A college degree is pretty much a necessity these days, but few of us can afford to pay for it without some form of outside aid. Outside aid comes in the form of grants and scholarships, which we don’t have to pay back, and loans, which we do have to pay back.
Finding Grants and Scholarships
Look first to qualify for grants, scholarships, and other forms of aid that you won't have to pay back once you graduate. There are many local, statewide and private forms of grant aid available.
Finding A College Loan
Most of us still need more help paying for college after grants are taken into account. Education loans come in three major categories: student loans such as Stafford and Perkins loans, parent loans such as PLUS loans, and private student loans not associated with the government. A fourth type of education loan, the consolidation loan, allows the borrower to lump all of their loans into one loan for simplified payment. To get started understanding government loans, go to www.studentaid.ed.gov or contact:
U.S. Department of Education
400 Maryland Avenue
SW Washington, DC 20202-0498
www.ed.govIf you or your family wants to take out additional private loans to help defray cost, a good list of private lenders is available atwww.finaid.org.
Applying for Grants and Loans
You must submit the Free Application for Federal Student Aid (FAFSA) if you want to apply for federal and state financial aid. Many colleges and universities, especially public institutions, also require the FAFSA. You must submit the FAFSA every year that you want aid. Visit www.fafsa.ed.gov to get started. You can also call 1-800-4-FED-AID to request a form. To apply for state based grants and loans, contact your state Department of Education.
Keep in mind that each state has a different FAFSA submission deadline. If you submit your FAFSA by March 1, you will be in time for all state deadlines, other than Michigan's. If you miss the deadline, you will be ineligible to receive state aid for the entire academic year. For an excellent overall site to understanding all types of aid available, as well as what might suit your needs the best, visit www.finaid.org.
Tracking and Checking Up on Your Financial Aid Package
It’s important to stay informed about your loan and aid package to make sure you are aware of your loan amounts and to make sure there are no mistakes in your records:
- Find out how much you've borrowed: To find out how much you've borrowed, check your promissory note(s). You can also go to the National Student Loan Data System at www.nslds.ed.gov (go to "Financial Aid Review"). Here you can find out what federal aid you have received, including all student loans and grants. The site requires a PIN that you already have or that you can get or change on the site. This site details all government issued loans including direct loans, FFEL loans, Stafford subsidized and unsubsidized loans, Perkins loans and PLUS loans.
* You can access a description of how to use the National Student Loan Data System at:www.edfund.org/pdfs/Accessibility/A_i-43.pdf.
* If you have a private label loan, you must contact the private bank or lending institution directly.
- Find your loan and your lending institution(s): www.studentclearinghouse.org/secure_area/loan_locator.asp
- Check parental loan amounts: You can only check the loans that are your responsibility. If your parents have taken out a PLUS loan for your college degree, then they can check it on the National Student Loan Data System with their own PIN number at www.nslds.ed.gov.
Managing Student Debt
Now that you are out of college, you must begin to pay back your loans! Check your promissory note for the details:
- Calculate Your Payback Amount and Payback Period: Visit the CNN and Money Magazine College Calculator atcgi.money.cnn.com/tools. The Smart Student Guide to Financial Aid also has a set of useful calculators atwww.finaid.org.
- Consider Loan Consolidation: Consolidating more than one loan into just one loan, thereby managing one simple monthly payment, can be an effective way to manage your student debt. Depending on your student loan, consolidation could help you get a lower interest rate. Keep in mind that your private label loans and your government loans should not be consolidated together, however. Visit www.finaid.org to get the scoop on loan consolidation.
- Postponing Repayment versus Defaulting on Your Loan: The quick answer here is to make your payments on time. If you can't, look into all of your options before you "default," which is the term for stopping your monthly payments. For a simple and thorough guide to your options if you are in this unfortunate situation, visit www.finaid.org/loans/default.phtml.
Your public library and the local college Financial Aid office can offer additional resources beyond what is listed here.
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