Financial aid available

Over the past 40 years just as with all other costs of living, the cost of education has risen considerably. General tuition increases of over 6% per financial year are common today. For example, in 1973 the cost of registration for a student at UCLA (University of California, Los Angeles) was $208.00 per quarter; it's now well over $2,300.00 per quarter.

That ten fold increase is not too uncommon, as a large proportion of items cost ten times what they did a few decades ago, but wages on the other hand have risen only three fold in the same period, from approximately $15,000.00 to $30,000.00 per financial year to around $39,000.00 to $42,000.00. These numbers may vary with gender, age and other issues, however, as a general guide the lower range of 3 to 1 ratio is about right.

The good news is that there are more forms of financial aid available today to students and parents than there ever have been in the past. Financial aid, as the name indicates, is funds that students and their parents are able obtain from scholarships, either from Federal and private lenders or a couple of other sources to aid students in paying for their education.

In the past students would have depended nearly totally on Pell Grants and Stafford Loans to finance education costs. Even if not completely coving living items, Pell Grants are still provided; however, they are need-based and represent a limited percentage of the education cost today. Stafford Loans are also need-based and can range from 25% to 40% of the normal cost of financing tuition. Perkins Loans are the same but are reserved for the lowest income families.

Luckily, PLUS Loans are now available, which was not an option to students 35 years ago. These are loans to parents not students, to assist paying for the students’ education. The interest rates are less than perfect, and there are many restrictions and charges. Nonetheless, with many students, they still form some part of the total package.

A word of warning about fees and charges: a large proportion of loans are nominally for a specified total, say $4,000.00 per year, and disbursed in two payments one per semester. However, it is not uncommon for up to 4% in fees to be deducted from that amount before any money is distributed, that 4% on $4,000.00 equals $160.00 you will never see yet still have to re-pay. Be sure where possible to seek low or no fee loans, and whilst Federal loan programs like the subsidized Stafford and others, have no credit check and low fees and interest is paid by the government, they're not the only source of financial aid today.

The general financial aid package today will be a complex mixture of scholarships if possible, grants, Federal and most likely private loans. Rates will vary from 5% for a Perkins loan to the more common 6.8% or higher, with the recent considerable increase in defaults on sub-prime lending primarily for mortgages, lenders are going to be far more strict than ever before about credit history and income.

The best method to obtain the information required is to look at the tables of the most general loan schemes, what interest rates and charges they carry along with any eligibility requirements is critical to keep in mind when considering any student loan consolidation information.