Frequently Asked Questions
From financial aid to making payments, we've compiled a list of frequently asked questions that provide answers to help you make smart decisions.
Yes. You should apply for financial aid as early as possible, preferably in January. The pool of funds for programs such as scholarships, grants, Perkins Loans and Federal Work-Study programs at most colleges are pre-determined; it is possible that they could run out of funds if you don't apply early.
You should apply for financial aid as early as possible. We recommend applying in January to potentially increase your chances for receiving more financial aid. The availability of some financial aid is limited and provided on a first-come first-serve basis.
Student Loan Basics
Federal student loans are originated by the government and feature fixed interest rates. Private student loans are credit-based education loans offered by banks and other lenders.
Interest is calculated as simple daily interest. The outstanding principal balance is multiplied by the interest rate and divided by 365 days to calculate one day's interest amount. For example, if you have a $10,000 loan and the interest rate is 7%, a day's interest would equal $1.92. ($10,000 x 0.07) / 365 = $1.92. For more information about interest rates, read our article on Understanding Interest Rates
The Internal Revenue Code (IRC) contains provisions that may provide tax savings to individuals and families who pay higher education expenses. Tax Benefits for Higher Education lists the types of tax benefits that are currently available.
Taxpayers who have obtained loans to pay for their own, their spouse's or their dependent's cost of at least half-time attendance in a degree program at an accredited college may be eligible to deduct all or a portion of the interest paid on their qualifying loans each tax year. The allowable deduction is subject to a limitation based on the amount of modified adjusted gross income of the taxpayer, and is phased out at higher income levels.
Repaying Student Loans
Yes. Your student loans are obligations that need to be repaid. You need to repay the principal (the amount borrowed), and the interest (finance charges on the principal) even if you were not satisfied with the education you received, did not get a job, etc.