What is financial aid?
Financial aid is assistance to help a student cover the cost of college. It is intended to supplement the family’s contribution and can include scholarships and grants, low-interest loans and part-time employment.
What is the purpose of financial aid?
The primary purpose of financial aid is to provide assistance to students who otherwise would be unable to pursue their education. The basic premise of most financial aid programs is that the primary responsibility for meeting college costs lies with the student and parents. Financial aid comes into play when the family is unable to pay for the entire Cost of Attendance.
Who is eligible for financial aid?
Financial aid requirements are different for each school, but there are some requirements common to many schools.
Typically, the applicant must:
- Be a United States citizen or eligible non-citizen (U.S. national or U.S. permanent resident who has an I-151, I-155 or I-155C).
- Be accepted for admission to an eligible degree-granting program or eligible certificate program.
- Demonstrate financial need, at least for certain forms of aid.
- Have been registered with the Selective Service, if a male 18 to 25 years of age.
- Be free of any drug possession or sale conviction.
- Have a high school diploma or equivalent.
What is financial need?
Need is the difference between the Cost of Education and what the parents and student might reasonably be expected to contribute to meet college costs.
How do I save for school?
Common ways to save for school include, savings accounts, savings bonds, 529 plans, Upromise Program and Coverdale ESAs. These are all great ways to start saving for college. The most important thing is to start saving as soon as possible.
How do I pay for school?
Many means are used to pay for school, including savings, family contributions, scholarships, grants, government loans and private student loans. This whole guide covers these in detail ... read on.
I don’t know what career I want to pursue. Should I still go to college?
Absolutely. Going to college will expose you to many areas of study that may help you decide on a career.
Is there an income cutoff for financial aid?
Most financial aid is determined by family income, assets and ability to pay - also known as "need". There is no cutoff, but it is also true that many families make too much money to get large amounts of "free" aid. Government loans are available to supplement this, but are limited in how much can be borrowed. You may have to fill the gap between Cost of Education and financial aid with a private student loan from CampusDoor.com.
What kinds of student loans are available?
There are many options available for both students and their parents. Students can borrow using Subsidized Stafford Loans (if family income is low), Unsubsidized Stafford Loans (if family income isn’t low), Perkins Loans, and Alternative Student Loans from CampusDoor.com. Parents can borrow the PLUS government loan in their name, if necessary.
I probably don’t qualify for aid. Should I still apply?
Definitely. You can’t be sure you don't qualify for aid and you may not receive financial aid you could get by failing to apply for it. There are also some sources of aid like unsubsidized Stafford and PLUS loans that are available regardless of need. Some other scholarships and grants, even if not need-based, require you to fill in the FAFSA. The FAFSA form is free, so you have no excuse! Some schools require the FAFSA even to consider you for non-need based aid.
Do I have to reapply for financial aid every year?
Yes. Almost all Financial Aid Offices require application each year.
Are my parents responsible for my educational loans?
Maybe. The only loans parents take in their own names are the federal PLUS loans. Perkins and Stafford loans are taken in the student’s name. Private student loans can be taken in the student’s name if they are creditworthy, or the parent can cosign if required. Usually, borrowers and cosigners are equally repsonsible for repayment of private loans.
Of course, your parents (or grandparents) may want to help pay your loan. If so, have your billing statements sent to their address or ask them to have the monthly payments automatically deducted from a bank account.
Should I report any outside scholarships to my Financial Aid Office?
Yes. You should report outside financial aid to your Financial Aid Office. Unfortunately, your financial aid package will be adjusted to compensate. However, at some universities, outside scholarships are used to reduce your contribution level or your loan level, not other financial aid.
Do I need to be admitted before I can apply for financial aid at a particular university?
Not usually. Normally, you can apply for financial aid any time during the enrollment period (usually after January 1). However, you must usually be admitted and enrolled to actually get any money.
Why can't I submit my financial aid application before January 1?
Financial need is based on each tax year, ending December 31st, so you can’t know all the numbers until at least January 1st. Many folks don’t apply until after parents receive their W-2s in February. You can get a jump on the process if you use paystubs and other information to figure out income and related info before that.
How do I apply for a Pell Grant and other types of need-based aid?
Submit a FAFSA. Check the appropriate boxes indicating interest in student employment, student loans and parent loans. This does not commit you to accepting these types of aid. You can accept or decline later. Leaving these boxes unchecked will not increase your grant aid.
If I take a leave of absence, do I have to start repaying my loans?
Maybe, maybe not. Subsidized Stafford loans have a grace period of 6 months and the Perkins loan a grace period of 9 months before the student must begin repaying the loan. When you take a leave of absence you will not have to repay your loan until the grace period is used up. If you re-enroll before the grace period ends, no payments start. But if you use up the grace period, then when you graduate you will have to begin repaying your loan immediately. You can request an extension to the grace period, but you have to do so before the grace period is used up.
If your grace period runs out during your leave of absence, you will have to start making payments on your student loans.
Can a 17-year-old student sign a promissory note for a student loan?
A 17-year old can sign for Stafford and Consolidation Loans. It’s unclear whether this applies to Perkins and Direct Loans.
All private education loans currently require a cosigner when the student is under the age of 18.
