College Student Loan News and Info

Continuing your education is not cheap especially in the midst of family, financial, work religious and social obligations.  For that reason, employers who offer tuition reimbursement programs have an edge in recruiting valuable employees.  Since such programs often come with stipulations, it is important for a prospective graduate student to weigh all the pros and cons that come along with getting a “Free” education. 

The first thing to consider is how much tuition reimbursement will benefit you.  After all, you are the one who will be doing the work.  Find out whether your employer offers 100 percent coverage or a lesser percentage.  Be aware of any conditions that could excuse your employer from paying, such as failure on your part to meet GPA requirements, or securing additional financial aid such as a graduate student loan.

Since the employer will be paying the bill, they can set all kinds of conditions.  One very common requisite is that you take courses that will make you a more valuable asset to the company.  Students are usually required to submit their course selections for approval before hand.  You should consider running all program information by your employer before committing to a graduate school or a graduate student loan to avoid later confusion. 

Some employers may also request that reimbursed students finish within a certain length of time.  The number of credit hours you plan to take can also affect your eligibility for tuition assistance.  Most programs require students to be enrolled at least part time, so before creating your schedule, you will want to determine whether your employer grants time away from the office (with or without pay) to attend classes. 

As part of your tuition reimbursement agreement, your employer may ask that you remain employed with the company for a set amount of time after graduation.  Becoming well versed in your company’s policy for repayment will safeguard against the unexpected in the event that you are unable to fulfill the agreement.  It is also a good idea (if repayment may become a factor) to find out whether the aid coming from your employer is taxable or pre-taxed money.  If it is untaxed, you could be responsible for paying that portion to the federal government when tax time roles around.

As previously mention your employer will want you to maintain a certain Grade level in order to qualify for reimbursement, but since all programs are different, you will need to research your company’s rules.  Does failing one class disqualify you for aid altogether, or does payment decrease in parallel to your performance? You need to know if reimbursement is based on your overall GPA or does it vary from class to class. 

Although there are many questions to consider keep in mind that your employer has a vested interest in making this process relatively easy for you.  Your education will ultimately benefit the company.  Given that, stand firm, and remember that by making the decision to continue your education, the hardest part is already over.

The Nurse Reinvestment Act, Public Law 107-205

Nursing: Title VIII Program Legislator

Title I: Nurse Recruitment 

• Directs the Secretary of Health and Human Services to promote the nursing profession through public service announcements. Permits the Secretary to make grants to support State and local advertising campaigns, excluding particular employment opportunities.
• Expands eligibility for the nursing loan repayment program to include service at any health care facility with a critical shortage of nurses. Restricts service to nonprofits after FY 2007.
• Directs the Secretary to provide nursing scholarships in exchange for at least two years of nursing services at facilities with a critical shortage. Makes such program discretionary after FY 2004.
• Permits part-time service if the aggregate service equals two full-time years.
• Treats such scholarships, for repayment purposes, as equivalent to those made under the National Health Service Corps Scholarship Program, except as specified.
• Grants preference according to financial need.
• Requires detailed, annual reports to Congress on the loan and scholarship programs, including numbers, demographics, and default rates.
• Leaves allocation of funds between the nursing loan and scholarship programs to the discretion of the Secretary. 

Title II: Nurse Retention 

• Authorizes the Secretary to award grants or contracts to schools of nursing or health care facilities to expand nursing opportunities:
• In education, through increased enrollment in four-year degree programs, internship and residency programs, or new technologies such as distance learning; and
• In practice, through care to underserved populations, care in noninstitutional settings or organized health care systems, and through developing cultural competencies. Makes career ladder programs and activities that enhance professional collaboration, communication, and decision-making eligible for a grant award.
• Directs the Secretary to award grants for geriatric care training programs.
• Authorizes the Secretary, acting through the Administrator of the Health Resources and Services Administration, to establish a nursing loan fund to increase the number of qualified nursing faculty. Cancels up to 85 % of such loan according to a schedule of employment milestones.
• Requires the Comptroller General to study and report to Congress within four years on:

(1)   National variations in nursing shortages;

(2)   Any differences in nurse hiring practices between profit and nonprofit private entities because of the inclusion of for-profit private entities in the loan repayment program; and

(3)   Whether the scholarship program increased applications to nursing schools.

• Authorizes appropriations for all programs for FY 2003 through 2007.
• Signed August 1, 2002

For a prospective or current college student it is important to know the two different types of Stafford loans.  Of course, we are all aware of the importants of being educated about a loan.  But, equally as important is realizing what these student loans mean for your financial future.  Remember it is your education and your money.  Two things that have extreme importance in today’s world.

Subsidized Stafford student loan means that no interest accrues on this loan while you are in school at least part time.  Interest starts accruing on the 6th month after you graduate, or withdraws from school, or 6 months after you drop below part time.  The government puts limits on how much you can borrow because they are the ones paying the interest for you to the lender.

Unsubsidized Stafford student loan are a bit different.  They accrue interest from the moment it is disbursed.  You, the borrower, have the option to pay the interest monthly, or let the interest accrue and be capitalized.  For a $3,500 Unsubsidized Stafford loan with a rate of 6.8%, this will accrue about $20 per month in interest.  So $20 per month for four years will add about $1000 to your original loan balance by the time your graduate.  And, if you have the interest capitalized this will only increase.

So, looking at the big picture, four years of school you take out as much Subsidized Stafford loans you can.  You also take out some unsubsidized loan to help cover tuition costs.  You have $17, 125 in subsidized Stafford, and $10,500 in unsubsidized Stafford:

Scenario #1 (you paid the interest monthly for 4 years)

Total loan debt: $27,625

Monthly payment: $318/month for 10 years

Total interest paid $10,535

Scenario #2 (you did not pay your interest)

Total loan debt: $29,695

Monthly payment: $341/month for 10 years

Total Interest paid $11,315

As you can see, it is wiser to pay the interest monthly if you can afford it.  If you cannot afford it, you can make up for it later by paying and not taking the full 10 years to pay the loan.  Federal student loans have no prepayment penalties, so the sooner you pay them off, the less you will end up paying in interest.

So, with all this information what does Stafford Loans mean to you?  Let me tell you what it means to me.

• Save money
• Ten-year loan term
• Affordable monthly payments
• Fixed Interest Rate
• Forgiveness potential
• On time payment incentives
• Regulated by the Federal Government
• Defer your loan payments while in school

So do your homework and research.  Now what you need and know how to go about getting it.  It is your future, go into it with a bang of knowledge.