The vast majority of people cannot afford t pay for school out of pocket so what’s a person to do if they want to attend college but don’t have the money to do so? The answer is financial aid. There are a lot of myths about financial aid that keep people from applying for it. Read on to find out about financial aid and how you can utilize it to pay for your education.
The FAFSA – Free Application for Federal Student Aid
Every student who wants to apply for financial aid must fill out this form. It’s completely free to fill out and can be done online or hard copy. The website is fafsa.ed.gov. There are a lot of sites on the internet that make you pay to fill it out but it does not cost you anything. Stay away from any other sites when filling out the FAFSA. By filling out the FAFSA you make yourself eligible for the three main types of aid:
Grants – grants are based on your economic need. When you fill out the FAFSA they use a formula to determine how much money they think you can contribute to your education. The lower the expected family contribution the more aid you will qualify for. Grants do not need to be paid back! It’s free money! Common grants are State Need Grants, and Pell Grants.
Work Study – work study is free money as well but you have to earn it by working a part-time job on or off campus. Here’s how work study works – let’s say you qualify for $3,000 in work study. That money is put aside in an account for you and you receive it in the form of a paycheck. The paycheck you receive depends on the hourly rate you earn and the number of hours worked.
Loans – loans are need based and non-need based. They are unlike many other loans in that they are not contingent on your credit score. Many people do not want to take out loans for college but for some it is the only way they can attend. The difference between an educational loan and a car loan is that the loan you take out for college is an investment in your future compared to a car loan that buys a car that immediately starts losing value.
The Stafford loan is the most common school loan. As long as you are in school you do not need to repay it. The unsubsidized Stafford loan accrues interest while you are in school while the subsidized Stafford loan’s interest is paid by the government. By law the interest rates on Stafford loans are to remain low. After you graduate from college there are several payment options and plans for any budget. You can also delay paying your loans for up to five years after you graduate if you cannot afford to make payments. Any money left over after tuition is paid can be used for any expenses you want such as rent, gas, books, and supplies.
The application only takes a little while to fill out and it’s free. You are not obligated to take any money or even attend school if you fill out the FAFSA and send it in.