Note: This tool is meant to give you a rough estimate of your college costs. It is NOT a guarantee of tuition costs, student loan amounts, or financial aid availability.
Can I afford
college financial aid?
As college costs continue to rise faster than inflation the need for students to use loans as a way to pay for their education is growing. An estimated two-thirds of college seniors who graduated in 2010 have student debt, with the average debt amount nationally at $25,250. Additionally, with unemployment up to 9.1 percent in 2010 for young college graduates, the ability to pay off student debt becomes even more challenging. When planning for college the question is not whether I can afford the tuition, but can I afford the financial aid after graduation.
Student loan interest rates currently range from 3.4% to 8.5% depending on the type of loan, when the loan was first dispersed, and whether or not the loan is subsidized. Below is a simple chart showing the most common loans and the rates after graduation and repayment starts.
|Loan Type||Fixed Rate for Loans First Disbursed Between July 1, 2010 and June 30, 2011||Fixed Rate for Loans First Disbursed Between July 1, 2011 and June 30, 2012|
|Subsidized Loans for undergraduate students||4.5||3.4|
|Fixed Rate for Loans First Disbursed on or after July 1, 2006|
|Subsidized Loans for graduate and professional students
Unsubsidized Loans for all students
|PLUS Loans (Direct Loan)||7.9|
|PLUS Loans (FFEL)||8.5|
Term in years
The payment period for student loans generally run between 10 and 25 years, depending on which plan you choose. Below is a quick overview of the basic options.
- Standard Repayment:
- 10 year term with a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50.
- Graduated Repayment:
- Payment period is up to 10 years. Your payments start out low and increase every two years.
- Extended Repayment:
- Terms longer than 10 years, but won't exceed 25. Payments can be a fixed amount per month or on a graduated repayment schedule. You must have more than $30,000 in loans.
See studentaid.ed.gov for full details.