With the increasing cost of graduate programs, it is highly unlikely that a single scholarship, federal grant or loan program will be able to meet all the financing needs of a student. Even after excluding the scholarship amount received (if any) and the federal grants, a student or his parents need to take various federal and private loans to cover all the education expenses.

Often it becomes difficult to track the monthly repayment of the various loans, not to forget that the failure to repay a single installment leads to capitalization of interest, thereby increasing the principal amount for future accretions. To avoid these problems and to organize the multiple federal loans in a more efficient way, the Department of Education allows the parents/students to consolidate the loans under a single Direct Consolidation Loan, with a single rate of interest and monthly installment amount.

Calculation of interest rate:

The interest rate for the Direct Consolidation Loan is calculated average taking a weighted average of all the interest rates per loan amount and rounding it off to the 1/8 of a percent. The resultant interest rate is between the highest and the lowest rates in the loans considered. In any case, it is never greater than 8.25 percent.

Why should you consolidate the loans?

In addition to providing a better and organized way of managing the loans, Direct Loan Consolidation has two major benefits:

• It often leads to a reduction in the overall interest rate for the all the loans consolidated together.
• It also results in the extension of the repayment period (up to 30 years), something that may not be possible for every individual loan.

However, before bundling up the loans together, you should consult a financial advisor, for it may happen that the advantage that you are seeking out of consolidation is not really there. The main disadvantage may be that with the increase in the number of years for repayment, the interest accrued and paid towards the loan will be significantly higher than what you may have paid under normal circumstances.

The Cost of Consolidation

There are no costs for federal student loan consolidation. However, private loan consolidation is a different story altogether, which will discuss in detail in the subsequent post. As such, there is no cost of consolidation in case of federal loans, namely, the Perkins program, Direct Plus, Direct Stafford Loan etc.

Direct Stafford loans are provided by the federal government, precisely the Department of Education, to the undergraduate and graduate program students who show financial need (in case of subsidized loan) and who do not show any financial need (in case of unsubsidized loan).

Salient Features:

• First and foremost thing to keep in mind is that Direct Stafford Loans are just that: LOANS. This means that the university financial aid you receive through this is to be paid back to the Department of Education along with the accrued interest. Therefore, before applying for Stafford loan, make sure you have tried all other options of receiving financial help, namely, grants and scholarships.
• These loans, once availed, will not get cancelled just because you made an ill-informed decision with the choice of college or course. The loan will need to be paid back along with the interest.
• The loan is available to students irrespective of their financial need.
• Direct Stafford Loan can be divided in two categories: Subsidized loan and Unsubsidized loan. Read more…

In the earlier posts, you read about the popular university financial aid options available for college freshmen in the country and the undergraduates. The whole aid system was categorized into merit based aid and need based aid.

Under need based college aid, we talked about federal grants and their salient features, the prime being the fact that the students receiving federal grants are not required to pay them back. Now, narrowing down further, here we will take comprehensive look at the system of federal Pell Grant, how they are administered, what are the eligibility criteria and the maximum amount of money that a student can receive under Pell Grant. Read more…

First things first: though the term EFC or Expected Financial Contribution sounds like the amount you have to pay towards your college education, it is seriously not so. It is a parameter or measure used by the federal grant departments and financial aid office in institutes and universities to determine a student’s need for financial aid and calculate the amount aid/grant that can be extended out to him/her. Read more…

Apart from your SAT scores, one thing you got to consider is the college tuition fee. Your parents are probably already thinking about it and doing the best they can to send you to the best university in the country. Only the most affluent can claim to go bear the entire education cost without seeking any form of financial aid. A good, rather, very good part of the American population is dependent on various forms of financial aid universities to fund their children’s college education. Read more…

Do you play any of the following sports?

• Baseball
• Basketball
• Bowling
• Cross Country
• Diving
• Fencing
• Field Hockey
• Football
• Golf
• Gymnastics
• Ice Hockey
• Lacrosse
• Rifle
• Rowing
• Skiing
• Soccer
• Softball
• Swimming
• Tennis
• Track & Field
• Volleyball
• Water Polo
• Wrestling

If yes, you may be eligible for an Athletic Scholarship to attend college. Over 600 U.S. colleges offer sports scholarships to athletes. Athletic Scholarships are awarded to an individual based on his or her ability to play in a sport. They can range from as little as $500 to as much as $30,000. Grants in aid, are awarded to individuals in return for competing on a college’s sports team. Read more…

There are plenty of people who are ready to dupe you in the name of acquiring for you a scholarship. As a scholarship aspirant you need to research meticulously on the funding procedures. Otherwise you can fall a prey to any scholarship scam. Here are some tips on how to identify and not fall into a unsuspecting trap -

• 1. Application Fee: Scholarship scams are used by organizations that charge fees for availing procedures or application submissions that can be undertaken free of cost. Never pay for scholarship application fees.
• 2. Guaranteed Scholarship Award: Scams that guarantee an award- Now this trap can be tempting to an aspiring student. Nobody can guarantee a scholarship. If you are worthy and your concerns are true you will certainly get it. Don’t get into the trap called ‘Scholarship guarantee’. No such thing exists.
• 3. You “Win” a Scholarship that You Never Applied: Scholarships scams will contact college students informing them that they have won full college scholarship. You cannot win a scholarship if you have never for applied for it.
• 4. Free Scholarship Scams: Nothing in life comes easily. There is no such thing like Free Scholarship. Scholarship is generally given to students with high quality academic record. Simply money does not grow on three.
• 5. Request for Personal Information: Some scams ask for your personal details, such as bank statement, date of birth, passwords, account numbers, social security number etc. Never share your personal information with anyone online. Your identity might get cloned

In today’s world, colleges receive around 200-400 applications for each scholarship opening.

While reviewing therefore, it is very important that your scholarship application should be outstandingly noticed in the crowd to get selected to the next stage. Also, it would save you time if you apply only for those scholarships for which you are eligible. It is highly doubtful that you will be awarded if you are not eligible for a scholarship.

Read more on Types of Scholarships available to judge which ones you may be eligible for.

Read more…

There is a lot of advice on How to Apply for a Scholarship – How to draft you LOR, Essay, Cover Letter, Resume etc.

However every International Student face their own set of challenges when it comes to applying for  scholarship abroad, primarily  because the same application tips do not work for all students.

In an earlier post we broadly discussed the Types of Scholarships available in the U.S.

In our endeavor to provide useful and accurate information for students seeking more information on Scholarships,we would like to encourage you to share what you might have/have  faced  while applying for a scholarship abroad.

Please tell us what do you think ..( in the below comment box)