It’s difficult to
know the true cost of a college until you have your financial aid package. Once that award letter arrives, you’ll get a realistic picture of how much you’ll have to pay for your school.
Many students find that there is still
a gap between what a college costs and what they can afford. That’s where student loans come in to help. While there are a variety of loan options, there are only two ways to secure one.
Can I Get a Student Loans Without the FAFSA?
When it comes to student loans, students and their families have a choice between borrowing from the federal government or a private lender. Many financial aid experts and administrators will advise you to borrow federal first; but to do so, you must complete the FAFSA.
What is the Purpose of the FAFSA?
The
FAFSA is the Free Application for Federal Student Aid (FAFSA). It is a form used by the federal government to determine how much financial aid a student should receive based on their parents’ income, family circumstances, and more.
To qualify for federal student loans, students must submit this form. It essentially acts as their application to get financial aid from the government.
Federal Student Loans
Generally, it’s better to borrow federal student loans first. They typically have lower interest rates, meaning you’ll save more over the lifetime of the loan.
There are two types of federal student loans: subsidized and unsubsidized. Subsidized loans do not accrue interest while you’re enrolled in school, while unsubsidized loans do. The Department of Education provides a
great breakdown of the difference in these loans.
But generally, subsidized loans are reserved for those students who demonstrate financial need. Anyone can qualify for unsubsidized loans, though. They only need to complete the FAFSA to take out these types of loans, and doing so will inform them of which loan they are eligible for and how much per year they can borrow.
Finally, depending on the career path you take after college graduation,
federal loans are eligible for student loan forgiveness. By working full-time for an eligible employer in a public service field and making 120 consecutive monthly payments, you can have your student loans forgiven.
If students opt out of completing the FAFSA, they only have one choice for student loans: private student loans.
Private Student Loans
There are a variety of financial institutions that offer student lending. You can find many of them right
here on Fastweb. Another option for finding the right bank is to ask your school for their preferred lender list. These are lenders that the schools work with on a frequent basis.
Private student loans have a range of interest rates and repayment plans. Their interest rates will be higher than federal student loans and will vary depending on students and their familial financial situation.
Most private student loans require a co-signer, meaning parents will have to sign private loan documents and be responsible for the loan if the student borrower goes into default. However, unlike federal student loans, you do not have to fill out a FAFSA to apply for a private student loan.
Private student loans may still be necessary even after federal student loans are applied to a student’s tuition. There are limits to how much a student can borrow through the federal loans program each year, so private student loans may be necessary regardless. With private loans, there is no annual limit to borrowing.
How to Apply for Student Loans through the FAFSA
To qualify for federal student loans, you need to complete the FAFSA. Once your form as been assessed and you’ve been given a
Student Aid Index (SAI), your school will be able to determine a financial aid package that meets your needs.
That package may include federal student loans. You can accept all, none, or part of the student loan component of your
financial aid package. When you’ve reached a decision on how much to borrow, you’ll communicate that with the school.
Again, if there is still a gap between what you’re offered in your financial aid package and what you can afford to pay, you’ll need to take out private student loans.
Do You Have to Fill out the FAFSA Every Year?
As a college or graduate student, you’ll need to
complete the FAFSA every year that you plan to be enrolled. This is in large part because your aid eligibility may vary from year to year depending on your and your family’s financial circumstances.
Fortunately, resubmitting the form after you’ve completed it the first time is much easier. You will follow instructions to renew your FAFSA and change any pertinent information.
Do My Parents Need to Provide their Information Every Year?
If you want to qualify for subsidized federal student loans, your parents need to provide their information each year. Again, this is the federal loan option that does not accrue interest while you’re enrolled in college.
If they do not provide their information, you will only be eligible for the unsubsidized student loan option. If your parents
refuse to provide their financial information, remind them that filling out the FAFSA with their data in no way obligates them to pay for college. By helping you complete the FAFSA, they are simply enabling you to potentially qualify for more student aid.
With private student loans, your parents would be required to be co-signer on the loan, so it’s ultimately in their best interest to
complete the FAFSA with you.
