Pell grants, other student aid can help older college students

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Pell grants, other student aid can help older college students
By Sandra Block, USA TODAY

As the labor market becomes increasingly competitive, millions of Americans who are out of work or worried about their jobs are trying to learn marketable skills. But when money is tight, going back to school may seem like an unaffordable luxury. The good news: Financial aid isn't just for the young. Even if you use Facebook to share pictures of your grandkids, there's a good chance you qualify for direct grants or low-interest loans.
Here's a look at what's available for adult learners:

•Federal grants. Federal Pell grants are available for undergraduate students of all ages who can demonstrate economic need. For the 2009-10 academic year, the maximum Pell grant is $5,350. Pell grants also are available for part-time students on a pro-rated basis, says Melissa Gregory, director of student financial aid for Montgomery College, a community college based in Rockville, Md.

CHART: Federal grants available to adult learners
To qualify for a Pell grant, you must fill out the Free Application for Federal Student Aid, or FAFSA. You can find an online version of the application at www.fafsa.ed.gov. If you plan to attend college this fall, Gregory says, complete the application as quickly as possible.

This year, the FAFSA includes a question asking the student if he or she is a dislocated worker — for example, laid-off workers who are unlikely to find new jobs in their field. If you answer in the affirmative, you may qualify for more aid, Gregory says.

Talk to your school's financial aid office if your economic circumstances have deteriorated since last year. The FAFSA is based on the previous year's income — a problem if you recently lost your job. Financial aid administrators have the discretion to consider major changes, such as job loss or a reduction in your hours, and recalculate your eligibility for aid, Gregory says.

The Obama administration is also encouraging states to change their rules so that laid-off workers can enroll in college without giving up unemployment benefits. Ordinarily, states require individuals who are collecting unemployment to look for a new job, which is difficult to do if you're attending college.

•Institutional grants. Some scholarships are specifically targeted at older students. For example, the Osher Re-entry Scholarship offers $2,500 for students who dropped out of college at least five years ago and want to finish their degrees, says Saskia Knight, vice chancellor for enrollment at Chapman University College, an Orange, Calif.-based college that focuses on adult education. Columbus State Community College in Ohio is offering scholarships of up to $1,000 for students 25 or older.

The best way to find out about such programs is through the financial aid office of the schools you're interested in attending, Chapman says.

•Student loans. Most adult learners can't rely on Mom and Dad to pay their tuition. The upside to this is you're eligible to borrow a larger amount of federal student loans than dependent students, says Kevin Walker, chief executive officer of SimpleTuition, a loan comparison website.

Undergraduate independent students can borrow up to $9,500 in Stafford loans during their freshman year, $10,500 during their sophomore year, and $12,500 for each of their junior and senior years. That compares with maximums of $5,500 to $7,500 a year for dependent students. Limits are higher for graduate students.

For the academic year beginning July 1, the interest rate for unsubsidized Stafford loans is 6.8%. For the 2009-10 academic year, the rate for subsidized Stafford loans, which are available to students who can demonstrate economic need, is 5.6%.

While unsubsidized Stafford loans are available to all students, regardless of income, you must fill out a FAFSA to qualify, Walker says.

You'll also have to fill out some paperwork to demonstrate to the Department of Education that you're an independent student, he says.

If you must borrow, it's worth the effort, because federal student loans carry lower interest rates and more favorable repayment terms than most private loans. In addition, he says, private lenders have tightened their lending standards considerably in recent months. If you're out of work, you probably won't get a loan unless you have a co-signer with good credit, Walker says.

The Obama administration has launched a website targeted at unemployed workers who want to go back to school. You can find it at www.opportunity.gov.