Show Me the Money! Part 5:
By DANIEL SILVER, Eastern Staff Writer
In the real world not all students qualify for scholarships and grants, and not all families have the financial means to underwrite higher education for their children. In these cases it may be up to the students to invest in themselves—or rather, to request that a bank make the investment in the form of a loan that the students promise to repay.
Low-interest Government Loans
a healthy assortment of low-interest federal government loans exists for
learners looking to further their training after high school and willing to
make the investment. To apply for the loans, students and their parents or
guardians must complete and submit the Free Application for Federal Student Aid
(FAFSA). (This year’s FAFSA submission deadline expired March 1, and families
who file a late form will likely receive less aid or less favorable aid than
had they met the deadline. For more information on the FAFSA and on next year’s
deadline, check the website http://http://www.fafsa.ed.gov/,
on the FAFSA application and the Expected Family Contribution (
government administers two main needs-based loans to students: the Federal
Perkins Loans and the Federal Subsidized
Stafford Loans. Schools usually reserve Perkins Loans, currently at 5-percent,
for students with exceptional financial need.
Federal Subsidized Stafford Loans, currently offer a variable 2.82-percent interest rate while a student remains in school and 3.42-percent during repayment. As long as the student remains enrolled in at least one-half the fulltime course load, the government will pay the interest on these loans. The student must start repayment of both interest and principal six months after graduation or after he or she no longer fulfills the minimum course load.
Sometimes a student may require more funds than the government’s need-and-eligibility formula allows. The student may then apply for Federal Unsubsidized Stafford Loans. (Students whose FAFSA applications do not show any need at all may also apply for these loans.) The chief difference for the borrower lies in the interest and repayment schedule. The government does not pay any interest for unsubsidized loans, so the student must either pay the interest each month as it accrues, or add the accumulating interest to the principal (i.e., capitalize the interest).
a student borrows only subsidized loans, only unsubsidized loans, or a
combination of the two, the Stafford program offers funding up to a maximum of
$2,625 for first-year undergraduates; $3,500 for second-year students; and
$5500 for each additional year of undergraduate study. Students may borrow
provide additional monies for undergraduate expenses, parents of dependent
students enrolled at least half-time may take education loans under the
students whose parents do not qualify for
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columns are available at http://www.newstribune.info/
U.S. Department of Education’s Federal Student Aid (FSA) office: http://studentaid.ed.gov/students/publications/student_guide/2004_2005/english/index.htm
WV Apply, Admission and Financial Aid Information at http://www.wvapply.com/
American Education Services http://www.aessuccess.org/;
(1-304-345-7211 or toll free:
Eastern Community and
Potomac State College of West Virginia University at http://www.potomacstatecollege.edu/ or (304-788-6820 or tollfree: 1-800-262-7332)
Community and Technical College System of West Virginia at http://www.wvtechprpe.wvnet.edu (304-558-2411)
Peterson’s Get A Jump! The Financial Aid Answer Book (2nd edition)
Your high school guidance counselor
Your college’s financial aid administrator