Financial Aid & Grants

Financial Aid FAQ'S

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What is a Federal PIN and how do I get one?

The PIN serves as your signature / identifier on the FAFSA, and for Federal student loans. It also is the means by which you can access your personal information on the Department of Education systems. Because it serves as your signature on Federal documents, it should never be shared with anyone else. You will use the same PIN for financial aid from year to year.

To receive a PIN (or to have a duplicate PIN sent to you if you have lost or forgotten your PIN number) visit www.pin.ed.gov The PIN will be emailed to you if you give them an email address: the link to your PIN will only open once so be sure to write it down and keep it in a secure place. If you do not provide an email address, your PIN will be mailed to you. A new feature of the 2008-2009 FAFSA is that a PIN can be generated for you immediately upon your request as part of the FAFSA completion process, so that the FAFSA can be signed right away. Be sure to use the PIN to sign the FAFSA application so that the application will be complete and ready for the government to process. Lack of signatures causes processing delays.

Do I need to file my taxes before I apply for financial aid?

No, you are not required to file taxes before submitting the FAFSA; you may complete the form using estimated tax information. However, it is important to be as accurate as possible: the likelihood of being selected for verification of your application information increases when estimated figures are used. If you are selected for verification you will need to submit additional documents to the financial aid office so that your FAFSA information can be verified (confirmed or corrected).

Once your taxes are filed you are expected to review your FAFSA information and make any necessary changes. Changes can be made online at www.fafsa.ed.gov or (if you submitted a paper FAFSA) on the paper Student Aid Report that the government will send you.

What is “verification”, and why was I selected?

The Federal Processor randomly selects over 30% of all FAFSA applications for the process of verification. If you are selected for verification the Office of Student Financial Planning (OSFP) will ask you to provide complete and signed copies of the prior year’s Federal taxes and the completed and signed Verification Worksheet for that academic year (available online at www.carthage.edu/forms). Additional documents may also be needed. Once all of the necessary documents have been received, the OSFP electronically transmits the confirmed or corrected information to the government. When the government notifies the OSFP that they have processed the transmitted information, the verification process can be completed.

Note: If a student is selected for verification, it is important to respond to the request for verification documents as quickly as possible, to prevent delays in financial aid processing and to ensure optimum eligibility for limited aid sources.

My parents will not help me pay for school. Can I file as an “Independent”?

The Federal government considers a student to be Independent if they meet one or more of these criteria:

Are 24 years of age or older.
Have already received their first Bachelor’s degree and will be working towards their Master’s or Doctorate degree during the FAFSA-related academic year.
Are married (including those who are separated but not divorced).
Have children for whom they provide more than half of the economic support.
Have dependents other than a child or spouse, for whom they provide more than half of the economic support.
Are an orphan (both parents are deceased) or ward of the court, or were a ward of the court until the age of 18.
Are currently serving on active duty in the U.S. Armed Forces for purposes other than training.
Are a veteran of the U.S. Armed Forces.
All other students are considered to be Dependent, and the parents’ information and signature will be required on the FAFSA. If you believe you have a situation that should be considered individually, ask to speak with a counselor in the Office of Student Financial Planning.

My parents are divorced. Which parent’s information should be given on the FAFSA?

If your parents have divorced or separated, provide answers about the parent you lived with more during the past 12 months. If you did not live with one parent more than the other, provide answers about the parent who provided more of your financial support during the past 12 months, or during the most recent year that you actually received support from a parent. If this parent is remarried as of today, their current spouse’s information will also need to be included, regardless of the amount of financial support that stepparent is providing towards the student’s education.

What should I do if changes occur after I file the FAFSA?

If divorce, death, loss of employment or another major change occurs in the family situation, affecting the student’s / student’s family’s ability to contribute to the cost of education, contact the Carthage Office of Student Financial Planning to determine what options or alternatives may be available.

I will be attending as a part-time student. Do I qualify for Financial Aid?

The student’s EFC and enrollment status are reviewed to determine whether or not the student is eligible for government grants and loans. Some students will be eligible for government grant aid with half-time or less enrollment, but more aid is usually available at half-time or greater enrollment. A student must be enrolled at least half-time to qualify for Federal student loans.

I have received a private scholarship. Will this affect my Financial Aid?

The total amount of financial aid from all sources cannot exceed the cost of attendance established by the college. In most cases, a private scholarship will not affect the amount of your financial aid, though it may have a direct effect upon the type and amount of student loan eligibility. If you are awarded a private scholarship, submit the Private (Outside) Scholarship Notification Form (available online at www.carthage.edu/finaid/printforms) to the Carthage College Office of Student Financial Planning, attaching a copy of the scholarship award notification letter. The student’s financial aid awarding will then be reviewed and adjusted to include the anticipated scholarship amount and to ensure that the student is not over-awarded.

Can I get a job on Campus?

Nearly every facet of Carthage College has students helping to run it in some capacity, either as Federal Work Study awardees or as Campus Employment students. Students who are awarded Federal Work Study (FWS) will be contacted regarding how to pursue their job possibilities. Students who are not awarded FWS have the option (usually after October 1st) to visit offices and professors to apply for any campus employment positions that are open.

Difference between Subsidized and Unsubsidized Loans:

"Subsidized" means that the federal government pays the interest on a borrower's loan, while the student is enrolled at least half time and during grace periods and deferments. Students must demonstrate financial need to qualify for subsidized loans.

The federal government does not pay interest on unsubsidized loans while the student is in school, during the grace period, or while in deferment. Interest is charged on the loan from the date on which it is disbursed until it is paid in full. The interest may be paid on a monthly basis, or allowed to accumulate, in which case it will be capitalized quarterly and added back to the principal amount borrowed. Students may borrow unsubsidized loans regardless of financial need.

The Federal Direct PLUS Loan is another unsubsidized loan program for parent borrowers which is designed for middle- and higher- income families who generally do not qualify for other financial assistance and who can accommodate loan payments while their dependent child is in school. Parents may also borrow Federal Direct PLUS Loan funds to supplement resources available to their dependent student. Parents who do not have an adverse credit history may borrow up to the total cost of the student's education, less any other aid received by the student.

Financial Aid Related Links

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Federal Student Aid (FSA): The Federal Student Aid programs are the largest source of student aid in America, providing over $60 billion a year in grants, loans, and work-study assistance. This site can help students at every stage of financial aid process, whether they're in school or out of school.

Finaid - Financial Aid Information: Best overall source inguiding students in financial assistance. Includes custom calculators to help the student figure out how much school will cost, how much he/she needs to save, and how much aid he/she will need.

Financial Aid Calculators: FinAid's custom calculators can help you figure out how much school will cost, how much you need to save and how much aid you'll need.

Free Application for Federal Student Aid (FAFSA): On-line application and renewal processing for federal student aid programs. Other options include requesting a PIN, correcting the ISIR, requesting a duplicate SAR, Question 28 worksheet, School Code search and checking on the status of a submitted FAFSA.

Great Lakes Educational Loan Services, Inc.: Obtain a wealth of information concerning your Stafford or PLUS loans processed through Great Lakes Higher Education, the federal loan guarantor used most by Carthage. Obtain details on the disbursement of all your loans.

IRS - Education Tax Credits: IRS Web page linking to details regarding various education-related tax credits and deductions.

Loan Forgiveness for Teachers: The federal government has a program of federal Stafford and Perkins loan forgiveness for students meeting certain eligibility criteria.

Mapping Your Future - Welcome!: A one stop site for students and parents with information on financial strategies, career options, loan counseling, and college planning.

The National Student Loan Data Systems(NSLDS): This is the best source to get a list of all student loans you took out while you were attending college. *Please Note* The individual may have loans with other loan agencies that have not provided information or authorization to the
Clearinghouse.

OFSA Ombudsman:The SFA Ombudsman works with student loan borrowers to informally resolve loan disputes and problems. Their goal is to facilitate and provide creative options and alternatives for borrowers needing assistance with federal loans.

Practical Money Skills For Life: Designed to help educators, parents and students develop better money management for life.

Selective Service System: A student can register for the selective service or verify their registration online.

The Smart Student Guide to Financial Aid Student Gateway to the U.S. Government: A comprehensive information portal providing answers to your questions about planning and paying for your education, career development, government, military service, community service and more.

The Student Guide to Federal Aid: A publication put out by the U.S. Department of Education. Information about federal student financial assistance (SFA) programs and how to apply for them.

Student Loan Borrower Assistance: National Consumer Law Center’s Student Loan Borrower Assistance Project is a great resource to learn more about your student loans and more about your options and rights. It provides a wide range of information about choosing loans, loan basics, questions to ask and other information about student debt.

U.S. Department of Education Home Page: This site contains everything a student needs to know about federal aid and educational opportunities.

U.S. Department of Education Pin Registration: This web site is your source of information for the U.S. Department of Education PIN.

Overview

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Overview of Federal Student Loans and Private Student Loans

The Federal and Private Student Loan Process

The process of applying for student loans can be both stressful and confusing. To help, this tutorial reviews the basic types of student loans and how you can qualify for them.
Interest Rate Types

There are two fundamental interest rate types of student loans, subsidized and unsubsidized. Very simply put:

Subsidized loans have some or all of the interest paid by someone besides the borrower while the borrower is in school. Examples of subsidized loans include the subsidized Stafford Loan and Perkins Loan.

Unsubsidized loans have interest which accrues from the day the loan starts; you may not be making payments on that interest while in school, but the interest clock is ticking. Examples of unsubsidized loans include the unsubsidized Stafford Loan, Parent PLUS Loan, private alternative student loans, and student loan consolidation.

Loan Programs

There are also two fundamental lending types of student loans, federal and private:

Federal student loans are loans issued by or guaranteed by the U. S. government. These include loans from the U.S. Department of Education, as well as Department of Health and Human Services. Most major banks and credit unions also offer federal student loans; these loans are backed by the U.S. government. And finally, student loan consolidation services offer federal consolidation loans. Interest rates on federal student loans are set by Congress every year, and are traditionally fairly low compared to private loans.

Private Student Loans are loans issued and guaranteed by non-federal organizations. These include loans from organizations such as TERI, state or local student loans, private bank student loans, and private agency loans (such as the Sallie Mae Signature Loan). Interest rates on private student loans are set by the issuing lender and can vary wildly. We recommend the Act Education Loan as a reliable source of private student loans.

Beware! Not everyone knows the difference between federal and private student loans, so make sure when you apply for a loan that you are signing a promissory note for the appropriate loan type.

Financial Aid and Student Loan Introduction

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The financial aid process can seem overwhelming and intimidating at first, but it's easier to understand once the process is laid out. Here, we'll walk you through the basics of the process.

Determine What You Can Afford

A college degree is likely to be the second biggest investment in any person's life besides their house. Just as you'd take the time to shop around and do some research on a potential house to buy, so too should you invest the time in yourself to figure out what you can afford. Do your personal budget, compare schools, and see what's affordable. Be sure to pay attention to the financial aid calendar so that you don't miss any important deadlines.

Scholarships and Grants

Scholarships and grants are your first stop in the process of finding money for college. Scholarships and grants typically never need to be repaid, and as such are the preferred form of financial aid if you can get them.

FAFSA and Federal Financial Aid Paperwork

The FAFSA, or the Free Application for Federal Student Aid, is the single-most important form you'll complete in the financial aid process for unlocking federal student aid such as government grants and loans. The FAFSA is also dependent on the IRS Federal Income Tax Return; we'll review all of the information you need to know about education tax credits and deductions.

Receiving Financial Aid

Once you've filed your FAFSA and applied for as many scholarships and grants as you're eligible to receive, you'll need to wait for financial aid award letters to arrive from schools. Once you receive them, you'll need to figure out what aid you will be receiving.

Federal Student Loans for Students

There are three basic federal student loans that students may qualify for after completing the FAFSA. These are the Stafford federal student loan, the Perkins loan, and the Graduate PLUS Loan. Depending on what program of higher education you're enrolling in, loan limits and terms will vary.

Federal Student Loans for Parents

Parents who want to help undergraduate children afford college are also able to borrow federally guaranteed loans called PLUS loans (Parent Loans for Undergraduate Students) to help pay for college.

Private Student Loans

When federal financial aid is insufficient, or education expenses exist outside of the coverage of federal student loans, private student loans can be used to "fill in the gaps" between federal financial aid and the full cost of education.

Repaying Your Student Loans

The process of repaying your student loans is even more important than the process of obtaining them. Prompt, on time payment builds a positive credit history and helps you obtain additional credit in the years after your education ends. Missing payments or defaulting on loans can do the opposite. Happily, there are a number of different options to help you repay your student loans, from payment plans to loan consolidation.

Federal Financial Aid Programs

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The federal government is the largest provider of financial aid. In fact, the federal government provided 75 percent of all available student aid, according to the College Board. So it makes sense to know as much as possible about federal financial aid programs and to apply for federal aid before seeking out more exotic financial aid sources.

The largest and most familiar federal student aid programs are:

Federal Pell Grants
Federal Academic Competitiveness Grants (ACG)
Federal National Science and Mathematics Access to Retain Talent Grant (SMART)
Federal Supplemental Educational Opportunity Grant (FSEOG)
Federal Stafford Loans
Federal Parent Loan for Undergraduate Students (PLUS) Loans
Federal Graduate PLUS Loan
Federal Perkins Loans
Federal Work-Study Program
Federal Pell Grants

Determining EFC and Cost of Attendance

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What is Cost of Attendance?

Your college or university will generally publish on its Web site or in its financial aid office the college's cost of attendance. This is an estimate of how much money will be required to attend school for one year at that college, including all reasonable expenses. Most people, when budgeting for college, look at the tuition and assume that tuition is more or less the "price tag" for that school, when the reality is that tuition may be as little as 50% of the overall budget. Here are some sample costs of attendance from a survey done by TheStreet.com:

Prestige school (Ivy League or near-Ivy League):
Tuition, $31,644;
Room/board, $9,873;
Books & supplies, $1,419;
Plus similar costs for personal expenses and transportation.
Total cost: an estimated $44,592 per year.
Private four year university/school:
Tuition, $16,086;
Room/board, $6,540;
Books & supplies, $920;
Plus costs for personal expenses and transportation.
Total cost: an estimated $26,226 per year.
State university/Public school:
Tuition, $8,670;
Room/board $7,176;
Books/supplies $950;
Plus expenses and transportation.
Total cost: an estimated $18,452 per year.

Incidentally, the fact that state and public universities are broken out into a separate category is an indication of price range, not quality. Some public universities are as well regarded or even more prestigious than their private university counterparts.

How does Cost of Attendance influence financial aid?

A school's financial aid office generally determines the programs and amounts of aid an applicant receives. This involves determining the cost of attending the college, calculating a student's Expected Family Contribution (EFC), and then awarding aid to meet the difference between the two - the calculated financial need.

What is the EFC?

The Expected Family Contribution (EFC) is the amount a family can be expected to contribute toward a student’s college costs. Financial aid administrators determine an applicant’s need for federal student aid from the U.S. Department of Education and other non-federal sources of assistance by subtracting the EFC from the student’s cost of attendance (COA).

The EFC formula is used to determine the EFC and ultimately determine the need for assistance from the following types of federal student financial assistance: Federal Pell Grants, subsidized Stafford Loans (though the William D. Ford Federal Direct Loan [DL] Program or through the Federal Family Education Loan Program [FFEL]), and assistance from the “campus-based” programs—Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Perkins Loans, and Federal Work-Study (FWS).

The methodology for determining the EFC is found in Part F of Title IV of the Higher Education Act of 1965, as amended (HEA).

Financial aid administrators use the information from the Free Application for Federal Student Aid (FAFSA), including the EFC, to develop a financial aid package. This package specifies the types and amounts of assistance, including non-federal aid, a student will receive to cover his or her education-related expenses up to COA. However, because funds are limited, the amount awarded to a student may fall short of the amount of aid for which the student is eligible

What is the source of data used in EFC Calculations?

All data used to calculate a student’s EFC come from the information the student provides on the FAFSA. A student may submit a FAFSA (1) through the Internet by using FAFSA on the Web, (2) by filing an application electronically through a school, or (3) by mailing a paper FAFSA to the Central Processing System (CPS).

Students who applied for federal student aid in the previous award year may be eligible to reapply by filing a Renewal FAFSA over the Internet or by submitting a paper renewal application. Applying for federal aid is free. However, to be considered for non-federal aid (such as institutional aid), a student may have to fill out additional forms and pay a processing fee.

What happens if awarded aid falls short of Cost of Attendance?

Then its student loan time - alternative student loans, to be specific. Alternative private student loans bridge the gap between awarded aid and Cost of Attendance. For example, let's look at the Prestige School's Cost of Attendance again and some financial aid. Let's say that you are awarded the maximum amount of federal aid for Pell Grants, Perkins Loans, and Stafford Loans as a freshman. That means:

Perkins Loan - maximum of $4,000
Stafford Loan - maximum of $6,625 ($2,625 subsidized)
FSEOG - maximum of $4,000
Pell Grant - maximum of $4,050

That puts your federal financial aid package at $18,675. Let's also assume that you receive $2,000 in scholarships and an additional $5,000 in state and institutional financial aid. That puts your aid package at $25,675, which will almost cover tuition. You'll still have about $2,955 in tuition to cover, plus the remaining expenses, which totals $20,680.

Graduate Student Loans and Financial Aid

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Graduate students have a unique set of needs in educational financing. For many students, there are a myriad of issues to face when considering advanced degrees - financial issues included.

Financial aid availability: Many federal and state aid programs available to undergraduate students are not available to graduate students (Pell Grants, SEOG as well as many state scholarships). Much of the aid received by graduate students is in the form of loans.

To make up some ground, Graduate Stafford Loan limits increase significantly, to $20,500 per year, for graduate students. Federal Graduate PLUS Loans can also help cover the cost of education. In addition, private student loans can provide additional funding at competitive rates.

Graduate Student Loan Center (Private Alternative Graduate Loans) - GradLoans.com, serving graduate students, specifically:

MBA Loan Programs - MBA Loans for graduate students
Dental School Loans - Student Loans for Dental School
Medical School Loans - Medical Student Loan Program
Business School Loans - Business School Loan Program
Law School Loans - Law Loans for Law Students
Nursing School Loans - Nursing School Loans
Graduate Student Loan Consolidation - Consolidate your federal and private student loans!

Graduate Center: Resources for Graduate Students including Graduate Schools, Graduate Student Credit Cards, Graduate Jobs, Graduate Financial Services, Online Graduate Degrees and other resources for graduate students.

Financial Aid Status: For federal aid applications, graduate students are automatically considered "independent students"; however some institutions may still require parental information in determining eligibility for non-federal sources or programs.

Consider the Cost vs. Benefits of a graduate education: Learn salary and employment information about others with the graduate degree you're seeking. Is the field growing and likely to offer employment when you receive your degree? Does the degree take you to the next "level" on your career path?

General Advice: Reduce debt as much as possible - Unless you have assistance from your employer or resources to meet costs, you're likely to borrow for your graduate education. Before beginning, consider paying off as much debt as possible, especially high interest credit card debts.

Reduce expenses to live within your means of your expected in school salary. For some, returning to school also means reducing hour at work and take-home pay. Really review your expenses and adjust your lifestyle to your in-school income. Make realistic decisions about work and school. The return to school can be a major change, carefully consider your course work and time requirements for school to your family and work circumstances.

Awarding Financial Aid

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The FAFSA and its results are only the first step in understanding what the cost of education will be. Your FAFSA results are sent to the school(s) you plan to attend a short time after filing your FAFSA. From the FAFSA results, the school create what's called an "award letter" that is sent to you for your review and approval. The award letter is usually a one or two page summary outlining the costs of the school and what aid is available to help you.

The amount of each award is based on a myriad of factors including, but not limited to: institutional or regulatory policies for minimum and maximum amounts, amount of funds available to the institution, and eligibility of the applicant. Let's take a look at a couple of sample financial aid award letters.

Below is a listing of your 2007-2008 financial aid award as of the date of this notification.

Awards listed under Award Detail as "predicted" are only projections of what you are eligible to receive. Final determination of your eligibility and the award amount is based on information from the state, a private donor, a college or division within the University, or the results of the federal financial aid application (FAFSA).

If you continue to meet all eligibility criteria associated with each fund, awards will be disbursed each term as indicated below.

Estimated Cost of Attendance: 15,070.00
Minus:
Expected Parental Contribution: 360.00
Expected Student/Spouse Contribution: 35.00
Total Expected Family Contribution: 395.00
Equals Your Gross Financial Need: 14,675.00

Award Detail

Predicted Federal Pell Grant: 3,960.00
Student Assistance Grant: 1,722.00
A Bright Student Scholarship: 3,000.00
Federal Direct Sub Loan: 1,500.00
Federal Perkins Loan: 2,093.00
Federal Work-Study: 2,400.00
Total Award: 14,675.00

Let's do a quick analysis of this award letter. First, we find the estimated cost of attendance, or how much it costs to attend this particular university, before any aid. This is the "sticker price", and while it can be startling, it's not necessarily what you're going to pay.

From the sticker price we see the expected contributions of parents and students. These two numbers are typically derived from the results of the FAFSA. In this example, the family's expected family contribution is $395.00. This is the total amount that the family is expected to pay from their own financial resources and savings.

That leaves the college with a gap of $14,675.00 to fill, which they'll meet with a combination of scholarships, grants, loans, and work. In the award letter above, we show all types of aid being used. Scholarships and grants make up $8,682, money that is ideal in that it most likely never needs to be repaid.

Federal student loans come next, totaling $3,593.00. These are funds loaned at relatively low, fixed rates that must be repaid over time, typically 10 or 15 years.

Finally, federal work study provides $2,400.00 in funding. Consider this to be almost a paycheck advance that you work to earn. One of the expectations of the work study program is that you'll use the earnings towards educational expenses. Should you use them otherwise as directed, you'll owe a balance on your tuition.

Which sources of financial aid you receive depend strongly on the financial resources of you and your family? A high EFC indicates that according to the formula used by the Department of Education, you are theoretically able to afford a significant portion of your educational expenses without federal financial aid.

Financial Aid Calendar

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January: Beginning on January 1, file your FAFSA online. By filing online, your FAFSA will be processed much faster than paper FAFSA applications. Many scholarships also begin accepting applications in January, so start applying!

February: Be on the lookout for your "Student Aid Report" (SAR). This report is a confirmation of the data you submitted on the FAFSA. If you need to make changes, follow the instructions or contact the school's financial aid office. You can also call 1-800-4-FED-AID for assistance. Check the schools listed on the "School Section" of the SAR to ensure the correct schools were recorded on your application. You can always submit it to additional schools at a later date. Many states have priority deadlines for the FAFSA to qualify for state aid by March 1, so make sure you file that FAFSA sooner rather than later!

March: Many schools begin making awards in March. You should receive a package of information from the school's financial aid office that details the financial aid programs and dollar amounts of your financial aid award. Learn more about how to read your award letter! Follow the instructions and be sure to meet any deadlines for accepting your financial aid award. Remember, financial aid rarely meets all the costs of tuition and fees; to make up any gaps between federal and institutional financial aid, you may need a private student loan.

April: Remember to file your IRS federal income tax return no later than April 15. Even though it's not strictly financial aid related, any tax penalties or taxes owed can wreak havoc on financial aid the following year, so be sure to stay on the good side of the IRS by filing a tax return. Even if you don't need to file a tax return, it doesn't hurt to do so - in 2006, anyone filing an income tax return qualified for the telephone excise tax refund, no matter whether you owed taxes or not.

May: Students who are graduating should immediately file for student loan consolidation. Students still enrolled in school for another year or more should continue searching for aid, scholarships, and grants throughout the summertime. For students who are studying abroad, May is the right time to acquire a study abroad loan. Those studying during summer semesters will need to have financial aid in order for Summer Semester I.

June: Jobs and travel often occupy the calendars of students during the summer. Remember that any income you make as a student can potentially impact your financial aid for the following year, so it may be worthwhile investigating internships or volunteer work to build experience.

July: For students taking summer courses, July is usually the beginning of Summer Semester II; be sure you have your financial aid in order. New rates on federal student loans typically take effect on July 1 of each year, so be mindful whether a rate change in any given year could benefit you positively or negatively.

August: First time Stafford Federal Student Loan borrowers often have to fulfill an Entrance Counseling session - and many schools provide these sessions over the Internet. Check with your school. Double check on any outside financial aid or college scholarships you may be receiving. Make sure any loans you're applying for are in progress and moving towards disbursement to your school. Keep in touch with your financial aid office to verify that your award package is in place.

September: School is beginning - make sure that all your loans are in process or disbursed, as the bills won't be far behind. If you find yourself confronted with a spate of unexpected expenses or shortfalls in aid, apply for an alternative student loan, since you can usually obtain alternative student loans in a much shorter period of time than federal student loans.

October: October is the month of early decision - many students applying to college file their college applications during October. Make sure you've got a clear understanding of a school's financial aid packages before doing an early decision application that may be binding!

November: Students who have graduated and not consolidated their student loans will be approaching the end of their grace periods. Remember, the repayment rate for Stafford Loans is 0.6% higher than the grace period rate, so consolidating can save you more than half a percent on your interest rate. November is also a great month to begin writing scholarship essays, as these can be time consuming, and it's best to have them done and reviewed prior to the start of the January scholarship season.

December: Gather up your tax receipts, pay stubs, etc. and fill out an estimated IRS 1040 so that you can file your FAFSA as soon as the doors open on January 1. If you have the opportunity to do so, consult with a financial planner (most community banks and credit unions offer low cost or no-cost consultations to members/customers) and review your finances to see about last minute changes you can make that impact financial aid eligibility.

Monthly Payment Plans

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Students and families have many choices to help them meet educational expenses that are not covered by financial aid. One great option that many colleges offer is an interest free, Monthly Payment Plan. While there are differences among plans, general features of monthly payment plans include:

The option to pay educational expenses over time without interest charges.
A one-time enrollment/application fee (usually $50 - $100)
Optional insurance (in case of unemployment, disability or life for example) in case the applicant becomes unable to fulfill the terms of the payment plan

How these Plans work

Generally, colleges and universities work with a payment plan company that administers a plan (manages billing, processes payments, and provides customer service to students and families) for the college. The college, through either the financial aid office or billing office, will provide information about this company and terms of the program offered at the school. Many of these payment plan companies have Internet sites that can help answer questions and provide interactive planning tools.

There are two main benefits to using a Monthly Payment Plan:

No interest charges - These programs provide an interest free option to manage educational expenses.

Spread out costs over a number of months - Rather than paying educational expenses in one lump sum, these plans effectively spread out payment over the student's period of enrollment.

Who benefits from a Monthly Ttuition Plan?

Everyone! Families that have sufficient income can benefit from the "same as cash" price of education while not having to manage one or two large payments per year.

529 Plans and Other College Savings Options

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529 Plans and Other College Savings Options

If you have kids, you want a college education for them. But -
Do you know how much college costs?
Do you know how much you need to save?
Do you know the many different tax-advantaged ways to save for college?
We've written this guide to answer these questions and give you the information you need to save and invest wisely for college. You can make a college education an affordable choice for you or your child.

College costs are rising - Are you keeping pace?

We all know that college costs are rising. For 2001-02, The College Board® reported that the average cost for tuition and fees at private four-year colleges was $17,100, up 5.5% over the previous year. Although the $3,800 average cost of tuition and fees at a four-year public college are a lot less, these costs are up 7.7% from the previous year. In the past 10 years, the cost of tuition and fees at four-year private colleges have risen 33% and at public colleges 40%.

If college costs were to increase at just 5% per year, in 10 years the average cost of tuition and fees at a four-year private college would be $27,900, and the average cost at a four-year public college would be $6,100. And this is just tuition and fees! For 2001-2002, The College Board® reported that room and board charges averaged $6,500 at four-year private colleges and $5,300 at four-year public colleges.

Financial Aid and Savings

As part of saving for college, you need to know whether your child will be eligible for financial aid, which reduces what you may need to save for college.

You also should be aware; however, that saving for college might impact financial aid. In fact, any investments or savings can affect federal financial aid eligibility (This is determined by completing the FAFSA) the impact on financial aid varies depending on whether the savings belong to the parent or the child. Now, savings in a parent's name can reduce federal financial aid eligibility by at most 5.6%. But assets saved in a child's name can reduce aid eligibility by 35%. Prepaid tuition plans like those we are about to discuss may have even a greater impact on federal financial aid. Every dollar saved in a prepaid tuition plan can reduce a family's federal financial aid need by a dollar. So, if you save $10,000 in a prepaid tuition plan, you will be considered as needing $10,000 less in financial aid. States and private colleges may have their own rules for financial aid, and some states give more favorable treatment to pre-paid tuition plans and other college savings options.

Financial aid is a complex and confusing area. But remember that financial aid today is not a gift - about 60% of aid for 2001-02 consisted of loans.2 While savings may decrease financial aid, you and your child will likely be in a much better financial situation on graduation day if you start saving now for college. The more you save now, the less you will need to borrow later.

Once you determine how much you need to save or can afford to save, you need to decide what types of college saving vehicles you want to use. In addition to mutual funds, regular brokerage accounts, and bank savings accounts, there are now a number of tax-advantaged alternatives available to help you save for college. Get the facts about each of the options, and decide which type might be right for you:

529 plans
Prepaid tuition plans
College savings plans
Coverdell Education Savings Accounts
Custodial Accounts
Savings Bonds

To help you understand the differences among these college savings options, use our Comparison of College Savings Options chart. We also offer you Tips for Choosing College Savings Options and links to other resources for more information.

Remember: the tax rules that apply to college savings options are complicated. Before investing, you may want to check with your tax adviser about the tax consequences of investing in any of these options.

529 Plans

Named after the section of the federal tax code that governs them, 529 plans are tax-advantaged programs that help families save for college. Selecting a plan requires homework. Almost every state offers at least one 529 plan, and the tax advantages, investment options, restrictions, and fees can vary a great deal. Beginning in 2002, even more choices may become available, as many colleges will be able to offer 529 plans too.

Before buying a 529 plan, you should find out about the particular plan you are considering. Request an offering circular or official statement from the plan sponsor or your financial professional. Most 529 plans provide this document on their Web sites. You can find links to 529 plan Web sites on The National Association of State Treasurers' College Savings Plans Network Web site or you can call them toll-free at 877-277-6496 for information on the 529 plans you are interested in.

Two Types of 529 Plans

There are two types of 529 plans - prepaid tuition plans and college savings plans. Every state offers at least one of these types of plans or is developing one. Some states offer both, and many of these plans are open to non-residents.

Prepaid Tuition Plans

Prepaid tuition plans allow parents, grandparents, and others to lock in today's tuition rates at any of a state's eligible public colleges or universities so that they don't have to worry about future tuition increases.

Contribution Limits you pay for amounts of tuition (years, credits, or units) in one lump sum or through installment payments. There are a number of options. Some states offer contracts for a two-year community college or a four-year undergraduate program, or a combination of the two, and can cover one to five years of tuition. Some states even allow the contract to be applied to graduate school tuition.

Covered Educational Expenses With only a few exceptions, however, most prepaid college plans do not cover other expenses, such a room and board. So you may want to consider other college savings options to cover these costs.

Residency Requirements and Other Limitations Unlike college savings plans, most prepaid tuition plans require either you or your child to be a resident of the state offering the plan when you apply. Some limit enrollment to a certain period each year. Many prepaid tuition plans also have age or grade limits for beneficiaries (i.e., future college students).

Investment Options Prepaid tuition plans have no investment options. Under prepaid plans, the price of the contract is determined prior to purchase and usually depends on the type of contract, the current grade of the beneficiary, the current and projected cost of tuition, and the projected rate of return. These programs then pool the money and make long-range investments so that the earnings meet or exceed state college tuition increases. When a child is ready to go to college, the plan transfers funds to cover the tuition directly to the institution.

Portability if your child chooses not to attend an in-state public college, all is not lost. All prepaid plans allow you to use plan money to pay tuition at most private and out-of-state public schools. Many prepaid tuition plans will pay out an amount equal to the weighted average tuition and mandatory fees at your state's public institutions, not to exceed the actual tuition and fees you incur. All prepaid plans also let you transfer the plan to a child's brother or sister (although age restrictions may prevent transfers to an older sibling). Unfortunately, if your child chooses not to go to college and a sibling doesn't use the plan, or you need to cancel the prepaid plan, most states will only give you back what you originally contributed with a reduction or elimination of any interest earned. Some plans also charge a cancellation fee.

College Savings Plans

With college savings plans, students of all ages can save for all college costs, including tuition, fees, room, board, textbooks, and computers.

Not Just for Children. If you are considering going back to college or graduate school, you can open a college savings plan for yourself. You will save on taxes and if you end up not going to school, you can always transfer the money, tax-free, to another 529 plan for your children or spouse.

Not Limited to In-State Public Colleges or State Residents Withdrawals from college savings plans can be used at most colleges and universities throughout the country, including graduate schools. Some foreign education institutions also may be eligible. Many states now offer at least one college savings plan that has no residency restrictions. You can live in Ohio, contribute to a plan in Maine, and send your child to college in California. However, if your state offers state tax advantages to residents who participate in the local plan, you'll miss out if you opt for another state's 529 plan.

Covered Education Expenses College savings plans typically cover all "qualified education expenses" at eligible colleges, universities, and other post-secondary institutions including:

Tuition
Fees
Books and supplies
Equipment
Room and board

Contribution Limits When you invest in a college savings plan, you pay money into an investment account on behalf of a designated beneficiary. Contributions can vary and are only limited by the maximum and minimum contributions limits set by most plans. Although the maximum amount of contributions differs from state to state, in the majority of states offering college savings plans, the maximum amount that you can contribute for one beneficiary exceeds $200,000.

To further increase the amount of contributions you can make, you can open a second college savings plan in another state. Currently, the IRS only requires that contributions for one child cannot be more than the amount necessary for the qualified higher education expenses of that child. So if you want your child to go to an expensive college and graduate school, one option you have is to open more than one college savings plan.

Most states also offer very flexible minimum contribution limits. Many require a $250 initial contribution with subsequent contributions of as little as $50. These minimum contribution amounts can be reduced even further in many states if you make contributions through payroll deductions or automatic transfers from a bank account.

Investment Options Typically, each plan gives you a number of investment options that allow you to invest in various portfolios of mutual funds. Some college savings plans offer age-based portfolios of mutual funds. When the child is younger, the portfolio typically invests mostly in stock funds, which carry a higher risk, but higher return potential. As your child grows older, the asset allocation becomes increasingly conservative as it gradually shifts to bond funds and other fixed-income funds.

Many states also offer non-age-based investment options, allowing you to select portfolios with conservative, moderate, and aggressive asset allocations. Some states also offer investments options that allow you to invest in certificates of deposits whose interest rates are linked to an index that measures the average cost of college tuition.

Until recently, once you selected an investment option within a college savings plan, you could not change that option. Only new contributions could be invested in different investment options. Now, however, the IRS allows you to change your investment options once every calendar year in a college savings plan. Not all plans have made the changes necessary to permit you to switch investment options, so check each college savings plan you are considering to see if it allows you to change investment options every year.

Investment Risk Investing in college savings plans does come with some risk. Unlike prepaid tuition plans, they don't lock in tuition prices. Nor does the state back or guarantee the investments. There also is the risk with most college savings plan investment options that you may lose money, or it may not grow enough to pay for college. For example, if you choose a plan option that invests in stock mutual funds, chances are that your invested funds annual performance will mirror the trends of the stock market. Thus, you may lose money during a declining market.

Fees, Charges, and Expenses All 529 plans have various fees and expenses. Not only do these charges vary among 529 plans, but also they can vary within a single 529 plan. With college savings plans, there are an even wider variety of fees and expenses. Like mutual funds, some college savings plans have different classes. Often referred to as Class A, B, or C shares, units or fee structures, each class has different fees and expenses. You can look at the offering document to see if a particular college savings plan offers more than one class.

It is very important to take fees and expenses into account when selecting a college savings plan. Slightly larger fees and expenses can make a big difference in the value of your investment over time. Let's say you invest $10,000 in a college savings plan with a return of 10% before expenses. With a plan that had annual operating expenses of 10.97% (Yes, one plan has expenses that can be this high!), after 18 years, you would end up with only $6,866. That's over $3,000 less than you started with. If the college savings plan had expenses of 0.85%, you would end up with $47,680 - an 85% difference!

Here's a list of some of the most common fees, charges, and expenses found in college savings plans:

Enrollment Fee. Several college savings plans charge a minimal enrollment fee. Currently, the highest enrollment fee is $90. Most enrollment fees are under $50.

Annual Maintenance Fee. Most college savings plans charge annual maintenance fees. These fees usually range from $10 to $50. Many plans reduce or eliminate this fee for residents, if you make automatic contributions, or if you maintain a certain balance, typically $25,000.

Sales Charge (Load). Several college savings plans charge a sales charge when you buy certain investment options within a plan or purchase a plan through a broker or investment adviser instead of directly from the state. Generally, you can determine the sales load by looking at the fees and expenses section of the offering circular or prospectus. Not every plan has a sales load. The load also may differ between classes in a single plan.

Deferred Sales Charge. A deferred sales charge or contingent deferred sales charge (CDSC) is a charge you pay when you withdraw money from an investment option or college savings plan. It is sometimes referred to as the back-end load. The charge may start out at 2.5% for the first year, and get smaller each year after that until it reaches zero. Generally, you can determine the deferred sales charge by looking at the fees and expenses section of the offering circular or prospectus. Not every college savings plan has a deferred sales charge. In some plans, a deferred sales charge also may be levied on certain classes of the plan.

Administration/Management Fee (Expense Ratio). This is the total annual college savings plan operating expenses expressed as a percentage of the plan's assets. For example, an expense ratio of 1% represents an annual charge to the plan's assets - including your proportional interest in those assets - of 1% per year.

Underlying Fund Expenses. Because college savings plan portfolios typically invest in a number of mutual funds, they bear part of the fees and expenses of these underlying funds. This expense is expressed as a percentage of a mutual fund's assets. Because college savings plan investment portfolios sometimes invest in a number of mutual funds, the offering circular or prospectus may contain fund expenses percentages for each of these funds.

Stafford Loans for Undergraduate Students

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There are two different types of Stafford Loans, subsidized and unsubsidized.

Subsidized Stafford Loans are awarded based on financial need. You will not be charged interest before you begin repayment or during periods of deferment. The federal government "subsidizes" the interest during these times.

Unsubsidized Stafford Loans are not awarded based on financial needs. Any eligible student can take out unsubsidized Stafford Loans. You will be charged interest from the time the loan is disbursed, to the time the loan is repaid in full.

The amount you can borrow is based on your grade level and your status as a student. Independent students may be eligible to borrow more because they are paying for college without assistance from family.

It is important to note that even if a student is financing their education on their own, dependency status is still determined by the school.

Based on your award letter, you may not always qualify for the maximum Stafford Loan amount. For additional loan funding, consider private student loans which allow you to borrow up to the total cost of education less other financial aid received.

Am I eligible for a Stafford Loan?

You must be enrolled at least half-time (based on your school's definition of full and half time status) to qualify for Stafford Loans.

How do I apply for a Stafford Loan?

You first must complete the Free Application for Federal Financial Student Aid (FAFSA) or Renewal FAFSA (for returning students). After the FAFSA is processed, your school will review the results and inform you of your loan eligibility by sending you an award letter. Once your award letter is received, you should apply for the Stafford Loan, as well as look at other federal student loans. If you aren't eligible for federal loans, you can then apply for private student loans.

When do I receive the Stafford Loan Funds?

Your lender will disburse your Stafford Loan funds directly to your school in two installments – fall semester and winter semester. Your loan money will be used to pay your tuition and fees. If you have funds left over, your school will credit your account or pay you directly based on your school's policy.

What if I want to cancel my Stafford Loan?

Your school must notify you in writing whenever your account is credited with your loan proceeds. This notification must be sent to you no earlier than 30 days before and no later than 30 days after the school credits your account. You may cancel all or a portion of your loan if you inform your school within 14 days after the date that your school sends you this notice or by the first day of the payment period, whichever is later. Your school can tell you the first day of your payment period.

What are the Stafford Loan Interest Rates?

Grace period: 6.22%, Repayment (not consolidated): 7.22%, New Stafford Loans will be fixed at 6.8%, Rates can change yearly, check back with us.

Will I pay any fees for the Stafford Loan?

Many guarantors no longer charge a guarantee fee for education loans. But if they do, this fee could be up to 1% of the loan amount. Additionally, your lender may charge an origination fee up to 3% of the loan amount. Guarantee and origination fees, if charged, are deducted from the loan funds before they are sent to the school.

What are the repayment options for a Stafford Loan?

The standard repayment term for this loan is 10 years. You may be able to extend repayment by deferring or consolidating your federal loans.

You can choose one of the following plans:

The Standard Repayment Plan requires you to pay a fixed amount each month based on your principle and interest but will be no less than $50 or the interest that has accrued.

The Graduated Repayment Plan allows you to make lower payments at the beginning of repayment then, over time, your payments begin to increase. Each of your payments must equal the interest accrued on the loan between scheduled payments. Initial payments generally cover “interest-only” for the first few years.

The Income-Sensitive Repayment Plan bases your monthly payment on your yearly income and your loan amount. Payments may change as your income rises or falls.

The Extended Repayment Plan is for borrowers with FFELP loans totaling more than $30,000. This plan offers a choice of fixed or graduated payments over a period of up to 25 years.

To consolidate your loans, please visit our Consolidation Section. Please note that deferment does not fix your rates, it merely puts payment on hold. To lock your rates, you must consolidate your loans.

PLUS Loan for Parents of Undergrad Students

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The Federal Parent PLUS Loan Program allows credit worthy parents to borrow money to pay for education expenses for each dependent, undergraduate, student enrolled at least half time in an approved college or university. These loans are available through both the Direct Loan and FFEL programs. Most of the benefits to parent borrowers are identical in the two programs; however some lenders do offer repayment and other savings benefits.

A Federal Parent PLUS Loan allows parents to borrow the total cost of undergraduate education (including tuition, room and board, supplies, lab expenses, travel) less any other aid.
These parent loans are non-need based. Unlike federal student loans, PLUS Loans are based on your credit rating, and the rating average that is considered "good" is usually 625 or better.
The interest rate is fixed but adjusted annually by the Department of Education based on the 91-day Treasury Bill rate for the last auction in May of each calendar year. It is currently 8.5%.
Parent loans require no collateral unlike Home Equity Loans.
Interest may be tax deductible.

The primary benefit of the Parent Loan is that parents can borrow federally-guaranteed low interest loans to help pay for their child's education.

Graduate Stafford Student Loans

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The average cost of graduate school has increased nearly 35% in the last 10 years. The Graduate Stafford Student Loan can help you meet the cost of a graduate education. Graduate Stafford student loans are available in two forms:

Subsidized Stafford Loans are awarded based on financial need. You will not be charged interest before you begin repayment or during periods of deferment. The federal government "subsidizes" the interest during these periods of times.

Unsubsidized Stafford Loans are not awarded based on financial need. Any eligible student can take out unsubsidized stafford loans. You will be charged interest from the time the loan is disbursed, to the time the loan is repaid in full.

You may also find that federal financial aid, including the graduate Stafford student loan, may not be enough to completely meet the cost of graduate school. To meet the total cost, investigate private graduate loans as well.

How much can I borrow?

The amount you can borrow is based on your year in school and your status as a student. Independent students may borrow more because they are paying for college by themselves. Students may not always qualify for the maximum amount - check with your financial aid office.

Am I eligible for this loan?

You must be enrolled at least half time in an eligible program of study. Students not enrolled at least half time might consider a continuing education loan which allows you to borrow to cover the costs of your continuing education.

How can I get this loan?

You first must complete the Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA. After the FAFSA is processed your school will review the results and inform you about your loan eligibility. Next you must complete the Master Promissory Note, which is the promissory note for your loan. Your school may require that you complete their form, again - check with your financial aid office.

What is the interest rate of this loan?

Graduate Stafford loans (both subsidized and unsubsidized) have been set at a fixed interest rate of 6.8% through 2013.

Are there any special fees I will pay?

You may be charged up to a 1% guarantee fee and a 1.5% origination fee. Recent changes in the Higher Education Reauthorization Act have prompted an annual reduction in the origination fee. By July 2010, there will be no origination fee.

When will I get my money?

In most cases, your loan will be disbursed in two installments and sent directly to the school as determined by your financial aid office. Your loan money will be used to pay your tuition and fees. If loan money remains your school will credit your student account or pay you directly.

Can I cancel the loan?

Yes. Your school must notify you in writing whenever it credits your account with your loan proceeds. This notification must be sent to you no earlier than 30 days before and no later than 30 days after, the school credits your account. You may cancel all or a portion of your loan if you inform your school that you wish to do so within 14 days after the date that your school sends you this notice, or by the first day of the payment period, whichever is later. Your school can tell you the first day of your payment period.

What are my Repayment Options?

The Normal Repayment: for this loan is 10 years. You may be able to extend repayment by deferring or consolidating your loans. You may choose one of the following plans:

Standard Repayment: requires you to pay a fixed amount each month-- at least $50 or the interest that has accrued.

Graduated Repayment: sets your payments lower at first and then increases them over time. Each of your payments must equal the interest accrued on the loan between scheduled payments.

Income-Sensitive Repayment: bases your monthly payment on your yearly income and your loan amount. Payments may change as your income rises or falls.

Extended Repayment: is for borrowers with FFELP loans totaling more than $30,000. This plan offers a choice of fixed or graduated payments over a period of up to 25 years.

Other Financial Aid Options

Also consider taking out Graduate Private Student Loans. Graduate private student loans lend up to the total cost of education, do not require the FAFSA and can be used for any education related expense, including computers, books, housing, etc. Scholarships are also a great way to get extra money for your graduate program.

Graduate Private Student Loans

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Are scholarships and federal loans are not enough to cover the cost of graduate school? The Graduate School Loan will help you bridge the gap between federal financial aid and the true cost of a graduate education. Created especially for graduate students like you with unmet financial need, our Graduate Student Loan program will help you achieve your professional and educational goals.

You can use a grad school loan to cover any education related expenses, including, student computers, books and room and board. Additional Benefits include:

Fast online approvals, high approval rating
Low interest rates, high annual maximums
No application fee or out-of-pocket expenses
Full deferment until you leaves school with a variety of repayment options
6 month grace period before repayment begins

How do I qualify?

You must be a U.S. citizen or permanent resident with a valid permanent-resident card or an international student applying with a U.S. citizen or permanent resident co-borrower;
Be at least 18 years old, or the age of majority in your state;

Be enrolled at least half time at an eligible college or university;
Meet our criteria for creditworthiness. If you do not meet our criteria, please consider applying with a creditworthy co-borrower.

How much can I borrow with a graduate student loan?

Annual minimum of $1,500
Annual maximum of the lesser of $50,000 or cost of attendance minus other aid
Annual maximum of the lesser of $70,000 or cost of attendance minus other aid for Dental, Law, Medical, Osteopathic and MBA Loans

What else sets the GradLoans Graduate Student Loan apart from the rest?

Full deferment and forbearance options available while in school, working towards a residency or internship, unemployed or experiencing an economic hardship, serving in the military or needing an administrative forbearance. Other benefits include:

Low minimum monthly payment of $50
No prepayment penalties
24/7 online account access
Fees as low as 0%

What is my interest rate going to be?

In school interest rates range: LIBOR + 4.95% - 7.75%, depending on the credit of you/ your co-signer and the repayment option selected.

Repayment rates range: LIBOR + 5.5% - 7.75%, depending on the credit of you/ your co-signer and the repayment option selected.

Remember, most students need a co-signer. And adding a qualified co-signer usually helps your chances of being approved and receiving the best interest rate.

Annual Percentage Rate (APR) and Repayment Example:

If you borrowed $10,000 in a single installment, the 3-month LIBOR remained constant at 2.68% (as of July 1, 2008) and you had a 24-month combined in-school and 6-month grace period with a 240-month repayment period, your possible APR and repayment schedules are shown below. Your annual percentage rate may increase or decrease after consummation.

Scholarships and Grants Financial Aid Advice

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The College Scholarship Search is sometimes overwhelming. Many students use scholarships to augment financial aid awards provided by their school. Every year, a sizeable number of scholarships have fewer students apply for them than they have money to give, meaning that there's still plenty of money not being awarded.

The most difficult part for many students is finding scholarships and grants. A quick check of Google indicates that for the search term "scholarship", there are over 3.2 million web pages to search through. How do you find the best ones?

This Blog contains many awards and details about how to apply, and best of all, it doesn't require you to give up any personal information in order to search the listings.

The Importance of Scholarships:

A scholarship is an award given to a student for the purpose of furthering their education. A scholarship can be a monetary award, or it can be an award of access to an institution. Scholarships are a vital piece of the financial aid system for three reasons:

They provide money which generally does not have to be paid back

They provide access to money which students may otherwise be ineligible for

When used in accordance with IRS guidelines, scholarship funds are tax-free

The second point is very important. Many scholarships are merit-based as opposed to need-based. There's a gap in education finance that isn't talked about a lot - the family that isn't poor enough to qualify for federal financial aid, but isn't rich enough to pay the cost of education without assistance. Scholarships can fill this gap along with private student loans. Obviously, because scholarships are money that does not have to be paid back, they're preferable to loans.

Federal Student Loan Consolidation

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The Federal Student Loan Consolidation Program offers a practical repayment option that allows you to bundle all of your federal loans into one single loan. Monthly savings from consolidation can be as much as half your previous student loan payments, providing payment relief after graduation, when you need it most.

Benefits of Federal Student Loan Consolidation

In addition to significantly reducing your monthly payments, consolidation can lower your debt to income ratio and improve your credit score. Student loan consolidation allows you to stretch your repayment period from the standard 10 years to up to 30 years, depending on the total amount of your student loans. The lower monthly payment means you'll have more money available to meet other living expenses, including car payments, housing expenses, and career-related necessities.

Who is Eligible for Student Loan Consolidation?

Anyone who took out federal student loans while attending college may be eligible for federal student loan consolidation. This includes federal Stafford Loans, Federal Direct Loans and Perkins Loans. Eligibility requirements include:

Minimum of $20,000 in Federal Student Loans.
Loans must not be in default.
Borrower must have graduated or be enrolled less than half-time.

If you have already consolidated your federal student loans, consolidate your private student loans. Check out our section on private student loan consolidation.

Private Student Loan Consolidation

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Private Student Loan Consolidation program provides the opportunity for significantly lower monthly payments by combining all your private student loans into one manageable loan. College graduates with any existing, nationally-marketed, private student loans may be eligible for this consolidation loan. There are no application fees or other out-of-pocket expenses to apply.

Significantly lower your monthly payments in the first year.
No application fees or prepayment penalties.
Fast and convenient online loan application.
Conditional pre-approval decision within minutes online or by phone.

Take Advantage of Lower Monthly Payments Today

Federal student loans can not be consolidated with your Private Student Loans. Consolidating federal student loans prior to consolidating private student loans can improve your credit score and may qualify you for a better interest rate.

Other Benefits of Private Student Loan Consolidation:

A 0.25% interest rate reduction for automatic checking account withdrawal.
Interest-only payments available for the first 24 months of repayment.
Interest payments may be tax deductible (consult your tax advisor).