Qualifications for Financial Aid and Student Loans

financial aidIf federal and private sources handed out money to each and every student who asked for assistance, it’s likely that the funds would run out well before each student got the help that he/she needed. As a result, administrators pull together a list of qualifications that students must meet before they can be provided with the financial aid they need for school. The qualifications for each type of student aid program can be a little different, and that’s a good thing, as it ensures that almost every student out there who needs a little help can get that assistance, either from one type of program or another. These are the qualifications that apply to some of the most common types of student financial aid available.

Qualifications for Student Loans in the Private Sector

Student loans that originate with private banks are quite a bit different than those that originate from the U.S. Department of Education. Instead of dipping into money from federal sources, the funding for private loans comes from private individuals running banks, and those loans are made with profitability in mind. It’s not surprising then that students are required to meet a specific set of financial eligibility requirements before they can take out a private loan. The banks want to make sure that students will pay back the money they borrow, and setting high eligibility limits can help banks to make sure that the loans they provide involve an acceptable amount of risk.

In an article on the issue in Bankrate, experts suggest that a student’s credit score can’t be lower than 650 in order to land a private loan. This sort of score is provided to people with a history of paying their debts in a timely manner and with bringing in a decent amount

of money on a regular basis. Students who don’t have this kind of score might need to find a willing cosigner who does have good credit, and that might convince the bank officials that the loan isn’t as risky as it might seem.

In addition to issues involving a credit score, most banks have eligibility requirements that mirror those provided by the U.S. Department of Education. The Wells Fargo Collegiate Loan, for example, requires students to provide proof of enrollment in a qualified program, U.S. citizenship (or temporary resident alien status) and a credit check and/or cosigner.

Since the list of requirements can vary from bank to bank, students might need to visit several before they find the right sort of loan that they can and do qualify for. Our “Find a Student Loan” tool can also be vital, as it allows students to compare one private loan product with another.

Qualifications for Scholarships

scholarshipsUnlike loans, which require repayment, scholarships are forms of merit-based aid that do not require an eventual repayment plan. Students can use this money to pay for school without ever worrying about how they might pay back their debts once graduation arrives. Since these products are a form of free money, they’re quite popular among students, and not surprisingly, the competition can be fierce. For example, according to an analysis in The Washington Post, only about 1 student in 10 wins a private scholarship for an undergraduate bachelor’s degree. That’s an incredibly low number.

Most scholarships are based on student merit, meaning that students must excel at something in order to tap into that money. Some students find that they’re outstanding in their field of study, as they have high test scores and grades, and this allows them to get the scholarship money they need. Others do well in a sport, and they obtain a scholarship for academics while they boost the prestige of the school on the field of play. Still others have some sort of artistic prowess, and while that might not involve their major field of study, they might get scholarships due to essays, paintings or sculptures.

It’s almost impossible to list the qualifications required for each and every scholarship, as there are literally hundreds available, and they all come with their own terms and obligations. Students who would like to know more are encouraged to visit the SimpleTuition Scholarship Center, where they can learn more about the programs available for their schools and their talents. In general, however, it’s wise for students who want to use scholarships to focus on excellence. The better they can shine, the more likely it will be that they’ll get some kind of scholarship.

Qualifications for Work/Study Programs

work studyIt’s not uncommon for students to use employment to help them pay their bills for tuition and related expenses. Work/study programs are similar, as they also involve employment, but they’re also a form of federal aid. Students in work/study programs aren’t required to fight for jobs, as their assignments might simply be given to them, and the jobs they have might involve education or campus work, so they might be slightly more rewarding than entry-level jobs in the private sector. In some cases, too, money that students might get for their work might be slightly higher than the money they’d get in the private marketplace. Additionally, these programs help to ensure that students don’t work so much that they can’t attend to their coursework.

The U.S. Department of Education suggests that about 3,400 postsecondary institutions participate in this program, which means that some schools choose not to accept this type of aid. If the school does participate, students must again meet the basic qualifications involved in order to obtain any kind of federal aid, and they must also meet specific eligibility requirements in terms of financial need. There is no clear-cut, printed cutoff for that need, but it’s reasonable to suggest that students with exceptional need would be the primary focus of this type of program.

Here to Help

Reading through qualifications like this can be difficult, particularly for students who are unaware of the basic ins and outs of financial aid as a whole. We’re here to help. We’ve pulled together a significant amount of information on the financial aid process on this website, and we have a number of tools that can help you to find the loans and scholarships you can use to cover your education bill. Please browse our site, and contact us if you have any questions.

 

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