Borrowing Money for College

There are many high school juniors and seniors that plan to go off to college in the fall, as well as many untraditional college students that wait until their later years to receive an education. The reasons are mixed and varied about why some people choose not to go to college, but the most common reason that people give for not attending college is that it is so expensive and that they cannot possibly afford the tuition. Even though the cost of tuition for colleges and universities seems to be rising throughout the countries, one doesn't need to look for private loans, like Sallie Mae or My Rich Uncle, to make college affordable for them.

There is an amazing amount of people who do not realize that the financial aid officers at their own college are a wealth of information about how to go about paying for college. One of the great things about a college's financial aid staff is that they will be able to answer any question you may have when it comes to paying for college. They will even help you through the process of filling out the FAFSA, if needed. The FAFSA is the single number one and only form that you need to fill out in order to receive federal student aid for attending college. With the many federal grant and loan options available, the dream of attending college can be realizable for practically anyone. All that needs to be done is to fill out the FAFSA and request that the results be sent to your college or university of choice. The financial aid officers at your school will take that information and proceed to let you know how much federal and state financial aid you are eligible for.

What Financial Aid is Available?

A couple of the big federal loans and grants that are available to people seeking financial aid for college is the Federal Pell Grant, Federal Perkins Loan, and the Federal Stafford Loan. All of these loans and grants can be received for tuition funding. The Pell Grant is simply that- a grant- a sum of money that does not have to be repaid. This Pell Grant is awarded to the student on the basis of his or her need for financial aid. Usually the specific college will have a deadline that the FAFSA needs to be filed by in order for the student to be awarded the Pell Grant. In addition, a student's EFC, estimated family contribution, will be taken into account. The lower your EFC you have the greater amount of the Pell Grant that you'll be awarded. The same is true for all of the loans and grants, too. Your school will take a look at how much your personal income could be contributed to your tuition. You will receive financial aid based upon your EFC. For example, if your EFC is zero then you will receive the maximum amount of all of the loans and grants that are possible.

One of the other important Federal loans that you can receive is the Stafford Loan. The Stafford Loan is available to college students all throughout their college careers. However, as one progresses through the different grade levels, he or she will be able to receive more money based on their standing. For example, the current amount that an independent college student as a freshman could receive through the Stafford Loan is $6,625. That amount increases as you progress through your college years, and the amount you could receive in your senior year from the Stafford Loan is $10,500!

Added Benefits of Federal Aid

In addition to receiving all of these grants and loans through your school's financial aid process, the government loans have added benefits also. There are deferment periods in which you are allowed to put off the repaying of the loans because of financial hardship or other reasons. They allow you to defer paying your federal loans anyway while you are attending college. Another benefit is that there is a maximum interest rate that the loans will never go beyond. For the Stafford Loan, the maximum interest rate is 8.25 percent, while the Perkins Loan maximum interest rate is at 5 percent. Unlike the fluctuating interest rates of private loans, you'll be assured that you will never have to pay the loans back that are higher than the maximum and the interest rates do not correspond to your credit rating at all.

Hopefully now you will be able to see that there is a lot of value in speaking with the financial aid counselors at your school. They will be able to help you give you that much needed federal financial aid, as well as walk you through the long financial aid process. But the benefit of borrowing and receiving Federal aid definitely outshines the benefit of private loans that rely on your credit rating, so they are virtually attainable for everyone! You no longer have to say that you cannot afford the tuition at the college you are looking at, but you can afford it because of the Federal Student Aid that you can receive.