These programs are now available for only percent of the semesters that the college publishes as the typical time it takes students to complete their degree or certificate.
Keep in mind, however, that the Direct Loan program has both annual and aggregate borrowing limits, so even within the percent time frame, a student may hit his aggregate borrowing limit and be restricted in his loan eligibility. Limited Institutional Monies: Some schools do not give undergraduates institutional grant funds or scholarships for more than eight semesters. Pell Eligibility: Students who are eligible for federal Pell Grants are subject to a lifetime limit of six years of funding.
Is there anything I can do? And your financial aid award letter might not have even mentioned the minimum GPA required to keep those funds, says Marguerite Dennis, who spent 40 years working in college admissions and financial aid and is the author of "The New College Guide: How to Get In, Get Out, and Get a Job.
If you must take out loans to make up the difference, start with federal loans. They'll most likely offer the lowest interest rates, they come with flexible repayment plans and, in some circumstances, they can be forgiven. These are the current federal loan options for undergrads:. Direct subsidized and unsubsidized loans: 4. Parent PLUS loans: 7. Private loans should be a last resort, but they can be a useful tool for some — particularly borrowers who have good credit or who have a co-signer with a great credit score.
Look for a private loan that offers incentives, such as cash back for good grades, and make interest-only payments while in school, if possible. That way, your accrued interest won't be added to your principal balance after you graduate. Let's dig a little deeper. You may qualify for more or less money than you did last year. But even if nothing has changed in your financial situation, you still need to fill out a new FAFSA every year, or you won't qualify for financial aid at all.
FAFSA is generally good for one full academic year, beginning in the fall. While you still need to provide up-to-date financial information, the FAFSA website doesn't make you start from scratch. Instead, it lets you submit a Renewal FAFSA that already includes your basic demographic information — the stuff that isn't likely to change each year.
If your FAFSA qualifies you for federal grants or loans, that money is disbursed directly to your school. Your school will notify you each time money is disbursed to cover expenses, typically twice a year. With grants or loans, your school will apply that money toward your tuition, fees and if you live on campus room and board.
Any money that is left over will be paid to you to use for other expenses associated with school. You may be able to choose how that money is paid to you: via check, cash, a credit to your bank account or a prepaid debit card.
You also have the option of using the IRS Data Retrieval Tool to help transfer data about income from your federal income tax returns. This can also be a huge time saver. Which means you'd be more likely to qualify for some aid. For example, if there are more family members in your household attending college now, you may see an increase in money on your award letter.
Published in: How to Pay for College. Carol Katarsky is a contributing writer for Nitro. She is an award-winning journalist with extensive experience writing about both finance and education. She lives in Philadelphia with her husband, son, and one cat more than she should.
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