Facts About Federal College Student Loans
If you do intend on borrowing from a federal college student loan program to finance your education, first consult with your college financial aid officer to determine the application procedure at that particular college.
The most affective educational college student loans are those targeted to financially needy students. These loans (Stafford College Student Loans and Perkins College Student Loans) require no interest or repayment while the borrower is enrolled in school.
College students who do not qualify for need based financial aid also have the opportunity available to borrow in the federal Unsubsidized Stafford College Student Loan Program.
Student loans to families of college students are also available from the states Higher Education Supplemental Loan Authority. Parents can also borrow through the federal PLUS Student Loan Program as well as a variety of supplemental educational college student loan programs, which your college financial aid officer can tell you about.
As with any college student loan, make sure you fully understand the interest rates, repayment terms and all tax implications. You need to find out whether interest charges are going to be variable or fixed whether the college student loan has forgiveness or deferment provisions, whether you can consolidate the college student loan with other loans, and whether it will carry prepayment penalties. It is always advisable to only borrow what you need. Remember that college student loans must be repaid even if you do not finish college.
Seven Facts to Remember
1. The amount of financial aid in which you will qualify for is determined by your financial needs. Though your expected family contribution will generally stay the same from college to college, your financial aid needs will increase or decrease depending upon the costs of said college.
2. Your need for financial aid will be more when attending a higher cost college than if you were attending a lower cost college. However, this does not mean that either the higher cost or the lower cost college can provide you with sufficient financial aid to meet all your financial need.
3. All colleges and universities will handle outside scholarships very differently. In some cases, an outside scholarship will not influence your college financial aid package; however some colleges will reduce your student loan portion of the package by the amount of the outside scholarship and others may actually withdraw institutional grant aid by the amount of the scholarship.
4. You must apply for federal financial aid each year. Your family’s federal income tax return will need to be completed early, allowing you to complete your FAFSA as accurately as possible.
5. If your family’s tax return cannot be completed early, you must then estimate on your FAFSA. If you do need to estimate, do so carefully. You will probably be required to submit an actual copy of your completed tax returns later. If your estimate is off base, you will have to correct the information on your application, which could possibly delay, or changing your financial aid package.
6. Contact all colleges to which you are applying to learn about there particular financial aid deadlines.
7. College is a huge investment, but it is the most important one you will make for your future. Take time to learn about all of your financial aid options before you make any college decision. College and university financial aid officers will help you find ways to pay for your education. They are professionals trained in this field. Use them.
