and up to $5,500 during their junior and senior years. There is an additional $2,000 unsubsidized loan available if the student is eligible.
An independent student can borrow a maximum of $7,500 during his or her first year of study, $8,500 after his or her first year, and $10,500 after two years of study. There is an additional $2,000 unsubsidized loan available if the student is eligible. The total outstanding debt for a dependent undergraduate is $31,000 and $57,500 for an independent undergraduate with a maximum of $23,000 being subsidized by Stafford.
Loans disbursed after July 1, 1994, carry a variable rate. The U.S. Department of Education holds out an origination fee for every direct-subsidized, direct-unsubsidized, and parent-plus loans. This fee helps offset the cost of funding these low interest loans. Stafford loans are one percent, and four percent for parent-plus loans. Students should allow seven weeks for the application and processing time of loan requests.
Students who have a four-year degree and are attending Harris-Stowe State University for the purpose of obtaining initial certification may be eligible for the Direct Federal Loan.
Direct Federal Plus Loan for Undergraduate Students (PLUS)
Under this program, parents can borrow for each dependent child in order to pursue his or her undergraduate studies. Students must be enrolled in at least six hours and be maintaining satisfactory academic progress. The repayment period on the PLUS loan begins on the day the loan is fully disbursed. The first payment of principle and interest is to be made within 60 days of the loan disbursement. The fixed interest rate for this loan is 7.9 percent. Parents must apply online and complete a master promissory note at https://StudentLoans.gov. All borrowers from Harris-Stowe State University, regardless of previous borrowing through FFEL, must complete a new master promissory note with the Department of Education at https://StudentLoans.gov. New student borrowers must complete entrance counseling. Review Your Federal Loan Records Online We encourage students to review their loan records with the federal government. Students can use their Federal PIN number to logon to http://www.nslds.ed.gov/nslds_SA/ and view the total student loans they have received from all schools attended.
For more detailed information about the William D. Ford Federal Direct Loan program, please visit www.direct.ed.gov.
The Alpha Kappa Alpha Educational Advancement Foundation Inc. (EAF) Scholarships and Fellowships
The Alpha Kappa Alpha Educational Advancement Foundation Inc. (EAF) is an organization dedicated to providing perpetual support for lifelong learning through a vibrant awards program that includes academic scholarships (financial and merit-based), community assistance awards and fellowships. Please visit our Web site at www.akaeaf.org for more information or call the EAF Scholarship hotline at (800) 653-6528.
ProNet International Gifts & Scholarships Inc.
Applications are accepted year-round. The charitable arm of ProNet International Inc. is awarding a minimum of two academic scholarships beginning April 25, 2009, for veterans intending to enroll in college/universities. First priority will be given to veterans who have served or are currently serving in the U.S. military in Iraq and or Afghanistan. Their dependents are also eligible. Applicants may download the application from www.pronetscholarships.org or for more information email firstname.lastname@example.org.
Thurgood Marshall College Fund (TMCF) Science, Technology, Engineering or Math (STEM) Emergency Scholarship Program
Applications are accepted year-round. As we are all experiencing the pressures of a declining economy, the Thurgood Marshall College Fund (TMCF) is committed to alleviating some of the financial burdens so many students are facing as they are working to achieve a college education. With that in mind, the TMCF has established a new STEM Emergency Scholarship Program for students who are confronted with an unmet financial need that if not met could mean they are unable to complete the school year. Click here for more information about this program. Click here for the application. More information about Thurgood Marshall College Fund scholarships can be found the at http://www.thurgoodmarshallfund.net/.
Scholarship Web Site Searches
Although it may appear that at certain times of the year, especially during the summer, that most scholarship opportunities have passed, there are a few Web sites that students should search on an ongoing basis. Listed below are two excellent sources for scholarship opportunities. These sites offer information for students of all levels, undergraduate through professional. Scholarship America www.scholarshipamerica.org Scholarship America has been developed to mobilize America through scholarships and educational support — making postsecondary education possible for all students.
EDUCATION TAX CREDITS
American Opportunity and Lifetime Learning Credits
The American opportunity credit allows taxpayers to claim a credit of up to $2500 for qualified education expenses paid for each eligible student. A tax credit reduces the amount of income tax the taxpayer may have to pay. Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself. Forty percent of the American opportunity credit may be refundable. The allowable American opportunity credit may be limited by the amount of the taxpayer's income. The refundable part of the credit may be limited by the amount of the taxpayer's tax. It is available for the only for the first 4 years of postsecondary education and only for 4 tax years per eligible student (including any years the HOPE credit was claimed). The student must be enrolled on at least a half-time basis for at least one academic period during the year for the expenses to be qualified and must be pursuing an undergraduate degree or other recognized education credential. An eligible student is either the taxpayer, taxpayer's spouse, or a dependent who is claimed as an exemption on the taxpayer's tax return.
The lifetime learning credit allows taxpayers to claim a maximum credit up to $2,000 per tax return incurred during the taxable year for qualified tuition and fees for eligible students for post-secondary education, including any course of instruction to acquire or improve job skills. There is no limit on the number of years the lifetime learning credit can be claimed for each student. The lifetime learning credit may be limited by the amount of the taxpayer's income and is a nonrefundable credit.
Both credits limit qualified expenses to the expenses of the taxpayer, the taxpayer's spouse, or a dependent of the taxpayer. Additionally, the total of qualified expenses must be reduced by any tax-free educational assistance (grants, scholarships, employer-provided tuition assistance) and by any refunds of qualified expenses. Qualified expenses paid for with loans are eligible. For each qualifying student, taxpayers must choose to claim either the American opportunity credit, the lifetime learning credit, or the exclusion for certain distributions from an education savings account for the taxable year.
To claim the credits, taxpayers are required to provide the name and taxpayer identification number of the student on the return. Educational institutions are required to report information related to higher education tuition and related expenses assessed during the taxable year.
Coverdell Education Savings Account
Taxpayers whose modified adjusted gross income is less than $110,000 for single filers and $220,000 for joint filers may establish a Coverdell Education Savings Account to finance the qualified education expenses of a designated beneficiary. Qualified education expenses include tuition, fees, books, supplies and equipment, and room and board. Contributions are non-deductible, and earnings on the amount held in the Coverdell ESA will be non-taxable until distributed. Annual contributions are limited to $2,000 per beneficiary under the age of 18.
Distributions from a Coverdell ESA are excludable from income to the extent the amount does not exceed the qualified education expenses of the eligible student during the year. If the distribution from the Coverdell ESA exceeds the qualified education expenses, only a portion of the distribution is excludable. In addition, distributions not used for education are subject to a 10 percent addition to tax. Any balance remaining in a Coverdell ESA at the time a beneficiary becomes 30 years of age is to be distributed and taxed to the beneficiary (and subject to the 10 percent addition to tax). However, the balance may be rolled over tax free to another Coverdell ESA benefiting another family member.
"Above-The-Line" Deduction for Qualified Higher Education Expenses
The taxpayer may deduct qualified education expenses paid during the year for the taxpayer, taxpayer's spouse, or taxpayer's dependents and may be limited by the amount of the taxpayer's income. Married taxpayers must file jointly to take the deduction, and the credit may not be claimed on the return of anyone who is claimed as a dependent on another person's return. The qualified higher education expenses are defined in the same manner as for the American opportunity credit. Taxpayers may claim the American opportunity/lifetime learning credit or the "above-the-line" deduction, but not both.
Deduction for Interest on Education Loans
The deduction for interest on education loans is an above-the-line maximum deduction for up to $2,500 of interest paid by taxpayers on qualified education loans. The amount of the deduction may be limited by the amount of the taxpayer's income. Taxpayers may take a deduction on qualified education loans for the benefit of the taxpayer, the taxpayer's spouse, or any dependent of the taxpayer as of the time the indebtedness was incurred. Married taxpayers must file jointly to take the deduction, and the credit may not be claimed on the return of anyone who is claimed as a dependent on another person's return.