Understanding Financial Aid

Don’t Get a Degree in Debt

Your parents may have graduated without student loans – but that’s rare these days. College costs have gone way up. In fact, according to Bloomberg, college tuition and fees have increased 1120% since records began in 1978.

So, is college worth it? We think so! College is an investment in your future. College graduates continue to average higher incomes than people with high school diplomas alone. If you say yes to college, cuLearn is here to help you get there and to graduate without more debt than you need.

How can you minimize the amount you borrow to cover the hefty price of a degree?

Info And Advice

What You Need to Know About Qualifying for Financial Aid

Many students think they won’t qualify for financial aid because their parents’ income is too high. This is a costly misperception because there’s actually no income cutoff to apply for federal financial aid.

That’s why every student – we repeat, every student – should complete the Free Application for Federal Student Aid (FAFSA).

  • The FAFSA is used to determine whether you’re eligible for federal financial aid, including federal loans, grants, scholarships, and work-study programs. Different types of federal loans are available, so as long as you meet some basic eligibility requirements, you can qualify for a federal student loan. Apply online at fafsa.ed.gov.
  • After you submit the FAFSA, you’ll receive a financial aid award letter from the school(s) you included on your form where you’re accepted. The letter will tell you how much financial aid you’ll receive in the form of scholarships or grants (if applicable), and the amount you’re expected to provide through other sources, such as work, savings, or private loans.

Still Need Money? Check into a Private Student Loan

Students and parents may use private student loans to “close the gap” between grants and scholarships, federal student loans, work-study and the total tuition bill.

While these loans don’t have all the protections and benefits of federal student loans, they can still be a great option — as long as you don’t borrow more than you need. For many families, private loans can have better rates and fees than Federal PLUS loans.

Tips to Make Finding and Applying for Financial Aid Easier

Read: Financial Aid FAQs

Options and Processes

Types of Financial Aid

In general, there are four types of financial aid: scholarships, grants, work-study and federal student loans.

“Free money” to help pay for college

Scholarships and grants are sometimes called “free money” or “gift aid” because you don’t have to pay them back:

  • Most scholarships are merit-based. This means they’re awarded to students with certain qualities, such as proven academic or athletic ability.
  • Most grants are need-based. This means they’re usually awarded based on your or your family’s financial situation.

Federal Work-Study Program:

  • This federal student aid program provides part-time employment, typically on-campus, while you’re enrolled in school to help pay your education expenses. Awards are based on need.

Federal student loans:

  • If you apply for financial aid, you may be offered loans as part of your school’s financial aid offer. Federal student loans let you borrow money for college directly from the government.  Unlike a scholarship or grant, a loan is money you must pay back – with interest. 
  • To apply, complete the FAFSA form.

Applying for Financial Aid

The application process for a federal student loan is different than applying for a private student loan. Here’s a high-level view of what you’ll need to do. 

Applying for a federal student loan

  1. Create a Federal Student Aid (FSA) ID.  You’ll use this username and password to log into certain U.S. Department of Education websites, include fafsa.ed.gov.
  2. Complete and submit a Free Application for Federal Student Aid (FAFSA).

Applying for a private student loan

Unlike federal loans, private student loans are offered by banks, credit unions, and other lenders—not the government. Private loan terms and interest rates will vary by lender. Typically, private lenders consider your credit history and require a co-signer.  Also, every lender has its own application process.

To apply for a private student loan:

  1. Complete the lender’s application: Most lenders offer an online application. If your lender requires a cosigner, you may have to complete your information before your co-signer can provide his or her information.
  2. Provide the required documents. Typically, you’ll receive an email detailing your next steps, including what documents you’ll need to provide. Documents vary by lender.

Choosing a fixed or variable rate

Unlike federal student loans, private student loans let you choose a fixed or variable rate.  Here are a few things to consider to help you make a choice that’s right for you.

Debt Repayment Options

Loan Consolidation and Refinancing Basics

“Consolidation” and “refinancing” are financial terms, so let’s cut to the basics.

  • Direct loan consolidation: This is a government program that lets you take multiple federal student loans and combine them into a single loan. This is mainly for convenience so you have just one payment each month.
  • Refinancing: Similar to loan consolidation, you take out one new loan to pay off your existing loans.   But – and this is important – you have a chance to look for a better interest rate and repayment terms.

Quick Comparison

To help you decide which option is right for you, here are some of the great and not-so-great features of consolidation and refinancing.

What it does:

Consolidation: Combines multiple loans into one new loan so you’ll have just one monthly payment

Refinancing: Combine multiple loans into one new loan so you’ll have just one monthly payment (some may refer to this as “consolidation,” but the private lender is really refinancing your loans)

What loans it works on:

Consolidation: Federal student loans only

Refinancing: Federal student loans, private student loans or a combination

How it affects your interest rate:

Consolidation: Generally won’t lower your interest rate (the rate you pay is a “weighted average” of the interest rates on your previous loans)

Refinancing: You can often find a lower interest rate than what you’re paying on your current loans

Potential savings:

Consolidation: Won’t save you money (if your monthly payment decreases, it’s probably because the term of your loan is extended, which usually means paying more interest over time)

Refinancing: If you have a good credit rating, you could get a lower interest rate, which could potentially save you money over time

Read: Debt Repayment FAQs

Helpful Tools

Refi Calculator

See an estimate of how much you can save on your payments by refinancing your current student loans.

Try: Refi Calculator

Planning Calendar

Getting ready for college?  There’s a lot to think about and a lot to remember. That’s where we can help!  Our Planning Worksheets will help you plan and get ready for college without missing any critical steps. 

Try: Planning Calendar

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