5 Foolproof Tips to Filling Out the FAFSA and Student Loan Timeline
Hi everyone! I hope you're having a great Monday-- after a weekend of working, today is actually my "weekend," so I'm having a pretty great one myself :)
We're picking up where we left off last time, but in this post we'll discuss how to actually apply for student loans, including information you'll need to gather before you start your application, deadlines to apply for aid, and additional documents you might need for private loans. [If you didn't catch the last post, it's best to start there before reading this one!]
Like I touched on last time, federal loans will cover the lions' share of tuition costs for most graduate students, so completing the FAFSA form is absolutely essential to unlocking these funds. Most of us are already well-acquainted with filling out a FAFSA, but just as a refresher, here are some tips to completing it.
As you can see, there quite a bit of information, so I'll say it again: Don't put it off! It's available so early, and filling it out last minute when your attendance to school is contingent on you receiving loans can cause some very real stress (been there, done that, lost 2 years off my life because of it). I think the trickiest parts to filling out the FAFSA are knowing which tax documents to include (hint: if you're applying for aid for 2017-2018 school year, you'll need to documents that you used to file in 2016-- or in other words, your 2015 taxes). However, having these documents at hand can make it easier to apply for Direct PLUS loans (federal loans that usually require a credit check), as well as private loans.
Once you've filled out the FAFSA, the timeline goes a little like this:
After your loan amount is approved, but before it's dispersed to your school, you'll have to fill out entrance counseling and sign the Master Promissory note. Both of these essentially say you agree to pay the government back and you know what you're getting yourself into. [I want to take a moment here to remind everyone that incurring student debt should not be taken lightly. While it's a great tool to getting a degree and career that's likely higher paying, it's also a huge responsibility and burden once you graduate. With that in mind, always remember that just because you're approved for a certain loan amount does NOT mean you must accept the entire amount. You have 120 days to decide how much of your approved amount you wish to accept, and as I noted last time, you will never regret taking only what you need!] Okay rant over.
I know we discussed it last post, but if you'll be needing private loans, I highly suggest this article for an unbiased opinion on some good ones on the market. As far as private loans, I would advise anyone to research, research, research for the lowest interest rate. Because interest accumulates while you're in school, it's absolutely critical to find the lowest one you can. While variable rates can be riskier, the rates are typically lower and over a few years while you're in school will rarely exceed fixed rates. Additionally, if you decide on a private loan that requires a cosignor, this person needs to understand the liability they're incurring by signing with you. Usually a parent will volunteer, but cosigning basically says if you can't pay for any reason, your cosignor will assume your debts. That requires some serious trust!
So now you have the loans to cover tuition and maybe some living expenses, and it's go time! Next time we'll talk about responsible spending while in graduate school [i.e. champagne taste on a beer budget] and steps you can be taking while you're still in school to reduce your debt. Until then!