Tuition, living expenses, books and food; college costs, a lot. You may have thought getting accepted was the hard part, only to find paying for your education is an even bigger challenge. Don't despair, the Federal Government is a multi-billion dollar resource for college students in need of financial aid. Uncle Sam has grants, loans and work-study programs available to students who need a little help.
A grant is the cheapest form of financial aid, because you don't have to repay it. Pell Grants are awarded based on a student's financial need. There are also grants given based on a college student's course of study. The first step to getting a grant is to fill out a Free Application for Federal Student Aid, FAFSA. Nearly all two and four-year colleges and universities use the FAFSA to award federal and state financial aid.
If you don't qualify for a federal grant, a loan may be next best option. The same FAFSA will gain you information about various loans. Federal loans offer borrowers lower interest rates and have more flexible repayment plans than many banks.
Schools usually participate in the Federal Family Education Loan, FFEL, or the Direct Loan Program. In the Direct Loan Program, the funds come directly from the federal government. Funds for a FFEL come from a bank, credit union, or other lender. Many schools give students a list of preferred lenders, or you can choose your own.
Students can borrow over $12,000 each year through the FFEL or the direct loan programs. Interest rates right now are below four percent. How much money you can borrow is determined by how many years of college you've completed as well as financial need. Students taking out a loan have to sign legal documents outlining the amount borrowed and the terms for repayment. The type of loan also helps determine when interest has to be paid.
Under both the Direct Loan and FFEL programs, the money goes straight to your school. The loan pays for tuition, housing and other school charges, first. You can get any leftover cash or give the school permission to hold the money for future expenses. First year students don't get their loan checks until 30 days into the school year. The delay is a way to protect you from having repay a loan in case you don't start school or drop out within the first month of class.
The federal government's work study program is another option for financial aid. Undergraduate students with financial need get jobs or perform community service related to their field of study. The money earned goes to help pay for their education. Work-study programs offer jobs on or off-campus. Off-campus work is usually for a private nonprofit group or public agency that works in the public interest.
So if you don't have thousands of dollars sitting around just waiting to be used for a college degree, check out the U-S government as a resource. The government has billions of dollars for financial aid for college students. One application puts you on your way to getting a grant, a loan or a job to off-set your expenses.
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