Scholarships and grants provide coveted financial assistance for college students, because these forms of aid do not require repayment. Grants generally focus on the neediest applicants, while scholarships tend to reward outstanding achievement in athletics and academics. Need-based grants and merit-based scholarships provide valuable financial aid entries, but most higher education is not fully funded by these options. Once these gift-aid alternatives are exhausted, students turn to loans that bridge the college affordability gap.
Public and private borrowing options exist for college students, but there are significant differences in how the two forms of assistance are administered. Far and away; the preferred path for students seeking loans is to utilize low-interest fixed-rate programs initiated by federal and state agencies.
Government-backed loans make the most sense for college students because terms and conditions are more manageable than loans issued by banks, credit unions and other private lenders.
- Low interest
- Fixed rates
- Flexible repayment options
- No credit check required
Important federal programs like William D. Ford Direct Loans provide subsidized and unsubsidized funding for students at all levels of higher education. Federal financial aid resources are deepest, so file your FAFSA on-time, to be considered for Pell Grants and Direct Loans.
The Texas Higher Education Coordinating Board (THECB) extends alternative loans once known as Hinson-Hazelwood Student Loan, or HH loans
Private lending is governed by credit-based principles that make it harder for students to secure aid. The limited number of credit interactions characteristic of college-aged borrowing histories is often insufficient for banks to approve loans for students. As a result, private loans for higher education are generally secured with the help of credit-worthy cosigners. There is nothing intrinsically wrong with that, but even with an additional credit reference attached to your private student loan, interest and other terms are not as attractive as government options.
In addition to grants and merit-scholarships, states often administer student loan programs. In many cases, terms and qualifying conditions are similar to Federal Direct Loans. State resources are not quite as deep as those of Uncle Sam, so interest rates and program charges suffer slightly. But when other forms of financial aid are tapped out, state-sponsored student loans provide competitive assistance for needy university students.
Programs vary in scope and size, so consult your state’s department of payday loans in Florida post secondary education for details about state-specific aid that is available at your school. These examples illustrate typical state programs found within the U.S.:
Alaska Commission on Post-Secondary Education (ACPE) stands committed to advancing higher education in the state. In addition to scholarships, student loans from the agency benefit two types of Alaska students:
- Students enrolled at Alaska State colleges and universities
- Alaska State residents attending college out-of-state
Like many state student loan initiatives, credit is considered when issuing Alaska Supplemental Education Loans (ASEL). In Alaska, applicants must have FICO scores of at least 680, or must present their loan requests alongside credit-worthy cosigners. Half-time students are eligible, and the application process starts with the free federal application (FAFSA). Another common eligibility requirement is a default-free track record repaying previous student loans. Interest rates on ASEL loans is 7.2%. Repayment terms are similar to federal loans, including six-month grace periods following school.
Public loans carry these advantages:
The state program administers College Access Loans that supplement federal loan access. Half-time students enrolled in associate’s, bachelor’s or advanced degree programs qualify for the alternative loans, which are not need-based. However, qualified applicants require favorable credit evaluations.
Cosigners with good credit are eligible to back the educational loans jointly, for friends and family. In Texas, cosigners must meet these standards:
- 21 years old
- Have a regular income source
- Not be married to the borrower
In most states, student loan application protocol requires each candidate to file a Free Application for Federal Student Aid (FAFSA). Individual state filing deadlines are frequently earlier than the federal standard, so make sure your timetable reflects whichever comes first. State loans have additional unique eligibility requirements, so use these state-specific pages to access particular program information.