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May-23rd-2013

Student Loan Series: Applying For Student Loans

istl-girlsIf you are ready to apply for student loans, but aren’t sure where to begin don’t worry because you aren’t alone. Now that you have learned about the different types of student loans out there you are ready to focus on applying for them. The process can seem overwhelming and complicated but in reality as long as you monitor your accounts, keep track of what and where you apply and check in with questions, you should be able to handle the process with ease.

One important categorization you want to hash out before starting any applications is how you qualify for student loans. What this means is since student with the greatest financial need generally receive the best terms, banks and/or the government needs to know your need and status. You want to know if you will be considered an independent student or a dependent of your parents. Although dependency status can be interpreted differently in some cases, for independent students the following typically holds true:

  • You are over the age of 24
  • You are married at the time of applying
  • You are on active duty or are a veteran of the armed forces
  • You have children who receive at least half of their support from you

source: U.S. Department of Education

    • Step 1: The first thing you want to do before any other applications is to complete the online Free Application for Federal Student Aid (FAFSA). Every time you contact a college admissions office you will be asked, “did you complete and submit your FAFSA?” so it woud be in your best interest to get it completed ASAP. You can then go back into it as you apply to more and more school and elect to have your results sent to those institutions. The FAFSA is used by the US Dept of Ed to perform “a statutorily required calculation and then transmits the results to the schools you listed or selected on the FAFSA. These results are used by those schools to determine your eligibility for aid from the federal student aid programs.”

 

    • Step 2: About a month after your FAFSA is completed you should receive a Student Aid Report (SAR). This is important to review as there are times mistakes occur and you will see any issues that may exist on the SAR. In the top right corner of the SAR will be the Expected Family Contribution (EFC), which determines the type and amount of financial aid you are eligible to receive. The school(s) you listed on the FAFSA get a copy of this and it must be returned to the given address with any mistakes corrections ASAP.

 

    • Step 3: Contact the schools you had the FAFSA sent to and ensure they have received all the required information for financial aid. Schools may have additional programs that require additional information from you to qualify. You want to check in with all schools you are looking to potentially attend and review individual financial aid awards as they come in. Be on the lookout for the award letter from schools which will explain what the financial aid package entails.

 

  • Step 4: The promissory note is basically the document that confirms you will owe the set amount of money based on the given terms in return for the education you are gaining from the student loan. Once this is signed and submitted you have officially began your journey into student loan debt, education and then finally forgiveness or repayment!
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