When you’re attending an expensive four-year college or university it can be difficult to come up with a financial aid package that can pay for your entire cost of attendance. While the Pell Grant can give you a significant amount of aid on an annual basis, it sometimes just isn’t enough. When this is the case it may be in your best interest to look into getting various student loans, as these financial aid instruments are available exclusively for students who need additional funding to put towards their college education.
There are several different kinds of student loans, with the primary two classification schemas involving both federal, and private education loans. Federal student loans are provided to you by the government much in the same way as the proceeds of your Pell Grant are. The main difference is of course the stipulation that you have to pay whatever money you receive from the government back, as student loans are indeed loans, and not grants. Private student loans are made possible by various independent lenders who typically have no formal association with the government.
By looking into both of these two types of student loans you can most likely get enough aid to pay for a large proportion of your college expenses for any school year. This is of course dependent on your ability to get approved for each of these kinds of student loans, and while this task is not very difficult if you can exhibit the appropriate credentials, it can be a bit stressful if you don’t know how to approach this process in a correct way. The good news is that by applying for a Pell Grant you have probably already begun this process, as most federal student loans can be applied for via the submission of the FAFSA.
Getting Federal Student Loan Aid
The FASFA wasn’t only created for students who wish to obtain the Pell Grant, and is rather the government’s universal application for all kinds of federal student aid, including the assortment of federal education loans that are available for a particular school year. This means that by completing a FAFSA you have already put yourself in the running for the majority of federal student loans, with the one exception being PLUS Loans, as these types of student loans must be applied for on an independent basis by your parents.
Both the Subsidized, and Unsubsidized Stafford Loans, and the Perkins Loan can all be secured via the submission of the FAFSA, and you will be notified of your approval status via an award letter from your school. This is the same document that will notify you of you status in regard to the Pell Grant as well, so pay attention to your mailbox a few months after you have completed your FAFSA—your financial aid future depends on it!. The primary disadvantage to federal student loans has to do with their “capped” award amounts, and while they can be taken out on an annual basis, they sometimes cannot provide you with enough capital to fit your entire college bill.
Private Student Loans
When you cannot come up with enough federal aid in combination with any other funding you may have received for a particular school year, such as a scholarship, you may then want to look into getting a private student loan to pay for the remainder of your educational costs. Private student loans can typically provide you with as much money as you need up to the cost of attendance of going to your school of choice, and for this reason they can be a real savior if don’t have any other options.
Private student loans are based on credit, and because of this it can sometimes be difficult to get such a large amount of private aid even when you really need it. Most students don’t have a significant credit history, or a good credit score. When this is the case, your only hope of getting an approval is to obtain a credit-worthy cosigner, as a cosigner can give the lender enough confidence to approve your loan regardless of your credentials in terms of credit. If you can get an approval then that is good news, just be careful with these types of loans, as they are very difficult to discharge in bankruptcy, and they can carry high interest rates that are sometimes variable.
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