Is there ever a chance you will not have to pay back your student loans?  The answer is: YES!
Depending on the type of student loan you have and when you obtained it, you may be able to cancel all or a portion of your loan under one of the following circumstances:

* The former student for whom the loan was taken has died.
* You become totally and permanently disabled.
* Your school closed before you could complete your program of study.
* Your school falsely certified that you were eligible for a student loan.
* You left school and were entitled to a refund but never received the money.
* You teach in a Department of Education-approved school serving low-income students or in designated teacher shortage areas (other types of teacher cancellations are available for Perkins loans).

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There are ways you can lessen the amount of student loans you need. Once you are accepted at an accredited university, college, or community college, talk to the financial aid department. There are several scholarships and grants that are based on income and may make it possible not to need as high a student loan.

The Pell grant is one of the federal programs most schools automatically file for students. The maximum award is over four thousand dollars. However, not all students will get the maximum amount. Many factors are considered when a student applies. With few exceptions, a part time student must be carrying at least a half time load.  Another factor that is considered is the actual college costs for both tuition and books.

Unlike a student loan, a Pell grant is just that, a grant. It is never repaid. It is up to the individual institution as to how the money is applied. You may either receive a check or have it applied directly to your school expenses. The various options will be discussed between the student and financial aid officer. Federal law required payments to be made a minimum of twice per academic year.

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There is a little known option available to students who need financial assistance.  This is a direct loan available from the Department of Education. .

You can obtain an application by either calling the Department of Education or going online. Doing a Google search will bring you to their website. From there, you can get all the information you need to apply.

You can apply for two different types of direct loans - subsidized and unsubsidized.

A subsidized direct loan means that the amount of credit you receive is based on the tuition you need.

As long as you are in school, you will not be required to make a payment and you will not be charged interest. This is the best option.

An unsubsidized direct loan means that there is a limit to the amount of money you can borrow. With an unsubsidized loan, the amount that you require is not taken into consideration.

There is considerable interest charged to both these types of credits that you will be responsible for paying.

Loan Amount Restrictions

The maximum amount for a subsidized loan varies depends on what year you are in college. An undergraduate can receive a maximum of $2,625, and the maximum you can receive on an unsubsidized loan is $4,000.

For the second year of college the maximum increases to $3,500 for a subsidized direct loan and $5,000 for an unsubsidized loan. For the remaining years that you are in college, a subsidized loan remains at $5,500. The limit for an unsubsidized direct loan does not increase for the remaining years.

If you are a Graduate or professional student, the maximum you can borrow on a subsidized loan is $8,500 per academic year. Graduate and professional students who apply for an unsubsidized direct loan can borrow up to $10,000 per year.

The student loan application process is not as difficult as it sounds. Although it can be done through a bank or credit union, it is best to do it directly from the educational institution. Once the application for admission is accepted, the next step is at the financial aid office. The personnel know the most direct and simplest methods of securing funds. When the aid request is sent directly from the school, the letterhead ensures the quickest response.

Once a person has an acceptance letter, the financial aid office can offer a list of various sources to pay for the education. Prior to entering this office, be sure to have as much of the background paperwork with you. These include your tax returns for the previous year as well as those of your parents. A parent or guardians income is usually considered unless the student is married or has been living separately for a period of time exceeding twelve months.

Three primary factors will determine the path decided upon for securing funds. These are; student’s status, financial needs, and grade point from high school. The student’s status refers to full or part-time. The course of study also comes into play because of special fees associated with certain scholastic paths such as lab or equipment needs. A prospective students high school grade point will help determine the student’s eligibility for grants and scholarships. The financial needs will consider the prospective student as well as parents and/or spousal income as well.

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