Posts Tagged ‘finance’

Student Loan – The Basic Facts

There are a lot of different ways of funding your way through college. You might be one of those students lucky enough to have a full scholarship. You may also have rich or generous parents who are willing or able to pay the bills.

However, many students are not so lucky. Most of the above funding sources will only pay part of the bill, not the total. And even if you can get all your tuition paid, you still have to come up with the money for rent, books, entertainment and other living expenses.

Employment

You may be able to get a job. This is a good idea for all students, but it is not always easy to do so. Some colleges are located far from towns with employment opportunities. Sometimes employers are reluctant to hire students as they usually cannot commit to full time work and will likely not be around during holidays. If you do manage to get a job, it will probably not be the highest paying job in the world, and you shouldn’t work more than part time. Remember that your main aim during your college years is to get the best grades you can, and working 40 hours a week just to pay your tuition would be self-defeating.

Loans

So that means that for many students, the only method of paying for college that will be available to them is to take out student loans. Going into debt is always a commitment, and it can be especially stressful before you have even started working and aren’t certain how you will pay back the loans. Student loans however, have a number of advantages over regular loans. First of all the rates and terms are more lenient. Student loans are likely to be at a much lower interest rate than most loans that will be available on the market for other purposes. They will also give you plenty of time to get on your feet and find a job after you finish your studies. This means they are not going to be due immediately after graduating.

Repayment periods on student loans are probably the fairest and most patient you’ll ever get in your life. These rates and terms reflect the faith that lenders put in today’s students. They know that ultimately, college is a good investment and most graduates will be able to pay back their debts if they are just given the time.

Federal Family Education Loan Program

Students are offered a long-term loan that allows them to continue their studies without paying for their expenses till they complete their school. Such loans are called Federal Family Education Loan Program. After six months of completion of course or withdrawal from the degree program, the repayment begins.        

DigiPen, which participates in the Stafford Loan Program, is the most common loans and mostly meant for undergraduate students. Subsidized loans and unsubsidized loans are the two types of loans, which are offered to students. In the subsidized loans, the government pays the interest while the student is in college. In the unsubsidized loans, the student is responsible for paying all the interest on the loans, during and after college. An origination fee of 3% for both the Stafford loans is charged by the U.S. Department of Education and the loan guarantor. One should be enrolled at least as a half-time student, to receive loan funds. It is possible for a student to receive both types of loans at the same time.

For undergraduate loans The Federal Parent Loan for Undergraduate Students is available. The parents can borrow the entire cost of the education. Any other aid that the student receives will be deducted from the total cost. This loan is not based on the assets of the family. 9% interest is charged. This is liable to change according to the school or the lender. A credit report is essential to acquire this loan.

Bank of America : Stafford , bank of America PLUS, college loan : Stafford, college loan : PLUS, Citibank : Stafford, Citibank : PLUS, Wadhovia Education Finance : Stafford, Wadhovia Education Finance : PLUS are some of the lenders who are in association with the DigiPen.

The student should apply for financial aid and should have a complete file in the Financial Aid Office. A loan entrance counseling session has to be undergone by the student at the end of which the student needs to take a test. On completion of the test positively the office should be given a notice. A promissory note will be mailed after the loan is certified.

Private bank loans are other financial aid options. They are alternative loans. These loans from private banks are very helpful to fulfill the student’s needs completely. The private loans have high interest rates. It is entirely based on credit reports. Many commercial lenders and colleges offer private loans. Bank of America, Key bank, Wadhovia Education Finance and Student Loan Express are some of the lenders with whom DigiPen works.

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