Financial aid can help parents and young people obtain a much-needed education. The following are 10 things that families need to know about financial aid:
- There's more than one type of financial aid.
There are several options for financial aid. Private schools, local banking institutions, and third-party companies offer financial aid to those who qualify. The Department of Education also offers a multitude of financial aid options to individuals trying to obtain an education.
- Some financial aid is free.
Financial aid does not have always cost students and their families. Free grants are available for students who meet the criteria, for example, the Pell Grant is available for students from low-income families. Special grants are also available for women, minorities, disabled individuals, and more.
- Credit scores don't matter.
Those interested in a federal loan don’t have to worry about their credit scores. The government will issue you a student loan even if you have credit problems, bankruptcies, repossessions, foreclosures, etc.
- Not all schools accept federal financial aid.
Not all educational institutions accept federal financial aid. Some schools have their own financial aid programs that use their own credit scoring system. You can find out your potential school’s financial aid policy by contacting the school’s financial aid representative.
- The FAFSA is the key.
You have to fill out a Free Application for Federal Student Aid (FAFSA) if you want financial aid. You can complete a form online, and you will need to have your income tax information available.
- Acceptance is quick.
Once you complete the FAFSA application, the government will make its decision within 24-48 hours. You will know very quickly what your options are for financial aid.
- Federal financial aid has strict student requirements.
To qualify for federal financial aid, you will have to meet certain requirements, such as signing up for school full-time. In addition, you will have to be below a certain income level to qualify for certain grants and scholarships.
- There are loan deferment options.
You can use the in-school deferment option to postpone the payment of your federal loan until six months after graduation. Other deferment and forbearance options are available for struggling students.
- Federal loans have (comparatively) low interest rates.
Federal student loans have interest rates that are much lower than loans from banks. The average interest rate for a federal student loan is around 6 percent.
- You have repayment options.
The government offers several easy repayment programs for those who want to pay loans back over extended periods. Student loans are meant to meet the budgeting needs of all families.