Students and Parents

Paying for College

Financial aid overview

Whether you're headed 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. Many financial aid awards are based on financial need. Plus, there are scholarships based on just about anything you can think of, from football to where you live to what your last name is.

Financial need is based on your expected family contribution. The formula used to calculate your EFC is set by Congress, and it uses the information from your Free Application for Federal Student Aid. Nearly all colleges and trade schools require students to submit the FAFSA. If you don't submit the FAFSA, you won't be considered for federal student aid programs, like the Pell Grant, Direct Loan, and work-study. The FAFSA is also used to determine if you qualify for state financial aid programs, like the Alabama Student Assistance Program Grant.

You should contact the financial aid office at the schools you're considering to see if they require anything other than the FAFSA. Schools often have separate applications for the scholarships they administer.

Alternative/Private Loans

You've probably seen television commercials for student loans. These are NOT federal loans. They're private loans, also called alternative loans. The interest rate will be based on your credit rating, and the lender may require a co-signer. The interest rate may be higher than you will pay on Direct and PLUS Loans. You probably won't 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 Federal Direct Loan. If you still need more funds and a private loan is your best alternative, compare lenders to see which one offers you the best interest rate and the best repayment options.