A loan is a form of financial aid that must be repaid, with interest
(although the federal government will pay the interest on subsidized loans while
you are in school). The Federal education loan programs offer lower interest
rates and more flexible repayment plans than most consumer loans, making them an
attractive way to finance your education. Education loans come in three major
categories: student loans, parent loans and private loans.
Stafford Loans
All Stafford Loans are either subsidized (the
government pays the interest while you're in school) or unsubsidized (you pay
all the interest, although payments are deferred until after graduation). To
receive a subsidized Stafford Loan, you must be able to demonstrate financial
need.
Stafford Loans allow dependent undergraduates to borrow up to $2,625 during
their first academic year, and up to $3,500 during their second academic year.
Students enrolled in bachelor degree programs can borrow up to $5,500 for each
remaining academic year. Independent students can borrow an additional
unsubsidized $4,000 the first two years and $5,000 for remaining years in a
bachelor program. Students may combine subsidized loans with unsubsidized loans
to borrow the maximum amount permitted each year.
Stafford Loans have variable interest rates, which are capped at 8.25% or
less, depending on yearly adjustments. All lenders offer the same rate for the
Stafford Loan, although some lenders give discounts for on-time and electronic
payment.
Repayment begins six months after graduation. You must also begin repaying a
Stafford Loan if your academic schedule falls below 1/2-time.
Perkins Loan
The Perkins Loan is a subsidized loan, which means the
federal government pays the interest while you are in school at least 1/2 time,
and for 9 months after you leave school. The interest rate is only 5% and there
is a 10-year repayment period. The Perkins Loan is awarded to students with
exceptional financial need. This is a campus-based loan program, with the school
acting as the lender using a limited pool of funds provided by the federal
government.
The amount of Perkins Loan limit is $3,000 per award year, with a cumulative
limit of $20,000. In addition to need, your loan amount is determined by the
funds that are available at your campus.
PLUS Loans (for Parents)
The federal Parent Loan for Undergraduate
Students (PLUS) lets parents borrow money to cover any costs not already covered
by their dependant student's financial aid package. PLUS loans have variable
interest rates, which are capped at 9%. Repayment begins 60 days after the funds
are disbursed, and the repayment term is up to 10 years.
The parents, not the student, are responsible for the repayment of PLUS
loans. If the student agrees to make payments on the PLUS loan, but fails to
make the payments, the parents will be held responsible.
Educational Assistance Loans
When necessary, Westwood College participates with several private lenders to
help students and their families bridge the gap between the cost of education
and the amount covered by other financial aid programs. Westwood?#352;?recommended
private loan programs include Bank One Education Loan, Key Alternative Loan,
Wells Fargo, and Sallie Mae Career Loan. Contact your Financial Aid office to
determine what options are available at your campus.
