When you complete the Free Application for Federal Student Aid (FAFSA), income and assets (yours and maybe your parents if you are considered dependent per FAFSA standards) are looked at to determine how much free aid or subsidized aid you will get. Not all federal aid is need based like loans such as the Unsubsidized Stafford and Parent PLUS loan.

The Perkins Loan is need based. It is a subsidized loan so the interest is paid by the govt. while you are in school, in your grace period, and in some cases while in a deferment period. The amount you get is based on financial need, amount of other aid, the availibility of funds at theschool and grade level. The loan is funded by the govt. but administered by the school you attend. They (school) will let you know how much you are eligible for.

A Stafford loan has two components. First let me start by telling that you will get a Stafford loan as long as you fill out the FAFSA. The amout you get is based on your grade level. Your financial need will determine if that loan is fully subsidized, partially, or not subsidized at all. All subsidized means, like the Perkins, is that the govt will pay for the interest while you are in school, in your grace period, and in some cases while in a deferment period. Unsubsidized the interest accrues on the loan as soon as the funds are disbursed. You are not obligated to make payments on the interest but it builds up.

A PLUS loan is a loan that parents can take out. It is not based on need but it is unsubsidized. Your parents have to pass a credit check but the credit check is done different then what we are use to with credit cards. Your FICO score is not looked at and there is no debt to income ratio. In most cases if credit problems exists lenders can work with the parent to get the loan approved. If the loan is denied you could potentially get more in the Stafford loan if you are a dependent because some schools would change your dependency status for that year and award you more in Stafford since independents get more in the Stafford loan then dependents. FYI parent are responsible in paying the loan back, not the student.

Hope this helps.

To know more you can visit

http://www.scholarshipgrants.blogspot.com