Welcome To Financial Aid 101
Family First Credit Union realizes the importance of a good education. We also realize how confusing it can sometimes be to navigate through the world of financial aid. Below you'll find the answers to the more frequently asked questions you may have. Click on the question to get to the answer, and if you have other questions, don't hesitate to contact us!
What are student loans?
What kinds of loans are there?
When do I start repayment of the loan?
What are the interest rates?
Where does the money come from?
Are there any fees involved?
What are the steps I need to take to get a loan?
How do I pay my loan back?
What is consolidation?
What are some other useful Student Loan and Scholarship Resources?
Q: What are student loans?
A: Student loans help students and parents pay for higher education. Repayment begins after the student leaves college.
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Q: What kinds of loans are there?
A: Federal loans and Private loans. Federal loans are through the government and a financial institution. They are insured by government agencies like HESC. These loans are low interest and help pay the cost of student education.
Federal Stafford loans may pay only for education costs not covered by other sources of financial aid. The federal PLUS loan is also available to those
that qualify. This loan is low-interest and loaned to the parents of a dependent undergraduate
student. This loan is based on credit worthiness, which requires a credit check.
Stafford Loans – Subsidized loans are based on financial need by the school. In most cases it is interest free for the borrower. Interest is paid by the Department of Education if the student is
enrolled at least half-time at an eligible institution or the student is in the grace periods – Repayment will start six months after graduation or withdrawal from school, or the student is in an authorized period of deferment.
Unsubsidized Loans – Unsubsidized loans are not based on financial need and are for students that do not qualify for subsidized loans or need to cover additional educational costs. With this loan interest accrues immediately on the borrower’s account and the borrower has the option of repaying the interest while in school.
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Q: When do I start repayment of the loan?
A: It depends on the loan. If the loan is subsidized you’ll start to pay off when your six months grace period is over or withdrawal from school. With your unsubsidized loan you will have the option to start paying back the interest while you’re in school so you won’t have as much when you are paying back your loans. Otherwise, the loan payments will start six months, or longer depending on the loan after you are done with school.
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Q: What are the interest rates?
A: The interest rates are changing annually. However, right now the rates are at an all time low, so if you are thinking about taking out a Student Loan, now would be the right time.
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Q: Where does the money come from?
A: When you take a loan out through Family First, even the federal loans, the money will come from HESC Guaranty Corporation. They deal only with student loans.
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Q: Are there any fees involved?
A: Each Stafford borrower is subject to an origination fee and a guarantee fee. However, these fees may be waived or reduced by your lender or guarantor. Contact Family First to verify the charges. Fees are deducted directly from the loan disbursement amount.
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Q: What are the steps I need to take to get a loan?
A: You'll need to fill out a Free Application for Federal Student Aid (FAFSA). You can fill out the application online at www.fafsa.ed.gov. Be sure to remember the PIN that is assigned to you with FAFSA. You will have to use it for every year you apply for financial aid. This will ensure you are placed with a financial institution you can trust.
 The application usually takes several weeks to process, so make sure you fill it out early. The best time to do this is after you have completed taxes. After the school you would like to attend sends you a SAR (Student Aid Report), read it carefully and decide which types of financial aid you think would work best for you and make any changes. Bring it into Family First for assistance in choosing.
Keep in contact with the financial aid office. They will send you documents regarding guarantors (the institutions that give you money). Keep a copy of all the paperwork. Your school will also send you a promissory note.
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Q: How do I pay back my loan?
A: You will receive statements and letters in the mail informing you of your repayment choices. You may start the payments, consolidate, or defer your payments. Some situations may allow you to defer your payments. If you qualify you will need to apply for a deferment.
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Q: What is consolidation?
A: Consolidation means to combine all of your loans, whether they are federal or private, into one loan. There are some advantages to consolidating: ease of one payment, lower monthly payments, locked interest rate, and repayment options. There also may be some added expenses if you extend the length of your loan.
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Q: What are some other useful Student Loan and Scholarship Resources?
A: Click on the Helpful Links button above, or here, to see a list of web pages that offer information about student financial aid.
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