Then you’ve come to the correct spot! While most student-athletes don’t file for student loans until they’ve been admitted to college (and committed to the sports program! ), 63 percent of parents wish they had more time to figure out how to pay for college.
Most families pay for college using a mix of scholarships, grants, and loans. If you don’t qualify for financial help or scholarships or have used all of your scholarships, grants, and aid and still have a significant amount, federal and private student loans may be an alternative.
Unlike academic, athletic, and merit scholarships and financial assistance grants, which are not repaid, student loans (federal and private) are borrowed to pay for education and must be repaid (with interest) after graduation.
But even if they’re given a more significant loan amount than they owe, students and their families should only apply for student loans after exhausting all other options like scholarships and grants.
What is a student loan?
After exhausting all scholarships, grants, and other federal assistance options, student loans enable you to borrow the remaining amount on your college tuition bill.
A family must complete and submit the Free Application for Federal Student Aid (FAFSA) to be eligible for federal loans. A creditworthy co-signer, such as a parent or legal guardian, is required for most private student loans.
Student loans, like other loans, must be repaid-with interest. An individual’s or a cosigner’s creditworthiness and other criteria such as income or credit history influence the amount of interest charged on a loan.
Applying for Student Loans
The FAFSA is required to apply for a government loan. Your institution will give you a financial aid offer after receiving your FAFSA results, which may contain a mix of federal and private awards and a list of federal student loan options. Depending on their requirements, students might opt to take all or part of the loan.
Most students need a creditworthy co-signer, such as a parent or legal guardian, to be accepted for private student loans. While each private student loan provider has distinct requirements, students (and cosigners, if necessary) must have the following information:
- Name, address, phone, email
- Paystub (less than 30 days old) and monthly housing payment
- Name, phone number, and tenure of the employer (if applicable)
- Verification of half-time enrolment (typically 6-8 credit hours per semester; varies by school)
- Attendance fees and financial assistance (see award letter from your school)
- Graduation date, loan duration, and loan amount
- Cosigner’s name and email (if applicable)
Remember that student loan providers might ask for extra proof of income and creditworthiness, such as rent or mortgage payments, bank statements, W-2 forms, tax returns, divorce paperwork, savings, and assets, at their discretion.
How much may a student borrow?
The amount a student may borrow for college depends on the loan type. Federal student loans have additional restrictions than private student loans.
Government Student Loans
- Undergraduates Most student-athletes fit this bill. The maximum amount of federal loans (Direct Subsidized and Unsubsidized Loans) each year varies based on your college year and dependent status. If your dependent status changes, so do your loan eligibility (and loan amounts).
- Dependent parents (undergraduate students). This loan may be used to pay for educational expenses not covered by financial assistance or the Direct Subsidized or Unsubsidized Loans.
- Professional or graduate students Students pursuing an accelerated degree, such as a five-year undergraduate/graduate degree, may be eligible for this kind of loan. Unsubsidized Direct Graduate Loans are available for up to $20,500 per year. Students may afford the remaining education fees with a Direct Plus Loan.
Private student loans have more considerable lending restrictions than federal student loans since private lenders issue them. Each bank or lender has its yearly limits, which often vary from $25,000 to 100% of the cost of attendance (or even higher if you anticipate higher indirect college costs, like travel fees).
When assessing how much a student or qualified cosigner may borrow, private student loan lenders often consider the following:
- Creditworthiness (good credit score, history)
- Education and employment—lenders may look at past or future job experience and significance.
- Finance up to 100% of the entire cost of attendance. However, this number may be reduced if you get financial help.
GADCapital suggests that Parents with good credit may be able to save money by applying for a private parent student loan instead of a Parent Plus Loan.
Students Loans Option
Fortunately, student-athletes and their families may pick from a range of student loan choices to help pay for college. Families may select between federal and private student loans, including parent loans.
Private student loan rates are generally depending on the borrower’s creditworthiness.
The Department of Education provides four categories of loans:
- Direct Subsidized Loans are for undergraduate students who can prove their financial necessity. The Education Department pays the loan’s interest while the student-athlete is in college.
- Direct Unsubsidized Loans are for college students. The loan’s interest starts accumulating as soon as it’s disbursed, even if the student-athlete is still in school.
- Parents of dependent undergraduate students may apply for Direct PLUS Loans to assist pay for educational expenditures not covered by other financial aid. No financial need is necessary. However, a credit check is required.
- Direct Consolidation Loans consolidate numerous federal student loans into one. This eliminates the need for several monthly payments.
- Private student loan services for parents include:
- Earnest College Ave.
- Discover \sPNC
- Citizens Financial Group – SoFi NCSA
Their loans are created for NCSA student-athletes and their parents, with low fees, flexible repayment choices, and rates for undergraduate, graduate, and professional degrees.