Mompreneur » Student Loans

Student Loan Options

admin — Thu, 04 Jun 2009 20:08:46 +0000

You have applied for all your scholarships and looked into all the student aid you can. Now it is time to look into bridging the gap with student loans. There are three major categories when it comes to education loans. They are:

Student loans

Stafford – Fixed-rate, low interest loans available to undergraduate students attending accredited schools at least half time. The most common source of college loan funds.
Perkins – A low interest loan for undergraduate and graduate students with “exceptional” financial need.

Parent loans

Parent PLUS – A low interest student loan for parents of undergraduate, dependent students. Families can fund the entire cost of a child’s education (less other financial aid).
Graduate PLUS – Federally sponsored loans for students attending graduate school. You may borrow up to the full cost of your education, less other financial aid received.

Private student loans – After you have pursued free money and federal loans, these may be available to cover the rest of your education costs.

There is a fourth type which is a consolidation loan this allows the borrower to lump all of their loans into the loan for simplified payment.

Federal student loans are the largest source of education loans. They have more favorable terms than private loans. The loans are guaranteed by the government and they set their interest rates low. Almost all students are eligible to receive federal student loan money. One of the biggest benefits is they have a grace period after school when no payments are due.

Very few students can afford to pay for college without some form of education financing. Almost two-thirds of 4-year undergraduate students graduate with some debt. The average student loan debt among graduating seniors is just over $19,000.

The Federal education loan programs offer lower interest rates and more flexible repayment plans than most regular consumer loans. In many cases, you can deduct some, if not all, of the student loan interest on your income tax return.

If your dream is to put yourself or your child(ren) through college. There are several ways you can do this. Hopefully the information I have provided over the last two weeks have helped you realize if there is a will, there most definitely is a way.

Am I Eligible for Federal Student Aid?

admin — Wed, 03 Jun 2009 18:22:50 +0000

You have applied for every scholarship you feel will be a good fit. Now what? Start looking into Federal Student Aid. The Free Application for Federal Student Aid (FAFSA) is the form used by the U.S. Department of Education to determine your Expected Family Contribution (EFC) by conducting a “need analysis”.

The first thing you want to know is who is eligible to receive Federal Student Aid? From www.fafsa.ed.gov here is your answer.

· Be a U.S. citizen or eligible noncitizen.

· Have a valid Social Security Number.

· Be registered with Selective Service if you are male and 18 to 25 years of age (go to www.sss.gov for more information).

· Have a high school diploma or a General Education Development (GED) Certificate or pass an exam approved by the U.S. Department of Education.

· Be enrolled or accepted for enrollment as a regular student working toward a degree or certificate in an eligible program at a school that participates in the federal student aid programs.

· Not have a drug conviction for an offense that occurred while you were receiving federal student aid.

Also:

· You must not owe a refund on a federal grant or be in default on a federal student loan.

· You must demonstrate financial need (except for unsubsidized Stafford Loans).

You might be wondering how much financial aid you are eligible to receive. This all depends on your Expected Family Contribution (EFC), your year in school, your enrollment status, and your cost of attendance at the school you will be attending. You will want to contact your school’s financial aid office to get this information.

Don’t forget to look at state and school resources to help pay your school costs as well. The financial aid administrator at the school you plan on attending can help you with that.

Start researching non-federal aid early (ideally, start in the spring of your junior year of high school). Many states, colleges and universities have filing deadlines that are much earlier than federal deadlines. Find out all application deadlines and make sure you meet them.

Paying for College…What Are My Options?

admin — Thu, 28 May 2009 18:24:46 +0000

My articles over the last two days have covered how to save for college. The focus has been on starting very young. Please know you really can start at any age, it is never too late. However, if you find yourself with a child in high school, getting ready to graduate and you have no savings, today I am going to cover your different options.

There are three ways you can get assistance to pay for college. They are:

· Scholarships – A scholarship is an award of access to an institution, or a financial aid award for an individual student scholar, for the purpose of furthering their education. Scholarships are awarded based on a range of criteria which usually reflect the values and purposes of the donor or founder of the award.

· Federal Student Aid – includes those programs of general student assistance, such as those authorized by Title IV of the Higher Education Act of 1965, which is administered by the U.S. Department of Education, and similar programs provided by other Federal agencies. It does not include programs which provide fellowships or similar Federal awards to students on a competitive basis, or for specified studies or research.

· Student Loans – are loans offered to students to assist in payment of the costs of professional education.

Step one, check out what scholarships may be available for your student. There are websites out there specifically geared to help you find the perfect scholarship for your student.

Step two, start applying for Federal Student Aid. There is more than $83 billion in federal student aid available every year.

Step three, apply for student loans.

Over the next several days I will go through and break these down more. There is a lot of help out there, you just have to know where to look and be willing to do your research.