What Does A Financial Aid Package Entail?
Most financial aid packages will also include a college student loan or two. College student loans are a form of financial aid, which does require repayment. They can be an excellent investment in your future, offering you the opportunity to cover the cost of your education expenditures by borrowing now and repaying it later. Most college student loan programs available are federally funded, providing long term, low interest college student loans. Some will be based on financial aid need, but there are college student loan programs available to all students regardless of there income. Unsubsidized college student loans are available to students who do not have financial aid need. Undergraduate students, graduate students, and parents of dependent undergraduate students may borrow through college student loan programs offered by many colleges as well as some financial or lending institutions.
Interest will always be charged on the amount you borrow and no more. Federal college student loans available through the college or university Financial Aid Offices have interest rates ranging from 5% to 7.9%. The federal government will pay the interest on subsidized college student loans while you are enrolled at least half time. However, you are responsible for the interest on unsubsidized college student loans while you are enrolled.
Most college students have overwhelmingly found that they can manage to repay their college student loans upon graduation. However, you should always carefully monitor the total amount you borrow and the repayment requirements that you will have when you have finished your education. All new borrowers at most colleges or universities must complete an online pre-loan counseling in which the college student loan responsibilities and repayment terms are completely outlined.
Sample Direct College Student Loan repayment schedules are available online at the U.S. Department of Education’s Direct College Student Loan web site. Borrowers are able to choose from a variety of repayment plans to fit their personal financial aid circumstances and can change plans if said circumstances change. Information regarding deferment provisions and repayment options are also available at the college’s financial aid office as well as on the Department of Education’s Direct College Student Loan web site. Provisions for the college student loan deferment or cancellation are also contained on the college student loan promissory note you will submit, and will also be provided to you online.
A Federal Direct Subsidized Stafford College Student Loans are awarded to students with financial aid need. This college student loan is subsidized because the federal government will pay the interest while the student is attending school and also during the grace period (the first six months after leaving school or dropping to less than half time enrollment status). The maximum amount that can be borrowed is based on dependency status and grade level according to the annual and aggregate college student loan limits established by the Congress.
The interest rate on a Direct Subsidized College Student Loan, for new college student loans disbursed on or after July 1, 2007, will be a fixed rate of 6.8%. A federal college student loan origination fee of 1.5% will be deducted from the amount of the college student loan prior to disbursement.
Over the next four years, beginning July 1, 2008, the College Cost Reduction and Access Act will reduce the interest rates on all new Direct Subsidized Stafford College Student Loans made to undergraduate students annually.
