Private loans are typically offered through a bank and generally accrue interest on day one
- Subsidized federal student loans generally carry the most favorable terms, with fees and interest covered by the government while the student is enrolled. Subsidized federal student loans are made to students demonstrating financial need and generally do not require a credit check.
- Unsubsidized federal student loans may have less favorable terms, and are not limited to students with financial need. They generally do not require a credit check.
- PLUS (Parent Loan for Undergraduate Students) loans are made to graduate or professional students or parents of dependent undergraduate students. While eligibility is not based on financial need, a credit check is required. Borrowers with an adverse credit history must meet additional requirements to qualify. Payments on PLUS loans are typically not deferred while the student attends school.
- Consolidation loans allow you to combine your federal student loans into a single loan. However, consolidating your loans may result in losing certain borrower benefits, such as interest rate discounts, principal rebates, or some loan cancellation benefits.
This means that from the day you accept the loan, the money you owe for borrowing will start to add up. The longer you take to pay it off, the more money you’ll owe. A credit check is generally required for private loans.
Many schools participate in federal or state work-study programs, which allow students with financial need to earn money to pay for school through part-time jobs.
Different kinds of financial aid have different application requirements. Scholarship applications may be offered directly through a college or university, or through local organizations, groups, or clubs.
Federal grants and student loans require the applicant complete and submit a Free Application for Federal Student Aid (FAFSA) form. Each year you’re in school, you’ll have to fill out and submit this form in order to remain eligible for financial aid. Your college, university or career school will work with you to determine how much money you qualify for and when you’ll receive it. Applications for state grants are often enacted through FAFSA as well.
If you are applying for federal aid, FAFSA submission opens October 1. Priority deadlines for related state and institutional grants vary, so early submission of the FAFSA is advised. State deadlines vary, and certain programs may award financial aid on a first-come, first-served basis. Schools may also have their own deadlines. Make sure you confirm all submission deadlines.
Many organizations and states require FAFSA as part of their grant or loan applications
FAFSA requires a few bits of information that you’ll need on hand when filling out your application. The most common information required includes:
- Your driver’s license number
- Your Social Security number or Alien Registration number if you are not a U.S. citizen
- Your parents’ Social Security numbers (if you’re a dependent student)
- Your federal tax returns (and your spouse’s if you are married, or your parents’ tax returns if you are a dependent student)
- Bank statements and other financial information from your parents (if you’re a dependent)
Private loans can sometimes have changing, or variable, interest rates and are generally ineligible for income-driven repayment – repayment plans that account for your income, family size, state of residence and other personal factors
During the application, you’ll be asked to fill out a series of questions in order to determine your dependency status. If you answer “yes” to one or more of these questions, you’ll be considered an independent student for the purpose of FAFSA and will not have to provide your parents’ information. If you answer “no” to all the questions, you’ll be considered a dependent student and will need to provide your parents’ information.