My Federal Student Loans Aren't Enough: Getting Supplementary Funds

Federal student loans are funds awarded to eligible students to help pay for higher education. Often times, however, federal loans do not cover all education-related expenses. If you find yourself in this position, you can access supplemental funding through scholarships, grants, and private school loans.

Scholarships and Grants

Scholarships and grants are an excellent option for students needing financial aid, because these funds do not have to be repaid upon graduation. There are thousands of scholarships and grants (and millions of dollars) available for post-secondary students to take advantage of. One of the most popular federal grants is called the Pell Grant.

Pell Grants are offered to students who demonstrate the greatest need for financial aid. To be eligible, a student's total family income is generally less than $30,000 per year. Currently, more than 5 million students receive Pell Grant funds to help pay college expenses.

If you think you may be eligible to receive a Pell Grant, simply go online and fill out a Free Application for Federal Student Aid (FAFSA). This application assesses your financial need and determines your eligibility status. The FAFSA application considers such factors as:

  • the cost of the chosen institution
  • the student's status (e.g. full- or part-time) while enrolled in the institution
  • how long the student plans to attend the institution
  • the student's family size
  • the student's total family income and assets

Private School Loans


You should only seek a private school loan if you have exhausted all other federal financial aid options (e.g. federal student loans, scholarships, and work-study programs). Private school loans should be a last resort because they often have higher interest rates and less flexible terms than federal student loans.

If you're considering a private school loan, consider the following tips.

  • Establish Credit - While federal student loans are mainly based upon financial need, private school loans generally depend on one's credit score. To have a good credit score means that you pay your bills on-time and in-full. If you have not yet established credit in your name, ask a parent or older sibling to co-sign the loan. The co-signer will be held responsible for any payments you fail to make. You will receive a higher interest rate and more flexible terms if you or your co-signer has a good credit score.
  • Research Lender Options - The United States government backs federal student loans. Private student loans, however, are backed by individual lenders. Be sure to investigate your lender options. Find out which lender offers the highest interest rate, fewest fees, and the most flexible repayment plan.
  • Don't Borrow Too Much - Since interest rates are generally higher on private school loans, don't borrow more money than you need.



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