Lisa Simpson
Sep 9,2009
In: Finance

There Are Alternative Options for Those Who Cannot Pay Their Children’s Semester Fees at One Go

school kids

Nothing can be more depressing than getting a bill that is more than the amount lying in the bank. It is all the more stressing if it relates to the future of the children. Parents of today are often facing this situation as the bills for the forthcoming semester are starting to roll in. Fortunately even at this late stage there are some alternatives.

Under the Extended Payment Plan the bills can be paid in monthly installments instead of at one go. Generally one has to pay $50 to about $100 to join the plan. The plans are routed through the education institutions like the colleges and universities. So for more details one has to contact the financial aid office of the concerned institution.

Thomas Blair of Roanoke College in Salem is in charge of the financial aid department. He said that one does not have to deposit the full amount on a payment plan. Small amounts can be paid in installments and this will reduce the money that is borrowed.

The Federal Student Loan is another scheme. Under it loans can be got for all the full time students irrespective of their financial requirements. These carry a fixed rate of interest calculating to 6.8%. For the academic year of 2009-2010 the student can take a loan of $5,500 for the freshman year. Sophomores can borrow to a limit of $6,500. The juniors and seniors can take loans up to $7,500. To be eligible for the Federal Student Loan an application form known as FAFSA (Free Application for Federal Student Aid) has to be filled up. The form can be traced online at www.fafsa.ed.gov.

There are another scheme or Plus loans if the federal loans fail to cover all the costs. One is the Parent Loan for Undergraduate Students (PLUS) that is federally guaranteed. It is the parents and not the students in this case who are responsible for the repayment of the loans. There is the option of deferring the payments until the student completes school. The Plus loan carries a fixed rate of 8.5% interest. This is more than the present rate of some private loans. But the latter rates are not fixed and may start to climb. A high credit score is not required to qualify for the PLUS loan. But the application can be rejected if the applicant is involved in foreclosure or bankruptcy. Moreover the applicant should not be carrying any debt that is over due for over 90 days.

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