Most federal financial aid is awarded to students who can demonstrate financial need. However, loans are often available to students from all income brackets, and some grants are based on other criteria. In order to obtain federal financial aid, students must apply by filling out the Free Application for Federal Student Aid. Institutions will use the information from the FAFSA to create a financial aid package for each student.

The Selective Service System: All males who are at least 18 years old must register with the Selective Service System if they want to be eligible for federal financial aid. Consequences for neglecting to sign up include fines and imprisonment.

Applying for Federal Aid with the FAFSA: There is only one way to apply for federal financial aid: fill out the FAFSA. It is a free application that relies on information about your family and financial circumstances to calculate what types and amounts of aid you will receive.

Tax Credits for Students and Their Parents: The government offers tax credits to students or the families of students who are enrolled in accredited institutions. Though not directly applicable to tuition, tax breaks can reduce income tax by as much as $2,500 annually.

Types of Federal Grants: Federal grants are given to students with demonstrated financial need, whose parent has died in Iraq or Afghanistan, for students interested in teaching or medicine, or for those who were at one point a part of the foster care system.

Types of Federal Loans: The William D. Ford Federal Direct Loan and Federal Perkins Loan Programs administer loans to students who need additional help funding their education.

Federal Work-Study: The Federal Work-Study Program is a type of financial aid that allows students to work an on-campus job or off-campus job related to their majors for a specific number of hours each week to earn money and experience.

Considerations before Accepting Your Financial Aid Offer: Your federal aid offer is likely to contain a combination of grants, loans, and work-study. As a rule, always accept grants, accept work-study if you think you have the time to work, and only accept the loans that you absolutely need.

Federal Loan Repayment: Federal loans don’t have to be repaid until you leave school or fall below half-time enrollment. Once you start, though, there are plenty of repayment plan options to consider.

Outside Contributions to Loan Repayment: Teachers, medical professionals, and public servants may be able to have their loans partially repaid or the outstanding balance forgiven if they agree to serve certain communities.

What to Do if You Can’t Afford Repayment: If you are having trouble making your loan payments each month, you can switch repayment plans to extend the life of the loan and lower monthly payments, request a deferment, or request forbearance.

What Happens if You Don’t Pay: The consequences of failing to repay your loans include delinquency, a plunging credit score, and default; these may result in legal consequences as well.