If your son or daughter is applying to college, be sure to check out the available financial aid. Many factors affect financial aid eligibility and any change in family financial circumstances can change your eligibility for aid. Deadlines to apply for aid vary by school, but usually by March 1st or so.
FAFSA stands for Free Application for Federal Student Aid, and applying on http://www.fafsa.ed.gov/ will determine what federal aid you are eligible for. While in college, filling out a FAFSA each year will allow you to access federal aid. The program offers more that $150 billion in aid to students yearly through grants, loans, and work-study funds.
You will need financial information for parents and the student to complete the FAFSA, so it helps to have your taxes completed first, though you can use estimates initially.
Even if you don’t think you qualify for student aid, everyone is qualified for an unsubsidized Stafford Loan. Unsubsidized Stafford Loans are federally guaranteed loans that aren’t based on financial need. With an Unsubsidized Stafford Loan, a dependent student can borrow up to $5,500 to $7,500 per year, (depending on grade level) at a (current) fixed interest rate of 6.8%. Interest accrues from the time the loan is disbursed to the school, as opposed to the subsidized Stafford, which delays interest accruement. With either Stafford Loan, interest and/or principal payments are not due until six months after graduation, or six months after you drop below a half-time student status.
Be aware of companies that try to trick you into thinking you have to pay to complete the FAFSA. You don’t! The first letter F, after all, stands for FREE!
In my area, there are local resources available to help with filling out the FAFSA, GRASP, the GReat Aspirations Scholarship Program, Inc. Check your local area to see if there are similar programs as well.
See this blog for more information on how to evaluate a financial aid award letter.
Paying for college can be challenging, but knowing your options can help make a college education affordable.