EDUCATION
SPECIAL SECTION:
• Elevator Installer – A career with high earning potential,
elevator installers repair and maintain elevators, escalators,
moving walkways, and lifts. A high school diploma and
apprenticeship is required for this role, so if you’re good
with power tools, this job might be a lift up for you.
TYPES OF COLLEGE LOANS
Getting into college is one of the most exciting times of a
student’s life and is the first step in shaping his/her career.
Many colleges and universities offer a myriad of grants or
scholarships to assist with paying for post-secondary school,
but often these are not enough. Student loans provide
financial assistance for students to cover the costs associated
with attending a college or career school, including tuition,
supplies, books, and living expenses. There are several types of
loans available including need-based, non-need-based, state,
and private.
Need-based loans are provided to students who are unable
to pay the amount needed to cover all costs to attend college.
Need is determined by the Free Application for Federal
Student Aid (FAFSA), which can be completed online, as the
name suggests, for free! Need-based loans are available as a
Federal Perkins Loan, awarded to students with the highest
need, or a Federal Direct Subsidized Loan, provided interest-
free while in college.
If FAFSA determines that a student is ineligible for a need-
based loan, non-need-based loan options are available as a
Federal Direct Unsubsidized Loan or Federal Direct PLUS
Loan. Unsubsidized loans allow the borrower to add interest
to the total amount borrowed after graduation, but beware, as
this leads to owing even more money when it comes time to
start paying off the loan. Direct PLUS Loans provide graduate
students or parents the opportunity to borrow the total cost of
attending college, minus other financial aid received.
Unlike the loans mentioned above that are sponsored by
the federal government, state and private loans are sponsored
by banks, colleges, foundations, and state agencies. The U.S.
Department of Education manages all college loans available
by state and requires students to be in-state residents or
enrolled in a college in that state. Private loans are an option
for borrowers but come with terms and conditions that may
not be as favorable as federal loans. Private loans also require
a cosigner who is responsible for repaying the money if the
student fails to do so.
MANAGING DEBT POST-COLLEGE
Student loan debt
continues to increase
and has become
a burden on both
graduates and the
U.S. economy. There
are a variety of loan
repayment options for
students. Here are some
tips on how to approach
repayment.
• Figure out what
you’ll owe and start
to save early – Creating a budget early will allow you to
build a solid foundation for repayment after graduation.
Setting aside money each month toward future savings for
repayment will set you up for success come graduation day.
• Understand your repayment options – There are several
different options available to start paying off student
loans based on the type of loan you received. Common
federal loan plans include standard, graduated, extended,
or income-based. Standard plans are payments in fixed
amounts that ensure loans are paid off in 10-30 years (these
payments are often very high for new graduates). Graduated
plans are payments that start out lower and increase every
two years, also ensuring loans are paid off within 10-30 years
(based on loan). This plan assumes you’ll continue to make
more money as you continue your career path, so additional
money is allotted to repayment as you go. Extended plans
may be made in a fixed amount or a graduated amount
and ensure payment in full within 25 years. Income-based
plans take 10-15 percent of your discretionary income
and are recalculated each year. Once you are married, your
spouse’s income will also be considered, if filing jointly on
tax returns. Any outstanding balance on the loan will be
forgiven after 20-25 years.
• Consolidate for ease – If you have multiple federal loans,
consolidating them into one can make repayment easier.
But there may be fees or other conditions associated with
consolidating, so be sure to do your research.
• Is forgiveness an option? Some programs offer loan
forgiveness if you meet certain criteria or work in a
particular field. People in government, nonprofit, and other
public service jobs may have the remainder of their loans
forgiven after 10 years of service. Additional forgiveness
options are available for nurses, teachers, AmeriCorps
and Peace Corps volunteers, and some state and private
programs.
Continued on next page >
WEST ALLEGHENY
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FALL 2019
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