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 is Self-Help Aid?
Student loans, whether federal or other, are called "self-help aid," meaning each student takes responsibility for repayment. Each loan comes with its own stipulations, for example: students may need a co-signer for private loans, and consolidate federal loans into a Direct Consolidation Loan to receive a lower interest rate.
Federal student loans typically offer borrowers many benefits over private loans, such as:
• lower interest rates
• flexible repayment options
• fixed interest rates
• interest may be tax deductible
• income-based repayment plans
Additionally, the government will pay the interest on subsidized loans while you are in school, and you may be eligible to have some portion of your loans forgiven if you work in public service. Students are not required to repay federal student loans until they leave school, change enrollment status to part-time, or graduate.
Examples of federal student loans are:
• Federal Perkins Loans
• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct PLUS Loans
Paul Smiths College participates in the William D. Ford Federal Direct Loan program for all Federal educational loans, including the Federal Parent PLUS Loan. A Parent PLUS Loan is a Federal loan that is an option for parents of undergraduate students who are attending school at least half-time. The PLUS loan is in the parent's name. A credit check is required for a PLUS loan. The interest rate on a PLUS loan is usually better than many of the alternative student loans and currently has a fixed interest rate of 7.21 percent set by the Federal government.
To request a PLUS Loan; www.studentloans.gov - the parent would sign in with their information and federal Pin.
*First time parent borrowers would also need to complete the PLUS Master Promissory Note.
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?