In addition to the student aid offered to their son or daughter, many families have questions about financing the remaining portion of their student's educational expenses. No single option is the right one for everyone; each family's circumstances will determine which financing strategy is best for their individual needs. Listed below are several options you may want to consider when researching which option is best for you.
Lawrence University Payment Plan
Lawrence offers the option of interest-free monthly payment plans, allowing families to spread payments over 10 months. The payment plan enrollment fee for 2009-10 is $85 and is to be included with the first monthly payment.
Payment plans are set up by LU's Financial Services. To learn more about the payment plan or to access the enrollment form, please click here.
Federal Direct Parent PLUS Loan
The Federal Direct Parent PLUS Loan is an optional federal loan program for parent(s) who wish to access additional resources to fund their child's education. Parents may borrow up to the cost of attendance less any financial aid their student is receiving. PLUS loans do require a credit check.
Interest & Fees: Interest is charged from the date the first disbursement is made until the loan is paid in full. Interest rates for the Federal Direct PLUS Loan is at a fixed rate of 7.9%. There is a loan fee of 4% of the principal amount charged for each Direct PLUS Loan that you borrow. The fee is reduced to 2.5% by an upfront rebate of 1.5% of the loan amount.
Repayment: Repayment begins 60 days after the loan is fully disbursed for an academic year. To request an in-school deferment, AFTER the initial PLUS loan disbursement, please contact Direct Loan Borrower Services at 1-800-848-0979. Deferment needs to be requested on an ANNUAL basis. An in-school deferment will delay payments on the PLUS loan until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled at least half-time. Interest will continue to accrue on this loan during the deferment period. Therefore, we recommend that you make your interest payments during this deferment period if at all possible.
The PARENT is responsible for repayment of this loan. You can estimate your monthly PLUS loan payments using the Direct Loan repayment calculator.
How to Apply?
Step 1: Complete the Free Application for Federal Student Aid (FAFSA), if not already completed.
Step 2: Complete a PLUS Loan Request and Authorization and submit it to the Lawrence University Office of Financial Aid.
Step 3: Parents who are first time Federal Direct PLUS loan borrowers for the dependent student on whose behalf the PLUS loan is borrowed must complete a Federal Direct Loan Master Promissory Note.
Note: If parents are determined ineligible to borrow through the Federal Direct PLUS program, the student may be eligible for additional Unsubsidized Federal Direct Loan. First and second year students are eligible for up to an additional $4,000 per year, while third through fifth year students are eligible for up to an additional $5,000 per year.
Combined Payment Plan-PLUS Loan
Some families are able to reduce their overall borrowing by paying part of their balance over a 10 month period while borrowing the remainder of a 10 year period. For example, if a student's balance is $15,000 and the family has budgeted $500 a month for educational expenses, rather than borrowing the entire $15,000 through a PLUS Loan, the family makes a monthly payment to Lawrence of $360 and a PLUS Loan payment of $140. This will save the family $1380 in interest over the life of the loan, not to mention $3,600 in borrowing.
Private Educational Loan Options
Private Educational Loans (also known as Alternative Loans) are loans through a lending institution and are not part of the federal government programs. Private educational loans are typically more expensive than federal government guaranteed loans and should only be used when all other options have been exhausted. Research all possibilities for scholarships, grants, work-study, and federal loan programs before borrowing from an alternative loan program. We have provided a link to help you get started in researching private loan options. Choose the loan that best suits your needs and remember to borrow only what you need!
