7 Phases of College Financial Aid Image

7 Phases of College Financial Aid Award Packaging

June 22, 2018

1. Apply

The Free Application for Federal Student Aid (FAFSA) is for students who are going to college.  You must complete the FAFSA to get certain types of financial aid. Your information is used to see if you can get financial aid. Financial aid can be used to help pay for expenses for attending a college or university. FAFSA is available at www.fafsa.ed.gov on October 1st of each year (this new availability date starts for the 2017-18 school year).

2. Sign Master Promissory Note

The Master Promissory Note (MPN) is a legal document that you sign. It means that you agree to repay a loan, interest and fees. It also explains the terms and conditions of a loan. It can be used to agree to terms for all direct loans or multiple loans while you are in college.

3. Payment of Funds

Complete the first few steps of the loan process. Then, your school will be paid with your financial aid funds (grants, scholarships, loans). This usually happens several weeks after classes begin. If you have money left in your student loans account after your tuition and fees are paid, the rest of the money will be sent to you. You will get this money in the form of a refund check. You must repay this refund check with interest to the lender after your grace period.

4. Saving

There are ways you can save when you go to college: 

  • Use items from home for your dorm,
  • Rent textbooks or buy used ones,
  • Pick a less-expensive dorm option,
  • Request a roommate,
  • Look for a summer job,
  • Participate in work-study on campus, and
  • Complete your FAFSA as soon as possible. This will ensure you receive all available funding.

5. Grace Period

The grace period is the time when you do not have to make loan payments. This usually takes place while you are in school and several months after graduation. The grace period may end if you go to school less than half-time or leave school before you graduate.

6. Repay Student Loans

The repayment process for student loans is the amount of time you have to repay a loan with interest. Know this part of the loan process when you decide to get a student loan.

7. Payment of Debt in Full

You usually have 10 years to repay a federal student loan. Some programs extend the period to 25 years.

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