Many college students today hit a hurdle right from the start when it comes to finding the money necessary for college because they have already managed to get themselves a poor credit report. Fortunately however there are several aid and loan packages available which look mainly at financial need and ignore your credit history. So, this is where you will need to start your search for funding.

One of the oldest sources of funding and one which is mainly available on the basis of financial need is the Pell grant. Provided the student and his family are classed as 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 documentation.

The student has to submit proof of the cost of his intended course (inclusive of not only tuition fees but also other qualifying costs) and will also have to provide evidence of the family's income from which an EFC (Expected Family Contribution) number will be calculated. Against this number a decision will be reached and a grant made or refused.

As the name suggests, a Pell grant is a gift and not a loan and as such 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, though this will not normally cover the total cost of attending college, it should go a long way towards helping. Nonetheless, the majority of students will need to seek loan funding in addition to a Pell grant and the best form of loan funding in this case are Stafford loans.

There are two types of Stafford loan and the first is a subsidized Stafford loan on which the federal 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 second type of Stafford loan is an unsubsidized Stafford loan on which you are responsible for making all interest payments.

You need to consider unsubsidized Stafford loans with great care because, although you are responsible for making interest payments, you will not be required to do so as long as you are studying full-time and for a period of up to six months following graduation. This said, during this period of time interest will be charged to any loan and will merely be added to the outstanding amount of the loan. This means that during a normal three or four year college course your loan debt can grow substantially.

Not surprisingly, the majority of students prefer to have an unsubsidized Stafford loan but loans are made depending upon the money available and on the basis of need so that only a small number of students qualify for subsidized loans. However, the good news is that the majority of students qualify for unsubsidized loans and, despite the disadvantages, they nevertheless represent one of the very best types of college loan funding available nowadays.

Naturally, there are other forms of loan funding available and you have to shop around to see exactly what is on offer and what best suits your circumstances. For students who come from low-income families however both Pell grants and Stafford loans are without doubt the best way to go.