Time to Get Started on Financial Aid
NEW YORK (MarketWatch) — Financial aid may be tougher to get this year — at a time when college costs are rising and some families need aid more than ever
“College endowments have taken big hits and state support is drying up in states like California,” said Allen Grove, author of the About.com Admissions Guide and a professor at Alfred University in western New York. “It’s like a train wreck.”
Too often families confuse the federal and state deadlines for financial aid applications. But worse, they forget that scholarship deadlines often start even earlier. State deadlines are almost always earlier, he said. Some are as early as March while the federal deadline is at the end of June. For complete information, go to the Federal Student Aid website, here, and fill out the Free Application for Federal Student Aid.
One of the common misconceptions is that scholarship applications coincide with financial aid applications, but that’s not the case. In fact, you may actually boost your chances of getting scholarship support if you start ahead of the normal financial aid season. “A lot of students and parents aren’t thinking about financial aid yet and should be,” says Grove. “To really get the edge, you need to start now — and earlier than the FAFSA deadlines.” .
Changes to federal loan programs
- Federal Stafford loans to students and PLUS loans to parents are no longer issued by private lenders. Instead, they are awarded directly from the Department of Education in an effort to remove the middleman. “It is now an easier and more seamless process — students will often get their grant and loan aid all directly through a college’s financial aid office,” Grove said.
- Don’t forget that while there are subsidized federal Stafford loans based on need and offering up to $20,500 per year depending on the degree and years in school, others may qualify for an unsubsidized Stafford loan to supplement work study, grants, and scholarships.
- Generally, subsidized loans, offering fixed rates at just 3.4% now, are made available to those with less than $50,000 in income, Grove said, phasing out at about $100,000. With subsidized loans, interest does not start accruing until after the student leaves college. Unsubsidized loans, with rates at 6.8%, start accruing interest immediately. Neither loan type requires payments until after college.