FAQs About Student Loans

Every year there are millions of dollars of financial aid available to college studentsacross the country. Most of the federal student aid is in the form of low interest loans,but colleges, community organizations, companies, and nonprofits offer hundreds of scholarships to students. College admissions offices may also have grants and scholarships available for qualifying students.

There are many different ways to learn about financial aid opportunities, but the best way is by contacting your college’s financial aid office. Most financial aid offices have information on dozens of scholarships that you can apply for and may also have tips about how to get these scholarships.

You can also find scholarships on your own by searching for nonprofits and community organizations that offer scholarships to qualifying students.

If you are interested in financial aid from the federal government, you should learn about the different federal education loan programs such as Direct Unsubsidized Loans and Federal Perkins Loans. You can apply for these loan programs by filling out and submitting a FAFSA form.

FAFSA, the Free Application for Federal Student Aid, is the application form for the federal government’s education loan programs. Whether you are applying for Direct Subsidized, Direct Unsubsidized, Federal Perkins, or Direct PLUS loans, you will need to fill out the FAFSA form first. Keep in mind that this form will determine if you are eligible for federal loans, but it does not provide grants or scholarships unless you and the submitted school qualify for special federal grant programs.

As indicated in its name, the FAFSA application is free to obtain and it is free to apply. Do not pay any organizations that are charging for the FAFSA application. You can find the application on the FAFSA federal government website.

All non-U.S. citizens can submit a FAFSA form, but only some are eligible for federal student aid. You are eligible for aid if you are a U.S. national, a U.S. permanent resident with a green card, recognized as a refugee or granted asylum, or are a T-visa holder.

If you have a different type of visa or were granted Deferred Action for Childhood Arrivals, you may still complete a FAFSA application. Though you will not qualify for federal student aid, many colleges and other organizations use the completed FAFSA for their own scholarship programs, so you should complete it and submit it anyway.

Your parent’s citizenship does not have any effect on FAFSA eligibility, and the FAFSA form will not ask about your parent’s citizenship status.

Incoming college students may apply for federal student loans, private loans, or both. Federal loans are provided by the Department of Education, while private loans come from banks and other lending institutions. Federal loans are highly regulated, provide fixed interest rates, and offer many repayment options after graduation. These features make them the preferred loan for almost every student and family.

Private loans are less regulated, so they may offer very different types of interest rates and an assortment of loan fees. Private loans are also less likely to provide support after graduation if you are having trouble making your loan payments. The interest rates and terms of private loans are based on the credit history of the student, his parents, and his cosigner. With strong credit, you may be able to obtain a private loan that is competitive with federal education loans.

If you are applying for federal student loans, and you have demonstrated financial need, you may qualify for Direct Subsidized Loans and Direct Unsubsidized Loans. Direct Subsidized loans are subsidized by the federal government for students who demonstrate the most financial need. The interest on these loans will be paid by the government until you leave college. Unsubsidized loans offer similar fixed rates and protections, but you will be responsible for paying the interest that accumulates while you are in school.

To apply for Direct Subsidized and Direct Unsubsidized loans, you must complete and submit the FAFSA application.

Though the majority of federal student aid is in the form of student loans, there are some federal programs that provide grants and scholarships, such as the Federal Pell Grant, FSEOG, and Aid for Military Families. You will need to fill out the FAFSA form and additional applications to determine your eligibility for these special programs.