With higher education being a must in this country, student loans are an unavoidable part of acquiring a college degree. While there are schools that are more helpful than others with financial aid, you will eventually have to secure a loan of some sort, which eventually leads to the debt that students will have to deal with after they graduate.
With this Guide, MyBankTracker wants to help you understand the different kinds of student loans available, what you need to do when it comes time to graduate and start repayment, and the types of repayment plans graduates have.
For most schools, applying for financial aid is primarily done through the government’s Free Application for Federal Aid, or FAFSA. Students enter their parent’s financial information -- incomes, assets -- and then schools determine whether or not students qualify for aid in the form of loans, grants, scholarships, or other methods of funding.
Like mentioned previously, some schools are more generous with financial aid than others, and students with parents at certain income levels may be able to qualify for scholarships depending on academic ability, or be given grants. Scholarships are offered by the schools and do not need to be paid back. Grants are from the government and are similar in that they do not need to be paid back.
Loans will most likely be part of a financial aid package offered by a school, on top of any out-of-pocket expenses that parents have to pay themselves. If out-of-pocket expenses are not an option, loans will again be the go-to option for covering tuition.
In the next part, we will cover some of the most popular loan options for students and the differences between certain types of loans.