How to Apply for a Student Loan
Whether you’re entering your freshman year or finishing up a graduate degree, a new year of college can be both exciting and stressful. In addition to choosing your classes and degree path you’ll, have to find a way to pay for your education. Fortunately, there are a variety of federal, state and private organizations that are willing to help. If you’re still short after receiving any grants or scholarship money, consider applying for a student loan.
Filling Out the Free Application for Federal Student Aid (FAFSA)
No matter your level of income or whether you intend to apply for a student loan, the federal government requires every college student to fill out the FAFSA each year by going to the federal student aid website. The form is not only required for those seeking financial support from the government or other institutions but automatically offers students different amounts of aid based on their eligibility. A number of grants and scholarships, none of which have to be repaid, are available through the FAFSA.
Apply for Scholarships
After filling out the FAFSA you can begin applying for scholarships. Because they normally don’t need to be paid back, scholarships should be your first choice of financial aid before opting for student loans. Many different organizations and businesses offer scholarships to aspiring students or those who intend to pursue a particular field of study. Try to apply for more specialized scholarships, with smaller applicant pools, to increase your odds of being awarded money.
Federal Entrance Counseling
If all of the combined federal financial aid and academic scholarships you’ve received up to this point still aren’t enough to cover the full cost of your college tuition and other expenses, only then will you need to apply for additional student loans.
As part of completing the FAFSA, the federal government and U.S. Department of Education offer students subsidized and unsubsidized loans under the Direct Loan Program. Before accepting any loans, however, you are required to complete an online Entrance Counseling course. This short online session lasts anywhere from 20 to 30 minutes and is designed to help you fully understand the financial responsibilities and obligations you are assuming by accepting a loan.
Loans and Other Payment Options
After you complete the Entrance Counseling, you are able to accept any loans offered to you by the federal government.
- Subsidized loans are only available to undergraduate students that show financial need. The U.S. Department of Education pays the interest as long as you meet certain criteria.
- Unsubsidized loans are available to undergraduate and graduate students. There is not a requirement to demonstrate financial need, but you are solely responsible for paying all interest accrued.
If these loans still do not cover all of your expenses, or you wish to find other sources of aid, you might begin looking into private loans offered by banks or other businesses. While these are potential sources of support they should be your last resort; grants, scholarships and financial aid offered by the government tend to have lower interest rates and better repayment plans than what private companies offer.
Student Loan and Debt Counseling
American Financial Solutions is a non-profit 501(c)(3) financial education and credit counseling agency that helps clients change their financial lives for the better. We offer a broad spectrum of education and counseling resources to help consumers with debt management, credit counseling and personal finance education. Contact us today to speak with a qualified financial counselor.
Published Apr 7, 2017.