8Why am I considered dependent?
P Many students ask, "Why am I considered 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 somewhat involved. Basically, however, in order to be considered independent by the government, you must be able to answer "YES" to at least ONE of the following questions:

1. Are you 24?
2. Are you married?
3. Are you a veteran of the US Armed Forces?
4. Are you an orphan or ward of the court?
5. Are you a graduate or professional student?
6. Do you have legal dependents other than a spouse?

If you can answer yes to any one of the above, then you are independent and it is not necessary to provide your parent's information on the Free Application for Federal Student Aid (FAFSA). If you cannot answer yes to any of the above questions then, like it or not, you are dependent. Therefore, you must provide parental information on the FAFSA.

There is ONE 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 described above, you should make an appointment to see a financial aid counselor to discuss your 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.

Last, but not least: It is a common misconception that if you are not claimed as a dependent on your parents' federal income tax return, then you can be considered independent for the purposes of financial aid. In fact, your status on your parents' tax return has no bearing whatsoever on your dependency status for financial aid! The two are completely unrelated.

8Where can I find scholarships?
P Finding scholarships (grant money other than that provided by your college or university) is a challenging, time consuming, but very worthwhile and potentially rewarding task. 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 with appropriate scholarship sources. Try a free scholarship search at: Absolutely Scholarships.

8If I get an outside scholarship, should I report that to my financial aid office?
P Yes. Any kind of financial aid from outside sources must be reported to your financial aid office. Depending on your school's policy on outside scholarships, your financial aid award may change. Ask your financial aid office how they treat outside resources. Many schools publish this policy in their college catalog.

8How do I apply for a student loan?
P Most students these days find that they need to get some type of loan to help finance their education. Federal Stafford loans are the best place to start, because they are the least expensive. The amount you can receive is capped, though, so it's possible you will need to supplement them with an alternative student loan.

If after checking your financial aid award letter or your student bill you determine you need a loan, you'll need to do some research to find a lender that best fits your needs. Many students are overwhelmed by the number of factors you need to take into account when comparing lenders (such as different payment terms, different interest rates, different online capabilities, different credit and income requirements). It's helpful to use a comparison search like 123-Student-Loan's to sort out all the different features.

Once you've found a lender and filled out an application, you then have the painful job of waiting to find out whether the loan is approved or not, and then waiting for your money. Lenders may pre-approve your application quickly, by final approval often takes a few weeks. Some lenders provide on-the-web pre-approvals, some do phone pre-approvals, and others require a paper application be mailed to them before starting the process. In any case, after you apply, the lender must then verify with the school that you're enrolled, and verify that you are eligible for the amount of funds you are requesting. Only after the school sends this certification can funds be released. Because this process has so many layers, it's in your best interest to make certain both the lender and the school have all the information they need to make sure everything moves along quickly.

8What is a Stafford loan?
P A Stafford loan is a variable interest rate loan made to students based on need. There are two kinds of Stafford Loans: Subsidized and Unsubsidized. With a Subsidized Stafford loan, you are not responsible for the interest charged on the loan as long as you are in school and taking at least six credit hours. Instead, the government pays the interest for you while you are in school. 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. Capitalization occurs on a periodic basis and compounds over time - meaning interest charged on the principal is added to the principal, and then interest is charged on the principal plus interest and so on. Beware, capitalized interest can be very costly! It's best to pay the interest if you can. Repayment of either type does not begin until six months after the student graduates or stops attending on at least a half-time basis (generally six credit hours).

8What is a Perkins Loan?
P The Perkins Loan is a Federal loan program that carries a 5% fixed interest rate. Repayment doesn't begin until 9 months after the student graduates or drops below half-time attendance (six credit hours). Once in repayment, the standard term is 120 months.

The school you attend is allocated funding for the Perkins Loan by the government who leaves it up to the school to determine your eligibility. Eligibility for Perkins is determined as a part of constructing your financial aid award. The maximum loan you may receive is $3,000. Perkins loans are more commonly given in the $1,000 to $1,500 range. Schools generally reserve Perkins funding for those students with the most financial need. The Perkins loan is available to both undergraduate and graduate students.

8What if I'm turned down for a student loan?
P While some lenders are more lenient than others, the qualifications for non-government student loans are pretty strict, due to the fact that these loans are unsecured and are a greater risk in general to the lenders. Finding a co-signer is usually a wise and often necessary move. If you have been denied, ask your lender if they have a credit resolution process. Most do.

Government loans are guaranteed by the federal government and subsequently, much easier to obtain. Always be sure to check out your eligibility for government loans before you look into alternative/non-government loans.

8Are my parents responsible for my educational loans?
P Parents will only be responsible for your educational loans if you are under 18 and they endorse/co-sign your loan. In general you and you alone are responsible for repaying your educational loans. Parents are, however, responsible for the Federal PLUS loans. If your parents (or grandparents) want to help pay off your loan, you can have your billing statements sent to their address. Or, if your lender or loan servicer provides an electronic payment service, where the monthly payments are automatically deducted from a bank account, your parents can agree to have the payments deducted from their account. Remember, your parents are under no obligation to repay your loans.

8Are alternative loans guaranteed by the federal government?
P No. Alternative loans are private loans issued by private lenders. Third party organizations may guarantee these loans, but the federal government has no involvement. The responsibility lies with you.