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From a personal perspective, education is an investment in your future. The Bureau of Labor Statistics links education to job growth in its projections for the 2008-2018 decade. In general, the BLS expects higher growth rates in occupations where workers have some postsecondary education, compared to occupations where workers have only on-the-job training. One way for you to subsidize your educational investment, particularly with the increased cost of education, is through financial aid.

Federal financial aid programs top the list

By far, the largest provider of financial aid is the federal government: During the 2009-10 academic year, it paid approximately $107 billion in undergraduate aid and $32 billion in graduate aid, according to the College Board. The government was the source of about 70 percent of undergraduate aid and 73 percent of graduate aid, including the following:

  • Federal Pell Grants: For undergraduate students, based on financial need. The government sets a maximum award limit, and the amount of the award is determined by the school.
  • Federal Supplemental Educational Opportunity Grants, or FSEOG: These awards are based on financial need and awarded by the school from annual allocation.
  • Teacher Education Assistance for College and Higher Education, or TEACH, grants: Grants are not based on financial need; the recipients agree to teach at specific schools or in specific subjects.
  • Federal Work Study: Based on financial need and awarded by the school from annual allocation, this type of aid allows student to work part time.
  • Federal Perkins Loans: These student loans are based on financial need, available to students enrolled at least half time, and awarded by the school from an annual allocation.
  • William D. Ford Direct Loans: Loans are available to undergraduates, graduates and parents of dependent students. If loans are based on need, they are subsidized, meaning that the government pays the interest while you are in school. Loans that are not based on need are unsubsidized. Annual and aggregate loan limits apply.

The remaining financial aid for 2009-10 was from these sources:

  • Private and employer grants, which may include scholarships: $10.5 billion
  • Institutional grants: $33.4 billion
  • State grants: $8.7 billion
  • Federal education tax credits: $7 billion

Financial aid: The little engine that could

President Obama sees educational funding as a priority. In a 2011 State of the Union address, he said, "Cutting the deficit by gutting our investment in innovation and education is like lightening an overloaded airplane by removing the engine. It may feel like you're flying high at first, but it won't take long before you feel the impact." U.S. students received nearly $199 billion in total financial aid in 2009-10, and student borrowing continues to increase, according to the National Association of Student Financial Aid Administrators. If you qualify, financial aid could help fuel your educational investment in your future.