Apply For Student Loan

Every year, millions of high school students intent on starting college apply for student loan assistance. Many adults who have been in the work force start college, too, or head back to school to complete a degree or pursue another one. For most students, loans are available, primarily through government subsidized and unsubsidized programs that involve Federal Student Aid, but also from private sources.

Government subsidized loans are based on need, and therefore offer the lowest interest rates, currently about 5.6%. Interest on the loan is not applied until you begin paying it back, usually 6 months after you graduate or stop taking classes. Unsubsidized student loans are federally guaranteed loans that are not based on need, and come with a higher interest rate, currently 6.8%. Interest on these loans accrue while you are in school and is capitalized once you graduate or stop taking classes, you pay interest on that interest, and that amount is added to the principle you owe. The most common loans received when you apply for a federal student loan are called Stafford Loans. They cover two common loans known as the Federal Family Education Loan Program, or FFELP, and the Federal Direct Student Loan Program, or FDSLP.

Receiving either of these loans begins with filling out a standard student loan application known as the FAFSA, or Free Application for Federal Student Aid. This application is available online from the Department of Education website, and admissions offices will have it, too. The good news is that more than 90% of applicants will qualify for some level of aid when they apply for student loan help from the federal government. The process is somewhat lengthy, and includes worksheets that ask for information on topics like household income, dependency status, state residency, and more. It is important to get started on the FAFSA well ahead of the start of classes. Deadlines for applying for a student loan are typically 2-3 months prior to the beginning of each semester.

The second step is to include your completed FAFSA with the entrance applications you complete for individual schools. Those schools then work with the federal student aid office to determine your eligibility and route the aid you receive to the school. You will receive a Student Aid Report that outlines the amount of the federal student aid you have been awarded. Next, finalize the exact type of loan you will receive by completing additional paperwork through the school of your choice.

In the rare event that you do not qualify for a federal student loan, or if you need more funds than your federal loan provides, there are private loans available, too. Banks, private lenders, business organizations, and even private citizens are sources for them. Each requires the prospective student to apply for student loan help, outlining the need, as well as the educational plans involved. Their interest rates will generally be higher than with federal programs, presently as high as 12%, but are still welcomed when they are needed. These loans must be paid back beginning six months after you graduate, or when you stop taking classes, though this stipulation varies, and some require that loan payments begin immediately. If payments are differed, interest accumulated while you were in school is added to the principle on the loan.

While applying for a student loan may seem a daunting task, it is best undertaken step by step, beginning with filling out the FAFSA form and awaiting news from the federal government. While waiting, research possible private loans to fall back on. But unless you are wealthy, the chances are good you will qualify for one of the Federal Student Aid loans that most students receive.