By Marcial Robiou
Some students are on their way to college this year and some will be applying to schools to start next year. Two different groups of students, with the same solitary question boggling their minds: “How the hell am I going to pay for all of this?”
Fret not; financial aid was founded upon this very concern. Contrary to popular belief, financial aid is not free money; but everyone and their mother should apply for it, even the people who think they might not qualify.
Financial Aid is a general term that includes all types of money, loans, grants, scholarships and work-study programs that help students pay for tuition, books, fees and living expenses.
This all started due in part to the Higher Education Act of 1965, which was created to help “strengthen the educational resources of this country’s colleges and universities and to provide financial assistance to students in post-secondary and higher education.”
The government reviews applications and, through a series of complicated number-crunches and sacrifices to the heathen voodoo Gods, Uncle Sam determines the amount a student is eligible for and how much of that needs to be repaid while in school and post graduation.
How does the government determine eligibility? You have to apply by filling out the FAFSA (Free Application for Student Aid). From there, it is submitted into a formula created by the aforementioned Higher Act. The result is the Expected Family Contribution (EFC).
The EFC basically measures a family’s financial strength and calculates how much it can afford out of pocket. This formula can also be utilized by the state or school to determine whether a student qualifies for aid from them, or from some other non-federal aid.
When is financial aid activated? Legally, financial aid does not kick in until the start of the school year and goes directly to the school for tuition, fees, and housing assistance. Anything left over after goes to the student.
What is most important is when one should apply for financial aid: as soon as you apply to school. Many students leave this task for last and miss the first week of school as a result. Do not be one of these.
See? That wasn’t so bad. For more information or assistance in this process the best place to go to is the financial aid office at school. Whether you have already enrolled in a college or are planning to do so in the near future, good luck and know this; the student who knows the most going in pays less going out.
And remember: consolidate.
Financial Aid Terms Grants – free money given to you by the government to go to school.
Scholarships – the same as grants. The only difference is there are scholarships given by the government and there are many more that are doled out by private companies.
Federal Loans – loans from the federal government. Loans must be repaid starting 6 months after you graduate and can be done on a monthly basis for up to 10 years. There are 2 basic types;
a. Subsidized – a loan that the government pays the interest for you while you attend school.
b. Unsubsidized – You can pay the interest while you attend school or let it compound and pay it after you leave school. Its cheaper in the long run to pay as you go instead of letting it compound.
PLUS Loans – Parents Loan for Undergraduate Students. It is a low interest loan that parents can take out for their dependent(s).
Alternative Loans – these are loans offered by banks with competitive rates. This option is one to consider when all state and federal options have been exhausted.