College financing is a huge issue; how is tuition going to be paid for? The following information breaks down the basics of financial aid so your child will know what to expect in the near future.
- Your child must file a FAFSA to determine what need based funding they are eligible for. The FAFSA is available through the federal department of education here: www.fafsa.ed.gov/
- There are four primary funding sources used to pay tuition. Need Based Grants, Merit Based Scholarships, cash payments and Student Loans.
- Need Based Grants originate from Federal and/or state government agencies. They can also be awarded by the school your child attends. They use the FAFSA to determine eligibility. The lower your household income the more likely your child can qualify for a need based grant. Examples for these grants include Pell, SEOG and TEACH.
- Merit based scholarships are awarded by admissions offices by considering GPA, class rank, standardized test scores, extracurricular activities and other factors. Your child can also apply for scholarships from outside scholarship groups. Your child’s FAFSA information will not have a bearing on these qualifications.
- Cash payments are straightforward. Colleges typically offer an interest free payment plan where the total balance due is split up into monthly payments.
- Student loans are a good option when you need to cover the remainder of tuition. There are two main varieties of loans, federal and private. Federal loans are made available by filling out the FAFSA form and include the Stafford loan, Parent Plus loan and Perkins loan. These are the best student loans a borrower can get because they may qualify for subsidies, have guaranteed interest rates and do not require credit approval. Private loans are credit based loans that typically come with a variable interest rate and may require a cosigner for approval.
- Aspire FCU offers our EdAccess Private Student Loan, a low-cost student loan designed to meet your child’s education needs. Borrow as little as $2,000 or as much as $30,000 per academic year, with up to a 10-year repayment period. Our loans come with competitive interest rates (and even lower rates with good grades!), a 1.00% interest rate reduction once 10% of the loan is repaid, and no there is no cosigner required for juniors and seniors. Visit www.custudentloans.org/aspirefcu for more information.
For more information on college funding, visit Aspire FCU’s College Resource Center at www.aspirefcu.org/college.htm.
* Private student loans should be used as a supplemental funding after exhausting all other sources of financial aid, including grants, scholarships, and federal student loans. Federal loans offer more attractive terms when compared to most other borrowing options, including private student loans. For more information on federal loans, visit www.fafsa.ed.gov.