college

What's not in a financial aid award letter

Unlike the federal Stafford loan, families aren't automatically qualified to receive the parent PLUS loan. Capped at the student's total cost of attendance minus any other financial aid the student has received, PLUS loans are only given to parents who pass a modest credit check and who haven't had a bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or debt write-off in the past five years, says the Department of Education.

"When schools list a PLUS loan on the award letter, they're assuming that parents meet those requirements," says Vaughn. "That's not always the case."

Students whose parents who don't qualify for parent PLUS loan funds will be eligible to receive an additional $26,000 in unsubsidized Stafford loans over their college tenure, according to financial aid Web site Finaid.org.

Preferred lender list not always preferable

To help families pay the expenses the aid package won't cover, schools frequently issue a list of preferred lenders or loans.

"These products might be the best option for your family, but they might not be," says Kendra Feigert, director of financial aid at Lebanon Valley College in Annville, Pa. "Families need to do their own research beyond what the aid office is saying."

Students can comparison shop interest rates, repayment terms and borrower benefits of various loan products by checking out what's offered through their local community banks and credit unions as well as through loan search engines such as the one at Bankrate.com.

Plans for the present, future

Besides financing an education with grants and loans, families can pay as they go by enrolling in a payment plan. "Schools usually don't list financing options they have available," says Feigert. "If a school has different kinds of tuition payment plans, that's usually not on the award letter."

Once families know how much they owe, it's up to them to ask questions about how to improve their financial aid package in years to come, says financial aid director Nicole Ferguson.

"We inform students on what grants and scholarships they could be eligible for next year, but most schools don't," she says. "The future is really up to the student."

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