Thanks to NCFS' College Assistance Program, asking for a 70-year advance on your weekly allowance isn't a student's only option for paying for college.

Financing education is not a pleasant topic. Many parents probably wish that it was not a consideration at all. Unfortunately, each year many students face limited choices because of lack of financial planning for college. In order to best prepare for the future, families need to understand college costs and financial aid. The following descriptions provide a brief overview of financing college costs.    

Financial College Cost: Financial aid makes up the difference between what families can afford and educational costs. The belief is that students who can’t afford the full cost of education should still have the chance to go. In the past, financial aid was synonymous with grants and scholarships, also known as “gift aid.” Today, education loans are the main source of financial aid. The recent shift in financial aid, from grants to loans, raises much concern. Now, college graduates will be paying off the cost of their education for many years to come. Unfortunately, there doesn’t seem to be much hope for change in the near future. It isn’t just students who have been forced to borrow. Parents are also borrowing money to meet their share of the costs. 

Financial aid consists of three kinds of assistance: grants and scholarships, work-study loan programs, and student loans. Grants and scholarships are only a small part of the available funds. Work-study loan programs give students the chance to earn money while they’re in school. Most financial aid comes in the form of student loans. 

Some students receive merit scholarships for outstanding achievement, athletic skill, special talents, or academic record. They are awarded without regard to a family’s ability to pay. The idea is that outstanding accomplishments, within and outside of the classroom, deserve recognition. However, less than 5 percent of all financial aid is in the form of merit scholarships. A Scholarship Search will help locate possible scholarship opportunities.

Often, colleges offer these awards to attract certain students, for instance, to recruit players for a specific team. Many parents and players are unrealistic about the availability of these well-publicized awards. Athletic scholarships are quite rare and it is only unusually gifted athletes who receive them. Unfortunately, coaches in youth leagues often raise unrealistic expectations about this.

Scholarships are also given to students with other talents. Any student with unique skills in a specific area, such as music, might find a college interested in recruiting him or her through merit-based awards. Students should realize that colleges offer even fewer of these scholarships. On the other hand, the number of academic scholarships seems to be increasing. There are probably more of these than any other form of merit-based aid, but still not many are available. 

Many colleges, including some of the most selective, are opposed to merit-based assistance. These colleges only give need-based aid. They feel that only students who demonstrate need deserve assistance. Their concerns that merit awards reduce the money available to help those who really need it.

Colleges award most of the available funds through need-based assistance programs. To determine eligibility for need-based aid, the family contribution is subtracted from the total cost of attending college. The difference is the family’s need for assistance. Therefore, the need increases as the total cost goes up. The total cost varies from one college to another. For example, private colleges are generally more expensive than public institutions.

Students should always apply to a financial safety school. This means applying to a less-expensive alternative, such as a state college or university, where the costs tend to be lower. At the same time, students should still be encouraged to apply to more expensive private colleges.

Lower income (under $25,000) are eligible for assistance. Families should communicate this to their children so that they do not assume they cannot afford college. As an example for their children, parents might consider putting spare change in a coffee can labeled college fund. The amount saved may not make a dent in the total cost of college, but sends a powerful message about the importance of education.

Middle-income families should understand where they standing relation to others applying for financial aid. Income alone can be deceiving. Family size, number of children in college, unusual expenses, savings and other assets will also be considered. Currently the statistical middleclass consists of the 3 out of 5 families with incomes between $25,000 and$70,000. These families usually qualify for financial assistance, but they will also be expected to make a significant contribution. This may require a number of sacrifices and a possible change in lifestyle. Going out to eat may become a rare luxury and these families should probably get accustomed to driving the same car for awhile.

Those families with incomes above $70,000 make up one-fifth of the population in the United States. These families appear to be in the best position to contribute towards their children’s education, but even they may struggle to meet college costs. These families should begin long-term financial planning as early as possible.

In conclusion, it is important for all families to have a better sense of what their expected contribution might be. Taking the time to secure a realistic estimate of college costs will help families plan more effectively.  

The REAL Cost of College

Attendance Includes all of the Following:

Making Plans NOW
Which Includes ALL of These Expenses
Can Avoid Interrupting a Child’s College
Education After Enrollment

College Financing Options Available  

NCFS’ lender will provide the student and/or parent with the college options that meet their borrowing needs. These include:

The Federal Stafford and Plus Government-Sponsored Loans 

These popular low-interest government loans provide an affordable way for students and/or parents to handle expenses of education tuition, room and board. These loan packages will provide the student with available loan amounts up to the cost of education as defined by the school, less any aid received. 

These loans are available to ALL regardless of family income or assets.

Our lenders interest rates, repayment terms, credit offers, and interest rate reductions help save students and parents thousands of dollars over the standard offered Stafford Loans. We at  NCFS are pleased that we are able to provide students and parents with the services and financial products that can make that college dream a reality. 

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The Federal Stafford Loan Program, formerly called the Guaranteed Student Loan Program permits students with demonstrated need to borrow money for educational expenses.  Unlike many lenders, NCFS’s lender offers a program to help students reduce the cost of "their" loan.

Now borrowers can get cash back - 3.3% based on the original loan amount - when they get a Stafford Loan with a Sallie Mae lender partner. Here’s all a borrower has to do:

Agree to receive account information from Sallie Mae at a valid e-mail address; and

Make his or her initial 33 scheduled payments on time. 

Borrowers can choose to receive the 3.3% Sallie Mae Cash Back savings as either a check or credit.

More borrowers qualify, earn benefits sooner

With Sallie Mae’s Cash Back program, students qualify and earn their benefit sooner than many other benefit plans. And once borrowers have earned the benefit, they will keep it.

Internet Self-Service Program Offers time savings, convenience 

Available on all Stafford loan repayment plans

The Sallie Mae Cash Back benefit is available on standard, graduated, our exclusive Flex Repay, income-sensitive, and also on extended repayment accounts. 

* All Terms are Subject to change based on amendments to the Higher Education Act Requirements:

Subsidized Federal Stafford Loans have lower interest rates than most commercially available loans except Perkins Loans. The government pays the interest while the student is enrolled. For new borrowers, the interest rate is variable, based on the 91-day Treasury-bill (T-bill) rate plus 3.1 percent, capped at 8.25 percent. Repayment on both interest and principal is deferred until six months after a student graduates or leaves school. In most states, a state government guaranty agency (or a private organization authorized by the state government) insures the loans. In those states where there is no guaranty agency, the federal government insures them, in which case they are called Federal Insured Student Loans.

Most states require Federal Stafford Loan borrowers to be full-time students. First year students may borrow up to $2,625 a year, and upper class students may borrow larger amounts annually, to a maximum of $23,000 for dependent undergraduates ($46,000 for independent graduates).

If you borrow money under the Stafford Loan Program, you're charged an origination fee or service charge of 3 percent. Your guaranty agency may also charge you an insurance premium of up to 1 percent. This amount is subtracted from the amount of your loan money before you receive payment.

Under certain circumstances (such as full-time study or service in the military or Peace Corps), repayment can be deferred temporarily. The schedule for repayment is worked out between the student and the lender; the borrowers usually has between five and 10 years to repay, with the amount of monthly payments and the length of the repayment period depending on the total amount borrowed. 

Unsubsidized Stafford Loans are intended for use by students who do not qualify for a Subsidized Federal Stafford Loan and/or who need additional funds. The amounts, interest rates, and terms are generally the same as for subsidized Federal Stafford Students Loans, with a couple of important differences. The government does not pay the interest while the student is enrolled. Repayment begins when the loan is disbursed instead of when the student graduates or leaves school; the borrowers may opt to postpone payments until leaving school, but interest begins to accrue immediately.  

If you find that the financial aid awarded to your college-bound student won’t cover all the costs associated with his or her education, don’t despair! The Plus Loan is a Federal low interest loan that you can make on behalf of your student; rather than taking out a costly personal or home equity loan.

The Advantages of a PLUS Loan:

• Plus loans are not based on your income or assets.

• You do not need collateral to take out a PLUS loan.

• Interest rates are variable, but cannot exceed nine percent annually.

• You may be able to deduct interest paid on a PLUS loan on your Federal income tax return.

• You may take up to 10 years to repay the loan.

• There is no early prepayment penalty.

• Flexible repayment options, including interest-only payments for up to four years.

• Covers all cost, including books, fees, supplies, transportation and living expenses.

Requirements:

• U.S. Citizen or eligible non-citizen.

• Parent of a full time or part time undergraduate student.

• No adverse credit. However, parents with adverse credit may be eligible with a credit-worthy co-borrower or by proving extenuating circumstances which are acceptable to the lender.

Loan Cost Reduction

Get 1/4% interest rate reduction by using Direct Repay a Check-less and Automatic Program.

Loan Payments automatically are deducted from your checking or savings account to cover your monthly PLUS Loan payment.

* All Terms are Subject to change based on amendments to the Higher Education Act Requirements:

The Federal PLUS Loan Program allows parents to borrow up to the total cost of education minus any student aid awarded, per child. (There's no longer an annual limit or aggregate total.) The interest rate on a Federal PLUS Loan is variable, based on the 52-week T-bill rate plus 3.1 percent, and is capped at 9 percent. Monthly repayments begin within 60 days of disbursements although some lenders may permit borrowers to make interest-only payments while the child is still enrolled. Federal PLUS loans are made without regard to financial need, but borrowers must demonstrate that they have a good credit history.

Because repayment must begin within 60 days, Federal PLUS loans are the  primarily assistance in meeting the cash-flow problems caused by college bills. Some parents borrow under the Federal PLUS program to meet all or part of the expected family contribution, while others borrow to make up the difference between costs and their contribution plus available financial aid.   

A Student Must

•  have a high school diploma or a GED, receive a passing score on an independently administered examination approved by the
  Department of Education, or meet other standards established by your state and approved by the department;

• enroll as a regular student in an eligible degree or certificate program;

• be a US citizen or eligible non citizen;

• have a valid Social Security Number;

• make satisfactory academic progress; and be enrolled in an educational institution participating in The Federal Student Loan
  Program and approved by the US Department of Education

• sign statements on the FAFSA regarding educational purpose and overpayments and defaults

* Also note that a student must enroll at least half the time to be eligible for Direct or FFELP loans.

• Defaults are reported to national credit bureaus and can remain on your report for seven years

• A default can mean not being able to obtain a credit card, a car loan or mortgage

• Your loan may be turned over to a collection agency. They often charge collection fees a swell as attorney cost.

• The loan guarantor can take you to court resulting in court cost and attorney fees.

• Federal tax refunds may be taken and applied toward your outstanding balance.

• Up to 10% of your net wages can be garnished and applied toward the balance of your loans.

• Many city, county or state government agencies can deny you employment. And if you’re already employed, you may be terminated.

• You will be ineligible to receive additional financial aid or future deferments.

• Holds may be placed on your college records.

• If you need a license to practice in your profession, it may be revoked, canceled or not renewed.

• Delinquencies will be reported to national credit bureaus. After 150 days, the entire loan, including interest becomes due immediately and in full. Default occurs when you’re at least 270 days late.

Remember, you made a commitment to yourself and your future. 

Borrowing for your education is a major responsibility. In most cases, you must start repaying your education loan within six months after you graduate or leave school. Usually your lender will send you a reminder of the exact date when your repayment begins. But even if you don't get a notice, you are still responsible for making your payments on time as you agreed to in your loan documents.

Promptly paying your education loan each month helps you establish a good credit record. This is very important because good credit is key when applying for other credit such as a car loan or home mortgage. Even late payments are noted by credit reporting agencies and may harm your credit rating.  

• Start a student loan file. Keep all you loan documents and information in one place. Be sure to keep copies of all letters, payments and other records. 

• Stay organized. Start a record of your loan amounts, lenders and guarantors.

• Keep track of how much you borrow each year to help you avoid taking on more debt than you can handle. 

• Send the payment due each month, even if you haven't received a bill. 

• If you can pay a little extra on your loan each month. Contact your lender for specific information about prepayment. 

• Let your lender know immediately if you have a change in name, address, telephone number, enrollment status or date you're leaving school. Contact your lender if you are having trouble making payments on time. Your lender may be able to offer some options or special payment arrangement that will help. 

• Never ignore correspondence. If there is a problem, take care of it immediately. 

• Student loans are a serious commitment. When you sign your loan promissory note, you are promising to repay the amount you borrow, even if you do not finish school, can not find a job or are dissatisfied with the education you have received. 

NCFS, Creating Solutions for Education!

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Revised: 06/01/2007