Blaine at Financial Aid Coach gets tons of questions about college loans this time of year.  Here are his thoughts and expertise laid out as a primer.  ​

This time of year, once families have decided where their high school seniors will attend college for the upcoming fall, a new set of questions come into play. Admissions applications and financial aid forms have been completed, but parents are often left with wondering how they will cover the balance remaining. Let’s take a look at something that’s commonly used to help bridge the gap of remaining cost; college loans.

Considering the rising cost of college, loans come into play more and more. These are made available through the Federal Government, private banks and credit unions and sometimes even schools themselves. It’s common for families to need to utilize college loans. Students are graduating from college with over $20,000 in loan debt, on average. That’s not accounting for loans that are in their parent’s name.

Here are some of the more common loans that are made available to families:

FEDERAL DIRECT LOANS
These loans, formerly referred to as the Stafford Loans, are loans in the student’s name provided through the Federal Government. There’s no application process. Students become eligible for this loan by filing a Free Application for Federal Student Aid (FAFSA).

These loans are provided in specified amounts to college students. They come in subsidized (government pays the interest) and unsubsidized (families are responsible for the interest) forms based on need as determined by the FAFSA and other financial aid forms. While a family may not qualify for subsidized Federal Direct Loans, you can’t be turned away from the unsubsidized Federal Direct Loan because you make too much money or have too much in assets. This is a common misconception.

Here’s a bit more info on Federal Direct Loans. The interest rates for the 2016-17 Federal Direct Loans will be announced later in the summer.

PARENT PLUS LOANSBecause the Federal Direct Loans have a maximum amount that can be borrowed, which is commonly not enough to cover the full remaining balance, parents are left to look into other options. One of the more common loan options is the Parent PLUS Loan.

This is another loan through the Federal Government. The difference between this loan and the Federal Direct Loan is that the Parent PLUS Loan is a loan in the parent’s name, as the name of the loan would indicate. This loan is applied for on a pass/fail basis at a fixed interest rate provided by the government each new school year. Parents can apply for the maximum needed to cover any remaining balance.

Check out a previous article on common loan myths to avoid confusion when it comes to repayment of the Parent PLUS Loan.

To read the rest of the article: ​http://financialaidcoach.com/introduction-to-college-loans-2016/

I can't believe how much university/college tuition has risen over the last few decades!  If you're a senior that has decided (back on May 1) which college you'll be attending, you might be overwhelmed about how to fill the gaps that you likely have in your financial aid package.

After all those essays from the admissions process, you're likely to want to take a break from anymore writing or submission of applications - but  don't!  Applying to scholarships is actually worth your while as there are many students that do sit back and relax and don't even bother to apply.  This ups your odds of getting some aid.  And, many of the times, you won't need to submit  a  personal  statement.  And very likely,  you'll find that you can recycle a lot of the work that was completed back in the fall!

LOCAL SCHOLARSHIPS
We highly advocate for prioritizing application to local scholarships.  There are many of them, while at a lower gift, you're more likely to actually receive the award.  There are a few places in which you can search for all types of scholarships, specifically for local scholarships...

• Talk to your guidance counselor, coaches, club/association leaders/teachers; these adults will be most in the know about scholarships related to your school and extracurricular activities
• Reach out to your local community hubs such as libraries, community centers, religious organizations, and cultural centers

ONLINE SEARCH
You can find both national, regional, and local scholarships online.  Our favorite websites for the search are:

• ​Unigo: www.unigo.com
• College board: bigfuture.collegeboard.org/scholarship-search

Again, if you don't apply, you won't get anything!  And lots of smaller scholarships can make a significant dent in tuition costs.  So, while we aren't telling you to avoid the big, prestigious scholarships, we do encourage you to apply to many of the opportunities that may have smaller awards that have less competition and better your odds of securing funds.  

Best of luck on the scholarship search and application process!