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Grants or Scholarships
Grant
What is it? A grant is a form of federal or state financial aid that does not need to be repaid. They're typically given to people who demonstrate financial need. There are five grant programs that are available for eligible students pursuing a postsecondary education.
Federal Pell Grant
A Federal Pell Grant, unlike a loan, does not have to be repaid. Pell Grants are awarded usually only to undergraduate students who have not earned a bachelor's or a professional degree. (In some cases, however, a student enrolled in a post-baccalaureate teacher certification program might receive a Pell Grant.) Pell Grants are considered a foundation of federal financial aid, to which aid from other federal and nonfederal sources might be added.
• How much can I get?
o The maximum Pell Grant award for the 2007-08 award year (July 1, 2007 to June 30, 2008) is $4,310. The maximum can change each award year and depends on program funding. The amount you get, though, will depend not only on your financial need, but also on your costs to attend school, your status as a full-time or part-time student, and your plans to attend school for a full academic year or less.
• If I am eligible, how will I get the Pell Grant money?
o Your school can apply Pell Grant funds to your school costs, pay you directly (usually by check), or combine these methods. The school must tell you in writing how much your award will be and how and when you'll be paid. Schools must disburse funds at least once per term (semester, trimester, or quarter). Schools that do not use semesters, trimesters, or quarters must disburse funds at least twice per academic year.
Federal Supplemental Educational Opportunity Grant (FSEOG)
The Federal Supplemental Educational Opportunity Grant (FSEOG) program is for undergraduates with exceptional financial need. Pell Grant recipients with the lowest expected family contributions (EFCs) will be considered first for a FSEOG. Just like Pell Grants, the FSEOG does not have to be repaid.
• How much can I get?
o You can receive between $100 and $4,000 a year, depending on when you apply, your financial need, the funding at the school you're attending, and the policies of the financial aid office at your school.
• If I am eligible, how will I get the FSEOG money?
o If you're eligible, your school will credit your account, pay you directly (usually by check), or combine these methods. Your school must pay you at least once per term (semester, trimester, or quarter). Schools that do not use semesters, trimesters, or quarters must disburse funds at least twice per academic year.
Academic Competitiveness Grant
The Academic Competitiveness Grant was made available for the first time for the 2006-2007 school year for first year college students who graduated from high school after January 1, 2006, and for second year college students who graduated from high school after January 1, 2005. The Academic Competitiveness Grant award is in addition to the student's Pell Grant award.
• How Much Can I Receive?
o An Academic Competitiveness Grant will provide up to $750 for the first year of undergraduate study and up to $1,300 for the second year of undergraduate study to full-time students who are eligible for a Federal Pell Grant and who had successfully completed a rigorous high school program, as determined by the state or local education agency and recognized by the Secretary of Education. Second year students must maintain a cumulative grade point average (GPA) of at least 3.0.
• Eligibility
o Eligible Students – An eligible student may receive an Academic Competitiveness Grant (AC Grant) of up to $750 for the first academic year of study and up to $1,300 for the second academic year of study. To be eligible for each academic year, a student must:
Be a U.S. citizen;
Be a Federal Pell Grant recipient;
Be enrolled full-time in a degree program;
Be enrolled in the first or second academic year of his or her program of study at a two year or four-year degree-granting institution;
Have completed a rigorous secondary school program of study (after January 1, 2006, if a first-year student, and after January 1, 2005, if a second-year student);
If a first-year student, not have been previously enrolled in an undergraduate program; and
If a second-year student, have at least a cumulative 3.0 grade point average on a 4.0 scale for the first academic year.
Note that the amount of the AC Grant, when combined with a Pell Grant, may not exceed the student's cost of attendance. In addition, if the number of eligible students is large enough that payment of the full grant amounts would exceed the program appropriation in any fiscal year, then the amount of the grant to each eligible student may be ratably reduced.
o Recognized rigorous secondary school programs of study for Academic Competitiveness Grant program in 2007-08
Go to http://www.ed.gov/admins/finaid/about/ac-smart/state-programs.html for more information on recognized rigorous secondary school programs of study for the Academic Competitiveness Grant program.
The National Science & Mathematics Access to Retain Talent Grant (National SMART Grant)
The National Science and Mathematics Access to Retain Talent Grant, also known as the National Smart Grant is available during the third and fourth years of undergraduate study to full-time students who are eligible for the Federal Pell Grant and who are majoring in physical, life, or computer sciences, mathematics, technology, or engineering or in a foreign language determined critical to national security. The student must also have maintained a cumulative grade point average (GPA) of at least 3.0 in coursework required for the major. The National SMART Grant award is in addition to the student's Pell Grant award.
• How Much Can A Student Receive?
o A National SMART Grant will provide up to $4,000 for each of the third and fourth years of undergraduate study to full-time students who are eligible for a Federal Pell Grant and who are majoring in physical, life, or computer sciences, mathematics, technology, or engineering or in a foreign language determined critical to national security.
• Eligible Students An eligible student may receive a National SMART Grant of up to $4,000 for each of the third and fourth academic years of study. To be eligible for each academic year, a student must:
Be a U.S. citizen;
Be a Federal Pell Grant recipient;
Be enrolled full-time in a degree program;
Be enrolled in a four-year degree-granting institution;
Major in physical, life or computer science, engineering, mathematics, technology, or a critical foreign language; and
Have at least a cumulative 3.0 grade point average on a 4.0 scale (as set forth in regulations to be promulgated soon).
Note that the amount of the SMART Grant, when combined with a Pell Grant, may not exceed the student's cost of attendance. In addition, if the number of eligible students is large enough that payment of the full grant amounts would exceed the program appropriation in any fiscal year, and then the amount of the grant to each eligible student may be ratably reduced.
• Eligible Fields of Study
Go to http://www.ifap.ed.gov/dpcletters/attachments/GEN0606A.pdf or a list of eligible fields of study.
Institutional Grants
• There are other grants in addition to ours. Colleges provide institutional grants to help make up the difference between college costs and what a family can be expected to contribute through income, savings, loans, and student earnings.
• Other institutional grants, known as merit awards or merit scholarships, are awarded on the basis of academic achievement. Some merit awards are offered only to students whose families demonstrate financial need; others are awarded without regard to a family's finances.
• Some grants come with special privileges or obligations. You'll want to find out about the types of grants
awarded by each college you are considering.
Scholarships
What is it? A scholarship is a grant-in-aid to a student by a college or foundation. These are not need-based funds. All outside scholarships are supposed to be reported to the college, but very often the college will use these funds against you by re-doing your financial aid package and subtracting these funds from the package. If possible, get scholarship funds paid directly to you or your child and bypass reporting to the college. If scholarship monies are paid directly to the college, do not count on this as extra funds.
Campus-Based Aid
What is it? Campus-based aid programs are administered directly by the financial aid office at each participating schools. Not all schools participate in all three programs. Check with your school's financial aid office to find out which programs they participate in.
• How much aid you receive from each of these programs depends on your financial need, on the amount of other aid you receive, and on the availability of funds at your college or career school. Unlike the Federal Pell Grant Program, which provides funds to every eligible student, the campus-based programs provide a certain amount of funds for each participating school to administer each year. When the money for a program is gone, no more awards can be made from that program for that year.
Federal Supplemental Educational Opportunity (FSEOG)
Federal Supplemental Educational Opportunity Grants (FSEOG) are for undergraduates with exceptional financial need. Pell Grant recipients with the lowest EFCs will be the first to get FSEOGs. Just like Pell Grants, FSEOGs don't have to be paid back.
• How much can I get?
o You can receive between $100 and $4,000 a year, depending on when you apply, your financial need, the funding at the school you're attending, and the policies of the financial aid office at your school.
• If I am eligible, how will I get the FSEOG money?
o If you're eligible, your school will credit your account, pay you directly (usually by check), or combine these methods. Your school must pay you at least once per term (semester, trimester, or quarter). Schools that do not use semesters, trimesters, or quarters must disburse funds at least twice per academic year.
Federal Work Study
Federal Work-Study (FWS) provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses. The program encourages community service work and work related to the recipient's course of study.
• Will I be paid the same as I would in any other job?
o You'll be paid by the hour if you're an undergraduate. No FWS student may be paid by commission or fee. Your school must pay you directly (unless you direct otherwise) and at least monthly. Wages for the program must equal at least the current federal minimum wage but might be higher, depending on the type of work you do and the skills required. The amount you earn can't exceed your total FWS award. When assigning work hours, your employer or financial aid administrator will consider your award amount, your class schedule, and your academic progress.
• What kinds of jobs are there in Federal Work-Study?
o If you work on campus, you'll usually work for your school. If you work off campus, your employer will usually be a private nonprofit organization or a public agency, and the work performed must be in the public interest.
o Your school might have agreements with private for-profit employers for Federal Work-Study jobs. This type of job must be relevant to your course of study (to the maximum extent possible). If you attend a career school, there might be further restrictions on the jobs you can be assigned.
Federal Perkins Loan
A Federal Perkins Loan is a low-interest (5 percent) loan for both undergraduate and graduate students with exceptional financial need. Federal Perkins Loans are made through a school's financial aid office. Your school is your lender, and the loan is made with government funds. You must repay this loan to your school.
• How much can I borrow?
o You can borrow up to $4,000 for each year of undergraduate study (the total you can borrow as an undergraduate is $20,000). The amount you receive depends on when you apply, your financial need, and the funding level at the school.
• Other than interest, is there a charge for this loan?
o No, there are no other charges. However, if you skip a payment, if it's late, or if you make less than a full payment, you might have to pay a late charge plus any collection costs.
• When do I pay it back?
o If you're attending school at least half time, you have nine months after you graduate, leave school, or drop below half-time status before you must begin repayment. This is called "grace period." If you're attending less than half time, check with your college or career school to find out how long your grace period will be.
Stafford Loans (Federal Family Education Loan or the William D. Ford Federal Direct Loan)
What is it? A need-based government loan made to students rather than their parents. The U.S. Department of Education administers the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Both the FFEL and Direct Loan programs consist of what are generally known as Stafford Loans (for students) and PLUS Loans (for parents).
Schools generally participate in either the FFEL or Direct Loan program but sometimes participate in both. Under the Direct Loan Program, the funds for your loan come directly from the federal government. Funds for your FFEL will come from a bank, credit union, or other lender that participates in the program. Eligibility rules and loan amounts are identical under both programs, but repayment plans differ somewhat.
• How can I get a FFEL or Direct Loan?
o For either type of loan, you must fill out a FAFSA. After your FAFSA is processed, your school will review the results and will inform you about your loan eligibility. You also will have to sign a promissory note, a binding legal document that lists the conditions under which you're borrowing and the terms under which you agree to repay your loan.
• How to Choose and Evaluate Lenders
o You'll need to choose a lender if you obtain a FFEL Stafford Loan. (If you have a Direct Stafford Loan, the federal government—through the U.S. Department of Education—is your lender.) Schools that participate in the FFEL Program will usually have a list of preferred lenders. Student loan borrowers may choose a lender from that list, or choose a different lender they prefer (for example, a credit union). Here are a few things to think about when selecting a FFEL lender.
• How much can I borrow?
o It depends on your year in school and whether you have a subsidized or unsubsidized Direct or FFEL Stafford Loan. A subsidized loan is awarded on the basis of financial need. If you're eligible for a subsidized loan, the government will pay (subsidize) the interest on your loan while you're in school, for the first six months after you leave school, and if you qualify to have your payments deferred. Depending on your financial need, you may borrow subsidized money for an amount up to the annual loan borrowing limit for your level of study (see below).
o You might be able to borrow loan funds beyond your subsidized loan amount even if you don't have demonstrated financial need. In that case, you'd receive an unsubsidized loan. Your school will subtract the total amount of your other financial aid from your cost of attendance to determine whether you're eligible for an unsubsidized loan. Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it's paid in full. You can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (that is, added to the principal amount of your loan). Capitalizing the interest will increase the amount you have to repay.
o You can receive a subsidized loan and an unsubsidized loan for the same enrollment period as long as you don’t exceed the annual loan limits.
Class Standing Maximum Stafford Additional Unsubsidized Loan Eligibility
Freshman $3,500 $4,000
Sophomore $4,500 $4,000
Junior $5,500 $5,000
Senior $5,500 $5,000
• How will I get the loan money?
o For both the Direct Loan and FFEL programs, you'll be paid through your school in at least two installments. No installment may exceed one-half of your loan amount. Your loan money must first be applied to pay for tuition and fees, room and board, and other school charges. If loan money remains, you'll receive the funds by check or in cash, unless you give the school written authorization to hold the funds until later in the enrollment period.
• What's the interest rate?
o For all Stafford loans first disbursed on or after July 1, 2006, the interest rate is fixed at 6.8 percent. This change from a variable to a fixed interest rate does not affect a borrower's variable interest rate on loans made before July 1, 2006.
o Go to http://www.studentaid.ed.gov/PORTALSWebApp/students/english/FFEL_DLInterestRates.jsp
for more information on interest rates.
• Other than interest, is there a charge for this loan?
o You’ll pay a fee of up to 4 percent of the loan, deducted proportionately from each loan disbursement. For a FFEL Stafford Loan, a portion of this fee goes to the federal government, and a portion goes to the guaranty agency (the organization that administers the FFEL Program in your state) to help reduce the cost of the loans. For a Direct Stafford Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, if you don’t make your loan payments when scheduled, you may be charged collection costs and late fees.
• When do I pay back my Stafford Loans?
o After you graduate, leave school, or drop below half-time enrollment, you will have a six-month "grace period" before you begin repayment. During this period, you'll receive repayment information, and you'll be notified of your first payment due date. You're responsible for beginning repayment on time, even if you don't receive this information. Payments are usually due monthly.
o During the grace period on a subsidized loan, you don’t have to pay any principal, and you won’t be charged interest. During the grace period on an unsubsidized loan, you don’t have to pay any principal, but you will be charged interest. You can either pay the interest or it will be capitalized (added to your principal loan balance, thus increasing the amount you’ll repay).
• How do I pay back my loans?
o You’ll repay your FFEL Stafford Loan to a private lender or loan servicer. You’ll repay your Direct Loan to the U.S. Department of Education’s Direct Loan Servicing Center. Both the Direct Loan and FFEL programs offer four repayment plans you can choose from, but the terms differ slightly. You will receive more detailed information on your repayment options during entrance and exit counseling sessions your school will provide. To read more now about repayment plans under both programs, go to the Repaying Your Loans section of this Web site.
• Can my Stafford Loan ever be discharged (canceled)?
o Yes, but only under a few circumstances. Your loan can’t be canceled because you didn’t complete the program of study at the school (unless you couldn’t complete the program for a valid reason—the school closed, for example), or because you didn’t like the school or the program of study, or you didn’t obtain employment after completing the program of study.
Non-Need Based Loans
What is it? In general loans are available up to the total yearly cost of college minus any need based aid received. These loans must be reapplied for every year. Loans in parents’ names require immediate repayment of principal and interest. Non-need based loans in the student’s name enable the principal to be deferred until 6 months after they leave school while the interest is payable immediately. Deferral Government (Stafford & PLUS) and Commercial or Alternative Education loans have origination fees (some of which are ridiculously high) and require a credit check and if necessary a co-signer.
PLUS Loans (Parent Loans)
Parents can borrow a PLUS Loan to help pay your education expenses if you are a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school. PLUS Loans are available through the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Your parents can get either loan, but not both, for you during the same enrollment period. They also must have an acceptable credit history.
• How do my parents get a loan?
o For a Direct PLUS Loan, your parents must complete a Direct PLUS Loan application and promissory note, contained in a single form that you get from your school’s financial aid office.
o For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application, available from your school, lender, or your state guaranty agency. After the school completes its portion of the application, it must be sent to a lender for evaluation.
• How much can my parents borrow?
o The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you receive.
• Who gets my parents' loan money?
o Either the U.S. Department of Education (for a Direct PLUS Loan) or your parents’ lender (for a FFEL PLUS Loan) will send the loan funds to your school. Your school might require your parents to endorse a disbursement check and send it back to the school. In most cases, the loan will be disbursed in at least two installments, and no installment will be greater than half the loan amount. The funds will first be applied to your tuition, fees, room and board, and other school charges. If any loan funds remain, your parents will receive the amount as a check or in cash, unless they authorize the amount to be released to you or to be put into your school account. Any remaining loan funds must be used for your education expenses.
• What's the interest rate?
o For PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed (at 7.90 for Direct PLUS Loans and 8.50 percent for FFEL PLUS Loans). For PLUS Loans disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable and is determined on July 1 of every year. For 2007-2008, the variable rate for these PLUS Loans (in both the Direct and FFEL programs) is 8.02 percent. Interest is charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.
• Other than interest, is there a charge to get a PLUS Loan?
o Your parents will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made. For a FFEL PLUS Loan, a portion of this fee goes to the federal government, and a portion goes to the guaranty agency (the organization that administers the PLUS Loan Program in your state) to help reduce the cost of the loans. For a Direct PLUS Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, your parents may be charged collection costs and late fees if they don’t make their loan payments when scheduled.
• When do my parents begin repaying the loan?
o Generally, the first payment is due within 60 days after the loan is fully disbursed. There is no grace period for these loans. Interest begins to accumulate at the time the first disbursement is made. Your parents must begin repaying both principal and interest while you're in school.
• How do my parents pay back these loans?
o They'll repay a FFEL PLUS Loan to a private lender or loan servicer. They'll repay their Direct PLUS Loan to the U.S. Department of Education's Direct Loan Servicing Center.
• Can a PLUS Loan be discharged (canceled)?
o Yes, under certain conditions. A discharge (cancellation) releases your parents from all obligation to repay the loan.
o Your parents’ PLUS Loan can’t be canceled for these reasons: You didn’t complete your program of study at your school (unless you couldn’t complete the program for a valid reason—because the school closed, for example), you didn’t like the school or the program of study, or you didn’t obtain employment after completing the program of study.
Top Five Commercial /Alternative Education Loans
Signature Student loans (Sallie Mae)
Ph: 800-695-3317 / website: www.salliemae.com
Overview
• Easy, secure online applications with immediate credit decision and electronic signature.
• No income requirement so you can focus on your studies.
• Cosigners help students get a lower interest rate and save a lot of money.
• Available for U.S. students in study abroad programs.
• Available to international students with an eligible cosigner.
• No payments are required while you are in school.
Benefits
• High approval rates.
• Cosigners help you qualify for a lower interest rate and can be removed from loan obligation after you make 24 on-time payments of principal and interest (you'll need to meet credit requirements).
• High aggregate loan limits so you can borrow as much as you need to pay for school.
• Easy online account management 24/7.
• Convenience of having all your student loans in one place and receiving one monthly bill when your Stafford loans are serviced by Sallie Mae.
• Discount of a half percentage point for those who take out private loans, which are not federally guaranteed. To receive this discount, student would also have to enroll in automatic bill payment.
Loan terms
Aggregate loan limits
• Community colleges
o $50,000
• Four- and five-year colleges
o $100,000 for undergraduates.*
Need more? Just get a cosigner.
*Includes all student loan debt, federal and private.
Interest rate
• Interest rates are variable and based on the Prime Rate.
• Manage your credit well and get a low interest rate.
• Make interest payments during school so you have a lower amount to repay.
Fees
• Usually 0%; a fee may be assessed depending on credit history.
Repayment
• Standard repayment term of 15 years, with the option to extend terms (up to 30 years) for higher aggregate loan balances.
• Prepay your loan at any time without penalty.
TERI Loan (The Education Resource Institute)
Ph: 800-255-8374 / website: www.teri.org
Overview
• Competitive interest rates
• Convenient, no hassle application process
• Preliminary approval in as little as 15 minutes if applying by Web or phone
• Your loan disbursement can be scheduled in as few as five business days.
• No application fees or other out-of-pocket fees
Eligibility
You are eligible for a TERI guaranteed undergraduate loan if you are:
• An undergraduate student enrolled in a degree or certificate program
• Enrolled at least half-time (as determined by your school)
• Attending a TERI-participating school (call (800) 255-TERI to confirm eligibility of school) You or your co-signer must also meet the following credit guidelines:
• Have an employment history of at least two years (if self employed, have been in business for at least two years);
• Have proof of current income;
• Have a satisfactory credit history of at least 21 months;
• Have resided at current and immediately preceding addresses for a total of at least 12 months; and
• Be a U.S. citizen or permanent resident and has resided in the U.S. for the previous 2 years.
Borrowing Limits
Borrowing limits for TERI guaranteed undergraduate loans are as follows:
• Borrow annually up to the cost of your attendance minus other aid (as certified by your school)
• $1,000 minimum loan amount
• Take up to 20 years to repay (up to 25 years for loans of $40,000 or more)
• No prepayment penalties
• Minimum monthly payment as low as $25
Repayment Options
You have one of three repayment options to choose from to fit your financial situation and education plans.
Option 1 - Immediate Repayment-For Maximum Savings Over the Life of the Loan
• Pay principal and interest beginning approximately 45 days after funds are disbursed.
Option 2 - Interest-Only Repayment-For Lower Monthly Payments While in School
• Defer principal and pay only interest while you are enrolled in school for up to 4 consecutive years (up to 5 years if enrolled in a 5-year program).
• Interest payments begin approximately 45 days after disbursement.
• Repayment of principal and interest begins approximately 45 days after graduation or when you cease to be enrolled at least half-time.
Option 3 - Deferred Principal & Interest Repayment-For No Monthly Payments While in School
• Make no payment while you are in school for up to 4 consecutive years (up to 5 years if you are enrolled in a 5-year program).
• Repayment of principal and interest begins approximately 180 days after graduation or when you cease to be enrolled at least half-time.
• Interest that accrues during the in-school deferment period is capitalized at the time your loan enters repayment.
CitiAssist Loan (Citibank)
Ph: 800-255-8374 / website: www.studentloan.com
Overview
• Competitive interest rates
• Reduce your interest rate by up to 0.75% in repayment
• Easy online application . Credit response in 3 minutes or less
• Borrow up to the full cost of education less any other financial aid received
• No annual or minimum loan amount
• No payments while in–school
• Flexible repayment options
Eligibility:
• Be enrolled or planning to attend an undergraduate program at least part-time at an accredited, approved college or university in the U.S.
• If the loan you are requesting is for a previous academic period, the loan period must have ended less than 12 months in the past.
• Students do not need to be making satisfactory academic progress in order to be eligible.
• Your co-signer, if applicable, must be a U.S. citizen or permanent resident with a mailing address based in the U.S. and have a valid Social Security Number.
• Unless you are applying under a special program, international students must be at least 18 years of age and must have a co-signer who is a U.S. citizen or permanent resident with a valid Social Security Number.
Loan Limits:
• There are no annual loan limits. You can borrow up to the cost of education less any financial aid you have received. Your school will be asked to certify the amount for which you are eligible, so the final approved loan amount could be less than the amount that you request.
• There is no minimum loan amount and high lifetime borrowing limits.
Great Rates:
As low as 7.75% (7.52% APR)
CitiAssist Loans have flexible credit guidelines that can help you get approved at the best possible rates. Credit histories for you and any co-signer may be used as a factor in determining your eligibility for a loan.
The interest rate charged is a reflection of the credit score of the applicant and a co-signer, if any.
No Loan Fees
Unlike other student loans, CitiAssist gives you 100% of the money you borrow. There are no origination, guarantee or repayment fees on the standard CitiAssist Loan program. Fees may be charged for certain customized school programs.
Repayment Terms:
No Payments While In-School
• CitiAssist Loans do not require payments while you're in school or during the six month grace period. If interest is not paid while you are in school, it will be capitalized once the loan enters into repayment. You can choose to pay interest in order to lower monthly payments after you complete school. There are no prepayment penalties.
Flexible Repayment Terms
• Undergraduate students have up to 20 years to repay their CitiAssist Loans plus any periods of deferment or forbearance.
Postponement of Repayment
• There is an interest only repayment option that is available for 24 or 48 month period. Or should you experience financial difficulty, just give us a call and we'll work with you.
Excel loans (Nellie Mae)
Ph: 800-634-9308 / website: www.nelliemae.com
Overview
• Undergraduate sophomores, juniors, and seniors with satisfactory credit who wish to borrow on their own signature. (Most freshmen and upperclassmen without satisfactory credit must apply with a co-borrower.)
• Funds can be used to cover prior-year balances.
• You choose the interest rate and fees.
• No income is required.
• Your credit rating won't affect your interest rate.
• Earn a 0.50 percentage point interest rate reduction with automatic debit payments.
• Early co-borrower release is available.
Loan rates and terms
• Annual loan amount
o $500 up to cost of attendance less other financial aid received
• Interest rate options
o Monthly variable: Prime rate + 1.25%
o Annual variable: Prime rate + 2.5%
• Disbursement Fee 0% with a co-borrower 5% without a co-borrower
• Repayment fee
o 0% if student makes payments of principal and interest while in school
o 2% if student defers principal and interest while in school
• Cumulative education debt limit
o No limit with a co-borrower
o $100,000 without a co-borrower
Repayment Options
• Defer principal and interest while in school at least half time.
• Pay only interest while in school at least half time.
• Pay principal and interest immediately.
• Take up to 30 years to repay, based on loan balance
• Zero-fee terms are available on the Student EXCEL Loan.
Additional Information
• Must submit a Student EXCEL Loan request before the end of the academic year for which the loan is being borrowed.
• Loan proceeds are sent to your school. The school first credits your account to pay for tuition, fees, room and board, and other applicable charges. If money remains, the school may release it to you.
• Nellie Mae will make a final decision on your loan in 3–5 business days. We then request certification of your loan from your school's financial aid office.
• After receiving your school's certification, Nellie Mae disburses your loan proceeds on a schedule predefined by Nellie Mae and your school.
• school first applies your loan proceeds to any outstanding education costs. After your bill is paid, the school sends any remaining funds to you.
• In general, your Student EXCEL Loan is disbursed in two installments (such as half in the fall and half in the spring). Learn more about the lifecycle of an EXCEL Loan.
Campus Door Loan (Collegiate Funding Services)
Ph: 800-786-0002 / website: www.campusdoor.com
Overview
• Interest rates as low as Prime minus 0.5%
• loan fees as low as 0% for most credit-worthy borrowers
• the ability to pay for education-related expenses incurred form 8 month in the past up to 18 months in the future
• can opt to roll any loan fees into the total loan amount to get a loan with no out-of-pocket expenses.
• 12-month grace period after graduation
Loan Fees and Eligibility
• A loan fee is assessed on approved loans to pay for administrative costs. Typically, these fees are deducted from the total loan amount. You can also choose to have the loan fee added to the loan amount.
• The loan fees vary from 0% to 9% depending on the creditworthiness of the borrower and/or cosigner.
• Each borrower may borrow up to a lifetime aggregate maximum of $250,000. However, your school’s
financial aid officer approves the maximum loan amount you are eligible for based on all sources of financial aid and the school’s Total Cost of Attendance.
• Must be 18 years of age
Disbursement of Funds
• Disbursement is made by a check co-payable to you and your school at the beginning of each term.
• An email is sent on the day that the funds are disbursed so that the borrower knows it is on its way to the
financial aid officer.
• The financial aid officer pays for tuition, fees, and room and board and then provides the student with a
check for any remaining balance.
Repayment
• After graduation, there is a 12-month deferment period before you need to start repaying a loan.
• There is a six-month deferment period if you leave school but do not graduate.
Additional Payment Ideas
Commercial Budgeting Organizations
What is it? Provides lump sum payments to college for parents who have sufficient cash flow to pay the family contribution on a monthly basis over 10-12 months but lack the funds for a lump budget payment plan or affiliate with one of the more popular commercial budgeting organizations, which is usually indicated with their financial aid award or tuition bill. Once again, some of these firms are reputable – while others are not.
Personal Assets
What is it? Withdrawing cash from your assets sometimes has tax consequences; plus if you are making good interest on your assets it may be wise to consider a lower interest loan and preserve your higher interest asset (if you are not going to be qualifying for need-based financial aid). You may be able to take a loan against your retirement program or a loan against your securities (borrowing on margin). The problem with a retirement loan is pay back of the loan (plus interest) is due in full within 5 years or one suffers major penalties & tax consequences; thus you are trying to pay for college with borrowed money that you must pay back totally at the same time. Also, you are putting dollars that have already been taxed into a retirement plan – just to pay taxes again on them later.
Equity in your home
Probably your best asset/loan situation is using the equity in your home to pay for college. This enables you to plan for all 4 years (plus additional children) rather than just one year, with refinancing being your best option. (Equity loans or lines of credit increase your monthly payments, thus hindering your cash flow at a time when increased cash flow is most important.) This way you have the use of 3 years or more worth of money to reinvest at a possibly higher percentage than you are paying for the loan.
Other advantages: (a) attending a PROFILE school – lower your EFC for future years, (b) Tax favorable status or mortgage interest. NOTE – if the cash you receive from refinancing the home will result in a loss of financial aid; you may have to put the money in an insurance-based product to protect the sum from the Financial Aid Formula. This method also allows you to work younger children into your college payment planning, rather than going from year to year and facing the possibility of being “loaned-out”.
Structured properly, not only can the use of the equity in your home to attain tax advantages and EFC benefits, but it can actually make money and not have these earning be negatively impacted by the College Funding formulas. These earnings can enable college costs to be met for all family members without disturbing the family budget, while possibly paying off the home earlier than planned and providing some additional retirement monies.
If you would like to know if your home qualifies for this type of program, please contact a CompassMark counselor today.
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