You’ve made the decision to further your
education. How are you going to pay for
it? If you’re like 86% of other college
students, you’re going to need student
Student loans (e.g., Stafford and Perkins
Parent loans (e.g., PLUS loans)
Private student loans (also called
alternative student loans)
We’re going to concentrate on student
Stafford – Federally guaranteed loan to eligible students
enrolled in accredited institutions of higher education.
Available both as subsidized and unsubsidized loans with
current interest rates offered to students based on
demonstrated financial need. The interest on subsidized loans
is paid by the government while the student is in school,
during the grace period, and during authorized deferment.
For unsubsidized loans, students are responsible for all of the
interest that accrues while the student is enrolled in school,
however the interest may be deferred throughout enrollment.
Unpaid interest that is deferred until after graduation is added
to the loan principal.
Perkins – Need-based loan offered by the U.S.
Department of Education which carries a fixed
interest rate of 5% for the duration of the ten-year
repayment period. Has a nine-month grace period,
so that borrowers begin repayment in the tenth
month either upon graduating, falling below half-time
status, or withdrawing from their school. Because
the loan is subsidized by the government, interest
does not begin to accrue until the borrower begins to
repay the loan.
Apply to your school of choice. Must be an degree
program at an accredited institution. Certificate
programs are not eligible.
Make sure all required admission documents such as
transcripts, resume, and letters of recommendation are
submitted in a timely manner in order to achieve full
Not eligible for loans until full admission status is granted
Activate your school email account.
Almost all financial aid correspondence is
in the form of email.
The FAFSA (Free Application for Federal Student Aid)
can be completed on the Internet at www.fafsa.ed.gov.
You will receive a Student Aid Report (SAR) from the
government agency within four to six weeks after your
application is submitted. This form must be completed
each academic year.
Must use financial information from the current year’s
The school code can be found at
Only one school can be chosen.
The most common mistake on the FAFSA is an
incorrect school code.
Most four year universities require at least 5 credit
hours per term for graduate students and at least 6
credit hours per term for undergrads. Check with
Cannot be in default on a previous student loan.
Must be a U.S. citizen or eligible non-citizen and
cannot be in default of previous student loans.
Register for the required amount of credit
hours so the institution can verify that you
are a student.
Complete Entrance Loan Counseling. This
explains exactly what you are getting into
by taking out student loans.
Specific to institution. Can usually be done
Complete a Master Promissory Note. This
is your promise to the Federal Government
that you will pay the money back under the
Usually by school email. Some type of
action on the student’s part is required as
to the amount of the award.
If you need more money, a form detailing
your special circumstances can be
submitted and the amounts may be
The Federal Government disburses stated
amount of funds to the school. The school
pays itself for the outstanding tuition, then
refunds the remainder to student using the
refund option selected.
Student chooses either direct deposit to
bank account or money card refund option.
Money cards are used like a debit card.
Some schools use a voucher system where
you can buy the books from their bookstore
and then pay for them later. Some schools
require that you purchase the books with your
own money and then reimburse yourself after
your refund is received.
Check with your institution ahead of time so
you can plan accordingly.
If you drop classes and fall below the minimum
credit hour requirements, you may be penalized.
If you are put on academic probation by your
institution, you may be penalized.
Penalties include immediate repayment of loans
and/or suspension from future loans.
Check with your institution for specifics.
Source: Repaying Your Student Loans, U.S.
Government Printing Office: 2002J493-209
If you have any questions or concerns
whatsoever, contact your school’s financial
aid department. They are the trained
experts and will provide current and
Repaying Your Student Loans, U.S. Government
Printing Office: 2002J493-209