Your Financial Aid Questions Answered

For students entering college, applying for financial aid can be as complicated as the college admission process. Even after qualifying for financial aid, students find themselves with a multitude of questions. Here’s a list of commonly asked financial aid questions to guide you through the financial aid process.

Am I eligible to receive financial aid?

There are several requirements to be eligible for federal student aid. You must be a citizen of the United States or an eligible noncitizen, you must have a valid Social Security Number, and you must have a high school diploma or a General Education Development (GED) certificate or have completed homeschooling. If you’re applying for federal student aid, you do not need to be enrolled in an eligible program. But to receive the funds you need to be enrolled as a regular student seeking a degree or certificate. You must maintain a certain grade point average. Men must be signed up for the Selective Service System. Most of these requirements also apply to private student loans.

Will my parents income or my scholarships affect my eligibility?

Federal student loans are based on need, but private student loans are not. It is easier to attain student financial aid from the Federal government if your parents’ income is low. However, it is easier to receive a private student loan if your parents’ income is high. If you receive a scholarship, it may affect your eligibility or the amount of funds you receive from the Federal government. However, the impact the scholarship will have on your eligibility is relatively low.

Do I have to reapply for financial aid every year? Is there a chance I will receive more or less funds?

 You must reapply for financial aid every year. You can submit your financial aid application any time after January 1st. There is a chance that the amount of aid you receive will change year to year. This is based on a number of factors, primarily any changes in your income, your parents’ income and the number of family members currently enrolled in college or university.

If I temporarily stop my education, do I have to start repaying my loans?

 You will not have to pay back your loans immediately after taking a leave of absence. Depending on which kind of federal student loan you received, you will generally get 6 to 9 months of deferment for your loan. For private student loans, the length of the deferment will vary based on the lender’s policy.

Do I need credit check or co-signer to be eligible for a student aid?

Federal student loans do not require either a credit check or a co-signer. This also means that your parents are not legally responsible for your student loans, even if you’re under the age of 18. For private student loans, a credit check is almost always required. A co-signer is not necessary for most private student loans, but it may increase your chances of being approved.

Are there any tax benefits associated with student loans?

The IRS allows you to claim two separate deductions on your taxes. The first is called the American Opportunity Credit, which allows you to claim up to $2,500 per student per year. The second is called the Lifetime Learning Credit, which allows you to claim up to $2,000 per student per year for any tuition, fees, books, supplies and equipment costs related to your education.

To learn more about financing your college education, visit Credible.