Personal Finance - College and Loans

Direct PLUS Loans (def)

loans that are for parents used to pay for their dependent undergraduate child's education. They are also used for graduate or professional degree students.

Direct Loans - Subsidized (def)

loans that are made eligible to undergraduate students who are in need of help to cover the costs of higher education.

Direct Loans - Unsubsidized (def)

loans that are made eligible to undergraduate, graduate, and professional students, but the eligibility is not based on financial need.

Private Student Loans (def)

non-federal student loans that are made by a lender such as a bank, credit union, school, or state agency.

Direct PLUS Loans (facts)

- In order to receive a direct PLUS loan you must submit a FAFSA, and must be a graduate or professional student enrolled at least half-time at an eligible school in a program leading to a graduate or professional degree or certificate. - Limits: You can only borrow up to your full cost of attendance, minus any other financial aid you receive (Direct Subsidized Loans, Direct Unsubsidized Loans, scholarships, and certain fellowships). - Interest rate: 7.6% - The U.S. Department of Education charges a loan fee of 4% of the principal amount of each Direct PLUS Loan, have a fixed interest rate and are not subsidized - Interest rates for direct PLUS loans for Parents and Graduate or Professional Students between 2014-2015: 7.21%

Direct Loans - Unsubsidized (facts)

- In order to receive either an unsubsidized or a subsidized loan, you must be enrolled at least part-time at a school that participates in the Direct Loan program. - Limits: for dependent students (those whose parents are unable to receive Direct Plus loans): $31,000. For independent students: $57,500 for undergraduate students. - Interest rate: 5.05% - Direct unsubsidized loans are available for undergraduate and graduate students, you don't need to demonstrate financial need. - The school you are to be attending determines how much you can borrow based off of the cost of attendance and other financial aid you may receive. - Interest rates for direct unsubsidized loans for undergraduates between 2014-2015: 4.66%

Direct Loans - Subsidized (facts)

- In order to receive loans you must submit a FAFSA, and then the college will use that information to decide how much loan money you can have (this is usually given in your financial aid package) - Limits: you can not receive these loans for more than 150% of the published length of your program. This is called your maximum eligibility period - Interest rate: 5.05% - You can not use this type of aid for graduate school or professional reasons (only for undergraduate) - Schools will first apply your loan to tuition, fees, room and board, etc. If there is any left over it will be returned to you. - The maximum annual award can be up to $5,500 depending on grade level and need

Private Student Loans (facts)

- To get these loans, a credit record is usually needed or a cosigner is required - Limits: There are statute of limitations on private student loans, and they vary by state and begin at the date of your last payment. If you resume payments at anytime, then the statute of limitation resets. - Interest rate: changes depending on the lender...commonly ranging between 5% and 14% - The conditions of the loan are set by the lender - Many of these loans have to be paid while you're in school, but you can defer payments on some while still in school - Private loans account for about 8% of student loan debt

Grants

A sum of money given by a certain organization, especially the government, for a certain reason or cause (college)

Student Aid Report (SAR)

A summary of the information you submitted on your Free Application for Federal Student Aid (FAFSA). The information determines your EFC and your eligibility for federal and institutional aid.

Loans

An amount of money provide by one party to another with the understanding that the money will be returned, in full, often with interest.

Scholarships

Financial aid that is awarded by merit or excellence in a variety of skill. These funds do not have to be paid back.

Work-study job

Gives you the opportunity to earn money to help pay your educational expenses.

EFC (Expected Family Contribution)

The amount the federal government determines your family should be able to contribute to your education. It's calculated using the information from your FAFSA, including your parents' income, investments and other assets, as well as the number of people in your family and whether any of them are also attending college that year. Colleges use your EFC to determine how much financial aid you need.

FAFSA (Free Application for Federal Student Aid)

The application required for students to be considered for federal student financial aid. Schools use your FAFSA information to determine how much federal aid and financial aid you are eligible to receive. File for FAFSA every October. Early submissions gives you a better chance for financial aid.