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Financial Aid 101


Call Laura Lillard at 423-648-2675 

Preparing to attend school can be an exciting and hectic time. Add “How am I going to pay for it all?” into the equation, and it can seem a bit overwhelming. But have no fear. This crash course in financial aid will give you the low down on all your options – when it comes to paying for school – and show you that the process is not as hard as you may think.

First Things First

So what do you do first? Before you do anything, fill out the Free Application for Federal Student Adi (FAFSA) online at

Financial Aid Officers use this form to determine the amount of financial aid that you can be awarded. Remember if you have previously completed the FAFSA application last year, you must submit a renewal FAFSA every year with your previous year’s tax return information.  If you change schools you must include the new school’s Department of Education Code. (Richmont is located in Tennessee and our code is G33554.)

Know Your Options

Once you’ve completed the FAFSA, you should start researching potential scholarships and grant money (also known as gift aid). One of the great things about scholarships and grants is that you don’t have to pay them back. Unfortunately, there are no Department of Education Grants, such as Pell Grants for a Master’s Degree Program. So be sure that you exhaust all forms of gift aid before considering any federal or private student loans.

So where do you begin looking? The financial aid office at your current school or your new school is a great place to start your search, as is the library. The Internet also offers a wealth of information about scholarships and other college-related topics. Also check with your employers, church, civic groups and other community organizations for scholarship opportunities.

Loan Basics

If you find that you still need money once you’ve fully exhausted all sources of gift aid, don’t worry! There are several low-cost loan options available, such as the Federal Stafford and Private loans.

To qualify for the Stafford Loans in the Title IV program you must maintain at least 6 credit hours in a degree program during each of the fall and spring semesters. Summer does not count, as we do not have summer loans.

Federal Stafford  Direct loans are all unsubsidized. The interest starts accruing on the unsubsidized loans from the date of disbursement. Pay these interest charges, if you do not then it is added to your loan and you are paying interest on interest. Principal payments start after you graduate or drop below six credit hours in a fall or spring semester.

The financial aid package “SAR” you receive back from the Department of Education based on your FAFSA application will include a figure know as your “EFC” (expected family contribution).  This figure may change from year to year as it is based on each year’s tax return. Currently, the maximum amount of Stafford loans that a master’s degree student can receive per school year is: $20,500. These amounts are the same for a Graduate degree regardless of where you decide to attend school.

An important thing to note about the Stafford Direct Loans is that the interest rates for School year 2017/2018 is set at 6.00%  This rate is adjusted each July so it may not be the same for 2018/2019.  So if you are thinking about dipping into retirement funds or charging tuition and other expenses on credit cards, this low rate may make borrowing from the government a better option if you need additional funding for school.

The Department of Education in 2006 established an additional loan called the Graduate Plus Loan. This is similar to the loans that have been previously offered to parents to assist students with the cost of an undergraduate degree. This loan is credit based and in some cases may require a co-signer. It will only cover the shortfall that you might have between your financial aid awarded and the Cost of Attendance at Richmont. The PLUS Loan will have a slightly higher rate of interest (7.00%) but payback is the same as the Stafford Unsubsidized loans, the interest due when you get the money and the principal six months after you graduate. For example, the total Stafford Loans are $20,500 for 2017/2018 and our cost of attendance is estimated to be $51,400. This new loan would provide you the additional $30,900 if you needed the funds.

All of the Federal loans have an upfront administrative fee.  It would be to your benefit to investigate private lenders such as Banks, Credit Unions, etc.  By comparing thier interest rates, fees and payback options, you may find a better source for your funds for school.  These loans are usually based on credit history and in some cases to get the lower rates you may have to use a co-signer. These private loans can also be set up to become repayable in the same manner as the Stafford Loans.  Always check into theses as some offer lower rates than the Federal Government.

By planning ahead, knowing your options, and investing a bit of time and organization, finding free aid and any additional funding through student loans is totally within your reach.


Call Laura Lillard at 423.648.2675 or e-mail