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How Does FAFSA Affect My College Financing?

Possibly the most important document in applying for college financing is your Free Application for Federal Student Aid, otherwise known as FAFSA. The FAFSA is simply a form that current and soon to be college students fill out every year to determine their eligibility for federal student aid. Most states use the FAFSA in regards to determining eligibility for non-federal student aid as well. Once you’ve filled out and submitted your FAFSA, you’ll receive a Student Aid Report or SAR. Your SAR will basically let you and your colleges know if you are eligible for student aid and how much you can get. Keep in mind that financial aid is typically rewarded on a first come, first served basis so you want to fill out your FAFSA and apply as early as possible, especially if you know you’ll need a great deal of aid.

Choosing Your Lender

After you’ve picked out your school and know how much you’ll need to borrow, you’ll have to pick out your lender. Since you’ll more than likely stick with the same lender throughout your college education, it’s important to do your homework in finding the right one now. Here are some things to consider when choosing your lender:

  • In the situation that you’ll be taking out a private student loan as well, does the lender offer combined billing for both types of loan?
  • Does the lender offer any type of discount or reduction for making your payments on time?
  • Will your lender eventually sell your loan to another company? Some lenders buy loans from other companies, which could cause you a hassle.
  • Find out if your lender provides you with savings or checking account for your loan, as you’ll probably need quick access to your account.
  • Will your lender pay for some of the fees associated with a federal loan, such as the origination fee? These fees can really add up so it’s always good to have a lender pays for them or at least includes them in the loan.

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