College is expensive, and the cost of attending most schools only continues to climb. Paying for college is a challenge for most families, but there are actually many ways to achieve a college education without having to pay upfront. There are grants and scholarships, loans, and work-study programs available to you through many different sources. In this article, you will learn about all your financial aid options, the steps you need to take, and resources to support you along the way.

Financial Aid for Students

Types of Financial Aid

• Grants and Scholarships: Financial assistance that does not have to be repaid
• Loans: Financial assistance that must be repaid
• Work-Study: Financial assistance you earn while attending school to pay for educational expenses

Qualifying for Financial Aid

• Need-Based Financial Aid: Awarded to students who do not have sufficient resources to pay for college
• Merit-Based Financial Aid: Awarded to students in recognition of special skills, talents, and/or academic abilities

Sources of Aid

• Federal: Through college financial aid offices and the US Department of Education
• State: Through your high school counseling office and state grant agency
• Institutional: Through a college's independent financial aid office
• Private: Through local organizations such as religious groups or civic clubs
• Alternative Financing Options:
  • College Choice 529 Savings Plan (or any other state’s 529 plan)
  • Home Equity Loans
  • Tuition Payment Plans
  • U.S. Military
  • Peace Corps
  • Americorps
  • 401k or Life Insurance Loans

Getting Started with FAFSA

The Free Application for Federal Student Aid determines which students qualify for federal grants, student loans, and work-study jobs, as well as eligibility for many private awards.

Important FAFSA Reminders

• Remember that federal, state, and school deadlines may vary.
• The first step is to apply for an FSA ID.
• Beware of scams and never pay for the FAFSA.

Timeline for FAFSA

1. Complete the Application Immediately after October 1: Apply online at www.fafsa.gov. It will take 3-5 days to process.
2. Review Your SAR: The Student Aid Report (SAR) summarizes info on the FAFSA. You should verify all information here.
3. Send to Schools: The Institutional Student Information Record (ISIR) summarizes info on the FAFSA. This is sent to all schools listed on the FAFSA.
4. Receive Award Letter: When financial aid is awarded, a letter will be sent directly to the student. The student will review and follow the school’s process.
5. Explore Options for Unmet Need: You’ll lastly need to find financial aid and assistance for any unmet needs. This may include federal and private student loans.

Federal Student Loans

Federal student loans are government regulated, so it is important to know that these loans have strict terms and conditions. However, these loans come with added benefits that private loans do not have.

Federal Direct Loans

• FAFSA required and no credit report check
• Repayment begins 6 months after graduation, or when student drops below half-time status or leaves school
• Interest rate is fixed
• There are annual limits
• Entrance and exit counseling exams required
• Consolidation options available

Parent PLUS Loans and Graduate PLUS Loans

• FAFSA recommended, but not required
• Credit report check required
• Repayment begins at graduation, or when student drops below half-time status or leaves school
• Annual Limits = Cost of Attendance - Financial Aid Received
• Consolidation options available

Repayment of Federal Student Loans

• You may be able to temporarily postpone or lower your payments after college
• You may be eligible to have some portion of your loans forgiven if you work in public service
• Interest may be tax deductible and there is no prepayment penalty fee

Private Student Loans

Private student loans are made by organizations such as financial institutions and state-affiliated organizations, so terms are created by the lender and are different for each entity. These loans typically end up being more expensive that federal student loans, but they can help fill the gap when other options have been exhausted.

• FAFSA recommended
• In the student’s name and may require a co-signer
• Fixed and variable interest rates
• Consolidation options available

Elements Student Wellness Resources

• iGrad: Financial literacy tools and resources available at igrad.com/schools/elements.
• Student Lending Appointments: Meet with our Student Lending Specialist to explore options and identify differences between federal and private student loans, get assistance completing your student loan application, and discuss options for undergraduate degrees and graduate students seeking a business degree.
• Undergraduate Private Student Loans: This private education line of credit fills the gap when you’ve exhausted all other lower-cost sources of aid. This type of loan is great for students attending most four-year public and private nonprofit schools because it covers the entire cost of attendance: tuition, fees, books, room and board, and other related expenses.

Have questions or need trusted advice? Our credit union experts are always here for you. Contact Elements Financial for support in all aspects of your financial life. 

This information is provided for informational purposes only. It does not constitute legal, tax or financial advice. Consult with your tax, legal or financial adviser before taking any action.