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Federal and Private Applications
The student loan application process can be confusing, but it’s almost a requirement for most students. Very few can afford college without federal student loans and private loans, as well.
Federal Loan Application: The FAFSA
The Free Application for Federal Student Aid (FAFSA) is THE federal loan application. Here’s the deal: the FAFSA is long and confusing. There is no short form or alternative application you can fill out and still get federal funds. However, there is assistance for students and parents that need help filling out the FAFSA.
The FAFSA may help you qualify for federal grants and work-study programs as well as federal loans. Unfortunately millions of students fail to complete the FAFSA for a variety of reasons: they miss the deadline, they are lazy or they think they just won’t qualify for money. If you fail to complete the FAFSA, truth is you are missing out on some of the easiest college money to come by.
How to Complete the FAFSA
The FAFSA is available in an online version (also in a Spanish version), a version you can download and print off, or you can send for a hard-copy of the application. The majority of students opt to file with the online version. Before you can complete an online FAFSA you are required to apply for a Personal Identification Number (PIN), which allows you to create a virtual account.
FAFSA deadlines are hard and fast. There is a federal deadline, but each state has a FAFSA deadline as well. Best bet: go by the earliest of the two deadlines.
Tip: The FAFSA is often a requirement for all types of scholarships, grants and loan programs outside the federal realm, another killer reason to make sure you get it done.
**For FAFSA assistance contact your high school guidance counselor or college admissions advisor.
Once You’ve Submitted the FAFSA
Based on the household income information on your FAFSA the federal government determines how much and what types of programs you qualify for. This information is reported to you in a follow-up document, the Student Aid Report (SAR).
The SAR includes details regarding:
* how much money you and your family are expected to contribute to your education also officially known as the Expected Family Contribution, or EFC.
* exactly what forms of federal financial aid you have qualified for—subsidized or unsubsidized Stafford Loan, Perkins Loan, Pell Grant.
The schools you indicated on your FAFSA also receive copies of your SAR. With this they create a financial aid package to offer you if they agree to accept you as a student. They send this to you in an award letter. Once you decide which school to attend, then you choose lenders for your federal student loans and if necessary lenders for any private loans you many deem necessary.
**You can choose any lender you want; the decision is not up to your school.
Applying for Private Student Loans
Private student loans are very different than the federal student loans and more like regular bank loans. They are credit-based as opposed to need-based. The FAFSA has nothing to do with private loans. For instance, you’re going to have to go to your bank, a student loan lender or credit union directly in order to borrow money. You will be required to fill out a loan application form and a credit check will be run.
What if you don’t have good credit or any credit?
Bad credit or no credit should not be the obstacle that keeps you from a college education. Here’s how you can be prepared for the credit check.
Get a Student Loan Cosigner
A cosigner, if they have better credit than you, can help you secure a private student loan at a much lower interest rate. What’s a co-signor? A person who knows and trusts you and vice versa who has really good credit and is willing to sign the loan promissory note along with you. A co-signor can be a parent, a relative or good friend. Essentially should you become delinquent on loan payments or worse yet default, the co-signor is responsible for any payments.
Tip: You can work on rebuilding bad credit or establishing credit as soon as you begin repaying your private student loan. Make sure your lender offers a co-signor release after so many consecutive, on-time payments. With every on-time payment you make you build a credit history.
Repaying Student Loans
Federal loans come with excellent repayment terms: subsidized Stafford Loans require you pay nothing until you graduate or leave school. Other federal loans that require interest-only payments may be deferred in some cases, until you graduate.
Most federal loans are packaged with 6-month grace periods; 9-month for Perkins Loans. Use this time to ideally get a job, create a budget and get settled.
Student loans are a must for most students. Best advice: do not overlook the FAFSA. It is a critical component in the college financial aid process.
The student loan application process can be confusing, but it’s almost a requirement for most students. Very few can afford college without federal student loans and private loans, as well.
Federal Loan Application: The FAFSA
The Free Application for Federal Student Aid (FAFSA) is THE federal loan application. Here’s the deal: the FAFSA is long and confusing. There is no short form or alternative application you can fill out and still get federal funds. However, there is assistance for students and parents that need help filling out the FAFSA.
The FAFSA may help you qualify for federal grants and work-study programs as well as federal loans. Unfortunately millions of students fail to complete the FAFSA for a variety of reasons: they miss the deadline, they are lazy or they think they just won’t qualify for money. If you fail to complete the FAFSA, truth is you are missing out on some of the easiest college money to come by.
How to Complete the FAFSA
The FAFSA is available in an online version (also in a Spanish version), a version you can download and print off, or you can send for a hard-copy of the application. The majority of students opt to file with the online version. Before you can complete an online FAFSA you are required to apply for a Personal Identification Number (PIN), which allows you to create a virtual account.
FAFSA deadlines are hard and fast. There is a federal deadline, but each state has a FAFSA deadline as well. Best bet: go by the earliest of the two deadlines.
Tip: The FAFSA is often a requirement for all types of scholarships, grants and loan programs outside the federal realm, another killer reason to make sure you get it done.
**For FAFSA assistance contact your high school guidance counselor or college admissions advisor.
Once You’ve Submitted the FAFSA
Based on the household income information on your FAFSA the federal government determines how much and what types of programs you qualify for. This information is reported to you in a follow-up document, the Student Aid Report (SAR).
The SAR includes details regarding:
* how much money you and your family are expected to contribute to your education also officially known as the Expected Family Contribution, or EFC.
* exactly what forms of federal financial aid you have qualified for—subsidized or unsubsidized Stafford Loan, Perkins Loan, Pell Grant.
The schools you indicated on your FAFSA also receive copies of your SAR. With this they create a financial aid package to offer you if they agree to accept you as a student. They send this to you in an award letter. Once you decide which school to attend, then you choose lenders for your federal student loans and if necessary lenders for any private loans you many deem necessary.
**You can choose any lender you want; the decision is not up to your school.
Applying for Private Student Loans
Private student loans are very different than the federal student loans and more like regular bank loans. They are credit-based as opposed to need-based. The FAFSA has nothing to do with private loans. For instance, you’re going to have to go to your bank, a student loan lender or credit union directly in order to borrow money. You will be required to fill out a loan application form and a credit check will be run.
What if you don’t have good credit or any credit?
Bad credit or no credit should not be the obstacle that keeps you from a college education. Here’s how you can be prepared for the credit check.
Get a Student Loan Cosigner
A cosigner, if they have better credit than you, can help you secure a private student loan at a much lower interest rate. What’s a co-signor? A person who knows and trusts you and vice versa who has really good credit and is willing to sign the loan promissory note along with you. A co-signor can be a parent, a relative or good friend. Essentially should you become delinquent on loan payments or worse yet default, the co-signor is responsible for any payments.
Tip: You can work on rebuilding bad credit or establishing credit as soon as you begin repaying your private student loan. Make sure your lender offers a co-signor release after so many consecutive, on-time payments. With every on-time payment you make you build a credit history.
Repaying Student Loans
Federal loans come with excellent repayment terms: subsidized Stafford Loans require you pay nothing until you graduate or leave school. Other federal loans that require interest-only payments may be deferred in some cases, until you graduate.
Most federal loans are packaged with 6-month grace periods; 9-month for Perkins Loans. Use this time to ideally get a job, create a budget and get settled.
Student loans are a must for most students. Best advice: do not overlook the FAFSA. It is a critical component in the college financial aid process.
