Provisions are identical to the Federal Stafford Student Loan programs. However, the primary lending institution is the college or university participating in the Federal Direct Lending Program, as opposed to a bank or other financial institution.
Lender of Last Resort
Program to assist students who have tried to obtain a Federal Stafford student loan and have been denied by two lending institutions. Eligible students must be enrolled at an eligible postsecondary educational institution.
Nursing Student Loan Program
Awarded to nursing students with demonstrated financial need. Up to $2,500 maximum for years one and two; up to $ 4,000 for years three and four. This loan has a 5 percent interest rate repayable after completion of studies. Repayment to be completed within ten years. Contact your college financial aid office. Deadline is set by the college.
Federal Pell Grant
The FPG is the largest grant program; almost 4 million students receive awards annually. This grant is intended to be the base or starting point of assistance for lower-income families. The amount you receive will depend on your Expected Family Contribution (EFC),the cost of education at the college or university you attend, whether you attend full-time or part-time. The highest award depends on how much the program is funded. The maximum for 1998-99 was $3,000.
Federal Supplement
Educational Opportunity Grant
Federal Supplemental Education provides additional need-based federal grant money to supplement the Federal Pell Grant. Each participating college is given funds to award to especially needy students. The maximum award is $4,000 per year, but the amount a student receives depends on the college's policy, the availability of FSEOG funds, the total cost of education, and the amount of other aid awarded.
Federal Work-Study
This program provides jobs for students who need financial aid for their educational expenses. The salary is paid by funds from the federal government and the college (or the employer). You work on an hourly basis in jobs on or off campus and must earn only up to the amount awarded, which depends on the calculated financial need and the amount of money available to the college.
Federal Perkins Loan
This loan is a low-interest(5 percent) loan for students with exceptional financial need (students with the lowest Expected Family Contribution). F.P.L
are made through the college's financial aid office. That is, the college is the leader. Students may borrow a maximum of $3,000 per year. for up to five years. of undergraduate study They may take up to ten years. to repay the loan, beginning nine months after they graduate, leave school, or drop below half-time status. No interest accrues while they are in school and, under certain conditions ( e.g., they teach in low-income areas, work in law enforcement, are full-time nurses or medical technicians, serve as Peace Corps or VISTA volunteers,etc.), some or all of the loan can be canceled within fourteen days after the date that their school sends notice of crediting of the transaction, or by the first day of the payment period, whichever is later, and payments can be deffered under certain conditions such as unemployment.
FFEL Stafford Student Loan
An FFEL SSL may be borrowed from a participating commercial lender such as a bank, credit union, or savings.avings and loan association. The interest rate varies annually (it has gone up to a maximum of 8.25 percent), and the rate for 1998-99 is 7.43 percent. If your child gualifies for a need-based subsidized FFEL SSL, the interest is paid by the federal government while you are in school. There is also an unsubsidized FFEL SSl not based on need for which you are eligible regardless of your family income.
The maximum amount dependent students may borrow in any one year is $2,625 for freshmen, $3,500 for sophomores, and $5,500 for juniors and seniors, with a maximum of $23,000 for the total undergraduate program. The maximum amount independent students can borrow is$6,625 for freshmen (of which no more than $2625in subsidized Stafford Loans), $7,500 for sophomores (no more than $3,500 in subsidized Stafford Loans), and $10,500 for juniors and seniors (no more than $5,500 in subsidized Stafford Loans). Borrowers must pay a 4 percent fee, which is deducted from the loan proceeds. To apply for a FFEL Stafford Student Loan (SS), you must first complete a FAFSA to determine eligibility for subsidized loan then complete a seperate loan application that is submitted to a lender. The financial aid office can help in selecting a lender, or you can contact your state department of higher education to find a participating lender. The lender will send a promissory note that your child must sign that agrees to repay the loan. The proceeds of the loan, less the origination fee, will be sent to your school to be either credited to the student account or paid to you directly.
William D. Ford Direct
Stafford Loans
The Federal Student Loan is basically the same as the Federal Stafford Student Loan Program. Not all colleges participate in this program. If your college does not,you can still apply for an FFEL SSL. Many of the terms of the Direct Stafford Loan are similar to those of the FFEL Stafford Loan. In particular, the interest rate, loan maximums, deferments, and cancellation benefits are the same. However, under the terms of the Direct Stafford Student Loan, students have a choice of repayment plans. They may choose either a standard fixed monthly repayment-at least $50-for up to ten years, an extended repayment plan with lower fixed monthly payments-but still at least $50-for twelve to thirty years at a rate with a higher total amount of interest payment, a graduated monthly repayment plan for twelve to thirty years in which payments grow from 50 percent to 150 percent of the standard plan, and an income contingent repayment plan with monthly payments based on yearly income and family size. Students cannot receive both a Direct Stafford Loan and an FIFE Stafford Loan for the same period of time but may receive both in different enrollement periods.
PLUS Loans
The PLUS Loans are for parents of dependent students designed to help families with cash-flow problems. There is no needs test to qualify, and the loans are made by FFEL lenders or directly by the Department of Education. The loan has a variable interest rate that cannot exceed 9 percent (the rate from July 1998 to June 1999 is 7.9 percent). There is no specific yearly limit; parents can borrow up to the cost of their child's education less other financial aid received. Repayment begins sixty days after the money is advanced. A 4 percent fee is subtracted from the proceeds. Parent borrowers must generally have a good record to qualify for PLUS loans.
The PLUS loan will be processed under either the Direct or the FFEL system, depending on the type of loan program for which the college has contacted.
HOPE Scholarship
Tax Credits
Beginning in 1998, the HOPE Scolarship tax credit helps offset some of the expense for the first two years of college or vacational school. Students or the parents of dependent students can claim an annual income tax credit of up to $1,500-100 percent credit for thr first $1,000of tuition and requires fees and a 50 percent credit on the second $1,000. Grants, scholarships, and other tax-free educational assistance must be deducted from the total tuition fee payments.
This credit can be claimed for two years only for students who are in their fist two years of college and who are enrolled on at least a half-time basis in a degree or certificate program for any portion of the year. This credit phases out for families with higher income levels.
AmeriCorps
AmeriCorps is a national service program for a limited number of students. Participants work in a public or private nonprofit agency providing service to the community in one of four priority areas: education, human services, the environment, and public safety. In exchange, they earn a stipend of between $7,400 and $14,800 per year for living expenses and up to $4,725 for up to two years to apply toward college expenses. Students can work either before, during, or after they go to college and can use the funds to either pay current educational expenses or repay federal student loans. We suggest speaking to the college financial aid office for more details about this program and any other new inititives available to students. 