Federal Aid Programs and Tax Benefits
The federal government offers a variety of programs and benefits to help students pay for college. You may be eligible for one or more of the following federal programs or tax benefits.
Federal Aid Programs
FAFSA - Free Application for Federal Student Aid
To apply for federal financial aid and most state aid programs, you must complete the FAFSA.
Apply as soon as possible, AFTER January 1, for the next academic year. You can indicate several college choices on one application so don't wait until you're admitted to apply.
Paper copies of the FAFSA are available from high school guidance offices, college financial aid offices, and at public libraries. You also can call 1-800-4FEDAID.
Federal Pell Grant
Undergraduate students who have significant financial need and have not earned a bachelor’s or professional degree may be eligible for grants.
Federal Supplemental Educational Opportunity Grant
Undergraduate students who have significant financial need and have not earned a bachelor’s or professional degree may be eligible for grants.
Federal Work Study
Financially needy undergraduate and graduate students can earn money to pay for education expenses through part-time work.
Federal Perkins Loan
Students with significant financial need may be eligible for low-interest loans.
Subsidized Federal Stafford Loan
Students may apply for the subsidized Stafford loan, which is based on financial need.
Unsubsidized Federal Stafford Loan
Students may apply for the unsubsidized Stafford loan, which is not based on financial need.
Federal Parent Loan for Undergraduate Students (PLUS)
Parents of dependent undergraduate students may apply for a PLUS loan, which is not based on financial need.
For more information about federal aid programs, contact:
Federal Student Aid Information Center
U.S. Department of Education
Phone:1.800.433.3243
(TTY: 1.800.730.8913)
Federal Tax Benefits
Hope Scholarship Tax Credit
Students or their parents can claim up to $1,500 per year for out-of-pocket tuition and fees for the first two years of undergraduate study.
Lifetime Learning Tax Credit
Students or their parents can claim up to $2,000 per year for out-of-pocket tuition and fees for most post-high school education and training.
State Prepaid Tuition and College Savings Plans
Parents, relatives or friends can invest after-tax money in a state tuition program for a future student. Money invested grows tax-free as long as it is spent on the student’s higher education.
Coverdell Education Savings Accounts
Parents, relatives or friends can make annual, nondeductible contributions to education savings accounts. Earnings grow tax-free and the money is tax-free when withdrawn as long as it is spent on the student’s education.
Student Loan Interest Deduction
Student borrowers or their families can deduct student loan interest payments from their taxable income.
Penalty-free IRA Withdrawals
Individuals under the age of 59½ may withdraw money from a regular or Roth IRA for tuition and other qualified higher education expenses without paying the 10 percent early withdrawal penalty.
Employer-provided Educational Assistance
Employers can provide each worker up to $5,250 of tax-free educational benefits per year.
For information about federal tax benefits, contact:
U.S. Internal Revenue Service
Phone: 1.800.829.3676
Other Federal Programs
AmeriCorps
People of all ages can earn money for college in return for one year of service in their communities.
U.S. Armed Forces
Students can take advantage of many educational programs offered by the U.S. Armed Forces. Opportunities range from free tuition at U.S. military academies to scholarships in exchange for service through the Reserve Officers Training Corps (ROTC) program.
Helpful Online Resources
The Student Guide: Financial Aid
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is a comprehensive resource on student financial aid from the U.S. Department of Education.
Funding Your Education
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an introductory publication for students below the senior year in high school.
IRS Publication 520: Scholarships and Fellowships
IRS Publication 970: Tax Benefits for Higher Education
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