Wiredscholar.com's Online Award Analyzer Helps Families Evaluate Award
Packages and Apply Online for Historically Low Interest-Rate Loans
RESTON, Va., March 12 /PRNewswire/ -- It's that time of year again:
college-bound students and their families will soon start receiving financial
aid award letters from the colleges where they were accepted. While the letter
might seem simple to understand at first, the reality is that parents and
students need to take a close look at its contents. The financial aid jargon
often can confuse the most prepared family. To assist parents and students in
this often-challenging phase of the "going-to-college" process,
wiredscholar.com, Sallie Mae's Internet destination for planning and paying
for college, offers an Online Award Analyzer to evaluate financial aid award
packages, and resources for families looking for additional funds.
Financial aid award letters provide students and their families with the
type and amount of aid they are eligible for, funding sources and conditions
of the award. 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. The 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 low-interest-rate (5 percent) loan 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 low-interest-rate education loans 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 their college's 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 award letter is 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 is the foremost online resource for "going-to-college"
information for students, parents and guidance professionals. Launched in
spring 2000, the site is the most comprehensive and objective resource on the
Web for information and interactive tools to assist with college preparation,
evaluation, selection, application and financing, all in one online location.
The site is a four-time "Forbes Favorite" in the college-planning category in
Forbes.com's "Best of the Web." Wiredscholar.com is an independent brand of
Sallie Mae, the nation's largest source of education funding, which extends
the company's commitment to helping students achieve a higher education. For
more information, visit http://www.wiredscholar.com.
Sallie Mae (NYSE: SLM), founded 28 years ago, provides funds for
educational loans, primarily federally guaranteed student loans originated
under the Federal Family Education Loan Program (FFELP). The company currently
owns or manages nearly $72 billion in student loans and provides parents,
students and educators with comprehensive information on the financial aid
process. Through its specialized subsidiaries and divisions, Sallie Mae 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. USA Education, Inc. 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.
Additional Funding Options
If family savings and income can't cover the out-of-pocket expense,
students may consider the following additional funding options:
-- Monthly Payment Plans: Extend payment of college costs not covered by
financial aid, over a period of time determined by the college. Many
schools offer 10-month payment plans.
-- Parent Loan for Undergraduate Students (PLUS): Federal loan that allows
parents of dependent students to borrow up to the full cost of the
students' education minus financial aid received. Credit-worthy
parents are eligible to borrow a PLUS loan for students regardless of
family income.
-- Private Loans: Non-federal loans available to credit-worthy students
from banks, credit unions and other private sources. Interest rates on
private loans are usually slightly higher than federal loans. Sallie
Mae offers the Signature Education Loan Program(SM) to help students
cover the cost of their education.
(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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Related links:
http://www.salliemae.com
http://www.wiredscholar.com
CONTACT:
Erin Love, +1-703-810-7136, for
Wiredscholar.com
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