Student Loans Information
There are more types of student loans available today to students than ever before. We provide you with all the loan information that you will need to make an informed decision as to what financial aid you will need in order to further you education and studies in the future. What is study loans? Student loans is financial aid that students and their parents obtain through Federal private lenders, scholarships, and a few other sources. All these sources are solely to aid students in paying for their education. Fact: Over the past 50 years, just as with everything else, the cost of education has risen dramatically and student loans became essential to further your study. Average tuition increases of more than 6% per year are common today. That ten times increase is not too unusual – many things cost ten times what they did a few decades ago. Income, on the other hand, has risen about four times in the same period, from about $15,000-$30,000 per year to around $39,000-$42,000. The numbers vary by gender, age and more but as a rough guide, the lower range ~3:1 ratio is about right. In the past students could depend almost entirely on Pell Grants and Stafford Student Loans to finance their education costs, if not complete living expenses. Pell Grants are still given, but they’re need-based and represent a small percentage of the education cost today. Stafford Loans are also need-based, and can range from 25%-40% of the average cost of financing school. Perkins Loans are similar, but reserved for the lowest income families. Fortunately, PLUS Student Loans are available, which was not an option 35 years ago. These are loans to parents, not students, to help pay for the student’s education. The interest rates are average, and there are certain restrictions and fees, but they often form part of the total package.
A word to the wise about fees in general. Many loans are nominally for a specified amount, say $4,000 per year disbursed in two payments (one per semester). But it’s not uncommon for up to 4% in fees to be deducted from that amount before any funds are distributed. That 4% on $4,000 equals $160 you never see, yet have to repay. Be sure to look for low or nofee loans. Though Federal loan programs, like the FFELP (Federal Family Education Loan Program) and the subsidized Stafford and others, carry no credit check and low fees and interest is paid by the government, they are not the only source of financial aid today. The average financial aid package today will be a complex mixture of grants, scholarships (if possible), Federal and (probably) private loans. Rates range from 5% (Perkins) to the more common 6.8% or higher. With the recent large increase in defaults on subprime lending (mostly for mortgages), lenders are going to be more strict than before about credit history and income.