Title IV programs offer loans and grants to students.
Paying for college expenses places a burden on thousands of Americans each year. Because of this, many college students and parents take advantage of the federal government's student loan options to finance tuition costs. Title IV programs designed to aid students meeting certain criteria offer loans and grants. Any loans obtained from a Title IV program create debt to repay after graduation.
Types
Title IV federal student aid programs are grant, loan, and work study options. Grants are awarded based first on financial need and secondly on course of study. The federal Pell grants aid undergraduate students coming from low-income families. Once a student becomes eligible, there are other grant options available for natural science, math and teaching students. Secondly, direct loan options are available under Title IV. The loan terms differ based on the type of loan. Finally, work-study programs are available to students. Universities partner with the federal student aid programs to offer payment for tuition, room and board.
Grants Vs. Loans
Federal grants, such as the Pell grant, are not repaid. Under the rules of the Pell grant program, a limit is set for the maximum amount any student can earn in one school year. The actual amount awarded is based upon financial need of the individual and the specific cost of education. Federal loans, on the other hand, do require repayment. However, like the Pell grants, loans also have a maximum amount that a student can borrow at at time. Interest will be charged on the loan amount. Payments generally begin six months after graduation. This time is known as the "grace period."
Considerations
Sometimes both grants and loans cannot completely pay for education expenses. In this case, the student must find the means to pay for the remaining costs. Private loans are available to students who have or have not used federal money. Private loans are not associated with the Title IV program. Although it is completely acceptable to use both federal and private loans, when repayment begins, the borrower will be unable to consolidate the two types into one loan.
Obtaining Funds
Any Title IV funds granted must be approved first. Any student wishing to apply for a federal grant or loan must complete a FASFA application. This application involves filling out various information about the student and both of the student's parents. To complete the application you will need tax statements, such as the 1020, for the student's parents and the student, if applicable. FAFSA enforces deadlines for application submission prior to the beginning of each school year.
Repaying Title IV Debt
Any federal loans obtained during undergraduate studies are subject to interest charges. Repayment of federal loans begins six months after the student graduates, or ceases to be enrolled at least half-time in classes. If you are unable to being payments at this time, or cannot afford the full payment, programs are available to help with federal loans. Deferment and graduated repayment plans offer even more aid to graduates having difficulty finding a job.
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