Types of Financial Aid

Financial Aid assists students and their families in meeting educational expenses that cannot be funded through their own resources. Listed below are the types of financial aid offered by Reading Area Community College.

• Federal Grants- Financial aid that does not have to be repaid.
• PHEAA State Grants- Financial aid that does not have to be repaid.
• Federal Work-Study- Part-time employment to earn money for education.
• Loans- Borrowed money that must be repaid with interest.
• Scholarships- Financial aid that does not have to be repaid.

Help Prevent Financial Aid/Scholarship Fraud

Every year, millions of high school graduates seek creative ways to finance the markedly rising costs of a college education. In the process, they sometimes fall prey to scholarship and financial aid scams. On Nov. 5, 2000, Congress passed the College Scholarship Fraud Prevention Act of 2000 (CSFPA). The CSFPA enhances protection against fraud in student financial assistance by establishing stricter sentencing guidelines for criminal financial aid fraud. It also charged the Department, working in conjunction with the Federal Trade Commission (FTC), with implementing national awareness activities, including a scholarship fraud awareness site on the ED website.

According to the FTC, perpetrators of financial aid fraud often use these telltale lines.

• The scholarship is guaranteed or your money back!
• You can't get this information anywhere else.
• I just need your credit card or bank account number to hold this scholarship.
• We'll do all the work!
• The scholarship will cost some money.
• You've been selected by a "national foundation" to receive a scholarship, or "you're a finalist" in a contest you never entered.

To file a complaint, or for free information, students or parents should call 1-800-FTC-HELP (1-877-382-4357) or visit the Federal Trade Commission website.

Federal Grants

Pell Grants

Pell grants are awarded to students who demonstrate financial need through the FAFSA. Pell grants are awarded only to undergraduate students who have not previously received a bachelor's or graduate degree. Pell grants are awarded based upon the analysis of the FAFSA, cost-of-attendance, expected family contribution, and enrollment status.

• Amounts up to $6195 for the 2019-2020 academic year.

Supplemental Educational Opportunity Grant (SEOG) Grants

SEOG grants are awarded to students who completed their FAFSA prior to May 1 and who are eligible for PELL grants in ascending order from among RACC students with the least ability to contribute to their costs of education as calculated from the need analysis.

• Amount of the award is $300 per academic year.

State Grants

PHEAA State Grant

This program provides grants to eligible Pennsylvania residents who are in need of financial assistance to attend PHEAA-approved postsecondary schools as undergraduate students.

• Award amounts are based on the college costs and the student’s need. Students must be enrolled in an approved program of study that is at least 2 years in length. Additional requirements, including satisfactory progress, can be found at PHEAA.org The maximum award is dependent upon available funding and subject to review and adjustment. For clarification of PHEAA certification requirements that impact most RACC students see PHEAA Awarding Requirements.

For more information visit PHEAA State Grant online or call 1-800-692-7392.

To determine your financial need, subtract the Expected Family Contribution (EFC) from your Cost of Attendance (COA). COA - EFC = Financial Need

Loans

Code of Conduct and Lender Policies

Reading Area Community College does not have a preferred lender list. If a student desires to use a loan program other than the Federal Direct Student Loan Program, it is their responsibility to locate a lender and complete all paperwork through them. The Financial Aid Office will certify a private loan upon receipt of the necessary information and request for certification. All private loans will be sent to the school in the form of a paper check, and may take additional time to process since our usual mode of certification is through the Federal Direct Lending Program as mandated by recent legislation. The Title IV Code of Conduct gives more information about the College's stance concerning lenders.

Federal Direct Student Loans

Federal Direct Student loans are borrowed money that must be repaid with interest. Information concerning student enrollment and participation in the Direct Lending program is sent each semester to NSLDS (National Student Loan Data System). NSLDS keeps a record of attendance for loan deferment purposes, and the principal and interest accrued from loans at various colleges to assist students with debt management and schools with certification.

The Federal Direct Loan Program makes low interest loans available to dependent and independent students enrolled for at least six credits per semester. Students may be eligible for either a subsidized and/or unsubsidized Federal Direct Loan as determined by the College.

• Subsidized Loans: The Federal government pays the interest on these loans while the student is in school or in a period of deferment.
• Unsubsidized Loans: The student pays the interest after the loan is disbursed until he or she repays the loan in full.

Applying for a Federal Direct Student Loan

The following steps must be completed to apply for a Federal Direct Student Loan:

• Submit a FAFSA for the appropriate academic year
• Complete Entrance Counseling* online at studentaid.gov
• Complete the Master Promissory Note (MPN) at studentaid.gov
• Complete the Student Loan Acknowledgement at studentaid.gov (Once Annually)
• Complete a Loan Request Form indicating the amount you wish to borrow and submit it to the Financial Aid Office, B107.

*If we are able to determine that a student has had a prior Federal Direct Student Loan within the last 10 years, we will not require the completion of the Federal Student Loan Entrance Counseling.

Exit Counseling

All students receiving student loans are required to do an exit interview when they leave the student loan program (are no longer intending to borrow). Exit Counseling prepares students for going into repayment, including information concerning available repayment options and contact persons. Exit Counseling helps to ensure that future students involved in the Federal Student Loan Programs will continue to receive a high quality of service. Exit Counseling can be completed online.

Repayment, Deferment, and Avoiding Default

Repayment begins 6 months after a student graduates or is no longer considered at halftime enrollment (6 credits) for a period of 6 months. Help with considering student resources and ability to repay can be found at mysmartborrowing.org. Another way to consider a student’s ability to repay is by estimating the amount of borrowing necessary to complete the student’s educational goals and then looking at a “sample repayment schedule” [link repayment schedule PDF] to estimate approximate repayment amounts after graduation. If a student needs assistance when entering repayment, they can always contact our office and we will co-ordinate with their servicer to help them make a smooth transition into whatever payment plan works best for their situation.

Under certain very specific conditions, students may be allowed to defer payment on a Federal Student Loan. Information concerning Federal Student Loan Deferments can be found at the Federal Student Aid website. Assistance with completing deferment paperwork can also be found in our office.

Our goal as an institution is to help current and prior students keep their loans in good standing and avoid the damaging consequences of Student Loan Default. Any student who borrowed while at our institution should feel free to contact us at any time if they are struggling to stay out of default. Our Default Management personnel will be happy to assist them in exploring any available options to keep their loans in good standing.