College Financing Options Still Available for This Fall

publication date: May 26, 2008

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author/source: Kate Copsey / STAFF

By Kate Copsey / STAFF

Organized students will be urged, beginning in their junior year, to pick appropriate schools and lock in their financing through grants, scholarships and loans early in their senior year. But the less organized group may be just now sorting out how to finance their further education. The good news is that regardless of where you are in the process, you can still attend college this fall. And you can still secure funding.

The primary source of this funding is via student loans. The loan options can be given directly to students or parents, primarily from the federal government or private banks. Trivium Educational Consultants is a private financial aid and admissions assistance firm based in Smyrna. Its president, M. Shawn Arnold, strongly advises against using predatory lenders such as those who beg attention through television and Internet advertising. In general these lenders charge higher interest rates, require that repayment begins while you are still in school and do not have consolidation options.

Loans to the Parent
Banks: Parents who have good credit and/or own a home can secure loans through a bank in the same way they would any other loan. The fact that it is for education does not generally figure into the agreement. A straight loan will be arranged at the branch level for most parents. Interest rates will be competitive within the commercial field but will be higher than educational loans.

Using the equity on your home is another way to get at money before the fall semester. Even though home values have fallen, you may have enough equity to pay for the first few semesters, at least.

“Banks are more conservative” because of the housing crisis, according to Brian Piel, the Branch Sales Manager at Regions Bank in Roswell. And in general there is “credit tightening,” which is not good news for those who have dubious credit or are running their own business, which can be deemed risky.

Piel also mentions that bank loans, from whichever source you get them “are due for repayment 45 days after closing.”

Some banks, such as Regions, have a specific division that deals with education loans. This may not be available in all bank branches, but branch managers such as Piel can point you in the right direction.

PLUS loans: PLUS loans are available to parents with good credit, as well as some who have poor credit. These are government loans through two different programs (Federal Family Education Loan and the William D. Ford Federal Loan) and are available to returning non-traditional students as well as typical freshmen.

The big difference with PLUS loans is that they are structured as student loans, not bank loans, despite the fact that they are provided through commercial entities. This means that they are not due for repayment until the student finishes school and can hopefully help pay the loans when they are gainfully employed. Rates for these loans are fixed.

PLUS used to stand for “Parent loans for undergraduate students.” The acronym was lifted – but the name remained – when the program expanded its availability to graduate and professional students.

Student Loans
Students can also go out on their own and get direct loans. This is terrific for those kids whose parents are low income and cannot help fund further education. There are a plethora of student loans through the federal agencies, and some are structured so that you can apply online.

Sallie Mae also offers loans through the government. These loans can be used by parents or students, and can be applied toward courses in major universities as well as technical colleges and trade schools.

All of these loans include a grace period for finding work after the student graduates. But students will lose this forbearance if they work during the school year and do not use the grant.

It is also important to remember that federal lenders begin taking loan applications for each year beginning in January. The cut-off date for these funds is June 30 of the same year, so there’s still time to get yours in. But the sooner you get your application in, the better chance you’ll have of being approved.

Other Funding Considerations
Major universities are expensive, and if they are out of town you need to budget for housing as well as course expenses. Local universities and technical schools are much cheaper per credit hour and will involve less general costs during the year.

For example, the total cost for an out-of-state student attending the University of Tennessee is estimated at over $30,000 a year, which includes housing. Over $12,000 of that cost is the out-of-state premium.

The University of Georgia in-state cost, on the other hand, is $2,248 per semester for a full time student, with no housing included. In-state students can attend Kennesaw State University for an even lighter $1,608 per year. That price also does not include housing.

Beginning school at a two-year college will put you in good standing for transferring to a 4-year college because your coursework will be university standard. High school standards around the state and county vary so much that borderline students may be deemed unacceptable if they are graduating from certain schools. For these students, particularly, it is advantageous to attend a local community college where they can demonstrate their scholastic capabilities in a college setting.

Work Study options are also available to students in need of financial help. Students are paid by the hour as they work for the university that they are attending. Each university has different regulations for this option, but for many students it is a first job to put on a resume as well as a chance to earn some tuition credits.

Basically though, even at this late stage it is still very possible for your student to find funding for that important step into the world of further education. Take care with the loans and avoid loan sharks, by using the following sites and your bank. Also remember that loans need to be repaid and will likely stay around for many years after graduation, so make sure that you are committed to a sensible repayment plan as well.

For loan information, consider visiting the following sites: www.studentaid.ed.gov
     www.salliemae.com
     www.fafsa.ed.gov