Federal Student Loan Application Process

Federal Student Loan Application Process

Most students who attend college do not have the funds necessary to pay for it themselves.

Most students who attend college do not have the funds necessary to pay for it themselves. This is especially true of international students. Chances are, these students cannot rely on their families to pay for their educations, either. For this reason, many students take out student loans in order to pay for their educations. The process for applying for student loans varies depending on whether you are applying for federal or private loans.

The process for applying for federal student loans is as follows:


The first thing you will have to do is fill out the Free Application for Federal Student Aid, or FAFSA. This is a sheet that helps you to identify what programs and loans you can qualify for that will help you attend college. You can apply for the FAFSA online.

Remember that it is important to fill out the FAFSA as soon as possible in order to be qualified for your next semester of school. The form requires a lot of information, some of which will need to be taken from tax papers and financial forms, so it’s a good idea to gather that information before you begin. The FAFSA has to be completed each year you are in school, but it will be easier after the first year.

Student Aid Report

After you fill out the FAFSA, the schools to which you apply will receive a Student Aid Report containing your expected family contribution, or EFC. This is the amount of money you or your family should be able to pay for your education. If your application is incomplete, your SAR will not include an EFC, but it will tell you what you need to do in order to resolve any issues.

When you receive your SAR, review it carefully to make sure that it is correct and complete. The school(s) you listed on your FAFSA will use your information to determine your eligibility for federal—and possibly nonfederal—financial aid. Schools may ask you to verify the accuracy of the date you provide on the FAFSA, so you need to be certain that the information is correct.

Financial Aid Applications

The schools will then send you letters that include information regarding financial aid options and grant programs. You will need to secure those applications and begin the process as soon as possible.

Accepting a Loan

After your school notifies you of the loan amounts that it is offering, generally in an “award letter” that lists all of your proposed financial aid awards (your award package), you should evaluate the aid offer carefully. Keep in mind that whatever you borrow must be paid back with interest. If your living expenses are not as high as the standard allowance projected by your school, you may not have to borrow as much as the amount in the award letter.

You have the right to decline the loan or to request a lower loan amount. Your school will let you know how to do this in the award letter.


Entrance Counseling

With the exception of parent Direct PLUS loan borrowers, if you haven’t received a loan before, you must receive entrance counseling before your school can make the first disbursement of your loan. Entrance counseling helps you to understand your responsibilities regarding your loan. Your school may require in-person counseling or you may be able to complete the counseling online.

Loan Disbursement

If you do qualify for federal loans, the money will generally be sent to the school, and the school will disburse the money to you. The money will go towards helping you pay for the cost of the semester, as well as books and supplies and, in some cases, living expenses.

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