On a student’s list of things to do, including packing to move out and unpacking into a new place, buying books and deciding between biking it or investing in a parking pass, the most stressful and confusing part of starting the semester can sometimes be dealing with financial aid.
Many students are confused about interest rates and payments with their loans. Mark Delorey, director of the financial aid office, said their office tries to alleviate some of this confusion in the financial aid process.
First, any student wishing to receive financial aid should fill out the Free Application for Federal Student Aid (FASFA). This application is downloadable or a paper copy can be requested by calling 1-800-4-FED-AID. This form must be completed each academic year the student plans to attend school.
Next, students will receive a financial aid package which may include loans, grants or scholarships. Before a student has access to their loan money, he/she must complete interest counseling and a promissory note. These two requirements are to insure that the student understands that loans must be paid back and that they are entering into a legal binding contract with either the federal government or a private lender.
Students can receive loans from different federal and Department of Education programs based off of their FASFA: the Student Loan Program (SLP), the Federal Family Education Loan Program (FFELP), the Federal Direct Student Loan and the Federal Perkins Loan Program.
Delorey suggest that SLP is the better program to FFELP because the loan is between the student and the Department of Education while the school simply processes the paperwork. FFELP is between the student, a lender and the Department of Education.
Another option for students and their families is the Parent PLUS Loan Program, which allows parents to borrow money to pay for their student’s educational expenses. This may daunt some college students whose parents have had a bad credit history; however it is important that all parents fill the form out even if the parents know they will not qualify.
“If the parent is turned down then the student is given extra eligibility,” Delorey said, “[The government] helps pay for what the family can’t contribute, not for what the family won’t contribute.”
The financial aid office has short list of lenders students can work with, including Sallie Mae, Bank of America, CitiAssist by Citibank, or the International Student Loan. Students also have a wide-range of private lenders to choose from, but it may not always be smooth sailing when dealing with different banks.
A variety of sources help students to understand loans, including TuitionBids.com. The Web site offered these tips to students applying for loans: compare offers, apply with a co-signer if possible, get a subsidized loan in which the government pays the interest as long as the student is in school, make sure that all interest rates and repayment costs are understood, and learn the rules about transferring loans if a student plans on transferring schools or studying abroad.
If you found the previous article informative, you should check out more information on your college, or read some of these articles:
- Back to School Savings (The Underground Way)
- Affordable Textbooks
- Scholarships, Your Ticket to College
- Finding the Right College or Univeristy
- Save Your money (or your parents money, you lazy bum)
- Choosing a Major
- Study Tips
- College Social Life
- Dealing With Professors
- Deceptive Practices by Credit Card Companies on Campus
- 18 of the Weirdest Scholarships for College
- Bullshit Your Way to an “A”
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