All too many college students today hit a hurdle right from the start when it comes to getting together the money necessary for college because they have already managed to get themselves a bad credit history. Fortunately however there are a number of aid and loan packages available which look chiefly at financial need and are not concerned with your credit record. Therefore, this is where you should begin your search for funding.

One of the oldest sources of funding and one which is mainly available on the basis of financial need is the Pell grant. Provided the student and his family are classed as a low-income family a Pell grant is all but automatic and a grant is made based upon the submission of an application and supporting documentation.

The student has to submit proof of the cost of his course (including tuition fees and additional qualifying costs) and will also have to provide evidence of the family’s income from which an Expected Family Contribution (EFC) number will be worked out. Against this number a decision will be made and a grant made or refused.

As the name suggests, a Pell grant is a gift rather than a loan and it does not need to be repaid. Pell grants are currently for a maximum of $4,731 annually (based on an assessment of financial need) and, though this will not usually meet the full cost of attending college, it could help considerably. Nevertheless, the majority of students will have to look for loan funding in addition to a Pell grant and probably the best form of loan funding here is a Stafford loan.

There are two types of Stafford loan and the first is a subsidized Stafford loan on which the federal government covers interest loan payments as long as you are in full-time study and for a period of up to six months following graduation. The second type of Stafford loan is an unsubsidized Stafford loan on which you are responsible for making all interest payments.

Unsubsidized Stafford loans have to be considered with great care because, although you will have to make interest payments, you will not have to do so as long as you are in full-time education and for a period of up to six months after graduation. This said, during this period interest will still be charged to your loan and will simply be added to the outstanding amount of the loan. This means that if you are on a standard three or four year college course your debt can increase substantially.

Obviously, most students prefer to take out an unsubsidized Stafford loan but loans are made according to the money available and also against need so that only a minority of students qualify for a subsidized loan. However, the good news is that the majority of students qualify for an unsubsidized loan and, in spite of the disadvantages, they nevertheless represent one of the best forms of college loan funding available today.

Naturally, there are other forms of loan funding available and you need to look around to see just what is on offer and what best meets your needs. For students who come from low-income families however both Pell grants and Stafford loans are almost certainly the best choice.

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