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 Going to college is a great career move - but it's also an expensive one making applying for a student loan a necessity for most families. If you're wondering how long it takes to apply and what kinds of information you will need handy when filling out an application then keep on reading. Here is one of those "all you need to know about applying for a student loan" articles.
Student Loan Statistics
According to Census 2000, individuals with a bachelor's degree earn nearly 70% more on than those with a high school diploma. But getting a college degree comes at a cost - and a high one. CollegeBoard.com statistics indicate the average cost to attend a private college is just a little over $24,000 - that makes applying for a student loan an important first step for most of us.
So what do we know so far? Getting a college degree provides us with a great financial benefit, but the cost of college is high. However, $161 billion in financial aid (including $66 billion in loans) was made available to students in 2007 / 2008 according to the Department of Education. With all that money available, let's take a closer look at student loan application process.
Student Loan Applications
When you're filling out an application for a student or college loan, there are three things you need to keep in mind:
- Timeline for Applying - you need to be aware of when you need to apply for a student loan and how long the process takes until you hear back on your loan application.
- Documents Needed for Applying - what are the documents you need to have prepared when you apply for a student loan.
- Student Loan Reports - the status reporting for a loan application which includes the student aid report, expected family contribution and the award letter.
We're going to talk about each of these steps in the student loan process in a little more detail in the paragraphs below.
Timeline for Applying for a Student Loan
People can argue that the preparation starts in grammar school with good study habits. We might agree with that notion, but we are going to reel forward a bit - to senior year in college.
In October or November, it's time to register for the SATs, it's also a good time to start to finalize your list of colleges that you'd like to attend. If you're going for an early decision, then you might have to apply to school as early as October. If that's the case, you might hear as early as December on your application.
In January, the timeline for applying for a student loan starts. Between January 1st and February 15th, you should fill out your Free Application for Student Financial Aid or FAFSFA. You can do this right over the web on the FAFSA website.
Documents Needed for Student Loans
In order to complete your application for a student loan, you will need to gather up certain documentation for the FAFSA. For the calendar years 2007 / 2008, you need to use 2006 information including:
- 2006 W-2 Forms and other records of income
- 2006 Federal Income Tax Return - IRS Form 1040
- If you are a dependent student, you will need your parent's Form 1040
- Bank statements
- Investment and mortgage information (stocks, bonds, and other investment records)
- Social Security number
According to the Department of Education, it should take less than 1 hour to complete your application for a student loan over the web.
Student Aid Report
If you completed your FASFA in January, you should receive a Student Aid Report or SAR some time in February or roughly 4 weeks after completing your application. The student aid report should accurately reflect the information you supplied during the application process.
At this point, you should correct any errors you find on your student aid report and send it back to your FAFSA processor. February is also a good time to complete any scholarship applications and check back with the financial aid offices of the colleges to which you applied to make sure they have everything they need
Expected Family Contribution
Your finalized student aid report will contain notice of your expected family contribution. The expected family contribution is based on the information you supplied in the FAFSA and is the information that will be used by the financial aid offices to determine their offers of financial aid.
Award Letters for Student Aid
By mid-April you should start to hear back from colleges letting you know if you've been accepted for enrollment. At this point it's time to compare acceptance terms, scholarship offers and offers of financial aid as outlined in Award Letters. This pretty much ends the cycle of applying for a student loan.
Colleges will consider your expected family contribution and the cost of enrollment when developing an award letter. You need to carefully consider all the information at hand before making a decision to enroll. Normally enrollment decisions are required by May 1st and you may be required to send in a non-refundable deposit towards your freshman tuition.
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