While there are many colleges which are all set to shape the bills for this year’s tuition, most of the people are not expected to be able to make payments till late summer. This is the time when the families of the college-going students take time to take a close look at their details of financial aid. Financial aid is something which many families want to hide from others as they think that it throws light on their inability to come up with enough money for their kid’s education. But this is a wrong notion altogether as there are many aspects of financial aid which you need to know. Read on the concerns of this article to know about few of the common questions on financial aid, scholarships and student loans which you hesitate to ask.
Question #1: Where does the money go when you get a student loan?
Well, the dollars that you get from your student loan goes to your school and they are instantly applied to tuition fees. After repaying the outstanding bills, if there’s money left, the office of the bursar will give you a refund of the balance either through a debit card, a check or through electronic transfer through bank account. If you get your tuition bill before the disbursement of financial aid, don’t panic.
Question #2: Can the proceeds of student loan be used to cover living costs?
Yes, if you have enough money left after you’ve paid off your tuition costs and other educational fees, you can definitely use them to meet your living expenses. In case you’re a student who is living on campus and away from your parent’s home, the school will take the opportunity to apply the remaining proceeds towards board and room costs.
Question #3: How should you take off money from your 529 account?
Well, all you need to do is to get in touch with the provider of the plan and you can thereafter get an online withdrawal done or you may even request through mail or phone. The toughest part is to determine how you should use the 529 savings and when to do the same. This is a topic that you should discuss with your financial advisor. Remember that the funds withdrawn from a 529 savings account is tax-free.
Question #4: Are taxes applicable on the aid money received?
Usually you don’t have to pay taxes on the student loan money or the gift aid money that you receive. However, you’ll owe taxes on scholarships and grants only if the sum of them is more than the qualified education expenses.
Question #5: Is it possible to get financial aid despite being a part-time student?
Yes, it is possible to get financial aid but the money won’t be as much. Part-time students qualifying for Pell Grants will get a calculated amount based on the number of total credit hours which they are taking. They should be taking classes that are worth 6 credits each term.
Therefore, if any of the above mentioned questions were going on in your mind, get the answers straight and take according steps to apply for a student loan.