Wiredscholar.com's Online Award Analyzer Helps Families Evaluate Award
Packages and Apply Online for Historically Low Interest-Rate Loans
RESTON, Va., March 10 /PRNewswire/ -- It's that time of year again:
college-bound students and their families will soon begin to receive financial
aid award letters from the colleges where they have been accepted.
Increasingly, these awards include a student loan component, and decisions
students make today may affect how they repay their loans after graduation.
Wiredscholar.com, Sallie Mae's comprehensive online "going-to-college"
resource, offers an Online Award Analyzer to help students and parents to
evaluate financial aid award packages and estimate monthly payments after
graduation. The site also offers other resources, including a free
scholarship search, for families looking for additional funds.
"Financial aid award letters provide students and their families with the
amount and types of aid they are eligible for, as well as funding sources and
conditions of the award," said David Cooper, managing director,
wiredscholar.com. "The type and amount of federal aid awarded depends on many
factors, including the cost of education, family information provided on the
Free Application for Federal Student Aid (FAFSA) and the availability of
funds."
Cooper added that financial aid award letters generally include
information on some of the more common financial aid sources found in award
packages, such as:
* Federal Pell Grant: Students who meet federal criteria for financial
need automatically receive this grant, which does not require
repayment. Once students accept this offer, the grant is credited
directly to their college accounts.
* Federal SEOG (Supplemental Education Opportunity Grant): This grant
is awarded to low-income families based on availability of funds at
the college and does not require repayment. Once accepted, the
grant is credited directly to students' college accounts.
* College or University Grant: Individual colleges or universities
determine eligibility for this award. The college funds this grant
and does not require repayment. Once students accept this grant, it
is credited directly to their college accounts.
* Federal Work-Study: This program is awarded to students with
financial need. Students work part time to earn this award and are
responsible for tuition payment. Work-study funds are not credited
directly to students' accounts.
* Federal Perkins Loan: This loan, with a 5 percent interest rate, is
for students with exceptional financial need and is based on the
school's available loan pool. As with all federal education loans,
repayment is required. Once students accept the loan offer, they
must follow their college's guidelines on receiving it. After the
school disburses the loan funds and students sign a promissory note,
funds are credited directly to their college accounts. Repayment
begins after the student leaves college.
* Federal Stafford Loans: These education loans, currently with
historically low interest rates, must be repaid. Annual borrowing
limits vary depending on a student's year in college; freshmen
receive a maximum of $2,625. Students must follow colleges'
guidelines on applying for and receiving the loan. After students
sign a promissory note, the lender disburses the loan funds to the
college. Students have the option of receiving a check or having
funds credited directly to their college accounts. Two types of
Stafford loans are available:
Subsidized: These loans are awarded to students with financial
need. The federal government pays the interest on the loan
while students are in college, and during deferment and grace
periods.
Unsubsidized: These loans are awarded to students regardless
of family income. Borrowers pay interest while attending
college, or may defer payment and allow interest to accrue. In
most cases, accrued interest is "capitalized," or added to the
principal loan amount when repayment begins.
If the resources described in the award letter are not enough to cover all
college expenses, parents should consider applying for the Parent Loan for
Undergraduate Students (PLUS). These low-cost loans (capped at 9 percent) are
available to parents of undergraduate dependent students and are not based on
income or assets. Parents may take up to 10 years to repay the loan, and
repayment begins shortly after funds are received. For more information and
to obtain a no-obligation pre-approval, parents can visit
http://www.parentanswer.com. Another option for families looking for
additional funds is a private education loan. Sallie Mae offers the Signature
Education Loan Program(SM), a private loan program, to help students cover the
cost of their education. For more information about either of these options
or to apply online, families can visit http://www.wiredscholar.com.
Wiredscholar.com: Wiredscholar.com is the foremost online resource for
"going-to-college" information for students, parents and guidance
professionals. The site is the most comprehensive and objective resource on
the Web for information, interactive tools and checklists to assist with
college preparation, evaluation, selection, application and financing, all in
one online location. Log on to http://www.wiredscholar.com.
SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the nation's
leading provider of education funding, managing more than $78 billion in
student loans for more than seven million borrowers. The company primarily
provides federally guaranteed student loans originated under the Federal
Family Education Loan Program (FFELP), and offers comprehensive information
and resources to guide students, parents and guidance professionals through
the financial aid process. Celebrating its 30th anniversary this year, the
company opened its doors in May 1973 as a government-sponsored enterprise
(GSE) called the Student Loan Marketing Association, and began the
privatization process in 1997. Since then, Sallie Mae's parent company name
has changed, most recently to SLM Corporation (effective May 17, 2002).
Through its specialized subsidiaries and divisions, the company also provides
an array of consumer credit loans, including those for lifelong learning and
K-12 education, and business and technical outsourcing services for colleges
and universities. SLM Corporation and its subsidiaries, other than the
Student Loan Marketing Association, are not sponsored by or agencies of the
United States.
The following is a sample financial aid award letter(1) for a freshman
attending classes full time and living on campus. The annual cost of
attendance is $15,000 and includes tuition and fees, room and board, books and
supplies, and personal expenses.
SLM UNIVERSITY
Office of Student Financial Aid
John E. Student Social Security Number: 123-45-6789
25 College-Bound Drive
University College, VA 20000
Dear Student:
After reviewing your FAFSA, we are pleased to provide you with the
following financial aid offer. This award is contingent upon anticipated
annual renewal of funding from federal, state and private sources. You may
accept or decline any of the awards offered(2).
Financial Aid Award
Type of Aid Fall Spring Total Accept Decline
Federal(3)
Pell Grant $600 $600 $1,200 ( ) ( )
Federal SEOG 800 800 1,600 ( ) ( )
College Grant 1,000 1,000 2,000 ( ) ( )
Federal
Work-Study
Program 700 700 1,400 ( ) ( )
Federal
Perkins
Loan 600 600 1,200 ( ) ( )
Federal
Subsidized
Stafford
Loan(4) 1,300 1,300 2,600 ( ) ( )
5,000 5,000 10,000
Please sign this letter and return it to the financial aid office within
two weeks. Read the enclosed information on how to apply for and receive the
Stafford Loan. If you need additional funding to supplement this offer,
please refer to the attached list of Additional Funding Options.
Notes:
With an annual cost of $15,000, SLM University will bill this student
$7,500/semester. The student received a financial aid award of $10,000/year
or $5,000/semester, but must work part time to earn the $1,400/year or
$700/semester work-study award. Even with grants, students loans and work-
study, the student will need an additional $5,000/year or $2,500/semester.
Families can utilize a PLUS or Signature loan to pay for the additional
$5,000.
(1) This letter contains some of the more common financial aid sources
found in award packages. The type and amount of federal aid awarded
depends on many factors including the cost of education, family
information provided on the FAFSA and the availability of funds.
(2) Students generally receive the conditions that govern the award and
are given the opportunity to accept or decline the awards offered.
(3) All federal programs listed on the award letter are based on need.
Award packages also may include non-need-based financial aid.
(4) Interest rates are based on the T-Bill + 1.7 percent during in-school
periods and T-Bill + 2.3 percent during repayment. Rates are
variable, reset every July 1, and capped at 8.25 percent.
SOURCE Wiredscholar.com
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