Preparing for College
The College Quiz was designed to help Arkansas high school and college students learn fundamental concepts about paying for college and understanding student loan financing. This quiz will help you to start thinking about financial aid in a very practical way.
$25,000 a year for college? Yes, the average cost of education is approximately $25,000 per year at Arkansas 4-public universities.
How much do you know about paying for college? Take this quiz to find out.
Grants
Federal Direct Loans
Work-Study Program
There are 3 main sources of financial aid.
Federal Aid
Federal student aid comes from the federal government – specifically, the U.S. Department of Education. It’s money that helps a student pay for education expenses at a postsecondary school.
State Aid
State aid comes from state government to help eligible residents reduce their educational costs. The programs listed below are examples of programs funded by the State of Arkansas.
- Arkansas Academic Challenge Scholarship
- AR Future Grant
- Governor’s Distinguished Scholars Program
Other Aid Options
ASLA College Planning Services
Financial aid can come from a variety of other sources. Below is a quick list of resources for you to consider when seeking aid options.
- College / University Scholarships
- Community, Church, Employer Scholarships
- Military Scholarships
- Private Student Loans
There are 3 initial steps to apply for financial aid.
Create a Federal Student Aid Account (FSA ID)
This is the electronic signature for the FAFSA, Master Promissory Note, Loan Counseling, and your sign in to review your federal aid status and history.
Complete the Free Application for Federal Student Aid (FAFSA)
This is the application for Federal Aid Programs, such as, Pell Grant, Work Study, Federal Supplemental Education Opportunities Grant, and Federal Student Loans.
Apply for Arkansas State Aid (Arkansas Residents Only)
This is the application for Arkansas state aid programs, such as, Academic Challenge Scholarships, Governor’s Distinguished Scholarship, Arkansas Future Grant, and Arkansas Workforce Challenge.
Our “How to Pay for College” booklet is a great resource for helping students prepare for college and applying for financial aid.
What types of federal student loans are available?
William D. Ford Direct Stafford Loans:
- are for undergraduate and graduate students
- provide affordable interest rates
- offer various repayment plans
Federal Direct Loans can be subsidized or unsubsidized. What’s the difference?
Subsidized Loan
Interest isn’t charged while you are in school. It begins to accrue six months after you drop to less than half-time or leave school. Eligibility is based on financial need, which is determined by the FAFSA.
Unsubsidized Loan
Interest is charged beginning on the day the loan is disbursed until it is paid in full. This is still a good loan option, but make sure you borrow subsidized loans first if you are eligible.
PLUS Loan
This works like an unsubsidized loan and is for parents of dependent, undergraduate students and for graduate or professional students. Eligibility is not based on financial need, but a credit check is required.
Tip: Federal Direct Student Loans are subject to an origination fee which is deducted prior to disbursement to your school.
How much can I borrow through the Federal Direct Student Loan Program?
These are the annual loan limits:
| Dependent Undergraduate Student | Independent Undergraduate Student | |
|---|---|---|
| First Year | $5,500 | $9,500 |
| Second Year | $6,500 | $10,500 |
| Third Year & Beyond | $7,500 | $12,500 |
Graduate and Professional Degree Students may borrow up to $20,500 each year.
The maximum loan amounts you may receive are:
- Dependent students may borrow up to $31,000
- Independent students may borrow up to $57,500
- Students receiving graduate and professional degrees may borrow up to $138,500
Understanding Interest
When you borrow student loans, you are required to pay the loans back with interest – interest is the cost of borrowing your student loan. Federal Direct Unsubsidized Loans accrue interest as soon as you receive loan funds. If possible, you should make interest payments on an unsubsidized loan while you are in school.
Here’s how it works…
A dependent freshman student is eligible to borrow up to fifty-five hundred dollars in unsubsidized loan funds. While you are in school for four years, this loan will accumulate approximately one thousand one hundred dollars in interest. It will cost an additional one thousand eight hundred dollars in interest during your ten-year repayment period. This means you will repay eight thousand four hundred dollars for the fifty-five hundred dollar loan you borrowed.
Remember, interest begins to accrue as soon as an unsubsidized loan is disbursed. While you are not required to pay interest while attending school at least half-time or during your grace period, however not making an interest payment increases your cost of borrowing. The ASLA Loan Repayment Calculator can be used to show you the approximate amount of interest on your loan balance.
*Amounts used are estimated for this demonstration. Interest rates change annually. The maximum a dependent freshman can borrow is $5,500 for an academic year.
Private Student Loans
The direct cost of education may not be completely covered by the financial aid. Students and families often look to fund the shortfall with private student loans.
A few tips about borrowing a private student loan:
- To get the best interest rate, students are encouraged to apply with a co-signer.
- Rates are based on your credit score.
- Federal student loans may be eligible for loan forgiveness programs, where private loans are not. If you plan to be employed by a federal, state, local, or tribal government or not-for-profit organization, a private loan may not be a good option. (Examples – School, state, military, non-profit hospital, etc.)
- ASLA provides the Loan Comparison Tool to help families determine which borrowing options are most cost-effective. This tool also provides an annual college funding plan using a family’s college savings information and available monthly cash contributions.
ASLA offers Arkansas students and families competitive rates, and a variety of payment plans to best benefits borrowers through the Arkansas Education Loan Program.
Satisfactory Academic Progress
To remain eligible for financial aid, including loans, you will need to make progress each period of enrollment towards completing your degree or certificate. Every school is required to have a defined standard for “Satisfactory Academic Progress” that gauges a student’s progress toward a degree or certificate. If you do not make academic progress, you may be disqualified from receiving future financial aid.
Satisfactory Academic Progress standards include elements such as:
- Must be enrolled in an approved degree or certificate program
- Must meet a minimum number of credit hours for enrollment
- Must meet a minimum cumulative GPA
- Must complete two-thirds of all classes attempted
You’re finished! You got right.
Congratulations! ASLA is here to assist Arkansas students in achieving their higher education goals.
R. Preston Woodruff, Jr. Scholarship
The Arkansas Student Loan Authority provides several $1,000 scholarships each year to incoming and current college students in Arkansas. One of the scholarships drawn will be renewable for up to 4 academic years.