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
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
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.)
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
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.
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
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