REGENTS REPORT

South Dakota Higher Education: Good Investment. Great Future. NO. 55, 11/01/96

Federal Financial Aid Programs
How South Dakota's Students Are Helped

Through the Department of Education, the federal government sponsors various programs to help students fund their higher education. Federal education appropriations recently passed by Congress and signed by the President call for South Dakota students to get roughly $32 million in FY 1997 from the U.S. Department of Education to assist them in paying for college. Generally, the FAFSA (Free Application for Federal Student Aid) is the only form necessary to apply for federal financial aid. Below is a list of common federal financial aid programs and a graph showing the funding levels for three common programs in South Dakota for FY96-97.

FINANCIAL AID PROGRAMS

PELL GRANT-The Federal Pell Grant Program provides grants to eligible undergraduate students who have not yet received their degrees to help them cover the costs of higher education.

SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS (SEOG)-This program provides supplemental grants to students who show exceptional financial need. Generally, priority is given to those applicants with a Pell Grant.

FEDERAL WORK-STUDY-Work-study programs provide part-time employment for college students who need income to help meet education costs.

PERKINS LOAN-The Perkins Loan is a low interest (5%) loan provided to students.

STATE STUDENT INCENTIVE GRANTS-SSIG assists states in providing grants to students attending institutions of higher education. Students with a substantial financial need may apply.

STAFFORD LOANS-Most Stafford Loans are subsidized by the federal government, which pays interest on the loan while the student is in college. Any student enrolled at least half-time may apply.

SELECTED FEDERAL FUNDS FOR SOUTH DAKOTA: FY96 AND FY97

SOURCE: Board of Regents STUDENT AID HAS CHANGED

Since FY91, the share of federal grants awarded has decreased while the share of loans has increased in the public university system. This increases the financial obligation of many higher education students. Below is a chart showing the increases in loans and the decreases in the number of grants awarded to post-secondary students.

FEDERAL FINANCIAL AID IN SOUTH DAKOTA PUBLIC UNIVERSITIES: FY91-FY95

LOANS VS. GRANTS

SOURCE: Board of Regents, Factbooks FY92-96

THE PELL GRANT

The Pell Grant is one of the most common forms of federal aid-nationally, one in four higher education students will receive a Pell Grant to help cover costs. South Dakota has a relatively high participation rate for Pell Grants and this indicates the importance that the grant has in helping South Dakota students pay for college. Below is a chart showing the Pell Grant participation rate in the upper Midwest region.

UNDERGRADUATE PELL GRANT PARTICIPATION BY STATE: 1994-95

SOURCE: Post-secondary Education Opportunity, September 1996

CONCLUSION

Federal financial aid plays an important part in helping South Dakota students pay for college. Many families make the mistake of assuming they are ineligible for federal financial aid or apply too late. For more information on federal financial aid, you can call 1-800-4FED-AID; or you can visit the Board of Regents homepage at http://www.ris.sdbor.edu/, where you can find links to the universities and their financial aid offices, as well as links to useful information from the U.S. Department of Education on federal financial aid programs.


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