is there such a thing as government college aid for bankrupt families?
my parents want me to find out cause they heard from a friend that the government gives aid to families who have declared brankruptcy trying to get a kid into college. i’ve been looking online but haven’t found anything, if possible links for more information would be ideal when answering this question. i need to know asap or i cant get into college thanks.
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Okay – here’s what you need to know.
Many of the financial aid programs that are sponsored by the federal government are based on "need". A credit check is not required, and it doesn’t matter if you have good, bad, or horrendous credit.
You apply for all forms of federal educational aid by completing the Free Application for Federal Student Aid (the "FAFSA") at the website that I’ve linked below.
The FAFSA asks questions about your finances and your parents’ finances – not just your income, but also certain types of assets, like savings accounts, stocks, investment property, etc.
The information that you provide is evaluated by the US Department of Education (the agency that oversees the federal financial aid program), and the agency derives an EFC or "expected family contribution". When you complete the FAFSA, you will have the opportunity to instruct the Department to furnish your EFC to the financial aid office of any eligible college or university that you choose.
When the financial aid office receives your Student Aid Report (SAR) from the government, they will use the EFC to identify the financial aid programs that you are eligible for. If your parents have recently declared bankruptcy, chances are that your EFC will be low. The minimum EFC is 0.
Certain forms of financial aid are offered only to students and families with extreme economic circumstances – these programs are educational grants and work-study. An educational grant is a free gift of money from the government – there are two primary types of these, the Pell grant and the FSEOG (Federal Supplemental Educational Opportunity Grant).
The amount of Pell and FSEOG grants that you are eligible for is directly tied to your EFC. The maximum Pell grant is $4731. Unlike the Pell grant, the FSEOG grant is not guaranteed – each school receives a certain amount of money from the government each year, and those funds are distributed to students on a first-come first-served basis – if you want to qualify for the maximum possible grant award, you should submit your FAFSA form as early as possible each year.
Work-study is also reserved especially to those students who need the most economic assistance. The work-study program is an opportunity to work part-time, while earning money to help pay for school. You are responsible for finding your own job (and keeping it), but employers are very much attracted to work-study students, because the government promises to pay part of your wages. In other words, you’re cheaper to employ than anyone else – so why not hire you?
The other major category of federal assistance is the federally-guaranteed loan – the best known of these is the Stafford Loan program. These will also appeal to you in your circumstances, because the Stafford loan is about the only kind of loan you could ever find that doesn’t require that you have a credit history or a cosigner. (so your parents’ bankruptcy won’t matter)
If your financial circumstances are particularly poor, the government has another "gift" for you. Part of your Stafford loans will be in the form of "subsidized" loans, which means that the federal government will pay all of the interest that accrues on your loan while you’re still in school. That will save you hundreds of dollars in interest payments – and maybe thousands over the long run.
The concern for you and your parents is whether there will be enough federal financial aid available to cover all of your educational expenses. Once you have exhausted the federal funds and turned to private educational lending, THEN you’re going to have problems with the bankruptcy. Like any other type of lender, legitimate educational lenders will not lend to borrowers with a recent bankruptcy, unless a creditworthy cosigner is willing to guarantee the loan.
What this means to you is that you’ll have to choose your school carefully – many of the more expensive schools are sure to be out of the question (but they are for most everyone anyway). You may need to start out looking at the local community colleges, and certainly the state university system, where tuition is lower, and you may qualify for additional state assistance that won’t be available if you look out of state.
I’ve attached an excellent government publication that explains the federal financial aid system. I would strongly recommend that you and your parents sit down and read it through, as it pretty much answers any questions that you might have about financing a college education. If you do have any remaining questions, the very best resource is your college’s financial aid department.
I wish you the very best of luck – keep the faith!
There is Government help and aid for everything.So dont worry.All you have to do is probably research at government websites.It should work out for you.Good Luck
mabe you can get a pell grant it is a government loan that you dont have to pay back.
By going to http://www.fafsa.ed.gov, you will make yourself eligible for government grants. They base it on last years income so if the bankruptcy is current you will need to file a lose of income form with the school and they will reevaluate your parents financial standing.
They still offer grants to the kids of those that have filed for bankruptcy, Trust me I know