Repaying your loans
To learn about loan repayment choices and work out your Federal Loan monthly payment, go to: http://studentaid.ed.gov/repay-loans/under- stand/plans
More information and next steps:
Your College/University, Financial Aid Office
123 Main Street, Anytown, NY 12345
Telephone: (123) 456-7890
Be aware that the options to pay for your education outlined on page one, and the additional options above, are only for the 20XX-XX year. It is important that you complete a FAFSA each year by the requisite deadline and comply with all other requirements of your financial aid package.
In addition to the cost of attending for the first year, the following are the estimated costs of attendance for the addi- tional academic years expected to attain a degree. Note that these are estimates and may be subject to change:
Cost of Attendance (COA): The total amount (not including grants and scholarships) that it will cost you to go to school during the 20XX–XX school year. COA includes tuition and fees; housing and meals; and allowances for books, supplies, transportation, loan fees, and dependent care. It also includes miscellaneous and personal expenses, such as an allowance for the rental or purchase of a personal computer; costs related to a disability; and reasonable costs for eligible study-abroad programs. For students attending less than half-time, the COA includes tuition and fees; an allowance for books, supplies, and transportation; and dependent care expenses.
Total Grants and Scholarships: Student aid funds that do not have to be repaid. Grants are often need-based, while scholarships are usually merit-based. Occasionally you might have to pay back part or all of a grant if, for example, you withdraw from school before finishing a semester.
Net Costs: An estimate of the actual costs that you or your family will need to pay during the 20XX–XX school year to cover education expenses at a particular school. Net costs are determined by taking the institution’s cost of attendance and subtracting your grants and scholarships.
Federal Work-Study: A federal student aid program that provides part-time employment while the student is enrolled in school to help pay his or her education expenses. The student must seek out and apply for work-study jobs at his or her school. The student will be paid directly for the hours he or she works and the amount he or she earns cannot exceed the total amount awarded by the school for the award year. The availability of work-study jobs varies by school.
Loans: Borrowed money that must be repaid with interest. Loans from the federal government typically have a lower interest rate than loans from private lenders. Federal loans, listed from most advantageous to least advantageous, are called Direct Subsidized Loans, Direct Unsub- sidized Loans, and Direct PLUS Loans: You can find more information about federal loans at StudentAid.gov.
Direct Subsidized Loan: Loans for which the U.S. Department of Education pays the interest while you are in school at least half-time, for the first six months after you leave school (referred to as a grace period), and during a period of deferment (a postponement of loan pay- ments).
Direct Unsubsidized Loan: Loans for which the borrower is responsible for paying the interest during all periods. If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan).
Parent Plus Loan: A loan available to the parents of dependent undergraduate students for which the borrower is fully responsible for paying the interest regardless of the loan status.
Private Loan: A nonfederal loan made by a lender such as a bank, credit union, state agency, or school.
Family Contribution (also referred to as Expected Family Contribution): A number used by a school to calculate how much financial aid you are eligible to receive, if any. It is based on the financial information you provided in your Free Application for Federal Student Aid (FAFSA). It is not the amount of money your family will have to pay for college, nor is it the amount of federal student aid you will receive. The family contribution is reported to you on your Student Aid Report, also known as the SAR.
Graduation Rate: The percentage of students who graduate from an institution. This shows students who began their studies as first-time, full-time degree- or certificate-seeking students and completed their degree or certificate within 150 percent of “normal time.” For example, for a four-year school, the graduation rate would be the percentage of students who completed that program within six years or less.
Loan Default Rate: The percentage of student borrowers – undergraduate and graduate – who have failed to repay their federal loans within three years of leaving a particular school. A low loan default rate could mean that the institution’s students are earning enough income after leaving school to successfully repay their loans.
Median Borrowing: The amount in federal loans the typical undergraduate student takes out at a particular institution. It also indicates the monthly payments that an average student would pay on that amount using a 10-year repayment plan.