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Let's talk college grants and loans
Let's talk college grants and loans
The first thing to think about is that there are several different types of Grants and Loans. Just like scholarships, you will have to search them out. It’s FREE money people! Do a little research, ask some questions, go look in the financial aid office at the institution you are attending, CALL someone, or….send an email. The key is that the FREE money isn’t just going to walk up to you and say, “Here I am! I am your FREE money for college.” You have to do some work and search for it. Here is some break down information. The first is that if you want to be eligible for grants and loans you and your family will have to complete the FAFSA…
Federal Application For Student Aid.
There is a FAFSA mobile app! It’s called myStudentAid.
https://studentaid.ed.gov/sa/events/mystudentaid-mobile-app-20180905
GRANTS
What is a grant?
A grant is a type of financial aid that doesn’t have to be repaid. SCORE!!!! Grants are normally for undergrad work (Associates or Bachelors Degree) and the amount is decided on by someone’s need, cost of attending school, and your current enrollment. There are requirements to qualify. The federal government has grants including Pell grants, PSEO Grants, SMART grants, and Academic Competitiveness grants. So, here goes…
Federal Pell Grant
FREE MONEY!!! You don’t have to pay it back! How much you receive will depend on grant funding and your costs to attend school. So, the earlier you apply the better! The funds are applied directly to your school account.
Federal Supplemental Education Opportunity Grant
These are given out to those with exceptional financial need. Those applicants who have the lowest “Expected Family Contributions” can receive $100-$4,000 per school year. The funds are normally applied directly to your school account.
Academic Competitiveness Grant
These are in addition to a Pell grant. These can only be awarded your first and second year of college. You have to have taken a rigorous high school academic load, maintained and continue to maintain a 3.0 GPA.
SMART Grant
These are for 3rd and 4th year students who are majoring in natural sciences, technology, computer sciences, life sciences, mathematics, engineering, or a foreign language that is determined as critical to national security. Students must have maintained and continue to maintain a 3.0 GPA You may receive up to $4,000 your 3rd and 4th year of college.
Institutional Grants
These are provided by the school that you are attending. They are normally called Merit Awards or Merit Scholarships. You want to apply to these ASAP! Don’t wait for an application deadline!
FEDERAL WORK STUDY
How do I apply?
First you will need to complete the FAFSA. You will need to indicate on your application that you want work-study assistance. Then contact your college’s Financial Aid office.
How much can I earn?
That depends on each college institution.
What type of jobs?
Campus jobs! Campuses normally have a list of work-study jobs available at the beginning of each semester, BUT mainly at the start of the school year!
PERKINS LOAN
The Perkins Loan is no longer available. It has expired.
STAFFORD LOANS
Oh, the Stafford Loan! Stafford Loans are what the majority of college debt falls under. So, let me see how straight forward I can make this for you.
What is a Stafford Loan?
The US Department of Education administers the Federal Family Education Loan Program (FFEL) which the Stafford Loan is part of. Funds for these types of loans come from a bank, credit union, or other lender (hmmmm, “other lender”). Fixed interest rate of 4.529% (for Undergraduate), this can vary slightly from year to year.
THERE ARE 2 KINDS OF STAFFORD LOANS!!!!!
Subsidized Stafford Loans
A Stafford Loan that IS awarded based upon financial need. The government will pay (subsidize) the interest on your loan while you are in college….and the first 6 months after you aren’t in college…and any period in which you qualify for deferment.
Unsubsidized Stafford Loans
A Stafford Loan that IS NOT based on financial need.
The school you are attending will do this……
COST OF ATTENDANCE
-THE AMOUNT OF YOUR CURRENT FINANCIAL AID AWARDS
____________________________________________________
WHETHER YOU’RE ELIGIBLE FOR AN UNSUBSIDIZED LOAN
You are responsible for all of the interest as soon as it is disbursed until you pay it off. You can choose to pay the interest as it accrues OR you can let it add up on your principal amount (the initial loan amount). Let’s just say that if you let the interest accrue you will have to pay MORE MONEY!!!!
How can I get a Stafford Loan?
Complete the FAFSA. Your institution will review and inform you how much you are eligible for.
How much can I borrow? PAY ATTENTION
If you’re a graduate or professional degree student, you can borrow up to….
$20, 500 with no more than $8,500 of this amount may be in subsidized loans
***When you graduate with a Masters or Ph.D., the maximum total debt allowed from Stafford Loans is $138,500.00. No more than $65,000.00 of this amount may be in subsidized loans. The maximum total graduate debt limit includes Stafford Loans received for undergraduate study.
Let me restate this: $138,500.00 is the max total debt you can borrow. College Loans are 10 year loans. That means that your monthly student loan payment could be $1,154.00 a month!!
That is MORE than my HOUSE PAYMENT!
What am I saying??? Apply for EVERY Scholarship you MIGHT be eligible for!
When do I have to repay my loan?
Loan repayment begins 6 months after you graduate, leave your institution, or are less than half time.
WOW!!!! Take a deep breath and read through all of that at least 3 more times! Then, read it again! HA!
PLUS LOANS
What is a PLUS loan?
PLUS loans are for Parents and Graduate students. Parents can apply for PLUS loans to help pay for educational expenses if you are a dependent undergraduate student enrolled in an eligible program (NOT UNDECIDED) and are at least half time. PLUS loans are credit based. Parents will need to have acceptable credit history. Interest IS charged on PLUS loans from the date of disbursement until the loan is paid off.
Can students borrow PLUS loans?
Only if they are in graduate school.
How do my parents get a PLUS loan?
They have to apply for one. Credit approval is required
How much can I borrow?
COST OF ATTENDANCE
-THE AMOUNT OF YOUR CURRENT FINANCIAL AID AWARDS
____________________________________________________
PLUS LOAN AMOUNT ELIGIBILITY
Lender sends the funds directly to your college account. If loan funds remain the difference will be sent to your parents and can be used for other educational needs.
When do I have to repay my loan?
First payment is due 30-60 days after the loan is disbursed. There is no grace period.
Can repay 10-25 years depending on how much your loan is for and your repayment plan.
PRIVATE EDUCATION LOANS
What is a Private Education Loan?
These are also called Alternative loans. They have been established by private lenders. Private loans have different lending criteria. They are not governed by the federal government. They are credit based. Students must have a co-signer to qualify for a Private loan. Interest rates are variable and can change monthly. These rates are generally higher than the Stafford rate of 6.7%. You are responsible for ALL of the interest while the student is in school.
Can I consolidate a Private loan?
Yes, BUT you will probably waive your federal benefits. This means that you will have to follow ALL of their terms and conditions that go along with the private loan.
Can my parents borrow a private loan?
NO. However, they can do a Student Loan Finance corporation that offers the co-sign option.
When does repayment start?
6 months after graduation, you leave the college, or are less than half time.
WHAT IF I CAN’T PAY IT BACK?
You CANNOT declare bankruptcy on a school loan!
Deferment is when you temporarily postpone your loan repayment schedule. You may
have the option of paying the interest while you are in deferment. If so, DO IT!!!!! Otherwise, you will be earning interest on the principle (TOTAL) amount.
Forbearance is when you may elect to stop payment OR reduce payments for 12
months! Interest will accrue during the 12 month period.
Default=This is very much super bad, don’t do it! You can default on a loan if you are not in communication with your loan agency. Or you just stop paying your loan back. After 90 days of non-payment the default information gets put on your credit report. Then it gets sent to collections. Then they can automatically take the amount out of your tax refund (IF you get a tax refund…..HA!) Then they can automatically take it out of your wages. This is called garnishing your wages. Then they could file legal action against you.
DISCLAIMER: Majority of this information is taken from lots of different websites. I cannot take credit for any of this information. Majority was found on the FAFSA website. https://fafsa.ed.gov/
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