Your Ultimate Guide to Paying for College

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Paying for college is already expensive — and costs continue to climb. Everyone is paying more, according to College Board.

In fact, in-state tuition and fees for four-year colleges for the 2017-18 school year rose 3.1 percent compared with the year prior. This increase in tuition costs brought the costs of in-state tuition to $20,770 this year. There were also increases for out-of-state tuition, increases in tuition at private colleges, and increases in tuition at two-year college.

Covering college costs can seem insurmountable, but there are lots of ways to pay for college including federal and private loans for students and parents, grants, scholarships, and working while in school.

This guide will answer questions about the kind of costs you may need to pay when you go to college.

What do you have to pay for college?

When you go to college, there are a number of costs you’ll have to pay. In addition to tuition, you’ll also have to pay for books; room and board (unless you’ll continue living at home); lifestyle expenses, including food and entertainment; and additional costs, such as car payments if you must drive to school, and travel expenses if you want to study abroad.

Tuition and school fees, along with room and board, are usually your most significant expenses. However, as the chart below shows, other expenses still add up to thousands of dollars each year, so you’ll need to factor these other costs into your college payment plans.

paying for college

Image credit: College Board

 

What is tuition?

Tuition — the price colleges charge students to attend classes — is the first thing students need to plan on paying.

Students may also need to pay other fees for enrollment, in addition to tuition. For example, summer classes at the University of Buffalo cost $270 in tuition per credit hour, with additional fees including a comprehensive fee, academic excellence fee, activity fee, and transcript fee.

The costs of tuition vary by institution; if you’re concerned about paying for college, looking for schools with low tuition is a good way to keep costs under control.

Tuition at a two-year college for in-district students is typically the least expensive option, followed by state school tuition for in-state students, state school tuition for out-of-state students, and tuition for private four-year colleges. This chart from College Board shows average published tuition for different types of educational institutions.

how do college payment plans work

Image credit: College Board

Because tuition is much lower at some schools than others, one of the best ways to make paying for college easier is to opt to at least start your education at an inexpensive school. To help lower costs, you could complete many of your credit hours at a community college and then transfer to a state or private school to finish up your degree.

Of course, even tuition at a two-year college still costs thousands. As College Board explains, most students do not pay the full tuition out-of-pocket. Instead, they receive financial aid that helps to cut the costs of tuition.

When do you pay for college tuition?

College must be paid for before you attend school or at the time when you are attending. Paying college tuition on time is essential, as many colleges will not allow you to register for classes until your tuition has been paid and many colleges will drop you from courses if your tuition is late.

Different schools have different rules for when college tuition is due, but payment usually must be made before the start of each semester or at the beginning of each trimester or semester.

For example, at Penn State University, tuition is due for the fall semester on August 22 and is due for the spring semester on January 5. However, at UC Davis, undergraduates must pay tuition for the fall semester by October 10, and the spring semester by April 13.

The bursar’s office at your college should provide you with information on exactly when payment is due. Schools may also charge late registration fees or impose other late charges if you fail to make tuition payments by the deadline set by the school.

Most schools do not require you to pay tuition for the entire year up front. However, if you receive financial aid, the grant or loan you receive typically covers a full academic year. As the Department of Education explains, when you receive a grant or loan for the full academic year, your school typically pays out your money once per term, or twice per academic year.

If it is too hard for you to pay your entire tuition when the semester first starts, you can discuss with your school how college payment plans work so you can find out if choosing a payment plan would make attending school more affordable.

How do college payment plans work?

Many schools also offer flexible payment plans to make it easier to afford the cost of tuition. In fact, College Board explains there are a number of different creative financing plans at most academic institutions.

These financing plans could include prepaying all four years of tuition at the beginning of your education to lock in a lower rate, or making monthly payments so you can spread out your tuition cost and do not have to pay the entire amount all at once.

Making monthly payments for college can make it much easier if you are trying to work your way through school since you can pay a smaller amount at a time. Although you are not typically attending school for the full 12 months of the year, the repayment plan could still allow you to stretch your payment out over 12 months.

However, College Board indicates that some schools charge for monthly payment plans or other extended payment arrangements. If your school charges fees, you’ll need to factor in this added cost when deciding if you should make monthly payments for college.

What are your options when paying for college?

Whether you pay tuition at the start of the school year, the start of each semester, up front for four years, or on a monthly basis, you’ll need to make sure you have the money to cover your costs.

Before you start school, you should have a plan not only to pay for tuition, but also to cover your other expenses including room and board, activity and academic fees, and other costs of living. You can obtain the money for school from:

  • Grants and scholarships
  • Personal savings and financial help from parents and other relatives
  • Working while in school
  • Federal loans for students or parents
  • Private loans for students or parents

Most people use a mix of different payment options to afford the cost of college. The “How America Pays for College” report from Sallie Mae shows the breakdown of how costs are typically covered.

how to pay for college

Image credit: Sallie Mae

 

As the chart shows, many students rely on both funds that do not have to be paid back, such as scholarships and grants, along with money from relatives, friends, and parents. However, loans are a major source of college funding, and both parents and students borrow to pay for school. The fact students often need so many sources of funds for college shows just how expensive college has become and how challenging it is to find the funds to pay for it.

The information below about each of these funding sources can help you to decide on the mix of funding you’ll need to pay for school.

Grants and Scholarships

Because you do not have to repay grants and scholarships, they should typically be your first choice when exploring ways to pay for college. Grants and scholarships can come from many different sources, as this chart from College Board shows.

how do college payment plans work

Image credit: College Board

Students should start looking for scholarships in their junior year, according to Ronald Ramsdell, founder of More College Money. There are many different sources of scholarships and grants, including:

  • Federal grants, including Pell Grants, Federal Supplemental Educational Opportunity Grants, and Teacher Education Assistance for College and Higher Education
  • State grants, such as the New York’s new Excelsior Scholarship Program
  • Grants and scholarships from the school you are attending
  • Scholarships from employers, labor unions, and professional organizations
  • Scholarships from churches and community groups
  • Scholarships from volunteer organizations
  • Scholarships offered by banks and credit unions
  • Scholarships from charitable organizations
  • Scholarships from health organizations
  • ROTC scholarships
  • Veterans’ services organization scholarships

You should ideally begin looking in your local community, as there may be less competition and it may be easier to obtain a scholarship if you start with organizations that you and your family and friends are members of. Scholarships.com, Fastweb, and MoolahSpot can all help you to find national grants and scholarships to apply for as well.

Personal savings and financial help from parents or other relatives

If you or your family have savings, tapping into savings is often the next best option to pay for college after you’ve exhausted scholarship and grant opportunities.

You and your family are expected to contribute if you have assets available and, in fact, when you complete college financial aid forms, you need to provide information about income and financial accounts for you and your parents so an expected family contribution can be determined.

However, while savings is a good way to cover college costs, parents typically shouldn’t compromise their retirement security by foregoing retirement savings or cashing in retirement accounts to cover college costs. While there are loans available to pay for a student’s education, no loans are available to fund retirement and parents don’t want to be broke as seniors because they’ve spent all their savings on college.

This chart below from Fidelity provides information on how to estimate expected family contributions. You can also use this calculator at College Confidential to get an idea of how much you and your family will be expected to contribute.

what is tuition

Image credit: Fidelity

Working while in school

If your goal involves paying for college tuition without loans, work-study programs or freelancing during school could help cover the costs of college and likely should be a top option after exhausting scholarships, available savings, and family contributions.

Federal work-study programs might be an option for undergraduate, graduate, and professional students who are attending school full-time or part-time and who have financial needs. Jobs through federal work-study programs often involve doing work related to your studies or community service work, which makes these jobs a great way to earn money for tuition while also building your resume.

However, you’ll need to make sure your school participates in the federal work study program by checking with the financial aid office, and you’ll need to both qualify for a work-study job and be able to find a job.

When your school provides information on your financial aid package, you’ll be offered a federal work-study award if you are eligible based on financial need. You can find out a lot more about federal work-study programs by reading our guide.

There are also a number of side gigs you could do while attending school, and with careful budgeting, working during school might make college affordable without loans — especially if the school offers a flexible or monthly payment plan.

Of course, if you’re hoping to pay for the costs of your education by working your way through school, choosing an inexpensive school or a school known for being generous with financial aid will make this a lot easier.

Federal loans

Federal loans are one of the most popular sources of college funding, and often should be the next source of payment for college expenditures after you’ve exhausted your scholarship opportunities, your contributions from savings, and are unable to earn additional funds through work.

Federal loans available to undergraduate students are called Direct Loans, or Stafford Loans. There are both subsidized and unsubsidized Stafford Loans, but there are maximum limits on how much students can borrow. This table shows the maximum limits for federal loans for student borrowers.

Year Dependent Students (except students whose parents are unable to obtain PLUS Loans) Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)
First-Year Undergraduate Annual Loan Limit $5,500 — No more than $3,500 of this amount may be in subsidized loans. $9,500 — No more than $3,500 of this amount may be in subsidized loans.
Second-Year Undergraduate Annual Loan Limit $6,500 — No more than $4,500 of this amount may be in subsidized loans. $10,500 —No more than $4,500 of this amount may be in subsidized loans.
Third-Year and Beyond Undergraduate Annual Loan Limit $7,500 — No more than $5,500 of this amount may be in subsidized loans. $12,500 — No more than $5,500 of this amount may be in subsidized loans.
Graduate or Professional Students Annual Loan Limit Not Applicable (all graduate and professional students are considered independent) $20,500 (unsubsidized only)
Subsidized and Unsubsidized Aggregate Loan Limit $31,000 — No more than $23,000 of this amount may be in subsidized loans. $57,500 for undergraduates — No more than $23,000 of this amount may be in subsidized loans.
$138,500 for graduate or professional students — No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

Source: Department of Education

When students are eligible for subsidized Stafford Loans, the government pays interest while the student is in school, as well as when loans are in deferment. For unsubsidized Stafford Loans, students are responsible for covering interest costs. If students do not pay interest while in school, interest continues to accrue and is capitalized, or added on to the loan balance so students pay interest on the interest.

Federal loans are typically preferable for undergraduate students compared with private loans because federal loans provide advantages not available with private loans. These advantages include lower interest rates than private loans, an easier qualification process, and more flexibility in repayment including income-driven repayment plans and public service loan forgiveness programs.

Parents may also take out federal Direct PLUS Loans. Unlike with federal Direct Loans for students, a parent’s credit score is a factor in applying for PLUS loans and parents cannot qualify with an adverse credit history.

To obtain Direct Loans for students or Direct PLUS Loans for parents, students must complete the Federal Application for Student Aid (FAFSA) each year. The FAFSA can be completed online at the FAFSA website or a paper copy can be requested by calling 1-800-4-FED-AID. The FAFSA should be completed in October when it becomes available, as aid can run out.

If students do not receive enough financial aid, and don’t have the money to cover the costs of their chosen school, working during school or taking private loans may be the only options to ensure there is enough money to fully pay for college.

Private loans

If students have exhausted other funding options, private student loans can provide additional money to cover college costs. As this chart from the Consumer Financial Protection Bureau shows, there are downsides to private loans compared with federal loans, including higher costs, less flexibility regarding repayment, and the possibility of payments rising if students take variable rate private loans.

what is tuition

Image credit: Consumer Financial Protection Bureau

Qualifying for a private loan can also be difficult unless students have a cosigner willing to commit to the lender to be held equally responsible for loan repayment. This is because private lenders consider credit scores, as well as consider a borrower’s income when determining whether to approve a loan and how much to lend. Many students don’t have much income and haven’t had time to build a good credit score, so they often won’t qualify on their own.

There are a number of private lenders, and students should compare private loans carefully to find a loan that works for them if relying on private loans becomes necessary to fund college costs.

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1 Important Disclosures for Ascent.

Ascent Disclosures

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.

  1. Ascent rates are effective as of 04/01/2019 and include a 0.25% discount applied when a borrower in repayment elects automatic debit payments via their personal checking account. Competitive rates calculated monthly at the time of loan approval.
    Ascent Tuition Cosigned Loan: Variable rate loans are based on a margin between 2.00% and 11.00% plus the 1-Month London Interbank Offered Rate (LIBOR), rounded to the nearest 1/100th of a percent. The current LIBOR is 2.491%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 4.24% – 13.24%. Fixed rate loans have an APR range between 5.07% – 14.15%. For Ascent Tuition loan current rates and repayment examples visit www.AscentTuition.com/APR.
    Ascent Independent Non-Cosigned Loan: Variable rate loans are based on a margin between 4.00% and 12.50% plus the 1-Month London Interbank Offered Rate (LIBOR), rounded to the nearest 1/100th of a percent. The current LIBOR is 2.491%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 5.88% – 13.16%. Fixed rate loans have an APR range between 6.69% – 13.45%. For Ascent Independent non-cosigned loan current rates and repayment examples visit www.AscentIndependent.com/APR.
  2. Payments may be deferred. Subject to lender discretion, forbearance and/or deferment options may be available for borrowers who are encountering financial distress.
  3. Making interest only or partial interest payments while in school will not reduce the principal balance of the loan. There are three (3) flexible in-school repayment options that include fully deferred, interest only and $25 minimum repayment.
  4. Flexible repayment plans may be offered up to a fifteen (15) year repayment term for a variable rate loan and ten (10) year repayment term for a fixed rate loan. Students must be enrolled at least half-time at an eligible school. Minimum loan amount is $2,000.
  5. Interest rate reduction of 0.25% for enrollment in automatic debit applies only when the borrower and/or cosigner signs up for automatic payments and the regularly scheduled, current amount due (including full, flat, or interest only payments, as applicable) is successfully deducted from the designated bank account each month. Interest rate reduction(s) will not apply during periods when no payment is due, including periods of In-School, Deferment, Grace or Forbearance. If you have two (2) returned payments for Nonsufficient Funds, we may cancel your automatic debit enrollment and you will lose the 0.25% interest rate reduction. You will then need to re-qualify and re-enroll in automatic debit payments to receive the 0.25% interest rate reduction.
  6. All applicants (individual and cosigner) are required to complete a brief online financial literacy course as part of the application process to be eligible for funding.
  7. Eligibility, loan amount and other loan terms are dependent on several factors, which may include: loan product, other financial aid, creditworthiness, school, program, graduation date, major, cost of attendance and other factors. Aggregate loan limits may apply. The cost of attendance is determined and certified by the educational institution.
  8. The legal age for entering into contracts is eighteen (18) years of age in every state except Alabama where it is nineteen (19) years old, Nebraska where it is nineteen (19) years old (only for wards of the state), and Mississippi and Puerto Rico where it is twenty-one (21) years old.
  9. 1% Cash Back Graduation Reward subject to terms and conditions. >Click here for details. In order to be eligible for the 1% Cash Back Graduation Reward, borrower must meet the following criteria after graduation:
    · The student borrower has graduated from the degree program that the loan was used to fund.
    · The student borrower may change majors and/or transfer to a different school, but must obtain the same level of degree (e.g. – undergraduate or graduate)
    · The graduation date is more than 90 days and less than five (5) years after the date of the loan’s first disbursement.
    · Any loan that the student has borrowed under the Ascent loan is not more than 30-days delinquent or in a default status as of the graduation date and until any Graduation Reward is paid.
  10. Students can apply to release their cosigner and continue with the loan in only their name after making the first 24 consecutive regularly scheduled full principal and interest payments on-time and meeting the other eligibility criteria to qualify for the loan without a cosigner.

* Application times vary depending on the applicants ability to supply the necessary information for submission.


2 Important Disclosures for College Ave.

CollegeAve Disclosures

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.

  1. All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
  2. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7% variable Annual Percentage Rate (“APR”): 96 monthly payments of $179.28 while in the repayment period, for a total amount of payments of $17,211.20. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
  3. As certified by your school and less any other financial aid you might receive. Minimum $1,000.

Information advertised valid as of 4/1/2019. Variable interest rates may increase after consummation.


3 Important Disclosures for Discover.

Discover Disclosures

  1. At least a 3.0 GPA (or equivalent) qualifies for a one-time cash reward of 1% of the loan amount of each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Reward for any applicable reward terms and conditions.
  2. View Terms and Conditions at DiscoverStudentLoans.com/AutoDebitReward.

* 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.

SunTrust Disclosures

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.

  1. Interest rates and APRs (Annual Percentage Rates) depend upon (a) the student’s and cosigner’s (if applicable) credit histories, (b) the repayment option and repayment term selected, (c) the requested loan amount and (d) other information provided on the online loan application. If approved, applicants will be notified of the rate applicable to your loan. Rates and terms effective for applications received on or after 3/1/2019. The current variable APRs for the program range from 4.251% APR to 13.250% APR and the current fixed APRs for the program range from 5.351% APR to 14.051% APR (the low APRs within these ranges assume a 7-year $10,000 loan, with two disbursements and no deferment; the high APRs within these ranges assume a 15-year $10,000 loan with two disbursements). The variable interest rate for each calendar month is calculated by adding the current One-month LIBOR index to your margin. LIBOR stands for London Interbank Offered Rate. The One-month LIBOR is published in the Money Rates section of The Wall Street Journal (Eastern Edition). The One-month LIBOR index is captured on the 25th day of the immediately preceding calendar month (or if the 25th is not a business day, the next business day thereafter), and is rounded up to the nearest 1/8th of one percent. The current One-month LIBOR index is 2.500% on 3/1/2019. The variable interest rate will increase or decrease if the One-month LIBOR index changes. The fixed rate assigned to a loan will never change except as required by law or if you request and qualify for the auto pay discount.
  2. Any applicant who applies for a loan the month of, the month prior to, or the month after the student’s graduation date, as stated on the application or certified by the school, will only be offered the Immediate Repayment option. The student must be enrolled at least half-time to be eligible for the partial interest, fully deferred and interest only repayment options unless the loan is being used for a past due balance and the student is out of school. With the Full Deferment option, payments may be deferred while the student is enrolled at least half-time at an approved school and during the six month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date. The Partial Interest Repayment option (paying $25 per month during in-school deferment) is only available on loans of $5,000 or more. For payment examples, see footnote 7. With the Immediate Repayment option, the first payment of principal and interest will be due approximately 30-60 calendar days after the final disbursement date and the minimum monthly payment is $50.00. There are no prepayment penalties.
  3. The 15-year term and Partial Interest Repayment option (paying $25 per month during in-school deferment) are only available for loan amounts of $5,000 or more. Making interest only or partial interest payments while in school deferment (including the grace period) will not reduce the principal balance of the loan. Payment examples within this footnote assume a 45-month deferment period, a six-month grace period before entering repayment and the Partial Interest Repayment option. 7-year term: $10,000 loan disbursed over two transactions with a 7-year repayment term (84 months) and 8.468% APR would result in a monthly principal and interest payment of $199.90. 10-year term: $10,000 loan disbursed over two transactions with a 10-year repayment term (120 months) and 8.938% APR would result in a monthly principal and interest payment of $162.92. 15-year term: $10,000 loan disbursed over two transactions with a 15-year repayment term (180 months) and 9.423% APR would result in a monthly principal and interest payment of $136.90.
  4. The 2% principal reduction is based on the total dollar amount of all disbursements made, excluding any amounts that are reduced, cancelled, or returned. To receive this principal reduction, it must be requested from the servicer, the student borrower must have earned a bachelor’s degree or higher and proof of such graduation (e.g. copy of diploma, final transcript or letter on school letterhead) must be provided to the servicer. This reward is available once during the life of the loan, regardless of whether the student receives more than one degree.
  5. Earn an interest rate reduction for making automatic payments of principal and interest from a bank account (“auto pay discount”). Earn a 0.25% interest rate reduction when you auto pay from any bank account and an extra 0.25% interest rate reduction when you auto pay from a SunTrust Bank checking, savings, or money market account. The auto pay discount will continue until (1) automatic deduction of payments is stopped (including during any deferment or forbearance) or (2) three automatic deductions are returned for insufficient funds during the life of the loan. The extra 0.25% interest rate reduction when you auto pay from a SunTrust Bank account will be applied after the first automatic payment is successfully deducted and will be removed for the reasons stated above. In the event the auto pay discount is removed, the loan will accrue interest at the rate stated in your Credit Agreement. The auto pay discount is not available when payments are deferred or when the loan is in forbearance, even if payments are being made.
  6. A cosigner may be released from the loan upon request to the servicer provided that the student borrower is a U.S. citizen or permanent resident alien, has met credit criteria and met either one of the following payment conditions: (a) the first 36 consecutive monthly principal and interest payments have been made on-time (received by the servicer within 10 calendar days after their due date) or (b) the loan has not had any late payments and has been prepaid prior to the end of the first 36 months of scheduled principal and interest payments in an amount equal to the first 36 months of scheduled principal and interest payments (based on the monthly payment amount in effect when you make the most recent payment). As an example, if you have made 30 months of consecutive on-time payments, and then, based on the monthly payment amount in effect on the due date of your 31st consecutive monthly payment, you pay a lump sum equal to 6 months of payments, you will have satisfied the payment condition. Cosigner release may not be available if a loan is in forbearance.
  7. If the student dies after any part of the loan has been disbursed, and the loan has not been charged off due to non-payment or bankruptcy, then the outstanding balance will be forgiven if the servicer is informed of the student’s death and receives acceptable proof of death. If the student becomes totally and permanently disabled after any part of the loan has been disbursed and the loan has not been charged off due to non-payment or bankruptcy, the loan will be forgiven upon the servicer’s receipt and approval of a completed discharge application. If the student borrower dies or becomes totally and permanently disabled prior to the full disbursement of the loan, and the loan is forgiven, all future disbursements will be cancelled. Loan forgiveness for student death or disability is available at any point throughout the life of the loan.

6 Important Disclosures for LendKey.

LendKey Disclosures

Additional terms and conditions apply. For more details see LendKey


7 Important Disclosures for CommonBond.

CommonBond Disclosures

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.
If you are unable to pay your government loan, the government can refer your loan to a collection agency or sue you for the unpaid amount. In addition, the government has special powers to collect the loan, such as taking your tax refund and applying it to your loan balance.

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 you refinance your government loan, your new lender will use the proceeds of your new loan to pay off your government loan. Private student loan lenders do not have to honor any of the benefits that apply to government loans. Because your government loan will be gone after refinancing, you will lose any benefits that apply to that loan. If you are an active-duty service member, your new loan will not be eligible for service member benefits. Most importantly, once you refinance your government loan, you will not able to reinstate your government loan if you become dissatisfied with the terms of your private student loan.

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 are a borrower with a secure job, emergency savings, strong credit and are unlikely to need any of the options available to distressed borrowers of government loans, a refinance of your government loans into a private student loan may be attractive to you. You should consider the costs and benefits of refinancing carefully before 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

  1. Undergraduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of March 1, 2019, the one-month LIBOR rate is 2.48%. Variable interest rates range from 4.45%-12.42% (4.45%-12.32% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 5.74%-12.19% (5.74% – 12.09% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.
  2. Graduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of March 1, 2019, the one-month LIBOR rate is 2.48%. Variable interest rates range from 4.45% – 12.18% (4.45% – 11.82% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 5.74% – 11.95% (5.74% – 11.65% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. You will be presented with an Application Disclosure and an Approval Disclosure within the application process before you accept the terms and conditions of your loan.
  3. Citizens One Student Loan Eligibility: Borrowers must be enrolled at least half-time in a degree-granting program at an eligible institution. Borrowers must be a U.S. citizen or permanent resident or an international borrower/eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For borrowers who have not attained the age of majority in their state of residence, a co-signer is required. Citizens One reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Citizens One Student Loans private student loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens One Student Loans-participating school. Please Note: International Students are not eligible for the multi-year approval feature.
  4. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply. Borrowers whose loans were funded prior to reaching the age of majority may not be eligible for co-signer release. Note: co-signer release is not available on the Student Loan for Parents or Education Refinance Loan for Parents.
4.24% – 13.24%1Undergraduate and Graduate

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

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