Applying for Student Financial Aid? Know Your Options!
When you think of paying for college, student loans may be the first thing that comes to mind. But there are many other financial aid options available. Read on to find out what type of need- and merit-based aid you can get to help with your college expenses. Schools offering Accounting & Finance degrees can also be found in these popular choices.
What to Know About Financial Aid
With increasing tuition costs, you may be wondering how you'll pay for school. If you're a prospective student considering financial aid for the first time, all the terms and options can become confusing. Or maybe you're a returning student and feel that financial aid has done all it can for you. Either way, we've got some helpful tips to consider.
The government puts together a package using your FAFSA application. This consists of loans and grants based on your income and your tuition costs. It's important that you understand all the financial aid options available to you, no matter what degree you're pursuing
Your college's financial aid office works with the government and lending institutions to administer/disburse your aid. So always feel comfortable going to your financial aid office when you have questions because they are there to help you.
One of the commonly neglected options available for students is work study. Non-taxable, the money that you earn during your work study is unlike loans because you won't need to pay it back after school. This option is beneficial because the money you earn can be applied to additional educational costs that a loan did not cover. The Department of Education and your college each pay half of what you'll earn.
Once the amount you'll be awarded each semester has been determined, the financial aid office will work out your pay and your work study assignment. You may be able to earn experience based on your major - such as a math tutor, working in the writing center, working in the computer lab or working for a professor in a particular department.
Another form of money provided by the government is a grant. This is generally considered a gift because the amount you'll receive is based on your financial need and your academic performance.
Given to low- and middle-income students, the Pell Grant is worth up to $5,815 (for the 2016-2017 academic term). While this grant is typically given to undergraduate students, you could be eligible for a post-bachelor's grant depending on what you'll study. You can also get this grant if you're a part-time student, and it can be directly paid to you, to your school or to a combination of both.
Iraq and Afghanistan Service Grant
This grant is for you if you lost a military parent because of his or her service in Iraq or Afghanistan. You must either be under 24 years old or have been a part-time student when the loss occurred to receive this award. This is equal to the amount you would receive with a Pell Grant.
If you've decided that your calling is teaching, you may want to seek out this grant. You can earn up to $4,000 per year if you agree to work in a high-need school or department after you graduate. The government has a listing of approved low-income schools and subjects (foreign language, science, math, etc.) that you can teach. You have eight years to complete four years of service in one of these areas, otherwise your grant will be transferred to a loan.
Similar to a Pell Grant, the Federal Supplement Educational Opportunity Grant (FSEOG) provides money to students who have the lowest income and need the extra coverage. Depending on your need, you can earn between $100 and $4,000 for the year. Also similar to the Pell Grant, this money can be given to you or directly to the school.
Each school has grants it can give to students. These grants are typically given on a financial-need basis or based on academic merit. It's best to check with your school to find grants that aren't included in your FAFSA package.
Free money is always welcome when going to school, but you need to work a little harder for this. Scholarships are offered by many colleges, organizations and businesses. Many foundations and memorials create scholarships in the name of someone who has made an impact on the community. You'll usually need to fill out an application and write an essay to accompany it, or be nominated for one. Like college admissions, these are highly competitive and often ask for letters of recommendation - but with some scholarships worth up to $100,000, the work is worth it.
Loans are the largest cause of debt for students. Because this is not free money, it will need to be repaid after you graduate. Also, student loans are difficult to write off in bankruptcy, so be sure to think it over before you sign.
Direct Stafford Loan
There are two types of Stafford loans available for students: the subsidized or the unsubsidized loan. Both are given through the Direct Loan Program. The subsidized Stafford loan is better because you aren't charged interest during your program, while the interest on an unsubsidized loan accrues during your program. You'll have the choice to pay off the interest while still in school or let it add on to the principal when you graduate.
Direct PLUS Loan
Many students who are just out of high school depend on their parents for money. If you are a dependent, your parents are eligible to take out a PLUS loan in their names. If you're a graduate or professional degree-seeking student, you can take out this loan yourself. You cannot have a bad credit history to receive this loan. The interest rate is 6.84% (for the July 2015 to July 2016 school year), and parents or grad students will only be able to apply for the amount that financial aid doesn't cover. While this is good for students who have no other way to pay for tuition, think twice before putting the added strain of this cost on your parents (or yourself).
Worth up to $5,500 for undergraduate students ($8,000 for grad students) each year, this loan is primarily given to students from low-income families. These loans have a lower interest rate (5%) so that they are more affordable and help to make college possible.
Think all the confusion isn't worth it? Find out why you should apply for financial aid.
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