Getting Started with a Student Loan Application

Getting Started with a Student Loan Application

With the cost of college education rising in the United States it is becoming more and more necessary for students to seek financial aid outside of their family.

A large percent of students have no choice but to seek help from the Federal Government in the form of student loans.

Although there are some quality private sources for student loans, the large majority of students seek help through Federal Student Loans (AKA: Direct Loans).

There are several types of Federal Student Loans to consider. Subsidized loans are based on the student's financial need and accrue no interest while the student is in school, during a grace period, or during a deferment period.

Unsubsidized loans have no financial need requirement and accrues interest at all times. PLUS loans are unsubsidized loans for the parents of students enrolled in college. Finally, eligible Federal student loans can be combined into a Consolidation Loan.

In order to get started with the Direct Loan application process, you will first need to have been accepted into a college that is eligible to participate in Federal Student Aid. Generally this only includes schools that are accredited by an accrediting agency recognized by the U. S. Department of Education. Once accepted into a college, your college's Financial Aid Office will be a tremendous help with the Student Loan Application process.

The next step would be to complete the Free Application for Federal Student Aid. This can be done entirely online through the Direct Loans website. Generally your school's Financial Aid Office will have a link to this website from theirs.

Filling out this application can be time consuming. Luckily, you can save your work and come back later. You will need several pieces of documentation such as those related to your and your family's income (tax documents).

Another requirement is the completion of an Entrance Counseling session. Most Financial Aid offices used to handle this part of the student loan application process, however the Direct Loan website has it all online now. This process takes about 20 to 30 minutes.

During this time, the student is educated about Direct Loans, managing educational expenses, other financial sources to consider, and rights and responsibilities of the borrower. There is a "quiz" with the Entrance Counseling, and you must get every question right to move on in the process.

Before the application process is complete, the student must complete a Master Promissory Note either at the college's Financial Aid Office of online at the Direct Loan Website. This is a legal document in which the student promises to repay the loan.

After these steps are complete, the Financial Aid officer will assess the student's eligibility and issue an award letter.