Things you should know about financial aid

Expand all Collapse all

• Financial aid to cover the rising cost of College

  As most students head off to school, they find themselves in need of financial aid to cover the rising costs of higher education. There are many options and details you should know. Here are a few of the most important things to know about financial aid according to the federal government’s StudentAid.ed.gov website.

• FAFSA

  The Free Application for Federal Student Aid (FAFSA) is your gateway to federal student loans, the cheapest form of student loans for most borrowers. You must complete this form to receive and federal, state, or college money and some scholarships and grants require it as well. The FAFSA asks basic information regarding the borrower’s income, dependency status, and savings to determine financial need. It is important to fill this form out as early possible. For more information on the FAFSA, visit www.fafsa.ed.gov.

• What kinds of loans are available?

  Federal Student Loans

  Direct Stafford Loans
  
  Offered by the federal government, these low-interest loans are for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. Eligible students borrow directly from the U.S. Department of Education (the Department) at participating schools. Direct Stafford Loans include both subsidized and unsubsidized loan options.
  
  Direct Subsidized Loans - Direct Subsidized Loans are for students with financial need determined by the U.S. Department of Education based on the information reported by the student on their FAFSA. Interest is paid by the government while you are enrolled at least half-time during the six month grace period, and in deferment. The loan payments may be deferred while you’re in school.
  
  Direct Unsubsidized Loans - you are not required to demonstrate financial need to receive a Direct Unsubsidized Loan. Unlike the subsidized option, you are responsible for paying the interest that accumulates while you are enrolled at least half-time during the grace period and during deferment. The loan payments may still be deferred while in school.
  Perkins
  
  The Federal Perkins loan has a lower interest rate and longer grace period than the Stafford loans, but is not subsidized. Perkins loans offer a low-interest loan for both undergraduate and graduate students with exceptional financial need. Exceptional financial need is determined by the U.S. Department of Education based on the information reported by the student on their FAFSA. Federal Perkins Loans are made through a school's financial aid office. Your school is your lender, and the loan is made with government funds. You must repay this loan to your school. More information is available at the school financial aid office.
  
  

  Alternative Loan Options

  Private
  
  Private student loans fill the gap in financial aid that is left between the Cost of Attendance (COA) and the loans you’ve received. Private loans are not offered through the federal government, so it’s important to look for a loan from an institution you trust, like your credit union. Look for a loan with zero origination or prepayment fees, low interest rates, flexible deferment and repayment options, and an easy application process. You’ll also want to make sure that the loan is certified through the school – which means the school verifies the amount you need to borrow to prevent you from borrowing too much or too little. Funds should be given directly to the school and any difference back to the borrower for books, transportation, technology and other necessities.
  
  Parent PLUS
  
  Parents of dependent students may apply for a Direct PLUS Loan to help pay their child's education expenses as long as certain eligibility requirements are met. Graduate and professional students may apply for PLUS Loans for their own expenses. These loans are in the parent’s name, cannot be transferred to the student and include origination and other fees.