The ideal situation is that families have the resources to cover the cost of their student’s college education. The reality is, most families will have to borrow in some capacity to make this happen. Every family should be able to make informed decisions. Here are some tips to help:
- Review the bill to be sure all financial aid, such as grants, scholarships, and the Federal Direct Student Loan have been applied.
- Also, review the fees and charges to be sure you understand what they are.
- Some colleges automatically charge students for a health insurance policy. These fees are sometimes $1,500 to $2,500 a year. Students already covered by a suitable policy can remove this charge by completing a waiver.
- If your student has not been offered the Federal Direct Student Loan of $5,500 for their freshman year, be sure the FAFSA has been submitted to qualify for this loan if needed. It’s not too late. This is the only education loan a student can take without a cosigner.
- Does your child qualify for the NYS Excelsior Scholarship? Students from a household with a federal-adjusted gross income of up to $125,000 are eligible for an Excelsior Scholarship award if they attend a NYS public school. Applications will be accepted through August 31, 2023. For more information, visit https://www.hesc.ny.gov.
- Utilize any savings earmarked for college. Other options to consider include college payment plans, home equity loans, or private loans. Be sure to speak with a financial advisor for the best option.
Let’s Talk Education Loans
- Options include Federal Direct Student Loans, Federal Parent PLUS Loans, and private loans.
- The interest rate for the Federal Direct Student Undergraduate Loan is 5.5%, effective July 1, 2023. The loan fee is 1.057%.
- The interest rate for the Federal Parent PLUS Loan is 8.05%, effective July 1, 2023. The loan fee is 4.228%.
- For information about federal student loans, visit studentaid.gov.
- Consider the costs of your student’s four-year education. Would your family benefit from having your student take the Federal Direct Student Loan?
- If financing beyond the student federal loans, current savings, and cash flow is needed, you may need to consider private education loans.
- Explore your options for private loans. It may be worth it. Two sites that compare loan options are www.simpletuition.com and www.collegeavestudentloans.com.
- Remember, federal parent PLUS loans and private loans are in the parent’s name. The parent, not the student, is responsible for repaying these loans.
Published in the Mendon Honeoye Falls·Lima·Sentinal