Finding the best student loans

19-2-_page_01-dumping-debtLacey Longpre

Co-Editor

As the average U.S. student’s debt after graduating from a public two-year college reaches $7,000, according to Forbes Magazine, students will be searching for loans to reduce these costs.

Students choosing to take out a loan for Pierce College need to consider what programs they’re going into, what their income level will be once they graduate and whether or not they’ve exhausted all other financial aid resources.

Additionally, students should compare different loans. Some loans have higher interest rates and may have a rigid payment plan. Loans that offer lower interest rates and flexible payment plans will help reduce debt after graduation.

A student’s eligibility for a loan is first determined through the Free Application for Federal Student Aid at fafsa.ed.gov. Students are advised to make sure they are on the appropriate site as it’s commonly confused with fafsa.com; another financial aid site that charges a fee to use its services.

“The first word in FAFSA is free,” Erin Anderson, Pierce College Puyallup financial aid program manager, said. “It’s a free application.”

Once students have submitted the FAFSA, they should go into their student Financial Aid Portal on the Pierce College website to be sure the application wasn’t flagged for verification. If the application was flagged, it means Pierce College may need additional information to verify that content on the FAFSA is accurate.

Also, there may be other required documents in addition to the verification paperwork. Such paperwork may include admissions applications and proof of citizenship. Students can check this through their Financial Aid Portal.

Students then need to fill out the Application for Direct Stafford Loan at Pierce College on the Pierce College website. The application asks for general information about the student including quarters when the loan is needed and if a student is requesting a subsidized or unsubsidized loan.

Subsidized loans are need-based, as determined by subtracting the FAFSA’s Expected Family Contribution from the school’s cost of attendance. The FAFSA doesn’t indicate eligibility for subsidized loans, since the cost of attendance is another factor. It’s suggested to ask the financial aid office for assistance in determining eligibility.

The interest rate for subsidized loan begins as soon as students enter their grace period, once students stop attending at least half-time, not after.

Unsubsidized loans aren’t need based, and the interest on it starts once the money is given.

Anderson suggests students analyze their budget to know what they need. When filling out this application, students may not need to take out the maximum amount a loan offers.

“We encourage people to take out only as much as they need,” Anderson said.

Students should also check how much money each loan gives. Anderson says that students make the mistake of asking for more money than the loan offers annually.

Once completed, the Direct Loan Entrance Counseling and Direct Loan Master Promissory Note needs to be completed at www.studentloans.gov. Anderson says that some students don’t fulfill both processes and it hinders their ability to obtain a loan. Students should fill out all appropriate forms to receive their money.

In applying for loans through Pierce, there are priority application dates to ensure that the application will be reviewed before tuition is due for each quarter. However, it’s recommended to apply as early as possible for the quarter that funding is needed. Check the Pierce College website or financial aid office for official dates.

If students can pay out of pocket for tuition, they can submit the application after these dates.

It’s also suggested to plan time to complete the process accordingly.

“You need to give yourself a lot of time,” said Alyssa Lunde, a Pierce College Puyallup student, commenting on the process she’s going through currently to take out a loan.

The time when students receive their loan money will vary. Individuals taking out a loan for their first time will have a 30-day delay in receiving their money. This is only applicable to first-time borrowers, after this there’ll no longer be a delay.

Students requesting a loan for only one quarter will have half the loan delayed until after the midpoint of the quarter.

Pierce College offers Direct Stafford loans, Parent PLUS loans and Federal Perkins loans.

Direct Stafford loans are known to have a lower interest rate, are funded through the Department of Education and don’t require a credit check.

Additionally, Parent PLUS loans allow parents to take out loans for their children to pay for higher education. These typically have higher interest rates than the Direct Stafford loans and require a credit check.

Anderson suggests that students take loans in their own names. This will allow them to build credit and pay at a lower interest rate.

The Federal Perkins loan is for students who still need additional funding after using all other financial resources. These are only available for the high cost programs of veterinary, dental hygiene and nursing.

Students can track their Stafford Loan disbursements through the National Student Loan Data System at www.nslds.ed.gov. This helps keep track of total loan debt, especially if loans are received from multiple institutions.

Student can look to private loans for funding as well; however, Anderson suggests students look to other options first as these banks can sometimes have contracts that use fine print to obscure some of the pitfalls of higher interest rates and rigid payment plans.

“Students sign it, not really understanding the conditions,” Anderson said.

Running Start students should look within the Running Start program for monetary assistance as they don’t qualify for financial aid because they are still in high school.

Students who earning their General Education Development are also ineligible to receive financial aid. Such individuals should look to outside resources for financial assistance.

Other legitimate resources for financial assistance are at www.studentloans.gov and studentaid.ed.gov.

Anderson says that following loan guidelines will decrease financial stress.

“Loans don’t have to be a scary thing,” Anderson said, “as long as you’re responsible with borrowing.”

Anderson also encourages students to ask questions to anyone in the financial aid office. Students can email further questions to financialaid@pierce.ctc.edu.

 

The Puyallup Post is the award-winning student news of Pierce College Puyallup in Puyallup, Washington. Copyright The Puyallup Post 2017. Twitter/Instagram @puyalluppost

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Finding the best student loans

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