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Options available for students needing loans

Submitted by Hillary Perkins on October 19, 2013 – 4:30 pmNo Comment

Anyone can fall on hard times. Whatever they have to do to make sure their bills and tuition are paid is what they will do. If this means taking out a loan and perhaps risking more debt, students may be willing to take that risk.

“A higher education is not possible without student loans, but we always encourage students to borrow no more than what they need,” said Karen Husley, associate director of financial aid.

Students take out loans for school tuition, as well costs of living on campus, text books and meal plans. Some different loan options are the Stafford Loans, the Perkins Loans and the PLUS Loans.

There are two forms of the Stafford Loans:  the Federal Family Education Loans and Federal Direct Students Loans.  The Federal Family Education Loans are provided by private lenders. The government provides the Federal Direct Student Loans to students and their parents. The Stafford Loans are either subsidized or unsubsidized. Subsidized loans are loans in which the government pays interest for students while they attend school.

The Perkins Loans are also provided by the government for students with high financial needs.  The purpose of the loans is to supplement the Stafford Loans. The Perkins Loans are subsidized loans, and students do not have to begin payments until nine months after graduation.

The PLUS Loans supplement other grants and loans that students receive for college.

When students use different strategies to take out loans and keep a budget for themselves, they have to be smart about their money. Scholarships and summer jobs allow students to save money, Director of Financial Aid Tammy Harrison said.

When it comes to the amount of money students can take out in loans, there are various qualifications, Hulsey said. Those qualifications include classification, student independence based on Federal Student Aid regulations and the degree that the student is trying to pursue.

The Arkansas Department of Higher Education distributes about $170 million in financial aid each year from state to state revenues and lottery funds. This money provides loan repayments and scholarship programs like the Arkansas Academic Challenge scholarship, the Workforce Improvement Grant, Arkansas Governor Scholars and Higher Education Opportunities, or GO, Grants.

ADHE also provides federal tax credits and benefits including the American Opportunity Tax Credit, the Lifetime Learning Credit, deductions for student loan interest, tax-free education assistance, and tuition and fee deduction.

American Opportunity Tax Credit is for undergraduates attending school at least part-time. With the Lifetime Learning Credit, students are not required to study for a degree or got to school part-time.

Deductions for student loan interest are designated for students who are considered dependents, and no deductions may not be taken out.

Tax-free education assistance is for employees, and provides tax-free money that is not allowed to be spent on families.

Tuition and fee deduction is for students claimed as a dependent, who can submit an American Opportunity Tax Credit or Hope of Lifetime Learning Credit in the same year.

The Public Service Loan Forgiveness Program helps students pay back their loans after graduation. Students must make 120 monthly payments on time and have a full-time job, as well as providing public service.

There are some loans available for the loan forgiveness program. The only loans that are received under the William D. Ford Federal Direct Loan are eligible to be a part of the Public Service Loan Forgiveness Program. Loans such as the Federal Family Education Loan and the Federal Perkins Loan are not eligible.

Students who applied for the FEEL program or the Perkins Loan, students can use the Direct Consolidation Loam program to take advantage of the PSLF.

More information is available at or aid.

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