Student Loans

Student Loans–All about Financial Aid

Over the past few decades, it seems the cost of everything in our society has risen to new heights; this includes the cost of education. Nowadays, the average tuition tends to increase by around six percent per year. Just as an example: the cost of registration at the University of California, Los Angeles (UCLA) in 1973 was merely $208 per quarter. Today, it is over $2,300 per quarter.

This ten-time increase in price is not unusual anymore; a lot of things today cost ten times as much as they used to several decades ago. Fortunately, income has risen to thrice as much in the same period.

The good news is that there is now a much wider variety of financial aid available than there has ever been. Financial aid refers to the student loans that students get from scholarships, the federal government, or private lenders, in order to help pay for their education.

Back in the day, students were completely able to rely on Pell Grants and Stafford student loans alone to alleviate, if not completely eradicate their financial costs and living expenses. Pell Grants are still given today, but are entirely need-based and only help with a small part of today’s cost of education. Stafford student loans are need-based, as well, and offer student loans of around 25%-40% of the average financial cost. Perkins Loans is quite similar, but it caters especially to families with extremely low income.

Today, there is also the choice to opt for PLUS student loans, which weren’t available several decades ago. These are student loans that are given to parents to aid them in paying for their child’s education. Although there are particular fees and restrictions that form the whole package, they have average interest rates, too.

A lot of student loans are given for a specific amount. Student loans may be given for $4,000 per year and split into two payments (one per semester). But it is not uncommon for up to 4% of the fees to be taken from this amount before any funds are given out. This 4% on $4,000 will equal to $160 that you may never see, but have to pay for. Because of this, make sure you search specifically for low or no-fee student loans.

Though federal student loan programs, such as the subsidized Stafford student loan, do not come with a credit check (they also have low fees and the interest is paid by the government), they are not the only financial aid source available nowadays.

The best way to start is to look at various student loan programs to find out their interest rates, fees, and other requirements for eligibility. One site that greatly summarizes this information is: http://www.finaid.org/

Student Loans

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