Unless parents have amassed sizable funds or earn high incomes, the majority of students nowadays take loans to pay for their college education. Applying for student loans in the US can be a daunting task. Here is the process.
Students and their parents must fill out the Free Application for Federal Student Aid (FAFSA) in order to apply for federal financial aid for college. Subsidized and unsubsidized loans made by the federal government fall into these two main groups. As long as you meet the requirements, subsidized loans are a more affordable choice. Federal PLUS loans for parents and private loans from different banks and lending organizations are additional sources of credit.
Step:1- Fill the FAFSA
Filling out the Free Application for Federal Student Aid (FAFSA), a federal form, is the first step in applying for student loans. The FAFSA asks questions about the student and their parents' earnings, investments, and other relevant information. Through the website for Federal Student Aid, one can submit the FAFSA online. The FAFSA is not a one-time effort; one must submit a fresh version every year to continue receiving financial aid.
Step:2- Assessing your financial aid packages
FAFSA information will be used by the universities the students apply to, to determine how much financial aid they can offer. They subtract your Expected Family Contribution (EFC) from their total cost of attendance (COA) to determine your financial need. The tuition, required fees, room and board, and other expenditures that make up the total cost of attendance are often listed on the websites of the individual universities.
Step:3- Examine your options for private student loans
An alternative is to look for a private loan from a bank, credit union, or other financial institution if you need more money than what federal student loans can provide. Private loans can be obtained without taking into account a borrower's financial situation, and the FAFSA is not required for the application procedure. An excellent credit history is required to obtain a private loan, or you must seek the help of a co-signer with good credit, such as a parent or other family.
Step:4- Choose the school
Even if it may not be the most important factor when choosing a university, knowing how much money is needed to be borrowed for each institution should be a top priority. It can be stressful to graduate from college with a lot of debt, or even worse, to continue accruing debt while still working towards your degree. It can also severely limit one’s ability to make decisions about their career and personal life in the years to come.