Smart Financial Aid Strategies: Scholarships to College Loan Options

In this comprehensive article, we’ll delve into the world of college loan decisions, providing college families with advice on navigating financial aid options intelligently. From understanding the different types of loans available to deciphering loan terms and interest rates, we explore strategies for minimizing debt, such as maximizing scholarships and grants, considering income-driven repayment plans, and exploring alternative funding options. With these practical tips and insights, college families can make the most intelligent financial aid loan decisions, ensuring a brighter financial future for their students.

Navigating A Confusing Process

College financing is traditionally very confusing for families to navigate. There can be many components that go into financing a college education. Families can make full out-of-pocket payments, participate in monthly payment plans with their school, get scholarships and grants, utilize 529 Plans, borrow federal student loans, or private student loans¹, pay with a credit card, and/or use any combination of these options.

How To Get Started

In order to get the process started, students first need to apply to schools. Once a student is accepted to a college, that school’s Admissions Office will inform the student of acceptance and tell the student what kind of merit funding will be awarded.

From FAFSA To Financial Need

Next, students and families need to file FAFSA and/or CSS Profile and any necessary state grant applications. Colleges will establish an estimated cost of attendance (budget) for the student and use the information from these forms, combined with any merit aid, to determine a student’s financial need. Many schools will use this remaining financial need figure to award need-based funding in the form of a grant.

Cost Of Attendance vs. Actual Cost

The residual remaining need will be the maximum amount of funding a student can borrow via loan funding. It is important to note that the full estimated cost of attendance is not the student’s responsibility to the school; rather, it is a cost of both billed and unbilled expenses. It is important for a family to know what a student’s actual costs will be to attend school for the entire year. What portion of that amount will be billed by the school and how much more funding is necessary to cover unbilled expenses like books, travel, etc.?

Calculating Out-Of-Pocket Funding

After the family determines the entire amount required to attend school for the year, they can begin to determine the amount of necessary out-of-pocket funds. At that point, it’s time to come up with a plan to tackle the outstanding portion.

It is at this point that the family learns what amount needs to be borrowed. Everyone loves free money, and aside from internal scholarships and grants, a student may also receive federal and/or state grants. In addition to internal awards, there are countless external funds available.

Applying For Scholarships

Students can explore available scholarships by visiting Going Merry and using their mobile app. Going Merry is a subsidiary of Earnest and its app stands out for its ability to facilitate searches for college scholarships along with a wealth of other college funding resources.

This free app assists students in uncovering and completing applications for scholarships, grants, and financial aid. With a user base of over 2 million students and over 20,000 registered high school counselors, the app simplifies the journey of obtaining educational funding.

Considering Student Loans

There are a few loan options, including federal student,  federal parent, and private loans. Students are guaranteed a small amount of federal student loan funding and should always rely on that before considering a private student loan. Parents of dependent students have the option of applying for a federal parent loan, and students can borrow a private student loan when federal aid is not enough via Earnest.

Earnest provides a range of advantages for student loan borrowers, including:

• Flexible repayment options: Earnest offers adaptable loan structures and payment choices, such as a Skip-A-Payment² feature and an Auto Pay discount³.

• Low interest rates: Earnest presents some of the most competitive starting interest rates for private student loans and refinancing.

• Rate Match Guarantee4: Earnest provides a unique rate match feature specifically for in-school student loans.

• No fees: Earnest imposes no fees, including late payment fees.

• 9-month grace period 5: Earnest grants a generous 9-month grace period.

• Team of experts: Earnest furnishes a dedicated team of experts available to assist with applications over the phone.

• Mid-loan term rate re-evaluation: Earnest offers the option to have your rate re-evaluated mid-loan term.

Choosing Thoughtfully

It’s crucial to emphasize that while securing scholarships and grants via Going Merry can provide significant advantages, making thoughtful decisions about loans using the Earnest platform can be equally, if not more, financially significant in the long run.

Visit Going Merry by Earnest to browse scholarships and grants, and apply in order to maximize your financial aid.

This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

¹ Before applying for private student loans, it’s best to maximize your other sources of financial aid first. It’s recommended to use a 3-step approach to assembling the funds you need: 1) Look for funds you don’t have to pay back, like scholarships, grant, and work-study opportunities. 2) Next, fill out a FAFSA(R) form to apply for federal student loans. Federal Direct subsidized and unsubsidized loans, excluding PLUS Loan for Parents and PLUS Loan for Graduate and Professional Students which require a credit check and a credit worthy endorser if the parent or graduate or professional student has adverse credit, do not require a credit check or cosigner, and offer various protections if your struggling with your payments. 3) Finally, consider a private student loan to cover any difference between your total cost of attendance and the amount not covered in steps 1 and 2. For more information, visit the Department of Education website at https://studentaid.ed.gov.

² Earnest clients may skip a payment through a one, one-month forbearance during a 12 month period. Your first request to skip a pay can be made once you’ve made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Any unpaid accrued interest may capitalize (added to the principal balance) at the end of the forbearance period by adding unpaid accrued interest to the outstanding principal as permitted by law and the terms of the loan agreement.

³ You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

⁴ Terms and conditions apply. To qualify for this Earnest Rate Match Bonus offer: 1) you must submit a completed student loan application; 2) you must provide documentation of an eligible competitive rate offer exclusive of all discounts by calling Client Happiness at (888) 601-2801 or chat on Earnest.com and follow the instructions to send in your proof of lower rate; and 3) you must provide a valid email address during the application process. The bonus will be paid out in the form of a gift card. You will receive instructions on how to redeem the gift card via the email address you have provided. Limit one rate match bonus per application. A bonus cannot be issued to residents in MA.

Bonuses that are not redeemed within 180 calendar days of the date they were made available to the recipient may be subject to forfeit. Bonus amounts of $600 or greater in a single calendar year may be reported to the Internal Revenue Service (IRS) as miscellaneous income to the recipient on Form 1099-MISC in the year received as required by applicable law. Recipient is responsible for any applicable federal, state or local taxes associated with receiving the bonus offer; consult your tax advisor to determine applicable tax consequences. Additional terms and conditions may apply. Earnest may discontinue this program at any time.

⁵ Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.