Financial Aid Definitions:
According to the dictionary: Money to support a worthy person or cause.
According to a high school council: Government loans you’ll be expected to pay back with interest upon graduation.
According to a recent college graduate: The reason I can’t sleep.
According to a high school senior: The topic of that boring presentation I was texting the entire way through…
Perspectives on financial aid are about as plentiful as college majors. They can range from knowing nothing on the subject at all, to consuming your brain like that continual nightmare where you show up to class stark naked.
The topic may seem intimidating, coming from serious-looking people in suits, armed with paperwork and a no-nonsense powerpoint. Or, it may seem daunting coming from your high school social studies teacher who announced to the class that he’s just finished paying off his loans. (OMG…what is he, 30?) Even the term “financial aid” sounds heavy with importance. But, if you arm yourself with a full understanding of what financial aid is and how it works, you’ll find it less scary, and you won’t be surprised six months after graduation when you receive your first bill. Here’s a quick overview to set you on the path of becoming a Master of Financial Aid.
What is Financial Aid, Really? The term financial aid in the college setting typically refers to government programs such as federal loans, grants, and work-study positions, but it can also refer to private loans and scholarships. Eligibility for financial aid often depends on financial need. This money can be used for tuition and other school related expenses such as textbooks.
Stafford Loans: Stafford loans are the most common type of federal loan. They have lower interest rates than private loans, and don’t require payments to be made until students drop below half-time, or have been out of school for six months. Stafford loans can be subsidized or unsubsidized.
Subsidized: The government pays the interest while you’re in school, and for the six month grace period after you’ve left school or graduated.
Unsubsidized: You’re responsible for the interest you’ve accumulated during school and your grace period.
How to Apply: The first step in the financial aid process is applying by filling out a Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov. This assessment will determine your need for government assistance. It is advised that this form be completed upon its availability for the upcoming academic semesters, as government funds are issued on a first come, first serve, basis.
Next Steps: If you qualify for financial aid, it is up to you to determine if you want to borrow all that is offered. Remember, everything you borrow must be paid back, and then some. While “after I graduate” might seem like lightyears away from now, the time will come quicker than you think. Keep track of how much you’re borrowing.
If you don’t qualify for financial aid, but still need assistance, don’t be discouraged. You can still look into private loans and scholarships!