With college and graduate school applications submitted, applicants across the country are now trying to figure out how to cover the cost of their education.
Decisions about financing education are difficult because they need to be based on a realistic assessment of a student's individual circumstances. Some students may figure out a cost effective path, such as attending community college and then transferring to their dream school. But too often, guidance on education financing is either nonexistent or so ineffective that students and their families are left drowning in debt without a line to grab.
Regardless of individual circumstances, however, there's one simple and effective thing that every student should do: fill out the Free Application for Federal Student Aid (FAFSA).
The FAFSA is required to secure access to federal student aid (which includes federal grants in addition to federal loans). Many states and institutions also use information from the FAFSA to determine eligibility for their different grant and loan programs. If you don't fill it out, you'll also foreclose any opportunity to receive this assistance.
Don't make the mistake of thinking filling out the FAFSA is not worth your time. The vast majority of students qualify for some form of aid and you should keep your options open. And, even if you are not eligible for certain grants, you cannot borrow federal loans if you don't fill out the FAFSA.
We've written before on the benefits of choosing federal loans (as well as the need for greater protections for private loans) but it is worth stressing the point again here: To the greatest extent possible, use federal loans to finance your education!
While federal loans may not be sufficient to cover the entire cost of an undergraduate education due to caps in Stafford loan eligibility, this is no longer the case for graduate and professional students. The Grad PLUS loan allows graduate and professional students to cover their costs without private loans.
Grad PLUS comes with all the protections of federal loans, including deferment, forbearance, and eligibility for Income-Based Repayment andPublic Service Loan Forgiveness. Grad PLUS also has a fixed interest rate. While that rate may seem a little higher than the variable interest rates on some private loans tailored to graduate students, it's fixed, which means it cannot skyrocket. (Variable means just that: variable.)
And undergraduates should always consider borrowing the maximum amount available in federal loans (only, of course, if it is necessary to borrow that much) before turning to private loans to ensure they are eligible for federal loan protections to the greatest extent possible.
The effects that available repayment plan options and interest rates may have on your ability to repay your loans are things to consider now, while making decisions about whether, how much, and what types of loans to borrow. But don't foreclose your access to the protections attached to federal loans simply by not filling out your FAFSA.
So how do you get started? The FAFSA is available now and should only take a short period of time to complete. Here are the important deadlines you need to know: The federal deadline is June 30, but states and institutions have earlier deadlines—some in February and many in March.
And because funds for many grants—which everyone should pursue since this type of aid does not need to be repaid—are limited and may dry up before February, you should submit your FAFSA as soon as possible (you're able to make corrections and changes after you submit it).
To help with any confusion and questions, the New York Times recently ran a seven-part series on its blog, The Choice, in which financial aid expert Mark Kantrowitz responded to readers' questions. We won't repeat his extremely helpful and extensive posts but encourage you to check them out if you have concerns or questions about the FAFSA.
To stay updated on proposals and programs for student debt relief, connect with us on Twitter (@EJW_org #studentdebthelp) and Facebookand register to learn more about relief programs like Income-Based Repayment and Public Service Loan Forgiveness from one of our freestudent debt relief webinars; the next one is Wednesday, January 25, from 1 to 2 p.m. ET.
Radhika Singh Miller is a program manager for Educational Debt Relief and Outreach at Equal Justice Works. In 2008, she served on the Student Loans Team in the Negotiated Rulemaking for the College Cost Reduction and Access Act (CCRAA) and has extensive knowledge of this landmark educational debt relief legislation. Radhika graduated fromLoyola Law School Los Angeles and was most recently a staff attorney at the Partnership for Civil Justice, focusing on constitutional and civil rights litigation and advocacy.