What To Expect In The Student Loan Process
The first step in the student loan process is filling out a Free Application for Federal Student Aid, or FAFSA. You can obtain this free application from your school’s financial aid office or online at www.fafsa.ed.gov. This is the application you use for all federal student loans and other types of federal financial aid.
Application Deadline
The FAFSA deadline varies depending on which state you currently reside (not the state in which you’ll be attending school). To get priority consideration for federal student loans, especially those types of loans that are available in limited quantities, you should complete your application as early as possible before the deadline. Note, you can’t submit your FAFSA before January 1 of the school year because the application requires the current year’s tax information.
The Application Process
The FAFSA requests a lot of different kinds of information. Knowing the information required ahead of time will help you prepare for the application.
· Personal identifying information like your name, address, and social security number
· Marital status
· U.S. residency
· Degree and school level expectations for the upcoming school year
· Education level of your parents
· Dependency status
· Parent’s financial information, if you are a dependent student
· Student financial information, regardless of dependent status
· Veteran’s benefits you expect to receive
· The school(s) which you are considering for the next school year
Once your application has been received, it will be sent to your school’s financial aid office. A financial aid officer will review your application and put together a financial aid award package based on the information included in your FAFSA. This aid package will include scholarships, grants, and federal student loans for which you are eligible.
Closing Student Loan Gaps
You can only take out a certain amount in federal student loans each year. If you have accepted the maximum amount in federal student loans and have financial need remaining, you can take out a private student loan.
Private student loans are offered by banks like Sallie Mae and Citibank. They differ from federal student loans in that the banks can set their own terms and conditions of the loan.
The application process for private student loans is different from that of federal student loans. The FAFSA application is not enough for you to get approval for a private student loan. Instead, you must submit a separate application to each lender.
Plan to have your credit and income checked for private student loan approval. If you don’t have a good credit history or meet the income requirements, you may be required to have a co-signer to get approved for the loan. With a good credit history and income, or a co-signer who meets those qualifications, you can get approved for a private student loan.