Financing Higher Education

  • Complete the FAFSA (Free Application for Federal Student Aid). Your FAFSA is used to determine your eligibility for federal student aid. It should be completed as soon after January 1 as possible, but not before. Call your college’s financial aid office and ask about their priority date, the date by which you must apply to take full advantage of the financial aid opportunities that college offers.
    • Get a PIN. Your Department of Education Personal Identification Number (PIN), available at http://www.pin.ed.gov, is a great tool that will help make the financial aid process quicker and easier for you. Have a parent do the same.
    • Gather the information you need to complete the FAFSA, including completed tax returns (yours and your parents’), Social Security numbers, W2s, bank statements, other financial and business records and the school codes of colleges you are interested in attending.
    • Go to http://www.fafsa.ed.gov and complete the FAFSA.
      NOTE: If you do not have access to a computer, you may complete a paper FAFSA. You can request a form from your high school counselor or your college financial aid office.
    • Ask for help. If you have any questions, call the Federal Student Aid Information Center at 1 (800) 4-FED-AID (1-800-433-3243).
  • Review the SAR (Student Aid Report). Your SAR is a report that shows all of the information you provided on your FAFSA. The SAR gives you the opportunity to review your FAFSA answers and correct any mistakes.
    • Receive the SAR.If you provided your e-mail address on your FAFSA, you will receive e-mail notification within three to five days with instructions on how to retrieve the SAR electronically. If you did not include an e-mail address on your FAFSA, the SAR will be mailed to your home address within two weeks.
    • Read through the SAR carefully.
    • File or correct. If you find no mistakes, simply file the SAR away for your records. If you do find a mistake, follow the instructions provided on the SAR to make the correction(s)
  • Compare Award Letters. Once they’ve received the information from your FAFSA, colleges will begin sending you award letters, which outline the financial aid package you will receive at that college. Below are the types of awards for which you may qualify.
    • Grants. Grants are basically free money for you often given by an individual, organization or government entity. One example is the Federal Pell Grant. The Federal Pell Grant Program provides need-based grants to low-income undergraduate and certain post-baccalaureate students to promote access to postsecondary education. Grant amounts are dependent on: the student’s expected family contribution (EFC); the cost of attendance (as determined by the institution); the student’s enrollment status (full-time or part-time); and whether the student attends for a full academic year or less.
    • Scholarships. Scholarships are basically free money for you often given by an individual, organization or government entity.
    • Work-study. This is a federally-funded program that allows you to earn money on a campus-based job.
    • Student Loans. This is money that you must pay back.
      • Federal Perkins Loan. The Federal Perkins Loan Program provides low-interest loans to help needy students finance the costs of postsecondary education
      • Stafford Loan. A Stafford Loan is a student loan offered to eligible students enrolled in accredited American institutions of higher education to help finance their education. It may be either subsidized or unsubsidized.
        • Subsidized. These are loans for student borrowers who demonstrate financial need, and the government pays the interest that accrues while the student is in school or in a qualified deferment period.
        • Unsubsidized. These loans are not need-based, and student borrowers are responsible for all interest that accrues. You can choose to make interest-only payments while in school or postpone these payments until you leave school or drop below half-time enrollment. When you postpone the interest payments, the interest that has accrued is added to the principal balance at the start of repayment (also referred to as capitalization).
  • Complete the College Award Letter.
    • Accept the Aid. Once you’ve made a final college choice, check out the college to find out how much you’ll need and then accept the aid you are interested in – especially scholarships, grants, and work-study offers, decline any loans you don’t absolutely need, sign the award letter (if required) and return the award letter to the financial aid office (if required).
    • Apply to the School. If you have not already applied to the school of your choice, now is the time to do so.
    • Notify Non-Selected Schools. You may also want to contact the colleges you have decided not to attend and let them know of your decision.
  • Complete Entrance Counseling. All first-time recipients of a Federal Stafford Loan are required to complete an entrance counseling session. This session will ensure that you understand your responsibilities as a student loan borrower. 
  • Complete MPN (Master Promissory Note). The MPN is a promissory note that can be used to make one or more Stafford Loans for one or more academic years (up to 10 years). 
  • Look for Additional Funding. If you did not receive enough from your college award letter to pay for your college-attending needs, there are other ways to fund your education.
    • Parent Plus loans. These loans are in the parent’s name and payments typically start while the student is in school. Interest accrues while the student is in school, and the government sets the rates. An MPN must be completed for these loans as well.
    • Scholarships. There are many scholarship opportunities locally, nationally and from the college.
    • Jobs. There are usually jobs available both on-campus and off-campus to supplement your loans.
    • Alternative loans. These are offered by some regional lenders and should be considered only if the student has used the maximum eligibility through the federal student loan programs.
  • Receive Your Loan Funds. Your funds will be disbursed automatically to the college you chose. The funds may be disbursed in two or more equal amounts, depending on the terms in your academic year, and origination and guarantee fees may be deducted from each disbursement. After your balance at the school has been paid, your school will release the remaining funds to you. 
  • Pay Back Your Student Loans. You will have to start repaying your loan six months after your graduate, withdraw or drop to less than half-time attendance. If you’re having trouble making your payments, contact your lender immediately. You may be eligible for a deferment or forbearance to postpone or reduce your payments. If you don’t make your student loan payments,
    • Your loan will be reported to the credit bureaus. This could affect your ability to qualify for future loans.
    • You will be ineligible for deferments.
    • Your entire loan becomes due.
    • You may lose federal payments and/or your tax refund may be withheld.
    • You may become ineligible for future financial aid or other federal benefit programs.
    • Your wages may be garnished.
    • Your interest rate may increase.
    • You will be responsible for collection costs which will increase the total amount you owe by as much as 25 percent.