Loans
If your Student Aid Report (SAR) indicates that you are eligible for one or more forms of government student loans, it is helpful to understand the specifics of each program. The Department of Education offers the Stafford, Perkins, Direct PLUS and Direct PLUS parent loan. It also offers you the opportunity to consolidate several loans into one convenient monthly payment.
The Stafford Student Loan - When the federal government reviews your Free Application for Student Financial Aid (FAFSA), it may determine that you are eligible for either a subsidized or unsubsidized Stafford loan. The subsidized form of the Stafford loan is based entirely on financial need, and you are not required to pay interest on the loan while in college at least half-time. Interest also does not accrue during deferment and grace periods. With the unsubsidized loan, you are not required to demonstrate financial need. The amount of money you can borrow is determined by the college you attend. You have the option of paying the loan interest while in college or having it added to your balance once the repayment period begins. In the second situation, your monthly payment will be higher because interest will have accumulated from the day you received the loan.
The Perkins Student Loan - To qualify for the Perkins student loan, you must show that you have extraordinary financial need. Your college receives funds from the government, which it then forwards to you. When it comes time to repay your loan, you will pay your college. The interest rate on a Perkins loan is just five percent.
Direct PLUS and Parent Direct PLUS Loans - The government PLUS loan program is limited to students pursuing a professional or graduate degree. Unlike other types of student loans, applicants for a Direct PLUS loan must demonstrate credit worthiness. The maximum amount you can borrow is determined by your school of attendance after it factors the cost of enrollment and your other sources of financial aid. The interest rate of PLUS loans for both students and parents is 7.9 percent.
Private Student Loans - If you do not qualify for government aid or you are not interested in it, you can apply for educational funding from a number or private sources. These include banks, credit unions, finance companies, trade organizations and more. All types of private loans require a good credit rating, and a co-signer may be needed in certain circumstances.
FAFSA
The Free Application for Federal Student Aid, or FAFSA, is a necessary step toward funding your education. Whether you are pursuing need-based grants, scholarships or student loans to help you afford the costs of college, the FAFSA should be your first priority. Even if you don't think you qualify for financial aid, it's worth your time and effort to complete the FAFSA each and every year. After all, there are many factors affecting eligibility for financial aid, meaning that if you aren't eligible one year, you could be the next!
To apply for student financial aid from the federal government, including the Stafford Loan, Perkins Loan, Pell Grant and work-study programs, you will need to submit the FAFSA. The FAFSA is also required by all state and many school student assistance programs. There is no charge for submitting this form. Learn more about potential funding options below or visit the Federal Student Aid web site and get started today!
Scholarships, Fellowships and Grants
Undergraduate scholarships, graduate fellowships and student grants are forms of aid that can help you pay for your college education. There are billions of dollars in scholarships, fellowships and grants awarded each year. Best of all, this form of student aid does not have to be repaid!
People are awarded scholarships, fellowships and grants for a variety of reasons. Generally, scholarships and fellowships are reserved for students with academic, athletic or artistic talent. However, awards are also available for students who live in certain parts of the country, who are interested in particular fields of study, who are members of underrepresented groups or for those who demonstrate financial need. If you don't fit into any of those categories, you should still browse through some of the free scholarship databases online because there are more and more unusual scholarships available. You never know when you're unique skills will come in handy!
Savings
Every dollar you save is a dollar less you'll need to borrow! It is never too early - or too late - to start saving for your or your child's education. After all, time is one of your most valuable assets, so the sooner you start, the more time your money will have to grow and earn interest. However, even if college is just a year or two away, there are tax benefits to saving in a section 529 college savings plan or prepaid tuition plan. Putting a portion of your paycheck aside now will allow it to earn interest, saving you money in the long run.
It is less expensive to save for college than to borrow money. When you save, the money earns interest, while when you borrow, you're paying the interest. Either way, you're setting aside a portion of your income to pay for college. Just keep in mind that paying for college before you or your child graduates definitely costs much less than paying for college afterward!
Military Aid
If you are currently in the military or interested in pursing an Armed Forces career, there are funding and educational options exclusively for you! Many people choose armed forces careers because of the college funding options available. Here are some of the military aid options:
- Montgomery GI Bill. Military student aid, such as the Montgomery GI Bill, is one of the options for funding. The Montgomery GI Bill provides up to 36 months of education benefits to eligible veterans for college, business, technical or vocational courses, correspondence courses, apprenticeship/job training, and flight training.
- Tuition Assistance. Tuition assistance is another program for service members. Members of the armed forces can enroll in courses at accredited colleges, universities, and vocational or technical schools. Tuition assistance can pay up to 100 percent of the cost of the course.
- Reserved Officer Training Corps. One of the best military aid options is the Reserve Officers' Training Corps (ROTC). In exchange for a military service commitment, the program provides you with money for college while you're in school. If you aren't sure about military life, take comfort in the fact that there is no military commitment for the first year in ROTC. You can try out the program and see if ROTC and the military are right for you. Full ROTC scholarships pay for almost all tuition, fees and books for four years of college. Scholarships also come in one-, two- and three-year lengths. ROTC students must take one military science course along with their other college courses and, upon graduation, enter the service as a commissioned officer.
- Military Academies. Although the application process is extremely competitive, service academies are a great option for someone who is ready to commit to pursuing an armed forces career. Each branch of the service operates its own service academy as a four-year school. All students receive a full scholarship with a small monthly stipend. Upon graduation, you'll have your Bachelor's degree, be free of college debt, and already have a career! Military academy graduates are immediately commissioned as second lieutenants in the Army, Air Force or Marine Corps, or as ensigns in the Navy or Coast Guard.