Student Loans & Financial Aid info

Direct Student Loans and Federal Family Education College Student Loans (FFEL) are the two largest government federal college student loan programs. FFELs are guaranteed college student loans made by a private lender. This means the government will reimburse the lender when a borrower defaults, or otherwise fails to pay back the loan. However, before being reimbursed, lenders are required to make certain efforts to collect for the college student loan.

Although the FFEL program is a federal program, it is generally administered through state or private nonprofit agencies referred to as guaranty agencies. Guaranty agencies will pay off the lender when and if the borrower defaults, and in turn, are reinsured by the Department of Education. The U.S. Department of Education can provide a list of state guaranty agencies.

Federal Direct Student Loans are made directly by the federal government to the college student, with the assistance of the school or any other entity that has assisted in the origination of the loan. Lenders and any guaranty agencies will not be involved in this process.

Both federal college student loan programs are highly regulated by Congress and the U.S. Department of Education. The maximum interest rates, and many of the important terms of federal college student loans are set by Congress, and are similar in both the programs. There are a few important differences in available repayment plans for FFEL and Direct Student Loan borrowers. You must be in the Direct Student Loan program to qualify for any public service forgiveness.

Stafford college student loans are for undergraduate, graduate and professional college students enrolled at least half time. Federal Stafford College Student Loans are made to students through the Direct Student Loan program and the FFEL program. FFEL and Direct Stafford student loans have the same loan limits, deferment, and cancellation programs. There are some subtle differences in respect to the repayment plans.

Stafford college student loans can be subsidized or unsubsidized. A subsidized student loan is awarded based on financial need and the government will pay all the interest before repayment begins or during authorized periods of deferment. Unsubsidized student loans are not awarded on the bases of financial need, and borrowers are responsible for all interest. Interest payments will usually be deferred while the borrower is still in school, but is added to the principal of the loan when repayment begins. Borrowers can choose to either pay interest while in school or during an authorized period of deferment to avoid the capitalization.

Interest rates for a Stafford subsidized loan will gradually be reduced over the next few years. These cut will apply only to new loans disbursed after 2007.

The new interest rates will be:

• 6% for student loans first disbursed July 1, 2008 to July 1, 2009
• 5.6% for loans first disbursed July 1, 2009 to July 1, 2010
• 4.5% for loans first disbursed July 1, 2010 to July 1, 2011
• 3.4% for loans first disbursed July 1, 2011 to July 1, 2012.

The Department of Education has established annual and aggregate limits for the various federal college student loan programs. Stafford college student loan limits will vary depending on whether you are financially dependent (not being supported by parent) or independent.

As of July 1, 2008, the total amount of Stafford college student loans, including both subsidized and unsubsidized, that undergraduates can borrow is up to $31,000 for dependent college students and $57,500 for independent college students. Subsidized student loans can be no more than $23,000 of this aggregate amount. The limits will vary for each year of study, depending on the length of program and the student’s year of study. For more information on Stafford college student loan limits, visit The Department of Education’s official website.

Most college students will borrow money, or take out a college student loan from a number of sources. Unlike free forms from federal financial aid, like grants or scholarships, college student loans will have to be repaid at some point. Not only will the total amount borrowed need to be repaid, but also it must be paid with interest as well. Typically, a college graduate will spend 10 or more years repaying a college student loan.

A higher education is without a doubt will be one of the most expensive investments you will ever make in your lifetime. According to the National Postsecondary Student Aid Study (NPSAS), 65% of a four year undergraduate college student will take out a college student loan to help them pay for college.

Guess what? College student loans are not exclusive to only undergraduates. In fact, parents have college student loan options and graduate college students require even more financial advantages than undergraduates do.

Types of College Student Loans

College student loans will commonly include a federal student loan, a private student loan, and loans for college students with bad or poor credit, student consolidation loans as well as alternative student loans.

Federal College Student Loans

The Federal Family Education College Student Loan Program (FFELP) is designed to provide American college students as well as their families with additional financial aid that is funded by the federal government. Federal college student loans include Stafford College Student Loans, Perkins College Student Loans, and the Federal College Student Consolidation Loan. College students are automatically considered for these particular loans when they file the annual FAFSA. The Stafford College Student Loan comes in two versions: the subsidized and the unsubsidized and is the single most used college student loan; almost every student will qualify for some kind of federal financial aid through the Stafford College Student Loan program.

Benefits of a federal college student loan will include low interest rates, lowered fees and more lenient payback policies. Unlike standard loans from your bank or financial institution, federal college student loans will have a more flexible repayment term that will make paying for college a much more manageable reality. In addition, federal college student loans are not required to be repaid until after you have graduated.

Private College Student Loans

A private student loan, such as those offered by banks, credit unions, and financial institutions were designed to fill the gap between the amount received from a federal college student loan, grant and other forms of federal financial aid. However, private college student loans do require the borrower or co-borrower to have good credit and will often come bundled with high interest rates and extra fees. For this reason, a federal college student loan is always to be considered first. When used appropriately, private college student loans can help a college student pay for extra educational costs, such as textbooks, computers, even room and board and transportation.

Just know it is always very important to weigh your options and make the decision that makes since for you as well as your particular financial situation.

There was a time in history were bad credit might have meant that it would be almost impossible for a college student and or their parents to quality for necessary college student loans in order to fund an advanced education. Fortunately, for many of us, a number of factors regarding the higher educational system has changed and the ability of college students and or parents with a poor credit history to obtain the college student loan necessary for an education is now much more possible through a variety of bad credit college student loan tools.

For many college students with bad credit, two of the best options available are actually provided for by the U.S. federal system. These student loans are the Federal Stafford College Student Loan and Federal Perkins College Student Loan; both of which are low interest college student loans.

With the Federal Stafford College Student Loan all college students are eligible for this student loan and while the interest rate will be determined at the time the loan is made; college students can be reassured by the fact that the rate is capped at a modest 8.25% This is a great savings over a private bad credit student loan; where a college student may be penalized with higher interest rates due to their poor credit rating. The amount of money that a college student can borrow depends on two major factors:

• The requirements of the college student
• The college student’s year in college (Upper class men are typically allowed to borrow larger amounts than Lower class men)

The Federal Perkins College Student Loan will also be a low interest college student loan with interest rates offered at around 5%. This type of college student loan is actually made through the college or university the student is attending; however, it is partially funded by the government.

If a college student should find that their college or university does not participate in the college student loan programs provided by the government, private lenders and financial institutions also offer their own bad credit college student loan program. The one disadvantage to a private student loan for individuals with poor credit is that they normally will have a much higher interest rate. Since the government does not guarantee these college student loans, the lenders will typically raise the interest rate in order to provide protection in the event that the borrower does default on the student loan.

While this can be a major downside when it comes time to pay back the college student loan, private bad credit college student loans are not without many advantages:

• College students may be able to obtain a larger student loan than would be possible through a government college student loan
• Non-degree certification programs and training courses are more often eligible.

The point is bad credit or good credit. We all have the opportunity to obtain a college student loan. We just need to know were to go and how to get the information that will best help you in your particular financial situation.

For many college students, financial aid can greatly affect their decision as to whether or not they will attend college, or which institution they do attend. Because of the importance, the decision to apply for a financial aid program, and which program to accept, should be made only with a total and complete understanding of the process, requirements, benefits, and responsibilities.

When you do apply for financial aid from federal financial aid programs, some of your information will be verified with certain federal agencies, including the Social Security Administration (for verification of social security numbers and U.S citizenship status). If the information does not match, any discrepancies must be resolved before you can receive any federal student financial aid.

Information is also checked with the National Student Loan Data System (NSLDS) to verify that you are not currently in default on a federal college student loan, have not received an overpayment on a federal grant, and have not borrowed more than the total limit allowed.

If you have received federal, state or University financial aid funds, you must make satisfactory academic progress throughout your program in order to continue to maintain your eligibility. Go can go to Satisfactory Academic Progress (SAP) for a complete explanation of these expectations.
After you have submitted your application for financial aid, you will need to submit the renewal FAFSA each and every year to continue to receive the financial aid. If there are any changes in your family’s income, household size, and or the number of family members enrolled in college, your financial aid eligibility can either increase or decrease depending on the situation.

In addition, there will be variations from year to year in the financial aid funds that will be available from federal, state and or University sources. These variations could require adjustments in financial aid awards.

If you are a non-degree graduate college student or a graduate college student paying the program fee, you might be eligible for some other college student loans. You can visit the “Non-Degree and Program Fee Students” on the internet for details.

They will primarily use two factors to determine the amount and types of financial aid you may receive: the cost of attendance and the expected family contribution (EFC).

The cost of attendance will include tuition and fees as well as room and board, books and supplies, and personal and transportation expenses. You can visit university costs at your schools website for a more complete listing of tuition, fees, and expenses.

Your expected family contribution (EFC) is a figure calculated by the U.S. Department of Education. They arrive at the EFC dollar amount by combining information from your Free Application for Federal College Student Aid (FAFSA) with standardized financial analysis for federal college student aid programs.

Financial aid services will subtract your EFC from your cost of attendance; the difference is your eligibility for federal financial aid, including federal, state, and institutional funds. In addition, they will also consider your year in school and your enrollment status when determining your need.

Federal Perkins Student Loans are low interest government student loans made through a participating school to undergraduate and graduate college students with substantial financial need. In order to qualify for a Perkins college student loan, a college student’s Expected Family Contribution (EFC), determined by the government’s FAFSA (Free Application for Federal Student Aid) will have to demonstrate the greatest level of financial need. Recipients of Federal Pell Grants will receive priority for Perkins Student Loans.

When applying for federal financial aid, it is important to note that the participating school will distribute the Perkins Student Loan on behalf of the government and when the funds are gone, they are gone. What this means is even if you do qualify for a Perkins Student Loan you may not actually get one. Therefore, with interest rates steady at 5%, it will be in your best interest to submit your FAFSA on January 1 or as humanly possible to that date. This can ensure that you get the maximum amount of Perkins Student Loan funds you have qualified for.

The maximum amount for a Federal Perkins Student Loan made to an undergraduate student is $4000 per year and up to a total of $20,000 over the course of an undergraduate program. For graduate college students, the maximums are higher, at $6,000 per year and $40,000 over the course of your graduate studies.

The federal government will subsidize all Perkins Student Loans. Therefore, while you are in school, and while the student loan is in any type of deferment period, the federal government will pick up the tab for all the interest. This can actually save you thousands of dollars in interest when you do eventually have to repay your student loan. I have an example below:

Let’s say an undergraduate college student is able to take the maximum Perkins Student Loan amount of $4,000 each year at 5% interest. The government is going to pay the student’s interest on the first student loan for over 4 years (4 school years plus a 6 month grace period), over 3 years on the 2nd student loan, over 2 years on the 3rd student loan and over a year on the 4th student loan. This would equal out to more than $2,000 in interest payments that you will not have to pay. That is like getting an extra $2,000 free to help pay for your schooling.

In addition to your EFC score, eligibility requirements for the Federal Perkins Student Loan are as follows. You must:

• Be a United States citizen or an eligible non-citizen with a valid social security number
• Demonstrate exceptional financial aid need
• Be working toward a degree or certificate in an eligible program
• Have a high school diploma, GED or pass an approved ability to benefit (ABT) test
• Register with the Selective Service if you are a male between 18 and 25
• Maintain satisfactory academic grades

If you were offered a Perkins Student Loan, you certainly would be wise to take the full amount you have been approved for. With a low interest rate of 5%, a Stafford Student Loan, private Student loan or any other college student loan product will not compete. Since a Perkins Student Loan will most likely not satisfy all of your student aid needs, you can also apply for other federal college student loan products, like a Subsidized Stafford College Student Loan, or Unsubsidized Stafford College Student Loan. If you are still coming up short and have exhausted your federal financial aid resources, you should turn to a private or alternative student loan source.

Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!

If you do intend on borrowing from a federal college student loan program to finance your education, first consult with your college financial aid officer to determine the application procedure at that particular college.

The most affective educational college student loans are those targeted to financially needy students. These loans (Stafford College Student Loans and Perkins College Student Loans) require no interest or repayment while the borrower is enrolled in school.

College students who do not qualify for need based financial aid also have the opportunity available to borrow in the federal Unsubsidized Stafford College Student Loan Program.

Student loans to families of college students are also available from the states Higher Education Supplemental Loan Authority. Parents can also borrow through the federal PLUS Student Loan Program as well as a variety of supplemental educational college student loan programs, which your college financial aid officer can tell you about.

As with any college student loan, make sure you fully understand the interest rates, repayment terms and all tax implications. You need to find out whether interest charges are going to be variable or fixed whether the college student loan has forgiveness or deferment provisions, whether you can consolidate the college student loan with other loans, and whether it will carry prepayment penalties. It is always advisable to only borrow what you need. Remember that college student loans must be repaid even if you do not finish college.

Seven Facts to Remember

1. The amount of financial aid in which you will qualify for is determined by your financial needs. Though your expected family contribution will generally stay the same from college to college, your financial aid needs will increase or decrease depending upon the costs of said college.

2. Your need for financial aid will be more when attending a higher cost college than if you were attending a lower cost college. However, this does not mean that either the higher cost or the lower cost college can provide you with sufficient financial aid to meet all your financial need.

3. All colleges and universities will handle outside scholarships very differently. In some cases, an outside scholarship will not influence your college financial aid package; however some colleges will reduce your student loan portion of the package by the amount of the outside scholarship and others may actually withdraw institutional grant aid by the amount of the scholarship.

4. You must apply for federal financial aid each year. Your family’s federal income tax return will need to be completed early, allowing you to complete your FAFSA as accurately as possible.

5. If your family’s tax return cannot be completed early, you must then estimate on your FAFSA. If you do need to estimate, do so carefully. You will probably be required to submit an actual copy of your completed tax returns later. If your estimate is off base, you will have to correct the information on your application, which could possibly delay, or changing your financial aid package.

6. Contact all colleges to which you are applying to learn about there particular financial aid deadlines.

7. College is a huge investment, but it is the most important one you will make for your future. Take time to learn about all of your financial aid options before you make any college decision. College and university financial aid officers will help you find ways to pay for your education. They are professionals trained in this field. Use them.

The first thing a new or returning college student needs to do is ensure that they have completed all of the appropriate FAFSA online application. If you are in need of application advice and submission instruction, please visit FAFSA online, this is a great guide to the Free Application for Federal Student Financial Aid. FAFSA Financial Aid Forms are required for all federal college student aid loans and are strongly recommended for all college students.

You should always start with the Stafford College Student Loan, as it usually will offer the best rates and repayment options. If you are in need of additional funds to pay for college, some additional options would be a Private College Student Loan and a PLUS Loan for Parents.

Searching For Scholarships

New scholarships are posted almost daily on the Internet Searches. These free services will include all the details you will need to apply; including all eligibility requirements, deadlines, amounts, and all contact information.

Have you heard of Scholarship Points? Scholarship Points is a quarterly drawing by the Advisors Foundation that will allow you to win scholarships from $250 - $1,000. You can even earn multiple chances for the drawing by performing simple tasks such as registering, taking surveys, and blogging. See what you can learn when you do the research.

Stafford College Student Loans

Stafford College Student Loans are federal college student loans that are made directly available to college and university students and are used to supplement ones personal and family resources, scholarships, grants, as well as work study. They can also be subsidized by the U.S. Government or can be unsubsidized depending on the college student’s financial aid needs.

Once you have received your results from your FAFSA application and are then aware of how much you qualify for, apply for a Stafford College Student Loan to meet the additional needs not covered by a FAFSA. Graduate college students are encouraged to review a variety of college student loan programs offered through the Graduate Student Loan Program, including the Graduate Stafford College Student Loan.

Parent PLUS College Student Loans

After you have found out how much federal financial aid you have qualified for your parents can then try to qualify to take out a PLUS loan on your behalf. This can help to fill in the gaps in your federal aid need based. However, it is important to file for the Stafford College Student Loan first, then the PLUS loan.

Graduate college students are now eligible for the Graduate PLUS College Student Loan. You can visit the Internet to learn more about this federal college student loan program for graduate students.

Federal Perkins College Student Loans

A Federal Perkins College Student Loan is a low interest (5%) loan for both undergraduate college students and graduate college students with exceptional financial aid needs. Your school will determine the level of aid and will also serve as the lender of the student loan. The Perkins college student loan is made primarily with government funds and a contribution from your school of choice. You repay this student loan to your college or university.

Undergraduate college students can borrow up to $4,000 for each year of undergraduate study (the total amount, as an undergraduate is $20,000). Graduate college students can borrow up to $6,000 for each year of graduate or professional study (the total amount, as a graduate / professional college student is $40,000, including any Federal Perkins College Student Loans you have borrowed as an undergraduate).

Whether you have already chosen a college or university, or you are still trying to decide, right now is a good time to figure out what it is going to cost and how you will pay for it.

Each college or universities financial aid assistance office is there to provide information to help you figure out the possible expenses. There is no need to be discouraged if the cost of continuing education seems too high, financial aid assistance is available for all students who qualify.

Financial aid assistance is a general term for any financial assistance given to a college student for any type of postsecondary education such as four year College, two year College, trade and technical schools.

Generally, financial aid assistance is divided into two main groups:

• Need based financial aid assistance
• Merit based financial aid assistance

There will be several types of financial aid assistance as well as a variety of sources of financial assistance. Remember, not all financial aid will based on financial need. Some awards are made on academic performance or selected skills of a college student.

Most people believe they will need financial aid assistance to pay for college, and rightly so with the continues rise in cost of higher education. Because there is such a high need and funds are usually limited, the federal government has set policies to measure the need. However, most financial aid assistance will be based on need.

Need based simply means that your family’s financial resources, as measured by a formula established by the federal government, will not be sufficient to cover your educational costs. The EFC formula analyzes a family’s income and assets to determine its “Expected Family Contribution” (EFC) toward the cost of higher education.

The federal government’s definition of financial aid assistance need will compare your income and savings to the cost of the college or university you plan to attend. Therefore, if you have chosen to attend a local community college, your financial aid need may be much smaller, while if you choose to attend a higher priced college or university, your financial aid need could be much large.

Once you have determined your financial aid needs, the college or university you plan to attend will help you identify different sources of financial aid to meet your financial needs. If you apply for financial aid assistance early, college staff will probably be more successful in finding financial aid assistance for you.

Most financial aid packages will include a variety of types of financial aid to include:

• scholarships or grants (free money that will not need to be paid back)
• loans (money that will be paid back, usually at a lower interest rates than other types of loans)
• work study (a campus job)

Need based financial aid assistance can come from:

• Federal Government
• State Government

Sources of financial aid assistance will include:

• The Federal Government
• State Agencies
• Professional And Service Organizations
• Private Foundations
• Individual Postsecondary Schools

To learn more about the financial aid assistance programs in your state and any additional application requirements, you can contact the state financial aid agency. As an additional resource, your local high school counselor can also have information available about state programs.

State programs can include:

• Scholarships
• Grants
• Work
• State Loans
• Tuition Assistance

Many college students have to rely on federal government college student loans to finance their educations. These college student loans have lower interest rates and do not require any credit checks or collateral. College student loans can also provide a variety of deferment options and extended repayment options as well. College student loans do include the Federal Stafford and Federal Perkins College Student Loans.

A Perkins College Student Loan can be awarded to undergraduate and graduate college students with extreme financial assistance needs. This kind of student loan is a campus based college student loan program, as the school is acting as the financial lender using a limited pool of funds usually provided by the federal government. The Perkins College Student Loan is the best college student loan available. It is a subsidized college student loan, as the interest will be paid by the federal government as long as you are enrolled in school allowing a nine month grace period after you have graduated. A Perkins College Student Loan has no origination or default fees, and the interest rate is locked at 5%. Your repayment period is 10 years.

The awarded amount of Perkins College Student Loan you receive will be determined by your school’s financial assistance office. The program will limit you to a $4,000 per year for undergraduate college students and $6,000 per year for graduate college students, with cumulative limits of $20,000 for undergraduate college student loans and $40,000 for undergraduate and graduate college student loans combined.

A Perkins College Student Loan will also offer you a better cancellation provision than a Stafford or PLUS college student loans.

If you find your borrowing needs are still not being met by the federal financial aid college student loan programs, many lenders and financial institutions can offer a multitude of supplemental borrowing programs known as Private or Alternative College Student Loans.

Parents of undergraduate college students can borrow parent loans such as the PLUS College Student Loan to pay for their child’s education. A new program that started on July 1, 2006, graduate and professional college students will also be able to borrow money through the PLUS College Student Loan program to pay for their own education.

A Stafford College Student Loan has a fixed interest rate of 6.8% for college student loans with a first disbursement date after July 1, 2006. (Previously, Stafford College Student Loans had variable interest rates (based on 91-day T-bill rate + 1.7% during school with an additional 0.6% increase upon graduation) capped at 8.25% or less, depending on your yearly adjustments.) All lenders and financial institutions offer the same rate for the Stafford College Student Loan, although some do give discounts for on time and electronic payment from your personal checking account.

The College Cost Reduction and Access Act of 2007 has reduced the interest rates on subsidized Stafford college student loans for undergraduate college students starting July 1, 2008. These reductions are also available only to undergraduate college students, not to graduate college students, and only for subsidized Stafford college student loans, not unsubsidized Stafford college student loans.