Useful Tips About a Student Loan Application

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Useful Tips About a Student Loan Application Powered By Docstoc
					                             Since there are not many people who can
finance a college education without some sort of financial assistance, at
some point most students will have to fill out at least one student loan
application. This process can be daunting, but fear of completing a
student loan application is no reason to give up on higher education.
Unfortunately, sometimes the easiest student loans to apply for are those
with the most unfavorable terms.For this reason, any student who is
attempting to procure financial aid should become familiar with the types
of loans available and the student loan application procedures that need
to be followed in order to qualify for these loans.FAFSA: The First Step
in Financing an EducationThe Free Application for Federal Student Aid or
FAFSA is the most important scholarship and student loan application that
any student must complete. It is also frequently the most complex and
tedious application for students and their parents. This is because the
FAFSA requires a lot of detailed financial information, including tax
returns, from both students and parents. While the application requires
time, this form is essential for all students. Filing a FAFSA is not only
the sole method of obtaining federal funding for education including
Stafford Loans, but this exhaustive form is also a prerequisite for most
state and institution based loan programs. Since these types of loan
programs tend to offer the most favorable terms for students, filing a
FAFSA should be every student's first step in the financial aid
process.Applying for Federal AidEven though the FAFSA is free and can be
completed online, its exhaustive nature causes too many students to give
up and accept private loans with high interest rates and unfavorable
repayment terms. A little preparation can help families avoid this
undesirable situation, however. Anyone seeking financial aid should be
sure to file a tax return as early as possible. As soon as the tax return
is done, families should gather the completed return, bank statements and
financial paperwork and fill out the FAFSA. Having paperwork on hand will
make the process go more quickly, and early filing is crucial in ensuring
eligibility for the maximum amount of aid available. It is imperative
that families not only file the form before the FAFSA deadline but before
the deadlines for individual school and private loan programs. A
completed FAFSA is frequently required before students can even submit
any other student loan application, and often these deadlines are earlier
than the federal deadline. School Based Financial AidMost higher
education institutions have financial offices and offer many forms of
financial aid and counseling to their students. While a FAFSA is usually
required to qualify for school based programs, there are also additional
applications to fill out. Since the deadlines for school based aid are
often very early, every student should contact the financial aid office
of his or her school as soon as a matriculation decision is made and
obtain the necessary paperwork. This paperwork will often include a
general financial aid application, applications for specific scholarships
and a student loan application for any loans offered specifically by the
school. These applications may require personal information in addition
to the financial information required for the FAFSA.State LoansMany
states offer specific loan programs including low-interest loans, loan
forgiveness incentives and career based loans. As with school based
loans, these require the completion of a FAFSA and additional application
paperwork, often including an additional student loan application, but
they are well worth investigating. Because they are partially funded by
the state, these loans are more favorable to students than higher
interest private loans. In addition, students planning on going into high
demand careers or settling in certain areas may find that they qualify to
have all or part of their loans forgiven once they satisfy graduation,
career and residency requirements.PLUS Loans For Parents and Graduate
StudentsThe PLUS loan program allows parents or graduate students to
borrow money to pay for a college education. The student loan application
process for these loans, unlike the loans described previously, requires
a modest credit check to establish the credit worthiness of the
individual parent or graduate student. Some schools also require a FAFSA
on file before they will certify a student's eligibility for one of these
loans. Those who qualify have the advantage of obtaining a loan with a
relatively low-interest rate that is guaranteed by the federal
government. This type of loan is useful for families when other types of
financial aid and non credit based loans are not enough to cover
educational expensesPrivate Student LoansPrivate student loans require a
credit check, but the student loan application process for them is
usually simple, and no FAFSA is required. This makes sense, since these
loans are offered by banks and other financial institutions who are
trying to make a profit. Because of this, the ability of families to get
favorable terms for thee loans is based on credit scores. The simple
application process for these loans has led many students to rely
exclusively on private funding and ignore all other options. While
private loans are a valid avenue to use in funding an education, they
should not be the first option considered. Even with great credit, after
all, the terms for these loans are almost never going to be as favorable
as those available with government backed loans.The Bottom LineThe
student loan application cycle can be challenging, and students need to
be informed and educated loan consumers. Financially savvy families must
gather records, file tax returns and fill out the FAFSA as early as they
possibly can. After the FAFSA has been processed, they need to fill out
school and state based financial aid paperwork, being careful to respect
all deadlines.Only after these avenues have been exhausted should they
look into other loan options.

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