Personal Finance Credit Loans And More

As with everything else the cost of education has risen considerably. Tuition fee increases in excess of 6% per year are commonplace nowadays. Just as one example, back in 1973 the price to register at UCLA (University of California) was about $200 per quarter while now it is more than $2,000 per quarter.

This ten times increase in cost is not too unusual and lots of things now cost ten times more than they did 20 or 25 years ago. On the other hand, wages have risen roughly three times in this same time period from about $15,000 - $30,000 per year to approximately $39,000 - $42,000 per year. The figures vary by age, gender and more but as a rough guide a three times increase is about right.

Fortunately there is some good news. There are far more types of financial assistance available today to both students and parents than there has ever been. Financial aid, as its name implies, is money which parents and students receive from grants, scholarships and loans issued by both Federal and private lenders to aid students to pay for their education.

Formerly, students were dependent almost totally on Pell grants and Stafford loans to finance their education costs and college living expenses. Nowadays Pell grants are still issued but they are need based and represent a very small percentage of the education cost today. A Stafford college loan is also need based but can meet 25% to 40% of the average cost of school today. Another form of financial aid is Perkins loans which are similar to Stafford loans but which are given only to particularly low income families.

Luckily, PLUS loans are also available now and these were not available 25 years ago. Despite the fact that they are called student PLUS loans are given to parents and not students to assist them to pay for their child’s education. Interest rates for PLUS loans are reasonable and there are a few restrictions and fees charged but they often form an important part of the student’s total package of funding.

One quick note on the subject of fees. Most loans are for a specified sum like $6,000 per year to be disbursed in several payments (usually one payment each semester). But it is not uncommon for up to 4% in fees to be taken from the loan amount before the funds are disbursed. That 4% fee on your $6,000 equals $240 which you will not see but which you must repay. If you are searching for a loan make sure that you do your homework and try to find a low or no-fee loan.

Though Federal loan programs such as the subsidized Stafford loan program levy low fees and the government pays the interest, they are certainly not the only type of financial aid today and are not always the best choice.

Meeting the funds to meet the cost of education today is a complex operation and the majority of students will have to put together a funding package which includes grants, scholarships, government loans and private financing.

Luckily, there are now far more funding options available than we have seen for a long time and market competition between private financial institutions especially means that you can obtain funds at a price which is not necessarily going to break the bank.

You are also fortunate to be living at a time when finding the information which you need about college loans and grants to make wise decisions about the options available to you is also fairly easy.

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