Student loans are a great way to pay for your higher education. The best thing about many student loans is that you can receive a deferment of payments until you have been out of school for 6 months. Once these 6 months are up, payments are generally placed at an affordable monthly rate. There are several different kinds of student loans out there, which are offered by many different loan companies. There are loans that are secured by the government and those that are not. The steps below outline how to receive a government-backed student loan, an option that should be evaluated before you seek out other loan alternatives.
- Fill out the Free Application for Federal Student Aid (FAFSA). This is a requirement to qualify for federal grants and government-backed student loans.
- Once you fill out your financial information, you will learn what your Expected Family Contribution (EFC) is. This amount will be used to determine whether you qualify for a Federal Pell Grant. For example, if your EFC is $0, you will likely qualify for the maximum grant amount. Grants do not need to be paid back, but there is a limit on how much grant funding you can receive per year. Although this amount may not pay for your entire class load, it can still help supplement your student loans so you will have less to pay back after you graduate.
- If you do not qualify for a grant or if the grant is not enough to pay for your class load, you may be able to receive a subsidized Stafford loan (a loan where the government will pay all interest incurred until 6 months after you graduate) or an unsubsidized Stafford loan if you do not financially qualify for a subsidized loan.
- Funding through these options is limited based on whether you are a dependent or independent student and how long you have been in school (i.e. undergraduates will likely be able to receive less than graduates).
- If you do choose funding via one of these options, your school will apply the money you are eligible for toward classes, books, and supplies that are purchased through the school, which will be deducted from your total amount (any grant money will be used first, followed by any loan money).
- Any remaining amount will be sent to you by check within a few weeks to a few months.
If you need additional money, such as for living expenses throughout the year, you may need to look into other student loan alternatives. You can find many of these alternatives simply by performing an Internet search on "student loans." Scholarships may also be a good alternative. Remember that these alternatives may require you to provide additional financial information and/or that you have a decent credit record or cosigner.