Paula Catanzaro EDU 653

 You’ve made the decision to further your education. How are you going to pay for it? If you’re like 86% of other college students, you’re going to need student loans.

 Student loans (e.g., Stafford and Perkins loans) Student loans  Parent loans (e.g., PLUS loans) Parent loans  Private student loans (also called alternative student loans) Private student loans  We’re going to concentrate on student loans…..

 Stafford – Federally guaranteed loan to eligible students enrolled in accredited institutions of higher education. Available both as subsidized and unsubsidized loans with current interest rates offered to students based on demonstrated financial need. The interest on subsidized loans is paid by the federal government while the student is in school, during the grace period, and during authorized deferment. For unsubsidized Stafford Loans, students are responsible for all of the interest that accrues while the student is enrolled in school. The interest may be deferred throughout enrollment. Unpaid interest that is deferred until after graduation is added to the loan principal.

 Perkins – Need-based loan offered by the U.S. Department of Education which carries a fixed interest rate of 5% for the duration of the ten-year repayment period. Has a nine- month grace period, so that borrowers begin repayment in the tenth month upon graduating, falling below half-time status, or withdrawing from their college or university. Because loan is subsidized by the government, interest does not begin to accrue until the borrower begins to repay the loan.

 Apply to your school of choice. Must be an degree program at an accredited institution. Certificate programs are not eligible.  Make sure all required admission documents such as transcripts, resume, and letters of recommendation are submitted in a timely manner in order to achieve full admission status.  Not eligible for loans until full admission status is granted

 Activate your school account. Almost all financial aid correspondence is in the form of .

 The FAFSA (Free Application for Federal Student Aid) can be completed on the Internet at You will receive a Student Aid Report (SAR) from the government agency within four to six weeks after your application is submitted. This form must be completed each academic year.  Must use financial information from the current year’s tax return.

 The school code can be found at FSLookupServlet. FSLookupServlet  Only one school can be chosen.  The most common mistake on the FAFSA is an incorrect school code.

 Most four year universities require at least 5 credit hours per term for graduate students and at least 6 credit hours per term for undergrads. Check with your school.  Cannot be in default on a previous student loan.  Must be a U.S. citizen or eligible non-citizen and cannot be in default of previous student loans.

 Register for the required amount of credit hours so the institution can verify that you are a student.

 Complete Entrance Loan Counseling. This explains exactly what you are getting into by taking out student loans.  Specific to institution. Can usually be done online.  Federal requirement.

 Complete a Master Promissory Note. This is your promise to the Federal Government that you will pay the money back under the terms specified.  Federal requirement.

 Usually by school . Some type of action on the student’s part is required as to the amount of the award.  If you need more money, a form detailing your special circumstances can be submitted and the amounts may be adjusted.

 The Federal Government disburses stated amount of funds to the school. The school pays itself for the outstanding tuition, then refunds the remainder to student using the refund option selected.

 Student chooses either direct deposit to bank account or money card refund option.  Money cards are used like a debit card.

 Some schools use a voucher system where you can buy the books from their bookstore and then pay for them later. Some schools require that you purchase the books with your own money and then reimburse yourself after your refund is received.  Check with your institution ahead of time so you can plan accordingly.

 If you drop classes and fall below the minimum credit hour requirements, you may be penalized.  If you are put on academic probation by your institution, you may be penalized.  Penalties include immediate repayment of loans and/or suspension from future loans.  Check with your institution for specifics.

 If you have any questions or concerns whatsoever, contact your school’s financial aid department. They are the trained experts and will provide current and correct information.

   wikipedia.org/wiki/Stafford_Loan  /student_guide/index.html /student_guide/index.html  Central Michigan University Off-Campus Programs Financial Aid Information Manual  Repaying Your Student Loans, U.S. Government Printing Office: 2002J