What is a credit union?

A credit union is a cooperative financial institution, owned and controlled by the people who use its services. These people are members. Credit unions serve groups that share something in common, such as where they work, live or worship. Credit unions are not-for-profit, and exist to provide a safe, convenient place for members to save money and get loans at reasonable rates.

Credit unions, like other financial institutions, are closely regulated. And they operate in a very prudent manner. The National Credit Union Share Insurance Fund (NCUSIF), administered by the National Credit Union Administration, an agency of the Federal government, insures deposits of credit union members at more than 9,000 Federal and state-chartered credit unions nationwide. Deposits are insured up to $100,000, the same as a bank.

What makes a credit union different from a bank or savings and loan?

A. Like credit unions, banks and savings and loans accept deposits and make loans. They differ in that most banks and savings and loans are "for profit" institutions owned by groups of stockholders whose interests include earning a healthy return on their investments. Credit unions are "not for profit" institutions owned by their members.

What are the benefits of joining a credit union?

Credit unions are non-profit organizations, so their members generally earn higher interest on money invested, get lower APRs on loans and pay fewer or lower fees than banks. They can get a range of financial services including checking accounts, debit cards, savings accounts, credit cards, auto loans, mortgages, CompleteEd private student loans and more.

Who's eligible to join a credit union?

There's a credit union for just about everyone. Anyone who has an affiliation that a credit union represents is eligible to join. Affiliations include belonging to a certain organization, school, religious group, profession or living in a specific geographic area. Go to the Credit Union Finder to find a fit.

What's the best source of financial aid?

The Federal government is the largest single source of financial aid, providing 67% of all direct aid dollars-70% in the form of loans with either subsidized or fixed, low APRs. Generally, Federal loans offer the lowest APRs out there and are available to both students and parents. So always exhaust all Federal aid options before applying for private student loans. To apply for Federal aid, complete the Free Application for Federal Student Aid (FAFSA) at fafsa.ed.gov early in January for every year of school.

What's free money?

Free money is the unofficial term used for any student aid that does not need to be paid back. Also called gift aid, it's awarded in the form of grants and scholarships. Always go after this money first. It's worth the time and effort to apply for as many grants and scholarships as possible for every school year. Apply for grants through the FAFSA process and look for scholarships at collegeboard.com. Never pay for a scholarship search service-the reputable ones are free.

Types of free money or gift aid include:

• Pell Grants & Federal Supplemental Educational Opportunity Grants (SEOG) are awarded by the Federal government to students with exceptional financial need. Students are not required to repay them. FAFSA is required for application.
• College & University Aid includes grants, scholarships, loans, student employment, tuition-savings programs and cooperative education programs. Offerings and eligibility vary. Aid could be awarded based on financial need, academic performance, proposed field of study, special talents or abilities and more. Keep in mind that private colleges use an alternate set of formulas in addition to Federal ones when evaluating a family's financial need. Contact individual schools for specific information and applications.
• Private Grants & Scholarships are awarded by foundations, religious groups, employers and community groups, among others. Eligibility is determined by the group or entity and can be based on financial need, academic achievement, special talents, athletic ability, proposed field of study, ethnic heritage, community activities and more.

What's the difference between Federal student loans and private student loans?

Federal student loans offer lower fixed APRs, but the borrowing cap is smaller. Some of them are awarded based on need. Private student loans have larger borrowing caps, but higher variable APRs, which are based on a borrower's or cosigner's credit history. A private student loan can help cover the funding gap left by Federal loans and aid.

What types of loans does the Federal government offer?

The Federal government provides a range of loans:

Perkins Loans

• Very low (5%), fixed APR loans guaranteed by the Federal government
• Loans made through participating schools for students with exceptional financial need
• Annual limit: $4,000 for undergraduates; $6,000 for graduate students
• No interest paid while in school at least half-time
• Repayment begins 9 months after graduation, or if student falls below half-time enrollment
• No fees
• Up to 10 years to repay

Federal Subsidized and Unsubsidized Stafford Loans

• Loans guaranteed by the Federal government for undergraduate, graduate, vocational and professional students
• Relatively low, fixed APR
• Federal government establishes loan maximums
• 1% borrower origination fee
• 1% default fee
• Up to $2,500 in student loan interest is tax-deductible per year, depending on income
• Subsidized
  • Awarded based on financial need
  • Government pays interest while student is in school, during 6-month grace period and periods of approved deferment
  • Student repayment begins 6 months after graduation or if status falls below half-time enrollment
  • Up to 10 years to repay with a $50 minimum monthly payment
• Unsubsidized
  • Awarded to qualified students, regardless of income
  • Student pays interest
  • Interest begins accruing upon disbursement
  • Interest payments due immediately, but can be deferred
  • Unpaid interest is rolled into principal at time of repayment
  • Repayment begins 6 months after graduation or if status falls below half-time enrollment (as established by the school)
  • Up to 10 years to repay with a $50 minimum monthly payment

William D. Ford Direct Loans

• Stafford and PLUS loans funded directly by the Federal government through participating campus financial aid offices
• No outside lenders such as banks or credit unions involved
• Ask school if it is a Direct Lending school

Grad PLUS Loans

• Loans guaranteed by the Federal government for qualified graduate students
• Low, fixed APR
• Qualification criteria based on borrower's credit history
• Borrow up to the full cost of education, less other financial aid received
• Interest accrues at time loan is disbursed
• No grace period-repayment begins upon graduation or if student falls below half-time enrollment (as defined by the school)
• Up to $2,500 in student loan interest is tax-deductible per year, depending on income
• 3% borrower origination fee
• 1% default fee

Parent PLUS (Parent Loan for Undergraduate Students) Loans

• Loans guaranteed by the Federal government for qualified parents of dependent undergraduate students
• Low, fixed APR
• Borrow up to the full cost of education, less other financial aid received
• Payments may be deferred until son or daughter graduates or falls below a half-time basis
• Up to 10 years to repay with $50 minimum monthly payment
• Up to $2,500 in student loan interest is tax-deductible per year, depending on income
• Loan qualification criteria based on borrower's credit history
• 3% borrower origination fee
• 1% default fee

Where is a good place to look for scholarships? Is it too late to apply for one?

Apply for scholarships as soon as junior year of high school. Also apply for every year during college. High school counselors and college financial aid advisors can recommend scholarships. Also look for scholarships at collegeboard.com -it's FREE! Be skeptical of any site or service that charges for scholarship searches.

What is a Direct Federal loan ?

It’s a Federal Stafford or PLUS loan funded directly by the Federal government through participating campus financial aid offices. No outside lenders such as banks or credit unions are involved.

What is a Family Contribution ?

It's the amount of money that a family is expected to provide towards the cost of college in order to qualify for Federal aid. Family Contribution amounts are determined by the FAFSA. A FAFSA must be submitted for each year of college-ideally soon after January 1st at fafsa.ed.gov.

What are private student loans?

Private student loans, such as the CompleteEd loan, usually supplement other college funding. Keep in mind that private student loans are not subsidized. They offer variable APRs that are generally higher than Federal need-based loans. Private student loans are available through private institutions and some colleges.

Which are better, private student loans or Federal loans?

Since Federal loans generally offer lower fixed APRs, and in some cases, pay some of the interest, always use Federal loans first. Private student loans are often used to cover the shortfall between the cost of education and the amount of Federal aid a student receives.

How much will a CompleteEd private student loan cover

CompleteEd loans cover up to 100% of tuition, fees, books, room and board, less any personal contributions, scholarships, grants and financial aid received. The maximum is $25,000 per academic year. Simply apply for the amount indicated as "unmet need" in school award letters.

What is the maximum private student loan amount?

It varies depending on the lender. CompleteEd private student loans can provide up to $25,000 per academic year, less any personal contribution and any private and Federal aid or loans received. The minimum loan amount is $2,500 per academic year. The lifetime loan limit is $125,000.

What's the difference between certified and uncertified private student loans?

Certified private student loan amounts are determined by the “unmet need” amount indicated in college award letters. Loan money is paid directly to schools, which are required to confirm enrollment of student borrowers. As a result, these loans usually offer lower variable APRs. The loan money covers up to 100% of tuition, fees, books, room and board. Any money left over after paying these costs is paid to the student.

Uncertified private student loans are awarded based on credit history and an institution’s lending limits. As a result, they usually offer higher variable APRs. The loan money is paid directly to the student borrower and may be used to pay a variety of college-related expenses.

What is the principal portion of a private student loan?

Principal is the amount borrowed, excluding interest and fees.

What's the difference between the interest rate and APR?

The interest rate is the cost of borrowing money. An APR (Annual Percentage Rate) is the effective interest rate with finance charges and fees included.

Does interest accrue during school?

Generally, private student loans begin charging interest as soon as the funds are disbursed. While usually not required, payments may be made while in school and during the grace period. Any unpaid interest will be rolled into the principal when repayment begins.

What fees are involved with a private student loan?

It depends on the loan. Some charge origination fees, repayment fees, and/or late payment fees.

What part of a private student loan is tax deductible?

Generally, money paid as interest is tax deductible for both private and Federal student loans for borrowers who meet income guidelines. We recommend talking to a tax advisor to determine eligibility.

Besides tuition, fees, books and room and board, what expenses should a college budget cover?

It should include the basics-computer/laptop, Internet access, software, phone service, special supplies or equipment for classes, student and facilities fees, transportation (at school and between school and home), dorm/apartment furnishings, social activities (dances, movies, sports, snacks, etc.). It's easy to estimate typical college expenses with the CompleteEd calculator.

When is the best time to apply for a private student loan?

Apply only after exhausting all Federal student loan programs. Federal loans may offer lower APRs and an overall lower cost of borrowing. To cover the gap left from Federal funding, apply for a CompleteEd student loan as soon as school award letters arrive.

What are the requirements to apply for a private student loan?

Private student loans are available only to student borrowers. The student or cosigner must have a good credit standing, a source of income, have citizenship in the U.S., and meet the minimum age required by the state. Other requirements depend on the type of loan.

What is an award letter?

It's the document schools send detailing the amount of financial aid-including Federal funding-awarded. It also specifies the amount still needed ("unmet need"), if any, to cover the cost of attending the school for the upcoming year.

Do private student loans require co-signers?

Sometimes. CompleteEd loans require a cosigner. Keep in mind that having a cosigner may lower the APR or facilitate approval.

Does the school have to approve a private student loan?

Sometimes. Schools get involved with certified student loans, like those from CompleteEd, by confirming enrollment of student borrowers. Schools also certify the eligible loan amount based on any personal contributions, as well as any scholarships, grants and Federal aid received. This amount is indicated as the "unmet need" in school award letters. Loan money is paid directly to schools, which may pay any remaining funds to the student.

Does CompleteEd offer other types of loans, like a car loan?

Right now, our services specialize only in private student loans.

Is prepayment allowed on Federal and CompleteEd private student loans?

Yes, there are no pre-payment penalties for paying off these loans early.

When is the first loan payment due on a private student loan?

With most student loans, including CompleteEd loans, the first payment typically will not be due until 6 months after graduation or enrollment status falls below half-time. However, interest begins accruing immediately on disbursement, similar to the unsubsidized Stafford and PLUS loans.

Can private student loan payments be postponed or canceled?

Loan providers have different policies. At times, CompleteEd allows postponement of payments for extenuating circumstances. Note that interest still may accrue during deferment and minimum payments still may be required. In rare cases, some loans can be cancelled partially or totally.

What is the minimum monthly payment amount for a private student loan?

The minimum amount is determined by the amount of principal borrowed, plus the interest accrued. The minimum monthly payment for a CompleteEd loan is $50, which is typical. Other student loans may require a larger minimum monthly payment.

Is there a grace period before beginning repayment?

Yes. Many private student loans and some Federal loans provide a 6-month grace period after graduation or falling below half-time enrollment status. In cases where interest begins accruing at the time the loan is disbursed, there is an option to make payments at any time. Note that grace periods vary for different types of Federal loans.

Is there any way to save money while repaying the loan?

Reduce the total amount of interest paid by making interest payments while in school. Contact your lender for the monthly interest accrual amount. Get an extra .25% APR discount with CompleteEd by signing up for automatic payments (ACH) during repayment.*

Who is ultimately responsible for a private student loan?

It depends on the type of loan. With Federal Stafford and Grad PLUS loans, the student is responsible because the loans are made in the student's name. With Parent PLUS loans, the loan is in the parent's name, making them responsible for the loan. For private student loans, like CompleteEd, both the student and cosigner are responsible in most cases. Cosigners can opt out of some loans after meeting certain requirements test.

* Discount applies while ACH is in effect. 3 consecutive non-sufficient funds will terminate ACH and cause discount to cease.