What to consider when paying for college

Deciding how to pay for college can be confusing. While most students are eligible for one or more financial aid programs such as Federal Stafford Loans, scholarships, grants, and work-study, there is often a gap between what these traditional sources of financial aid cover and the total costs associated with completing a college degree.

When this happens, students and their families need to determine how much additional money they need and if this remaining balance will be covered from their income, assets or other sources including loans such as an alternative student loan or a Federal PLUS Loan.

To make the most financially sound choice, be sure you have a clear understanding of the options available to you. Compare and contrast each loan program to ensure you select the one that is the best fit for you and your family.

Compare interest rates
Be sure you know not only the rate of the loan, but how it is calculated and whether it is fixed or variable. Variable rates can change as often as every 30-90 days, and these changes can significantly affect the total amount you will need to repay over a typical loan period of 10-15 years. Conversely, a fixed interest rate remains consistent throughout the life of the loan. With a fixed rate, your monthly payment will always be the same, making it easy for planning and budgeting.

What’s your rate?
Lenders often advertise their lowest possible rate, but not all borrowers qualify for this rate. Therefore, it is important to find out what rate you actually qualify for. The rate you receive will depend on your creditworthiness including factors such as your credit score, debt-to-income ratio (DTI), minimum income, presence of co-borrower(s), and your chosen repayment option.

Consider The Maine Loan^®
With a fixed rate lower than the Federal PLUS Loan, The Maine Loan from the Maine Educational Loan Authority (MELA) can help students and their families meet the full cost of college.

Why choose The Maine Loan?
• Same fixed rate offered to all approved borrowers
• Trusted lender with 25 years of industry experience
• High quality individualized customer service
• Available for the full cost of education minus financial aid
• No annual or aggregate borrowing limits
• Range of repayment terms up to 15 years

Importance of smart borrowing
Although college is an investment in your future, it is important to engage in smart borrowing to minimize your total student loan indebtedness. All student loans must be repaid so it is best to be conservative. Borrow wisely and borrow the minimum amount needed to fund your education.

 To learn more about the Maine Educational Loan Authority (MELA), visit www.mela.net