The FAFSA opens on October 1 every year and you must re-submit an application every year you’re in school to claim your benefits. Check the website to ensure you submit your applications before the deadline on June 30.

Applying for the FAFSA is the first place you should turn to for help to cover the costs of your college education. These loans are divided into subsidized and unsubsidized options, which carry different terms based on financial need.

Note: Not everyone is eligible for federal financial student aid. Among other requirements, students must be U.S. citizens or eligible residents. DACA recipients are not eligible for federal loans, though DACA recipients and international students who find themselves in need of financial assistance may be eligible for private student loans with Ascent.

Both subsidized and unsubsidized loans are sometimes called Stafford loans. Some students may qualify for one or both, depending on your financial situation. Let’s break each one down:

Direct Subsidized Loans

• Undergraduate school, community colleges, or trade schools
• Based on financial online payday NY need
• Amount offered determined by your school
• The Department of Education pays interest while you study at least half-time, for six months after you leave school, and during any periods of deferment

Direct Unsubsidized Loans

• Not based on financial need
• Interest accrues while in school with no grace period. For most federal student loans, you have a six-month grace period before you have to begin making payments. This grace period gives you time to get financially settled and to select your repayment plan.

What is FAFSA? When is it due? Find answers to these questions and more in our FAFSA 101 crash course.

Private Student Loans

Private school loans can be used to fill the gap between the cost of your education and the amount you receive from completing the FAFSA. You should also exhaust your scholarship, grant, and federal options before applying for private student loans.

Unlike federal student loans, you typically need to meet lender-specific criteria and undergo a credit check when applying for a private student loan. These circumstances may vary depending on the private student loan company you choose to work with.

However, private student loan companies may offer more flexible repayment options compared to federal loans. Another big difference is that private loans often provide the option of variable interest rates, which means your rates may increase or decrease based on ount of the loan you’re responsible for repaying, but may be beneficial if federal loan interest rates increase over the course of your loan.

Variable rates aren’t offered for federal loans, which means if federal student loan interest rates go down, you’re stuck with your initial loan rate.

Now that we’ve covered the basics of financial aid, let’s dive into understanding how a private student loan works and why it can be an important factor in making college work for you.

What to Look for in a Private Student Loan

Once you’ve applied for and accepted any scholarships, grants, and federal loans, your next step should be to compare this total award amount, or the breakdown of the types and amounts of aid being offered, with your expected college expenses.

If you haven’t secured enough money to cover the cost of tuition, room and board, books, and other expenses, and you’re left to pay out of pocket, a private student loan may help you cover this gap.

Keep in mind, not all loans are created equal, and research is essential. It’s important to choose the loan provider that you’re eligible to apply for with loan options that can meet your needs.