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Who Is Eligible for Student Loans?
Student loans are a great way for students to get financial help when they are in college. This type of financing is meant to help students pay for education-related costs, like tuition, supplies, books, as well as living expenses. Since it’s a loan, you are expected to pay it back over the years, which is the less pleasant side of this process.
Who is eligible for student loans, though? While there are different options for all students, only a select few will qualify for student loans. What are the eligibility criteria? This post will clarify everything.
What Is FAFSA?
FAFSA stands for Free Application for Federal Student Aid. This is a special form you must complete in order for the federal government to grant you access to financial aid. It can be completed by both graduate and undergraduate students. Many students fill out the FAFSA to get a student loan which then helps them pay for any college expenses.
The FAFSA is used by several colleges and states in order to determine the particular students that will get financial help, as well as the amount each one will receive.
Eligibility Requirements for FAFSA
Do you want to qualify for a student loan? If that’s the case, you must be eligible for FAFSA first. Here are the eligibility criteria you must meet:
- You should have a valid Social Security number
- You must be a citizen of the U.S. or a noncitizen that has national status in the U.S. or has an Arrival/Departure Record, a green card, or a battered immigrant-qualified alien status. You could also have a T visa or be the child of someone with a T-1 visa.
- You should have a high school diploma or an equivalency that is recognized. This could be a GED. You might also qualify if you’ve completed a home-school high school education program approved by the state.
- You must keep amazing progress in college after enrolling. Each school has its own standards when it comes to satisfactory academic progress.
- You have to be enrolled or accepted to enroll in a certificate program or degree that is eligible.
Federal loans come with no income requirements. Also, incoming students don’t have any GPA requirements and they can be used for universities or community college. For some scholarships, the Pell Grant and work-study aid, though, there might be income requirements.
Documents Required to Submit FAFSA
In order to submit your FAFSA successfully, you need to prepare certain documents, such as:
- Your driver’s license (if you own one)
- Your Social Security card
- The W-2 forms from you and your parents for 2021
- The tax returns from you and your parents for 2021
- The untaxed income records from you and your parents for 2021
- The current bank statements of your parents
While the parents’ information is required in some cases, you will not have to submit it if you’re independent.
On top of this, you must make an FSA ID. This ID will allow you to sign the promissory notes and FAFSA. Then, it’s necessary to sign a specific certification statement on your FAFSA. It should mention that you do not currently owe any money on a federal student grant, you are not in default of any federal student loan, and that you agree you will only use the financial help for educational purposes.
How to Take out Student Loans
Many students think that obtaining and applying for student loans is extremely complicated. However, the process is quite simple – what is difficult is trying to understand whether you are eligible for the aid or not. To take out a student loan, you must do the following things:
Find Out If Your Colleges Are Eligible for Student Aid
Only specific institutions will be eligible for financial aid, so if you enrolled in a certain college and want federal student loans, it’s crucial to find out if it’s eligible.
Eligible schools include postsecondary vocational institutions and higher education institutions that can meet certain requirements. In order for an institution to qualify for student aid, it must provide a qualifying certificate program or degree that could later help the student make a career and find profitable employment.
Complete Your FAFSA
If your school qualifies for federal student aid, you can proceed with filling out your FAFSA. You must create an FSA ID for it. Also, you can complete it online, as the process is very easy.
Whether you are the student yourself or a student’s parent, you can pick the academic year you are currently applying for after logging into the FAFSA platform. Once you log in, you can start providing the requested information.
To fill out the FAFSA, the student’s personal details must be included. Other than that, you must add information about the school where you want the application to be sent. Sometimes, information about the parents and the dependency status must be included in the form.
Lastly, you must also add financial information.
In the end, you have to sign and send the form.
Review Your Financial Aid Award Letter
Once the FAFSA is completed and sent, it will be received by the school you’ve picked. How much you will receive for the student loan will be decided by the school’s financial aid office.
But the information will also be transferred to the Department of Education, then the Student Aid Report. You will later receive an award letter that tells you how much financial aid you are going to receive. Keep in mind that it might take some time before you receive the award letter, depending on the school.
You will then have to review the financial letter and tell the financial aid office what you wish to do. It’s crucial to respond as soon as possible.
If you’re approved for the loan, the school will tell you when and how you’ll receive the money.
Impact of COVID-19 on Student Loans
COVID-19 changed the student loan situation a little bit. Borrowers are allowed to suspend payments until December 31, 2022, without being penalized. All the payments made on this financial aid during this period will go to interest gathered before March 13, 2020. Afterward, it will go to the main balance. Besides, you will not have to worry about more interest gathering during this time.
Any skipped payments for people opting for a Public Service Loan Forgiveness or forgiveness under an income-driven repayment plan will still count for the monthly repayments.
No tax money or refunds will be granted from other federal aid for students who haven’t done student loan payments during this period.
What Causes You to Lose Eligibility for FAFSA?
You could easily lose FAFSA eligibility in these situations:
- You did not submit the FAFSA for each year you’re enrolled
- You were unable to maintain proper academic progress during your studies.
- You used to be a noncitizen who qualified, but your status is either revoked or it expired
- You defaulted on a student loan.
- You get to the maximum annual or aggregate lifetime loan limits for subsidized or unsubsidized student loans
- You haven’t enrolled in an eligible program for funding.
5 Best Private Student Loans
Navigating the complexities of college financing can be a daunting task, especially when federal loans either fall short of your needs or aren’t accessible at all. For many students, this is where private student loans step in. These loans can bridge the financial gap, ensuring that your educational journey isn’t hindered due to funding constraints. Whether federal aid didn’t fully cover your tuition, or you found yourself ineligible for it, private lenders offer a wide array of loan solutions tailored to unique academic and financial scenarios. Discover some of the top private student loan providers that can come to your rescue when federal avenues are limited or unavailable:
AmOne (Best for Okay to Good Credit)
AmOne is well-positioned as a reliable choice for students with okay to good credit profiles. By linking potential borrowers with a broad network of lenders, AmOne streamlines the loan application process. This can be particularly beneficial for students who may not have stellar credit but are above the threshold of bad credit. Their system ensures that even students with average credit scores can obtain competitive rates and terms that fit their educational financial needs.
Spring Loans (Best for Bad and No Credit)
Navigating the world of student loans can be particularly daunting for those with bad or no credit history. Spring Loans offers a compassionate solution, emphasizing a borrower’s entire financial picture rather than solely relying on traditional credit scores. This unique approach, which factors in more than just credit history, enables students with less than ideal or non-existent credit profiles to access the funding they need for their education.
First Premier Lending (Best for Bad Credit)
First Premier Lending is a beacon of hope for students with credit challenges. Recognizing that a bad credit history doesn’t define a student’s future potential, they offer tailored loan solutions that consider the broader context. Their commitment ensures that students with credit missteps still have avenues to finance their education without being bogged down by prohibitive interest rates or stringent conditions.
College Ave (Best for Good Credit)
For students boasting a good credit profile, College Ave stands out as a top choice. Offering a suite of tools, calculators, and user-friendly interfaces, they simplify the loan selection process. College Ave’s competitive rates and diverse loan terms reflect their aim to reward those with good credit, ensuring that students can finance their education with ease and peace of mind.
Sallie Mae (Best for Very Good Credit)
A titan in the student loan sector, Sallie Mae continues to be a preferred choice for students with very good credit. Their rich history, combined with an understanding of the evolving educational landscape, allows them to offer premium loan conditions. Students with excellent credit profiles can tap into Sallie Mae’s resources, benefiting from optimal rates and terms that ease the journey through higher education.
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Students must be part of an eligible program, maintain satisfactory academic progress and be eligible U.S. citizens or noncitizens to qualify for a student loan. Make sure to complete the FAFSA correctly if you want to get the student loan you’re looking for. And don’t forget, private loans from lenders like College Ave are always available, as well.