Start Early

You’ll want to start as soon as possible. You can start applying on October 1 for the upcoming school year, and you’ll want to get your paperwork in as soon as you can. Some funds are distributed on a first come first served basis, so if you want access to some of the limited grants, it will be necessary to get in there early. 

Apply Online

As for the application itself, the easiest way to apply is online. The website itself is very helpful, but to make things even easier you’ll need some items to get started. Make sure you have your social security number, driver’s license number, federal tax information– including returns for both parents and students, records of any untaxed income, and financial information. This could include accounts, investments, and real estate among other things.

The 3 Main Types of Financial Aid

There are three main types of aid available on a federal level and those are grants, loans, and work-study. There are many kinds of each, but here are the basics.

Grants

Grants are awesome. They’re awarded based on need, and they generally don’t have to be repaid. They’re limited, though, and apply to very specific demographics. Pell Grants, for example, are the most common type of federal grants and are awarded to first-time undergraduate students. Those are based on need, so there’s no extra work to be done. Grants work similarly to scholarships.

Loans

Loans are exactly what you imagine, money that needs to be paid back. There are two types of loans to consider, subsidized and unsubsidized. Subsidized loans have the interest paid by the government as long as the borrower (the student) is in school. That means they won’t accumulate extra charges on the loan. When they graduate, or if they leave school, and start to repay the amount borrowed then the interest will start to accrue. Unsubsidized means, you guessed it, interest starts to accrue right away. These can end up being more expensive in the long run, but sometimes are the only option available. 

Work-Study

Work-study means that the student is given a job through the school that is paid for with government funds. Consider it a grant that you work for. This type of aid is best used for things like housing and food since they’ll receive a paycheck rather than being paid all at once.

Disbursement

Speaking of getting paid, the money will arrive at a set date, usually within the first week of school but it depends on your institution. The school is given the funds and must distribute them within the first month of your first semester. They also must split it up and deliver some in the second semester, trimester, or whatever system your school uses.

After paying for tuition, the money technically belongs to the student, to do with what they please. This can be a great opportunity to teach a lesson about budgeting since that amount will likely have to last an entire semester. If you or your student is looking for a checking account to help manage their financial aid for the new school year, RMCU has a checking account that is right for you.