Repay your federal grant! | 06.17.09

Posted in FAFSA, Financial Aid By Student Loan Network Staff

By definition, to grant means to give or transfer. So if you are given a grant, why do you need to pay it back? I thought grants were essentially free money? Don’t worry. Most grants do not require repayment, but if you do not meet the conditions of the grant be prepared to pay.

If you complete your FAFSA and are awarded a Pell grant you must attend at least 60% of the semester before you are one hundred percent vested in your federal aid award for that semester. If you withdraw from all your classes before you have completed at least 60% of the semester the college must then determine what portion of your federal aid you are entitled to. Essentially, they take money away from you which you then need to repay to the school.

If you read the fine print on the federal TEACH Grant, which is a grant providing up to $4,000 per year in grant assistance to students who are completing or plan to complete course work needed to begin a career in teaching, you will notice that in exchange for the grant, a student must sign an agreement to serve as a full-time teacher at certain low-income schools within certain high-need fields for at least four academic years within eight years of completing their course of study. If you fail to honor your commitment your grant is converted to an unsubsidized Stafford loan and must be re-payed.

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