FAFSA Application Season – The First Step in Applying for Financial Aid

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FAFSA Application Season – The First Step in Applying for Financial Aid

If you are a high school senior and are planning to go to college in the fall, the first step in the financial help application process is the FAFSA.  What is a FAFSA?  It is the Free Application for Federal Student Aid.  What is it for?  You have to complete this government form to qualify for federal student help, including Pell Grants, Stafford Loans and often college administered scholarships and grants.

For help and advice visit: http://www.fafsaonline.com

Students who don’t want to complete the FAFSA often go right to Private Student Loans to help cover their expenses.  These are often more expensive the federal installment loans but may be easier to get – if you have good credit.

It is an exciting time for many students. This is the time when you head off to school for the first time after graduating from high school. You may also be leaving home to attend school for the first time as well which is a challenging time for many students. It is also the first time that students are dealing with financial issues well beyond their experience to date. These financial decisions can make a huge difference in their ability to go to school, but also how much money that may owe after they graduate. We thought it would be appropriate to discuss some of the terms and conditions that these students may be faced with for Pell Grants, Stafford Loans, college grants, scholarships and grants as well as private student loans.

All students should apply for grants and scholarships if they feel that they may qualify. These grants and scholarships will come with conditions which must be met, however this is generally free money that does not need to be paid back and does not carry an interest charge. Students need excellent marks to qualify for these programs.

Private student loans will be the next most flexible for many students, however many come with interest charges that begin immediately and applicants must have a reasonable credit rating. In fact since most students will not have a credit rating at all, some may need somebody to cosign the loan for them. This is a serious commitment and means that if the student cannot repay the loan for some reason, the cosigner will become obligated to repay the loan. If they cannot repay the loan, both the student and the cosigner will have a bad credit rating as a result.

Other types of government loans will carry more favorable conditions which allow for more flexible interest charges and repayments as long as you stay in your program and you find a job when you graduate. Before you sign on the dotted line take the time to understand all of the conditions and when interest charges will be calculated.

This is a heady time for students. Suddenly they are handed all of this money, probably more than they have seen in their lifetimes, they going to a school that is much more difficult than anything they have been exposed to and they may be living away from home. Many squander the opportunity by partying too much and spending their money only to run out before the end of the term.

This is an important time for all students and it bears important and serious planning from a financial perspective to ensure that their long term financial reputation is not ruined in any way. Building an excellent credit rating now leads to reduced interest charges on car loans, mortgage loans etc making homes more affordable and money easier to obtain. Your education at college or university is about to begin and so is your financial education. Decisions you make now regarding finances will impact your career and quality of life for rest of your lifetime.