Paying for College

Loans

• Federal
• Private Alternative

Federal Stafford Student Loans

Stafford student loans are low-rate student loans available to all students, regardless of financial need, who meet the eligibility requirements established under the federal student aid program. Unsubsidized Stafford loans are available to students with no financial need, but students are responsible for paying the interest while in school (or they can let it compound and be added to the principal). The good news about student loans is that the principal does not have to be repaid until the student graduates (or drops below half-time enrollment).

Currently, the limits on Stafford loan borrowing for undergraduate, dependent students who have met the necessary enrollment status requirements are as follows:

• First year = $5,500
• Second year = $6,500
• Third and fourth years = $7,500
• Maximum aggregate amount for dependent undergraduate students (total) = $31,000

Note: Independent students and/or dependent students whose parents cannot secure parent PLUS loans may be eligible to borrow additional funds under the Stafford loan program.

Federal Parent PLUS Loans

The PLUS Loan program is a loan program for parents who have students in college. It allows credit-worthy parents, regardless of financial need, to borrow money to help cover the remaining part of the bill. Parents can borrow up to the stated cost of attendance minus any other financial aid received by the student. Repayment for these parent loans typically begins 60 days after the funds are disbursed, although loans disbursed after July 1, 2008 offer the option to defer payment until the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis. Independent students pursuing graduate and professional degrees also are eligible to borrow under the PLUS loan program.

For more information on these federal loan programs, visit http://studentaid.ed.gov