Student and Parent Loans

At CWI, we are committed to helping you make smart choices - borrowing a student loan is a BIG commitment and should be considered carefully.  Please review the tabs below, learn the basics, and make wise decisions about your student loan debt.

    Basics

    Sometimes, grants, scholarships, work-study, and other forms of aid that don't have to be repaid won't cover the entire cost of your education.  You may need to consider borrowing funds, in the form of a student loan.  Before you borrow, be sure to:

    1. Apply for ALL of the grant and scholarship opportunities available to you.  Start with Federal Aid, CWI Scholarships, and Idaho Scholarships.
    2. Understand your tuition & fee charges vs. the full cost of your education.  Borrow only when absolutely necessary.
    3. Protect your future financial health - make a plan to avoid borrowing completely or borrow the smallest amount possible. Learn more and plan your strategy at BigFuture.org
    4. Select a smart loan repayment plan, be aware of all the "income sensitive" repayment options, know what to do if you have trouble making loan payments after you graduate.

    If you decide to borrow a student loan . . .

    There are some very important facts you need to know so you will be prepared for the future.  First, student loans are legal obligations that must be repaid and, unlike other forms of consumer debt (credit cards, car loans, etc.), student loans usually CANNOT be discharged in bankruptcy.  You will have to repay the amount you borrow, plus interest over time.  The interest is the "cost of borrowing" - the lower the interest rate, the less you will have to pay over time.

    At CWI, there is one main source of student loan funding and one much smaller source:

    • The federal government, through the U.S. Department of Education offers Subsidized and Unsubsidized Direct Loans - the overwhelming majority of CWI students who choose to borrow from one, sometimes both of these programs depending on need.  Federal student loans do not require a credit check and have reasonably low interest rates.  Repayment and forgiveness options are generous.
    • Private lenders, like banks, credit unions, and other financial institutions also offer education loan products - less than 1% of CWI students who choose to borrow from private student loan programs.  Private student loan borrowers must be credit-worthy and interest rates are usually market-based and competitive.  Repayment and forgiveness options are more restrictive than federal loans.

    Please be sure to research student loan basics by visiting the following helpful web resources:

     

    Students

    Overview: Federal Direct "Stafford" Loans

    Direct Subsidized and Unsubsidized loans are available to eligible students to help cover unmet, education-related costs.  Subsidized and Unsubsidized loans are both "guaranteed" student loans - no credit check is required.

    Subsidized Loans:

    • Direct Subsidized Loans are available to undergraduate students with financial need.
    • Your school determines the amount you can borrow, and the amount may not exceed your financial need.
    • For a subsidized loan, the U.S. Department of Education pays the interest

    ○     while you’re in school at least half-time,
    ○     for the first six months after you leave school (referred to as a grace period*), and
    ○     during a period of deferment (a postponement of loan payments).

    *Note: If you receive a Direct Subsidized Loan that is first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.

    Unsubsidized Loans:

    • Direct Unsubsidized Loans are available to undergraduate and graduate students; there is no requirement to demonstrate financial need.
    • Your school determines the amount you can borrow by considering the cost of attendance and other financial aid you receive.
    • For an unsubsidized loan, you are responsible for paying the interest during all periods. 
    • If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan).

    Source: U.S. Department of Education, http://studentaid.ed.gov/types/loans/subsidized-unsubsidized

    How do I apply?

    To apply for a Federal Direct Student Loan, you must first complete and submit the FAFSA. Your school will use the information from your FAFSA to determine how much student aid you are eligible to receive. Direct Loans will be included along with grants, scholarships, and work-study as part of your CWI financial aid package.

    Source: U.S. Department of Education, http://studentaid.ed.gov/types/loans/subsidized-unsubsidized

    What else do I need to know about Federal Direct Student Loans?

    Quite a bit!  Federal Student Loans, like all loans, must be repaid.  Please take a moment to learn about the following Frequently Asked Questions at the U.S. Department of Education's studentaid.gov website.

    How do I apply?
    How much can I borrow?
    What are the current interest rates?
    Other than interest, is there a charge for this loan?
    What additional steps must I take to receive my loan?
    How will I receive my loan?
    When do I have to pay back my loans?
    What types of loan repayment plans are available?
    What if I have trouble repaying the loan?
    Can my loan be canceled, forgiven, or discharged?

    Source: U.S. Department of Education, http://studentaid.ed.gov/types/loans/subsidized-unsubsidized

    Parents

    Overview: Parent Loan for Undergraduate Students (PLUS)

    Parent PLUS loans are available to credit-worthy parents of eligible dependent students to help cover unmet, education-related costs.

    • The U.S. Department of Education is the lender.
    • The borrower must not have an adverse credit history.
    • Loans have a fixed interest rate of 7.9%.
    • The maximum loan amount is the student’s cost of attendance (determined by the school) minus any other financial aid received.

    Am I eligible for a Direct PLUS Loan?

    To receive a Direct PLUS Loan, you must

    • be a graduate or professional degree student enrolled at least half-time at an eligible school in a program leading to a degree or certificate, or be the parent (biological, adoptive, or in some cases, stepparent) of a dependent undergraduate student enrolled at least half-time at a participating school; and
    • Your child must also meet the general eligibility requirements for federal student aid.

    Source: U.S. Department of Education, http://studentaid.ed.gov/types/loans/subsidized-unsubsidized

    How do I apply for a Direct PLUS Loan?

    In order to receive a Direct PLUS loan, your child must complete the FAFSA and you must submit a Parent PLUS Loan Application online at studentloans.gov

    Source: U.S. Department of Education, http://studentaid.ed.gov/types/loans/plus

    What else do I need to know about Federal Parent PLUS Loans?

    Quite a bit!  Please take a moment to learn about the following Frequently Asked Questions at the U.S. Department of Education's studentaid.gov website.

    Can I still receive a Direct PLUS Loan if I have an adverse credit history?
    What additional steps must I take to receive my loan?
    How much can I borrow?
    What is the current interest rate?
    Other than interest, is there a charge for this loan?
    How will I receive my loan?
    How do I pay back my loan?
    When do I begin repaying my loan?
    What types of repayment plans are available?
    What if I have trouble repaying the loan?
    As a parent borrower, can I transfer my loan to my child?
    Can my loan ever be canceled or forgiven?

    Source: U.S. Department of Education, http://studentaid.ed.gov/types/loans/subsidized-unsubsidized

    Debt & Repayment

    Be a smart borrower - keep your total debt low and know your repayment options.

    Before you accept a student loan, please carefully consider your future ability and willingness to repay the money you borrow (paid back with interest).  Plan ahead and be prepared to begin repaying your student loans when you graduate.  Here are a few key strategies to help you make smart decisions now and avoid struggling with debt later:

    Strategy #1 - Know your goals.

    Be sure to research your degree plan and path to graduation.  Do everything you can to take ONLY the classes you need to graduate to avoid paying extra costs and graduate on time.

    EASY TIP:  Know how much you can expect to earn when you graduate from college and adjust your borrowing expectations accordingly. Look up your expected occupation online in the federal Career One Stop database.  Be sure to locate the "Wages and Salaries" data for your expected occupation and location.

    Strategy #2 - Know how much you owe.

    Students apply for aid, including student loans once per year.  Each year, you will have the opportunity to review your financial aid and load options for just that school year.  Of course, as your loan options are presented one year at a time, it can be easy to lose track of exactly how much you've borrowed.

    EASY TIP:  Review your student loan history and total loan debt at least once per year.  www.nslds.ed.gov  (Click "Financial Aid Review")

    Strategy #3 - Make smart borrowing decisions each and every year you are in college.

    Financial aid and student loan funding is not unlimited.  If your goal is to earn a Bachelor's degree, Master's degree or higher, you need to know how much funding is available to you.  At CWI, our tuition and fee costs are low making it easy to avoid student loan debt altogether if you choose.

    EASY TIP:  Estimate your total student loan debt at graduation and calculate your future monthly student loan payments.  www.BigFuture.org - Student Loan Calculator
    www.mappingyourfuture.org - Debt/Salary Wizard

    Strategy #4 - Know your repayment options and select the right payment plan for you.

    The U.S. Department of Education has seven different payment plans currently, most of which are designed to flex with your earning ability.  Learn more about the right payment option for you at www.studentaid.gov

    EASY TIP:  Know what payment plan is right for you BEFORE you graduate - you have to apply to participate in some plans.  Check out the:

    Apply to participate in an "Income-Based", "Pay As You Earn", or "Income-Contingent" repayment plan at www.studentloans.gov

    Strategy #5 - If you have trouble making your loan payments, seek help and avoid default.

    If you don’t make your loan payments, you risk going into default . Defaulting on your loan has serious consequences. The federal government can take action to recover the money you owe. Understand how missing a loan payment can be a problem, what default means and the consequences of default, and what you need to do if your loan is in default or if you think the default on your loan is an error.  Please review Avoiding Default or Getting Out of Default at www.studentaid.gov

    What is default?
    How is missing a payment a problem?
    How do I avoid default?
    If I don’t make my loan payments, when is my loan considered to be in default?
    What should I do if my loan is in default?
    What are the consequences of default?
    What if my loans are in default, but I think it’s an error?

    Source: U.S. Department of Education, http://studentaid.ed.gov/repay-loans/default

    What else do I need to know about repaying my student loans?

    A lot, actually!  Be informed - please take a moment to learn about the following Frequently Asked Questions at the U.S. Department of Education's studentaid.gov website.

    When do I begin repaying my federal student loan?
         What’s a grace period?
         Can my grace period change?
    How much will I need to pay?
    How do I make my payments?
    Can I pay more than my required monthly payment?
    What should I do if I’m having trouble making my loan payment?
    What happens if I don’t make my student loan payment?
    Can I cancel my loan?

    Source: U.S. Department of Education, http://studentaid.ed.gov/repay-loans/understand#how-much-will-i