As the acceptance letters start rolling in, it’s time to start thinking about how to pay for your
child’s college education. If this is your first rodeo, you’re going start hearing a lot of terms
that might not make a lot of sense to you. No fear — we’ll help sum them up! These are the
financial aid terms every parents should know.
FAFSA (Free Application for Federal Student Aid)
This is the application that you fill out that summarizes your current financial situation and
starts the process of getting federal financial aid. It may also be used by your state, college,
and private lenders to determine your child’s eligibility for other types of financial aid.
Financial Aid Award Letter
After your FAFSA is processed, each college will provide your child with his or her financial
aid award letter that will outline the cost of attendance and the amount of financial aid the
school is offering.
Direct Subsidized and Unsubsidized Loans
When your child receives their award letter, there may be two aid amounts labeled as
“direct subsidized loan” and “direct unsubsidized loan” which have different interest
repayment conditions.
--Direct Subsidized Loans: Interest on the loan is paid by the U.S. Department of
Education while the student is in school at least half-time, the first six months after
he or she graduates, and during a period of deferment.
--Direct Unsubsidized Loans: The student is responsible for paying the interest
during all periods.
Grants
This is a form of financial aid that is given to a student based on need. They sometimes are
related to the student’s area of study, and most of the time, they don’t have to be repaid
unless the student leaves school.
Work-Study Programs
This form of financial aid allows a student to work part-time during their undergraduate or
graduate studies. Typically, work-study encourages community service work or work related
to the student’s major.
anything you may need. To schedule an appointment with one of our advisors, please call
(516) 932-5130 or email info@americaninvestmentplanners.com.
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