Understanding Student Loans

There are 4 types of financial aid for students seeking to pay for their education.

   These funds do not have to be repaid. However, some special grant programs require a commitment to work in an assigned location for a specified number of years.

   These funds you have to pay back with interest over a period of time. There are many types of programs that can fit your needs.

   These programs include assistantships, cooperative education programs and workstudy programs. They are essentially jobs arranged by schools to allow you to work while you are in school to earn your aid.

   The federal government provides credits and deductions to help you and your parents meet the cost of education.

   Student loans are funds borrowed to pay for ones education or tuition cost.

A student or parent can apply for a loan at any financial institution thru the school that the student will be attending. The student can fill out a financial aid application at the schools financial aid office and have financial aid professionals' assist in finding a lending institution to provide funds.

There are many different financial aid programs. Some of these are...

1. Parent plus Parent Loan for Undergraduates Students 2.22% Borrow 100% the cost of college education.
2. Stafford Loans
3. Private Loans
4. Nellie Mae Private (EXCEL) Loan
   This loan program includes the following:
   1. Student EXCEL Loan
   2. EXCEL Grad Loan
   3. EXCEL Education Loan
5. Perkins Loan

   Perkins loans are Federal loans with a low 5% interest rate. Eligible students at participating schools may borrow up to $4,000 a year for undergraduate study and up to $6,000 a year for graduate study. You do not have to repay a Perkins loan until nine months after you leave school.

   Stafford loans are low-interest Federal loans with a rate of 3.42% available to students attending school at least halftime. (The in school interest rate is 2.82%) You do not have to begin repaying a Stafford loan until six mouths after you leave school.

   "PLUS" stands for Parent Loan for Undergraduate Students. PLUS loans are available to parents of dependent undergraduate students with a rate of 4.22%. Parents must begin repayment of PLUS loans within 30 days after the final loan disbursement.

   If you find it necessary to add additional money for schooling after checking out your Federal options, Private College Loans may be the answer.

   All applicants for the EXCEL Education Loan and all co-applicants for the Student EXCEL and EXCEL Grad Loans must submit one of the following income verification documents with the complete application.

   A copy of your paycheck stub or letter from your employer, dated within the last 40 days, which identifies your company name and a year-to-date earnings.

   If self-employed, a copy of your federal income tax return (with all schedules) for the last three years, or a letter from your CPA with your most recent tax return stating length of self-employment in current profession and expected adjusted gross income for the current year.

   If retired, a copy of your current pension/retirement checks or bank statement of direct deposit, and/or your most recent 1099 form.

   Unlike the PLUS and Stafford programs, the Federal Consolidation Loan program offers students and parents the opportunity to reduce monthly payments up to 67% by extending the term.

   Under provisions of the Higher Education Act, student and parents borrowers can save thousands by converting federal education loans at 8.25%-9% to a fixed rate Federal Consolidation loan at interest rates as low a 0.64%.