Student loans are still an option in troubled economy

The News-Sentinel (Fort Wayne, Ind.) (MCT) - In the current state of the economy, accruing more debt is probably the last thing on anyone's mind, but it may be the only option for some college-bound undergraduate students.

Financial aid professionals say it's a safe time to borrow.

"More funding is being put into federal programs," said Michelle Silcox, associate director of financial aid at the University of Saint Francis. And the federal loans are the best option _ of course, after scholarship and grant options are exhausted, she said.

Federal loans carry low interest rates and allow students to defer paying them back until after graduation. Some don't charge interest until the repayment period, which can come six or more months after graduation.

These federal loans can only be obtained by filling out the Free Application for Federal Student Aid. This form evaluates a student's income _ mainly the parents' income if the student is a dependent _ and then the information is sent to the school to tell what grants, work study or loans should be issued based on that calculation.

FAFSA on the Web applications must be submitted by midnight Central Daylight time, June 30, and corrections on the Web forms must be submitted by midnight Central Daylight Time, Sept. 15, according to the fafsa.ed.gov. State guidelines are earlier, March 10 in Indiana, for example.

"It's really important that they file the FAFSA by (the deadline)," said Silcox, adding this applies to all students, regardless of income. "There's a lot of funding from the state ... and that deadline is crucial." Even if circumstances change within a family, such as loss of a job, alterations can be made with the school's financial aid department. Silcox said it's best to keep the school informed.

"The reason we recommend (filing the FAFSA) is because no student knows what the future will hold," she said.

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TIPS FOR FILING THE FAFSA

Start early: The Indiana filing deadline, for example, is March 10.

Complete your taxes: The FAFSA works hand-in-hand with the federal income tax return form. It's easiest to have your taxes completed before tackling the FAFSA.

Find help: School counselors and college financial aid offices can help you fill out the form.

Go online: Visit www.fafsa.ed.gov .

Warning: The FAFSA is a free form for federal aid. Other sites, such as www.fafsa.com, charge to complete the form.

Source: Educational Opportunity Center, 3000 South Wayne Ave, Fort Wayne, Ind.

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© 2009, The News-Sentinel (Fort Wayne, Ind.).