Types of Financial Aid
What is Gift Aid?
Gift Aid in the form of scholarships or grants is financial assistance that does not require repayment. This can include state and federal grants, merit-based scholarships and academic awards. Grants are awarded on a financial need basis and may come from the federal government, your home state government, the college or a private or nonprofit organization.
Common federal grants include:
• Federal Pell Grants
• Federal Supplemental Educational Opportunity Grants (FSEOG)
• Military Service Grants
Paul Smith's College offers a multitude of scholarships and grants for students. To find out which ones you may qualify for, contact your Admissions Counselor.
What is an Endowed Scholarship?
An Endowed Scholarship begins as a donation or gift to the college. The endowment provides a permanent asset from which the college may provide financial support to students meeting certain established criteria. The endowment becomes a fund that is invested and managed by the college with the goal to grow the value of the fund so that in the future, the value of the award is not diminished by inflation.
Endowed scholarships are awarded annually to qualifying students who meet the fund's requirements. For example, stipulations for recipients can be based upon academic achievement, GPA, field of study or geographic area of origin.
What are Federal Direct Loans
There are two types of Federal Direct Loans:
Federal Direct Subsidized Student Loans – These are need-based loans. The federal government pays the interest that accrues on the loan while you are enrolled in at least 6 credits and you won’t be charged any interest during your six-month grace period. Graduate students are not eligible for subsidized loan funds.
Federal Direct Unsubsidized Student Loans – These are non-need based loans, and are available regardless of financial need; interest begins to accrue as soon as you receive your loan. Students may choose to pay the interest that accumulates or have it capitalized – meaning, the interest will be added to the principal amount of your loan and additional interest will be based upon the higher amount. Paying the interest as it accumulates will reduce the amount of interest that must be repaid.
Beginning July 1, 2014, the interest rate is 4.66% for subsidized and unsubsidized loans for undergraduate students. The interest rate is 6.21% for unsubsidized loans for graduate/professional students. Loans with a first disbursement on or after October 1, 2014 and before October 1, 2015 will have a loan origination fee of 1.073%, You will pay back 100% of what you borrow (plus interest); however, only 98.92% of the gross loan will be disbursed to the account.
Accepting your loans
Once you have received and reviewed your award offer you must accept or decline your loan(s) via the PSC Student Portal.
*First-time borrowers must complete an electronic Master Promissory Note (eMPN) and Entrance Counseling online at http://studentloans.gov before your loan(s) can be disbursed to the college.
Repayment of both types of loans begins six months after graduation or if you fall below 6 credits.
A federal loan servicer will be assigned by the Department of Education and communicate directly with students. Work with your servicer to select a repayment plan. NOTE: A borrower may prepay all or any part of the unpaid balance on the loans at any time without penalty. For more about student loan repayment, click here.
Parent Loan for Undergraduate Students (PLUS)
Financial Aid Services offers Parent Loans for Undergraduate Students (PLUS) through the Federal Direct Lending Program, whereby federal funds are borrowed directly from the Department of Education. Funds are available to parents for their dependent, undergraduate students who are matriculated in a degree program and enrolled in at least six (6) credits. Parents of dependent students may borrow up to the cost of attendance minus any other aid through this credit-based loan program each academic year. Only one parent of a student can borrow through this loan program (per application).
Interest Rate/Origination Fee
An interest rate of 7.21% is effective for Federal Parent (PLUS) Loans with a first disbursement on or after July 1, 2014. Interest begins to accrue upon disbursement or parents may choose to defer payments.
The Parent PLUS Loan has a loan origination fee of 4.292% (loans disbursed beginning on or after October 1, 2014). You will pay back 100% of what you borrow (plus interest); however, only 95.71% of the gross loan will be disbursed to the account.
Choose When to Pay Back
1. Begins within 60 days after the last disbursement of the loan for the academic year; OR
2. Parents may choose to defer payments until 6 months after student graduates or falls below 6 credits. Parent borrowers may choose to pay interest monthly, quarterly or choose to have interest capitalized. Contact the Loan Servicer to discuss this repayment option.
Apply for a PLUS (Beginning July 1st for 2015-16)
To apply, go to http://studentloans.gov. The parent borrower will need their Federal PIN to sign in. Once signed in, go to "Start PLUS Application Process," then select "Parent PLUS." Contact Customer Service at 1-800-557-7394 for online application assistance.
Once the application is completed, you will receive an instant credit check.
If the application is approved, first-time parent borrowers must complete an online electronic Master Promissory Note (eMPN) at http://studentloans.gov. Notification of your approval will be sent to Paul Smith’s College electronically.
Private Alternative Loans
Private student loans are generally more expensive than federal student loans, and often require repayment while the student is still enrolled in school. While the decision on how to fund your education is entirely your own, Paul Smith's College recommends exhausting all federal student loan options before considering a private loan.
What you need to know about private loans:
• They can carry a variable interest rate, sometimes higher than 18%
• They are not subsidized, no one repays your loan but you
• You may need a cosigner
• Interest may not be tax deductible
• They cannot be consolidated into a Direct Consolidation Loan
• Prepayment penalty fees may apply
Private loans can vary widely in interest rates, repayment terms, and eligibility criteria.
BE A SMART CONSUMER AND SHOP AROUND!
We encourage you to compare lender discounts and other borrower benefits when applying a alternative education loan. You have the right to select any lender you wish to use for an alternative loan. It is the responsibility of the student to thoroughly evaluate each lender before choosing the one that is right for you.
Please use ELM Select to compare lenders
What to Consider When Selecting a Lender
Students are encouraged to research the interest rates, credit check requirements, conditions, terms, and repayment of alternative loans when selecting a lender. Below are some questions to ask when comparing lenders.
- What is the interest rate?
- Is the rate a fixed (rate does not change) or variable (rate changes) interest rate?
- Are there any fees associated with the application for or the repayment of the loan?
- Can principal and interest payments be deferred while I am enrolled in school?
- Am I required to have a co-signer?
- Will a co-signer help lower my interest rate?
- Is there an option that my co-signer can be released from the loan after a specified time period?
- Do I have to be enrolled for a specific number of credit hours to apply for the loan?
- How long to I have to pay the loan back?
- Can I use the loan to cover a prior balance? If yes, how long after that semester is over can I apply?
- Are there any other benefits/incentives offered with the loan?