When Financial Aid Doesn't Cover Everything

Once you have applied for and received your financial aid award package, your next question may be, "How do I take care of the costs that financial aid doesn't cover?" If your family cannot meet the financial responsibilities from current income and/or assets, there are a variety of options available. Similar to the purchase of a house or a car, higher education is a long-term investment with long-term value.

A number of Marietta College financing options are outlined below for you to consider. As you review this information, you may decide that one method best fits your needs or you may elect to use a combination of payment plan for part of the cost with a loan for the remainder.

You will receive a mailing from the Student Billing Office in early July with more detailed explanations and enrollment forms for the various payment plans. The initial bill for the fall semester also will be mailed to the student's home address early in July and you will continue to receive a statement from Marietta College each month.

Semester Payment Plan
This plan calls for one payment for each semester. The payment for fall semester is due at the beginning of August, and for spring semester at the beginning of January.

 

Monthly Budget Plan
This is a ten-month plan that is offered through Tuition Management Systems (TMS). The Monthly Payment Option allows you to spread your payments equally over a ten month period with the first payment due on July 1. As long as payments are current, the only fee for this plan is an $85 (est.) enrollment fee. The enrollment fee also provides for life insurance for the payer in the amount of the contract balance. You will receive a monthly statement directly from TMS. For more information about Tuition Management Systems, phone them at (800) 722-4867, visit their website at www.afford.com/marietta, or e-mail them at tmsservice@afford.com.

 

Deferred Payment Plan
The Deferred Payment Plan, offered directly through Marietta College, spreads each semester charges over three installments. For the fall semester, the first payment is due on August 1; another payment will be due on September 30 with the final payment for the semester due on October 31. There is a monthly interest charge of 1.5% on any unpaid balance. Because of this interest charge, families with larger balances may find it more economical to enroll in the Monthly Budget Plan offered through Tuition Management Systems.

 

For more information about payment plans, contact Donna Born in the Marietta College Business Office at (800) 274-4619.

Borrowing Options

If you are thinking about borrowing to help pay for your student's higher education, first learn all you can about education loans, study your cash-flow position, and then borrow only what is necessary.

PLUS Loan
You may be eligible for a Federal Parent Loan for Undergraduate Students (PLUS). PLUS loans are for parents, stepparents or legal guardians of dependent undergraduate students. You may borrow up to the total cost of education less any other financial aid received. To be eligible for the PLUS loan, the borrower must be considered credit-worthy. If the parent's loan application is denied, the student becomes eligible to borrow an additional Unsubsidized Stafford Loan of up to $5,000, depending on need and grade level.

To apply for a PLUS loan, complete and return the "PLUS Loan Credit Authorization" form. Upon receipt, Marietta College will check for credit-worthiness and, if eligible will create a PLUS loan promissory note through the Federal Direct Loan system and send it to you for your signature.

 

Alternative/Supplemental Loans
Students who have borrowed the maximum allowable under the Federal Stafford Loan program, but who need to borrow additional amounts may want to consider borrowing an alternative loan. Alternative loans are borrowed from a bank, and don't have the same restrictions as federal loans. However, since they are education loans, they may include advantages that are similar to some of the federal education loans such as deferment options and lower interest rates. Alternative loans usually require a credit-worthy cosigner if the student does not have a favorable credit history and require certification by the school. The maximum borrowing limit is the annual cost of attendance minus all other financial aid received.

 

Home Equity Loan
If you are a homeowner, you may be able to borrow a home equity loan. One of the biggest advantages to this loan is that the interest is tax deductible if the borrower itemizes deductions on their federal income tax return. For more information about home equity loans, contact a lending institution near you.

 

Life Insurance
Your life insurance policy may have options for borrowing for education purposes. For more information, contact your insurance agent.

 

For more information about federal or alternative loans, contact Peggy Arnold in the Office of Student Financial Services (800) 331-2709.

Financial Planning Worksheet

If using a payment plan alone is more than the maximum you can afford each month but you would like to keep the loan interest charges to a minimum, using a combination of payment plan and loan might be to your advantage. Use the information supplied below to calculate the most advantageous combination of loan and payment plan for your family. This information shows only examples and does not show the effect of loan origination fees or take into account the TMS enrollment fee.

For all options:

1. Determine what your family can afford to pay each month.
   
2. If Federal work-study is part of the financial aid package, subtract it from the total award unless the student is planning to apply the entire work-study amount to their bill.
   
3. Then, subtract the amount of financial aid that remains from the total expenses listed on the award letter.
   
4. The amount remaining is the family's cost.

To use the Semester Payment Plan
Divide the family's cost by 2.

To use only the Monthly Budget Plan through Tuition Management Systems
Divide the family's cost by 10 to determine your monthly payment amount.

To calculate your monthly payment on a PLUS loan
Multiply the family's cost by the repayment factor for your interest rate.

Example
If Marietta College total expenses are $26,840 and the financial aid award is $16,064 (once work-study has been subtracted), the family cost is $10,776. In this example, the maximum the family can afford to pay each month is $500.

• Using the Semester Payment Plan, the family would have to pay $5,388 at the beginning of each semester. ($10,776 divided by 2)

• Using only the Monthly Budget Plan, the family would have to pay $1,077.60 per month. ($10,776 divided by 10)

• Borrowing the entire amount through a PLUS loan at 8.0%, the family would pay $130.62 per month ($10,776 x .012133, which is the repayment rate for 8.0% interest). Since the family can afford to pay more than $130.62/month, they would save interest charges by making part of their payment through the Monthly Budget Plan (TMS) and borrowing part through a PLUS loan.

• However, if the family contracted with TMS to pay $420/month for a total of $4200 and decided to pay the rest through a PLUS loan of $6,576, the PLUS loan payments would be $79.78/month. Adding the two payments together would mean a total monthly payment of $499.78. Using this combination, the family would save over $2,000 in interest over the life of the loan by borrowing less, yet still be within their affordable monthly payment range.