Applying for colleges and student loans can be an overwhelming experience. And if you’re a first-generation college student, the process can be more daunting because of the inability of a parent to show you the ropes of college applications and student loan requirements.
Here are a few things first-generation students should know about student loans and how to get money to pay for school.
Find out your family’s Expected Family Contribution (EFC)
Your EFC is calculated when you submit your Free Application for Federal Student Aid (FAFSA). The FAFSA is your ticket to federal financial aid, which can help cover some or all of the costs of college minus your EFC, which your family is expected to pay. The earlier you apply, the sooner you’ll know the amount you’ll need for college.
Anna Ren, an independent education consultant and founder of Elite Advantage Prep, said you can figure out your EFC online.
“Take advantage of [using] EFC calculators that are available on every school’s financial aid website,” Ren said. “That way, [you] can get a realistic idea of what that school will cost.”
Ren, who was the first in her family to graduate from college, said you should avoid settling for local schools just because you might think they cost less. Look for other options, too.
“Students that come from low-income families should try to apply for schools that meet 100% of financial need or as close to that as possible,” she said. “As a high school student, I thought my local state school would be the most affordable option, but they actually didn’t offer me anything but loans, whereas Georgetown offered me the most aid in the form of grants.”
Get federal student loans
Federal loans are your best option to borrow money for school. They tend to have lower interest rates and flexible repayment options after you graduate. Direct Subsidized Loans will show up in your FAFSA award letter and are based on financial need. Direct Unsubsidized Loans also are available, but they aren’t based on need. Parent PLUS Loans are available for parents to take out on their child’s behalf.
Repayment options are more lenient on federal student loans than private borrowing. For example, you might qualify for income-driven repayment plans that can lower monthly payments when it’s time to starting paying back your loan.
Consider private student loans
If you need help beyond federal loans to pay for school, you could consider private student loans. They’re issued by banks, credit unions, and private companies rather than by the federal government, and tend to have higher interest rates.
Because the eligibility requirements are more stringent for private loans, you might need a cosigner to get approved. In that case, a cosigner agrees to repay your loan if you don’t. Sometimes, you could get a lower interest rate than the one charged by federal loans if your cosigner’s credit is strong. Evaluate your options and be sure to read through each lender’s terms and interest rates before finding the best private loan for your situation.
Apply for grants and scholarships
After you complete the FAFSA, your award letter will tell you how much money you’ll receive from federal and state grants and scholarships.
Grants and scholarships are essentially free money you won’t have to repay, unlike student loans. Grants are based on need and are great for anyone who doesn’t have the family resources to help pay for school. You also can try for scholarships, which usually are based on academic or athletic merit, so look for all the ones you think you’d be eligible for.
You also can apply for first-generation scholarships. Even winning one or two can help lessen the amount of student debt you’ll need to take out.
Getting money as a first-generation college student
If you’re the first in your family to go to college, it can be overwhelming for you and your family. As long as you start planning early and exhaust all your options, you should be able to afford college.
Do your best to get as much free money as possible through grants and scholarships, and then tap into student loans to help pay for the rest.
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