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Wednesday, January 16, 2013

Campus-Based Student Financial Aid Programs Under the Higher Education Act

David P. Smole
Specialist in Education Policy

Alexandra Hegji
Analyst in Social Policy

Three Higher Education Act (HEA) student financial aid programs—the Federal Supplemental Educational Opportunity Grant (FSEOG) program, the Federal Work-Study (FWS) program, and the Federal Perkins Loan program—collectively are referred to as the campus-based programs. The campus-based programs were reauthorized under the Higher Education Opportunity Act (HEOA; P.L. 110-315), which amended and extended authorization for programs funded under the HEA. The campus-based programs are currently authorized to be funded through FY2014.

Under the campus-based programs, federal funding is provided to institutions of higher education for the provision of need-based financial aid to students. Institutions participating in the programs are required to provide matching funds equal to approximately one-third of the federal funds they receive. The campus-based programs are unique among the need-based federal student aid programs in that the mix and amount of aid awarded to students are determined by each institution’s financial aid administrator according to institution-specific award criteria (which must be consistent with federal program requirements), rather than according to non-discretionary award criteria, such as those applicable for Pell Grants and Subsidized Stafford Loans.

Each program provides students with a distinct type of aid. The FSEOG program provides grant aid only to undergraduate students. The FWS program provides undergraduate, graduate, and professional students the opportunity for paid employment in a field related to their course of study or in community service. The Perkins Loan program provides low-interest loans with favorable terms and conditions to undergraduate, graduate, and professional students.

Funding is provided to institutions separately for each program according to formulas that take into account both the allocation institutions received in past years (their base guarantee) and their proportionate share of eligible students’ need that is in excess of their base guarantee (their fair share increase). From these funds, institutions’ financial aid administrators award aid to eligible students who have financial need.

The programs are among the oldest of the federal postsecondary aid programs; however, they now operate amidst a host of other aid programs and tax benefits, some of which are not needbased. At present, a relatively small proportion of all students receive campus-based financial aid.

This report describes the FSEOG, FWS, and Federal Perkins Loan programs, as amended by the HEOA. It also presents historical information on appropriations provided for the programs and the federal student aid that has been made available to students through the programs.

Date of Report: January 3, 2013
Number of Pages: 28
Order Number: RL31618
Price: $29.95

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