The Federal Supplemental Education Opportunity Grant, or Federal SEOG, is a program that provides grants to help low-income students cover a portion of their college expenses. Individual grants range in value from $100 to $4,000, and each participating school has a limited annual budget for them. Once the allotted funds are gone, they're gone -- so if you think you may qualify, apply for financial aid quickly to get priority consideration.
Federal SEOG money is allocated annually by the Department of Education's Office of Federal Student Aid, and preference is given to students who receive Pell Grants. Additionally, the college itself must fund a quarter of the value of its Federal SEOG payments, which is one reason that not all colleges participate in the program.
Will a Federal SEOG be enough?
The Federal SEOG program provides need-based financial aid to U.S. citizens attending accredited and participating colleges. To apply for these grants, all you have to do is fill out the Free Application for Federal Student Aid (FAFSA) form -- the same form you fill out to get many other forms of need-based financial aid. Your school will determine whether you qualify and for how much. The earlier you fill out the form, the better, as schools generally pay qualifying students on a first-come, first-served basis.
Assuming you receive a Federal SEOG award, that's money you don't have to pay back, so it permanently reduces your out-of-pocket cost for college. Free money is hard to beat -- but it is important to realize that the maximum Federal SEOG is $4,000. That is unlikely to cover the full cost of your education, so you'll want to have a solid plan in place to cover the rest.
Scholarships and other grants are great -- but they can be hard to come by. Loans are tempting, as they're relatively easy to get. But remember: Student loans generally can't be discharged in bankruptcy unless you can show an undue hardship. As a result, consider any loans you'd apply for in the context of your expected future earnings power. Those loans will need to be repaid with interest, even if your salary after graduation isn't stupendous.
Instead of financing the rest of your education with loans, consider options like campus jobs, working part time, or attending school part time while working full time as ways to reduce the amount you borrow. Federal SEOGs can be awarded to part-time students, so that avenue of funding won't be cut off just because you choose to work your way through school.
What do you want from your college education?
Regardless of the funding choices you're offered or the package you ultimately accept, remember that the funding is only a means to an end -- with that end being your education. Take it a step further, and that education itself should be viewed (at least in part) as a means to another end -- a career that you can use to support yourself and your family.
Don't let the promise of a Federal SEOG or any other grant distract you from that goal. Treat your education as an investment -- both of your time and significant amounts of cash -- to help prepare you for your life and career. With that framework in mind, you can build a plan that will put you in a position to leverage your college education and have a successful return on your investment -- no matter what your financial aid package looks like.
Chuck Saletta has no position in any stocks mentioned. The Motley Fool has no position in any stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.