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The average graduate in Kentucky leaves school with $28,910 in student debt, according to a ValuePenguin report. That’s significantly below the average student debt of $39,400 among Class of 2017 graduates.
But even though Kentucky students leave school with lower-than-average debt, paying down a five-figure loan is no easy feat. Whether you’re beginning your educational journey in the Bluegrass State or you’ve already graduated, here are some strategies for overcoming your Kentucky student loans.
Federal student loan options
The first step to take if you need student loans is to fill out the Free Application for Federal Student Aid (FAFSA). When you complete this application, you’ll send your financial information to your schools of choice. Each will then use this data to assemble a federal financial aid package for you. This package could include grants, work-study eligibility, and federal student loans.
When you apply for federal student aid, you may be eligible to receive Direct Loans, which can be subsidized or unsubsidized. Graduate students and parents of college students may also apply for federal funds.
How much you can borrow depends on your financial situation. For example, first-year dependent undergraduates may borrow up to $5,500 in Direct Loans. Independent students can borrow more.
Private student loan options
Federal student loans are many borrowers’ first choice, thanks to their flexible repayment plans and forgiveness options. But if you’ve received your federal financial aid package and need to fill a funding gap, consider private student loans.
When you apply for a private student loan in Kentucky, you’ll have to meet the specific credit and income requirements of the lender you apply with. This might be challenging if you haven’t established a credit history, or if you have poor credit. If that describes you, look for lenders who allow a cosigner to help improve your application. For example, College Ave allows cosigners on private student loans.
There are a few other key aspects to consider when evaluating private student loans. Look at the interest rates you’re quoted, the terms of the loan, and the fees you could be charged. Some lenders advertise no fees while others charge for loan origination, late payments, or early repayment.
Kentucky Higher Education Assistance Authority (KHEAA)
KHEAA is a government agency that helps Kentucky students earn a postsecondary education. While the agency can’t directly help you with your Kentucky student loans, some of its programs could help you cover a portion of your college costs, requiring you to take out less money in loans.
Here are two ways KHEAA could help you:
Apply for state funding. KHEAA is tasked with administering several state-specific financial aid programs largely funded by the Kentucky Lottery. For a list of these scholarships and grants, plus application instructions, review this information from KHEAA.
Create a savings plan. Get information from KHEAA on how to open a Kentucky Education Savings Plan Trust if college is a few years away and you have time to save.
How to refinance student loans in Kentucky
If you’ve already graduated and are researching strategies for repaying your Kentucky student loans, you might have considered refinancing. Student loan refinancing could help lower your interest rate, reduce your monthly payments, and get you out of debt faster.
However, if you refinance your federal student loans with a private lender, you’ll lose your federal loan protections, such as the ability to pursue income-driven repayment or Public Service Loan Forgiveness. Because of this, you may only want to refinance student loans from private lenders. That’s because private student loans don’t have the same protections as federal loans.
Before you refinance your Kentucky student loans, do the math to make sure this route is best for you. Our refinancing calculator, for example, could help you see how much money you could save. If you decide to refinance, this list of the best refinancing lenders can kick-start your search.
Find Kentucky student loans that fit your needs
You’re ultimately going to be responsible for repaying the money you borrow, so it’s critical to understand all of the details of your loans before you take them out. There’s a smart way to borrow money for school. With some research and attention to detail, you can find the best options for student loans in Kentucky.
Need a student loan?Here are our top student loan lenders of 2018!
|1 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or Nationwide Bank, 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 11/1/2018. Variable interest rates may increase after consummation.
2 Important Disclosures for Discover.
3 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.
* 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 PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 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. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 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.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.94% – 12.78%1||Undergraduate, Graduate, and Parents|
|4.06% – 13.06%3||Undergraduate and Graduate|
|4.34% – 12.99%2||Undergraduate and Graduate|
|4.37% – 11.23%*,4||Undergraduate and Graduate|
|5.03% – 11.23%5||Undergraduate and Graduate|
|4.12% – 13.13%6||Undergraduate and Graduate|
|5.62% – 10.01%7||Undergraduate and Graduate|
|3.93% – 9.81%8||Undergraduate, Graduate, and Parents|
|4.26% – 12.13%9||Undergraduate, Graduate, and Parents|