Researching Financial Aid Options
The first step in the financial aid process is for students to find out how much college costs. By requesting catalogs from nearby programs or schools, or by viewing such catalogs at the library, students can begin their research:
- – How much do different schools charge for tuition? How about for lab fees, books, or other charges? These expenses are called a school’s cost of attendance (see Terms to Know at right).
- – What will it cost for the student to commute to a particular school?
- – Is the school near the student’s current job, if he or she plans to continue working? What about his or her future job? For instance, if the student plans to take on a part-time retail or wait staff job to help with expenses, are such opportunities located close to campus?
- – Does the school offer any child care options?
- – How do the costs and benefits of private colleges compare to those of public and community colleges?
- – What academic programs are offered at various schools? Which programs will allow the student to graduate with the ability to become a good wage earner—and repay his or her loans?
Grants and Scholarships
Grants and scholarships (see Terms to Know at right) do not need to be repaid and do not charge interest. Work-study programs (see Terms to Know at right), which allow students to fill positions (usually on-campus) and work a guaranteed number of hours toward their college costs, are also highly attractive options. See our Resources section for information on how to find grants and scholarships.
Loans
Did you know that the federal government has several different kinds of federally insured loans? Each loan has different eligibility requirements, benefits, and costs. They are:
Federally Insured Loans
Perkins
Perkins loans are granted by colleges to students with exceptional financial need. They offer very desirable terms.
- – Their fixed interest rate is 5%, which is lower than the rate of other federal loans.
- – A nine-month grace period before repayment exists for these loans after students graduate, withdraw from school, or cease to be enrolled at least half-time.
- – For students in certain professions, Perkins loans may offer generous forgiveness programs after graduation.
Stafford Subsidized
Stafford Subsidized loans are the form of federal financial aid most commonly offered to students by colleges. These loans are granted to students but usually disbursed (see Terms to Know at right) to schools, who apply the funds toward tuition and fees. The fact that these loans are subsidized (see Terms to Know at right) means that their terms are more desirable than some other loans:
- – They accrue interest while students attend school, but the U.S. government pays the interest until the repayment period begins.
- – A six-month grace period before repayment exists for these loans after students graduate, withdraw from school, or cease to be enrolled at least half-time.
- – These loans are awarded based on financial need.
Stafford Unsubsidized
Stafford Unsubsidized loans are not subsidized, so the federal government does not pay the interest they accrue while students are in college. As a result, borrowers may either pay the interest while they are in school or allow the interest to be added (capitalized) onto the principle balance at the end of the loan period.
- – A 6-month grace period before repayment exists for these loans after students graduate, withdraw from school, or cease to be enrolled at least half-time.
Grad PLUS
Grad PLUS loans are granted to students continuing their education above the bachelor’s degree level.
- – Grad PLUS loan repayment begins almost immediately after the funds are received by the school. However, qualified students are eligible for a deferment of their loan payments while enrolled in school.
- – Applicants must successfully pass a credit check and meet other eligibility requirements.
See our Resources section for more information.
