Financial Aid

There are many options available to help pay for one’s college education. Financial aid is money loaned to students by the government to assist in paying for college. How to repay the loans depend upon the type of loan one receives. Loans accrue interest while the student is in college, but not all students have to repay that interest. Some loans, like grants, don’t even have to be repaid. The two main types of financial aid loans are Stafford Subsidized and Unsubsidized Loans.

• Subsidized Stafford Loans are based on the financial need of a student. If the government feels that a student is in particular financial aid need, that student may qualify for special treatment. Basically, all loans accrue interest during schooling and after graduation. Under a subsidized loan, the student is not responsible to pay the interest back to the government until the loan goes into repayment after graduation. Instead, the government fronts the cost of the interest while the student is in college, during the typical six month grace period after graduation, and during times of deferment.

• Deferment means that during repayment, the student is experiencing financial difficulty in repaying a loan. He or she can send in an application to the loan agency requesting a government deferment. If granted, the student will not have to pay his or her student financial aid for a few months, and in the mean time the government will cover the costs of any accrued interest. Upon leaving deferment, the student then resumes payment of the loan including the interest. Students are only granted a limited amount of government deferments, so use them wisely. If a student is experiencing financial difficultly and cannot repay the full monthly amount of a loan, he or she can apply for a forbearance. Like a deferment, a forbearance is a period of time during which the student is not responsible to repay a financial aid loan, however, interest will continue to accrue on the account during the lifespan of the forbearance, even if that loan is a subsidized. When a student leaves a forbearance, the total amount of money owed will have increased, and he or she is responsible for repaying the new total.

• An Unsubsidized Stafford Loan is basically the opposite of a subsidized one. The student is responsible for all the interest accrued on the loan regardless of the collegiate status of that student. Many students choose to pay off the monthly interest of the unsubsidized loan while they are in college, leaving the total balance of the loan untouched until graduation. Other students defer the interest accrued on the loans until after graduation, choosing instead to repay the interest with the actual monthly payments after the post-graduation grace period.

Financial aid for college is stressful, but not all that hard to figure out. The good thing is that most repayment agencies are understanding when it comes to college students. Most graduates who experience difficulty repaying their loans have no problems securing a deferment or forbearance, so don’t stress too much where the money is coming from after graduation. Over time, the loans will be paid off, but the education one receives will last a lifetime.

Student Financial Aid

Paying for college is one of the most challenging things every student has to face. If one is fortunate enough to have received a scholarship, then luckily he or she is ahead in fighting that epic financial battle. For those that are still struggling, there is the option of student financial aid.

• Nearly every college in America offers student financial aid. The first thing a student has to do to qualify for student aid is prove that he or she is experiencing financial difficulty. A FAFSA, or Free Application for Federal Student Aid, is a form which helps state governments identify whether or not an individual qualifies for student financial aid. If one’s parents make less than a certain amount of money per year, that student is more likely to qualify for money. The amount of money a student qualifies for also depends upon which college he or she plans on attending. The more expensive the school, the more stingy the government will be in providing student aid, so be careful of applying to extravagant schools if one is especially broke with no scholarships lined up.

• The downside of the FAFSA is that if a person’s parents make too much money, that person may be denied student aid because the government feels that he or she can afford to go to school without help. Emancipation is essentially the way in which minors legally divorce their parents and establish themselves as independent adults, but they cannot live at home. If the government denies student aid because one’s parents make too much money, and his or her parents do not intend on paying for college, emancipation might be the only option. Get a job, get emancipated, move out, and reapply for student aid with one’s own paperwork and the odds of qualifying for student financial aid will definitely go up. Emancipation is unnecessary if one is already eighteen.

• Federal grants are another type of student financial aid. These loans do not need to be paid back, but the competition to receive one is steep. Just like scholarships, students usually have to have outstanding academic records and must participate in many other extracurricular activities in order to qualify for a federal grant. Some federal grants have very specific criteria, such as Masonic or government affiliation. Students who receive federal grants have to maintain a high grade point average while in college, and must be considered full time students. A student is considered full time if he or she is carrying at least twelve credits per semester. Federal grants can be revoked, however, if a student fails to meet these standards. Typically, student financial aid loans are more lenient with things like grade point average and academic standing. They are more understanding if a student receives a bad grade or falls behind in studies for some reason. As long as the loans are paid back on time there is usually nothing to worry about once one has already qualified for student aid.

Applying for student aid is a process which requires patience. It could take months for the government to respond back to an individual, so it is best not to wait until the last minute. Be careful because some colleges have deadlines as to when classes can be paid for, and if one receives a check for student aid after the deadline, the school will not hesitate in assigning fees or even removing a student from class enrollment lists.