What financial options are available if I don't receive a scholarship to college?

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Financial Options Available To Students With No Scholarship Program

Expected Family Contribution (EFC) determines a student's aid package
Over the years, college education has become more and more expensive but in this competitive world there is no alternative to a good educational grinding in the college culminating in a diploma or a degree. The federal government has been providing financial aid to deserving and needy families for this purpose but this academic school year, the aid packages of some families will be restricted due to the provisions of new federal guidelines which have raised the eligibility for financial aid.

The expected family contribution (EFC) is determined when a student submits a free application for Federal Student Aid and based on this EFC, the various forms of federal and state aids such as Pell grants and Stafford loans are finalized. A student's financial aid packet in a private school is also based on EFC.

Pell Grants

Among the grants for colleges, Pell grant is the most prevalent federal grant. It is meant for undergraduate studies and it is determined according to your financial needs. Part-time students can also avail of this grant which has an upper limit of $3000 per year. You can avail of this grant in conjunction with other financial aids also.

Federal Supplemental Educational Opportunity Grant

This grant, also known as SEOG, is similar to the Pell grant and is meant for undergraduate studies being based on financial need. With an upper limit of $1000 per year, SEOG can also be combined with financial aids or school grants.

Based on some factors such as, financial need, merit and grades and the study programs, financial grants are also provided by colleges and universities. In order to apply for any of the grants you should fill up a financial aid form (FAFSA). You can get all the information, including deadlines for submitting the application, online and take the help of your college to fill up the form.

Some other loans which are need-based

1.  Perkins loan: this loan is given by the university from out of the money received from the government.
    
2. Subsidized Stafford loan: Private lenders who are guaranteed by a non-profit state or federal agency give out such loans to the students. Details are available with the financial aid office.
    
3. Subsidized Direct Loan: Such loans are given directly by the federal government without going through the private lenders.

The federal government is responsible for the interest on the Stafford and Direct Loans for the time the student stays in school.

Loans which are not need-based

1.  Unsubsidized Stafford/Direct Loans: Payment of interest is the responsibility of the student while in school and the payment can be deferred resulting in capitalization of the interest with the principal.
    
2. Parent Loan (PLUS): After a credit check, parents can get this loan from the federal government.
    
3. Private loans: Private loans with a higher interest rate are available if you are unable to get other loans but only after a credit check of the students and parents who are responsible for the interest payments while the students are in school.

Student Loan Repayments

At the "exit interview" after the end of the school program, the following will be reviewed by the financial aid officer: all loans taken, expected payment amounts and the borrower's rights and responsibilities. Repayments could either be of the same amount each month for 10 years or in graduated amounts rising every two years.