Student Loan Information

Your key to higher earnings is higher education.
There are many good reasons for you to attend college but certainly one of the most compelling is your earnings potential over the course of your lifetime.

The U.S. Census Bureau calls it “The Big Payoff” and shows that college graduates with a bachelor’s degree will earn almost $1,000,000 more on average than a high school graduate and for advanced degrees up to millions more.

Trends in Higher Education series, “Education Pays”, The College Board, 2007

While college can be expensive, the cost of not pursuing a college degree is greater.

Trends in Higher Education series, “Education Pays”, The College Board, 2007

While education costs continue to rise, it is irrefutable that the cost has become an investment with a significant return over the course of a lifetime.

Your Education Loan Options
When it comes to paying for college, what’s important is to first determine what type of college you will attend and what your estimated expenses will be – taking into consideration all expenses.

Tuition and fees constitute about two-thirds of the total budget.

Some Facts¹:

• About 56 percent of students enrolled at four-year colleges or
  universities attend institutions that charge tuition and fees of
  less than $9,000 per year.
• More than $130 billion in financial aid is available to students
  and their families.
• About two-thirds of all full-time undergraduate students receive grant aid.

¹Trends in Higher Education Services, The College Board, 2007-2008.

Two Primary Sources of Loans
Federal and private loans are the two largest sources of funding your education.

Federal Financial Aid
Federal loans are “needs based” and tend to have better terms, so you should always consider these loans first.

Federal financial aid is administered by the U.S. government and is usually based on economic need. Students enrolled in two- or four-year public or private educational institutions, career schools or trade schools are eligible for this aid.

Three Kinds of Federal Aid
There are three types of federal aid: federally guaranteed loans, grants and scholarships, and work-study programs. The following charts outline each category.

Federal Student Loans

Federal Stafford Student Loans
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.

Stafford Student Loan Limits

Federal Perkins Student Loan
 A federal Perkins loan is a campus based loan awarded directly to a student with exceptional financial need, no parental co-signer needed.

Federal Parents PLUS Student Loan
The federally sponsored Parent PLUS loan is a low interest student loan for parents of undergraduate, dependent students. With a Parent PLUS loan, families can fund the entire cost of a child's education (less other financial aid).

Federal Work-Study
Federal Work-Study (FWS) is campus-based that provides part-time jobs for undergraduate and graduate students with financial need.  The undergraduate student is paid on an hourly basis and receives minimum wage(or more).  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.

Grants & Scholarships

Federal Pell Grants
A Federal Pell Grant, unlike a federal student loan, does not have to be repaid. Federal Pell Grants are awarded usually only to undergraduate students who have not earned a bachelor's or a professional degree. Federal Pell Grants are considered a foundation of federal financial aid, to which aid from other federal and non-federal sources might be added.

Scholarships
Scholarships are one of the best types of student aid, as they never have to be repaid.

Applying for Federal Financial Aid

1. How to apply:
First complete a Free Application for Federal Student Aid (FAFSA) form which you can fill out online at http://www.fafsa.ed.gov/ for college.  Based on your FAFSA, your college will receive a report from the government, and in turn, will send you a financial aid award package.  This package indicates the amounts and kinds of financial aid for which you are eligible – usually a combination of federal, state and institutional aid.

2. What happens after I apply?
Within approximately three weeks after submitting your FAFSA, you will receive a Student Aid Report (SAR) that indicates the amount of money your family is expected to contribute towards the cost of a family member’s education.

Financial need is the difference between the cost of attendance (COA) at a college and the expected family contribution (EFC) that a student and/or your family is expected to pay.

Example:

3. When will I be notified of my aid package?
If you complete all your financial aid applications by the required deadlines, you will receive a financial aid package from each of the colleges that accept you.  This package will tell you if you are eligible for any federal, state, and college money available to you in the form of grants, scholarships, loans, and work-study.  You will need to sign and return the letter to your college of choice to let it know that you are accepting its financial award.

4. Federal aid isn’t enough?
If you find yourself caught in the aid gap, don’t panic, you’re not alone.  In fact, those who preceded you have developed ways to deal with the problem.  You should consider these time-tested strategies when your Expected Family Contribution (EFC) exceeds your budget:

Has your family’s economic condition changed?
If so, talk with your college financial aid officer.  If there has been a change in your family’s economic condition, your school may take this into consideration.

Did you get a better offer from one school than another?
Don’t shy away from using an aid package offered by another school as a bargaining chip with your financial aid officer.

Consider an edukey Private Student Loan
Private loans were created for situations where there is a shortfall in federal and school financial aid.  They’re specifically designed to meet the needs of students and their families, providing affordable payments and flexible loan amounts that can be used for all college expenses from tuition and books to travel and computer.

Please explore the eduKey loans website to learn more about how eduKey loans can help you go to the college of your choice. To learn more about eduKey private student loans, click here.