College Parents of America brings you a series of information regarding college Financial Aids & Scholarships. This chapter focuses on loans for students and parents.

1. Don’t go to College without us….
Financial Aid 101 - Loans

2. How do I pay for college?
•$19,388 average, in state, 4-year public universities
•$30,916 average, out of state, 4-year public universities
•$39,028 average, 4-year private universities
EVERY YEAR!!
Source: The College Board, Annual Survey of Colleges, 2009

3. Financial Aid 101 - Loans
What are loans?
• Loans are a form of financial aid that many students use to
help meet the cost of attendance with is not covered by
their scholarship and grant awards and personal resources.
• Unlike grants and scholarships, loans accrue interest and
must be repaid.
• Payment on most college loans may be deferred until after
graduation, and occasionally even for a time after
graduation if your student stays in close contact with the
school and explains the need to defer.

4. Financial Aid 101 – Types of Loans
Federal Loans
•Federal student loan programs offer favorable terms reserved for
students.
•Interest rates are lower than typical consumer rates and you may
have an interest-free grace period before repayment begins.
Private Loans
•Interest charged on this loan is determined by the lender
•The lender determines eligibility for this type of loan.
•Length of repayment depends on amount owed and type of
repayment plan selected with the lender.
Before turning to student loans, make sure that you have exhausted the
"free money" part of the award - namely, scholarships and grants - and
family's allocated savings, investments or income to pay for college
expenses. – Simple Tuition
Loans available to students and parents may be divided into two types:

5. Financial Aid 101 – Federal Loans
Federal Loans
Federal Direct
Loans
(to students)
Federal Direct
PLUS Loans
(to parents)
Perkins Loans Stafford Loans
• Students should always start with the federally-backed or funded
loan types - such as Perkins, Stafford/Direct Loans, and PLUS loans
for parents.
• All of these loans have fixed interest rates and lower (or no) credit
score qualifications for borrowers.
• Most of these loans have limits and may be harder to qualify.

6. Financial Aid 101 – Private Loans
• If you were turned down by PLUS loan and your student doesn’t
qualify for other federal loans, you still have options.
• Private lenders offer many loans that can help you with your
college education. Most carry higher rates than government loans,
but lower than other types of consumer borrowing.
• Some private loans offer better flexibility and are easier to qualify.
• University financial aid office may offer you a list of the school’s
preferred lenders. Ask your financial aid officer to explain the
features of the loans each of these lenders offer, but don’t limit
yourself to the banks on the list.
Some of the Top Private Lenders*
Sallie Mae
$20.990 billion
Citi Student
Loans
$5.870 billion
Wachovia
Education
Finance Inc.
$5.540 billion
Wells Fargo
Education
Financial Services
$5.147 billion
Bank of
America
$4.921 billion
*Listed by origination volume, data accurate as March 5, 2010

7. You have questions, we have answers!
Join College Parents of America and get more tips and advice on:
How to choose private loans for students and parents;
How to select a co-signer;
How the private loan application process works; and Much More…
For more information, please contact us the following ways:
www.CollegeParents.org
888-761-6702