2008-09
Financing Options Available to Meet the Family Contribution
Students and
family may use a combination of programs to manage the expected family
contribution.
The
following payment plan and supplemental loan tips are alternatives to
lump-sum payments on the tuition due dates of August 15th and
January 1st.
The
Wesleyan Monthly Payment Plan (MPP). This interest-free plan, administered by
Tuition Management Systems, provides for 10 equal payments beginning July 1 and
covers the charges for the academic year beginning in September. There is
an application fee of $65 which includes life insurance coverage for the
balance due on the plan. To apply on line click
here.
There are many alternative loan programs. Borrowers should investigate
all options before making an informed decision.
What is PLUS?
The Federal Parent Loan for Undergraduate Students (PLUS) is a loan
borrowed by a parent. The loan has a fixed interest rate of 8.5%.
Fees of 4% are deducted from the loan when disbursed to the school. In
most cases, repayment of the loan begins immediately after the loan has
disbursed. The differences between PLUS lenders are the “borrower
benefits” – the incentive(s) a lender is able to offer the borrower.
Most offer 0.25% interest reduction for auto debit and online
management, some offer annual rebates, or straight interest reductions. To
confirm a student's eligibility to receive this Title IV federal funding
a completed 2008-09 Free Application for Federal Student Aid (FAFSA)
must be on file with the institution.
Questions to ask a lender about “borrower benefits”:
1) Are loan borrower benefits automatic, or do I have to qualify for
them?
2) Are benefits annual or one-time only?
3) What percent of your borrowers obtain the advertised rate discount,
fee waiver, or other benefit?
4) Do I forfeit the benefit if I make a late payment?
5) What percent of your borrowers default on their loans?
A
word of caution about payment incentives linked to making a number of
on-time payments: only a small number of borrowers actually benefit from
this type of incentive because there may be the occasional late payment.
If you select a loan with such a payment incentive you can ensure that
payments will be made on time by arranging for automatic payments
through your bank account.
Suggested PLUS Lenders
What is an Alternative Loan?
(Also known as Private Education Loan)
These loan products are not backed by the federal government. They
typically have variable interest rates based on Prime or some other
banking measure and rely on a credit review to calculate the initial
rate of interest. Typically the student is the borrower and often a
co-borrower is required to pass credit or receive a favorable interest
rate. Interest accrues from disbursement. These loans may not be
included in a federal consolidation.
Suggested Alternative Lenders
As a
starting point
for any educational loan, be sure to review your state’s higher
education assistance program(s). Here are the most common state
organizations for which we have processed applications:
VSAC for Vermont
http://www.vsac.org/
MEFA for Massachusetts
http://www.mefa.org/
PHEAA for Pennsylvania
http://www.pheaa.org/
HESAA for New Jersey
www.hesaa.org
Connecticut Family
Education Loan Program (CT FELP)
www.chesla.org
College Foundation of North Carolina
http://www.cfnc.org/
RISLA for Rhode Island
http://www.risla.com/index.aspx
FAME for Maine
http://www.famemaine.com/
