The Not-So-Evident Process to Studying in the United States

The

not-­‐so

Evident

Process

to

Studying

in

the

United

States

How

to

study

in

the

U.S.?

1. Choose

school,

apply

and

get

accepted.

2. Finance

your

studies

a. Grants:

Best

option,

you

don’t

have

to

pay

back.

b. Work-

study

funds.

c. Loans:

you

can

take

either

a

Federal

student

loan

or

a

loans

from

private

institutions.

The

advantage

of

the

former

is

that

it

offers

better

interest

rates

and

income-­‐based

repayment

plans.

i. Federal

Student

Loans:

– Direct

Loans:

The

lender

is

the

U.S.

Department

of

Education.

There

are

4

types:

Subsidized

(for

students

that

demonstrate

financial

need),

Unsubsidized,

PLUS,

Consolidation.

– Federal

Perkins

Loan

Program:

For

students

with

exceptional

financial

need,

the

school

is

the

lender.

3. Once

you

choose

the

type

of

loan

you

will

be

using,

the

loan

is

assigned

to

a

loan

servicer

by

the

U.S.

Department

of

Education

after

the

amount

is

disbursed

(paid

out).

The

loan

has

been

disbursed

when

your

school

transfers

your

loan

money

to

your

school

account,

gives

money

to

you

directly,

or

a

combination

of

both.

It

is

usually

disbursed

in

at

least

two

payments;

your

loan

servicer

will

contact

you

after

the

first

payment

is

made.

A

loan

servicer

is

a

company

that

handles

the

billing

and

other

services

on

your

federal

student

loan.

The

following

are

the

loan

servicers

that

manage

federally

held

loans

made

through

the

William

D.

Ford

Federal

Direct

Loan

(Direct

Loan)

Program

and

the

Federal

Family

Education

Loan

(FFEL)

Program.

Assignation

of

loans

to

these

servicers

depends

on

how

they

are

evaluated.

Aspire

Resources

Inc.

CornerStone

COSTEP

Direct

Loan

Servicing

Center

(ACS)

Department

of

Education

Student

Loan

Servicing

Center

(ACS)

EDGEucation

Loans

EdManage

ESA/Edfinancial

FedLoan

Servicing

(PHEAA)

Granite

State

GSMR

Great

Lakes

Educational

Loan

Services,

Inc.

KSA

Servicing

MOHELA

Nelnet

OSLA

Servicing

Sallie

Mae

VSAC

Federal

Loans

Getting

a

Federal

Student

Loan

1. Fill

out

and

submit

the

Free

Application

for

Federal

Student

Aid

(FAFSA)

before

the

deadline

set

by

your

school

(federal

and

state

deadlines

might

differ

so

check

out

for

that!)

2. The

sort

of

financial

aid

that

is

offered

to

you

depends

on

the

school

you

are

attending,

among

other

things.

There

are

three

types

of

loans:

a. PERKINS

LOANS

Perkins

Loans

are

available

through

schools

for

students

in

need.

The

US

Government

loans

money

to

the

school,

which

passes

it

on

to

select

borrowers.

Perkins

Loans

are

unique

because

of

their

low

interest

rate.

These

loans

are

available

for

students

that

are

any

of

the

following:

full-­‐time,

part-­‐time

graduate,

or

undergraduate.

You

must

be

either:

a

US

citizen,

a

permanent

resident,

or

have

another

special

status.

The

hardest

part

about

getting

a

Perkins

Loan

is

that

you

must

demonstrate

financial

need

relative

to

other

students.

Apply

early

if

you’re

hoping

for

a

Perkins

Loan.

The

maximum

loan

depends

on

your

status.

Undergraduate

students

may

get

up

to

$4000

annually

and

$20000

over

their

undergraduate

lifetime.

Graduate

students

have

a

$6000

annual

limit

and

$40000

lifetime

limit.

Borrowers

who

use

Perkins

Loans

may

enjoy:

• No

credit

check

needed

• Flexible

repayment

options

(including

consolidation)

• No

prepayment

penalty

• A

fixed

5%

interest

rate

• Interest

is

subsidized

while

you’re

in

school

b. STAFFORD

LOANS

Stafford

Loans

are

easy

to

qualify

for.

These

loans

are

available

for

students

that

are

any

of

the

following:

full-­‐time,

part-­‐time,

graduate,

or

undergraduate.

You

must

be

a

US

citizen,

national,

permanent

resident,

or

have

other

special

status.

In

addition,

you

must

be

enrolled

at

least

half

time

at

an

eligible

institution.

After

filling

out

a

FAFSA

application

you

have

to

choose

a

lender.

The

maximum

loan

depends

on

your

status

and

can

range

from

$2625

to

$18500.

Ask

your

Financial

Aid

office

for

details.

In

general

“independent”

(or

self-­‐supporting)

students

and

graduate

students

can

borrow

the

most.

Borrowers

who

use

Stafford

Loans

may

enjoy:

• No

credit

check

needed

• Flexible

repayment

options

(including

consolidation)

• No

prepayment

penalty

• Loan

forgiveness

is

available

in

limited

circumstances

If

you’ll

use

a

Stafford

Loan,

be

aware

of

the

following:

• You

pay

a

fee

(but

it

may

be

covered

by

your

lender)

• You

must

repay

the

loan

• Loans

issued

after

July

2006

have

a

fixed

6.8%

APR

• Interest

may

be

subsidized

if

you

can

demonstrate

need

• Interest

may

be

capitalized

(added

to

the

initial

principal

amount

of

the

loan)

if

you

decide

not

to

pay

while

in

school

c. PLUS

LOANS

PLUS

loans

are

unique

because

you

can

get

really

large

loans

depending

on

your

costs

of

attendance.

PLUS

Loans

are

available

to

students

who

are

all

of

the

following:

dependent

students,

part-­‐time

or

more,

undergraduate.

However,

the

application

is

filled

out

by

parents

and

they

are

the

ones

that

get

the

loan.

You

must

be

a

US

citizen,

national,

permanent

resident,

or

have

other

special

status.

The

maximum

loan

depends

on

your

cost

of

attendance

and

any

resources

you

get.

You

can’t

borrow

more

than

it

costs

for

school,

but

you

can

include

a

variety

of

costs

when

calculating

cost

of

attendance

including

books,

supplies,

and

more.

Note

that

the

amount

you

can

borrow

is

reduced

if

the

student

receives

resources

such

as

scholarships.

Borrowers

who

use

PLUS

Loans

may

enjoy:

• Higher

loan

amounts

after

other

loans

are

exhausted

• Flexible

repayment

options

(including

consolidation)

• No

prepayment

penalty

If

you’ll

use

a

PLUS

Loan,

be

aware

of

the

following:

• Parents

must

pass

a

credit

check

• You

may

pay

a

fee

of

up

to

4%

• You

must

repay

the

loan

• Loans

issued

after

July

2006

have

a

fixed

8.5%

APR

• Interest

will

not

be

subsidized

• Repayment

begins

60

days

after

the

loan

is

made

no

grace

period

Loan

Payment:

You

must

repay

your

loans

even

if

you

don’t

complete

your

education,

can’t

find

a

job

related

to

your

program

of

study,

or

are

unhappy

with

the

education

you

paid

for

with

your

loan.

However,

certain

circumstances

might

lead

to

your

loans

being

forgiven,

canceled,

or

discharged.

1. If

you

are

able

to

pay

you

do

so

at

the

interest

rate

fixed

by

Congress

(while

interest

rates

on

new

federal

student

loans

are

set

at

6.8

percent

and

7.9

percent,

the

rate

on

Stafford

loans

was

set

at

3.4

percent

until

July

1st,

when

they

doubled

to

6.8

percent.)

2. If

you

are

unable

to

pay

you

can:

a. Deferment:

you

take

a

break

from

payments

for

a

little

while.

Several

events

may

qualify

you

for

a

deferment.

While

your

loan

is

in

deferment,

you

may

still

be

charged

interest.

For

subsidized

loans,

the

interest

will

most

likely

not

accrue.

However,

unsubsidized

loans

will

continue

to

have

interest

charged

against

them.

Some

of

the

most

common

deferments

are

listed

below:

• Unemployment

deferments

• In-­‐school

deferments

• Military

deferments

• Career

related

deferments

b. Loan

consolidation:

Student

loan

consolidation

is

the

act

of

putting

various

(or

even

one)

loans

into

a

new

package.

You

get

some

special

benefits,

and

you

can

structure

the

loan

the

way

you

want.

The

main

reasons

to

consider

student

loan

consolidation

are:

• Potential

for

lower

monthly

payments

• Fixed

interest

rate

• Only

write

one

check

for

various

loans

• Potentially

flexible

payments

during

hard

times

c. Forgiveness,

cancelation,

or

discharge

assigned

to

a????

Some

facts:

The

Office

of

Federal

Student

Aid

processes

roughly

14

million

financial

aid

applications

a

year

and

disburses

about

$80

billion

in

financial

aid.

Resources

come

from

the

Federal

Government

and

are

distributed

among

schools

that

then

distribute

the

resources

they

have

according

to

their

own

terms

and

conditions.

More

Questions?

What

is

the

FAFSA

application?

An

application

that

can

be

filled

out

online

or

on

paper

(the

online

format

is

encouraged

in

terms

of

speed

and

error

checking)

that

is

used

to

determine

the

dollar

amount

you

or

your

family

will

be

expected

to

contribute

towards

college.

All

federal

grant

and

loan

awards

are

determined

by

the

FAFSA,

and

nearly

all

colleges

use

the

FAFSA

as

the

basis

for

their

own

financial

aid

awards.

The

FAFSA

is

managed

by

the

Office

of

Federal

Student

Aid,

part

of

the

Department

of

Higher

Education.

The

FAFSA

requires

information

in

five

categories:

• Information

about

the

student

• Information

about

the

student’s

dependency

status

• Information

about

the

student’s

parents

• Information

about

the

student’s

finances

• A

list

of

the

schools

that

should

receive

the

results

of

the

FAFSA

What

do

I

need

to

fill

out

the

FAFSA

application?

• Your

most

recent

income

tax

return

(or

your

parents’

return

if

you

are

a

dependent)

• Your

current

bank

statements

• Your

current

investment

records

(if

any)

• Records

of

any

untaxed

income

you

may

have

received

• Your

Driver’s

License

(if

you

have

one)

• Your

Social

Security

Number

• If

you

are

not

a

U.S.

citizen:

your

alien

registration

or

permanent

resident

card

Resources

General

Information:

http://studentaid.ed.gov/

http://www.huffingtonpost.com/news/student-­‐debt/

http://www.fafsa.ed.gov/index.htm

http://banking.about.com/od/loans/a/studentloans.htm

Repayment

plans

and

options:

-­‐ Income

based

repayment:

http://1.usa.gov/1bIO1yw

-­‐ Pay

as

you

earn:

http://1.usa.gov/194F7V0

Debt

forgiveness:

-­‐ http://www.huffingtonpost.com/2013/09/27/student-­‐loan-­‐forgiveness-­‐

guide_n_4002065.html?utm_hp_ref=student-­‐debt

-­‐ Public

service

loan

forgiveness:

http://1.usa.gov/18sELJS

-­‐ Teacher

loan

forgiveness

program:

http://1.usa.gov/1bITqWq

Guidance

and

debt

advice:

-­‐ Consumer

Financial

Protection

Bureau’s

guide:

http://1.usa.gov/1as4UK8

-­‐ American

Student

Assistance’s

guide:

http://bit.ly/15xGpNs

News:

-­‐ http://www.huffingtonpost.com/2013/06/10/college-­‐degrees-­‐best-­‐value_n_3414643.html?utm_hp_ref=student-­‐debt

-­‐ http://www.huffingtonpost.com/2013/09/24/student-­‐debt-­‐impact_n_3983321.html?utm_hp_ref=student-­‐debt

-­‐ http://www.huffingtonpost.com/2013/07/17/elizabeth-­‐warren-­‐student-­‐loan_n_3612384.html?utm_hp_ref=student-­‐debt

 

FRIDAY

Advertisements

What do you think?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s