Some colleges are removing student loans from their financial aid packages
It’s April and that means colleges have made their decisions as to whether students are accepted, rejected or deferred (waiting list) to the university. Regardless, most students have a pretty good idea as to where they’ll end up come September. College costs are on the rise and due to the recession over the past two years, families are relying on financial aid more than ever to pay for college. However, the majority of financial aid packages include loans that must be paid back with interest, as opposed to grants/scholarships, which is essentially “free money” that does not have to be paid back and there’s no interest rate to worry about.
Some colleges are changing their “loan to grant/scholarship ratio” and are instituting programs that completely eliminate or reduce any type of loan from financial aid packages, which is a huge win for students. Most college students are straddled with student loans for years following their college graduation and student loans cannot be discharged in bankruptcy.
According to the Institute for College Access & Success, 50 colleges, plan to completely eliminate or reduce loans from their financial aid packages (for the complete list of colleges, visit www.ProjectOnStudentDebt.org). Harvard,Princeton and Yale are among the 50 colleges that will institute these new measures to help students pay for college.
So How are Financial Aid Packages Calculated?
Financial aid packages are calculated via a holistic approach, meaning it’s not only the cost of tuition that’s factored into the financial aid package; books and living expenses are factored in as well. An estimation of what the student and their family is able to pay for all of these expenses (which is figured out by the FAFSA form, Free Application for Federal Student Aid), is then subtracted from the sum of tuition, books and living expenses.
While this new plan is a win for students, students should also be applying for scholarships on websites such as www.Fastweb.com and www.Cappex.com.
Loading ...
Pingback: Student Loan Guide | How to Save Money, Reduce Debt and Manage Credit Cards | Help Save My Dollars.com