11/22/2006

College Loans

by Karen Willis

5.9% and 10.5% - too high for inflation, but not too high for the rising costs of college tuition at private and public universities in the U.S. The rate of growth in tuition costs continues to rise since the College Board released their numbers in 2005.

College costs encompass many things including academic courses, food, housing, transportation, health care, and everything and anything in between. Parents, students, or the person footing the bills fortunately have many sources that provide reprieve to these exorbitant and ever-rising costs.

In this article, we'll explore some of those financial aid options that can help people fulfill their academic goals.

One of the most common loans is the Stafford Loan. The Stafford loan is offered by the Federal Government and students must complete the FASFA (Free Application for Federal Aid) in order to qualify. The loan is either subsidized by the federal government, meaning Uncles Sam takes care of the loan's interest rate while the student is in school, or it's unsubsidized - a loan available to all students regardless of financial need. Students can apply for free at http://www.fafsa.ed.gov/. Both undergraduate and graduate students can apply. There are application deadlines as well, so be sure to refer to the website for important dates.

Perkins Loans are also offered by the federal government. These loans provide low interest rates for students who exhibit ‘exceptional' financial need. Perkins Loans work by allocating a sum of money to a specific school, which will in turn apportion the aid to students in need. Just like the Stafford Loan, students will need to fill out a FASFA in order to determine eligibility

While the government is a good place to start, there are several private financial institutions ready and willing to fund college educations. Various lending organizations exist that can assist with college financial aid. Private loans (which can be found at websites like www.collegeboard.com) do not require forms like the Federal government does, and will allow a parent to defer payment till the student graduates. Banks including Bank of America and Chase Bank provide competitive financial aid packages that could help fill the void that government funding doesn't cover. As with any private loan, shop around and find the best rate that fits your needs including repayment plans and level of customer service.

Don't forget about the school you or the student will be attending! It's a safe bet most colleges and universities provide some type of financial aid package to incoming and current students. Find out in advance what the eligibility requirements are and what forms are needed to apply.

College is costly - that's a known fact. There are several financial resources available though to assist in the rising costs needed to provide a university level education - and they're worth every penny!





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