The first step to receiving financial aid is to fill out the Free Application for Federal Student Aid (FAFSA). This form will determine your eligibility for student loans, grants and work study programs. The form calculates your income, and your parent's income if you are under twenty-five years of age, and determines how much you should be expected to contribute to your education. This application can be completed online. You should have you and your parents' tax forms, mortgage papers and other financial information ready. This is a complicated process and you should have all relevant data available, including all Social Security numbers.
There are several types of student loans --- federal, private and institutional. Federal loans are dispensed by the U.S. Department of Education and are usually the best option because of the low interest rates, deferment and forbearance options and subsidized interest rates. Examples of federal loans are Stafford (subsidized and unsubsidized) and Perkins. During the time when you are in school and for a grace period of six months afterward, the federal government will pay the interest on your subsidized Stafford loans. Unsubsidized loans accrue interest from the time the loan is dispersed. (See Reference 4)
Culinary schools sometimes offer institutional loans, which are student loans that are disbursed and serviced by the school. Terms and interest rates vary by school. Private loans are another option when federal aid is not available. These loans are more difficult to obtain than federal loans. Borrowers must have a good credit history and may need co-signers. Rates tend to be much higher than federal loans and repayment terms are not as favorable. It may be harder to obtain payment deferments and forbearance, so use private loans as a last resort.
There are over $400 billion worth of federal grants available to students. The largest program is the Federal Pell Grant, disbursed by the U.S. Department of Education. Unlike student loans, grants do not need to be paid back. A student may receive up to $5,500 worth of grants in a school year. The amount awarded depends on a student's income, enrollment and graduation date. Scholarships for culinary students are available from many different restaurant organizations, such as the International Food Service Executives Association, the American Restaurant Association and the American Institute of Baking, along with the culinary schools themselves.