Published March 2012. Financial aid and student loan rules change often, so some details may be out of date. Ask us about your situation.
March is the time of year colleges across the country begin mailing and/or emailing financial aid award letters to eligible students interested in attending their respective colleges. Here are financial aid tips when reviewing the many financial aid award letters you will receive during the upcoming weeks.
Financial Aid Tip #1
One thing all students can count on is a Federal Direct Student Loan on every award letter. The loan can be a Subsidized Loan (Federal Govt pays interest on the loan while student is attending at least half time), an Unsubsidized Loan (Student is responsible for the interest on the loan while attending at least half time) or a combination of both. The principal is deferred until student stops attending college or drops below half time status. However, no matter what type of Direct Student Loan, the maximum annual amount that a first year undergraduate student can borrow is $5,500.
Financial Aid Tip #2
Beginning July 1, 2012, all new Direct Student Subsidized and Unsubsidized loans will have a fixed interest rate of 6.8%. The President’s FY 2012-13 budget request has proposed maintaining the current subsidized interest rate, 3.4% for the 2012-13 academic year.
Financial Aid Tip #3
Many students will be offered Federal Work-Study awards but it is important to note that students are not able to deduct this award from the semester college bill. In order for the student to realize this type of award, first the student needs to secure a work-study position at the college, then “work” the designated hours for which they will be paid, typically students are paid every two weeks. Depending on the college and type of work-study position, the student is paid Minimum Wage and possibly more per hour.
Financial Aid Tip #4
Grants and Scholarships are the best type of financial aid award so make sure you understand all criteria associated with the grants and scholarships. The criteria to receive these awards could include any of the following requirements such as enrollment status, full-time, part-time, a minimum GPA requirement each semester, course of study, etc.
Financial Aid Tip #5
Students and families should be certain that the college of their choice has all of the documents needed for a complete financial aid package. More importantly, prior to making a deposit for their college choice contact the Admissions and Financial Aid office to ask if there is any additional aid available for the upcoming academic year. Remember, it costs you nothing to ask and could lead to additional grants and scholarships, perhaps saving you thousands of dollars$$$.