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Dissecting the Different Types of Federal Student Loans

Posted by Manuel Fabriquer on Tue, Feb 2, 2016 @ 9:59 PM
Student Loans

For most families of college-bound students, higher education presents a significant expense. In this competitive job market however, a college education is a huge, and often necessary asset, and so students and their parents work hard to make it happen. Fortunately, there is an abundance of opportunities when it comes to financing your studies.

Scholarships and grants are the first consideration for up and coming university freshmen. These are monetary gifts from schools, organizations, or the government (as in the case of the Pell Grant) that do not need to be repaid.

Yet after these resources have been exhausted, and your family financial contribution taken into account, you may be found eligible for some federal loans. While these are a useful option for funding your studies, it is important to understand the facts before you borrow. Let’s take a look at the different types of federal loans available.

Loan Basics

There are many benefits to taking out federal loans as opposed to loans from private lenders. Some of the advantages include:

  •  Flexible repayment options including income based or graduated repayment

  • Lower interest rates than private loans

  • In most cases, no cosigner or credit check required

  • Loan repayment does not begin until you’ve graduated or stopped attending at least half-time

You can borrow between $5500 and $12500 each undergraduate year with Direct Subsidized and Unsubsidized loans. How much you can borrow is dependent on specific circumstances such as your year of study. Additionally, you may be eligible for as much as $5500 per year in Perkins Loans.

After completing your FAFSA and submitting a financial aid application to your school, you’ll receive an award letter. This will let you know the total cost of attendance, what you’ve received in the form of gift aid, and what you are eligible to borrow. It’s good to remember that you only should borrow as much as you need. This is often less than the amount your school offers you.

Dissecting the Loans

Stafford Loans are the most well known type of federal student loan. These are split into two types: subsidized and unsubsidized. Subsidized loans depend on your family’s financial situation and are based on need. While you are enrolled in school at least part-time, interest does not build on subsidized loans. Unsubsidized loans come with a higher interest rate, and they start accruing interest from disbursement. Students do not need to demonstrate financial need to receive Unsubsidized loans.

Direct PLUS Loans are a third loan option. These fixed interest rate loans can be taken on by parents of dependent undergraduate students or graduate/professional students. If parents take out the PLUS loan, they will be responsible for its repayment. However, they do not need to make payments until you are finished with school.

Perkins Loans are a fourth type of loan, based on need, and include a 5% interest rate. Perkins Loans may be eligible for loan forgiveness following your graduation from college. Certain public service jobs can help you qualify as well as Peace Corps service and other opportunities. The criteria are fairly specific for loan forgiveness programs, but are worth looking into.

 

More questions about financing college? Get in touch with us now! 

Tags: strategies for college, college planning abc, college planning, college applications, cost of attending college, money for college, Manuel Fabriquer, College Admissions, attending college, cost of college

5 Benefits of Working With a College Planner

Posted by Manuel Fabriquer on Wed, Oct 7, 2015 @ 10:05 PM

College Planner

 

1.    A well-honed application that shines.

Top college consultants have years of experience helping students apply to and be accepted at great institutions. With hundreds of thousands of students applying to schools each academic year, competition for admission is tougher than ever. You need the expertise of someone who knows just what admission committees are looking for and how to make sure your application fits the bill. At College Planning ABC, we can help you edit and polish your essay, ensure your application highlights your strengths, and even practice your interview skills with you, to make sure you’re fully prepared.

 

2.    A streamlined, less stressful process.

Applying to college can seem overwhelming. It can be a challenge to even know where to begin. A college planner can assist you every step of the way. From researching and narrowing down a list of schools to making sure you fill out all the correct forms and submit them on time, a college planner helps take the pressure off of what can often be a stressful time. With a college planner on your side, you can have a successful college application process and still have time to make the most of enjoying your senior year.

 

3.    A second pair of (expert) eyes.

Forms, forms, forms. It can feel like the college application process is all about paperwork. When applying to several different schools, it is tough to keep track of all those bits and pieces. It’s even harder to avoid missing something or making a careless error. When you work with an accomplished college planner, you’ll have the peace of mind of knowing you’ve got support on your side. We can review all of your documents, complete the CSS Profile, make adjustments and confirm the accuracy of your Student Aid Report (SAR), and help you with any other important forms, both academic and financial.

 

4.    The chance to save money.

A premier college planner offers one special advantage that you can’t get anywhere else: the opportunity to potentially save thousands of dollars on your student’s higher education. From finding lesser known scholarships to providing expert advice on loans and financing, the experience of a qualified college planner gives you a significant resource to work with. At College Planning ABC, a great many of our clients have saved an incredible amount of money on their education. We may be able to help you do the same!

 

5.    You can dream big.

At College Planning ABC, we’ve helped thousands of students realize their dreams. In fact, many families come to us with modest expectations, unsure of how to begin and what to strive for. Together, we show students the possibilities out there for them, aid them in identifying opportunities for scholarships and grants, and give them the tools they need to have a truly successful application season. There are more options available than many students realize, and their ambitions are indeed within their reach. Sometimes all it takes is a little guidance. We can’t guarantee you’ll be admitted to the institution of your choice, but we can promise that we’ll help you dream big and allow you to have the best possible shot at achieving your goals.

 

Our Approach

With these 5 benefits and many more to boot, it’s clear that working with a college consultant can give you a tremendous advantage. At College Planning ABC, we guarantee to provide (on time) all of the services listed on our college planning agreement. At the conclusion of your partnership with us, if you are not 100% satisfied, you can request your money back. We believe so strongly in the quality of our services that this is our promise to you.

 

Ready to start the application process? Get in touch with us today. 

 

Tags: strategies for college, college planning abc, college planning, college applications, College Planning News, Manuel Fabriquer, College Admissions, attending college

6 Things to Consider When Choosing a College

Posted by Manuel Fabriquer on Thu, Sep 3, 2015 @ 11:22 PM

Choose College PHOTO

If you’re a junior or younger in high school, you’re still in the phase of narrowing down your options. Here are 6 important aspects of a college or university to consider when making your selections.

 1.      Class Size

For the best educational experience, a smaller class size is nearly always preferred. A lower student to teacher ratio generally means more one-on-one time with faculty and more personalized attention: always a plus to help you on the road to better learning. Private colleges and universities tend to have a reputation for smaller class size (and a lower overall student population), while large state universities more commonly offer 200+ student lectures, particularly in your first and second year. The average class size at your school will also depend upon your chosen major, as some are less common. Class size may not be the most vital element on your pros and cons list, but you should definitely give it some thought.

 2.     Location

So many students can’t wait to take off for college and go far from home. Others prefer staying closer to home. Remaining a few hours’ drive from parents or loved ones can be a great support, but striking out on your own can foster tremendous independence. Which option works for you depends on your specific needs. But don’t just consider proximity to family. Take a look at where the college or university is located geographically and within its city or town. Will you be bored with a small town feel? Some private colleges are nestled away in areas far from major cities which limits activities but can make for a more close-knit, centralized college experience. Would you prefer an urban environment, where your campus is in the heart of it all? You’ll never run out of things to do and places to go, but you may miss out on that more traditional “college” feel. Consider these factors and how they’ll impact your college experience.

3.     Program Reputation or Variety of Programs

Do you already know what you want to study? You are probably considering colleges and universities which offer great programs in your chosen field. For focused students ready to tackle a specific major, the quality and reputation of their chosen program will likely weigh heavily in their decision-making process. Look for programs that offer a variety of options, unique opportunities for students, and a supportive alumni system. This can be instrumental to you when you head out into the job field. For those students still undecided on a major or course of study (a situation which is very common), you may want to consider schools with a wide range of majors to choose from. This will give you plenty of options as you narrow down your educational path. You might also want to take a close look at schools that offer special programs to freshmen. Some colleges have first year programs designed to help you discover your passions and choose the right major for you.

4.     Living Options

Dorm life is a huge part of the college experience for most students. If visiting a college you’re considering, make sure to take a tour of the residence halls. You’ll be living in one of these for at least one or two of your college years, if not all. Clean and safe dorm environments are important to most students and their families. Perhaps specific living requirements are important to you, like substance-free dorms or single sex dorms. Be sure to investigate all your residence options carefully, to make sure you have the best chance at finding a pleasant living situation that meets your needs. Also, make sure to see if your chosen university guarantees housing for students. Some schools, mostly those in big cities, do not guarantee housing for upper classmen. You should discuss with your family if finding your own housing will be workable, financially and otherwise.

5.     Financial Aid

With the rising cost of higher education, financial aid is typically one of the most important factors students consider when deciding which college to attend. Finances are a personal matter and you’ll have to weigh the cost of each schools benefits versus its associated costs with your parents or other financial support systems. Upon admission to a university, carefully check your financial aid award letter to see what grants, scholarships, and loan options you have. Don’t forget to apply for outside scholarships. Don’t let money be a deterrent for receiving a college education. There are thousands of schools out there that are affordable and there are countless opportunities for securing the funds you need to attend any school.

 6.     Clubs & Activities

Lastly, do some research into what societies, clubs, and activities are available at the schools on your list. College and university life is about academics, of course, but also about making lasting friendships and having meaningful experiences. Sports, academic societies, Greek life, and clubs can all round out the college experience and help make your 4 years unforgettable. Your university should have a list of clubs and societies on their website, and often the contact information for the club officers is listed. Reach out to these students for more information on activities that interest you. This will help you see what kind of extracurriculars you may want to get involved in, and could help make your final decision that much easier. 

Tags: strategies for college, college planning abc, college planning, college applications, Manuel Fabriquer, College Admissions, attending college

How Many Colleges Should I Apply To For My College Admissions?

Posted by Manuel Fabriquer on Tue, Sep 1, 2015 @ 8:51 PM
HowManyPhoto

If you’re entering your senior year of high school this fall, you may have begun to give some serious thought to your college applications. Perhaps you’ve already visited some schools last year or over the summer. Maybe you have a few tours planned for the next few months, but haven’t yet fallen for any one university. No matter where you are in the process, the following question will inevitably enter your mind:

How many colleges should I apply to?

While there’s no simple answer or magic number, most college admissions experts and counselors agree that a realistic number is between 8 and 12 institutions. Less than that may be tempting fate, and more than that may be overdoing it. Let’s take a closer look.

All Eggs, One Basket

First off, let’s agree that it’s generally not a great idea to apply to a single school, particularly if it’s not one that accepts nearly every student. Some students choose to do this, and they are accepted and attend that institution. But what if the school you’ve selected doesn’t accept you? Or what if you change your mind and wish you’d considered more options? Even as you narrow down your picks, it’s a smart idea to keep the doors open for a few different opportunities.

Some Considerations

A lot of students like to “diversify” their applications by considering several different criteria. You might apply to different schools based on variations in location, cost, programs, and more. Perhaps you’d like a good mix of public and private universities. All these approaches are wise. The more diverse your prospective schools, the more options you’ll have as acceptances come rolling in. As well, many students find their opinions and interests change somewhat over the course of their senior year. Having a range of school choices may prove wise when you discover you’re suddenly not keen to go to that out of state college.

Reaches, Matches, and Safeties

Another way to “diversify” your applications is to choose a mix of schools that represent a tier of selectivity or difficulty. Ivy leagues and top private universities may be “reach” schools for most students. Even those with stellar academics and impeccable records aren’t guaranteed ivy admission. So these reaches are colleges you know you have a shot at getting into. These are the schools you cross your fingers for!

“Match” schools are those which should likely make up the bulk of your applications. Match schools are those in which you fall inside the statistics of the average admitted student. You have a fairly good chance of being accepted at these institutions.

And finally, “safety” schools are those which you know accept large numbers of applicants and which probably do not have overly rigorous admission standards. Applying to one or two of these is a way of “hedging your bets.”

Why Not Too Many?

Applying to dozens of schools may seem at first glance like a great way to turn the odds in your favor. But in reality, this isn’t the wisest move. Adding more applications can be a financial burden (with high application fees at some colleges) and also may equate to less attention given to each application. This could, in effect, reduce your chances of acceptance. Lastly, applying to an overlarge number of schools could simply add additional, unneeded stress to your life.

 

Looking for advice on what schools are the right choice for you? Contact us today at College Planning ABC, the leading Bay Area college consultant. 

Tags: strategies for college, college planning abc, college consulting, college planning, college applications, Manuel Fabriquer, College Admissions, attending college

What Should I Write About For My College Admissions Essay?

Posted by Manuel Fabriquer on Tue, Sep 1, 2015 @ 10:08 AM
what to write

There are many facets to a successful college application. Grades and test scores, recommendation letters, and interview are only a few of the elements taken into consideration by admissions committees. There is also another important part, and it is one that gives you a chance to share who you are: the admission essay.

High school seniors often panic about writing the essay. With word limits to think about and admissions officers to impress, the essay can seem like it may make or break your admission decision. While a poor essay won’t necessarily ruin your chances of getting into your dream school, it is definitely one aspect that can give you a much-needed edge. So what should you write about? In the end, it’s less about what you write than about how you write it, and even more importantly, who shines through the essay: you!

Get (Kinda) Personal

An admissions essay is not like a research paper or book report. Instead, it is a story. The admission committee wants to read your words and immediately know who you are and what you’d bring to their campus. The more personal you can be, the better. This demonstrates you as a likeable, open, authentic, and genuine person; one who will be an asset to their institution. Your story should be personal and meaningful to you, but it shouldn’t delve into territory that is too uncomfortable. You want to make the readers feel moved, but not put them off with oversharing.

Stand Out

Admissions teams are tired of reading the same old essay over and over again. Many topics are overdone (sports championships, cliche volunteer stories). Consider something fresh, but something that is unique and truly you. If the university offers a prompt for the essay, you’ve already won half the battle. Now, spend some time and come up with a great answer, perhaps one with an innovative perspective that they won’t expect.

Write in Your Own Voice

The admissions essay is not your opportunity to impress (well, maybe a little). It should be clear that you can communicate well with the written word and that you can easily share your views. But leave the “showing off” for other areas of your application such as academic transcripts and lists of achievements. The essay should delve into who you truly are. One of the best ways to do this is to write in your own voice. Avoid slangs and colloquialisms, but try and write in a way that’s similar to how you speak. Don’t bother filling your essay with lengthy vocabulary words you would never use in everyday life. This comes across and disingenuous and most likely doesn’t reflect who you are as a high school student. 

Write About Something That Matters to You

If you only had a few minutes to tell an admissions committee about yourself, what would you say? What story would you tell? The answer to that question may reveal the ideal topic for your essay. A strong essay should have a beginning, middle, and end, and ideally include a conflict or struggle. Showing how you dealt with a challenge in your life is always a great starting point, as is writing about a significant life event that shaped you or changed you. 

Tags: college planning abc, college consulting, college planning, college applications, Manuel Fabriquer, College Admissions, college admission essay, admission essays

I’m Lost: Where to Begin in the College Admissions Process?

Posted by Manuel Fabriquer on Thu, Aug 27, 2015 @ 4:41 PM
im lost

So the time has come. It’s time for you (or your son or daughter) to start thinking about college. Most students begin this process around their junior year of high school, but some families like to start even sooner. But what do you do when the college application process totally baffles you? Here’s a quick guide to taking your very first steps in the college search.

Figuring Out Who You Are (For Now)

Before you even begin thinking about where you’ll go and what you’ll study, stop and take some time to consider who you are right now. What do you really want from your college experience? Do you dream of heading across the country? Perhaps you want a very traditional college experience with lots of fraternities and sororities? Or maybe academia is your priority and you’re aiming high with Ivy League and other top tier schools? Before you research any programs or universities, make lists of what you’d like in your higher education experience, what type of atmosphere you most desire, and perhaps even what kind of environment you think would be best for your personality and temperament.

Time for a Family Meeting

Next up is a thorough discussion between parents and student. What do your parents envision for your future? Are your dreams and goals in line? If not, how can you compromise? It is vital to talk about the college process early, to avoid arguments later on and to ensure you’re all on the same page. If you plan to study 10 states away, but your parents banked on you staying closer to home, these issues will need to be worked out, and the sooner the better. This conversation, and others, is also when you should begin addressing the financial piece. What will your parents be able to contribute to your college education? Will you need to take out loans? Are you hoping for scholarships? Talking about this early on allows you to apply to the right schools that meet your situation and needs. 

Basic Research of Schools

Now that you know a little bit of what you’re looking for and have narrowed it down at least somewhat in terms of finances, it’s time for the fun part: researching colleges. If you are firmly decided on what you want to study, you may be best seeking out institutions with solid reputations in these subjects. If you’re open to a variety of majors, however, you can be a bit more versatile in your research. There are plenty of useful college search tools on the Internet, but a great place to start is Peterson’s.

Moving Forward

As you begin to hone in on some colleges and universities that interest you, your family can begin planning visits and tours. This is the best way to see whether or not a school is the right fit for you. Keep researching, too. University websites are chock full of information. You can discover so much about a school from its website, social media accounts, and even from contacting current students.

Moving forward in the college admissions process, it’s a smart idea to work with a college consultant. A consultant can be an invaluable resource when it comes to choosing colleges, applying, and making sure you have the best chance of being admitted to the school of your choice. It is a complicated process, but with help, applying to higher education is a breeze. For the top Bay Area college planner, get in touch with Manuel today at College Planning ABC.

 

Tags: strategies for college, college planning abc, college planning, college applications, College Planning News, Manuel Fabriquer, College Admissions, attending college

What are Colleges Looking For?

Posted by Manuel Fabriquer on Tue, Aug 25, 2015 @ 11:12 PM
WhatCollegePhoto

It’s no surprise that colleges these days seem to be more competitive than ever. Good grades, top SAT scores, extracurricular activities. What does it take to stand out from the crowd? When you start to plan your college application process, you may find yourself wondering exactly what colleges are looking for in their potential students. As a top Bay Area college planner, I’ve discovered firsthand just what colleges seek in their incoming classes, and I’m going to share that with you today.

Students Who Challenge Themselves

Colleges love to see that students have challenged themselves academically. If you’ve maintained a rigorous course load in high school, this looks favorable to admission officers. Schools want to know that students will be able to handle the academic challenges of their institution.

Leadership Qualities and Integrity

Universities want students of character who display strength, leadership, and a good sense of values. These insights can be gleaned from your personal essay but especially from your recommendation letters. With these, admissions counselors learn how others view you, and what their assessments may be. The best recommendations come from teachers or guidance counselors who know you well and have observed you at your best.

Consistent Academic Success

Admissions committees understand that not all students will achieve stellar marks throughout all four years of high school. However, your grades should display that you’ve given a solid effort and earned the best grades possible in the vast majority of your classes. It’s okay to start out a little weaker academically, as long as your transcript displays an upward trend.

Community & School Involvement

Most schools want you to be more than just a terrific student. They want to know you’ve made your mark in your high school and your community. Being involved in sports, clubs, and extracurricular activities, particularly if you’ve played a leadership role, adds a great deal to your application. While in high school, you should also strive to make community service and volunteering a part of your routine. This looks good on applications, of course, but more importantly, helps you to grow and become a better, more mature individual.

Something Special

Your chance to shine may come in the guise of your admissions essay. This unique and revealing glimpse into your life shows more than just what’s on the page. Go beyond your resume and academic achievements. Select a topic that isn’t overdone and share your personal story. Show what makes you different than other students; what makes you an individual. Something that the admissions committee can relate to and/or find memorable goes a long way. Your essay provides a look at who you really are and what you’ll bring to the campus community.

A Good Fit

What universities look for depends a great deal on the institution itself. Some place higher importance on academics while others seek to build a well-rounded, diverse student body. It’s important, therefore, to tailor your application for each college, while still staying true to who you are and what you offer.

Getting In

With some hard work and smart approaches (as well as working with a knowledgeable and experienced college consultant), you will find the application process to be a breeze. And if you’ve got what it takes, you’re sure to shine as an outstanding potential student.

Tags: strategies for college, college planning abc, college planning, college applications, Manuel Fabriquer, College Admissions, attending college

4 Common Mistakes Students Make on College Applications

Posted by Manuel Fabriquer on Wed, May 27, 2015 @ 9:48 AM
4 mistakes

In the flurry of completing what seems like mountains of paperwork for your college applications, it is often far too easy to make a careless mistake. While a single error won’t automatically disqualify you for admission, a flawless application is always received better. It’s a good idea to put your best foot forward in the college process, and that means your application should be spotless. Let’s take a look at some of the most common mistakes students make on their applications and how to avoid them.

1.      Forgetting to sign the application.

After completing your application materials, go over them again and again. It’s easy to forget to fill out a section, but you certainly don’t want to ignore an important section such as the signature form, which certifies the veracity of your application. Without your signature, the application can’t be officially considered. So make sure you sign your completed application before mailing it off. Filing out your applications online can be helpful, as an online signature form is typically provided before the application can be submitted.

2.      Using a funny or unprofessional email.

As a high school student, it’s possible you have a clever or funny email you use when keeping in touch with your friends. While this email may be appropriate for use with your peers, you will want to choose something more mature and professional for your college applications. Your selection of iluvjustinbieber4lyfe@aol.com may not be taken as seriously as a more standard email. Save your witty names for your social media and opt for choices like brittanysmith@gmail.com. 

3.      Failing to correct spelling or proofreading errors.

Sadly, some of the most avoidable mistakes are those most often made. It is vital that you comb your college application for minor errors in spelling and grammar. Try reading everything aloud--this can help you to catch some of the more subtle errors. Having a second pair of eyes glance over your work can also be helpful. Ask your guidance counselor to take a look.  Why worry about spelling and grammar? A polished application shows primarily that you are an intelligent student with good communication abilities, but it also highlights the fact that you are putting a great deal of effort into your application for this university. Essentially, attention to detail shows that you care.

4.      Using the wrong college or university name. 

If you’re like most students, you’re probably applying to multiple colleges and universities. This is a great way to increase your chances of acceptance. You will likely use the same resume for each application, and many of the same supporting materials. Colleges often use the same or very similar prompts for their application essays, so you can frequently use the same basic essay for every school. However, you must take extra caution when re-using such items, especially when it comes to the essays. Be sure you are tailoring these items to the school in question and make extra sure you change identifiers for each school. Nothing is more embarrassing than applying to Harvard with an essay that raves about your love for Yale. So avoid that face-palm moment by scouring through your essays and applications before submitting them for good.

Generally, if you follow the directions given for your application, fill it out slowly and with care, and check, double-check, and re-check it, you should have no problems and experience a smooth application process. Additionally, don’t forget to call your college or university to check up on the status of your application. Make sure the application itself has been received as well as any supporting materials. This ensures no surprises and lets you know you’ve done your part in the application process. Now it’s just a waiting game!

Tags: strategies for college, college planning abc, college consulting, college planning, college applications, Manuel Fabriquer, College Admissions, attending college

How Much Does College Really Cost?

Posted by Manuel Fabriquer on Thu, May 14, 2015 @ 10:15 PM
CollegeCostPHOTO

It’s not surprising that college these days can be fairly expensive. Educational costs are rising, particularly as universities strive to remain competitive. Fortunately, with scholarships, grants, and loan options, college is perhaps more affordable than ever. But what is the final cost of those four years? Though you may have a general idea of tuition amounts and the living expenses you’ll be responsible for, how much does college really cost?  

The Basics: Tuition, Fees,  Room & Board

In a recent College Board survey, reports showed that an average budget for an in-state public college was just over $23,000 per year. At a private college, a moderate budget amounted to approximately $46,000. These estimates include all of the basic, upfront items like tuition, fees, room & board, books, supplies, and other miscellaneous costs. Tuition and fees alone might be roughly ½ to ⅓ of that overall estimated budget and will vary greatly depending on your university and, at public colleges, your status as an in-state or out-of-state student. Fees are typically included within the tuition rate, and help offset the cost of student services such as library access, athletic facilities, and on-campus transportation. 

Room & board comprises your housing and dining options. This is a cost which can change dramatically based on many factors. Will you live in an on-campus dorm? An off-campus apartment? Will you have a meal plan and eat entirely at your school’s dining hall? Or will you cook the majority of your meals in your residence? These elements will determine whether you need to consider extra costs up front (such as signing up for a meal plan).

Books & Supplies

First-year students and their parents are often shocked by the cost of books and supplies when they begin their college education. If you’re in a science or mathematics major, you can expect to pay several hundred dollars each semester for your books. Other majors, such as fine arts, may have fewer books, but have hefty costs for supplies. It’s important to prepare yourself for these costs when heading to college for the first time. 

Other Costs

When estimating your cost of attendance, colleges typically include expenses that you won’t find on your bill, such as transportation, personal items, and clothing. Because these estimates will vary from student to student, it’s important to know your own budget for certain expenses. A student whose parents live far away from the university will probably incur larger transportation expenses when visiting home during breaks than a student whose parents live in the next town. Such miscellaneous expenses could amount to several thousand dollars per academic year.

Paying for College

Despite what may seem high costs, there are many ways of financing your college education. If you’re fortunate enough to receive scholarships or grants, this is money you do not have to repay. This will drop your costs significantly. Taking out federal or private loans is also an option, which a vast majority of parents and students choose to take advantage of. Remember, however, that all loans will need to be repaid, and these amounts gather interest. If you take out a substantial loan, you may end up paying a great deal more money than the original amount of the loan itself over the length of your repayment period.

No matter what, you should not let costs dissuade you from the incomparable benefit of receiving a university education. For more information on affording college, please contact us directly at College Planning ABC. 

Tags: strategies for college, college planning abc, college consulting, college planning, college applications, money for college, Manuel Fabriquer, College Admissions, attending college, Paying for college

Understanding Loans Before You Borrow

Posted by Manuel Fabriquer on Fri, Apr 17, 2015 @ 3:39 PM

Loan Photo WEB

While a college education can be expensive, it is an invaluable resource, helping you excel in your chosen career field and contributing to your all-around personal development. Fortunately, students these days have options for financing their higher education plans. Alongside scholarships, grants, and family contributions, students can choose to take out federal and private loans to help pay for their educational costs. Taking out a loan is a serious consideration, and it is important that you fully understand the facts and obligations associated with loans before borrowing.

Borrowing from the Government

If you plan to take out loans for your college education, federal loans are the way to go. Your university will determine your possible loans in line with information gathered from your FAFSA. With a fixed interest rate on federal loans, you’ll better know how much interest you’ll be paying over the life of the loan. Conversely, private loans have variable interest rates, which can present a financial challenge should the rates rise. As well, federal loans offer repayment options and programs for those who are experiencing financial hardship.

The most common type of federal loan is the Stafford Loan. These loans have yearly and overall borrowing limits, which differ based on what year you are in college, and whether or not you are financially dependent on your parents. Stafford Loans are divided into two types: subsidized and unsubsidized. Subsidized loans, contingent on financial need, do not accrue interest while you are still enrolled in school part-time or greater. Unsubsidized loans do accumulate interest, beginning when the loan is distributed. Unsubsidized loans also have a higher interest rate.

Other federal loans include Perkins Loans and PLUS Loans. Perkins Loans, with an interest rate of 5%, can assist students with up to $5,500 each year. If you’re a dependent student, your parents may qualify to take out a PLUS Loan. This loan is repaid by your parents and also has a fixed interest rate, making it a better alternative to a private loan. While you are enrolled in school, your parents do not need to make payments. A PLUS loan amount cannot exceed the total cost of educational expenses minus a student’s existing financial aid.

Things to Know

While private loans are an option, their variable interest rates and lack of structured repayment should make them your last resort. No matter the loan, it’s important to know that loans taken out in a student’s name are the responsibility of the student. Once you’ve graduated, you will be responsible for repaying your accumulated educational debt.

Fortunately, most federal loans have a grace period. Immediately following graduation, this grace period typically lasts 6 months. During this time, you won’t need to begin making repayments, but on unsubsidized Stafford loans, interest will still accrue. Many students take advantage of this grace period to commit to the job search in earnest. If you don’t find suitable employment or are experiencing financial hardship, there are options for repayment that can take into account your current income. This can temporarily lower your payments so that you can still continue to make them on time. In some circumstances, there are also options for forbearance and deferment, subject to the discretion of your loan servicer. Depending on your career interests, it may be worth investigating loan forgiveness programs, which can result in some reduction in your overall loan amounts.

 For further information on student loans, check out the following resources:

 https://studentloans.gov/myDirectLoan/index.action

 https://studentaid.ed.gov/types/loans

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