As a parent, it is likely that you will want your child to attend college. It is common for many parents to become overwhelmed with stress of how to pay for the schooling as well as the amount of debt they will be taking on. It is not as hard as it seems to break everything down and understand how loans work. Understanding loans, grants, and scholarships will make everything much easier in the long run and will likely ease some of your worries. Coming up with a plan for you and your child is the best way to prevent any sort of unnecessary anxiety. The first step is choosing a school and getting in contact with the financial aid office to figure out what necessary steps need to be taken through the university or college. They will likely advise you to apply for your FAFSA.
This Federal Student Aid is your entire financial aid package which will include funds from programs that will help you pay for your child’s schooling. Please keep in mind that not all college will participate in FSA (Federal Student Aid) programs. The FSA programs listed in this article have been noted to provide a large sum of money, $150 billion a year to be exact, to students attending most post-secondary schools. Federal Pell grants is the first type of grant. This is available solely to undergraduate students. Some graduate students who are in a program with teaching credentials have the ability to qualify for this grant. It is important to note that grants will not require a repayment. Loans such as Federal Stafford Loans will require repayment. These student loans are not exclusive to undergraduate students. Any undergraduate student or graduate student is eligible to apply for these loans.
The Federal Direct Loan Program provides Stafford loans. This means that the government is the source of the funds. The first-year undergraduates will have access to loans that amount up to $5,500. Students who study for subsequent years of study will see an increase in the loan with higher amounts for those participating in graduate programs. It is important to remember the interest rates that are applied to the loans when the loan is taken out. Keep in mind that there are two different types of Federal Stafford Loans. The two types include: Subsidized Stafford loan and Unsubsidized Stafford loan. The subsidized loans have an interest which is paid by the government while your student is attending school. This also applies to any grace periods and deferment periods in which your student takes. Unsubsidized Stafford Loans require you to pay interest at any given time while you have the loan taken out.
There are other types of loans such as the Federal Plus Loan. These are unsubsidized loans which the parents of the undergraduate students pay. The interest rate is determined at the time in which loan is taken out.
All of this information may seem incredibly scary or overwhelming. Please remember that so many people have done this over the years and have made it out just fine. The most important thing is that your student receives the education they need. Encourage your student to apply for grants and scholarships not only when they are first applying for college, but throughout their college careers. There are general nationwide scholarships, state scholarships, and scholarships that apply specifically to the school and programs in which your student is pursuing. This is wonderful because scholarships, much like grants, do not need to be paid back. They may come with stipulations such as a GPA requirement.