November 3, 2010

Financial Aid Loans | UNIVERSITY FINANCIAL AID: LOANS

The private education system is much more expensive than the public one. On the other hand, many prestigious universities are included in it. That is why a lot of students want to get their college degree in one of them. As a result, most of them need financial assistance to accomplish their educational goals. The government offers a variety of grants and scholarships, but they may not be enough for everybody.

Student loans are a type of university financial aid accessible for anyone who wants to apply for them. There are federal and private ones. Private loans are provided by private parties or non-profit private institutions.
Federal loans, like FAFSA (Federal Student Aid) or PLUS (Federal Parents Loan for Undergraduate Students) are state funded and you can apply to them on their websites. You should provide exact and genuine information when you fill out your form, and you should do it as early as you can. These federal aids are low interest ones, and should be earmarked to pay for books, housing, fees, and supplies.

Private loans are offered by private financial institutions and have nothing to do with the government. These are suitable for undergraduates and graduates students. You should take into account that the final authorization relies only on your credit review. Also, you may need some references from former borrowers.

Interest rate repayment is an aspect you should consider. An unsubsidized loan comes with the burden of accumulated interest from the first day. On the other hand, someone else pays in full or partly in case of a subsidized loan. As long as repayment is concerned, you should keep in mind that it is better to progressively pay off the loan interest than waiting until you earn your college degree. ‘

Finally, you should analyze all types of available loans and decide the one that is more convenient for your higher education.

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Filed under Financial Aid by jolinsz

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6 Comments on Financial Aid Loans | UNIVERSITY FINANCIAL AID: LOANS »

April 26, 2011

crisfdez @ 1:57 pm:

I think you should just try your luck with the university's financial aid dept. I do think it's BS that people who aren't well off have to deal with a decreased chance of getting into a university, but what can you do? I'm sure that if you apply to enough schools, your chances should shoot back up, at least.

Also, I like your term “intellectually promiscuous”.

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May 3, 2011

Josh M @ 7:48 am:

Help:

The Federal Work Study program is an optional form of financial aid. Though there's a possibility of some financial assistance there, some students just aren't interested, because they just don't feel that they want to make the commitment to working a part-time job while they're trying to settle into the routine of school. Rather than offer work study to a whole bunch of applicants that wouldn't be interested, the FAFSA allows you the opportunity to opt out of consideration.

The same applies to the financial aid system's loan programs. While loans are a central part of the system, some students just don't want to take on the financial burden of loans. If you say "no thanks!" on the FAFSA, your school won't include a loan offer in your aid package.

As far as your specific question, it IS likely that your decision to opt out of consideration for the work study program MAY cost you some money – but here's the thing – the work-study program is relatively small (compared to other aid programs), and it's far from a "sure thing" that you'd be offered a work study assignment, even if you had indicated that you would like to be considered.

However, work study or not, it would not have affected the loan offer (except under the very unusual circumstance that you are receiving sufficient financial aid to cover ALL of your school expenses).

Your Stafford loan eligibility is tied to your year in college. Dependent first year freshmen can borrow up to $5500, sophomores can get $6500, and third and fourth year students have a $7500 limit. The only way you wouldn't be approved for the top dollar amount is if you didn't "need" that much money. Let me explain.

Suppose your school anticipates that it will cost you $10,000 a year to attend. Now suppose that you had an EFC of zero, qualifying you for the maximum Pell grant award of $5350. Now let's also suppose that your school had awarded you a $3000 scholarship. What have you got? $10,000 work of school expenses, and $8350 worth of financial aid.

That leaves you only $1650 short of what you'll need for your school expenses – and that $1650, not $5500, becomes the maximum that you would be eligible to borrow from the Stafford lending program.

Having said that – if your school has a February 1st "priority aid deadline" (wow, that's early!), changing your FAFSA now isn't going to make it all that likely that you'll be offered work study aid. As I said earlier, that's a fairly small program, and many schools wipe out their entire annual allocation in the very first round of aid packages. The Feb 1 deadline is the day they started assembling aid packages, so there's a semi-decent chance that the work study money is already gone for this year. The best thing you can do is call the financial aid office, and ask them if it would be worth your while making that change to your FAFSA. They MAY be able to simply note your change or heart internally.

Good luck!

Edit: Okay, so your Stafford max is now $9500 for a freshman, $10,500 for your 2nd year and $12,500 in your third and fourth. Nothing else changes about the answer I provided.

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