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Student Loan Options
College costs rise every year. Once you know your student's expected expenses, you
may want to look into loan options. Federal and private loans can help make higher
education affordable. And the interest paid may be tax-deductible.*
Federal Stafford Loans
These long-term, low-interest loans come in two types-subsidized and unsubsidized.
Subsidized loans are based on financial need; interest is deferred until repayment
after the student leaves school. Unsubsidized loans are not based on financial need;
interest accrues while the student is in school. Both have a variable interest rate
based on the 91-day T-bill (+1.7% while in school, +2.3% during repayment). The
rate is capped at 8.25%.
Both types of loans must be repaid within 10 years, but neither requires payments
to be made while the student is in school.
Parent Loans for Undergraduate Students (PLUS) loans are designed for parents whose
undergraduate students are dependents. Parents can borrow an amount equal to the
total cost of attending school minus other financial aid received. A PLUS loan's
variable interest rate is based on the 91-day T-bill plus 3.1%, and will not exceed
9.0%. Repayment begins within 60 days after the loan is made and may continue up
to 10 years.
College Financing-on the House
You may be able to use your home's equity to pay for college-or any other expense.
The interest rate on home equity loans is often lower than on other commercial loans,
because the loan is secured by your home. For most people, the interest paid on
a home equity loan or line of credit is tax-deductible.*
Contact us for more information or to apply.
Student Consolidation Loan
Once a student graduates, they can consolidate student
loans from different lenders into one, fixed-rate loan. If you consolidate during
the 6-month period after leaving school, or in deferment, you'll receive a "grace
rate" discount. This applies to federal loans disbursed from July 1, 1995 through
June 30, 2006, and will be used to calculate the final consolidation rate. There's
no processing fee, so it costs you nothing to consolidate your loans into one, fixed
rate. If you owe $5,000 or more, consolidating your loans may be the best option
for you. Use this handy calculator
to see how much you could save. Come to UW Credit Union for all your student loan
*See your tax advisor for deductibility in your situation.