Provided your coffers are not full, paying for college will be a significant criterion when choosing which schools you are applying to. Many different kinds of financial aid, including grants, loans, and scholarships, are available for college students, and it's important to know what options are a good fit for you and your family.
FAFSA and Financial Aid
The first thing every prospective student needs to do is fill out a FAFSA. Grants and loans from the federal government are only available to the students who apply for them, but you must complete a form called the FAFSA, which is usually due March 1 but will be accepted throughout the year. Here is a link to complete the FAFSA online: http://www.fafsa.ed.gov/
Federal Grants
Grants are financial aid that is awarded to students and does not have to be paid back. Several federal grants are available. The Federal Supplemental Educational Opportunity Grant (FSEOG) program is a grant available to students with financial needs. In addition, other federal grants for students include the Federal Pell Grant, the TEACH Grant, available to prospective teachers who plan to work in urban and low-income areas, the Academic Competitiveness Grant (ACG), the National SMART Grant to retain science and mathematics talent, and the Iraq and Afghanistan Service Grant. Additional awards are also available for Native American students and nontraditional students.
Federal Student Loans
Also known as Direct Stafford loans, There are two kinds of federal student loans available, subsidized and unsubsidized, along with Plus Loans for parents of students. Subsidized federal loans are for students with financial needs established by the FAFSA. Unsubsidized loans are available to everyone else, provided you have not committed a felony or drug violation. The amount of money that a student can borrow for an unsubsidized loan is set by the institution where you are enrolled. PLUS loans for graduate and professional degree students are available as well.
Student Loan Repayment
Several repayment plans are available to students after they graduate, but some may require certain eligibility requirements. Typically, students have between ten and twenty-five years to pay back their loans at a fixed interest rate. Listen carefully to your options before you decide on a loan.
Loan Forgiveness
The federal government has a few loan forgiveness programs that could be of interest to you if you plan on a career in education or public service. Teachers that work full-time for five years in an elementary or secondary school that services low-income families could be available. In addition, public servants who have made more than 120 payments are also eligible for loan forgiveness programs. To find out more, visit: http://studentloans.gov/
Private Loans
Many bank, private lenders, and other financial institutions also offer student loans, but often with variable rates. Always be sure of the annual percentage rate when applying for loans, and understand the terms for repayment. More than likely, you won't start repaying your loans until after college, but it's important to realize and understand your actual financial obligations whenever you are applying for loans.
Scholarships
Though they can be hard to come by, scholarships are always out there somewhere. Start by calling local organizations and foundations (i.e. Rotary Club, civic organizations, etc.) to see if they sponsor any scholarships that you would be eligible for. Visit your local libraries and ask librarians if they known of any scholarship opportunities. Talk to your high school guidance counselor about local and national scholarships you could apply for, and be sure to check with the financial aid offices at the schools you are visiting to see what kinds of financial aid they offer. Some of the colleges you are considering may have academic scholarship packages that you could be eligible for. SAT or ACT scores and high school GPAs will be most likely be considered.
You will also find many resources on the web to help you track down scholarships, including search engines, bulletin boards, and message boards specifically for students in need of financial aid for college. Using these tools, students may be successful in finding scholarship opportunities that are awarded to specific nationalities, ethnicities, and immigrant groups. First generation college students may also be able to find scholarships available to them as well.
In addition, need-based scholarships are offered by many institutions of higher learning. Both federal and state agencies also have need-based scholarships. A list of state agencies that offer scholarships and grants can be found here: http://wdcrobcolp01.ed.gov/Programs/EROD/org_list.cfm?category_ID=SHE
Military Scholarships and Grants
The Iraq and Afghanistan Service Grant is available to veterans returning from duty in the middle east. Special scholarships are available for military families. For more information, visit the following site: http://studentaid.ed.gov/PORTALSWebApp/students/english/military.jsp
Credit Cards and Other Loans
Try to avoid financing your eduction with credit cards and/or signature loans. The interest you pay on your federal student loans is deductible from your annual federal tax bill, so take advantage of this break while it lasts. Credit cards and bank loans usually have variable rates that could rise unexpectedly and cause repayment to become difficult. Always be sure to understand the legal terms of your loans, and ask any questions that you have before you accept financial aid.
Written in November 2010 for an educational website. I used government websites as sources.
