Student Loan News, Updates and Blog Posts

For most, the grants and scholarships written about in the last post won’t come close to covering the cost of attendance. So the next step should be to explore Federal Loans. There are a number of Federal Loans, and the next few posts will discuss each in greater detail:

• Federal Perkins Loan
• FFEL Stafford Loan
• Direct Stafford Loan
• FFEL Plus Loan
• FFEL Graduate Plus loan
• Direct Plus Loan

The Federal loan that is typically discussed first is the Federal Perkins Loan, which is available to both undergraduate and graduate students. These loans are offered by participating schools – not banks – to students who demonstrate the greatest financial need. The student will repay the principle and interest to the school after graduation, with a term up to 10 years depending on how much you borrow. The interest rate on Perkins loans is fixed at 5%.

Undergraduate students are eligible for up to $4,000 a year, with a maximum of $20,000 over their undergraduate studies. Graduate students can receive up to $6,000 a year, with a maximum of $40,000 (but this amount includes their undergraduate loans).

As discussed earlier, you’ll need to complete the FAFSA to apply; in addition, you’ll need to sign a promissory note. The promissory note is a binding legal contract that says you agree to repay your loan according to specific terms – it is an important document that must be reviewed and its implications understood before you sign.