Because of the massive amount of money required to attend college for four years (or more if the student plans to attend graduate school), many parents will encourage their children to apply for scholarships while they apply for need based financial aid. In the United States, parents will be required to fill out the Free Application for Federal Student Aid (FAFSA form). This application will be similar to the tax forms filled out at the end of the year. The form will take into account the income of the student’s family, as well as the number of siblings the student has and their age (if they will be attending college soon). From the FAFSA form, colleges will be able to determine the “expected family contribution,” or in general terms, how much money the family will be required to pay themselves.

Of course, if the family is very needy, the student will receive many grants and scholarships from the college and government that will not need to be paid back. However, the bulk of tuition and other expenses will be required to be paid through loans. There are many different types of student loans available. The first is known as a Federal Perkins Loan. This loan has almost zero interest and is usually a small amount. The amount available for borrowing is usually determined by the expected family contribution. Another type of loan is the Federal Stafford Loan. This loan is given to students at a very low rate for the simple fact that they are students. There are two types of Federal Stafford Loans: subsidized and unsubsidized. Subsidized loans have the interest paid by the government as long as the young adult is a full time student. Unsubsidized loans defer the interest until the student graduates. Almost all student loans are unsubsidized but have deferred payments until the graduation of the student. There are also Federal PLUS loans offered to the parents of a student at a good rate as it is for education. Finally, there are alternative student loans that are done on a private basis that can be used for tuition, apartments, books, a computer or any other education related expense. Instead of being disbursed to the college, it is sent directly to the student. These loans also have deferred payments until graduation.

Another excellent form of financial aid is scholarships. Generally, during a student’s final year of high school, the student can retrieve a list of scholarships from the guidance office. The amount and terms of the scholarship vary. Some will pay thousands of dollars each year for the full four years while others may be a smaller one time award. The process for getting a scholarship is much like the application process for college. The student must fill out an application detailing their academic achievements as well as their extra curricular and volunteer activities. The application is then reviewed by the granters of the scholarship and a deserving student is chosen. Some scholarships are merit based while others are need based. Depending on the financial situation and academic situation of the student, it may be advantageous to apply for both types. Many students are able to pay for their entire first year of college through scholarships which will help lessen the burden of student loans.

Cost should not be a determining factor when choosing a college. Generally, the more expensive a college tends to be, the more need based financial aid is available. Harvard, for example, gives millions of dollars in need based financial aid to deserving students. Parents can also help by filling out the FAFSA form and getting a Federal PLUS loan. Generally students will begin to hear back from the colleges regarding their applications in April or May, which will be around the same time that scholarships are awarded and the FAFSA awards are given.

This entry was posted on Monday, May 28th, 2007 at 11:54 am and is filed under Grants & Loans, Scholarships, Fafsa. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.