What To Do After Being Denied FAFSA Funds
Many times there are things that can and do go wrong with the FAFSA application. Even though you may feel like you are well within the range of FAFSA approvals, the government could deny your application for a variety of reasons. Most of the times, it has more to do with technical or funding issues more than with your own needs and finances. If you feel this is the case, the first thing you must do is contact the FAFSA administration office and ask for an explanation. Once you have spoken with them and discovered if and where the application went wrong, take the time to see if you can fix the problem and amend your application. After you have exhausted FAFSA as a funding source, ask the FAFSA representative about additional funding sources that are available through the government that could help you on your way.
If you have spent time with a financial aid consultant, schedule a time to chat with them about your options. After you have confirmed that FAFSA money has been denied and you still are in need, there are a couple programs that you should still explore, the most popular being the PLUS loan. The PLUS loan is taken out by parents and is similar to a car loan or mortgage because it is simply based on credit of the applicant. Financial need is not taken into account at the time of the application.
These loans are low interest and they are designed specifically for the use of education. Also, when you are awarded these loans, they do require you to report any previous scholarships and financial aid you have received because they will take it into account and deducted it from the overall loan amount. Because of this loan, parents are able to fund the entire college education without depleting assets. The payments tend to be low, and they allow you to defer payments and interest until after graduation, which allows the student to get a job in the field of their major.
Alternately, the Stafford loan, or a direct loan from the government is another option. These loans are referred to as in-student loans and are also deferred until after graduation. They are backed completely by the government; so the interest rates are generally lower then the national average on other types of loans and college funding options. The money generally is awarded from a third party institution such as Sallie Mae or Chase.
Before you get too involved in looking for too many loans, a viable option is to check with merit-based funds in your city or town. Many of the local scholarship committees tend to not advertise themselves too publicly, mainly because they are small and have very limited funds available for students. If you can track some of them down and make your situation known to them you stand a good chance of being awarded extra money that you might not have otherwise received. It is always a good idea to avoid scholarship search companies that ask for money up front to search for scholarships.