Frequently Asked Questions (FAQs)
Honest Answers to Your Student Loan Questions
What are the best ways to pay for College?
After you have exhausted Scholarship opportunities available at your college and in the private sector, apply to the Federal Government for federally funded grants and subsidized student loans, which currently have the best rates. See our Financial Aid Guide for detailed information on the various programs, as well as an outline of the application process, including the FAFSA form and a Scholarship Search.
First look at the Federally guaranteed Stafford loan with a fixed rate and generous borrower benefits to both full- and part-time students in Undergraduate and Graduate programs.
If your tuition costs exceed Stafford limits, parents and graduate students should look next at the Federal PLUS loan with a great fixed rate and borrower benefits that enable you to reduce the rate even further.
Filling the gap above what Stafford and PLUS offer is possible with Alternative loans that can provide you with up-to $250,000 for school.
How soon should I apply for financial aid?
When you apply to the college, you should complete the financial aid form as well. Students intending to apply for loans or who want to be considered for federal grants must complete the FAFSA. This form is available online in January. Some schools also require completion of the CSS profile.
What is EFC?
The Expected Family Contribution (EFC) measures a family’s financial strength, and is used to determine eligibility for federal student aid during one school year. One receives an EFC based on the processing results of the FAFSA (Free Application for Federal Student Aid).
What is the FAFSA?
The Free Application for Federal Student Aid (known as the FAFSA) is a form that can be filled out annually by current and anticipating college students (both undergraduate and graduate) to determine their eligibility for federal student financial aid. The Department of Education begins accepting the application January 1 of each year. Applicants who have filled out a FAFSA in previous years are able to fill out a renewal FAFSA, but information on taxes and savings, for example, must be updated annually. Most states and schools use information from the FAFSA to award non-federal aid as well. Visit www.fafsa.ed.gov to fill out this form.
What is the CSS?
In addition to filling out a FAFSA, many private colleges and universities will require that the student submit the CSS PROFILE form administered by the College Scholarship Service (CSS), the financial aid division of the College Board. The CSS PROFILE is used to determine a student’s eligibility for non-government financial aid, such as the institution’s own grants, loans and scholarships.
What is Work Study?
Financial aid recipients are often offered a position in a “Work Study” program. This is an arrangement that allows students to work on campus to help cover some of their college costs.
Is there financial aid for adults?
Federal loans are available for students as long as they are enrolled in school and attend at least part time. While there are fewer grants and scholarships available, a little research can come up with a variety of resources. Adults who are employed should look to their employers for employee reimbursement benefits, corporate scholarships as well as internships available.
Do I have to be smart to get a scholarship?
Scholarships come in two varieties. The first type is the competitive one, where a student competes with other applicants and is measured by a combination of factors including academic achievement, competitive performance (i.e., artistic or musical or athletic ability), service, and leadership or character as evidenced in an essay or listed activities. Need based scholarships are usually offered to students who meet some type of competitive criteria, but also demonstrate financial need as evidenced by the family’s income and assets. Many colleges offer both types of scholarships and automatically consider the applicant for both if they qualify. Private or corporate scholarships may also require a particular field of study, or that a student maintains a certain GPA to continue to be eligible.
What is the difference between fellowships and grants?
Fellowships are awarded based on the strength of a student’s application to a degree program. Grants are based on financial need.
What do I need to know about educational loans?
The government offers several programs to assist students in meeting their expenses, including Stafford, Parent PLUS and Grad PLUS. You can get applications for these loans from your school’s financial aid office. Some lenders offer private loans to meet any additional need. Information about these loans can be found at www.stufund.com or the school’s financial aid office.
Are there outside sources that I should consider to fund my education?
You should consider any organizations to which you belong that might have funds available such as religious organizations, fraternal organizations, clubs, athletics, veteran groups, ethnic groups, unions, employers, rotary clubs, etc.
What is a cosigner?
A cosigner is someone who becomes jointly obligated on a loan with the borrower, and assumes responsibility for the loan if the borrower fails to repay it. Adding a creditworthy cosigner to a loan may increase a borrower’s chance of being approved and of obtaining a lower interest rate and/or loan fee.
What is LIBOR?
LIBOR is the interest rate that banks charge each other for one-month, three-month, six-month and one-year loans. LIBOR is an acronym for London InterBank Offered Rate. This rate is charged by London banks and then published and used as the benchmark for bank rates all over the world. LIBOR is also used to guide banks in setting rates for adjustable-rate loans, including some student loans.
What is Prime?
The Prime Interest Rate or Prime Lending Rate is a term applied in many countries to a reference rate used by banks. The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with high credibility, though this is no longer always the case. Some variable interest rates may be expressed as a percentage above or below prime rate. The rate is almost always the same amongst major banks. Adjustments to the prime rate are made by banks at the same time although the prime rate does not adjust on any regular basis.
How do I go about applying to college?
Applications can be made on line, often using the Common Application, or by paper application obtained from the college admissions office. Students should apply to a number of schools that they feel reasonably sure they will be able to get into, as well as one or two schools that may be more selective or considered “a reach”. A fee may be required for each application. Students are also responsible for taking any required exams, such as the ACT or SAT, and sending test scores to the schools when applying.
Are my chances better applying early decision?
Applying Early Decision can be an advantage. Often, there are fewer students applying and the admission rate is usually higher for students in this group. The down side is that the student must make the commitment to attend, often without having important information on financial aid or the opportunity to compare offers from other schools.
Is it ever too late to go back to school?
The average age of students attending college is going up as more and more adults make the decision to start or return to school to earn a degree. College credits earned earlier in life as well as CLEP credits (learning experience credits) enable many adults to complete a degree. Students can attend school both full and part time. So the answer is no….it is never too late.
What is the difference between a college and a university?
Although the two terms are often used interchangeably, the distinction is one of size. Four-year or senior colleges offer a Bachelors degree in liberal arts or the sciences. Universities are usually made up of more than one college: It could be a university that has several undergraduate schools, i.e., college of liberal arts and an engineering college or a combination of both undergraduate and graduate schools.
What is a two year or junior college?
A junior or community college offers a plan of study leading to an Associate Degree – an AAA (Associate degree in Applied Arts) or an AA (Associate of Arts degree). The AAA prepares a student to complete a course of study leading to some type of applied/job related skill such as a radiology technician, administrative assistant, or computer technician. An AA degree is an approved course of study in liberal arts. Students earning this degree are prepared to transfer to a senior college in order to obtain a Bachelors degree. Often, the junior college has an articulation agreement with a corresponding senior college to accept some if not all of the credits towards a program of study.
Is going to college really worth the time and cost?
Recent projections indicate that the difference in lifetime earning between a high school and college graduate may be as much as a million dollars. But more than that is the opportunity to expand one’s knowledge base, learn specific skills for work and pursue a career that one enjoys, finds meaningful and financially rewarding. In order to keep up with a fast changing, highly competitive job market, today’s young adults must be literate, technically savvy, and knowledgeable about a variety of topics as well as be prepared to problem solve and meet a variety of professional demands.
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