Pay for College

Not sure where to start? Find an expert in your state here or read below to learn more about paying for college.

FIRST THINGS FIRST: FILE THE FAFSA

Think of the FAFSA — the Free Application for Federal Student Aid — as your gateway to college funding. Filing the FAFSA is the first step in the financial aid process. It determines your eligibility not only for federal student aid, but also for many forms of state and institutional aid.

Get started on the FAFSA here. You may have heard that the FAFSA is too complicated to complete, but it's usually easier than you think. It may take some time, but it's more than worth it!

And remember — never pay to file the FAFSA! If you need help filing it, college planning organizations in your state are ready to guide you through the process, free of charge.

The best kind of money for college is "free" money — money that you don't have to repay. This type of money is divided into two categories: scholarships, which are typically merit-based, and grant aid, which is typically need-based.

There are many free ways to find scholarships. Never pay to find scholarships!

Your high school guidance counselor can be a great resource for finding scholarships, especially local ones that are specific to your area.

Some tips for finding and securing free money for college:

• A Pell Grant is a federal grant awarded by the U.S. Department of Education to undergraduate students who demonstrate financial need. The maximum Pell Grant for the 2017-18 award year is $5,920. You are automatically considered for Pell Grants when you file the FAFSA.
• Reach out to your college or university’s financial aid office to discuss any scholarship or grant programs they offer.
• Many states agencies and state-funded nonprofits offer scholarships and grants. Click here to find opportunities in your state. You can also visit the Department of Education’s state index to find your state’s higher education website and learn more about their options.
• Thousands of private organizations offer scholarships and grants and are usually tailored to specific needs and interests. Local scholarships tend to be less competitive than national scholarships, so you have a better chance of getting free money for college. While the awards may be smaller, they can help you pay for books and living expenses. Every dollar counts!

If you have exhausted your options for scholarships and grants and still need money to cover the cost of tuition and living expenses, then you should consider loans.

MAXIMIZE YOUR FEDERAL STUDENT LOANS FIRST

It's important to know that education loans are borrowed money that must be repaid with interest. The interest rate, forgiveness options, and repayment schedule will vary based on the type of loan you choose. Carefully review all the conditions of the loan and understand the terms before signing.

Your best resource to navigate the different loan options will be your college or university’s financial aid office. They will be able to explain all your options and how to apply for different loans.

The U.S. Department of Education offers several federal loan programs depending on your needs and who is borrowing the money. Remember that you must file a FAFSA to qualify for federal loans. These loans should be your first choice. Only once you have exhausted these loans should you look to borrow from a non-federal lender.

Key tip: You should always exhaust your free money, campus-based aid, and Federal Stafford Loans before looking to borrow non-federal loans.

FILLING THE GAP WITH NONPROFIT LOANS

You should use non-federal education loans — which must be paid back with interest — only as a last resort to pay for college.

If you still need to fill the gap between the cost of attendance and your available savings, free money, and federal student loans, consider borrowing from a nonprofit or state-based organization. These organizations, which are guided by public-purpose missions, were founded solely to help students and families pay for college.

Find a nonprofit loan here.

You can trust that nonprofit organizations are working for you. They follow a set of strong consumer protections — called Guiding Principles — that affirm their commitment to working in your best interests, and not in the interests of shareholders.

Currently, all nonprofit and state-based lenders offer a fixed interest rate option, which is, in many cases, less than five percent, with low or no origination fees. Some lenders also offer variable rate options. The majority of these loan programs require a credit-worthy borrower or co-signer, resulting in extremely low default rates (often less than one percent).

Many nonprofit loan programs also include borrower benefits, such as no prepayment penalties and interest rate reduction options, and some offer benefits for graduates that work in a critical field in the organization’s state. Several nonprofit programs also offer income-based repayment options.

OTHER LOAN OPTIONS

Credit unions, banks, and other organizations also offer education loans. Check with your local credit union or bank to review your options. Remember to carefully review all terms, rates, and fees before signing a loan agreement.

If you need help filing the FAFSA, find an expert in your state here.

GET TO KNOW THE FINANCIAL AID OFFICE

Your best resource to navigate all your financial aid questions will be your college or university’s financial aid office. They can help you understand all your options, including available campus-based aid programs, grants, and scholarships.

KNOW WHAT YOU OWE

It's important to keep track of what loans you've taken out, who your lender is, and what the interest rates and repayment requirements are.

For federal student loans, all your loan information is available through the National Student Loan Data System. You will need to have your FSA ID handy to access your account.

For non-federal loans, you can contact your lender if you need information on your loans.

NEED AN ADVOCATE?

If you're having trouble with your student loans, free help is available. NEVER pay for student loan help.

Remember: if you have to pay, stay away!

In addition to contacting your student loan servicer or your nonprofit or state-based organization for help, you can contact:

The U.S. Department of Education

The Consumer Financial Protection Bureau

The National Consumer Law Center Student Loan Borrower Assistance Project

Not sure where to start? Find an expert in your state here or read below to learn more about student loan repayment.

WHATEVER YOUR SITUATION, WE'RE HERE TO HELP YOU MANAGE YOUR STUDENT LOANS.

If you have federal student loans, there are a number of options and benefits that you can use when repaying your student loan debt. While it's important to advocate for yourself and be an informed student loan borrower, we know that the process is confusing for everyone, and that you'll likely need some help. Don't feel bad — student loan repayment is confusing even for those who study student loans for a living!

Your student loan servicer is your first resource for any questions or concerns about repaying your federal student loans. They provide all the help you need for free. Find who your servicer is here.

If you're worried about paying back your loans or don't have the money to make your payments, always reach out to your servicer for help. They can help you enroll in a repayment plan that's right for your financial situation. Ignoring your student loans won't make the problem go away — it will just end up costing you more money and will hurt your credit score. Remember: There's always help available. Defaulting on your loans is never the answer.

THE BASICS

What happens to my loans while I'm still in school?

While you're enrolled in school, your loans are in "In-School Status," which means that you don't need to make any payments on them. There are two types of federal undergraduate loans: subsidized — which means the government pays the interest on the loans while you're in school — and unsubsidized — which means the interest accrues while you're in school and will become your responsibility to repay.While you're not required to make any loan payments while you're in school, if you can at all afford it, it's a great idea to pay down at least the interest on the loans while you're in school. This will mean you'll have less debt to repay later once you're out of school.

What happens to my loans when I am no longer in school?

Once you're no longer enrolled in school, your loans move from "In-School Status" to a "Grace Period." The Grace Period lasts six months from your last date of enrollment. So, if your last date of enrollment was May 14, your student loans would be in "Grace" until November 14.

When do I start making payments? What is a student loan servicer?

As your Grace Period starts to wind down, you will start receiving communications from your student loan servicer. A student loan servicer is the company that helps you select a repayment plan and collects your payments on behalf of the federal government. Student loan servicers for federal student loans are contractors of the U.S. Department of Education. You can find out who your loan servicer is by logging in to the National Student Loan Data System.

Your student loan servicer is your first resource for any questions or concerns about repaying your federal student loans. They provide all the help you need for free.

What do I do if I'm having trouble with my student loan servicer?

If you are having trouble with your loan servicer, you can always file a complaint through the U.S. Department of Education, and your servicer will work with you to resolve the issue.

WHAT IF I CAN'T AFFORD TO PAY MY STUDENT LOANS RIGHT NOW?

There are options available to you if you're unable to afford your monthly student loan payments.

I'm overwhelmed and have missed some payments. Can I get back on track?

Ignoring your student loans is never the answer. Even if you've missed payments, you can always get back on track. Instead, if you're having trouble, contact your servicer for help. You can also contact your local nonprofit or state-based organization and they can help you get on the right track.

Can I lower my monthly payments? They're too high for me right now.

With a payment based on your income, family size, and other factors, you can get a monthly payment amount tailored to fit your financial situation. Depending on your income, your payments could be as low as zero dollars per month!

What happens if I need to postpone making payments?

If options such as switching to an Income-Driven Repayment plan or consolidating your loans won't work for you, the next step would be to look into postponing your payments. Keep in mind, in most cases, the interest on your federal student loans continues to accrue during this time

HOW DO I CHOOSE THE RIGHT REPAYMENT PLAN?

Choosing a repayment plan can be a confusing process.

First, determine your goals for repayment.

• Do you want to have the lowest-possible monthly payment?
• Do you want to pay off your loans as quickly as possible?
• Would you like your monthly payment amount to adjust as your income changes?
• Are you planning to receive Public Service Loan Forgiveness?Learn more about how to achieve your repayment goals here.

Estimate how much your monthly payment may be here.

CAN I GET MY STUDENT LOANS FORGIVEN?

There are some specific circumstances in which you could have your loan debt reduced or eliminated. Review the available programs to see if you may qualify.

DON'T GET SCAMMED

There are many illegal "debt relief" scam companies that contact students and borrowers and offer help with their student loan debt. These companies will charge you a significant amount of money to do what your loan servicer does for free. Do not work with these companies.

Find more information on student loan scams and what to do if you're contacted by a scammer.

Much like mortgage refinancing, student loan refinancing allows you to take on a new loan that will pay off your existing loan(s). Any benefits, rates, and terms that you had on your existing loan(s) are replaced by the terms, benefits, and rates of the new loan.

1. What are the potential advantages of refinancing student loans?

Any benefits, rates, and terms that you had on your existing student loans are replaced by the benefits, rates, and terms of the new loan. Refinancing can reduce your interest rate, monthly payments, and total debt. In exchange for a shorter repayment term and slightly higher monthly payments, you might qualify for a lower interest rate that further decreases the total amount you pay back.

2. Can I refinance both my federal and private student loans?

Yes. For the time being, there is no refinancing program offered through the federal government. However, federal loan refinancing programs are offered by nonprofits, some states, credit unions, private banks and for-profit companies. Federal loans may be combined with private loans under most refinancing programs, but be careful. You will lose any benefits on your federal loans once they are refinanced.

3. How do I know if refinancing is right for me?

This will depend on your individual goals and circumstances. Typically, refinancing is a good option for those with good credit who have high-rate federal student loans, Graduate or Parent PLUS loans, or high-rate private loans. Interest rates can vary widely from loan to loan. Depending on your individual situation, refinancing higher-rate loans into a lower-rate loans could save you thousands of dollars in costly rate hikes.

4. How do I qualify for a refinancing loan?

If you are looking to refinance your loans, either you or a cosigner will need to have adequate credit. You are likely a strong candidate for refinancing if you’re current on all of your existing debt, have little to no delinquency of your outstanding debts over the past few years, have a credit score at least in the mid-600s, have no public records such as judgments, liens, or bankruptcies on your credit report and are able to document your monthly earnings and meet the lender’s minimum earnings threshold.

5. Do I need a cosigner?

Depending on your credit score and your income, you may need a cosigner. Even if a cosigner isn’t required, it’s possible that having a cosigner will qualify you for a lower rate. Make sure that your cosigner understands that they are equally obligated as you are to pay back the loan.

NONPROFIT REFINANCING OPTIONS

Find a nonprofit refinancing loan here.

Whether or not refinancing is a good move depends on your goals and your personal situation. Use online calculators to help you see how much you can save by refinancing, either in the monthly payment amount or in total borrowing costs.

Nonprofit and state-based organizations offer low-cost refinancing loans. Learn more here.

Financial Path To Graduation: This tool from the Consumer Financial Protection Bureau can help you understand your financial aid offer, give you a plan for how to cover the additional costs, and help you decide what the next steps to take are.

Budgeting: This resource from Federal Student Aid helps teach you about budgeting and explains the benefits of managing your finances well.

College Scorecard: This resource from the Department of Education helps you research colleges, different programs, costs, admissions, and more.

Student Banking: This resource from the Consumer Financial Protection Bureau can help you make smart banking decisions and manage your money wisely.

MyMoney.Gov: This resource from the Treasury Department lays out five principles that serve as the building blocks for managing and growing your money, as well as overall financial wellness and provides additional tools and resources to help along the way.

Repaying Student Loans

Repay Student Debt: This tool from the Consumer Financial Protection Bureau provides information and advice for optimizing how you pay off your student loans based on some basic information about your situation.

Repaying Your Loans: This resource from Federal Student Aid reviews important terminology and explains the loan repayment process in depth.

Scams: This resource from the Consumer Financial Protection Bureau helps to explain common types of scams, what strategies scammers typically use, and how to best protect yourself.

Student Loan Simulator: This tool from Federal Student Aid helps you make decisions about your student loans, including finding a repayment plan that best fits your needs and goals and providing valuable information on whether to consolidate your loans or change repayment plans.