Types of Financial Aid Programs

STAFFORD LOANS

Stafford Loans are low Interest loans funded by the federal government to finance education. These loans do not require credit checks or collateral. Student loans also provide a variety of deferment options and extended repayment terms.

The federal loan for students is called the Stafford Loan and has two variations:

• Federal Family Education Loan Program (FFEL) loans are provided by private lenders, such as banks, credit unions and savings & loan associations. These loans are guaranteed against default by the federal government.
• Federal Direct Student Loan Program (FDSLP) loans, administered by “Direct Lending Schools”, are provided by the US government directly to students and their parents.

All Stafford Loans are either subsidized (the government pays the interest while you’re in school) or unsubsidized (you pay all the interest, although you can have the payments deferred until after graduation). To receive a subsidized Stafford Loan, you must be able to demonstrate financial need.

With the unsubsidized Stafford loan, you can defer the payments until after graduation by capitalizing the interest. This adds the interest payments to the loan balance, increasing the size and cost of the loan. All students, regardless of need, are eligible for the unsubsidized Stafford Loan.

Stafford Loans allow dependent undergraduates to borrow up to $5,500 their freshman year, $6,500 their sophomore year and $7,500 for each remaining year (independent students can borrow an additional un-subsidized $9,500-$10,500 the first two years and $12,500 the remaining years).

Graduate students can borrow $20,500 per year.

The current interest rate is 4.529% for undergrads. (as of November 2019)

PLUS LOANS

PLUS loans are federal loans that students can use to help pay for college.

Eligibility is based on meeting requirements for federal student aid, not having an adverse credit history and being enrolled at an eligible college.

To apply, borrowers must fill out the FAFSA form (Free application for federal student aid). Once you have done this, your college should provide you instructions about the PLUS loan application process.

You can borrow up to the cost of attendance as determined by the college you are attending.

The current interest rate for PLUS loans is 7.08% as of November 6th, 2019. The rate is fixed for the life of the loan.

PERKINS LOANS

Perkins loans were low-interest loans made by the Federal Government for undergraduate students with exceptional financial need.

Perkins loans were run by the school you attend and your payments are made to the lender (the school).

In September of 2017, the Federal Government eliminated Perkins Loans.

PELL GRANTS

Federal Pell Grants are awarded only to undergraduate students pursuing a bachelor’s or a professional degree and is offered at over 5,400 institutions.

A Federal Pell Grant, unlike a loan, does not have to be repaid.

Qualifying individuals an receive up to $6,195 good until June 30th 2020 per year depending on your need, your cost of attendance, and if you are enrolled full time or part time.

In order to be considered for aid you must fill out the FAFSA form.