Loans are just one of the many options which students have available to help pay for college.  Scholarships and grants should be pursued first, however; because these do not have to be paid back.  If you do find that a loan is the only way you can fund your education, you should be aware of the many different loans available to you, and the many different aspects of those loans that must be considered before applying.

Your first step is filling out the Free Application for Federal Student Aid.  It is important to get the form, found at fafsa.gov, filled out as soon as possible.  State governments use the information on a first come first served basis when determining your eligibility for their grants.  This form is also required when requesting federal loans.

If your scholarship and grant awards are not enough, begin applying for loans.  One type of loan to consider is the PLUS (Parent Loan for Undergraduate Students).  It is a loan that parents are responsible for repaying 60 days after disbursement at a current rate of 8.5 percent.  While there is no limit on funds, a credit check is required.  If your parents do not qualify, the limit on a Stafford loan may be increased.

Stafford loans are paid directly to the school by the government or are provided by lenders.  Subsidized loans are need based and the interest is paid by the government while you are in school.  Unsubsidized loans can be acquired by anyone, regardless of need.  You are responsible for the interest while in school but can elect to defer it until after graduation.  Repayment of these loans, at a current fixed rate of 6.8 percent, is not expected until six months after you graduate.  You can, however; get a rate reduction through your lender or a forgiveness of some or all of your loan depending upon your profession.  You can borrow different amounts based upon your year in school.  Freshmen can borrow up to $3,000.  Sophomores can receive $4,500.  Juniors and seniors can get $5,500.  If you are an independent student or if your parents were turned down for a PLUS loan, the limits on a Stafford loan are increased.

Another type of loan is a Perkins Loan.  This is also need based, and eligibility is determined by your school’s financial aid office.  The loan is funded by the school from money received by the government.  It is subsidized and has an interest rate of 5 percent.  Undergraduates and graduates can receive $4,000 and $5,000 per year respectively.

Those who have received loan funds before can expect their money about a month before that of a first time borrower.  This means you should apply as soon as possible, especially if you’ve never received a loan before.  An entrance interview is required before a loan can be disbursed.  Your school’s financial aid office will assist you in completing the interview, which can probably be done online.

One thing to keep in mind when applying for loans is some schools will not accept Stafford Loans.  Check with your school’s financial aid office.  If this is the case, you will either have to find a school that does or acquire a private loan.  Most private loans will have to be immediately repaid, and are most likely based upon credit checks which makes them unattainable for some students.  Some loans, such as one through U-promise, can defer payment until after graduation.

Do not procrastinate.  Get your forms in early.  Explore every avenue for aid that you can.  This will ensure that any setbacks that come along can be handled quickly, and you will get your money on time.  You have enough stresses to worry about in college.  Don’t make money one of them.

The FAFSA isn’t enough though. You’ll have to fill out a second application to apply for a student loan. Visit your financial aid office for this paperwork. There are two different types of loans available. Subsidized loans which are based on your financial needs and an unsubsidized loan which isn’t need based. Unsubsidized loans mean the interest will begin to accrue right away.

After you’re awarded a federal loan, it’s necessary to attend a 30 minute counseling session. This session will discuss fulfilling your student loan obligations in a responsible manner. You’ll learn how to budget and also how to responsibly pay back your loans. You will not be able to receive student loan funds unless you attend this program. When you leave school upon graduating, you’ll be required to attend an exit counseling session. There you’ll be reminded of your obligations and taught the best ways to repay your loan. You’ll also assist in setting up a payment schedule that works and also discuss deferment should the need arise.

Other things to consider when filling out the FAFSA application:

•    Be sure to have all of your forms filled out and good to go way ahead of time. There are deadlines involved for receiving the maximum awarded amounts.
•    It’s preferred that forms are filled out online. This allows errors to show up immediately. This type of filing is actually more convenient thanks to the tools offered on the web site.
•    File your taxes early since your application can’t be mailed until that task is complete. The sooner you fill out all of the necessary forms the better your chances of getting the maximum amount of money available to you.
•    If you’re asked for more information, respond immediately. If you don’t, the process will become stalled.
•    Be sure to keep copies of every piece of piece of paper no matter how insignificant.
•    Fill out all paperwork completely and accurately. Neatness counts.

For assistance, visit the university or college’s financial aid office. They’re a great source of help and will answer all of your questions. If necessary, you can make an appointment with your school’s financial aid counselor. Bring along all necessary paperwork. If you’re still in high school, your guidance counselor can also coach you. Though it may seem like an intimidating process, there are trained professionals to guide you as you go.

If you’re considering financial aid to assist in paying for college tuition, don’t rule out a grant. Grants are great because they might not require high academic or athletic achievement like scholarships, and you won’t have to repay them as you would a loan. You might be interested to learn that you’re automatically applied for grants when you fill out your Free Application for Federal Student Aid or FAFSA. If you’re interested in learning which types of grants available, visit your high school guidance counselor or the college’s financial aid office.

What follows is a brief overview of the different types of grants.

Pell Grants are awarded by the federal government and are available based on financial need. Though they’re not necessarily based on academics, you’re required to maintain at least a C average. You’ll also need to have completed high school and have in your possession either a diploma or GED. Pell Grants are only available to US citizens who have a social security number. In addition to filling out the FAFSA, you’re going to have to apply for the Pell Grant every year financial aid is needed. These grants range in amount from $400 to $4,050. Apply for more than one if you’d like.

You might also be eligible to receive the Federal Supplemental Educational Opportunity Grant. This is another need-based grant for which you apply automatically when you fill out your FAFSA. Many factors are considered when awarding this grant such as family, income, how many of your siblings are currently attending college, and your family’s assets. You’ll also be required to disclose the amount of money your parents or guardians will be paying towards your education or Expected Family Contribution (EFC).

State grants are available to those who meet certain other requirements. These grants are based on academics. Students who will be attending state funded colleges are eligible for state grants. It’s important to note that in order to receive this grant, you must be a resident of the state where the college is located. Your chosen school’s financial aid office has plenty of information available regarding state grants. There is also plenty of information regarding state grants online.

If you’ll be attending a private college you might consider a school-based grant.  The grants can be need-based, or they might be awarded based on academics. Some are even awarded in the same manner as scholarships.

Finally there are private grants available. These are awarded by community groups, businesses, foundations, private donors or organizations with interests and affiliations similar to your own. Grants can be based on talent, ethnicity, religion, academics or through a lottery system.

For more information on grants or any other type of financial aid, visit your high school guidance counselor.  Though you may be automatically eligible when you submit your FAFSA form, you might still want to research the various grant options to see which are right for you. You might even be eligible for more than one, helping to further ease the financial burden. Good luck!