1. Consider ways to keep your costs down to reduce student loan debt.
- Create a budget to help you determine how much loan money you will need. Do not borrow more than you need.
- Keep track of your loan debt and the amount you will have to repay when you graduate.
2. Take advantage of the interest-free Installment Payment Plan offered by the University to finance all or a portion of your fee bill. Further information is available at the Bursar’s Office.
- Did you know that almost all students will qualify for a Federal Stafford Loan? To apply for this loan, begin by completing the Free Application for Federal Student Aid ( FAFSA).
- By filing the FAFSA, some students may also qualify for Grants and/or Federal Perkins Loans.
- If additional funds are needed, a Federal PLUS Loan or a private (alternative) student loan are options.
Why Choose a Federal Perkins or Federal Direct Stafford Loan Over a Private (Alternative) Loan?
Fixed Interest Rates
- Federal student loans have low fixed interest rates (5% for Federal Perkins Loans, 4.66% for Federal Stafford Loans for undergraduates, 6.21% for graduate students) for the life of the loan. Rates don’t change based on volatile market conditions as they do for most alternative loans. You may think you have a good deal on your private loan now, but what would happen if the Prime or LIBOR rate on which the private loan is based increases significantly?
No Credit Check
- Federal Direct Stafford and Perkins loans are not based on your credit. You don’t have to be credit-worthy or have any established credit to qualify for federal student loans.
More Flexible Deferment, Repayment, & Cancellation Options
- Federal Stafford and Perkins loans are both deferred while you are in-school. No payments are due for six months after you leave school in the case of Stafford loans, and nine months after you leave school in the case of Perkins loans. Also, if you qualify for Subsidized Stafford Loans or Perkins Loans, the government will pay the interest that accrues while you are in-school and during your grace period. This is not the case with unsubsidized or private loans.
- After you graduate, federal loans have more flexible repayment options than alternative loans. Most alternative loans don’t offer more than one year of forbearance (temporary suspension of payments at the discretion of the lender). Federal loans offer a variety of deferment options (temporary suspension of payments if you meet certain requirements, such as unemployment or economic hardship), and up to five years of forbearance if you are having trouble making payments.
- In certain circumstances, your Federal Stafford or Perkins Loan may be discharged (cancelled). This is not the case with alternative loans.
Why Choose a Federal Direct PLUS Loan Over a Private (Alternative) Loan?
PLUS Loans are available to parents of undergraduate students. Graduate students may also borrow PLUS Loans on their own behalf.