North Carolina is home to a number of prestigious and well-respected schools, including Duke University, Wake Forest University, and the University of North Carolina at Chapel Hill. However, access to such great programs comes with a high price tag, which means many students must rely on student loans to pay for school.
In fact, the Institute for College Access & Success found that 58% of students who attend public and private nonprofit four-year instutions in the state walk away with student loan debt.
Understanding your student loan options can help you make informed choices and decrease the amount you need to borrow. Here’s everything you need to know about North Carolina student loans and other options available to you.
North Carolina student loans
When it comes to student loans, North Carolina offers two unique options you can use to pay for school.
1. North Carolina Forgivable Education Loans for Service
North Carolina Forgivable Education Loans for Service (FELS) provide financial aid to students in North Carolina. Depending on the degree you pursue, you could receive up to $56,000 in student loans through FELS.
However, FELS work differently than other student loans. FELS are eligible for forgiveness if you work in North Carolina in a field with a critical shortage. The state government will forgive one loan for every year of full-time employment in a qualified position. Careers in health care, nursing, counseling, and education can qualify for the program.
Before you go this route, keep in mind that if you leave your job or move out of state, you might lose your eligibility and will have to repay the loans in full.
2. North Carolina Principal Fellows Program
The state government created the North Carolina Principal Fellows Program (PFP) to encourage qualified individuals to enter administrative positions in schools. Through PFP, participants can receive up to one year of academic study at the master’s level — a $30,000 value — and a one-year internship in the school system.
To be eligible, you must agree to work as an assistant principal or principal in a public school in North Carolina for at least four years. After your four years of service, the government cancels the loans. If you don’t complete the service term, you must repay the loan in cash.
Other student loan options
If you’re ineligible for North Carolina student loans or need additional money to pay for school, you can choose federal or private student loans.
If you’re considering applying for student loans, start with federal loans. Federal student loans typically have lower interest rates than private loans and offer unique benefits and protections, including income-driven repayment plans and loan forgiveness.
The federal government issues loans under the William D. Ford Direct Loan Program. There are four types:
- Direct Subsidized Loans: The government issues subsidized loans to undergraduate students with financial need. While you’re in school, for the first six months after graduation, and during deferment, the government pays the interest that accrues, saving you money.
- Direct Unsubsidized Loans: Both undergraduate and graduate students are eligible for unsubsidized loans regardless of financial need. You’re responsible for the interest that accrues on the loans.
- Direct PLUS Loans: These loans are for graduate students and parents of undergraduate students who want to help their children pay for school.
- Direct Consolidation Loans: If you leave school and struggle to manage multiple payments, you can take out a Direct Consolidation Loan, which allows you to combine multiple federal loans into a single loan and leaves you with one monthly payment.
Sometimes, federal and state loans aren’t enough. Maybe you exhausted all your aid but need to cover the cost of another semester or pay for fees or textbooks. If that happens, private student loans can be a useful tool.
Unlike federal loans, private loans are issued by banks and other financial institutions. They tend to have higher interest rates and stricter repayment terms than federal loans, but they can help you fill funding gaps and finish your education when you’re short on cash.
To apply for a private student loan, check out our list of the best private student loan lenders.
Refinancing options for graduates
If you already graduated and are researching strategies to accelerate repayment on your North Carolina student loans, one option to consider is refinancing your debt.
Through refinancing, you work with a private lender to take out a new loan for the amount of some or all of your current student loans.
Your new loan will have different repayment terms than the old loans and might even have a lower interest rate. Although there are some drawbacks to refinancing, especially if you have federal student loans, it can be a useful tool to save money and pay off your debt faster.
If you decide refinancing is right for you, compare offers from multiple refinancing companies to get the best deal.
Managing your student loans
By knowing the options available to you, you can make informed decisions about what kinds of loans to take out and how much to borrow. If you do your homework, you can reduce the amount you owe after graduation.
If you need help understanding your borrowing or repayment options for your North Carolina student loans, sign up for the Student Loan Hero app to get free help.
Need a student loan?Here are our top student loan lenders of 2019!
|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 2/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.23% – 13.23%1||Undergraduate and Graduate|
|4.20% – 11.44%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.50% – 10.11%*,4||Undergraduate and Graduate|
|4.25% – 13.25%5||Undergraduate and Graduate|
|5.85% – 6.99%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.42%8||Undergraduate, Graduate, and Parents|