Loans/Debt Management
FEDERAL STAFFORD STUDENT LOAN
A Federal Stafford Loan offers freshman students up to $3,500 and sophomores up to $4,500 per year. Students enrolled in certificate programs will remain at freshman level for borrowing purposes. THIS IS A LOAN AND MUST BE REPAID. Interest rates vary annually. For loans first disbursed on or after July 1, 2008, the interest rate is a fixed 6.00%. If you already have a Stafford Loan, borrowing a new loan will not affect the rate or terms of your previous loan(s). You may qualify for a Subsidized and/or an Unsubsidized Stafford Loan up to the amounts listed above. First-time borrowers will be required to complete online loan counseling. Instructions for doing this will be included with your award notification. Subsidized Stafford Loans – These loans are based on financial need; therefore, some students may not qualify. With a Subsidized Stafford Loan, no interest accumulates and no repayment is required as long as the student is enrolled in college at least half-time. Students have six months after dropping below half-time status before repayment begins and interest accrues. Unsubsidized Stafford Loans – Students who do not qualify for Subsidized Stafford Loans may borrow up to the maximum amounts designated on the award notification through Unsubsidized Stafford Loans. The interest rate is the same, but interest will accrue and can be paid by the borrower while he/she is in school and during the grace and repayment period. Independent students do have the option of borrowing an additional $4,000 in Unsubsidized Stafford Loan Funds. To be considered for these additional funds, please contact the Financial Aid Office. To determine your eligibility for these programs, you must apply for federal aid, as outlined in this brochure. Funds are issued only after tuition and fees have been paid. First-year, first-time borrowers will not receive Stafford checks until 30 days after the first day of class. CREDIT RECORDS: Student loans can be an excellent way to finance an education and establish a good credit rating at the same time. When it is time for repayment, always communicate with your lender when changing your name, address or phone number or if you have difficulty making payments. can borrow up to the cost of the college education, less aid, at a variable rate of interest (currently not to exceed 9%). Repayment begins 60 days after the final disbursement of the funds, according to the terms negotiated by the bank. Regulations require students to first utilize all eligibility for grants and the Federal Stafford Loan before receiving a Federal PLUS loan. THIS MONEY MUST BE REPAID. To determine eligibility, you must apply for federal aid, as outlined in this brochure. Funds are made in multiple disbursements and given to the parent(s) after tuition and fees have been paid.
HOPE SCHOLARSHIP TAX CREDIT
The Hope Scholarship is a non-refundable federal income tax credit of up to $1,500 – 100% of the first $1,000 and 50% of the next $1,000 – for qualified tuition and related expenses paid during the first two years of college. This credit is available for each student enrolled at least half-time. The amount of your Hope credit for 2007 is gradually reduced (phased out) if your modified adjusted gross income (MAGI) is between $45,000 and $55,000 ($90,000 and $110,000 if you file a joint return).
LIFETIME LEARNING TAX CREDIT
The Lifetime Learning Tax Credit is a non-refundable federal income tax credit of up to $2,000 – 20% of the first $10,000 – for qualified tuition and related expenses. The amount of your lifetime learning credit for 2007 is gradually reduced (phased out) if your modified adjusted gross income (MAGI) is between $45,000 and $55,000 ($90,000 and $110,000 if you file a joint return).Students who do not meet the Hope Scholarship eligibility requirements may claim this credit. The income ceiling is the same as the Hope Scholarship.
STUDENT LOAN INTEREST
Students can deduct up to $2,500 of student loan interest paid in 2007 on any federal or private educational loans on your federal tax return (1040). The loans must have been used to fund half-time or greater attendance. The credit is gradually reduced for single taxpayers with incomes above $55,000 ($110,000 for joint returns) and is not available to those with incomes above $70,000 ($140,000 for joint returns). NOTE: These summaries are meant to give a general overview of these educational tax initiatives. Please consult a tax advisor regarding the specifics of your personal situation.
FEDERAL PARENT LOAN FOR UNDERGRADUATE STUDENTS (PLUS)
The Federal PLUS is for parents of dependent students. It is a loan in which family income is not taken into consideration; therefore, the program is open to almost any family that has good credit. The family
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