Know Your Student Loans

Know Your Student Loans

If you’re applying to schools for a nursing degree, you know that education costs a lot of money. Luckily, schools and the government offer financial aid in the form of student loans, grants, scholarships, or even work study. But all aid is not the same – even loans are actually vastly different. You need to know the difference.


If you have already filled out the Free Application for Federal Student Aid (FAFSA), then you might have already started receiving notification about what kinds of government aid you could receive, some of which is probably a mix of student loans.


A loan is money borrowed that you are agreeing to pay back under certain terms and conditions. Student loans are one of the biggest ways schools can help you out so that you don’t have to pay the entire tuition at once.


All loans aren’t the same, however, so make sure you know exactly what kind of loan you are agreeing to before you sign for it. You want to find out the amount of the loan, the interest rate charged on the loan, the amount of time you have to pay back the loan, where you send the payments, and if you have a grace period before your payments must start after you graduate, leave school, or attend school less than the half-time plan that is usually required.


What does each loan really mean?


According to Federal Student Aid, an office of the U.S. Department of Education, there are many loans available, but each has slightly different borrowing and payback terms, interest rates, and regulations.


You might notice these loans listed on your letter:


Direct Subsidized Loan


These federal loans are for undergraduate students who qualify based on need. A subsidized loan does not charge interest on any of the money you are borrowing while you are in school or during the deferment period which is typically several months after you graduate, leave school, or are considered less than half-time status. That means, if you’re in college for four years, you can continue to borrow and no additional interest will be charged to you during that time.



Direct Unsubsidized Loans


Unlike subsidized loans, the unsubsidized loans have an important difference. These federal loans charge interest from the very first signing and they are not based on financial need. If you borrow the money, you’ll be charged interest even while you’re still a full-time student. Your repayment, however, can wait until you graduate.


Direct PLUS Loans


Graduate students and parents of undergraduate students have less access to loans that are as forgiving on interest rates. PLUS loans are like the unsubsidized loans for undergraduates as they start accruing interest charges from the outset.


Direct Consolidation Loans


When you have student loans from a lot of different places, it’s sometimes tough to keep all the terms, conditions, and payback straight. Consolidating your loans, or creating one loan by combining all the smaller loan amounts and terms, can help.


Federal Perkins Loans


This low-interest loan is for students with a demonstrated financial need and is managed by the school. A Perkins Loan doesn’t begin a repayment plan until nine months after you graduate, leave school, or attend less than the required half-time status.


Bank Loans or Private Loans


Bank loans are historically more expensive because they generally charge more interest and the payback often doesn’t take your income level into account. So borrowing $10,000 at a bank loan rate of 18.5 percent is going to be more expensive than paying back that same loan at today’s Direct Loan rate of 4.29 percent or even today’s PLUS Loan rate of 6.84 percent. Some bank loans require repayment plans that begin regardless of whether you’re still a full-time student or are working.


Student loans help many students pay for college, but not all loans are created equally and you have to know what each entails before you agree to the terms. When you’re thinking about how much you can realistically borrow, it helps to know what the total amount plus interest will look like as a monthly payment over a certain number of years. Check out the government’s Repayment Estimator for an idea of what your loan repayment might look like after graduation.

6 Tips to Help Pay for College

6 Tips to Help Pay for College

When the Institute of Medicine recommended that 80 percent of nurses have a BSN by 2020, lots of nurses didn’t know what to think. While many in the field like the idea of having a higher degree, the logistics of going back to school can be challenging.

If you want to go back to school to earn your BSN or a higher degree, figuring out where you will get the time to attend and the money to pay for college are the biggest challenges. And while the next blog will tackle the time issue, this one will focus on paying for college.

Consider these six tips when you are wondering how you will pay for this next big step in your education.

Check With Your Employer

Before you look into anything, check to see if your employer has any kind of tuition assistance available. They might pay for some of your classes, all of them, or only specific ones that will enhance your job. But any benefit is better than none at all, so be sure to find out all the details.

Consider a 529 Plan

You might have set up a 529 plan for your own kids or might have used one when your own parents set up a plan to fund your education. But adults can benefit from the tax advantages of a 529 plan, too. As long as the money is used for your education, you can sock away funds to help pay for things like tuition and supplies. If you already have 529 plans for your kids, you can still open one for yourself.

Set Up an Automatic Plan

Maybe your employer offers an automatic withdrawal for your retirement and you have found that a great method of savings. You hardly miss what you don’t have in the first place. You don’t want to divert any retirement funds to pay for your education, but setting up an additional withdrawal is a fantastic way to save. If you can divert some of your paycheck through your automatic deposit plan or even on your own through your bank, you can start putting aside some money.

Create a Specific Fund

If you can’t manage to do an automatic withdrawal, you can still set up a specific fund (some kind of money market fund is better than a savings account). Determine how much you want to accrue each year and figure out how much you need to contribute each week to meet that goal. The type of fund you choose depends on how soon you will need the money. For example, if you are going to start school in two years, you need something you can have fast access to. If your plan includes starting classes five years from now, you have more time to let your money grow and less immediate need for it.

Find Money Sources

There’s no doubt your schedule is packed and you are wondering how you will find the time, let alone the money, when it comes time to start your degree program. But if you plan right, you can take some time now and try to raise funds you will only use for your education. Teach community classes, make a specialized craft, fix computer equipment, take per diem work when you can, build websites – whatever fits your skills and your time. Use the money only for your education.

Make Friends With the Financial Aid Office

Always make sure you fill out the Free Application for Federal Student Aid (FAFSA) to be put into consideration for financial aid to help you pay for college. Although some schools cannot or will not budge on their allocated aid, it never hurts to ask to see if they have any wiggle room. If a little extra money means you can earn your degree that much faster, it only makes sense to appeal your amounts.

Going back to school is a huge life transition, but it shouldn’t be one that puts you into enormous debt. There are lots of places where you can get assistance or you can establish ways to save steadily and successfully on your own.