0:00:00.095,0:00:01.413 - [Interviewer] We're here[br]today with Sean Logan, 0:00:01.413,0:00:04.046 director of college counseling[br]at Phillips Academy. 0:00:04.046,0:00:07.378 Sean, one of the big[br]decisions that students face 0:00:07.378,0:00:09.715 is that of student[br]loans when they're going 0:00:09.715,0:00:11.796 through the college admissions process. 0:00:11.796,0:00:13.684 Can you kind of explain to me where are 0:00:13.684,0:00:15.103 the different places I can get loans 0:00:15.103,0:00:17.739 and then how that impacts[br]what those options are? 0:00:17.739,0:00:19.363 - [Sean] Sure, so the government is 0:00:19.363,0:00:22.207 probably the best source[br]of loans right now. 0:00:22.207,0:00:26.617 And, you know, there's[br]also smaller state loan 0:00:26.617,0:00:29.952 programs that are out there,[br]and that varies by states. 0:00:29.952,0:00:31.019 - [Interviewer] So that's sort[br]of the federal government, 0:00:31.019,0:00:32.320 then there's the state government. 0:00:32.320,0:00:32.970 - [Sean] Yep. 0:00:32.970,0:00:33.366 - [Interviewer] Okay. 0:00:33.366,0:00:34.493 - [Sean] There are colleges that will 0:00:34.493,0:00:36.803 do their own institutional loans 0:00:36.803,0:00:39.903 and then there are private[br]institutions that will do loans. 0:00:39.903,0:00:42.320 - [Interviewer] Okay, and of all these 0:00:42.320,0:00:45.198 different options, where should I begin? 0:00:45.198,0:00:47.718 - [Sean] So, with your[br]financial aid package, 0:00:47.718,0:00:49.679 colleges will help you[br]sort of understand this, 0:00:49.679,0:00:52.181 but in general, colleges[br]are gonna use a lot 0:00:52.181,0:00:54.115 of federal money at[br]first and try to package 0:00:54.115,0:00:56.055 you that way, and again,[br]it's generally the best 0:00:56.055,0:00:57.980 type of loan you can get. 0:00:57.980,0:01:00.222 There are need-based[br]loans that are out there 0:01:00.222,0:01:03.253 so you have to have certain[br]levels of income to qualify. 0:01:03.253,0:01:06.352 The first being that[br]the Federal Perkins loan 0:01:06.352,0:01:09.119 generally for more lower income students. 0:01:09.119,0:01:12.242 That has a lot of really[br]positive perks to it. 0:01:12.971,0:01:16.002 They include things like a fixed rate. 0:01:16.002,0:01:18.430 It has no origination fee. 0:01:19.114,0:01:21.705 You have the flexibility[br]with the government 0:01:21.705,0:01:24.086 paying all of the[br]interest until six months 0:01:24.086,0:01:27.382 after you graduate, so that's[br]a great factor for that. 0:01:27.382,0:01:27.975 - [Interviewer] Okay, so you're not gonna 0:01:27.975,0:01:29.438 pay any interest while you're in school. 0:01:29.438,0:01:31.133 - [Sean] While you're in school, 0:01:31.133,0:01:32.758 and you do have, again,[br]some flexibile terms 0:01:32.758,0:01:36.066 with deferring that if[br]you go to graduate school. 0:01:36.066,0:01:37.786 And again, you can take out in your 0:01:37.786,0:01:39.677 first year up to 5,500 dollars, uh, 0:01:39.677,0:01:42.058 you can take out up to 5,500[br]dollars as an undergraduate 0:01:42.058,0:01:43.279 for the Federal Perkins loans. 0:01:43.279,0:01:46.170 - [Interviewer] Okay,[br]and that's up to 5,500? 0:01:46.170,0:01:48.191 And is that per year or overall? 0:01:48.191,0:01:49.792 - [Sean] Uh, a year. 0:01:49.792,0:01:50.988 - [Interviewer] Okay, got it. 0:01:50.988,0:01:52.839 Are there any other[br]kind of need-based loans 0:01:52.839,0:01:54.487 that are available from[br]the federal government? 0:01:54.487,0:01:55.091 - [Sean] There are, so there's 0:01:55.091,0:01:57.539 also subsidized Stafford loans. 0:01:57.539,0:01:59.167 They're not quite as good terms 0:01:59.167,0:02:02.012 as the Perkins loans, but[br]again, still very good. 0:02:02.012,0:02:04.879 Probably the next best[br]loan you'll find out there. 0:02:04.879,0:02:08.315 There is an origination fee to that. 0:02:08.315,0:02:10.362 Right now, the interest rate is actually 0:02:10.362,0:02:13.267 a little bit lower than the Perkins loan, 0:02:13.267,0:02:16.309 but that will go up[br]depending on the markets. 0:02:16.309,0:02:17.469 Again, it has the same maximum 0:02:17.469,0:02:21.906 of 5,500 dollars per, for this[br]year, for your first year. 0:02:21.906,0:02:23.624 - [Interviewer] And is that[br]5,500, does it stay 5,500 0:02:23.624,0:02:25.216 every year or does that change? 0:02:25.216,0:02:28.024 - [Sean] So that can go[br]up as you're a sophomore, 0:02:28.024,0:02:30.278 junior, or senior, that amount can go up. 0:02:30.278,0:02:32.901 So you have a little bit[br]more flexibility with that. 0:02:33.285,0:02:35.831 And the subsidized Stafford, also, 0:02:35.831,0:02:37.049 their interest rate is also paid for 0:02:37.049,0:02:39.791 by the government until six[br]months after you graduate. 0:02:39.791,0:02:40.487 - [Interviewer] I see, so that's also 0:02:40.487,0:02:42.145 no interest paid while in school. 0:02:42.145,0:02:43.806 - [Sean] Correct. 0:02:43.806,0:02:45.642 - [Interviewer] Are there any loans that 0:02:45.642,0:02:48.380 the federal government offers[br]that aren't need-based? 0:02:48.380,0:02:48.984 - [Sean] There are. 0:02:48.984,0:02:51.089 Now, one thing to remember is you still, 0:02:51.089,0:02:53.316 you need to fill out a[br]FAFSA form to qualify 0:02:53.316,0:02:56.776 for any federal loans,[br]so even if you, go ahead. 0:02:56.776,0:02:57.428 - [Interviewer] Just so I understand, 0:02:57.428,0:02:59.228 so it's even if I don't[br]have financial need, 0:02:59.228,0:03:00.727 my family makes a lot of money, 0:03:00.727,0:03:02.268 I still fill out the FAFSA just 0:03:02.268,0:03:03.860 to get access to federal loans. 0:03:03.860,0:03:04.951 - [Sean] Correct, and that's an important 0:03:04.951,0:03:07.368 fact that people don't realize. 0:03:07.368,0:03:09.816 So there is an unsubsidized Stafford loan 0:03:09.816,0:03:12.091 and again, it's not quite as good of terms 0:03:12.091,0:03:13.532 as the other two we've talked about, 0:03:13.532,0:03:16.634 but it's still a very good[br]option for many families. 0:03:16.634,0:03:19.384 - [Interviewer] Okay,[br]so I know that the rates 0:03:19.384,0:03:22.451 for the Stafford subsidized[br]and unsubsidized are the same 0:03:22.451,0:03:25.098 so what are the actual[br]differences between the two loans? 0:03:25.098,0:03:26.328 - [Sean] So the biggest[br]difference is is that 0:03:26.328,0:03:28.034 the federal government[br]will not pay the interest 0:03:28.034,0:03:29.371 while you're in school. 0:03:29.371,0:03:31.088 - [Interviewer] Okay, so[br]they're not gonna cover you. 0:03:31.088,0:03:31.912 - [Sean] Right. 0:03:31.912,0:03:34.712 - [Interviewer] Okay, and then,[br]are there any other kinds, 0:03:34.712,0:03:35.734 you mentioned there was one other kind 0:03:35.734,0:03:37.811 of federal loan that's not need-based. 0:03:37.811,0:03:40.714 - [Sean] There also is something[br]called a direct plus loans 0:03:40.714,0:03:44.335 which a parent can take[br]out instead of the student. 0:03:44.335,0:03:46.949 It's in the federal program, so it still 0:03:46.949,0:03:49.374 has some of the benefits of that program 0:03:49.374,0:03:51.232 but it's a higher rate, but again, 0:03:51.232,0:03:53.646 it still has a lot of the other benefits 0:03:53.646,0:03:55.053 of the federal program and it's 0:03:55.053,0:03:56.631 backed by the federal government. 0:03:56.631,0:03:57.400 - [Interviewer] Great,[br]okay, great, so that makes, 0:03:57.400,0:03:59.407 those are for the[br]federal government loans. 0:03:59.407,0:04:01.636 What about sort of state[br]or college sources. 0:04:01.636,0:04:03.248 What are those loans all about? 0:04:03.248,0:04:04.913 - [Sean] So again, that[br]really is gonna depend 0:04:04.913,0:04:07.073 on the state and it's really[br]gonna depend on the college. 0:04:07.073,0:04:09.313 So, those could be very good options. 0:04:09.313,0:04:11.751 Personally, when I was in college I had 0:04:11.751,0:04:13.783 some of my loans were college loans 0:04:13.783,0:04:16.822 and those loans were actually,[br]had no interest rate at all. 0:04:16.822,0:04:18.511 So I was basically allowed to borrow, 0:04:18.511,0:04:20.298 again, in that example we used before, 0:04:20.298,0:04:23.224 I borrowed 5,000 dollars but[br]there was no interest at all. 0:04:23.224,0:04:25.092 All I paid back over the life of the loan 0:04:25.092,0:04:27.706 was the 5,000 dollars, so college loans 0:04:27.706,0:04:29.550 can be a really good opportunity, 0:04:29.550,0:04:30.851 but again, not all colleges offer them 0:04:30.851,0:04:32.849 and some of them don't[br]have as good of terms 0:04:32.849,0:04:34.567 as say the federal government does. 0:04:34.567,0:04:35.843 - [Interviewer] Okay,[br]so that's really sort of 0:04:35.843,0:04:37.665 state by state, college by college. 0:04:37.665,0:04:39.374 There's not sort of a[br]general rule of thumb, 0:04:39.374,0:04:40.558 it's just worth looking into. 0:04:40.558,0:04:41.417 - [Sean] But it's worth looking into. 0:04:41.417,0:04:44.435 The colleges will, if[br]you qualify for them, 0:04:44.435,0:04:45.869 they'll give you those options. 0:04:45.869,0:04:48.745 At the state level, it's[br]also worth looking into. 0:04:48.745,0:04:50.683 The colleges will[br]generally be able to sort 0:04:50.683,0:04:52.460 of let you know if you[br]qualify for these loans 0:04:52.460,0:04:54.782 and you can decide how good they are for 0:04:54.782,0:04:56.431 your family and your situation. 0:04:56.431,0:04:57.708 - [Interviewer] Great,[br]and then you mentioned 0:04:57.708,0:04:58.963 federal, state, college, and 0:04:58.963,0:05:00.181 you also mentioned private loans. 0:05:00.181,0:05:02.202 Where do those kind of[br]fall into this equation? 0:05:02.202,0:05:05.184 - [Sean] So, I think in[br]terms of the best terms, 0:05:05.184,0:05:07.403 the most flexibility,[br]they're probably at the, 0:05:07.403,0:05:09.526 you know, they would be my last option. 0:05:09.526,0:05:10.887 Now, they could be very[br]good options for a family 0:05:10.887,0:05:13.184 that still need money, but I would say 0:05:13.184,0:05:14.889 if you've exhausted those other options, 0:05:14.889,0:05:18.040 this is, that's probably[br]the next place to go. 0:05:18.040,0:05:19.557 You know, they aren't subsidized. 0:05:19.557,0:05:21.218 They are not need-based. 0:05:21.218,0:05:23.494 And they definitely require,[br]most of them will require 0:05:23.494,0:05:25.095 a parent to commit to repay 0:05:25.095,0:05:27.012 the loan if the student fails to. 0:05:27.012,0:05:30.715 The interest rates will vary[br]by the different institutions. 0:05:30.715,0:05:33.316 So, banks, other financial institutions 0:05:33.316,0:05:34.429 typically have the highest interest rates 0:05:34.429,0:05:37.170 and the least flexible payment options. 0:05:37.170,0:05:38.956 - [Interviewer] So then,[br]why wouldn't, as a student, 0:05:38.956,0:05:42.069 why wouldn't I just[br]take all Stafford loans 0:05:42.069,0:05:44.449 or Stafford subsidized, or you know, 0:05:44.449,0:05:46.458 if I didn't qualify,[br]Stafford unsubsidized. 0:05:46.458,0:05:49.312 Why would I even bother looking 0:05:49.312,0:05:51.046 at something like a private loan. 0:05:51.046,0:05:53.296 - [Sean] Well, unfortunately,[br]with a Stafford loan, 0:05:53.296,0:05:54.736 right now, in the first[br]year the most you can 0:05:54.736,0:05:56.802 take out is 5,500 dollars and you may need 0:05:56.802,0:05:58.557 a little bit more than that for loans. 0:05:58.557,0:06:00.656 So, you may need to look at other options 0:06:00.656,0:06:02.364 and so that's why you would move down. 0:06:02.364,0:06:05.161 With a Perkins loan, you may not qualify 0:06:05.161,0:06:07.101 because you don't meet[br]the income standards 0:06:07.101,0:06:09.039 and for the subsidized Stafford loan, 0:06:09.039,0:06:10.419 you may not qualify for that. 0:06:10.419,0:06:13.021 So, again, you may, you would definitely 0:06:13.021,0:06:14.936 qualify for the unsubsidized loan, 0:06:14.936,0:06:16.041 but then if you need a bit more 0:06:16.041,0:06:17.526 you may have to go to[br]these other alternatives. 0:06:17.526,0:06:18.699 - [Interviewer] I see,[br]so if you kind of pass 0:06:18.699,0:06:21.463 that yearly maximum on the Stafford loans, 0:06:21.463,0:06:23.460 you don't qualify income-wise for Perkins, 0:06:23.460,0:06:26.093 then it'll be down to either a plus loan, 0:06:26.093,0:06:27.618 which has a fairly high interest rate, 0:06:27.618,0:06:30.077 state or college loan,[br]which kind of varies, 0:06:30.077,0:06:31.934 or the private loans, and[br]those can have variable 0:06:31.934,0:06:34.255 interest rates and maybe[br]not as good repayment terms. 0:06:34.255,0:06:34.873 - [Sean] Right. 0:06:34.873,0:06:37.054 - [Interviewer] But it sounds[br]like first and foremost, 0:06:37.054,0:06:39.771 if you can get access[br]to Stafford or Perkins, 0:06:39.771,0:06:40.770 that's the place to start? 0:06:40.770,0:06:42.269 - [Sean] Yes, absolutely. 0:06:42.269,0:06:43.957 - [Interviewer] Great, thank you so much.