| According to the U.S. Department of Education, more | | | | maximum amount students may borrow annually is |
| than $100 billion dollars in federal student loans were | | | | $20,500, depending on the year in college the student |
| originated last year alone. The DOE also reports that | | | | is enrolled in, and the type of degree being sought. |
| $10 billion in privately funded student loans was | | | | Another very good benefit of the Stafford loan is that |
| originated during the same period. More students than | | | | it does not have to be repaid until after a student |
| ever are finding that they need financial assistance to | | | | graduates. |
| help fund their education. | | | | A Perkins Loan is another Federal loan that is given to |
| The fact of the matter is that many families just don't | | | | students who likely would not be able to go to school |
| have the money in savings to pay for college. If a | | | | at all without federal assistance. During the time a |
| family has had a primary breadwinner lose their job, a | | | | student is enrolled full-time, no interest accrues on the |
| main source of income may be gone for months or | | | | loan, and there is a nine-month grace period after |
| even years. Unemployment numbers are nearing 10%, | | | | graduation until repayment begins. Students may |
| and families who are facing college need somewhere | | | | borrow up to $60,000 towards their educational |
| to turn for assistance. | | | | expenses. They may apply up to $27,500 to |
| Fortunately, they too can take advantage of the billions | | | | undergraduate costs and up to $32,500 on graduate |
| of dollars in federal student loan money that is | | | | school expenditures. |
| available. Although in most circumstances the money | | | | Another loan option for families is the federal PLUS |
| does have to be repaid, having a modest amount of | | | | (parent loan for undergraduate students) loan program. |
| student debt at graduation is much preferable to not | | | | Parents or legal guardians are allowed to take out a |
| being able to go to college at all. In most cases, | | | | loan on behalf of their undergraduate student. The |
| government loans have up to ten years to be repaid | | | | interest rate is fixed at 7.9%, and a 3% origination fee |
| after graduation, but some loans can be repaid over a | | | | applies; a 1% federal default fee may also apply. PLUS |
| 25-year repayment period, depending on the amount | | | | loans are designed to cover the gap between the |
| borrowed and the repayment terms chosen. | | | | remainder of the other available student aid and the |
| There are several different types of federal student | | | | tuition that is still owed. It is not designed to help cover |
| loans for students and their families to choose from, | | | | living expenses. |
| but the first step begins with an application. The Free | | | | Once a student gets approval for a federal loan, the |
| Application for Federal Student Aid (FAFSA) must be | | | | financial aid office at their school will schedule an |
| submitted. The application analyzes the family's | | | | entrance counseling session. Upon graduation, they will |
| financial information and calculates how much money | | | | also schedule an exit session. At each of these |
| the student and their family is eligible for based on the | | | | meetings, the financial aid officer will address issues of |
| expected family contribution (EFC), which is the | | | | repayment and financial planning as it relates to the |
| amount of money the student and their family is able | | | | student's loan. By taking advantage of the generous |
| to contribute to the educational expenses. | | | | terms of our federal student loan program, students |
| The most common federal student loan is the Stafford | | | | give themselves a chance to complete their education |
| loan. A Stafford loan approval is not based on the | | | | and enter the work force in a much higher-paying job |
| applicant's credit score, which may be very good for | | | | that may have more security than jobs that do not |
| families that have been in financial constraints. The | | | | require a college degree. |