August 28, 2009

Financial Aid 101

Posted in FAFSA, Parent PLUS Loans, Scholarships, Stafford Loans, Student Loan News, The Financial Aid Process tagged , , , , , , , , , , , , at 6:57 AM by Joe From Boston


With colleges heading back this week, you should have your financial aid already lined up, but it’s the perfect time to start planning for next year.

Let’s go over the basics:

* Fill out the FAFSA as early as you can.  Financial aid is first-come, first-served so get your paperwork in early.  If you ‘re waiting on a few last 1099s, use your existing paperwork to file early, and file an amendment when everything finally arrives.  If you use a tax prefessionsal, they will often file the FAFSA for you for little to no additional charge.

* You need the FAFSA for all federal loans, such as Stafford, PLUS and Perkins loans.  Some scholarships also require the FAFSA.

*Always exhaust your federal options first, such as Perkins, Stafford and PLUS loans, before looking at alternative sources of funding such as private loans or home equity loans.   Federal student loan offer borrower incentives and protections that you will not find elsewhere.

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7 Comments »

  1. Linda said,

    Hi, my daughter was not eligible for anything other than an unsubsidized stafford loan, but since she got good scholarships it wasn’t an issue. However, she hates the school she is in and wants to transfer to a school that has no scholarship awards. I will now need either a PLUS loan or she will need a student loan with us as the cosigners. What do I have to do to change the stafford loan remains to the new school?

    • Linda,

      Unfortunately, you cannot transfer a Stafford Loan to another school. You will need to send your FAFSA to the new school and await a financial aid package from that school.

      Financial aid is first-come, first-served, so don’t be too surprised if you don’t get much for the remainder of htis school year; you will likely get a better package next year when you apply at the normal time.

  2. Billie Jordan said,

    We have filed our FASA and our daughter’s college has told us we qualify for a Federal Parent Loan PLUS. Now, do we contact our financial institution and apply for the loan or what is our next step?

    • Hi Billie,

      Yes, you now want to contact the financial institution of your choice and apply for a PLUS Loan. If your lender does not deal in PLUS loans, the school can provide you with a list of lenders who do (and from whom they receive no kickbacks, by law)

  3. REGINA CONNER said,

    I filed for the Parent Plus Loan and received a letter stating the loan was approved, however, it had the incorrect school listed. What do I do now?

    • If I were you, I would first call the lender and ask why the wrong name is listed on the form and ask them to correct it. They should correct it. Then call the school and let them know what is happening, as PLUS loans are dispersed through the school.

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