Student Loans and Grants

Everyone has a right to an education, however how far a person can actually go in their studies is often dictated by their financial situation, and not every student is in a position to be able to afford their ongoing education.

There are two common methods of obtaining financing to be able to continue your education, you can either apply for a state funded grant to assist with some or all of the cost of your education, or you can find a student loan that will give you the financing you need, but at a lower rate of interest then a conventional loan. Lets take a look at what each of these options offer you.

Student Loans

A loan, as you know, has to be repaid, and this is the biggest distinction between loans and grants for educational purposes. A student taking a loan can expect several benefits over taking a conventional loan, the first of which is lower interest rates, allowing the student to repay the money without excessive interest charges being made. The second advantage is the ability to defer the loan repayments until after your education is complete, which can prove a huge benefit to those with limited financing.

Obtaining a student loan is generally easier than a conventional loan that you might need for something other than education. However the commitment to the loan remains the same, and you must be aware that once repayments on become due, which is usually between six and twelve months after you education is complete, you have the same obligation to pay as with any other loan, and the penalties for non-payment are equally severe.

Student loans can be obtained from either the federal government, or privately from a vast number of lenders throughout the country. There are several federal government loan schemes available which you can read more about within the pages of our website. If a federal loan is not possible for some reason you can turn to a private lender, and while the terms for the loan will not be as favourable as those from the government, you will at least be able to finance your education, and still on better terms than for conventional loans.

Federal Grants

Grants differ from loans in that for the most part they do not need to be repaid. There are of course restrictions on who can apply, with preference given to those most financially in need. If you or your immediate family are considered to have sufficient financial assets to allow you to pay for your education yourself, then you will most likely not be approved for a federal grant.

The most common type of federal grant is the Pell Grant. Currently the maximum amount that you can receive via a Pell Grant is $5,550 for the 2011/2012 financial year. The amount you will actually receive though will depend on your specific financial need, and if you are deemed to be able to afford some of your education costs yourself, you will be awarded an amount proportionate to what you can pay with your own funds.

The second most common federal grant is the FSEOG, this grant can be received in addition to the Pell grant, and is reserved for those with the most extreme financial need. Payments go up to a maximum of $4,000 per year, and like a Pell grant, the amount you actually receive will depend on your own personal financial circumstances and what ability you have to pay for some of your education costs yourself.

Grants of either type are typically given directly to your school for dispersement. Depending on your circumstances the school may or may not give some or all of the grant that has been awarded to you.

To find out more about student loans, or your options for obtaining grant funding, check out the rest of our website, if you have any questions regarding your own particular circumstances and your likelihood of receiving a grant or a loan, you should consult the appropriate department within your intended school or college.