Am I eligible for
Just about everyone qualifies for some type of financial
aid. In fact, over 8 million students receive financial aid
every year. Even if you’re not a straight-A student
or a star athlete, you may be eligible for more aid than
you think. To see if you meet basic eligibility requirements,
take our Financial Aid Eligibility Quiz. Then, complete the
Free Application for Federal Student Aid to see how much
aid you can get.
When do I start the process?
It’s never too soon to start. There are steps you can
take beginning in high school to help you prepare both financially
and academically. Otherwise, you should start the year before
you go to college by completing the Free Application for
Federal Student Aid (FAFSA)
as soon as possible after January 1.
What is FAFSA and
where do I find it?
The Free Application for Federal Student Aid (FAFSA)
is used to determine how much aid you can receive and how
much your family is expected to contribute toward your college
costs. You must complete a FAFSA (or Renewal FAFSA) each
you wish to be considered for financial aid.
You can find the FAFSA form online at www.FAFSA.ed.gov,
or you can get a paper copy from your school’s Financial
Aid Office or your high school guidance counselor.
To learn more about the FAFSA, see The Financial
Aid Process: Completing the FAFSA.
How can I increase
my chances of getting more aid?
The single most effective way to increase your chances of
qualifying for more money is to apply as soon as possible
after January 1 of the year you wish to receive financial
aid. The aid pool at most institutions is limited, and is
typically awarded on a first-come, first-served basis. For
more information, see our Top Tips for getting the most financial
How do I get the
Methods of distributing financial aid vary from campus to
campus. Most financial aid will not be given directly to
you. The majority of aid gets credited directly to your student
account at the start of an academic term.
How do I know if
I’m a Dependent student?
If you are less than 24 years of age on December 31 of the
school year, an undergraduate student, single, not in the
military, have no dependents,
and are not an orphan or ward of the court, then you are
a Dependent student as far as the Department of Education
Which loans require
Federal Stafford Loans do not require any credit checks.
However, if your son or daughter has defaulted on a student
loan, or is not making satisfactory academic achievement,
they may not be eligible to obtain a new federal loan. The
PLUS (Parent Loan for Undergraduate Students) Loan requires
a credit check and may be denied if the parent has adverse
credit history. All alternative loans have credit checks.
When do I start
repayment of my loans?
The borrower is not required to make any payments
until six months after leaving school or going below
half-time. For example, if the student receives a degree
in May, but goes on to graduate school in the fall, no
payments must be made because there was not a six-month
lapse in schooling.
Federal PLUS Loans
Repayment will start usually no later than 60
days after the last disbursement. All federal loans have
at least two disbursements, typically one for each school
term. At most schools, the last disbursement will take
place in January, and the repayment will normally start
between February and March.
The repayment terms may vary, depending on the
type of private loan you have.
Is each loan separate,
or do they just roll them all into one account?
Each loan is considered a separate loan, but all federal
loans under the same Social Security Number may be consolidated.
A Federal Consolidation Loan
is where the individual loans are paid off to create one
new loan. The repayment term may then be extended to minimize
the monthly payment, while maintaining the benefits of the
original, separate loans. Alternative loans will not be included
in a Federal Consolidation Loan.
I consolidate my student loans?
many benefits-even if you’re currently making your
monthly payments without any difficulty.
- You can make monthly bill paying easier with one student
loan payment to one lender.
- The rate on a Federal Consolidation Loan
is fixed for the life of the loan. Federal Stafford Subsidized
and Unsubsidized Loans carry variable interest rates that
are adjusted annually.
- Consolidating will help ease the pressure on your monthly
budget by reducing your monthly student loan payment 10% – 60%.
- You can save money by using your student loan payment
savings to pay off high-rate debt, such as credit cards.
help your credit scores and debt-to-equity ratio, both
key factors if you’re looking to purchase or refinance
See our Before and After examples for a
look at what consolidating your student loans can do for
Won’t my total cost increase
if I extend repayment to 30 years?
Extending the repayment period does increase total interest
payments, since smaller payments are made over a longer period
of time. However, there are no prepayment penalties for accelerating
repayment, so you could pay off the loan in a shorter period
of time and save on total interest payments.
parents consolidate their Federal PLUS loans with my student
All loans must be under the same borrower’s Social Security
Number, thus parents cannot consolidate their PLUS Loans
with their children’s Stafford Loans, or vice-versa.
the interest rate determined?
The interest rate is determined by taking a weighted average
of the interest rates on all loans to be consolidated and
rounding up to the nearest 1/8 of 1% or 8.25%, whichever
interest tax deductible?
Most people can deduct interest paid on Federal Consolidation Loan.
Consult your tax advisor for more information.
I know what my payment will be?
Try our consolidation loan
calculator to get an idea of the savings you can expect from
a Federal Consolidation Loan.
Consolidate Student Loans Now makes it simple. Just fill out our easy online form. You’ll
receive an e-mailed, preprinted, and fully completed loan
application in your e-mail inbox within 48 hours.
the difference between private and Federal student loans?
Federal student loans are guaranteed by the Federal government,
and offer attractive terms such as low interest rates, deferred
repayment, subsidized interest payments and longer repayment
terms. Credit checks, if required, are less stringent than
for other types of consumer loans. You must complete the
Free Application for Federal Student Aid (FAFSA)
to be eligible for Federal student loans.
Private loans are non-government loans
offered by banks, credit unions and other lenders. These
loans are not based on financial need, but rather on your
creditworthiness and ability to repay. Private loans are designed
to supplement federal loan programs and can be used for a
wide range of education purposes, including tuition, books,
living expenses and computers. The rates and terms vary by
lender and borrower creditworthiness. In some cases, a co-signer
is required to receive a private loan.
Do I need
a co-signer for a Private Loan?
Not necessarily. You may be eligible for a private loan if
you have a satisfactory credit history, are employed full
time and are a U.S. citizen or permanent resident. If you
don’t meet the minimum eligibility requirements, you
can apply for a Consolidate Student Loans Now Private Loan with a co-applicant
the rates for a private loan?
The rates vary according to the specific purpose of the loan.
For instance, private loans for undergraduates carry a rate
of LIBOR plus 4.65%. All Consolidate Student Loans Now Private Loan rates are
based on LIBOR, plus a margin.
The Education Resources Institute (TERI) is a private, nonprofit
institution that guarantees all Consolidate Student Loans Now Private Loans.
To be eligible for a Consolidate Student Loans Now Private Loan, borrowers
must be enrolled at least halftime in a TERI-approved school.
Please call Consolidate Student Loans Now or your school’s Financial
Aid Office with any questions about TERI-approved status.
I apply for a Consolidate Student Loans Now Private Loan?
Consolidate Student Loans Now makes it simple. Just fill out our easy online form.
should I save for my child’s education?
How much you need to save depends on the school your child
attends. Tuition and fees at public colleges are generally
lower than those at private schools. Regardless of the school,
though, education costs have been rising, and are expected
to continue increasing over the next decade.
Here’s how much college funding you’ll
need to save to send one child to an average four-year private
or public college. Don’t let these numbers frighten you.
Start implementing your college savings plans today.
|Child’s Age (Years)
||Average Cost Private College
||Average Cost Public College
Which is better, a prepaid tuition
plan or a college savings plan?
A prepaid tuition plan offers a conservative approach to
investing for college, and can be right program for students
planning to attend a state college. And, if tuition costs
increase, you win-the number of credit hours you purchased
remains the same, regardless of any changes in college costs.
The Consolidate Student Loans Now Scholar’sEdge™ savings
plan is more flexible, allowing you to save for any attendance
at any college. The amount you invest, plus the accumulated
return on your investment, may well exceed college costs-so
you’ll come out ahead.
Both plans are tax-deferred, and allow tax-free
withdrawals for education-related expenses.
If savings may
impact my child’s federal aid eligibility, why should
I save at all?
Whether you save or not, you will be expected to contribute
to your child’s education to the extent possible. If
you haven’t put away any money at all, then you may
have to take out loans either as part of your financial aid
package or to pay part or all of your Expected
Family Contribution … or both. Even though you and
your child may be eligible for low-cost loans, any type of
loans means paying interest whereas saving money means getting
will I be expected to contribute toward my child’s
To meet the cost of attendance, each school looks to the
students and parents to make an Expected
Family Contribution (EFC). The EFC is based on your family’s
ability to pay, and is determined by need analysis derived
from the information reported on your child’s Free
Application for Federal Student Aid. The EFC normally includes
both a student’s share and the parents’ share, both of which
take into account income and assets. The total EFC is calculated
using a standard formula established by law so that, regardless
of the college your child attends, your EFC will be the same.
The EFC calculation uses a standard formula based on the
information reported on the FAFSA.
This calculation considers family size, the number of family
members attending college, whether the student is Dependent or Independent,
and the family’s income and assets (both student’s
and parents’), including cash, checking and savings
accounts, real estate other than your family home, and investments.
The difference between your EFC and the cost of admission
(COA) determines your financial need.
Because both the cost of the school and
your family finances are considered, your family may qualify
for more financial aid than you think.
contributing to a 529 impact financial aid eligibility?
Although your savings will be considered in the EFC calculation,
income is a bigger factor than assets. However, both types
of 529 plans will impact your EFC.
A college savings plan, such as the Consolidate Student Loans Now
Scholar’sEdge plan, is considered the parents’ assets
and is factored into the EFC at 5.6% so that a portion of
the assets are considered in the financial aid calculation.
A prepaid tuition plan, on the other hand, is considered
to be the student’s asset, and reduces financial aid
save-me or my child?
While there are potential tax benefits to saving in your
child’s name, there are also potential financial aid
implications. Parent assets are factored into the EFC at
low rate-5.6%, while student assets are assessed at 35% of
assets and 50% of after-tax income over $1,750.
borrow-me or my child?
You should definitely investigate loans for your student
first, such as the Federal Stafford Loan. These are the lowest-cost
aid available and offer significant benefits such as flexible
repayment, deferment and forbearance, and consolidation.
a PLUS Loan different from a Stafford Loan?
Both loans are federally guaranteed, but the Federal PLUS
Loan is made to the parents of Dependent undergraduates,
while the Stafford Loan is made directly to the student-in
his or her name. Other differences are:
- Interest rates: The interest rate on a Stafford Loan
is generally among the lowest available (currently 6.8%).
The Parent PLUS Loan interest rate is slightly higher (8.5%
as of 07/01/06), though still quite low compared to other
types of consumer financing.
- Repayment: Repayment on Federal Parent PLUS Loans begins
within 60 days of disbursement whereas Stafford Loan repayment
is deferred until after graduation.
- Loan Amounts: Parents can borrow up to 100% of college
education costs, including room and board, books and tuition.
Federal Stafford Loan borrowing is capped at $2,625 and
$3,500 for first- and second-year undergraduates, respectively
may borrow an additional $4,000), and $5,500 for third-
and fourth-year students (Independent students
may borrow an additional $5,000).
Is there a credit
check required for a Federal PLUS Loan?
Yes, parents must pass federal guidelines for creditworthiness.
These guidelines are generally less stringent than for other
types of consumer credit, such as home equity loans and credit
if I’m not approved for a PLUS Loan?
A student whose parent(s) have been turned down for a PLUS
Loan may be eligible to borrow additional funds through the
Unsubsidized Stafford Loan Program, subject to the school’s
does a Federal PLUS Loan cost?
The Federal PLUS Loan has a 3% government origination fee
and a 1% guarantee fee, which is normally waived. Fees are
taken out of the proceeds of the loan, so there is no up-front
money required to obtain the loan.
Federal PLUS Loan funds disbursed?
The school’s financial aid office will distribute the
funds directly to the student in scheduled payments over
the course of the academic year. All federal loans have at
least two disbursements, typically one for each school term.
At most schools, the last disbursement will take place in
January, and the repayment will normally start between February
any prepayment penalties on the Federal PLUS loan?
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