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Financial Aid Options For Working Professionals

Although a number of scholarships and grants are reserved for the truly impoverished full-time student, there are a few solid alternatives available to the working adult.

Student loans are available to all, and although they are not free money, the interest rates and terms make them an attractive alternative for the adult learner.

Federal Stafford Student Loans

The most common source of educational loan funds is the Stafford loan program. The Stafford loan program falls under two categories: The Subsidized Stafford Loan, and the Unsubsidized Stafford Loan.

Subsidized Stafford Loan

The Subsidized Stafford Loan is a federally subsidized loan for which no interest is charged, nor is repayment required, while the borrower is enrolled at least half-time. In fact, the federal government pays the interest on the loan while you're enrolled, and including the six month grace period upon completion of your degree program. In order to qualify for this loan, the student must show financial need as prescribed by the federal government. Financial need is determined by taking your expected contribution and subtracting this from the annual tuition for a particular university. Expected contribution is computed by the federal government as follows: 50% of your (Total Adjusted Gross Income less allowances for Federal and State taxes) plus 35% of your assets.

As you can see, although you may not be able to fund your entire education through the Subsidized Stafford Loan, you may be able to finance a chunk of it. Monthly payments begin six months after you graduate, drop below the level of a part-time student, or withdraw from the school. The interest rate on the Stafford Loan for new borrowers is variable with a cap of 8.25%. Origination and insurance fees may also be assessed, but they are usually minimal. The loan must be repaid within ten years.

Unsubsidized Stafford Loan

The Unsubsidized Stafford Loan can usually be used to cover what you did not qualify for through the subsidized loan. There is no financial need requirements for this loan. The loan is variable, with a cap at 8.25%. The primary difference between the two loans is that interest accrues on this loan when disbursed. But, on the up-side, there are no financial need requirements on this loan.

Borrowing Limits

Total borrowing through the Stafford Loan program can reach $46,000 for undergraduate students, and $138,500 for graduate students. This includes Stafford Loans received for undergraduate study.

Federal Pell Grants

A Federal Pell Grant may be awarded to you if you are pursuing an undergraduate degree. You must be able to show financial need as prescribed by the Federal Government.

Pell Grant awards for the current award year will depend on program funding. The maximum award for the 1996-97 award year was $2,470. How much you receive will depend not only on your financial need, but also on whether you are a full or part-time student, and whether you attend school for a full academic year or less. You may apply for each of these options by first filing the Free Application for Federal Student Aid (FAFSA). You can receive or download the FAFSA Express software at http://studentaid.ed.gov/PORTALSWebApp/students/english/fafsa.jsp.