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When you apply for financial aid, you are making a decision for your future. You need to be sure that the money that you are going to borrow is going to be able to be paid back once you have graduated. Make sure to research all options that you have available to you before you enter blindly into a student loan. This is money that must be repaid. In today’s economy there are many loans are being defaulted on. This is going to affect credit ratings of those that default. So, when that decision is made, you need to be well informed. What you need to apply - The first thing that you need is gather all of your important papers together. You will need to know a lot of information about your financial situation. If you or a parent that is going to file for assistance for your student or if you are the student that is applying alone, you will need to have your income tax completed by the March 1 deadline. You will also need bank statements, W-2’s, and any statements that you may receive from benefits. Once you have logged on to the site, you are going to begin filling out the FAFSA (Free Application for Student Financial Aid). It will ask you questions about your financials and what schools you are going to attend. You will be assigned a PIN that will be used for electronic signatures. However, before you sign it, make sure that all of the information that you have entered is correct. If there is information that is left blank, you could delay the processing of your FAFSA and possibly miss deadlines for your school. Also, if any information is incorrect you stand to lose your financial aid award. Sometimes there may be a need to have all of this information reviewed. As long as everything matches, you should be fine. Once the FAFSA has been reviewed, you will receive information electronically that will allow you to see how much you and your family are expected to contribute to your education. The report is called a SAR (Student Aid Report). This is basically a printout of all of the information that you entered. At the end of this printout, you will find what is called the EFC (Expected Family Contribution). This is just an estimate from the financial information that you entered. This is given to anyone that will apply. Types of aid There are different types of financial aid. First there is a need-based aid. Second, there is merit-based aid. While both types of financial aid are available, not all with qualify for both. The decision will be made from your FAFSA what type of award you will be given. The need-based aid comes in three forms: Grants, Loans and Work Study. The merit-based awards are scholarships. Needs-based awards are given to students that qualify from financial information given on the FAFSA. Grants are loans that are given to students that do not have to be repaid. Grants are only for undergraduate students. There are also student loans. These come in subsidized and unsubsidized loans. The interest rates on these loans depend and these must be repaid. Students are given a 6 month grace period after graduation to start repaying these loans. The Work-study program is money that you earn through a part-time job while in college. This money does not have to be repaid. All of these types of needs-based awards can help with college expenses and tuition. Merit-based awards are generally given based on some type of skill or talent. Scholarships do not have to be repaid. However, there is a stringent application process that is very important that you meet all the deadlines. A prospective college student should take some time to research available scholarships. There are many companies that offer scholarships to all types of student. There are also many interest groups that offer scholarships. The key here is applying to as many as possible. This can increase your chance of getting a scholarship. The Facts - Many people have a lot of misconceptions about when they apply for financial aid. First off, if your parents have a high income, this does not immediately eliminate you from receiving financial aid. There are many factors that go into deciding a person’s qualification including how many students from the same family are attending college, income, and other assets. The only way to truly find out is to fill out the FAFSA. Also, many students believe that if they or a sibling have previously applied and were denied that means they will be denied again. This is not true. As stated before, many factors go into the decision. You can’t know all the different items that make the decision. The best thing is to just apply. By filling out the FAFSA and applying for financial aid, you are taking the first steps to continuing your education. However, you need to keep in mind that if you are awarded the money in either subsidized or unsubsidized loans, you are responsible for paying that money back. Make sure that you understand the terms of your loans. Keep track of all of the paperwork that you will have sent to you. This will make things easier for you once the time for repayment comes around. If you receive any type of grant or scholarship, that money does not need to be repaid. Also, you may want to consider consolidation once you have graduated. Each year you will need to re-apply. The review will be done every time a FAFSA is put in. Finally, hold on to your PIN. This information will make it easier for you to apply for financial aid each year. Getting financial aid to go to school can be difficult. It’s hard to know where to start. There is so much to know when you apply for financial aid. It's good to have a website you can get a lot of information all in one place. You can also learn about bank student loans, in general government student loans can have a lower interest rate.
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