| Paying for college is no easy matter nowadays and | | | | Students) are also available nowadays and these |
| this brief article provides an introduction to the world | | | | were not around a few years ago. PLUS loans are |
| of financial aid | | | | given to parents rather than students to assist |
| As with everything else the cost of education has | | | | parents to pay for their child's education. Interest |
| gone up significantly. Average tuition increases in | | | | rates for PLUS loans are average and there are a |
| excess of 6% a year are commonplace today. Just | | | | few restrictions and fees to pay but they often |
| as one example, back in 1973 the cost to register at | | | | form part of the student's overall package of funding. |
| UCLA (University of California) was round about $200 | | | | One quick note on the subject of fees. Most loans |
| a quarter and today it is well over $2,000 a quarter. | | | | are for a specified sum of money such as $6,000 a |
| This ten times increase is not at all unusual and lots | | | | year to be disbursed in several payments (often |
| of things cost ten times more than they cost back in | | | | once per semester). However it is not uncommon for |
| the 1970s. On the other hand, incomes have | | | | fees of up to 4% to be deducted from the loan |
| increased approximately threefold in the same period | | | | amount before the funds are distributed. That 4% |
| from about $15,000 - $30,000 a year to | | | | fee on your $6,000 represents $240 that you not |
| approximately $39,000 - $42,000 a year. These | | | | see but that you must repay. When you are looking |
| numbers vary according to age, gender and a great | | | | for a loan make sure that you do your homework |
| deal more but as a guide a three times increase is | | | | and look for a low or no-fee loan. |
| just about right. | | | | Despite the fact that Federal loan programs such as |
| Fortunately there is some good news. There are a | | | | the subsidized Stafford loan program charge low fees |
| lot more forms of financial assistance available | | | | and the government pays the interest, they are not |
| nowadays to parents and students than there has | | | | the only type of financial assistance today and are |
| ever been. As its name implies, financial assistance is | | | | not necessarily the best option. |
| money which parents and students get from grants, | | | | Meeting the cost of a college education today is a |
| scholarships and loans issued by Federal and private | | | | complex operation and most students will have to |
| lenders to help students to pay for their education. | | | | assemble a package of funding that includes |
| A few years ago, students could depend almost | | | | scholarships, grants, government loans and private |
| completely on Stafford loans and Pell grants to | | | | financing. |
| finance their education costs and living expenses. | | | | Luckily, there are now a lot more more funding |
| These days Pell grants are still issued but they are | | | | options available than we have seen for a long time |
| need based and represent a small proportion of the | | | | and competition in the open market from private |
| education cost today. Stafford loans are similarly | | | | financial institutions especially means that you can find |
| need based but can meet 25% to 40% of the | | | | funds at a price that is not necessarily going to break |
| average cost of financing school these days. Another | | | | the bank. |
| form of aid is Perkins loans that are similar to | | | | You are also lucky to be living at a time when finding |
| Stafford loans but that are issued only to the lowest | | | | the information that you need to make good |
| income families. | | | | decisions about the choices available to you is also |
| Luckily, PLUS loans (Parent Loans for Undergraduate | | | | relatively easy. |