Finding Financial Aid For College Without Drowning in Debt

A while ago it was possible to take some evening classes for a year or two, study hard and earn a degree while still managing to put food on the table. Not so much these days. With the ever deepening recession and the escalating costs involved in running a campus, many colleges have had to up their tuition fees considerably.

So what type of financial aid for college is available?

Your first step is to try and obtain a grant or scholarship where you will not be required to pay back the money after graduation. The main difference between scholarships and grants is that scholarships are usually given to students as a reward for outstanding academic school achievements and for a specific field of study. It also usually requires the student to commit to a period of time working for the organization providing the scholarship. Grants are less rigid in nature and can also be given to specific focus groups based on gender, race or particular fields of study such as music, dance, media, communication or professional development. Both scholarships and grants usually cover most expenses for the student including tuition fees, study materials, stationery and even residency.

The most familiar Federal college grants are the PELL and Federal supplemental educational grant (FSEOG). Grants are issued strictly based on the financial need of the student and families earning $20,000 or less per annum are usually considered for these grants. The EFC (Estimated Family Contribution) specified on your application form is especially important here so be completely honest in this regard. The grant amount awarded is then based on whether you will be a full or half-time student and on the time that you plan to engaged in scholastic programs.

A student loan is an alternative form of financial aid for college and if subsidized does not require you to repay the interest on the loan whilst studying. Subsidized loans are strictly based on the financial need of the student and generally has a repayment period of 10 years. Stafford & Perkins loans are loans provided by the Federal Government and do not require a background credit check or a cosigner. The loan limits are based on your year level at college and whether you are seen as being dependent or independent. The Perkins loans (all subsidized loans), although funded by the government, are issued at the college you will be attending.

Parent loans such as the PLUS loan (Parent Loan for Undergraduate Students) and FFELP (Federal Family Education Loan Program) are also government issued loans. Credit checks are done prior to the issuing of these loans and interest rates are normally better than those for personal loans.

If all else fails you can of course turn to personal loans through the banks and other institutional lenders. This should however be very much a last resort as interest rates will almost certainly be higher than those on other loans, repayment periods will be shorter and repayments will start while you are still studying. This means that you will be repaying your loan before you have graduated and have a salary coming in.