Paying for College

Loans

• Federal
• Private Alternative

Federal Stafford Student Loans

Stafford student loans are low-rate student loans available to all students who meet the eligibility requirements established under the federal student aid program. Subsidized Stafford loans are available to students with unmet financial need under the federal formula, which means the interest on the loan is paid by the federal government while the student is in school. Like other student loans, Stafford loans do 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 (only $3,500 can be subsidized)
• Second year = $6,500 (only $4,500 can be subsidized)
• Third and fourth years = $7,500 (only $5,500 can be subsidized)
• Maximum aggregate amount for dependent undergraduate students (total)=$31,000 (only $23,000 can be subsidized)

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 Perkins Student Loans

Perkins student loans are low-rate loans capped at 5%. These loans are awarded as a part of a student’s financial aid package from a college, and these loans must be given to students by the colleges on a need basis. The good news about student loans is that they do not have to be repaid until the student graduates (or drops below half-time enrollment). Undergraduate students can borrow up to $5,500 per year under the Perkins program with a maximum aggregate borrowing total of $27,500 for undergraduate students.

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 the funding section of http://studentaid.ed.gov