Education Loans

When figuring the cost of college, remember that there is more to plan for than just tuition. You may hear the term Cost of Attendance (COA) which refers to the estimated cost to attend school. This includes tuition and fees plus books, supplies, transportation, room and board, spending money, health insurance and loan fees.

Your college or university will generally publish on its Web site or in its financial aid office the college's cost of attendance. This is an estimate of how much money will be required to attend school for one year at that college, including all reasonable expenses - such as tuition, room/board, books and supplies, plus an average allotment for personal expenses and transportation.

You can determine what you've saved for college by starting with the amount you're willing to contribute from your savings. If you have a part-time job or are planning to work the summer before you go off to college, it's a good idea to save most of that for your college education. The more money you save, the more prepared you'll feel once you get there. How much are your parents contributing to your education? Have your grandparents put money aside for you? You can add that amount to your savings as well.

Everyone has a different financial situation. You need to save but you also need to have a life, so it's unrealistic to put 100% of your wages aside for school. However, it is important to remember that the more you save, the easier it will be to pay for college.

If you don't have enough money from savings to contribute to your COA, explore other options such as applying for grants and scholarships. Grants and scholarships are financial aid awards that never need to be paid back and all students, regardless of need, should explore this type of aid.

The Free Application for Federal Student Aid (known as FAFSA) is a form that can be filled out annually by current and prospective university students (both undergraduate and graduate) - and sometimes their parents - to determine their eligibility for federal student financial aid including grants, loans and work-study programs. In addition, most states and schools use information from the FAFSA to award non-federal aid. Please check with fafsa.ed.gov for updates to the FAFSA process.

You can fill one out online at fafsa.ed.gov. You can also get a paper copy of the FAFSA at your high school guidance office or university financial aid office.

You will need a number of documents, including the following:

• Your Social Security number (SSN) and your parents' SSNs
• Your driver's license number
• Most recent federal tax information/tax returns (IRS/W-2) for you and your parents
• Records of untaxed income, such as Social Security benefits, welfare benefits (e.g., TANF) and veterans benefits, for yourself and your parents
• Bank statements and information on savings, investments and business/farm assets for yourself and your parents

The SAR is a Student Aid Report produced by the U.S. Department of Education and sent to students who have applied for federal student financial aid. It is also sent to any schools a student lists on the FAFSA. The SAR summarizes the information from the student's FAFSA and provides families and schools with the student's Expected Family Contribution (EFC).

Expected Family Contribution (EFC) is an estimate of the parents' and/or student's ability to contribute to college expenses. Eligibility for a number of federal, state, local and institutional aid programs is based on a student's EFC. EFC is calculated based on a student's FAFSA application. The lower the EFC, the less money a family has to contribute to a child's education. The EFC is usually subtracted from the Cost of Attendance (COA) to determine a student's financial need. If COA - EFC > 0, then a student has financial need.

Some of these factors include:

• Additional family members supported by the head of household, e.g., additional brothers and sisters or grandparents living at home
• Additional siblings in college
• Lower income (especially student income)
• Fewer assets (especially student assets)

All the schools you applied to will send you a financial aid award letter in April/May. Make sure to respond to your award letter ASAP so you don't miss any aid deadlines. This letter may include information such as the following:

• Estimated Cost of Attendance
• Expected Family Contribution
• Need (which is defined as the difference between your total expenses and the amount of money your family is expected to contribute)
• Aid you're awarded from that school to help fill that need

Federal grants are a type of aid that is awarded by the federal government. Grants for college students do not have to be repaid. Grants are based upon financial need, as calculated by the federal aid program. The first step is to complete the FAFSA. A school grant is awarded directly from your chosen school. To learn more about your school's grants, visit their Web site or financial aid office.

A Stafford Loan is a low-cost student loan offered to eligible students enrolled in American institutions of higher education and is sponsored by the federal government. See the "Stafford Loans" section for more details.

A Federal PLUS Loan (Parent Loan for Undergraduate Students) is designed specifically to help parents fill the gap between their child's current financial aid and the rising cost of tuition. PLUS loans are sponsored by the federal government. See the "PLUS Loans" section for more details.

Tuition and fees are rising every year, but federal loan limits are not. To help you manage the remaining cost of your education, lenders have worked with your school to offer an option for financing: private loans, also known as school-certified private loans or alternative student loans. The money borrowed through a private education loan, which is subject to credit approval by the lender, can be used for tuition, room and board, books and supplies, a computer, studying abroad and more. See the "Private Loans" section for more details.

Rates for each school year are capped on July 1 by the government. Your rate depends on the type of Stafford Loan and when your loan funds are disbursed. View Stafford loan interest rates.

A subsidized Stafford Loan is a need-based loan; the government pays the interest on these loans when you're in school so that you're not incurring interest. An unsubsidized Stafford Loan is not need-based; if you choose not to pay interest until after you graduate, your interest builds up while you're in school and will be capitalized (added to principal).

The maximum loan amount you can get with a Stafford loan your first year is $5,500. If your school determines your need to be higher than the limits on a Stafford Loan, they might offer an additional type of loan, like a PLUS Loan.

With a PLUS loan, parents may borrow up to the full cost of their child's education minus other aid received. For example, assume your tuition bill for a year at your chosen school is $15,500 and you were awarded $5,500 for a Stafford Loan your first year.

COA	$15,500	In this example, if your parents applied for a PLUS
- Other Aid	- 5,500	loan, they might be approved for up to $10,000.
	$10,000

Your parents should consult their tax advisor.

Tuition and fees are rising every year, but the federal loan limits are not. To help you manage the remaining cost of college, lenders work with your school to offer an option for financing - private loans, also known as private education loans, school-certified private loans or alternative student loans. Private loans are subject to credit approval and must be repaid based on the terms and condition of the loan note you sign when you take out the loan.

Rates are determined based on creditworthiness of the borrower and the co-signer, requirements vary by lender. Creditworthiness is often defined as meeting the following financial and credit standards:
• Two years of employment history
• Proof of current income (if self-employed, applicant must have been in business for two years)
• Two years of U.S. residency
• Two years of satisfactory credit history

You may qualify for a better rate if you apply with a co-signer because a co-signer usually has a more established credit history than a student borrower. When applying with a co-signer, both you and the co-signer will complete the application for credit, will sign the loan note and are responsible for repayment of the loan obligation. Keep in mind a private education loan may have a higher interest rate than federal loans, so explore all federal options before applying for a private education loan, only borrowing what you absolutely need.

Automatic payments are loan payments that are automatically deducted from your checking or savings account. It's easy to set up with your lender or loan servicer. You can usually pick which day of the month you want the funds taken out. What's great about automatic payments is you don't have to worry about sending a check each month. Most lenders offer an incentive for borrowers who participate in automatic payment programs. The PNC Solution Loan™ offers a 0.50% interest rate discount for automatic payments, which can result in savings over the life of the loan.

A student loan deferment allows you to temporarily postpone your monthly payments under certain circumstances, such as the following:

• Enrollment in school at least half time
• Economic hardship
  
• Unemployment
• Military deployment

Please note interest may continue to accrue during periods of deferment. Certain restrictions and conditions may apply. Contain your lender or servicer to discuss deferment options.

If you have more than $30,000 in outstanding federal Stafford and/or PLUS loans with one or more lenders, and all of your loans were established after Oct. 7, 1998, you may be eligible for an extended repayment plan. With an extended repayment plan, you may:

• Lower your monthly payment by up to 40%
• Maintain borrower incentives such as interest rate reductions and principal rebates
• Maintain full deferment eligibility
• Pay no fees and incur no credit check

Anytime you extend your repayment term, you will increase the overall interest amount you pay over the life of the loan. You may apply for an extended repayment plan during your grace periods, once your loans have entered repayment, or during periods of deferment or forbearance. Just contact your lender or loan servicer and request the extended repayment plan available for federal Stafford and/or PLUS loans (private loans are not eligible). Make sure to contact all of your lenders if you have loans with more multiple lenders.

Colleges have different rules for keeping cars on campus. Many schools do not allow freshmen to keep cars on campus, but if they do, you might have to park it far away and will usually be charged a parking fee for each semester. To find out if your school allows cars on campus and the parking rates, look on their Web site. And when you're thinking about the bottom line, make sure to think about gas, insurance, maintenance and parking fees. Other students from your area might be heading home for the same breaks - so you might be able to catch a ride with a friend.

It's almost impossible to get through college without a computer. While most colleges provide computer labs on campus, some colleges give a laptop to each incoming student, and others may offer discounts on new computers. Ask your school if they offer a wi-fi wireless network for their students. Free software may also available through your school.

If you're staying in the dorms, find out if there's a kitchen on your floor and don't be afraid to use it. Or it might be a good idea for you or your roommate to bring a microwave to school. Think beyond mac & cheese and ramen noodles!

• Nacho Heaven: Assemble a plate of your favorite chips and add canned beans, zesty salsa and shredded cheese. Microwave for 2-3 minutes until cheese is melted.
• Easy Quesadillas: Layer one oversized tortilla with a handful of cheese, pre-diced peppers and canned corn. Cover with 2nd tortilla and microwave for 60 seconds. Serve with salsa.
• Pita Pizza: Top one whole pita pocket with marinara sauce, some bagged veggies and cheese. Microwave for 60-75 seconds. Enjoy with ranch dressing.
• Apple Crumble: Combine apple pie filling, a handful of granola and a crumbled cupcake in a small bowl. Microwave for 60 seconds and enjoy with some vanilla ice cream or yogurt
• Peanut Butter Fudge: Microwave 12 oz. of semisweet chocolate and 12 oz. of peanut butter on high for 3 minutes. Add enough milk to mixture to make it pourable and combine thoroughly; pour into 8 x 8 baking pan and chill overnight.

Warehouse clubs such as Sam's Club and Costco sell a wide variety of merchandise in which customers pay annual membership fees in order to shop. Clubs are able to keep prices low due to their no-frills format. Customers are required to buy large, wholesale quantities of the store's products, which make these clubs attractive to bargain hunters. Make sure you know how much the membership fees are before you join. If you get a group of students to go in with you, you can split up the large quantity items and defray the cost of the membership.

It's a tough decision to make, but a year off does give you more time to prepare financially for school. If you work a full-time job during that year and put most of your paychecks in savings, you could have a significant chunk of cash to put toward your total cost of degree (TCD). You can also search for more scholarships, too. The pros and cons of delaying entry into school should be considered when thinking about this option.

Your future salary depends on your career and where you live. Check out the Salary Wizard on Salary.com to find average U.S. salaries for your chosen career.