Frequently Asked Question

"Frequently Asked Question" submitted by SchoolGrantsfor Editorial Team and last updated on Sunday 8th January 2012

Table of Contents

Many visitors write in with questions regarding the financial aid process. In order to better serve the community, we have compiled a short list of the more frequently asked questions we receive. Can't find an answer to your question? Try posting it to our Message Board or you may also use our feedback form.

Are all schools eligible to offer federal financial aid?

No. The school must be accredited by an agency recognized by the Secretary of Education and eligible to participate in federal student aid programs. Federal financial aid is available only to students attending eligible institutions. Call the Federal Student Financial Aid Information Center toll-free to find out if a particular school is an eligible institution (1-800-4FED-AID).

How do I get my hands on my official transcript? And what is it?

The transcript is a list of your courses and grades, an explanation of the school's grading scale, and a list of the school's course offerings. It's your official high school record of success. Your guidance counselor can assist you in how to obtain it.

What is the FAFSA?

The FAFSA (Free Application for Federal Student Aid) is a federal form you must fill out to qualify for most student financial aid.

Should I wait until income tax forms have been completed before submitting the FAFSA?

No. Submit the FAFSA as soon as possible after January 1. Although it is better to do your taxes early, it is okay to use estimates of your income, so long as they aren't far off from the actual values. Keep in mind that if you wait too long, you may miss state aid deadlines. Most states require the FAFSA to be submitted by March 1, and some even as soon as early or mid-February. Many colleges award aid on a first-come, first-serve basis.

Do I have to submit a new FAFSA every year?

If you applied for aid last year, you may not have to complete an entire FAFSA, but can instead use a Renewal FAFSA. If you receive a Renewal FAFSA, you're only required to provide new financial data and non-financial information. You can leave information that has not changed from the prior year.

How do I apply for Federal aid?

All students interested in applying for federal financial assistance must complete the Free Application for Federal Student Aid (FAFSA). You may either complete a paper application (available from your high school's guidance office) or via the internet.

For all the information you need to know about the financial aid application process see: Applying for Financial Aid.

Applying over the internet is the fastest way to get your FAFSA processed. To apply online, go to FAFSA on the Web The FAFSA will ask you (and your parents if you are a dependent student) for information such as your household size, number in college and income and asset information. Follow the directions carefully as making corrections is a time consuming process.

Where can I find scholarships?

Finding scholarships (grant money other than that provided by your college or university) is a challenging, time consuming, but oh so worthwhile task. My recommendation is to use one of the many free scholarship search services available on the internet. They will compile a profile of your activities, interests, achievements and academics to match you to scholarship sources that you may be eligible for. A definitive list of scholarship search services can be found at:
Scholarships and Search Services

Why am I dependent?

Many students ask me, "Why am I dependent, even when I live on my own, my parents don't support me and do not claim me as a dependent on their tax returns. The answer to this question is easily answered by using our dependency status calculator at:
Am I Dependent?

If you can answer yes to any one of the questions on that form, then it is not necessary to provide your parent(s) information on the Free Application for Federal Student Aid (FAFSA). If you cannot, you must provide parental information on the FAFSA. However, with all good rules, there is an exception. If you have had an involuntary dissolution (i.e., breakup) of your family that can be documented by a third party (ex. guidance counselor, minister, psychologist, or someone other than your parent that is in a position to speak knowledgeably of your situation), then the financial aid office may be able to grant you a dependency override. This means that the financial aid office uses its judgment to grant you independence even though you do not meet the federal definition. Dependency overrides are hard to come by. Your circumstances will have to be pretty severe in nature (ex. your parents are deceased, incapacitated, etc.). Living on your own is not sufficient. If you think your situation is as I've described above, you should do the following. First, make an appointment to see a financial aid counselor to discuss you situation. Be prepared to go into detail. Ask them what they think. If they think you have a strong case, you will have to write a letter to the aid office requesting that they reevaluate your dependency status. At the same time, you should also ask that they reexamine your aid eligibility. Be sure to include the third-party documentation, it's essential. One final note. That you are not claimed as a "dependent" on your parents federal income tax return has no bearing whatsoever on your "dependency" status for financial aid. They are two completely unrelated definitions. Pass this one along to your friends! I'm sure it will help clear up the misconceptions about what makes a student independent!

What is a Stafford loan?

A Stafford loan is a variable interest rate loan made to students based on need. There are two kinds: Subsidized and Unsubsidized. With a Subsidized Stafford loan, the student is not responsible for the interest charged on the loan while the student is in school and taking at least six credit hours. Instead, the government pays the interest for you, hence "subsidized". Students receiving Unsubsidized Stafford loans are responsible for the interest charged on the loan while in school. A student can choose to either pay the interest or capitalize it. If the student choose to allow the interest to capitalize, interest will be charged and added to the prinicpal. Capitalization occurs on a periodic basis and over time compounds -- interest charged on principal then added to principal, then interest charged on principal plus interest and so on. Repayment of either type does not begin until six months after the student graduates or stops attending on at least a half-time basis (six credit hours). See also: Stafford Loans.

What is a Pell Grant?

A Pell Grant is gift aid that you do not have to repay. It is given to the neediest of students. For the 1999/2000 academic year, a student will qualify for a Pell Grant if his/er Expected Family Contribution (EFC) is less than or equal to $2,800. The EFC is the number arrived at by processing the data you provide on the Free Application for Federal Student Aid (FAFSA). You can find yours on your Student Aid Report (SAR) on the first page. The lower your EFC, the greater the Pell Grant (up to a maximum of $3,125.

What is SEOG?

SEOG or Supplemental Educational Opportunity Grant is federal gift aid given to the very neediest of students. Students who receive a Pell Grant may also qualify for SEOG. The government allocates SEOG funding to each school and the school, in conjunction with federal guidelines, determines who will receive this type of aid.

Is Student Loan Debt Summary a bill?

No. The Student Loan Debt Summary is simply a listing of your federal education loans. Current balance and payment information is being provided as an estimate of your loan obligations to assist you with your financial planning. You may contact your lender for the most recent information.

Why is my graduation date important?

The graduation date on record with your lender determines when you’ll enter repayment on your student loans. If the date is inaccurate, you may be asked to begin repayments before you are required to by law.

What if my graduation date is incorrect?

Contact your school. Only your school can initiate changes to your graduation date.

What if I’m graduating soon?

Typically, you’ll need to start repaying your loan six months after you graduate or enroll less than half time. Contact your lender for your exact payment and balance information.

What if I transfer to a new school?

Be sure to verify your graduation date. If the date is no longer correct, you’ll need to update it by contacting your new school and lender.

Start date when attending another school?

The date your classes at another institution will begin.

What was, or will be, your last date of attendance?

List your date of graduation, withdrawal from school, or dropping below half-time enrollment.

What if I’m leaving school or dropping below half-time enrollment?

Contact your lender to find out about the repayment process. Also verify your current address for the lender. An incorrect address is one of the leading causes of default, which can have a negative impact on your ability to obtain credit in the future.

Do I have to pay back my student loan even if I drop out of school?

Yes. You are legally and financially responsible for completely repaying your student loan whether or not you complete your education, obtain employment or are satisfied with your education.

Am I required to attend student loan exit counseling before I leave school?

A. Yes. Because exit counseling helps you manage your debt, it’s required when you end an academic program for any reason.

End date when attending another school after graduation?

The date you will graduate, withdraw or enroll less than half time at this second institution.

Why is it so important that I communicate with my lender?

Your lender/servicer is responsible for managing the day- to-day details of loan tracking and collection. To keep your loan on track, it is critically important to make sure your lender is apprised of any changes in your personal or academic information. It might surprise you to know that failure to update addresses is one of the leading causes of student loan default.

What kind of information must be reported to my lender?

If you change your name, address or phone number; drop below half-time status; withdraw from school; transfer to another institution; move your graduation date; or experience any other change that might impact your eligibility for an existing deferment, you must report the specifics to your lender.

When do I have to start making payments on my student loan?

You must start making monthly loan payments when your grace period expires after you graduate or drop below half-time enrollment.

What is a grace period, and how long does it last?

A grace period is the short time period after graduation during which you are not required to begin repaying a student loan. The grace period is intended to give you a chance to get settled and prepare for repayment. The duration is six months on Stafford loans and nine months on Perkins loans.

As a student borrower, what kind of written documentation must be made available to me?

You have the right to receive a copy of your promissory note either before or at the time the loan is disbursed, a disclosure statement before the loan repayment terms begin, written notice if your loan is sold to a new holder and proof of discharge when your loan is paid in full.

What is a promissory note?

A promissory note is a signed legal document that indicates your promise to repay your student loan and formalizes your agreement to abide by its terms and conditions. The Stafford Loan Master Promissory Note (MPN) is a contract between you and your lender and is good for either a single or multiple academic years.

What is a disclosure statement?

A disclosure statement is an estimate of the actual cost of your loan and includes interest rates, fees, loan balance and the size and number of payments. Due to the variable nature of interest rates and your individual circumstances, the actual cost of the loan may change.

Can I prepay my student loan?

Yes, you have the freedom to prepay all or part of your loans without penalty.

Can I change my repayment plan?

Once a year, you may contact your lender to change your repayment plan. If you would like to change your plan or if you need additional details, contact your lender.

What is "Pay interest until repayment starts "?

Did you, or do you plan to pay the interest that accrues during school and during your grace period on unsubsidized loans.

Free Credit Report

To manage your finances well, you need to understand the concept of having good credit and using it wisely. Your credit report—a listing of all your credit accounts and your payment history, details on where you live and work, and whether you’ve been sued or filed for bankruptcy—is a logical starting point. Federal law allows every consumer to order a free credit report annually from each of the three major credit reporting agencies. Check our Credit Rating and Credit Report as well as Tax Incentives for Education

The benefits of this new law include education tax credits, a new education IRA, penalty-free withdrawals from traditional IRAs for education expenses and a deduction for student loan interest. Check: Federal Taxation of financial aid for students

How do I order my free report?

It’s easy. Order on the Web, by phone or mail.

P.O. Box 105281, Atlanta, Georgia 30348-5281
Does it take a long time?
If you order your credit report online, you’ll receive it immediately. If you call or send a written request, you should receive it within three weeks.

What information do I provide to get my free report?

You need to give your name, Social Security number, date of birth and current address (if you’ve moved within the last two years, you’ll be asked for your previous address). After providing this information, you’ll be asked additional questions to verify your identity, such as the amount of a car payment, or the name of the institution where you most recently opened a loan account.

What if I find errors on my credit report?

You can submit a dispute online at each credit reporting agency’s Web site or you can notify the credit reporting agency in writing. You should also provide written notice to the company that provided the erroneous information.

What if I’ve been a victim of identity theft?

Immediately contact the fraud department of any one of the three credit reporting agencies to place a fraud alert on your credit file. The alert signals creditors to contact you before opening any new accounts or making any changes to your existing accounts.

How long does negative information stay on my credit report?

Most negative information stays on your credit report for seven years after the last date the delinquency was reported.

What is a credit score?

A credit score is like a test score: the higher, the better. The more bad marks on a credit report, like late payments or large credit card balances, the more points taken off the credit score.

Is my credit score included in my credit report?

No. Obtaining your credit score will cost you less than $20. For more information on credit scores, visit

Why do I need to know my credit score?

If you intend to borrow money, you should know how lenders evaluate you as a credit risk. A high credit score means you’re a good credit risk and you’ll be offered better interest rates. You could save tens of thousands of dollars in interest on a large purchase like a home or car.

Can I improve my credit score?

Yes. Create a spending plan that realistically matches your income; close accounts; reduce balances and pay your bills on time. Your credit score will improve.

How can I reduce credit card offers and other solicitations?

Call toll free 888.5OPTOUT or visit to remove your name from credit card mailing lists. To reduce the number of telemarketing calls for credit cards and other offers, register your phone number(s) at