Getting the Most Out of Your Financial Aid Options

Graduating with a diploma in one hand and a hefty I-owe-you in the other hand has increasingly become the new normal.

There are more than 37 million borrowers with outstanding student loans in the United States and their numbers are rising. Meanwhile, interest rates on federal loans are rising steadily. While you may panic when you imagine that first monthly loan payment bill arriving in the mail, remember that you have options you can pursue before signing any promissory notes. Also, if you do decide to borrow, remember that not every loan offers comparable terms.

Think of the time you put in applying for grants, scholarships and loans as working hours that could be rewarded with thousand dollar paychecks. Just as experts recommend working 9-to-5 on job applications when you are seeking employment, put some 9-to-5 days in on Saturdays or during the summers before you graduate high school searching for scholarship money. The endgame is well worth it.

Coming out on the other side of your college experience with far less student loan debt to repay can be one of the more rewarding things you can accomplish. Achieve your educational and financial goals by learning what types of aid are available and how non-traditional programs can meet your needs.

Understanding Different Types of Financial Aid

Getting the most out of your financial aid options means knowing which questions to ask and how to research the answers. You may already have a stream of questions running through your ear:

•    What do I qualify for?
•    How do I find applications?
•    Are there specific applications depending on which school I go to?
•    Do I have to wait to be accepted to apply for financial aid?
•    What will make me stand out as a scholarship candidate?
•    What can I expect to get should I apply?

The first item you should research is whether you qualify for any grants or scholarships. If you meet the qualifications, which may be based on factors such as merit or need, get started filling out forms and writing any necessary essays. The best part about this type of financial aid is that it does not require repayment. The money goes toward tuition and there’s no need to plan on paying these off until after graduation.

For most need-based financial aid, you will need to complete the FAFSA (Free Application for Federal Student Aid). For most schools, the FAFSA covers state, local, federal and institutional financial aid eligibility. FAFSA takes into account you and or your family’s income, assets and dependency.

FAFSA also grants you access to federally funded loans tailored to meet student needs. You may qualify for long-term payment plans and some of these loans are subsidized (meaning the government will pay interest while you are in school). While private loans are another way to fund your educations, these typically come with higher interest rates and require a positive credit history.

Looking at Non-Traditional Degrees

Another way to capitalize on your financial aid opportunities is by spending less on your education. You can do this once you disregard the myth that every student should be attending a four-year college or university. There are multiple advantages in participating in a two-year, technical or online school as a precursor to traditional four-year programs.

Many students who delay attending a four-year school by pursuing these options wind up with far less student loan debt and can embrace the ability to take less rigorous courses, allowing time for work in their field earning money and gaining experience. Students can also save money by living at home rather than paying dorm expenses and paying tuition for these programs that often cost less.

If you decide that you have not gotten everything you would like out of these primary programs, then you can reapply for financial aid and find out about more advanced studies following completion of these programs. The two years spent pursuing non-traditional schooling may be enough time to put aside savings that can be used for future tuition or living costs.

Taking advantage of financial aid begins with finding out about all the public and private scholarships and grants which are available and then completing the FAFSA. A simple online search should help you turn up all the financial aid information you could possibly want. Take the extra initiative and talk to the guidance counselor at your high school or pay a visit to the financial aid website or office of the universities you hope to attend.

You may not feel you are reaping the benefits of tedious hours filling out paper work right away, but figuring this financial aid picture out sooner, rather than later, will save you money and stress after school ends, when you are ready to take the next big steps in your career.

As your future co-workers complain about the enormous student loan debts they pay in addition to their other living expenses, you will truly see the wisdom in your prescient decision to make the most of financial aid early on.

Alanna Ritchie is a content writer for Debt.org, where she writes about personal finance and little smart ways to spend (and save) money. Alanna has an English degree from Rollins College.