While acquiring the Pell Grant is perhaps one of the best things you can do if you require additional aid for college, it sometimes simply cannot provide you with enough funding to pay for all of your education-related expenses. When this is the case, you should not overlook what student loans can do for you in terms of financing part of your higher education, as college loans have been designed to provide students with the money they need when their other forms of aid in combination with whatever they can offer out-of-pocket cannot fit the bill.
Student loans are in-effect real loans, and thus have to be paid back at some point, and in this regard are different than the Pell Grant. Despite this, student loans can work wonders if you know how to approach the application process correctly, and by going over quickly the various types of loans, and what they can do for you, it should be readily evident for you, and your parents how you should proceed in terms of applying, and getting approved for these specialized kind of loans.
The FAFSA and Federal Student Loans
There are two main categories of student loans—federal student loans, and private student loans, Federal student loans are provided directly from the government, and private student loans are made by various independent lenders. Federal student loans typically come with lower interest rates, and more flexible repayment terms when viewed in contrast with private student loans, and for this reason it is recommended that you take into consideration your options in terms of federal loans first, before looking into any sort of private loan funding.
The great thing is that you have most likely already applied for federal student loan aid without even knowing it! This is because you apply for the majority of federal student loans via the same application you filled out to make yourself eligible for the Pell Grant—the FAFSA. By completing a FAFSA on-time, and in an appropriate fashion, you should have made yourself eligible to receive the three best federal education loans that are currently in existence—the Subsidized Stafford Loan, the Unsubsidized Stafford Loan, and the Perkins Loan.
The Subsidized Stafford Loan, and the Perkins Loan are only given to students who exemplify a very high financial need for aid—much in the same way the Pell Grant is based. The Perkins Loan is more difficult to get due to the fact that it is only available at roughly 1,800 postsecondary institutions from across the nation, and because it is only approved for students that demonstrate the absolute highest financial need. The Stafford Loans should be within your reach though, and both these loans can be used together during any particular school year.
Private Student Loan Funding
If federal student loans aren’t enough to pay for all of your education-related expenses it may then be time to look into private student loan funding, as these sorts of loans can provide you with a tremendous amount of aid to put towards you college education. This is because private student loans can typically amount to the entire cost of attendance of going to your particular postsecondary institution, and can thus cover the remainder of your education bill once all other forms of financial aid have run their course if that is what you want to happen.
There is a caveat however, as private education loans are based on credit, and you therefore need to have either a good credit history, or a credit-worthy cosigner to get an approval. Because most students don’t have a substantial credit history, getting a cosigner is typically the only way to go if they want to get approved for these loans. Be careful even if you can get an approval as the interest rates and fees can be much higher than their federal loan counterparts, and they are extremely difficult to discharge in bankruptcy if you can’t pay them back after you graduate.
