Paying for College Responsibly


When you’re planning for college, the first question is often which school to choose. But just as important is the question of how you’ll pay for it. That’s why we’ve partnered with Sallie Mae® to bring you their 1-2-3 Approach to Paying for College. These three steps can help you make more informed, responsible financial decisions for a big investment in your future.

1. Start with money you won’t have to pay back. Supplement your college savings and income by maximizing scholarships, grants, and work-study. Begin with any college savings that have been put aside in a dedicated college savings account and include current income that you’re earmarking for college. Maximize “free” money you will not have to pay back, including scholarships and grants. Then consider work-study.

2. Explore federal student loans. Apply by completing the Free Application for Federal Student Aid. After you’ve maximized your free money, consider federal student loans, which are provided by the government. Federal student loans come in two varieties: Direct Subsidized Loans, for students with demonstrated need; and Direct Unsubsidized Loans, which are available regardless of family income.
• You can apply for both by filling out and submitting the FAFSA.
• They’re issued in the student’s name and the student is responsible for paying them back.
• They’re eligible for income-driven repayment plans that link monthly payments to income.
• Federal loans may be eligible for loan forgiveness programs, such as the Public Service Loan
Forgiveness Program for borrowers who are employed by a public service organization.

3. Consider a responsible private student loan. Fill the gap between your available resources and the cost of college. If you still need additional funds after following steps 1 and 2, consider a private student loan. Private loans differ from federal student loans in several ways:
• They’re originated by banks and credit unions.
• They’re credit-based: the lender reviews your credit score and history to determine if you qualify. A cosigner—parent, guardian, or other adult—may improve the chances of approval. Some lenders offer a cosigner release option.
• Your interest rate is based on several factors, including your creditworthiness and the loan terms and options that you choose.
• Private student loans may offer different features, terms and options, and benefits that can help reduce your interest rate and/or total loan cost.

IMCU has partnered with Sallie Mae® to bring you options for college financing.
See IMCU.COM/Student-Loans.aspx for more details.

*Borrow responsibly. We encourage students and families to start with savings, grants, scholarships, and federal student loans to pay for college. Students and families should evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan.

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