Review Your Financial Aid Award Letter
After you submit your FAFSA, the schools you applied to will send you a financial aid award letter. This letter might provide information on:
- The total estimated cost of attendance, including tuition and fees, housing and meals, books and supplies and personal and miscellaneous expenses
- Scholarships and grants you qualified for
- Work-study opportunities
Letters will vary from school to school. This sample letter shows you what type of information you can expect:
Image: Massachusetts Educational Financing Authority
If you want to accept the financial aid award, youll generally need to sign and return the letter. Most schools send letters by mail that youll need to mail back, but some have established secure online portals for the exchange of documents.
If you receive multiple financial aid letters, you can make objective comparisons using our awards comparison tool.
Types Of Private Student Loans
When youve explored scholarships, grants, and federal loans, and still need money for college, you can consider a private student loan.
- Theyre issued by a bank or other financial institution.
- Private student loans are taken out by the student theyre often cosigned by a parent or another creditworthy individual.
- Parent loans are another way to get money for college. A parent or other creditworthy individual takes out the loan to help their student pay for college.
Madison is using 4 steps to ease the burden of college expenses
S To Apply For College Grants
If you havent already, complete the FAFSA to apply for federal grants and other aid, including work-study programs and federal loans. Fill it out as soon as possible, because some schools award aid on a first-come, first-served basis.
Search for private grants and scholarships using the U.S. Department of Labor’s free scholarship search tool.
Review your financial aid award letter from each school you’re considering. Each letter will list the grants, scholarships, work-study programs and loans youre eligible for. Accept all the grants and scholarships youre offered before taking out any student loans.
About the author:Anna Helhoski is a writer and NerdWallet’s authority on student loans. Her work has appeared in The Associated Press, The New York Times, The Washington Post and USA Today. Read more
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Compile All The Financial Information Youll Need To Apply For A Student Loan
To obtain federal student aid, youll have to fill out the Free Application for Federal Student Aid, otherwise known as the FAFSA. As the name implies, the form is free and puts you in the running for financial aid for college, including federal student loans.
The FAFSA comes out in October each year, and youll need to apply the year before youre planning on attending school and then reapply each year until the year before you graduate.
Since theres a lot of information on the form, it might be ideal to start compiling what you need in September. That way, youll have everything you need to apply the day the application comes out.
Heres a list of some of the information you or your parents will need from to get ready for the FAFSA:
- Federal Student Aid ID
- Drivers license number
- Social Security number or Alien Registration Number
- Federal income tax returns, plus records of untaxed earnings, including private financial aid
- Statements for bank and investment accounts and other assets
- List of up to 10 schools where you want your FAFSA submitted
Think you shouldnt have to use your parents information on the FAFSA? Even if your parents dont intend to help you pay for college, or if you live on your own, you might still be required to include them. Double check with our guide on FAFSA dependency status.
Finally, if you want to see for yourself which questions might be asked on the FAFSA, heres a worksheet provided by Federal Student Aid to help you prepare.
Consider Private Student Loans
Another option if you need to borrow more money than federal student loans can provide is to apply for a private loan from a bank, credit union, or other financial institution.
Private loans are available regardless of need, and you apply for them using the financial institution’s own forms rather than the FAFSA. To obtain a private loan, you will need to have a good credit rating or get someone who does have one, such as a parent or other relative, to cosign on the loan.
Having less-than-stellar credit can make it difficult to qualify for student loans. Private lenders will consider your income and credit history, and as a college student, you likely have poor credit or no credit at all. However, some lenders offer student loan options for borrowers with bad credit.
Generally, private loans carry higher interest rates than federal loans, and their rate is variable rather than fixed, which adds some uncertainty to the question of how much you’ll eventually owe. Private loans also lack the flexible repayment plans available with federal loans and are not eligible for loan consolidation under the Federal Direct Consolidation Loan program. However, you can refinance your private loans after you graduate, possibly at a lower interest rate.
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Research Private Student Loan Lenders
There are many different private student loan lenders, but they all have their own offers. Look for lenders with low interest rates and flexible repayment terms. Do your due diligence by reading reviews and asking for recommendations.
To help you shop, use a to estimate costs based on available interest rates. Another way to get an estimate without impacting your credit is to , which uses a soft pull of your credit report that does not affect your score. Not all lenders offer this benefit.
Submit A Css Profile For Institutional Financial Aid
Besides federal aid, you may be eligible for institutional aid, which comes from the school you attend. To qualify, you must submit the CSS profile.
To do so, create an account. Then, select the schools youre interested innot all schools participateand provide information about yourself, your familys finances, and your assets. There is a $25 fee for submitting the profile, and youll have to pay $16 for each additional report.
The College Board has a comprehensive guide on how to complete the CSS profile if you need additional help.
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How To Compare Offers When You Apply For A Private Student Loan
Lets say you and a cosigner have applied for a few different private student loans to see which one gives you your best offer.
Currently, interest rates for private student loans range anywhere from as low as 1% to as high as 13%. Checking your rates with a few different lenders will help you find a student loan with the lowest long-term costs of borrowing.
However, there are a few other things to keep in mind when searching for a lender:
- Which lender offers you enough to fill your tuition gap?
- Does the lender with your best offer also have benefits such as deferment or forbearance?
- What do reviews of the lender have to say?
- Does the lender offer a soft credit check to apply for a student loan?
While finding the lowest rate is certainly a priority, dont forget these other factors, as well. This is a lender youll likely have a relationship with for one or two decades. Be sure they have good reviews and options to help if you hit some financial bumps in the road.
When youre comparing offers, use our student loan repayment calculator to crunch the numbers and see exactly what repaying your loan will look like.
How Much Can I Borrow In Student Loans
The highest amount of student loans you can borrow depends on your loan type. For federal loans, your allotment also depends on your year in school and your dependency status. For instance, undergraduates can currently borrow between $5,500 and $12,500 in Direct Loans per year. Graduate and professional students, meanwhile, can borrow up to $20,500 in Direct Loans before covering any additional need via Direct PLUS Loans or private loans.
For private student loans, lenders generally allow creditworthy borrowers to receive up to 100% of their schools annual cost of attendance. Keep in mind that aggregate loan limits apply, however. Your overall loan limit could hinge upon your degree program.
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Verify That Everything Is In Order
Finally, go back through everything you applied for and monitor the progress of those applications moving forward. When applying for the FAFSA, for example, you can check the status almost immediately after submitting it online. If you mailed in your application, you can check the status between seven and ten days after the date it was mailed by logging into your account on the FAFSA.gov website. This way, you can make sure that youll be receiving the money youre entitled to and have time to correct any errors, if necessary.
How you receive the funds will vary depending on the type of loan youre taking. Some private student loans will deposit money directly into your bank account. In this case, verify with your bank that youve received the correct amount of funding. Other loans go directly to your college, like many federal loans and certain private student loans . Call your schools administrative office to verify that they received the funds and that your account is in good standing. In many cases, you can see if the loan has been disbursed to the school through the schools website.
If you encounter any type of problem, take steps to correct it immediately by contacting your school or your lender. If you dont have access to your funds through your bank account, call the loan provider and correct any errors to avoid a delay in disbursement. Make sure to take care of issues after your loan applications have been approved and before the first week of classes begins.
Confirmation Of Enrolment Form
Confirmation of Enrollment for full-time students will begin no earlier than 15 days prior to the study period start date of each respective term. Students must ensure that their applications are completed in full at least 1 month prior to their study period start date, to avoid any delay in funding.
If you are a full-time student but do not want to take OSAP funding or are ineligible for OSAP funding due to restrictions, you may be eligible to be interest and payment free from your previous OSAP loans, for the duration of your full-time program at Humber College.
In order to do this, you will need to submit a Continuation of Interest-Free Status request online via your OSAP portal or you can also submit a paper application. The form can be found on the OSAP website and submitted to the Financial Aid Office once complete.
Online and paper applications will be processed by the Financial Aid Office in the order in which they are received.
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Applying For Student Loans: An Overview Of The Process
The application process involves more than just filling out and submitting an application. You need time to choose between private and federal student loans, as well as to research different lenders and compare interest rates and terms. As a result, you should try to begin the process as soon as possible.
Once youve chosen your school, make sure that youve applied for any scholarships, grants, and need-based aid that you may be eligible for. Your goal should be to get as much free funding as possible before pursuing student loans to close the remaining gap for the cost of your education.
Maximum Lifetime Limit For Student Aid
There are lifetime limits on the number of weeks you can receive student aid. This includes interest-free periods while you are in school. Once a lifetime limit has been reached, interest starts to accumulate. You will also have to start paying back the loan 6 months after you graduate or finish your studies.
Full-time students can receive student aid for no more than 340 weeks, except:
- students enrolled in doctoral studies can receive student aid for up to 400 weeks
- students with permanent disability can receive student aid for up to 520 weeks
Private Loans Vs Federal Loans
Federal loans may be a better student loan option than private loans for a variety of reasons.
Federal loans are typically less expensive than private loans. And federal loans may include benefits that private loans donât. That includes things like deferred payments, better interest rates, help paying interest, debt consolidation options and loan forgiveness. Private loans may also have additional fees.
Before private student loans can be disbursed, borrowers must fill out a self-certification form to confirm they know all their options. The form is required by law. And it directly encourages borrowers to âpursue the availability of free or lower-cost financial aid.â Your schoolâs financial aid office and your lender should be able to provide more details if you need the form.
How Do Student Loans Work
13 Minute Read | September 24, 2021
Student loansmy favorite!
Heres the thing about student loans: Not enough students understand how they really work or the effect they can have on future goals and plans. When youre about to graduate from high school, it can feel like everyone wants you to continue your education, but nobody can tell you the best way to pay for it. Its just kind of expected that if you want to go to college, youre going to have to take out a massive loan in order to afford that diploma.
And thats why we have a $1.6 trillion student loan crisis in our country right now.1 Listen: I get it. When I was in high school, no one warned me about the dangers of loans or told me how to prep for college the right way, and I made a lot of dumb decisions as a result. But Im here to make sure that wont happen to you!
In fact, Ill make a deal with you. Ill tell you everything you need to know about student loans if you promise not to take them out. Deal? Deal.
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Important Fafsa Deadlines For 2021 2022 And 2023
When to Apply for Student Loans for the 2021-2022 Academic Year: The federal deadline to complete the FAFSA for the 2021-2022 academic year is June 30, 2022.
When to Apply for Student Loans for the 2022-2023 Academic Year: The FAFSA for the 2022-2023 academic year opened on October 1, 2021 and the deadline is June 30, 2023. Some financial aid is awarded on a first-come, first-served basis, so we recommend that you fill out the FAFSA as soon as youre ready.
Keep in mind that states and individual colleges and universities have their own unique deadlines to be considered for financial aid. You can find state-specific deadlines for 2021, 2022, and 2023 online and be sure to check the schools website or with the financial aid office for more information.
You End Up Paying Much More By Way Of Interest
Your loan starts attracting interest the moment you take it. Lets say you need only $1,000 for your first year in college. If you limit your loan to that $1,000, your interest for that first year will accrue only on the principle amount of $1,000. During the second year, the interest will accrue on the initial $1,000 + the next $1,000 that you borrow and so on.
If you take a loan of $4,000 in the first year itself, your interest for the first year will accrue on the full $4,000 during the next four years. Even if the interest is set at a rate amount when you take the loan, this higher interest accrual over the next four years will far exceed any savings from the lower rate of interest.
You end up paying more no matter which option you choose. If you choose to make interest only payments while you are still in college, that interest will be calculated on the full amount youve borrowed. If you choose to defer your payments, the interest will be calculated on the original amount that you borrowed. Either ways, the interest will be much higher when you take a loan for four years as compared to taking the loan for one year at a time.
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Ascent Student Loans Disclosures
Ascent loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations and terms and conditions may apply. For Ascent Terms and Conditions please visit: AscentFunding.com/Ts& Cs.
Rates are effective as of 01/01/2022 and reflect an automatic payment discount of either 0.25% OR 1.00% . Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates.
1% Cash Back Graduation Reward subject to terms and conditions, please visit AscentFunding.com/Cashback. Cosigned Credit-Based Loan student borrowers must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs are available for the most creditworthy applicants and may require a cosigner.
Student Loans: Harris Supports Tuition
One way Harris has proposed to lessen the burden of student loans is to make two-year college tuition-free. Specifically, Harris has supported:
- tuition-free college at two-year and four-year public colleges and universities for borrowers who earn up to $125,000 in annual income and
- doubling the maximum Pell Grant award.
Sanders and Warren both championed tuition-free college in the U.S. Senate and on the presidential campaign trail. Like wide-scale student loan cancellation, Congress has yet to pass tuition-free college. .
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