Understanding Student Loans - More Information
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LOAN AND DEBT
Student loans can be a great thing. They allow so many students to get the
essential education they need in today's competitive economy. It can be a bit
daunting to stare the whole student loan process in the face, however. This
is especially true for the uninitiated student or parents facing the student
loan or grant process for the first time.
There are three broad types of financial aid; loans, grants, and work study
aid. Loans must be repaid while grants are an outright gift if the student
maintains the qualifications of the grant. Work study programs are jobs
subsidized by state or federal government as part of student financial aid
program. Aid is distributed according to Title IV of the Higher Education Act
of 1965, as amended (HEA). The programs are administered by the U.S.
Department of Education.
Title IV federal student aid programs are:
- Federal Pell Grant Program
- Federal Supplemental Educational Opportunity Grant (FSEOG)
- Federal Work-Study (FWS) Program
- Federal Perkins Loan Program
- William D. Ford Federal Direct Loan Program
- Federal Family Education Loan (FFEL) Program
- Leveraging Educational Assistance Partnership (LEAP) Program
[formerly State Student Incentive Grants (SSIG)]
- Special Leveraging Educational Assistance Partnership (SLEAP)
- Robert C. Byrd Honors Scholarship Program
How much can one expect to receive? Will you be able to afford to get the
education you want? Educational institutions use formulas to determine each
student's expected family contribution (EFC). This is the figure the institution
feels the student should pay. They then use this figure to ascertain the
amount of financial aid the student is eligible for. They will determine weather
or not the student is dependent or independent. If a dependent student, the
parents financial information will be used to calculate financial need.
The federal government has basic criteria to determine weather a student is
dependent or independent. To be classified as an independent student, the
- be at least 24 years old by December 31 of the applicable award year
for which aid is being applied for
- be an orphan or a ward of the court through the age of 18;
- be a veteran of the U.S. Armed Forces;
- have legal dependents other than a spouse (for example, dependent
children or an elderly dependent parent);
- be a graduate or professional student; or
- be married.
The educational institution will also make a distinction between
undergraduate and graduate / professional students. A student is pursuing a
degree higher than a baccalaureate degree, and has an undergraduate
degree, they are classed as a graduate / professional student. The student
may not simultaneously receive Title IV aid as an undergraduate and
graduate / professional student.
The school will examine the student's academic course load. The will
determine weather or not the student is a full time student. If not, the student
can be classified as a 1/4, 1/2 or 3/4 time student. Federal regulations
require a standard determination of a student's attendance be measured in
clock or credit hours. This is factored into the award eligibility determination.
For the complete financial aid eligibility requirements, see the FSA
Handbook, Volume 1: Student Eligibility and Subpart C of the Student
Assistance General Provisions regulations (34 CFR 668).
Student loan programs are eligible for the benefits of student loan
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