Student Loans Insight

There are different theories about things that are free. Some say that there’s no such thing as a free ride. Others disagree. There are some, however, who view all financial aid for college as free money. While some of aid costs less than other types, it is not necessarily all free.

Each student should fill out the Free Application for Federal Student Aid (FAFSA). This needs to be done as close to the beginning of the year as possible so that those eligible for free federal aid can receive as much of it as possible. Therefore, it will be best if you find out what is required for the FAFSA and begin gathering those documents as early as December before you plan to apply. Right after Christmas, get your family to get a head start on the income tax forms because you will have to file the income tax before you have all the paperwork you need for the FAFSA. If you can file your FAFSA on January 1st, you will get a head start on some of the free money available for students. Some of the funds used to disburse federal aid have a certain amount of money in them and when it’s gone, there is no more for the year. Sometimes it pays to stand in the front of the line.

Once the FAFSA is filled out, you may be eligible for some grants offered by the federal government. If you receive those grants, that is free financial aid. However, after you receive the grants and any scholarships for which you are eligible, there is no more free money. Everything else offered by the federal government and by private lenders will have to be repaid.

Work-study programs are “grants” in that you receive a paycheck for work performed in a work study position on the campus. It is not necessarily free because you are working for it but it will also not have to be repaid.

However, loans are financial aid that will need to be repaid after you finish college. Whether privately funded or federally funded, a loan is a loan which means you will have to repay it. Therefore, it is to you advantage to get your financial house in order, set up a budget and prepare to live like a college student for awhile. The less money you borrow for college, the less money you will have to repay and the less interest that you will have to pay to borrow money. There is some free financial aid – but you also must remember that not all of it is free and be prepared to work to pay it back.