Federal Aid Programs

Federal Pell Grant Program

This program is the cornerstone of federal student assistance. Pell Grants are awarded to the neediest students. The maximum Pell Grant award has remained static at $4,050 since 2003-04. It has failed to keep pace with inflation, dropping 20 percent in constant dollars since 1975. In other words, when adjusted for inflation, today's maximum award is worth only 80 percent of its value in 1975.

In FY 2006, the Pell Grants helped more than 5.2 million undergraduate students attend college. The average grant was approximately $2,445. The average family income of recipients is less than $20,000. In FY 2006, the program provided $13 billion in grants. For FY 2006, awards ranged from $400 to $4,050.

Federal Supplemental Educational Opportunity Grants (SEOG)

This campus-based program provides additional grant assistance to Pell Grant recipients in order of need. Grants are matched by colleges and universities. It is an efficient, cost-effective way to aid students and encourage them to persist in their education.

In FY 2006, this program provided grants to nearly 1.3 million students at approximately 4,000 postsecondary institutions. Awards ranged from $100 to $4,000; the average grant was $766. The federal share of a student's award cannot exceed 75 percent of the total; the remaining 25 percent is contributed by the institution. Nearly 60 percent of students who received federal SEOG grants came from families with annual incomes of less than $20,000; and 80 percent had family incomes under $30,000. For FY 2006, the program provided $771 million in grants.

Federal Work-Study (FWS) Program

This campus-based program provides part-time jobs to students who need help to finance their education. Federal funds cover up to 75 percent of student wages, with the rest paid by the institution, the employer, or another donor.

In FY 2006, the FWS program provided aid to nearly 810,000 students at more than 3,300 postsecondary institutions. Average earnings were $1,447. About half of the students who receive work-study come from families with annual incomes of less than $30,000. In FY 2006, $980 million was awarded.

Federal Perkins Loan Program

This campus-based program provides low-interest loans to undergraduate, graduate, and professional students. Loan funds are provided through new Federal Capital Contributions, institutional matching funds, and collections from prior borrowers. Part or all of the loan may be forgiven for borrowers who work in certain occupations. This has helped provide law enforcement officers, teachers, and nurses to many rural and inner-city areas.

Undergraduates may borrow up to $4,000 per year, up to a maximum of $20,000. Graduate students may borrow up to $6,000 per year, up to a maximum of $40,000 (including any undergraduate Perkins Loans). In 2005-06, the Federal Perkins Loan Program provided new federal loan funds to more than 524,000 students at about 1,800 postsecondary institutions. The average loan was $2,166. Nearly half of undergraduate dependent borrowers were from families with incomes of $30,000 or less. In FY 2006, $1.1 billion was available to students.

Since the inception of the federal Perkins Loan program in 1958, over $28.8 billion in loans have been made to students through almost 26 million aid awards. A key factor of the program's success is the central role of the college that originates, services, and collects the loans, while providing loan counseling for the borrower.

Leveraging Educational Assistance Partnerships (LEAP), formerly the State Student Incentive Grant (SSIG) Program

LEAP gives incentive grants to help states provide grants to students at postsecondary institutions. Students must demonstrate financial need to receive these grants. States are required to match each federal dollar with one state dollar. Funds appropriated over $30 million are available for additional activities, such as early intervention programs, to states willing to match each federal dollar two to one.
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n FY 2006, federal appropriations for the LEAP Program were $65 million.

TRIO Programs

TRIO was designed to help low-income Americans enter college, graduate, and launch a career. TRIO services provide help in choosing a college; tutoring; personal, financial, and career counseling; and special instruction in reading, writing, mathematics, and study skills.

Two-thirds of the students served by the program come from families with incomes of less than $28,000 where neither parent graduated from college. In FY 2005, 2,707 TRIO programs served nearly 878,000 low-income students.

Federal Subsidized Loan Program

The U.S. Department of Education operates two major student loan programs - the Federal Family Education Loan (FFEL) program and the William D. Ford Direct Loan program.

The FFEL program provides loans to students at postsecondary institutions through the use of private lenders and guaranty agencies. Students must demonstrate financial need to be eligibl