10 Facts for Applying for Scholarships and Student Loans
Hi Money Masters,
The process of figuring out how to afford college can be quite daunting. There is a lot of information out there! I’m here to simplify some things for you regarding this process. Here are 10 facts about applying for scholarships or loans (private or federal) …
1. Research the company, organization or scholarship sponsor to ensure it is reputable and legit.
2. How do you get the money once awarded? One way is that it will go directly to the school where it will be applied to any tuition, fees, or balances. The other way is it might be sent directly to you via a check.
3. Federal undergraduate loans don’t require borrowers to have a credit history or a co-signer.
4. Federal student loans are based on basic eligibility criteria, such as citizenship requirements and enrollment in an eligible program.
5. Complete the Free Application for Federal Student Aid, or FAFSA, to apply for a federal student loan. This is the first step for the various types of aid, including grants, scholarships and work-study.
6. Most private lenders expect a credit score or a co-signer with a good credit score and steady income.
7. If you do not have a co-signer you would need to have a good credit score of 670 or higher on a 300-850 scale used by FICO.
8. If you already have some college debt, refinancing is an option, however, you do need good or excellent credit to qualify. The minimum credit score requirements range from 650 to 680.
9. Any scholarship funds awarded do affect any other student aid since all your student aid, in sum, cannot exceed the cost of attendance at your chosen institution. Make sure to inform your school if you’ve been awarded a scholarship so that the financial aid office is aware.
10. Avoid scholarship fee scams. A legitimate scholarship offer will never request students to pay to qualify. Scholarships are awarded on factors including educational merit, financial need or extracurricular activities. If the requirements include fees, down payments or other criteria different from the usual requirements, then it may not be legit. (See #1!)