With college costs often in tens of thousands of dollars per student per year, many families are looking to the federal aid programs to help fund education. During the 2007 to 2008 school year, 47 percent of all undergraduate students and 62 percent of full-time undergraduate students received federal financial aid. The FAFSA, or Free Application for Federal Student Aid, is how the government determines the amount of federal aid each undergraduate and graduate student receives.


Federal aid for students falls into three major categories. Grants are mostly available for undergraduate students and are ideal because the money does not have to be repaid. Federal loans are available for students and parents and must be repaid over approximately 10 years. Federal work-study aid provides students with part-time jobs on or near campus by which they can earn federal funds distributed by the school. As of the 2007 to 2008 school year, undergraduate students received an average of $6,600 of federal aid across all types.

Average Grant Amount

Of all undergraduate students enrolled full-time or part-time during the 2007 to 2008 student year, 27.6 percent received federal grants. The average amount of the grant was $2,800 across all students, and the average amount for full-time students was $3,700.

Average Loan Amount

Undergraduate students receiving the Perkins and Stafford loans during 2007 to 2008 borrowed an average of $5,100 each in federal loans. Independent students borrowed an average of $2,200 per year more than dependent students. About 10 percent of parents of dependent students enrolled full-time took out federal PLUS loans, borrowing on average $11,400 for the school year.

Average Work-Study Amount

Only about six percent of undergraduate students accepted federal work-study aid during the 2007 to 2008 school year, although 10 percent of full-time undergraduates accepted work-study aid. The average aid amount provided through work-study was $2,200.

Who Should File

Everybody who is interested in receiving federal student aid, including federal student and parent loans, should file the FAFSA. Although federal grants and work-study awards are made on the basis of financial need, all students who file the FAFSA are offered federal Stafford loans and all parents are offered federal PLUS loans. As of 2010, Stafford loans carry a 6.8 percent interest rate and PLUS loans have a 7.9 or 8.5 percent interest rate, both of which are better than most private lenders.

Related Articles