Financing College - Loan Types

Federal Student Aid

A student loan is for college and requires that the student and parents go through some steps to see how the student qualifies. Typically in early January of their senior year students and parents fill out the FALSA form, which comes from the Department of Education. This form can also be filled out online. The Free Application for Federal Student Aid or FALSA is one of best sources to help pay for college. The form lets schools examine the financial position of a potential student, and then they use that data to determine the amount of money the student can borrow. This form is the first step in receiving state, federal and school specific funding for college. It tells each school how much money to allot for loans, grants and scholarships. The parents and the students also visit the college of their choice to fill out more paper work before the student is granted a loan or grant.

Sign the Promisory note

source Commons Wikimedia
source Commons Wikimedia

Department of Education

The Department's Federal student aid programs are the largest source of student aid in America. They also give grants based on need and for minorities. Pell Grants are also federal grants. Families have to have completed income tax forms before they can fill out the FALSA

Student Eligibility

What determines a student’s eligibility for this loan?

  • For most loans they must demonstrate a financial need.
  • They must have a high school diploma or a GED, pass an ability-to-benefit test and meet any criteria from their home state.
  • They must be accepted as a student in their college of choice. In addition to graduation they must have taken the SAT or ACT receiving a satisfactory score.
  • They must be a U.S. citizen or eligible non-citizen which means a refugee, asylum granted, Cuban-Haitian, status pending, conditional entrant valid only if granted before 1980, a victim of human trafficking or a parolee that has been paroled into the U.S. for at least one year and you must prove you intend to become a U. S. citizen.)

FALSA Process

Once you have filled out the FALSA and given a copy of your income tax, the family’s financial information is analyzed using the federal need formula. Then the Student Aid Report (SAR) form contains all the data you entered on the FALSA and the Department of Education will send it to you via email or postal mail. This is a time you make sure there are no errors on the paper work. The form highlights items that may need your to complete. You submit the corrected SAR form back to the Department of Education, keeping a copy for yourself. At the upper right front of the page there is an area that lists Expected Family Contributions which is an estimate of the amount your family can contribute. This form is also sent to the state. Many students receive Pell Grants which help children whose parents can’t contribute.

Student Loans : Applying for US Department of Education Loans

College Classroom


Compare Lenders

Once a student qualifies for a loan they can choose which institution to make the loan.  The best thing to do is make a comparison of the loans taking into consideration the interest rate and the repayment requirements.  You will want to know if there are any hidden fees.  They can get a list of lenders from their school. 

Perkins Loan

The Federal Perkins Loan Program provides low-interest loans for needy students financing the costs of post secondary education. Students can receive Perkins loans at any one of approximately 1,800 participating post secondary institutions.  Students who undertake certain public, military, or teaching service employment are eligible to have all or part of their loans canceled.

Stafford and Brad Plus Loans

Stafford loans are popular as they have low interest rates and their repayment benefits are attractive. For example, students can defer repayment if they attend graduate school or they can renegotiate loan terms to stretch them out or lower their payments

There is also the Brad Plus loan where the parent is a co-signer and once the student graduates they are required to make 12 consecutive on-time principal and interest payments.

Florida's Bright Scholarship Program

In Florida they have the Bright Futures Scholarship program. To be eligible for their scholarship program the student must make good grades and get a good score on their ACT test. The amount of money received depends on your performance. To keep getting the scholarship money you have to keep your grades up. Other states have similar programs so be sure to see what is available in your state.

Student Loans : About Government Student Loans

Students Graduated

source comments Wikipedia
source comments Wikipedia


Certainly there are many institutions that offer private loans or student loans with parent’s co-signing. There are many programs available for scholarships and grants. This hub was primarily designed to explain the U. S. Department of Education funding as this is the most popular procedure for a college student loan.

© 2011 Pamela Oglesby

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Comments 30 comments

onceuponatime66 profile image

onceuponatime66 6 years ago from USA IL

FASA isn't that the loan company to apply? I didn't know about FALSA?

ghomefitness profile image

ghomefitness 6 years ago from Chicago,IL

Thanks for the info, we will be filling these out soon for my daughters who are seniors this year.

rpalulis profile image

rpalulis 6 years ago from NY

Wow its been so long for me, I forgot about all those forms and test. I am so glad my Dad was on top of all that when I was going to school, and really glad now that I have them all paid off. Great hub, very informative and helpful.

Pamela99 profile image

Pamela99 6 years ago from United States Author

onceuponatime, FALSA is the actual paper work that is given to you by the Department of Education to get approved for a national loan. My granddaughter just went through this last year so I looked up FALSA and they have a website that tells about the requirements.

Hope that straightens it out.

ghomefitness, I am glad this hub was helpful. Thanks for your comment.

rpalulis, Paying them off must have been a wonderful moment. Thanks for your comment.

topstuff profile image

topstuff 6 years ago

Just point out one spelling mistake overe Hubpages sign up make money todafy.It couldbe very prominent to make people run away.Nice hub

Nellieanna profile image

Nellieanna 6 years ago from TEXAS

I'm sitting here thanking my parents for getting all 4 of their children through college - as their major goal even when they first got started with nothing but their own educations and faith. Wow.

oceansnsunsets profile image

oceansnsunsets 6 years ago from The Midwest, USA

Great hub Pamela!

Pamela99 profile image

Pamela99 6 years ago from United States Author

Topstuff, Spelling is repaired. I got a new ergonomic keyboard for Christmas and I have not found it very easy to adapt to the new setup. Thanks for letting me know and I appreciate your comments.

Nellieanna, I wish more parents were like yours! Your education is certainly noted in your writing. Faith works wonders. Thank you for your comments.

oceansnsunsets, I appreciate your comment.

Nellieanna profile image

Nellieanna 6 years ago from TEXAS

Thanks, Pamela. Parents who care about their children's education usually continue it when the children are at home too. There were so many memorable discussions and also one-on-one little "lessons" just between me and a parent, especially Dad. Mother was more a teach-by-example person. But Dad loved to 'splain things and point out the 'moral of the story". The joy of learning was always expressed. And that is something that any parent can instill, regardless of the level of education, I think.

Pamela99 profile image

Pamela99 6 years ago from United States Author

Nellieanna, I think you are right. Discussion with children are great and I think it builds self esteem in the child when they get that individualized attention. Thanks for your comments.

Simone Smith profile image

Simone Smith 6 years ago from San Francisco

This is a great guide, and with great comments too! Thanks, Pamela99, for taking the time to put all this information in one place :D

Pamela99 profile image

Pamela99 6 years ago from United States Author

Simone, I appreciate your comments and hope this hub helps someone who is just entering into the student loan process.

katiem2 profile image

katiem2 6 years ago from I'm outta here

Pamela, This is much needed help. I have two very bright young ladies to send through college and on... Those savings made all through their childhood is just not hitting the mark. Whew the expense of a good college education is going through the roof. But it is a must and your help is much appreciated. Thanks for the student loan how to finance college. I'm also looking for ways to get scholarships. My honor students have 4.6 GPA, were working for it! :) Katie

Pamela99 profile image

Pamela99 6 years ago from United States Author

Katiem, Since your children are doing so well in school I would think they have a good chance at a scholarship. In high school there are courses you can take and sometimes get college credit. One of the most important things is they need to ace the SAT or ACT. That counts greatly toward getting accepted into college and scholarships. Best of luck with that. Thanks for your comments.

Darlene Sabella profile image

Darlene Sabella 6 years ago from Hello, my name is Toast and Jam, I live in the forest with my dog named Sam ...

Another one of your excellent hubs, I am cheering you on for the contest...I will save myself for the know me...rate this up very informative. Great jub my friend. Love & peace darski

Pamela99 profile image

Pamela99 6 years ago from United States Author

Darlene, Thank you so much for your comments. Love and peace to you Darski.

Just Ask Susan profile image

Just Ask Susan 6 years ago from Ontario, Canada

Informative Hub Pamela. I remember the day I made my final student loan payment. I was ecstatic. Here in Ontario our student loans are called O.S.A.P.

Pamela99 profile image

Pamela99 6 years ago from United States Author

Susan, Thanks so much for your comments,

akirchner profile image

akirchner 6 years ago from Central Oregon

Super, Pamela - I wish I'd known all this stuff back when my kids were applying. We muddle through somehow but I don't remember knowing this much stuff!

Pamela99 profile image

Pamela99 6 years ago from United States Author

Audry, There seems to be a lot of steps. I read a lot on line then called my granddaughter who just went through it and she really was helpful. Thanks for your comments.

dallas93444 profile image

dallas93444 6 years ago from Bakersfield, CA

Good information I shared with my niece. Flag up!

Pamela99 profile image

Pamela99 6 years ago from United States Author

Dallas, I hope this helps you neice. Thanks gor your comment.

Hello, hello, profile image

Hello, hello, 6 years ago from London, UK

That is an excellent hub and surely great help.

Pamela99 profile image

Pamela99 6 years ago from United States Author

Hello, Thank you so much for your comments.

Om Paramapoonya profile image

Om Paramapoonya 6 years ago

I'm planning to go back to school at some point, so I'm bookmarking this hub! Thanks so much for sharing, Pamela. :)

Pamela99 profile image

Pamela99 6 years ago from United States Author

Om Paramapoonya, I wish you much success. Thanks for your comments.

Support Med. profile image

Support Med. 5 years ago from Michigan

I just hope everyone realizes the great responsibility that comes with free and/or easy money that's still a 'loan.' But, there is no denying, that education is key. v/r

Pamela99 profile image

Pamela99 5 years ago from United States Author

Support Med, Thanks so much for your comment.

StephenCowry profile image

StephenCowry 4 years ago

Parents are responsible for the future of their children. Thus, every opportunity that comes must be taken just for their children to go to school. Loans are fine, you just need to be responsible for it so you'll have a clean record.

Pamela99 profile image

Pamela99 4 years ago from United States Author

Stephen, Thank you for your excellent comment. I agree with your completely. It is not an easy road, but most things worthwhile aren't that easy. Best wishes for your future.

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