Top three questions and answers about Student Loans
You get a student loan when you are going to college or university. It is a loan taken out with the specific intent of paying for college tuition and books. Student loans can also provide enough money to pay for all or a portion of living expenses while you are in school.
You want a student loan because the interest rate is substantially lower than other loans and the payment schedule can be deferred while you are in school. A student loan can be paid back over a longer period of time. The interest does accrue while you are in school, you just don’t have to pay for the loan until you are out of school.
The federal government in the United States has a federally guaranteed student loan program. The loan is often offered as part of a complete financial aid package that could include scholarships, grants, or work study options. Because most US students qualify for some type of student aid from the government, it is important that every student start with the federal student aid and loan program.
Once you know if and what you are going to get from Federal Aid and Loans, you can then turn to private student loans.
When should I apply?
At the beginning of each year, you need to apply as soon as possible starting on January 1st to meet the Federal Student Aid deadline. You do need your prior year’s tax returns, so get them done as soon as you can and then apply. Each school has its own deadlines so if you know where you are going, contact the school for their specific information.
How do I apply for a Student Loan?
The first step is to apply for a pin number. This federal student aid pin is used to sign the Free Application for Federal Student Aid or FAFSA if you apply online. Even if you don’t apply online, the pin can be used to access and correct a processed FAFSA at a later time. Go to www.pin.ed.gov and set your pin number. If your parents’ information is going to be included on the FAFSA, you will need one of them to sign the application as well. Your parents should get their own pin number.
Applying for federal student aid and filling out the FASA is free. You should never pay someone to complete this form. Go to the FAFSA site at www.fafsa.ed.gov and follow the process. Submit the application and then wait for you Student Aid Report. This report will list your availability and approval for all student aid; including approval for government funded and partnered loans.
If you have the information you need, the form takes about two hours to complete. You can do part of it, leave it for a bit and return within a 45 day period from the time you started.
The basic information you need is your Social Security Number, driver’s license if you have one, your 2009 W-2 Forms and other records of money earned. You need your 2009 Federal Income Tax Return including IRS 1040, 1040A, 1040 EZ, Foreign Tax Return, or Tax Return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federal States of Micronesia, or Palau.
If you are married, you need the same tax information for your spouse, and if you are filing as a dependant student, you may need your parents´ 2009 Federal Income Tax Return. You also need your 2009 untaxed income records, Veterans non-education benefit records, child support received, worker’s compensation, and your current bank statements.
If applicable, you need your current business and investment mortgage information, business and farm records, stock, bond and other investment records. If you aren’t a US citizen you need your alien registration or permanent resident card.
Do I need my parents’ information?
You might. What you will need to do is fill out the Dependency Status Worksheet on the FAFSA website. Worksheet link: http://www.fafsa.ed.gov/before015.htm. This worksheet is specifically designed to help students figure out if they need to fill out the parental information on the FAFSA.
There are the top three questions. Don’t wait until you think you have everything, just begin and collect the information as you go.
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