Student loan how-to

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You've been accepted to college -- now you need to figure out how to pay for it. Here's a step-by-step checklist for finding financial aid, including student loans.

Fill out the Free Application for Federal Student Aid, if you haven't done so. For this, you'll need your Social Security number, driver's license, latest income tax returns, bank statements and investment records. The application can be found at www.fafsa.ed.gov, by calling 800-433-3243, or at college and high school counseling, career and financial aid offices. The California FAFSA deadline is in early March, but the application can be submitted throughout the year. FAFSA is required before college students can receive state or federal financial aid, including student loans.

Financial aid procedures vary by college, so check with your college's financial aid office and seek help from counselors.

College financial aid offices may request additional documentation to confirm aid eligibility. Qualifying for financial aid depends on a number of factors, including family income, high school grade-point average, number of students in your family and the cost of the college you'll be attending.

You will receive a letter estimating the cost of attending your college of choice, the expected family contribution (how much you or your family will be required to contribute) and the remainder. To fill in that gap, the paper will detail your eligibility for state, federal and university grants as well as federal loans. You can accept or reject the grant or loan offers.

If the expected family contribution, grants and federal loans do not cover the cost of attendance, students may need to work or take out more loans. The financial aid office of the university the student plans to attend determines how much the student can borrow from federal loan programs.

If private loans are needed, you can look for lists of companies that lend money for college -- on university financial aid Web sites and that of the U.S. Department of Education at www.ed.gov. If you decide to accept the loan, you must sign a loan agreement called a "master promissory note" and complete loan entrance counseling, online or in person.

Types of Financial Aid

Scholarships: Money given to students from local, state or national organizations; amounts range from as little as $25 to full-ride scholarships; does not have to be repaid

Cal Grants: State money given to college students; five types of awards based on financial need and grade-point average; $576 to $9,708 depending on which college, public or private, the student will attend; does not have to be repaid

Pell grants: Federal money given to college students; maximum amount for 2008-09 is $4,731; does not have to repaid

Institutional grants: Money from the students' college of choice; amounts vary; does not have to be repaid

Work study: Federal program that supplements income for part-time work on or off campus while students attend college; amount depends on which job the student does, but should be at least the federal minimum wage; does not have to be repaid

Perkins loans: Federal program that provides low-interest loans to help needy students; money goes to the school, with the college paying the students' tuition and fees with the loan; amounts range from $4,000 a year for undergraduate students to $6,000 a year for graduate students; interest rate is 5 percent; must be repaid

Stafford loans: Federal program that provides two types of lower-interest loans, subsidized (the government pays the loan's interest while the student is in school) and unsubsidized (student pays the interest); subsidized limits are $3,500 to $8,000, depending on student's year in college; unsubsidized limits are $2,000 to $12,000, also depending on student's year in college; interest rates start at 6.8 percent and decrease as the years progress; must be repaid

PLUS loans: Federal program that allows parents to borrow with a credit history check; eligibility is based on whether the student is an undergrad or graduate student and whether the student is considered a dependent of his or her parents'; limit is equal to the student's cost of attendance minus any other financial aid received; interest rate is 8.5 percent or less; additional fees may apply; must be repaid

Private or alternative loans: Lenders that loan college students money for college; applicant must undergo a credit check; amount allowed to borrow may depend on credit history; interest rates tend to be higher than federal loans and are based on credit score; additional fees may apply

-- MICHELLE HATFIELD