Financial Aid and Loan Offers – Evaluate Carefully

By now college-bound seniors should have received their award letters from the colleges of their choice. Remember that both grant awards (which is outright money that does not need to be paid back) and loans are listed on the same letter. Also keep in mind that loans are not financial aid. For this reason it is critical to review the loan terms and interest rates being offered very closely. Families who own a home may discover that they will get a more favorable interest rate through secured loans such as a home equity line of credit than from the Federal unsubsidized Stafford loan (now at 7%) or school-sponsored loans (rates vary). Students should also check the loan offerings from organizations such as the Massachusetts Educational Financing Authority.

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