By: Stephanie Hodge BreuerThe Application Process
Acquiring a college student loan can seem like a daunting process but it doesn’t have to be overwhelming. The first thing to do prior to applying for a college loan is to make sure you meet the most basic requirements. These include being a U.S. citizen or permanent resident, making sure you are enrolled in at least half-time status at an eligible college institution, not in default on a previous student loan and do not owe a refund on a Title IV grant. After meeting these requirements, the most important part of the college student loan application process begins! You will then be required to complete a form called the Free Application for Federal Student Aid or FAFSA. Each school year you wish to receive a college student loan, you will need to complete this application. Once completed and mailed, your school’s financial aid office will receive your Student Aid Report from the Federal Government. This report will determine your financial aid eligibility for the college student loan. You will then receive an award letter that will summarize your financial aid eligibility at your particular institution. Generally, your school will then require confirmation that your college loan award was accepted. Once you have accepted your college student loan award, you will need to complete a Master Promissory Note (MPN). The MPN is where you will pick the lending institution that you will be responsible for repaying. During the MPN process, your school will certify your college student loan aid eligibility and your selected lending institution will usually send your college loan funds directly to your school.
What Comes After Graduation?
Happy educating! …Or is it? Now comes the repayment! After finally completing the college student loan application process and having to endure the challenges your classes then present while in school, you’re probably ready to relax after graduation day! Don’t worry; take it easy, you’ve still got at least six months before repayment begins (in most cases, anyway). This is where words such as “student loan refinancing” and “student loan consolidation” come into play! You want to start off on the best financial foot possible after graduation and student loan refinancing as well as student loan consolidation can help you achieve this goal.
Student Loan Consolidation
College student loan consolidation can be simple, but you may want to consult a loan specialist for help if you’re unsure. Student loan consolidation occurs when you combine multiple college loans with varying repayment schedules into just one loan, either a Federal Family Education Loan Consolidation Loan or a Direct Consolidation Loan. This allows you to make one monthly repayment and often reduces your monthly payment while permitting you a longer period of time over which to repay your college student loan. Also, the interest rate on your student loan consolidation loan might be lower than you were previously expected to pay on your existing college student loans.
Student Loan Refinancing
Student loan refinancing is another option to consider when trying to improve your financial situation after graduation. Refinancing a college loan may be of particular benefit to you, if you have more than one college student loan. As mentioned previously, these often carry a variety of different interest rates. By combining these loans, you will end up with one low interest rate. A better interest rate will help lower your monthly repayment amount as well as lowering the total balance that will need to be repaid over the life of the college loan. A tip to help you get a leg up prior to refinancing: Check your credit report! Look it over and if there is anything that can be cleaned up or improved upon, do so now prior to meeting with a lender. The better the credit score, the better chance you will have of qualifying for lower college student loan refinancing rates. Additionally, the approval process of student loan refinancing will be much easier.
