Student financial aid is available from a number of sources, including the Federal Government, State governments, colleges and universities, and other organizations. Students can receive aid from more than one source.

The Federal Government supplies the largest amount of all student aid, about 75 percent or $35 billion annually. The largest and most popular Federal student aid programs are:

These are need-based grants that were given to just under 4 million students for school year 1994-95. In school year 1995-96, the maxi-mum Pell Grant was $2,340.

There are two types of Stafford Loans -- subsidized and unsubsidized. Subsidized loans are need-based and unsubsidized loans are non-need-based. In 1994-95, approximately 6 million students received Stafford Loans.

With a subsidized loan,

With an unsubsidized loan, the interest accrues while the student is in school. After graduation, the student must pay back the loan and the interest on the loan, including the interest that accrued while the student was in school.

For both types of loans, the loan limits are $2,625 for the first year, $3,500 for the second year, and $5,500 for the third or more years. An undergraduate cannot borrow more than a total of $23,000.

Federal PLUS Loans allow parents to borrow money for their children's college education. The yearly limit is the cost of education minus any estimated financial aid for which the student is eligible.

In the past, students and parents could only receive Federal loans (including Stafford and PLUS Loans) through banks or other lenders under the Federal Family Education Loan (FFEL) Program. Beginning July 1, 1994, the Federal Government began to phase in a new program called the William D. Ford Federal Direct Loan Program.

The intent of the Direct Loan Program is to provide a simpler and faster way to obtain loans. Direct Loans are currently being offered at approximately 1,350 schools. Students who attend schools that are not participating in the Direct Loan Program will continue to obtain their loans from banks or other lenders under the FFEL Program.

The terms of the loans are basically the same under the FFEL and Direct Loan programs. The difference is that Direct Loan borrowers will repay their loans to the U.S. Department of Education rather than to a bank or other lender.

A key goal of the Direct Loan Program is to allow students to pick a repayment plan that best fits their financial circumstances. Under Direct Loans, a borrower may choose from among four different repayment plans, including the Income Contingent Repayment Plan where the monthly payment is based on the borrower's annual income and the amount borrowed. Increasingly, lenders under the FFEL Program are also providing a variety of repayment options.

The Federal Government provides money to colleges to give to needy students through three Federal Campus-based Programs. These three programs include (1) a grant program (Federal Supplemental Educational Opportunity Grants, or SEOGs), (2) a loan program (Federal Perkins Loans), and (3) the Federal Work-Study Program.

Students can get aid from more than one Federal program. For the most up-to-date information about student aid supplied by the Federal Government, call the Federal Student Financial Aid Information Center toll-free at the U.S. Department of Education at 1-800-4FED-AID.

States generally give portions of State budgets to public colleges and universities. This support lowers tuition for all students attending these schools. Some States also offer financial assistance directly to individual students, which can be need-based or merit-based. To find out about State aid where you live, call or write your State's higher education agency. The phone numbers and addresses of all of these agencies are listed in the last section of this handbook.

Colleges themselves provide aid to many of their students. Most of this "institutional aid" is in the form of scholarships or grants. Some is need-based and some is merit-based.

When your child wants financial aid information about specific schools, he or she should contact the financial aid offices of these schools and request information.

Other organizations, such as corporations, labor unions, professional associations, religious organizations, and credit unions, sometimes award financial aid. You can find out about the availability of such scholarships by contacting someone from the specific organization or by directly contacting its main headquarters.

In addition, some organizations, particularly foundations, offer scholarships to minorities, women, and disabled students. To learn more about such scholarships, go to the nearest public library with a good reference section and look for directories that list such scholarships. (The names of a few books that list scholarships appear in the last section of this handbook.)

College admissions offices and high school guidance counselors should also be able to provide more information about scholarships.

The guidance counselors at your child's high school should be able to provide information on when and how to apply for Federal, State, and other types of aid. If they cannot give you this information, try a local college.

Even if your child doesn't plan to attend that particular institution, financial aid officers there should have information on Federal financial aid. Many colleges can also tell you about State aid and their own institutional aid.