Students and Parents

Paying for College

Financial aid overview

Whether you're planning to go to college or trade school, you need to consider what your education will cost and how you'll pay for it. Don't rule out a school based on cost alone. Financial aid programs are available to help students with the costs of higher education. Although some financial aid program awards are based on academic achievement, athletic skill, musical ability or other talent, many awards are based on financial need.

Financial need is usually calculated by subtracting the expected family contribution from the total cost of education. The expected family contribution is determined by applying a comprehensive formula to information submitted by the student and parents or spouse on a need analysis form.

Most colleges and trade schools require students to complete the Free Application for Federal Student Aid (FAFSA) to determine their need and eligibility for federal and state financial aid programs. You should contact the financial aid office of the school you plan to attend to make sure you've completed all required applications. That office is the best source of information regarding student financial aid for which you may qualify.

Alternative/Private Loans

You've probably seen television commercials for student loans. Keep in mind that these are NOT federally guaranteed loans. They're private loans, sometimes called alternative loans. The interest rate may be based on your credit rating, and the loan may require a co-signer, especially if you're a dependent student. The interest rate may be higher than you will pay on Stafford and PLUS Loans. You will probably not have the same deferment options you have with federal loans, meaning you may have to start repaying the private loan while you are in school.

If your grant, scholarship, work-study and personal funds aren't enough to cover your college costs, you should first get a Stafford Loan. If you still need more funds and a private loan is your best alternative, you should compare lenders to see which one offers you the best interest rate and the best repayment options, including letting you defer payment until after you finish college.