Are you wondering if your financial aid will cover your college costs, including your living expenses? After you have exhausted your options with scholarships, grants, and student and parent loans from federal, state and college sources, you may be able to borrow from private financial institutions.
The Basics of Financial Aid
When you apply to college, a financial aid application usually is part of the process, if you stated that you are interested in receiving some sort of financial help. People who are U.S. citizens and permanent residents, or others who qualify for federal financial aid, are expected to file a FAFSA (Free Application for Federal Student Aid). The application is then reviewed by Department of Education officials and you receive an aid package that fits your financial situation. As part of the application, you will be required to submit your financial documents and those of your parents. Depending on how much you and your family are expected to contribute toward your education, your aid package will probably include a combination of student loans and grants from the federal government. Examples of loans include Stafford and Perkins loans, while an example of a federal government grant is the Pell Grant.
Loans - Government and Private
In addition to the federal government, states can also be a source of government loans. This will depend on what state you live in and what the provisions and requirements are for student financial aid. Your college financial aid office, high school counselor or your state education department will have some more information about these kinds of funding.
If after availing yourself of all federal and state funding as well as scholarships from your college and other private organizations you still fall short, you may want to look into private loans either from your college or university or from your bank. If your college or university offers a loan program, you are likely to get better rates that way. If not, you may want to look into private lenders, starting with federally subsidized federal loans, and then your local bank or any banks with which you already have a relationship.
Borrowing to Cover Living Expenses
Typically you cannot get a college living expense loan from the federal government, but it really depends on how living expense is defined. Money borrowed from the federal government may cover room and board as well as child care costs for example, but not to buy or run a car. How the money you borrow is applied to cover living expenses really depends on the school you attend. For example if while filing your FAFSA application, you indicated that you intend to live off campus, your living expenses off campus will be considered under room and board and you may receive some funding toward that as part of your grant or loan package. However, if you do not receive any federal or state aid (loans or grants) toward your living expenses, you can resort to private funding as outlined above. The financial institution you eventually choose to go with will require proof that you are currently enrolled in an academic program before funds will be disbursed to you. The loan you get and the rates you are offered will also be tied to your credit worthiness and credit history.