How to Get a Student Loan
Know the eligibility requirements for federal financial aid., Complete your FAFSA as early as possible., Get your EFC., Determine the cost of your program., Compare your estimated costs with your EFC., Read your financial aid offers carefully., Know...
Step-by-Step Guide
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Step 1: Know the eligibility requirements for federal financial aid.
In order to receive financial aid from the federal government, you must be a U.S. citizen, a U.S. national, or a U.S. permanent resident.
You must also enroll at least half-time at an accredited college or university.
Certain non-citizens can be granted exceptions to the requirement to be a citizen, national, or permanent resident.
If you are a documented refugee, or you hold a T-visa (a visa granted to victims of human trafficking), for example, you may be eligible for federal financial aid.
Check in with financial aid officers at schools you are considering to be sure. -
Step 2: Complete your FAFSA as early as possible.
You can fill out the FAFSA (Free Application for Federal Student Aid) during the January preceding the school year for which you will need a student loan.
The FAFSA is the most important financial aid form; it gives you access to a wide variety of government grants and loans.
Because some kinds of aid are awarded on a first-come, first-served basis, it’s important to get this crucial piece of paperwork filed as soon as you can.
There’s no need to wait until you know what program you’ll be attending or even until you know that you’ll need a loan – submit the form regardless.
You can fill out the FAFSA online at www.fafsa.gov.
If you prefer a paper version, you can download one from the website or, if you know which college you will be attending, you can request one from the financial aid office.The FAFSA will require your family’s tax information (or, if you are an independent adult, your own tax information).
This will include social security numbers, numbers of dependents, and annual income.
However, you can submit your FAFSA using projected estimates, so do not feel that you need to wait until you’ve completed your taxes., Within a few days of submitting your FAFSA, you will receive a report that confirms your application and informs you of your EFC (Expected Family Contribution).
The EFC is determined by a formula from the information on your FAFSA; it represents the theoretical amount of money your family will be expected to contribute to your education.
This number will determine how much financial aid you’ll ultimately be offered by programs that accept you.Note that the EFC is simply a number determined by a formula.
It may not be an accurate representation of what you and your family feel you can actually afford, and it may not be the amount you wind up paying.
Try not to get discouraged if the number is much higher than you’d like; you may be able to find funding sources that will help reduce your costs. , Once you know where you’ll be going to school – or, at least, once you’ve narrowed your choices down to a few programs that have accepted you – calculate your costs.
Virtually every school will provide a breakdown of costs for you, so check websites or call the financial aid offices for more information.
And don’t make the mistake of looking only at tuition! Depending on your program, major, and personal circumstances, you’ll also need to consider: housing costs (unless you will be living for free with your parents or elsewhere) meals (whether you sign up for a school meal plan or not) student fees textbooks, supplies, and laboratory fees transportation expenses miscellaneous personal expenses , For most students, the estimated cost of attending your program of choice will be significantly more than your EFC.
If you subtract your EFC from the annual cost, you’ll have a basic estimate of how much financial aid you’ll likely be offered.
Although it isn’t official, this estimate should help you start planning a budget.Say, for example, that the annual cost of attendance at your university of choice is $24,000.
If your EFC is $9,000, that means that the federal government assumes, from your FAFSA, that your family can contribute $9,000 a year.
The difference between $24,000 and $9,000
-- $15,000
-- is what you are likely to be offered in financial aid. , When the official financial aid offers come through from the schools that have accepted you, read them.
In most cases, they represent the maximum amount you will be able to get from the federal government and from the school itself.
Financial aid packages typically consist of:
Grants.
These do not need to be paid back, so you should simply be able to accept them and apply them to your education-related expenses.
Loans.
These are the federal loans you are being offered based on your FAFSA.
You may choose to accept some or all of this money depending on your needs.
Work-study offers.
Work-study money has to be earned by working a certain number of hours on campus. , When you accept a student loan, you become responsible for that debt.
Take the time to understand what these loans are and how they work.
Direct Subsidized Stafford Loans are awarded based on financial need.
While you are in school, and for six months following your graduation, the government will pay the interest for you.
After that, you will be responsible for making payments, and interest will begin to accumulate.Direct Unsubsidized Stafford Loans can be awarded through your school regardless of your financial need.
Unlike Direct Subsidized Loans, all of the interest is your responsibility.
You don’t have to make payments while you are in school, but interest will accumulate during that time.Federal Perkins Loans are awarded in addition to other loans for students with significant demonstrable need.
They have a low interest rate of 5% and do not need to be repaid until after you graduate., Unfortunately, many students graduate from college with tremendous amounts of debt and no clear means to pay it off.
The federal government is somewhat flexible about repayment plans, and in some circumstances, you may be able to postpone or reduce your payments, but the fact remains that student loan debt can be a financial burden that follows you for decades.
If you can pay for more of your education yourself – by attending a cheaper program, completing your first two years at a community college, working while you go to school, and/or accepting more help from parents and other family members – consider doing so.
Although education is valuable in and of itself, one thing to consider is whether your program of study is likely to lead to a secure, well-paying job.
If you are studying drama or philosophy or another field that is famous for its unemployment rates, you should approach student loan debt with extra caution. , To minimize your overall debt upon graduation, consider making payments during the school year.
Even if you can only manage small interest payments on your unsubsidized loans, you will make repayment during the years after graduation much easier. -
Step 3: Get your EFC.
-
Step 4: Determine the cost of your program.
-
Step 5: Compare your estimated costs with your EFC.
-
Step 6: Read your financial aid offers carefully.
-
Step 7: Know what kinds of loans you are accepting.
-
Step 8: Weigh your options carefully before accepting a federal loan.
-
Step 9: Consider making interest payments while you are in school.
Detailed Guide
In order to receive financial aid from the federal government, you must be a U.S. citizen, a U.S. national, or a U.S. permanent resident.
You must also enroll at least half-time at an accredited college or university.
Certain non-citizens can be granted exceptions to the requirement to be a citizen, national, or permanent resident.
If you are a documented refugee, or you hold a T-visa (a visa granted to victims of human trafficking), for example, you may be eligible for federal financial aid.
Check in with financial aid officers at schools you are considering to be sure.
You can fill out the FAFSA (Free Application for Federal Student Aid) during the January preceding the school year for which you will need a student loan.
The FAFSA is the most important financial aid form; it gives you access to a wide variety of government grants and loans.
Because some kinds of aid are awarded on a first-come, first-served basis, it’s important to get this crucial piece of paperwork filed as soon as you can.
There’s no need to wait until you know what program you’ll be attending or even until you know that you’ll need a loan – submit the form regardless.
You can fill out the FAFSA online at www.fafsa.gov.
If you prefer a paper version, you can download one from the website or, if you know which college you will be attending, you can request one from the financial aid office.The FAFSA will require your family’s tax information (or, if you are an independent adult, your own tax information).
This will include social security numbers, numbers of dependents, and annual income.
However, you can submit your FAFSA using projected estimates, so do not feel that you need to wait until you’ve completed your taxes., Within a few days of submitting your FAFSA, you will receive a report that confirms your application and informs you of your EFC (Expected Family Contribution).
The EFC is determined by a formula from the information on your FAFSA; it represents the theoretical amount of money your family will be expected to contribute to your education.
This number will determine how much financial aid you’ll ultimately be offered by programs that accept you.Note that the EFC is simply a number determined by a formula.
It may not be an accurate representation of what you and your family feel you can actually afford, and it may not be the amount you wind up paying.
Try not to get discouraged if the number is much higher than you’d like; you may be able to find funding sources that will help reduce your costs. , Once you know where you’ll be going to school – or, at least, once you’ve narrowed your choices down to a few programs that have accepted you – calculate your costs.
Virtually every school will provide a breakdown of costs for you, so check websites or call the financial aid offices for more information.
And don’t make the mistake of looking only at tuition! Depending on your program, major, and personal circumstances, you’ll also need to consider: housing costs (unless you will be living for free with your parents or elsewhere) meals (whether you sign up for a school meal plan or not) student fees textbooks, supplies, and laboratory fees transportation expenses miscellaneous personal expenses , For most students, the estimated cost of attending your program of choice will be significantly more than your EFC.
If you subtract your EFC from the annual cost, you’ll have a basic estimate of how much financial aid you’ll likely be offered.
Although it isn’t official, this estimate should help you start planning a budget.Say, for example, that the annual cost of attendance at your university of choice is $24,000.
If your EFC is $9,000, that means that the federal government assumes, from your FAFSA, that your family can contribute $9,000 a year.
The difference between $24,000 and $9,000
-- $15,000
-- is what you are likely to be offered in financial aid. , When the official financial aid offers come through from the schools that have accepted you, read them.
In most cases, they represent the maximum amount you will be able to get from the federal government and from the school itself.
Financial aid packages typically consist of:
Grants.
These do not need to be paid back, so you should simply be able to accept them and apply them to your education-related expenses.
Loans.
These are the federal loans you are being offered based on your FAFSA.
You may choose to accept some or all of this money depending on your needs.
Work-study offers.
Work-study money has to be earned by working a certain number of hours on campus. , When you accept a student loan, you become responsible for that debt.
Take the time to understand what these loans are and how they work.
Direct Subsidized Stafford Loans are awarded based on financial need.
While you are in school, and for six months following your graduation, the government will pay the interest for you.
After that, you will be responsible for making payments, and interest will begin to accumulate.Direct Unsubsidized Stafford Loans can be awarded through your school regardless of your financial need.
Unlike Direct Subsidized Loans, all of the interest is your responsibility.
You don’t have to make payments while you are in school, but interest will accumulate during that time.Federal Perkins Loans are awarded in addition to other loans for students with significant demonstrable need.
They have a low interest rate of 5% and do not need to be repaid until after you graduate., Unfortunately, many students graduate from college with tremendous amounts of debt and no clear means to pay it off.
The federal government is somewhat flexible about repayment plans, and in some circumstances, you may be able to postpone or reduce your payments, but the fact remains that student loan debt can be a financial burden that follows you for decades.
If you can pay for more of your education yourself – by attending a cheaper program, completing your first two years at a community college, working while you go to school, and/or accepting more help from parents and other family members – consider doing so.
Although education is valuable in and of itself, one thing to consider is whether your program of study is likely to lead to a secure, well-paying job.
If you are studying drama or philosophy or another field that is famous for its unemployment rates, you should approach student loan debt with extra caution. , To minimize your overall debt upon graduation, consider making payments during the school year.
Even if you can only manage small interest payments on your unsubsidized loans, you will make repayment during the years after graduation much easier.
About the Author
Jessica Smith
A passionate writer with expertise in lifestyle topics. Loves sharing practical knowledge.
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