i don’t understand financial aid, FAFSA vs. Student Loans
ok, so
1. i applied for FAFSA for the 2008-2009 school year and it said the deadline for that school year is July 30, 2009. How can that be? that’s long after the school year is over.
2. What is the difference between FAFSA and a student loan from a bank? can you do both?
3. Someone said that because I applied this late, i probably wont get much money. But the deadline isn’t until July of next year and this is about the time I applied last year and I got money.
Okay, let’s see if we can get you some answers here.
1. FAFSAs are, indeed, processed until the end of the academic year. You can apply, retroactively, for an academic term that is ongoing AND, you can apply for summer aid, if you haven’t used up your full eligibility for the year. A student who will be entering college for the first time in June or July of 2008 (summer term) can apply for aid using this year’s FAFSA form. Summer terms count as part of the 2008-2009 school year.
2. The difference between a FAFSA and a student loan from a bank.
The biggest part of the federal government’s student aid system is the Stafford loan program. When you apply for a Stafford loan through your school’s financial aid office, they’ll send you a list of lenders who make Stafford loans.
There is an alternative to the Stafford loan program – those loans are all made by banks and other lenders, and they’re not part of the government’s financial aid program – that’s why they’re called “Private” educational loans.
Do not let anyone confuse you about private loans – every one of these products is more expensive than the government’s Stafford loan program.
Here’s something else to remember – Stafford loans are offered without any credit check, and you never need a cosigner – private loans do.
3. Applying late may not have any effect on your financial aid eligibility, depending on your financial need. The Pell Grant is available to any student whose Expected Family Contribution score (derived from the FAFSA) falls below a certain limit. The timing of your financial aid application does not impact your Pell Grant eligibility.
Applying late MAY (and probably will) impact your ability to take advantage of a couple of other types of federal financial aid – an additional grant called the FSEOG grant, and a part-time employment program called Federal Work-Study. Those forms of aid are distributed to each school in a lump sum, and the school splits those funds amongst all of the students who establish eligibility. Schools use a “priority aid deadline”, and usually cut off applications for those limited fund programs as of a certain date. It’s pretty likely that you’ve missed your school’s priority aid deadline by at least a month or two, so you’re out of luck on those programs, even if you would have otherwise met the criteria for eligibility.
Schools also have other forms of aid called “institutional funds” – these are unique to every school. Those funds are also “distributed” to eligible applicants who submit their financial aid information prior to the priority aid deadline.
Quit procrastinating with financial aid. If you’re a college student, you’re supposed to be developing responsible adult behavior. Leaving money on the table is costly and just plain lazy.
I hope that helps.
