Student Loans for College & Graduate School

If you’re looking to go back to school, it’s likely that student loans will play a big role in your financial plan. While some students choose to finance their education by going without any financial help at all, many others turn to student loan options. As we discussed in our recent post about how to get out of student debt, choosing to go without college can actually end up costing you more money down the road!

But if you do decide to take out student loans, here are a few things you should know. First, student loans are great if you need to cover tuition costs. But they aren’t always ideal for covering living expenses while studying away from home. That said, depending on your study area, federal student aid programs may not be a viable option for funding your studies. If you’re planning to attend graduate school, especially in science-related fields, you might consider earning a certificate instead of pursuing a degree. Certification training costs less than a traditional degree, yet provides plenty of job security and higher salaries.

Many government programs offer grants for students who want to work towards advanced degrees. The National Science Foundation (NSF) offers several types of grants designed specifically for scientific research. Furthermore, the NSF provides grants to students who want to pursue careers in education.The National Endowment for the Arts (NEA) offers grant opportunities for performance artists, writers, musicians, dancers, filmmakers, and visual artists. The U.S. Department of Agriculture (USDA) also offers numerous scholarships and grants for students interested in agriculture, food systems, and rural economic development. You’ll find links to each program below.

BankAid.org is a nonprofit organization started by the Consumer Financial Protection Bureau (CFPB). Their website serves as a free lending match service between banks and non-profit organizations like colleges and universities. Banks have access to thousands of non-profits willing to lend to students, often at lower rates than offered directly to students. Through this site, you can search for local lenders to apply for low-interest loans.

Scholarship searches can be time-consuming, but they don’t have to be. Many schools offer scholarship databases online. Some of these sites let you sort through database results based on criteria like GPA and major. Other sites allow you to search for specific scholarships based on geographic location, ethnic background, age, gender, and even high school sports team affiliations.

Work-study jobs are paid positions that require little to no experience or academic qualifications. Many employers across the country offer work-study programs for interns, apprentices, and seasonal workers. These jobs are often advertised on job boards and websites like Monster.com and CareerBuilder. Searching for work-study jobs can be a good way to earn money without having to pay upfront fees to enroll in school.

You may be surprised to learn that sometimes our own government provides funds to assist students. Educational assistance programs include Pell Grants and Supplemental Security Income for Students (SSI), both of which can be applied toward educational expenses. SSI is generally only available to people under the age of 65 who qualify for Social Security disability payments. Eligibility requirements vary by state. Generally speaking, individuals who receive either Medicaid or the Supplemental Nutrition Assistance Program (SNAP/Food Stamps) along with SSI may also be eligible. Check the eligibility guidelines for your state before applying.

Student Loan Concepts ▼ Let’s talk a little more about this:

A student loan, whether federal (i.e., Stafford loans) or private (i.e., Perkins loans), is a type of loan taken out by students to pay for tuition, books, and fees at universities and colleges across the United States. In addition to traditional education loans, students have added options, including Direct Subsidized Loans (Direct PLUS Loan), Direct Unsubsidized Loans (Direct Consolidation Loan), Parent PLUS Loans, and Federal Family Education Loans (FFEL). Students who receive financial aid may have their payments partially or fully subsidized or unsubsidized. Parents may qualify for these loans if they meet certain criteria, either independently or jointly with the student.

College or graduate school expenses

Tuition costs vary depending on what program a student chooses, where he or she attends school, how many credits he or she takes, and various other factors. However, the average annual cost of attending an undergraduate institution is currently around $17,000. This includes room and board, books, supplies, incidental expenses, and living expenses not covered by grants or scholarships. Private schools tend to charge much higher tuition than public institutions. However, the quality of education is generally comparable regardless of price. Many graduate programs in fields such as medicine, law, engineering, business administration, dentistry, veterinary sciences, nursing, pharmacy, teaching, architecture, computer science, physical therapy, and social work require additional years of post-secondary schooling after high school graduation, so the total cost of attending a graduate school is often substantially greater than that of undergraduates. Tuition rates vary greatly between different types of schools, ranging from free to over $50,000 per year.

Credit Card Debt

The average consumer debt per household is approximately $16,400, according to the Federal Reserve Bank of New York’s 2014 report, Total Consumer Debt. The data shows that credit card debt makes up the largest share ($9,000), followed by auto loan debt ($8,400), home mortgage debt ($7,800) and student loan debt ($3,900). To put this into perspective, total household debt was $13.58 trillion at the end of 2013, or about 72% of disposable income. Household debt reached its peak in 2007, when it was $14.66 trillion. If households were to repay everything borrowed in full, it would take them nearly 30 years—until 2038.

Student Loans

In 2008, the US government issued $936 billion worth of student loans. By the end of 2010, the outstanding balance owed by borrowers had grown to $955 billion, an increase of $19 billion. An estimated 22 million Americans borrow money from the federal government to attend college, making up 41% of all households headed by a college graduate. About 1.3 million students defaulted on their federal student loans in 2011. Student loans are made possible by the Higher Education Act of 1965, which guarantees the U.S. government’s investment in the nation’s colleges and universities.

Credit Cards

Credit cards, or plastic, are the most popular way people finance themselves today. Currently, about 553 million adults in the United States carry balances on their credit cards—totaling $870 billion, or 18 percent of annual personal income.

Student loans are a great tool to help pay for college or grad school expenses by providing low interest rates while at the same time helping students finance their education. However, not everyone qualifies for student loans, so borrowers need to understand what they are if they plan on applying. There are two types of student loans: subsidized and unsubsidized. Subsidized loan programs have lower interest rates than unsubsidized loans. The interest rate on a subsidized loan is fixed at 4% and is tied directly to the difference between the prime rate (the base rate banks charge) and the federal discount rate (the lowest rate the government will lend money out at). The interest rate on an unsubsidized loan will always be higher, starting at around 8–10%.

A private lender may offer a guaranteed or unguaranteed interest rate. Borrowers should keep in mind that, depending on the type of loan, lenders may require high credit scores and income levels before they approve a loan. If you do receive a loan, there will be some restrictions on how much you can borrow and how long you can take to repay the loan. In addition, once you graduate, it is possible that you might have difficulty finding employment. Therefore, borrowing money for college or graduate school is a short-term solution for financing your education. Long-term solutions would be to save for tuition and then take out a personal line of credit or home equity loan to cover any remaining tuition costs.

Qualifying for debt forgiveness is a complicated issue. You will need good grades throughout college and graduate school and proof of having worked in certain industries. One way to qualify for debt relief is to work as a teacher or doctor for two years after graduation and earn $30,000 per year. Another option is to work in public service for 10 years after graduating. Borrowers must meet these requirements to apply for the Public Service Loan Forgiveness Program.

Income-Based Repayment Plans provide borrowers with flexible repayment plans based on their current incomes. These options allow borrowers to make smaller monthly payments every month over a period of 20 years. Unlike standard repayment plans, each payment amount is determined by dividing the total amount borrowed by 25 and adding in a percentage that varies based on the borrower’s income. Interest is paid back at a maximum rate of 6%, regardless of the borrower’s actual income.

Federal Perkins Loans are loans that are made available to parents who want to fund their child’s education. Students enrolled full-time in undergraduate coursework for 12 months are eligible for a federal grant. Parents can choose to either fund 100% of their child’s tuition or split the cost 50/50 with the government. The maximum amount a parent can borrow is capped at $23,000. Many states also have their own financial aid programs, which may be less expensive than the federal program.

Direct PLUS Loans are federally guaranteed student loans provided to parents of dependent students.

►HEY, we’ve got more valuable information here: ►CLICK HERE LOANS FOR STUDENTS◄

►Cloud of related items ▼

►Loans For Students◄

 

bloque1x