College Funding
College Funding 101
from Student-Loans.Net
College funding is a large sea of possibilities best navigated by those who understand it. In short, there are scholarships, federal college aid, and private educational loans. The following is a quick breakdown of college funding and where to apply for it.
Scholarships
Scholarships are a favorable source of college funding because they do not require the recipient to pay them back. Savvy students will seek out and apply for as many scholarships as possible during the end of their high school career and throughout their collegiate career. Scholarship awards can range from the hundreds to thousands of dollars. Students can qualify based on financial need or academic background. There is a wide assortment of scholarships based simply on race, marital status, collegiate status, and so on. Scholarships are applied for through the company or organization that sponsors them.
Federal College Aid
Another popular source of college funding is federal financial aid. Federal aid comes in two main forms – grants and federal loans. Grants are like scholarships; they don’t have to be repaid. Federal loans do have to be repaid. However, students enjoy below prime rate interest charges with federal loans. Students who demonstrate financial need can also qualify for subsidized federal loans in which the government pays interest charges during deferments and grace periods. To apply for federal college aid students must submit a Free Application For Federal Student Aid (FAFSA).
Private Educational Loans
Typically used as a final effort to bridge the gap between college funding and expenses, private educational loans, unlike most student aid, are based on a borrower’s credit history. With excellent credit (or a co-signer with excellent credit) the borrower can secure a loan at prime. Loan limits for private loans are much larger than federal funding. Private education loans are applied for through the student loans company of your choosing. Certain lenders offer near-instant credit decisions via an online application. Others offer a slightly slower process. Either way, private lenders do not operate under the tight deadlines, therefore loans can be applied for at the borrower’s convenience.
