Types of Student Financial Aid & Where to Get Them
Some say education is one of the best investments one could have for a lifetime. But, as tuition fees and school appliances have risen up higher, education becomes one of the highly-demanded, high-cost investments. Thus, organizations, the government, and other institutions have tried to give a hand making student financial aid. Financial aid comes in two types: Merit-Based and Need-Based financial aid.
-Usually comes in the form of aid awarded by the school/institution you’re attending, or aid awarded by outside organizations. It is usually awarded for outstanding academic achievements, leadership potential, special talents, and other personal characteristics.
-Sometimes, it could be awarded without regard for the actual financial need of the applicant. At many institutions, every student accepted is automatically considered for merit student financial aid scholarships. At other schools, but, there is a separate application process required for applicants. eg.: athletic scholarships
Need-Based Financial Aid
-Usually awarded on the basis of the individual financial need, eg.: grants, scholarships and Federal Pell grants, Federal Perkins Loans, Federal Stafford loans (both subsidized and unsubsidized) and Federal PLUS loans.
Federal student loans are supported by the U.S. government and can be attainted through your school, university, banks and student loan lenders by way of the Federal Family Education Loan Program. In comparison to private loans, these types of loans generally have lower interest rates attached, various methods of repayment options, lengthier repayment periods and less stringent credit requirements.
How to get a Federal Student Loan?
The process starts by filling out and submitting the Free Application for Federal Student Aid (FAFSA). Federal student loans can be in the form of need-based help or for parents of potential college students.
To qualify for fed student financial aid, one must file Free Application for Federal Student Aid (FAFSA). FAFSA calculates income and assets to determine a student’s “Expected Family Contribution” toward their college education for that year. Colleges use EFC to choose the types of aid eligible for a student.
Where to find other aid providers?
Aside from the Federal government, there are also other financial aid providers, such as the state governments, individual colleges & universities, and private lenders.
1) State governments: typically provide some types of need and non-need-based student financial aid, eg.: grants, loans, work-study programs, tuition waivers and scholarships.
2) Individual colleges and universities: federal student financial aid grants, need and merit- based scholarships.
3) Private lenders: may offer their own need or merit-based aid, as well as endowed scholarships. Some schools may only require the FAFSA; some may also require additional need-based analysis document, such as the CSS/Profile, to apply for these funds.
When Should I Pay My Aid Back?
Most aid starts their grace period after you have graduated, left school, or dropped below half-time enrollment. Grace period is a period of 6 to 9 months before which aid must be repaid.
But for aid that parents have applied for and been granted, the loans must be repaid as soon as the full amount of the loan is disbursed. Student loans are, for the most part, the only type of student financial aid that requires repayment.
Plus!
The excellent thing of student loans is, the interest paid on is usually tax deductible. You can also go for student loan consolidation which allows you to consolidate all of your debt into one single loan.
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Tags: Federal Family Education Loan Program, Federal Pell grants, Federal Perkins Loans, Federal PLUS loans, Federal Stafford loans, Free Application for Federal Student Aid (FAFSA), Loans, Merit-Based Financial Aid, Need-Based Financial Aid, student financial aid, student loan lenders, Student LoansTags: Federal Family Education Loan Program, Federal Pell grants, Federal Perkins Loans, Federal PLUS loans, Federal Stafford loans, Free Application for Federal Student Aid (FAFSA), Merit-Based Financial Aid, Need-Based Financial Aid, student financial aid, student loan lenders
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