Financing Options
COMPARE AND CHOOSE: IT PAYS TO UNDERSTAND COLLEGE FINANCING OPTIONS
Education is an important investment for students, and we encourage individuals to carefully consider all financing options when choosing a student loan. Parents should often be included in financing discussions because some loans require credit checks or cosigners. Among the factors to evaluate are:
What is the right option? When comparing the cost of student loans, families should ask:
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What is the interest rate?
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Are there any loan fees?
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Are there any loan discounts?
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What will the monthly payment be upon graduation?
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What is the repayment term?
What about repayment? When considering repayment, families should ask:
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Is there a grace period after graduation?
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How long is the repayment term?
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Who will service the loans?
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Are there deferment or forbearance options?
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Is there loan forgiveness?
Students and their families have choices when it comes to college financing. Every family is unique and no one solution is right for everyone. The chart below outlines the available loan programs (Stafford Loans, Parent PLUS Loans, Private Loans, Graduate PLUS Loans) to help compare and decide which financing option is best.
Note: Other types of loans may be available, but the chart below represents the most common programs.
Amounts as of July 1, 2012
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Stafford Loans
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Parent PLUS Loans
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Private Loans
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Graduate PLUS Loans
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Interest Rate
Interest Rate Type
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3.4%
Fixed
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7.9%
Fixed
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Check with your lender
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7.9%
Fixed
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Fees
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1% of the accepted amount
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4% of the accepted amount
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Check with your lender
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4% of the accepted amount
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| Credit check required |
NO
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YES
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YES
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YES
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When payment starts
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6 months after graduation or falling below half-time enrollment
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60 days after final loan disbursement for academic year OR option to defer loan within application
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6 months after graduation
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Immediate repayment after final disbursement
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Minimum enrollment
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At least half-time
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At least half-time
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Check with your lender
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At least half-time
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FAFSA required
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YES
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YES
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NO
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YES
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Cosigner/endorser option
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N/A
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YES
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Yes, for freshmen
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YES
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Cosigner/endorser release
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N/A
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NO
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Some after 1 year
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NO
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SAP required
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YES
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YES
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Most do not require
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YES
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Standard repayment term
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10 Years
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10 – 25 Years
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Check with your lender
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10 Years
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Consolidated loan repayment
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Up to 25 years
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Up to 25 years
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Check with your lender
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Up to 25 years
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Servicing
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Assigned
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Assigned
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Check with your lender
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Assigned
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.25% auto debit discount
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YES
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YES
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N/A
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NO
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Loan forgiveness
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Death or Disability
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Death or Disability
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Check with your lender
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Death or Disability
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Who can apply
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Student
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Parent or Step Parent
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Student
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Student
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Responsible for repayment
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Student
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Parent
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Student
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Student
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How to apply
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Accept on Central Pipeline
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www.studentloans.gov
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Lender website
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Accept on Central Pipeline
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