Ultimate Guide to FAFSA and Student Loans: Making sense of it all

Dive into the essentials of the student loan application process, from tackling FAFSA to understanding loan offers. This guide is here to make sense of it all for you.

Arro Team

Feb 20, 2024

Exploring student loans can feel daunting and tricky, but you're not alone. Let’s break down all things student loans, dive into the FAFSA form, check out your loan options, and discover helpful resources to make smart choices. Arro is with you at every step to guide you through.

Essential Checklist for Applying for Student Loans 📝

Let's start with the basics. Here’s what you need to get the ball rolling:

Financial documents: Gather your tax returns, bank statements, and Social Security number. 💼💰
FAFSA time – your gateway to federal financial aid. 📑🖊️
Weigh your loan options – not all offers are created equal. 🤔
School selection – it's about finding the right fit for you. 🏫

Unlocking Financial Aid with FAFSA 🌐

The free Application for Federal Student Aid (FAFSA) is the key to securing federal loans, grants, and work-study opportunities. This is the very first step in understanding what federal financial aid you are eligible for based on your financial situation. Don’t miss out on potential aid by waiting too long to apply. Remember, deadlines matter – for the 2024-2025 award year, it's June 30, 2024. ⏰📅

Filling Out FAFSA: A Step-by-Step Guide 🚶‍♂️

FAFSA Application: Start by filling out the free FAFSA application to apply for financial aid through the FAFSA at Apply for Aid - FAFSA

Begin with personal details – name, DOB, and more. 📋👶
Provide a list of prospective schools & where your next chapter may unfold 🏫
Determine your dependency status – this affects the information required. 🤔
If you’re a dependent, you’ll need your parents' financial information. 🏦
Enter financial data including taxes, income, and assets. 📑
Review, sign electronically, and submit. Congratulations, you’re on your way! ✅

Understanding Loan Options & Offers 💸

After applying for FAFSA, schools that you have applied and have been accepted to will send you financial aid offers. Once you receive those offers, here is what is important to evaluate

Look at the total cost & the total package of aid offered. 🏫💳
Understand the type of loans – subsidized means that interest isn’t being added while you are in school studying. 📈
Familiarize yourself with loan limits and interest rates. 📉
- Undergraduate and Graduate Loans: Understand the types of loans that are available for both undergraduate & graduate students by heading over to Undergraduate and Graduate Loans through FASFA’s Website.
- PLUS Loans: This is a type of federal loan that graduate students or parents of undergrads can use to pay for college costs that other financial aid doesn't cover. It's helpful for those who need more money to fully pay for school, and is a way to get a government-backed loan with set interest rates and several ways to pay it back. See full details at PLUS Loan application & requirements
- Master Promissory Note (MPN): An MPN is a paper you sign (this is a legal document) to agree to pay back your federal student loans, along with any interest and fees. You only need to sign it once, and it covers any federal loans you take out while in college.
  - Learn about and complete your Master Promissory Note, a key step in securing your loans, at MPN.

Before You Borrow: Know What You're Getting Into 📚

Loan Entrance Counseling

Loan entrance counseling is a must-do, and is actually required for anyone getting a federal student loan for the first time. This counseling teaches you about your loan, how to handle your financial aid money while in school, and how to pay back what you owe. This is a critical step that helps you understand what you're signing up for and how to manage your loan with confidence and responsibly.

Annual Student Loan Acknowledgment

The Annual Student Loan Acknowledgment lets you see how much money you're borrowing in student loans every year. It's a way to keep track of your debt and think about how it affects your future money situation. This helps you make smart choices about borrowing and paying back your loans.

However, according to the important notice on the site states, “The Annual Student Loan Acknowledgement process continues to be available on StudentAid.gov. However, borrower completion of the Annual Student Loan Acknowledgment prior to disbursement will not be required for the 2022–23 award year and beyond.”

Deciding on the Right School 🤔🎓

Choosing a school involves much more than just academics:

Consider each school’s programs and how they align with your career & future goals. 📚
Look at graduation and employment rates. 🎓💼
Campus culture can significantly impact your college experience. 🏰🌟

The Importance of Affordability 💸🌟

Aim for a school that matches your financial reality and future earning potential. It’s about making a choice that allows you to thrive both academically and financially.

Exploring Grants: Free Money for College 🎁

Pell Grants: Pell Grants are federal grants given to undergraduate students who need financial help to pay for college, and they don't have to be paid back.
TEACH Grants: Planning to teach? See if you qualify for a TEACH Grant

Tools and Calculators to Plan Your Financial Aid 🛠️

Federal Student Aid Estimator: This estimator can help you understand and figure out how much federal financial aid you might receive for college before you apply, making budgeting and planning for the future much easier.
Loan Simulator: This simulator can show you repayment plans and strategies, helping you find the best way to manage and pay off your student loans when it comes time.

Summing It Up with Arro 📌

Applying for student loans and FAFSA can seem daunting, but you are not alone. Arro is here to help make finance, credit, and loans easy to understand - and be a trusted resource. We are here to guide and inform you on all things credit, finance, and loans.

Start Your Credit Journey with Arro

Apply for an Arro Card today! Whether you're managing student loans or looking to kick start your credit building journey, Arro is here to support you every step of the way.

Ready for a simple start to credit? Download the Arro App from the iOS App Store or Google Play and apply for your Arro credit card today!