A lot of college students nowadays run into trouble before they even start when it comes to finding the money necessary for college because they have already managed to get themselves a bad credit report. However, fortunately there are a variety of loan and aid packages available that look principally at need and are not concerned with your credit history. Thus, this is where you ought to start looking for funding.

A well established source of funding and one that is mainly available on the basis of economic need is the Pell grant. Providing the student and his family are considered to be 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 documents.

A student will be required to provide proof of the cost of his course (inclusive of not only tuition fees but also other qualifying costs) and will also have to provide details of the family's income from which an Expected Family Contribution (EFC) number will be obtained. Agaist this number a decision will be taken and the grant either made or refused.

As the name suggests, a Pell grant is a gift and not a loan and it does not need to be repaid. Pell grants are currently for a maximum of $4,731 a year (depending on an assessment of financial need) and, while this will not usually cover the total cost of attending college, it will be a great help. However, many students will have to look for loan funding in addition to a Pell grant and the best form of loan funding initially are Stafford student loans.

There are currently two different forms of Stafford loan and the first of these is a subsidized Stafford loan on which the 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 other form of Stafford loan is an unsubsidized loan on which you will be expected to make all of the interest payments.

Unsubsidized Stafford loans need to be considered with great care because, while you are responsible for making interest payments, you will not have to do so as long as you are in full-time education and for up to six months after graduation. However, during this period interest will still be charged to your loan and will merely be added to the principle amount of the loan. This means that during a standard three or four year college course your debt can grow substantially.

Of course, a lot of students prefer to have unsubsidized Stafford loans but loans are granted according to the funds available and on the basis of need so that only a minority of students will qualify for subsidized loans. However, the good news is that the majority of students qualify for an unsubsidized loan and, despite the drawbacks, they nonetheless represent one of the very best types of college loan funding available today.

Of course, there are other types of loan and grant funding available and you need to shop around to see precisely what is on offer and best meets your needs. However for students from low-income families both Pell grants and Stafford loans are undoubtedly the best option when looking for money for college.