OPTIONS AVAILABLE FOR STUDENT LOANS

ALEXA GANZEVELD, TRUMPET KNIGHTLIFE EDITOR

Today, around 70% of American students end up taking out loans to go to college. The average graduate leaves school with $30,000 in debt and 45 million Americans owe $1.6 trillion in student loans and counting, according to marketplace.org.

As tuition continues to increase, more students are turning to loans to help pay for the high price of a college education, including 74% of Wartburg students, according to a survey of 39 Wartburg College students conducted by the Wartburg Trumpet and distributed via email.

“The Financial Aid Office prepares a financial aid award for every student who completes the FAFSA,” Jen Sassman, director of the financial office said. “Student eligibility for Federal Direct Loans is shared on the award.”

Students who are borrowing for the first time must complete a Master Promissory Note and Entrance Counseling, according to studentaid.ed.gov. Wartburg College participates in the Federal Direct Loan Program and will process private education loans from any lender students are comfortable using, even if it is not listed on the FASTChoice tool.

“We also have limited funds in two institutional loan programs set aside for May Term travel trips for students who qualify,” Sassman said. “May Term Award letters are sent to students enrolled in May Term travel courses in October indicating which loan programs they can complete an application for consideration.”

RELATED: TUITION INCREASE RAISES CONCERN

The U.S. Department of Education’s federal student loan program is the William D. Ford Federal Direct Loan (Direct Loan) Program. Under the program, U.S. Department of Education is the lender. There are four types of direct loans available through the program. Federal student loans offer benefits private loans do not, such as a fixed interest rate, according to the U.S. Department of Education.

“A loan is money, property, or other material goods given to another party in exchange for future repayment of the loan value or principal amount, along with interest or finance charges,” according to Investopedia. “A loan may be for a specific, one-time amount or can be available as an open-ended line of credit up to a specified limit or ceiling amount.”

The first type of loan is a direct subsidized loan. This loan was made for eligible undergraduate students that demonstrate financial need to help cover the costs of higher education at a college or career school, according to the U.S. Department of Education.

Direct unsubsidized loans are loans that are eligible for undergraduate, graduate or professional students, but eligibility is not based on financial need, according to the U.S. Department of Education. Direct PLUS loans are loans that are made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid.

Eligibility is not based on financial need, but a credit check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify, according to the U.S. Department of Education. Fore more information about federal loans, go to studentaid.gov/.

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