Understanding Financial Aid

Flikr Creative Commons | Some rights reserved by Philip Taylor PT

Flikr Creative Commons | Some rights reserved by Philip Taylor PT

February is Financial Aid Awareness Month. This is a time when high school and university counselors and representatives encourage college students and those students college-bound in the fall to complete their Free Application for Federal Student Aid (FAFSA).

Filling out the FAFSA is the only way to apply for federal grants, loans, and work-study programs to assist with the cost of financing a college education.

Ways to Pay for College

There are many ways to fund a college degree. The most common sources of funding include:

  • Grants
  • Work-Study
  • Scholarships
  • Federal Student Loans
  • Private Educational Student Loans

Aid is granted to students based on many factors, and is not guaranteed, but it is important to apply early because federal aid is granted on a first come, first served basis.  First utilize grants, scholarships, and work-study. Then, you can consider other options for financing the remaining expenses.

Paying It Back

Typically, grants and scholarships do not have to be paid back if you fulfill the requirements of the program. Work-study is a form of a part-time job either on campus or in the community and the money earned does not need to be paid back either. Scholarships are merit based awards that come from a wide variety of sources including the college itself, community organizations, employers, military, and many other public and private institutions.

Educational or Student Loans can be federal or private. Federal loans offer lower interest rates and more flexible repayment options than loans from private lenders. These funds must be repaid, plus interest, over a period of time (typically 10 -15 years).

Loan providers will tempt you with very large sums of money, but it is important to crunch your own numbers to determine how much your education will actually cost and only accept what you need.

How We Can Help

Here at Lutheran Social Services Consumer Credit Counseling Service, we can help you create a budget before you head off to college. We also offer student loan consultations. Our certified credit counselors will help you establish exactly who you owe and discover potential repayment options if you are struggling to make payments after graduation. Learn more about repaying your student loans here: http://studentaid.ed.gov/repay-loans/understand.

To fill out your FAFSA for the 2013-2014 school year, visit http://www.fafsa.ed.gov/.

Together we can make a difference. Make a financial gift to LSS today.

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