Are you a parent of a college-bound student looking for a federal loan to fund a tertiary education? If this sounds like you, then this post will be useful and helpful.
Funding a college education via federal student loan can be complicated if you don’t know what you’re doing; yet it is quite simple, providing you meticulously follow the instructions on the application form.
The first thing a student (or prospective students) needs to do is to fill out a FAFSA (Free Application for Federal Student Aid).
The federal student loan program helps college students and their parents meet the cost of pursuing higher education. Yes, it is possible to pay for college with a federal student loan.
This is usually referred to as "post-secondary financing option." It is available online or from the Financial Aid Office at post-secondary institutions.
The application is free and a student will not qualify for a federal student loan for college unless this application has been submitted.
Within 30 days after submitting the FAFSA application, the student will receive a Student Aid Report (SAR) in the mail. A copy of the SAR is sent to the school the student is planning on attending.
Within two weeks after the SAR is received, the student will receive a letter from the Financial Aid Office of the school he or she is planning on attending.
This letter will state how much financial aid the student will receive and how this financial help will be structured.
The award letter will show whether or not the student has been awarded the Stafford Federal Student Loan for college.
If the Stafford Loan has been awarded, the student must fill out an application form in order to get the required promissory note.
The student then signs the promissory note in order to receive the loan proceeds. Once the promissory note is signed, it must be mailed to the office listed on the application form.
It is a good idea for the parent and student to keep a copy of the promissory note for their own records.
Stafford Loan recipients need to keep in mind that the funding offered is for one year only.
A new FAFSA and loan application must be submitted each year.
If a student was not awarded a Stafford Student Loan, alternative sources of financing for college are available.
It is possible to get financing for post-secondary studies from private sources.
In the case of a student who gets approval for a Federal Student Loan for college, but the amount of the loan is short of the amount of funding needed, then private funding sources are viable option.
A private student loan center will be able to provide assistance to those parents and students looking for alternate sources of financing for post-secondary education.
Private funding for college education can be obtained from other sources, including:
- Bank-based student loans
- Credit unions
- Peer-to-peer lending
- “Scholarship loan” by the state agencies and philanthropic organizations
A credit score can also play a very important role in getting a loan for college education. You can read about credit here.
Thank you for reading how funding a college education via federal student loan work. I hope this post helps parents and students get an overview of this subject.
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