August 21, 2006
Paying options assist studentsStudents looking for more than just Federal financial aid to help pay for college can turn to My Rich Uncle for help.
“My Rich Uncle is a private loan company looking to help students bridge the gap between their Federal financial aid, and the actual cost of going to school,” Richard Feliciano, a representative for My Rich Uncle said.
The actual cost of going to school that Feliciano cites is the cost of living. Transportation is expensive; the cost of gas is close to $3.00 in the Valley right now. Students also have to worry about the cost of housing and eating, and balance that with recreation time.
Feliciano said that with these expenses combined, most students would have to work long hours to pay for their education, and sacrifice valuable time that could be used for school.
He also said that because of these factors, students turn to high interest credit cards, putting themselves further into debt.“Many students think that they’ll just put it on a credit card, and then pay the minimum balance due until they graduate. They forget how high the interest will be over that time,” Felciano said.
My Rich Uncle boasts one of the lowest interest rates of private lenders, approximately 6.25 percent. They also offer merit based reductions of .25 percent for good grades, awards, or for participating in extracurricular activities.
“Like most private lenders,we are not need-based. The amount of money you can receive is determined by a credit score. Your field of study also affects the amount you can borrow,” Feliciano said.
He said that students majoring in business, dental, law or medical fields can receive up to $70,000, while others may only receive $50, 000. Being a student in one of these areas also helps the chances of being approved for a loan.
“Typically the more money a student has the potential to make, the more confident we are that they will pay of their loan,” Feliciano said.
However, loans translate into future debt upon graduation.There are ways to bridge the gap without taking on unnecessary debt.
Pat Peppin, Director of Financial Aid, made her opinion of private loans clear. Her words of advice were, “Stay away from those.”
She said that interest rates for Federal funding are comparable to private lenders; however, many private lenders require students to begin paying off their loans immediately upon graduating. Students have a grace period of 6 months with need based Federal loans.
Right now, a student can borrow $2,625 a year. As of July 1, 2007 students will be able to borrow $3,500 a year, she said. If that is not enough, she encourages students to turn to scholarships.
“That’s free money!” said Peppin. “It takes more work, but it never needs to be paid back. There are millions of dollars in scholarships out there, apply for all of them, even the ones that are only $50, it will all help” she said.
Peppin said that to find scholarships, students can look to fastweb.com, a safe, free scholarship database. MCC also has a web page devoted to scholarships that is updated regularly.
“Be careful of how indebted you get, it will always be hanging over your shoulder, and can affect your ability to purchase cars, or homes in the future,” warned Peppin.