Sparrow Nest

Author: Carlos Paniagua Emiliano

  • Best Grants for Graduate School

    Best Grants for Graduate School

    What’s better than free money to pay for school?

    Unfortunately, finding free money for graduate school can be challenging. However, there are options such as grants to help pay for your education. 

    A grant is a type of financial aid that does not have to be repaid and is typically given based on need. In this article, we’ll talk about the benefits of a grant, eligibility requirements, and how to find a grant for graduate school. 

    Benefits of a Grant 

    A major benefit of grants is that the money is free, and you’re not responsible for paying it back unlike a loan. However, there are other long-term benefits of a grant. Receiving a grant could mean less scholarship applications to fill out or less student loans to borrow. 

    Who is Eligible for a Grant for Graduate School?

    For the most part, if you’re a student or will be a student at an accredited university, you are eligible for grants. In order to qualify for federal grants for graduate school, you will need to demonstrate financial need by filling out the FAFSA. Some federal grants, such as the Iraq and Afghanistan Service Grant, are available to students under certain circumstances. 

    Depending on the award, the provider might ask for a minimum GPA, type of degree program, or research goals. 

    What is the Difference Between a Grant and a Fellowship?

    Fellowships are also a great source to earn money for graduate school. They offer free money that you can use to pay for your education, similar to grants. Fellowships don’t need to be paid back as well. 

    However, the difference between a fellowship and a grant is the reason why the money is issued to a student. While most grants require you to demonstrate financial need, fellowships will be based on academic achievement or research. 

    How to Find Grants for Graduate School 

    Your best bet in finding grants is through federal and state governments, your school, and professional organizations. 

    Federal Grants

    In order to receive grants from the federal government, you will need to fill out the FAFSA. 

    You won’t be eligible for the Pell Grant since that grant is exclusively for undergraduate students. However, there are a few other federal grants you should consider. 

    TEACH Grant

    The Teacher Education Assistance for College and Higher Education (TEACH) Grant offers a $4,000 per year grant for a graduate student. In order to be eligible, you must agree to teach full-time for four school years.

    Fulbright Grant 

    If you like to travel and want to learn more about the world, consider the Fulbright program and the grant they offer. The grants are administered by the U.S. Department of State’s Bureau of Educational and Cultural Affairs. These grants are intended for individual study or research projects or for English Teaching Assistants Programs. In order to be eligible, you must hold a bachelor’s degree and have sufficient language skills fit for your chosen country. 

    State Grants

    Different states offer grants that cover a graduate education. They will vary and have different requirements beyond financial need, such as participation in a certain field of study. Reach out to your state’s department of education or education agency to learn more about the grants they might offer. 

    School Grants

    Universities may offer grants to students pursuing a graduate education. Some universities will require that you demonstrate financial need. Others might automatically consider you for grants and other types of assistance. Check your university’s graduate school to learn more about the grants offered for your field of study. Don’t hesitate to ask the school’s financial aid office as well. 

    Professional Organization Grants 

    Professional organizations or associations are another great source for grants. Professional organizations usually seek to advance a particular profession or the interests of their members. Because of this, members pursuing a graduate degree could be eligible for grants. If you’re interested in a particular organization, such as the American Bar Association or the American Marketing Association, check their website to see the resources that they offer. 

    Final Thoughts 

    Graduate school can be very pricey, but it can also be an important tool for social mobility. Fortunately, there are many ways to find financial assistance. See what grants you qualify for before applying for student loans. Remember, exhaust all your options before turning to private student loans.

  • Best Scholarships for Graduate School

    Best Scholarships for Graduate School

    Going to graduate school is a great opportunity to secure higher earnings. It could also help you ascend to a higher position at a company. However, grad school is expensive.

    Did you know that there are scholarships available designed for graduate education?

    In this article, we’ll talk about the importance of a scholarship, the requirements for these scholarships, and the best resources to find graduate school aid.

    Benefits of a Scholarship

    Aside from being free money, scholarships have huge benefits. First of all, they help reduce the amount you need to take out in student loans. It can also help you focus on your studies more by reducing the need to get a job to support your graduate education.

    Earning a scholarship can be difficult to accomplish. Because of this, it could be a great addition to your resume if you earn a scholarship, especially for graduate students.

    What GPA Do You Need to Get Graduate School Scholarships?

    It depends on the scholarship provider, but typically a 3.5 GPA would be a minimum requirement for securing a graduate school scholarship. This is important if you’re applying for a scholarship that considers academic achievement. Other scholarships might require a 3.0 GPA if they’re based on aspects such as community service or even financial need.

    Keep this in mind when applying for scholarships. The goal of the scholarship can help you determine if it requires a higher GPA. For example, if the scholarship is meant to celebrate students in STEM, you might need at least a 3.5 GPA to be eligible.

    How to Apply for Graduate School Scholarships

    There are multiple routes to take in order to get a scholarship for graduate school. For some graduate programs, you will be automatically considered for merit-based scholarships. Other programs might have separate applications to apply for scholarships.

    Before applying, think about the requirements they have for the application. Many will require an essay or personal statement in-line with the goal of the scholarship. A resume might be required because it will highlight campus involvement or community service. Every provider will have different requirements. It’s important to do your research and find scholarships that are fit for you.

    How to Find Graduate School Scholarships

    In order to apply for a graduate school scholarship, you have to actually find said scholarships.

    Reach out to your university’s financial aid office to see what scholarships, or even grants and fellowships, are available for you. Once you’ve done your research at your university, it’s time to find scholarships elsewhere.  

    Here are a few resources you can use to start your grad school scholarship hunt.

    Professional Organizations

    If you’re passionate about your field of study, joining a professional association could have many benefits. A professional organization offers exclusive resources to members passionate about those career interests. Such resources are scholarships for undergraduate or graduate students in the association. For example, the American Bar Association awards scholarships to first-year law students from underrepresented communities. Find a professional association and learn about the scholarship opportunities they offer.

    Search Engines

    Search engines are a great way to find scholarships available for you. You can use them to find awards based on a degree program of interest such as an MBA, law school, or a medical program. You can even search for scholarships based on the amount they’re providing. This tool can help you prioritize the ones that you believe will benefit you the most.

    GoGrad

    GoGrad helps you find scholarships for graduate school. The platform has specific categories for LGBTQ students, military veterans, women, and students pursuing an MBA. GoGrad also gives you a timeline of financial aid for graduate school, helping you stay on track as you apply for scholarships.They also debunk common misconceptions about scholarships and provide educational resources.

    Sallie Mae

    Sallie Mae is one of the most recognizable private student loan companies. Did you know that they also offer free scholarship resources? Sallie Mae offers a free Scholarship Search tool for both undergraduate and graduate students. You can easily create a profile that finds the best scholarships based on your field of study, skills, and interests. Plus, by registering for the free tool, you could have a chance to win one of their $1,000 monthly sweepstakes.  

    Scholarships.com

    Similar to Sallie Mae’s Scholarship Search tool, Scholarships.com matches you with scholarships. This tool also organizes and filters scholarships for you by dollar amount or due date. This can help you prioritize certain scholarships before others.

    Chegg.com

    When you create a free account with Chegg, you will have access to over 25,000 scholarships. You can also find tutors to review a scholarship essay if you need someone to look through it.

    Fastweb.com

    Fastweb provides access to over 1.5 million scholarships through the search tool. The tool also personalizes your options when you make a free profile and sends you notifications when you’re matched to a new scholarship.

    Niche.com

    Niche not only helps students find the right universities and programs, but it also provides access to thousands of scholarships through their search tool. The tool matches applicants with scholarships that fit their backgrounds and interests. As a great bonus, many of the Niche scholarships are “no-essay,” meaning that an essay is not required to apply.

    Cappex.com

    Cappex also matches students with scholarships. They even segment scholarships by the current level of undergraduate enrollment. When you create a free account, you will be entered for a chance to win a $1,000 Cappex Easy Money Scholarship. With over a billion dollars in scholarships on the platform, there are bound to be a few scholarships fit for you.

    Scholarships360

    Aside from scholarship matching, Scholarships360 offers a section dedicated to graduate scholarships. They even offer tips to pay for your education. You can find the top scholarships of the year for graduate programs such as law school, medical school, or an MBA.

    Bold.org

    Bold offers exclusive scholarships only found on the platform. They also match you with scholarships after making a free profile. By creating a profile, you can showcase your experiences and skills to the scholarship panels. Plus, everything is done on Bold, meaning that you can manage your scholarships, check the status, and even have funds applied to your tuition right through their website.

    Final Thoughts from the Nest

    Applying for financial aid as a graduate student can be hard. There aren’t the same amount of resources available for graduate students as there are for undergraduate students. However, there are so many ways to secure the funds you need to pay for your graduate studies. Scholarships are a great option to consider before deciding to take out a student loan. Reach out to your university’s financial aid office and check out all these search engines for scholarships fit for you!

    If you need to take out private student loans once you’ve exhausted all other options, consider using Sparrow. Sparrow matches you with private student loans fit for your needs and your educational goals. You can even compare loans side-by-side, helping you determine which loans work best for you.

  • A Guide to Direct Consolidation Loans

    A Guide to Direct Consolidation Loans

    After graduating from college, you may leave school with more than one student loan. If juggling more than one loan feels overwhelming, a Direct Consolidation Loan might be a good option for you.

    In this article, we’ll talk about what a Direct Consolidation Loan is, the pros and cons, and how to get a Direct Consolidation Loan. 

    What is a Direct Consolidation Loan?

    A Direct Consolidation Loan allows you to combine multiple federal student loans into a single loan with a fixed interest rate.

    For private student loans, something similar exists but with a different name: student loan refinancing. Refinancing allows you to convert private and/or federal student loans into one private loan. See below for a list of the best student loan refinance rates:

    The latest rates from Sparrow’s partners

    See a rate you like? Click Apply and we’ll take you to the right place to get started with the lender of your choosing.

    Compare your personalized, pre-qualified rates from these lenders in minutes.

    Find my rate

    Pros and Cons of Getting a Direct Consolidation Loan

    It’s important to weigh the pros and cons of a Direct Consolidation Loan before deciding to move forward. Sure, having to make a single monthly payment rather than making multiple payments a month toward your student loans sounds neat. However, there are more things to consider. 

    Pros

    When you consolidate your student loans, you may be eligible for lower monthly payments because the repayment term will probably be longer. 

    Consolidating a loan could also open up new repayment options. Repayment plans for Direct Consolidation Loans include: 

    • Standard repayment plan 
    • Graduate repayment plan
    • Extended repayment plan
    • Income-contingent repayment
    • Pay As You Earn (PAYE)
    • Revised Pay As You Earn (REPAYE)
    • Income-Based Repayment (IBR) plan 

    Finally, when loans are consolidated, the interest on the consolidated loan is simply the average of the old loans’ interest rounded to the nearest eighth of a percent. This means that the interest rate on a consolidated loan could be higher or lower than the initial interest rate on each individual loan. 

    For example, let’s say you have three loans. One loan has a 3.4% interest rate, and the other two have a 5% interest rate. Consolidated, the interest rate would be 4.47%, better than 5% interest. 

    Cons

    Consolidating your student loans could mean taking on a longer repayment term, which could also mean more interest paid over time. Not only are you paying for your loan, you’re also paying for the interest that comes with each additional year that it takes to repay your loan. 

    Sure, your monthly payments will be low because your loan repayment amount is scattered over a longer period of time, but the interest is what will cost you more money the more time it takes to pay your loan back. 

    Once you consolidate your loans, you won’t get a grace period. The first payment will be due in about 60 days after your loan is disbursed. 

    Finally, consolidating your loans could make you lose certain benefits, such as reduced interest rates, rebates, and loan cancellation benefits that could be available under certain loans you may have. Whatever benefits you had with those loans leaves if you consolidate them. 

    How Long Does it Take to Get a Direct Consolidation Loan? 

    Getting a Direct Consolidation Loan will take time. It typically takes 30-45 days to consolidate your loan, but it can take up to a few months. 

    However, filling out the Direct Consolidation Loan Application doesn’t take too long. If you are interested in applying for a Direct Consolidation Loan, the process must be completed in one sitting. In general, it takes around 30 minutes or less to complete. 

    Can Direct Consolidation Loans be Forgiven?

    Did you know that consolidating your loans can make you eligible for the Public Service Loan Forgiveness program (PSLF)? The PSLF program is a federal loan forgiveness program for those employed in an eligible public service or nonprofit role. After ten years of making payments on your Direct Consolidation Loans, the Department of Education will forgive your remaining balance. 

    Keep in mind that due to the COVID-19 pandemic, past payments that aren’t typically eligible for loan forgiveness under this program can now be forgiven through the PSLF waiver. This means that if you have not consolidated your loans but you work for a qualifying employer and have been making payments, those payments can count toward the program if you consolidate your loans by Oct. 31, 2022. 

    Final Thoughts

    Determining whether to consolidate your federal loans can be a tough decision to make. If you are passionate about public service or non-profit work, consolidating your loans might be the best option for you, but if you want to save as much money as possible in the long-term, it might make sense if you don’t do so. Weighing the pros and cons in relation to your situation can ease the concerns of whether or not consolidating your loans is a good option for you.

    If you need help choosing the best student loan refinancing option for your private loans, Sparrow is a great place to start. Sparrow’s rate comparison tool allows you to easily compare rates side-by-side to find the best student loan refinance option for you. Get started today!

  • What are Parent PLUS Loans and How to Apply

    What are Parent PLUS Loans and How to Apply

    Whether you’re an undergraduate student looking to attend graduate school or a parent looking to help your child pay for college, looking for ways to fund that education can be difficult. However, parent PLUS loans could make it easy to pay for a college education. 

    In this article, we’ll break down what parent PLUS loans are and the process of applying for, borrowing, and paying those loans back. 

    What are the Two Types of PLUS Loans?

    Parent PLUS loans are federal loans for students pursuing graduate or professional degrees and parents of undergraduate students. These loans have a fixed interest rate and are unsubsidized, meaning that interest accrues while you are in school. 

    Parent PLUS

    If you are the parent of a dependent student, you could take out a parent PLUS loan to pay for your child’s undergraduate education. These loans are the responsibility of the parent and can’t be transferred over to the student after completing school. 

    Grad PLUS

    Students pursuing graduate school or professional school can consider a grad PLUS loan. These loans are particularly focused on students considering education beyond the undergraduate level. Grad PLUS loans are the responsibility of the student that takes out the loan. 

    How Much Can You Borrow in PLUS Loans?

    Unlike other types of loans, you can borrow as much as the total cost of attendance in PLUS loans, minus any other financial aid received.

    For example, if the total cost of attendance for your program is $40,000, and you receive $20,000 in scholarships, $5,000 in grants, and $2,000 in work-study funds, you will be eligible for up to $13,000 in PLUS loans. 

    However, just because you can borrow that much money, it doesn’t mean that you must do so. PLUS loans should be used to cover the difference once you have exhausted all types of financial aid. 

    Remember to accept aid intentionally by following this order: Scholarships/Grants (free money) → Work Study (earned money) → Loans (borrowed money)

    Do You Have to Pay Back PLUS Loans?

    PLUS loans are, well, loans. If you take out a grad PLUS loan, you are responsible for paying that loan back. If you take out a parent PLUS loan, you are responsible for paying for that loan, not your child.

    With a grad PLUS loan, you can enroll in an income-driven repayment plan.

    If you have a parent PLUS loan, you qualify for a:

    If you consolidate your loan, you qualify for an Income-Contingent repayment plan.

    What if you cannot make payments toward your parent PLUS loan?

    You can request a deferment. Graduate students have a grace period of six months after graduating before making a payment. But, since interest accrues, borrowers are responsible for that interest during that period.

    If you have parent PLUS loans, you could be eligible for the Public Service Loan Forgiveness program (PSLF). The PSLF is a loan forgiveness program for those interested in public service. After 10 years’ worth of payments, your remaining balance will be forgiven. To qualify, you will need to consolidate your loan to make it eligible for PSLF forgiveness. You will also need to work for an eligible employer.

    How to Apply for a PLUS Loan

    There are certain criteria borrowers must meet to qualify for a PLUS loan. 

    Parent PLUS 

    In order to qualify, you must: 

    • Be the biological or adoptive parent of a student enrolled in school at least half-time
    • Pass a credit check. If you cannot pass the credit check yourself, you can use an endorser. An endorser agrees to pay for the loan in case the borrower doesn’t repay the loan. The Department of Education can also approve you through an explanation of circumstances related to your credit history. 
    • Meet general eligibility requirements for federal student aid. You must be a citizen or eligible non-citizen to receive any kind of federal aid. 

    You will need to apply through the Direct PLUS application for parents. 

    On-hand, you will need:

    • A verified FSA ID
    • School name 
    • Personal information (name, address, email address, phone number)
    • Student information (name, address, social security number, date of birth)
    • Employer’s information

    Grad PLUS

    In order to qualify, you must: 

    • Be enrolled at least half-time in graduate or professional school. 
    • Pass a credit check. Just like parent PLUS loans, if you don’t pass the credit check, an endorser could help you secure a loan. The Department of Education can also approve you through an explanation of circumstances related to your credit history. 
    • Meet the same general eligibility requirements needed for federal student aid. 

    You will need to apply through the Direct PLUS application for graduate/professional students. 

    On-hand, you will need:

    • A verified FSA ID
    • School name 
    • Personal information (name, address, email address, phone number)
    • Employer’s information

    Final Thoughts

    Direct PLUS loans are a great way to pay for your college education. It’s important to weigh out what your options are to pay for college before deciding if a PLUS loan is ideal for you or your child.

  • Are International Students Eligible for Federal Student Aid?

    Are International Students Eligible for Federal Student Aid?

    As an international student, navigating the U.S. financial aid process can be tricky and stressful. You may have questions about whether, as an international student, you are eligible for certain types of aid. 

    In this article, we’ll talk about federal student aid and the eligibility criteria for international students. 

    Are International Students Eligible for Federal Student Aid?

    American students receive federal and state financial aid through the FAFSA in order to fund their education. In most cases, international students will be unable to receive federal student aid, but there are exceptions. If you are an international student and an eligible noncitizen, you can receive federal aid. 

    Eligible noncitizens include:

    • U.S. nationals, such as citizens of American Samoa or Swains Islands.
    • U.S. permanent residents with a permanent residence card – also known as a “green card.” 
    • Others with Arrival-Departure Record (I-94) from the Department of Homeland Security showing any of these statuses: refugees; asylum granted; indefinite parole; humanitarian parole; Cuban-Haitian entrant.
    • Those holding T nonimmigrant status 

    In order to fill out the FAFSA, you must have a Social Security Number (SSN) or an Alien Registration Number (ARN). This is why only U.S. citizens and eligible noncitizens can fill out the FAFSA and receive federal aid through this method. 

    What International Students Do Need To Know About Federal Aid

    Most international students can’t apply for federal aid through the FAFSA. However, some colleges might ask you to fill out a manual version of the FAFSA anyway. Colleges can use this information to determine what kinds of institutional aid students are eligible for. 

    When it comes to federal aid, there are a few other resources for you such as Fulbright grants for non-U.S. students wanting to study in America. These resources are great if you are a student interested in graduate school, conducting graduate research, or in becoming a foreign language teacher assistant at a college. 

    Can International Students Get Pell Grants?

    The federal Pell Grant program is the largest federal grant program offered to undergraduate students. This grant is designed to support students from low-income families. To qualify for the program, a student must demonstrate financial need by filling out the FAFSA.  

    What Financial Aid Can International Students Get?

    Even though you might not be eligible for federal student aid, there are other forms of aid that can help you cover the cost of attending college. 

    Institutional Aid 

    Colleges and universities can decide if international students receive financial aid on their behalf. It’s important to keep in mind that not all colleges and universities will offer aid for international students. Making a list of prospective colleges and making a note of whether or not they offer aid for you will help you find a school that covers your needs. 

    If the colleges you’re interested in offer financial aid for international students, they might require you to fill out certain forms to determine financial need and eligibility under their guidelines. 

    Examples of financial aid eligibility forms include:

    • International Student Financial Aid Application (ISFAA): Individual applications for different schools will be required. 
    • CSS Profile: Participating colleges/universities use this form so you can fill out a one-time form and submit it to select schools. 
    • Manual FAFSA form:. Because the online application requires an SSN or an ARN, the manual version reduces the need for one if you’re an international student. Filling the form out manually helps colleges/universities determine your eligibility for institutional aid. 

    Aside from need-based aid, some colleges might open up merit-based scholarships to international students that have excelled in their coursework. Reach out to the financial aid office of your prospective colleges to learn more about what their requirements are for these types of scholarships. 

    Financial Aid From Your Home Country

    Many foreign governments might have financial aid programs that help international students study in the United States. Speak to your home country’s department of education to learn more about the types of aid that they could offer you. If possible, speaking to your country’s embassy or consulate in the United States might help you find government-backed scholarships. 

    Tuition Waivers

    A tuition waiver allows you to not pay a portion of all of a college’s tuition for a certain amount of time. Not all schools will grant tuition waivers to international students but there are a significant amount of schools that do. Some schools will set requirements that you’ll need to meet in order to be granted a waiver, such as academic performance or involvement in a fellowship program. Speak to your prospective school’s financial aid office to see if they offer tuition waivers. 

    Student Loans

    If you need further assistance to pay for college, an international student loan might be something worth considering. Lenders can offer assistance based on your individual situation. 

    Final Thoughts 

    Applying for financial aid as an American student is already difficult enough. International students face major challenges in order to receive financial aid as well. However, there are schools in the U.S. that understand your needs and will work with you. Speak to the financial aid office of colleges/universities to determine what aid is available to you.

  • Are International Students Eligible for Student Loans?

    Are International Students Eligible for Student Loans?

    As an international student, attending college in the U.S. can be exciting. It can also be expensive. Since many U.S. students take out student loans to pay for college, you might be wondering if you can too.

    In this post, we’ll dive into the student loan eligibility of international students and the availability of student loans.

    Are International Students Eligible for Federal Student Loans?

    As an international student, you are eligible for federal student loans if you are an eligible noncitizen. Eligible students can apply for federal student loans by filling out the FAFSA.

    Eligible noncitizens include:

    • U.S. nationals, such as citizens of American Samoa or Swains Islands.
    • U.S. permanent residents with a permanent residence card – or “green card.”
    • Others with an Arrival-Departure Record (I-94) from the Department of Homeland Security showing any of these statuses: refugee; asylum granted; indefinite parole; humanitarian parole; Cuban-Haitian entrant.
    • Those holding T nonimmigrant status

    Are International Students Eligible for Private Student Loans?

    If you are unable to secure federal student loans because you are not an eligible noncitizen, you can still apply for private student loans.

    Private lenders will request proof of enrollment in an eligible program to lend to you. You’ll want to make sure that you have proper documentation, such as your student visa and tuition bill. Keep in mind that each private lender is unique, so they will each have their own requirements. 

    As an international student, it can be a challenge to secure loans on your own. While not impossible, having a cosigner can help you meet the requirements you otherwise wouldn’t by yourself. A cosigner typically has to be a U.S. citizen or permanent resident with good credit. This will help you secure private student loans with lower interest rates.

    However, if you don’t have a cosigner, you can still apply for private student loans. There are many lenders that offer private student loans specifically for international students.

    How Much Can an International Student Get in Student Loans?

    Typically, you can borrow up to the total cost of attendance, minus other aid received, depending on your school. However, each lender will have its own borrowing limits.

    To verify the cost of attendance at your respective school, talk to your school’s financial aid office. If your student loans are approved, the financial aid office will certify the loan amount.

    How to Find an International Student Loan

    It might be hard to figure out where to start if you’re navigating student loans for the first time. However, Sparrow is a great resource to help you find the best student loans for you.

    International students can use Sparrow to receive personalized rates on student loans. Many lenders allow international students to borrow if they have a U.S. citizen as a cosigner.

    Did you know that two of our lending partners focus primarily on international student loans? This puts your needs first! To compare international student loans side-by-side, Sparrow will be the best option for you!

    Final Thoughts

    You might have a lot of questions and worries about studying in the United States. Paying for college is a big part of the conversation, too. The good news is that you don’t have to go through it alone. With these resources on-hand, you are a step closer to studying in the United States. It’s a matter of finding the student loan that is right for you as an international student!

  • What is a Student Loan Grace Period?

    What is a Student Loan Grace Period?

    Before even starting college, you’ll imagine all the things that you can do with your degree. But then it hits you: student loans. The great news is that student loans include grace periods that give you time to plan before it’s time to pay.

    In this article, we’ll dive into what a student loan grace period is, their length, and their flexibility.

    What’s a “Grace Period”?

    A grace period is a portion of time after graduating where you don’t have to make any payments on your student loans. Instead, you start paying once the grace period is over. 

    How Long is a Student Loan Grace Period?

    Typically, student loan grace periods last six months after graduating or leaving college. However, your grace period depends on whether you took out a federal loan or a private loan.

    • Federal Direct subsidized & unsubsidized loans: Six months
    • Federal Stafford subsidized & unsubsidized loans: Six months
    • Federal PLUS loans: NONE (but there is a six month deferment period)
    • Federal Perkins loans: Nine months
    • Private student loans: Varies by lender. Learn more about your private student loan.

    The latest rates from Sparrow’s partners

    See a rate you like? Click Apply and we’ll take you to the right place to get started with the lender of your choosing.

    Compare your personalized, pre-qualified rates from these lenders in minutes.

    Find my rate

    Can You Pay Student Loans During Your Grace Period?

    Fortunately, you can begin to pay off your student loans during the grace period.

    You can begin making monthly payments as if there isn’t a grace period. It might help you budget for your student loans adequately if you start paying sooner. If you have federal student loans, exit counseling will show you the amount owed before graduating. At the same time, if you’re unable to make a payment as you had planned during your grace period, you’re off the hook.

    You can also pay off your loan’s interest if you’re not able to make full payments. Despite having a grace period, interest can still accrue toward your student loan. Before it’s added to your monthly balance, paying off that interest can ease the amount you’ll owe on a monthly basis. If this option is available to you, your lender will reach out to you.

    Can You Extend a Grace Period on Student Loans?

    If the six-month grace period isn’t enough, it is possible to extend it. However, the type of student loan you have determines the route you can take.

    Federal Student Loans

    A grace period can be extended if you are called to active military duty for more than 30 days before your grace period has ended. You’ll get another six-month grace period once you’re finished serving.

    If you return to school at least half time before the grace period ends, you’ll have another six-month grace period.

    What if you’re not planning on joining the military or going back to school? You could enroll in an income-driven repayment plan for $0 monthly payments. This option is worth considering if you’re struggling to find work after graduating. Check with your federal student loan servicer to see if you qualify. Another option could be to request deferment or forbearance on your loans. Depending on special circumstances, you could qualify for deferment or forbearance.

    Private Student Loans

    If you need an extension, lenders might extend your six-month period by three months. Deferment and forbearance might be an option to consider if your lender offers this. However it’s important to speak to your lender as soon as possible to see if they offer these options.

    Final Thoughts

    A grace period can ease the worry of having to pay back your student loans immediately. If you’re looking for a job or if you’re planning to move to another part of the country, take advantage of the time. You can also take this opportunity to get a head start on your student loan payments. Regardless of whatever you plan to do, it’s there to help you focus on the things that matter post-graduation.

    If you’re looking for private loans that offer grace periods, Sparrow is a great place to start. With our one-time application, you can automatically find rates fit for you. At the same time, you can easily compare student loans side-by-side. This can help you determine if the grace period is right for you. Take control of your future with Sparrow!

  • Variable vs Fixed Interest Rate Student Loans: Which is Better?

    Variable vs Fixed Interest Rate Student Loans: Which is Better?

    Whether you’re just applying for a student loan or you’re trying to refinance your student loans as a way to pay them off, you’ll often get the choice between a variable vs a fixed interest rate. You might be asking yourself, “what does that mean?”

    In this article, we’ll take a look at what variable and fixed rates are, how the interest rates are determined, and the pros and cons of each type of rate. By the end, you’ll be able to determine the best interest rate option for you! 

    What is a Variable Interest Rate? 

    Variable interest rates fluctuate over the course of your repayment term. This means that your monthly payments can change on a monthly basis because of the interest rates’ fluctuation. However, the interest rate tends to start a little lower than fixed interest rates, depending on your lender. Private student loans typically have both variable and fixed interest rate options. 

    >> MORE: What is the average student loan interest rate

    What is a Fixed Interest Rate? 

    A fixed interest rate is simply a rate that doesn’t change. The interest rate you received when you took out the loan will remain the same throughout the span of your repayment period.  Federal student loans are fixed. 

    >> MORE: Compare variable vs fixed interest rates across different lenders

    The latest rates from Sparrow’s partners

    See a rate you like? Click Apply and we’ll take you to the right place to get started with the lender of your choosing.

    Compare your personalized, pre-qualified rates from these lenders in minutes.

    Find my rate

    How are Interest Rates Determined? 

    Lenders have a wide range of criteria that they use to determine the variable or fixed rate of your student loans. Each lender is different but this section covers the overall idea of how most determine the rates. 

    How are Variable Interest Rates Determined?

    You might be wondering if a variable interest rate means that a lender will change the interest rate whenever it feels like it. (I know I did.)

    The simple answer is no. Variable rates are determined by two things: a fixed margin and a variable index.

    A fixed margin is set by your lender based on your ability to pay. They assess this by looking at your creditworthiness as well as the creditworthiness of your cosigner, if you have one. Generally, a higher credit score leads to a lower fixed margin.

    The variable index is based on a benchmark in the financial market, specifically the London Interbank Offered Rate (LIBOR). This rate is the average of the interest rates banks charge each other to borrow and lend money. As such, lenders would charge a market rate as well as the LIBOR rate on your student loans on a monthly basis. However, by 2023, LIBOR will be retired and replaced by the Secured Overnight Financing Rate (SOFR). This rate calculates the cost of borrowing cash overnight collateralized by Treasury securities.  

    For example, let’s say you have a $20,000 student loan with a fixed margin of 4% and an initial variable index of 1.5%, meaning that your overall variable rate is 5.5%. If the LIBOR, or whatever benchmark your lender, uses increases by 1% the following month, your variable interest rate for that month will be 6.5%. However, if that benchmark’s rate decreases by 2% the month after, your variable interest rate for that month will be 4.5%. 

    >> MORE: Compare student loan variable interest rates

    How are Fixed Interest Rates Determined?

    Similarly to the fixed margin in a variable interest rate, your creditworthiness (as well as your cosigner’s creditworthiness) could determine the fixed rate. Your lender might also have a standard fixed rate for student loan borrowers. 

    >> MORE: Compare student loan fixed interest rates

    Pros and Cons of Variable Interest Rates

    We discussed a few of the pros of variable interest rates, such as rates typically starting lower than fixed rates. Another advantage of variable interest rates is that you could save on interest if the rate doesn’t rise too much. Luckily, the LIBOR rates haven’t been on the increase in the last few years.

    However, variable interest rates are a gamble since they’re subject to change throughout the repayment period. Since the amount fluctuates, you could find yourself having a bad month in which the variable rate increases heavily. This change can make it difficult to pay. Secondly, variable rates are nearly unpredictable, meaning that your monthly payments will change from month to month. Your monthly payments and total costs will be pretty unpredictable throughout the span of your repayment terms. 

    Pros and Cons of Fixed Interest Rates

    Fixed rates are extremely predictable, since the rates are going to stay the same throughout your repayment terms. This quality allows you to plan accordingly for the future with the interest rates in mind. 

    However, variable interest rates could be lower than fixed rates during your loan’s repayment period. Accordingly, you might spend more money than if you had a variable interest rate. At the same time, fixed interest rates typically start higher than variable rates. 

    Which is Better?

    There’s really no answer for that, since it is ultimately up to you to determine the best option fit for you. Many borrowers might prefer fixed loans because it’s a safer bet and because it will help them budget and plan for the future while they pay for their student loans. However, you might determine that you are in a good position to take on a variable interest rate with the possibility of saving more if the interest rate index is low or remains the same from month to month during your repayment period. 

    Different factors might weigh into your decision, such as your career path and your financial situation while in college, so it’s important to think about how that will affect you. 

    >> MORE: Compare student loan interest rates

    Final Thoughts

    Determining the best interest rate for your student loan is simply up to you and how your finances are looking. After weighing the pros and cons of variable vs fixed interest rates, it will be easier to relate them back to you in deciding what works for you. 

    You don’t have to make this decision alone. Sparrow’s application allows you to find the best student loans with the best interest rates for you. The platform makes it easy for you to compare real pre-qualified rates without having to apply with lenders one-by-one. Save time by finding the ideal interest rate for you with Sparrow!

    Sparrow aims to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

  • How to Save Thousands on Student Loans with an Autopay Discount

    How to Save Thousands on Student Loans with an Autopay Discount

    Forgetting to pay a bill, especially your student loans, can be scary. Automating your payments is an easy way to help you keep track of your student loans and never miss a payment. However, did you know that autopay can also save you money? 

    In this post, we’ll dive into what autopay is, the potential savings you can earn, and if automating your student loan payments is right for you. 

    What is Autopay?

    Autopay is a convenient way to never miss a payment. On a monthly basis, autopay automatically withdraws money from the bank account your lender has on file.

    Different lenders have different terms for autopay, such as auto debt, automatic debit payments, or direct debit. 

    There are three main ways to make automatic payments: 

    1. Standard Autopay by the Lender: Through this method, you simply give your bank account details to your loan servicer. From there, you authorize them to withdraw your payment every month. 
    2. Online Bill Pay: When using online bill pay, you enter your lender as a recipient. Then, you can select an amount that will be automatically paid to the lender each month. This method is typically offered by banks to customers who log into their accounts online or through a mobile app. 
    3. Credit Card Bill Pay: If your servicer accepts credit card payments, you will be required to make automatic monthly withdrawals. It is similar to online bill pay, but with a credit card. 

    Autopay can help you reduce the worry of whether or not you made a payment on time, no matter the method of making the payment. 

    How Much of a Discount Does Autopay Get Me?

    The autopay discount varies by lender. Most lenders offer a 0.25% reduction in your student loan’s interest rate if you enroll in autopay for your monthly payments. 0.25% might not seem like a lot, but, depending on the repayment terms, it could save you quite a bit. 

    How Much Will an Autopay Discount Save Me?

    Knowing how much the 0.25% interest rate discount will save you is important before deciding to enroll in autopay. Let’s dive into an example. 

    Let’s say we have a $30,000 student loan with an initial interest rate of 5% under a 10-year repayment term. Without the 0.25% autopay discount toward your interest rate, you would be paying $38,184 over the life of your loan. However, with the 0.25% autopay discount, you would be paying $37,745, saving you $439 throughout your entire repayment term. 

    What if we double the student loan amount to $60,000 with an initial interest rate of 5% under a 20-year repayment term? Without the 0.25% autopay discount, you would be paying $95,034 over the life of your loan. However, with the autopay discount, you would be paying $93,056, saving you $1,978 in the same time frame. 

    While the amount might seem small, it’s a decent chunk of money that you could use for some really cool things. $1,978 could be used to pay rent or to go on vacation, but even $439 could be used to go on a nice shopping spree, make a car payment, or invest it into the stock market.

    How to Decide if Automatic Student Loan Payments are Right for You 

    Overall, your student loan principal and repayment terms determine the savings you can have from an autopay discount. While saving money on your student loans is appealing, it’s important to determine if opting in to autopay is a good idea for you.

    Pros and Cons of Student Loan Autopay

    Aside from saving you 0.25% on your interest rate, let’s look at some other pros and cons of student loan autopay. 

    Pros of Student Loan Autopay

    • You won’t miss your payments: You won’t end up in delinquency or default if you set up autopay since the payments will be made for you automatically. 
    • Some lenders allow you to make greater-than-minimum payments: If you are in a financial situation that allows you to pay more than the monthly minimum, opting into greater-than-minimum autopay payments could allow you to pay off your loans faster. 

    Cons of Student Loan Autopay

    • Overdraft fees: You have to make sure that you have enough money in your bank account to cover the automatic payments. If you don’t, you’d have to worry about a late payment as well as an overdraft or insufficient funds fee. Make sure you are confident you won’t run into any issues with over-drafting before opting into autopay. 
    • It’s hard to cancel: If you are having a hard time keeping up with the automatic payments, it might be difficult to cancel. Most times, you’ll have to contact your lender and do so in writing so they can stop. Not to mention that you will have to cancel well before your next repayment period if you want your automatic payments to stop sooner than later. 

    If you believe that it will be difficult to keep up with autopay on time, allowing your lender to make automatic payments toward your student loans might not be the best option for you.

    How to Set Up Student Loan Autopay 

    Before you set up autopay, you’ll have to know who your loan servicer is. A loan servicer is the company that manages the loan for your lender. To find your student loan servicer, you can log in to your student loan portal to determine this information.

    If you are unable to find the information that way, you can contact the lender directly to ask for the information. This will help you determine what your servicer offers when it comes to autopay discounts as well as the terms and conditions of automatic payments. 

    From here, make sure that you can afford to enroll in autopay. Go over your finances to make sure that you can budget enough money in your account in time for each autopay period. Some servicers allow you to choose your own repayment date, meaning that you could even set up autopay close to when your payday is, making it easier for you to know how much money you have after making a student loan payment. 

    Finally, enroll! As said earlier, many student loan servicers provide user-friendly online student loan portals with features that will allow you to enroll in autopay yourself. If your servicer doesn’t, you can call them so that they can set it up for you. Regardless, you will need to have your bank account information handy, such as your account number, your bank’s routing number, or your credit card if your servicer allows you to make credit card payments. 

    Final Thoughts

    Determining whether or not to set up autopay is up to you. Everybody’s financial situation is different, and every servicer is different as well. Regardless, you can expect substantial savings on your student loans if you decide to enroll in autopay. You can use the savings to pay your student loans sooner, put it into a savings account, or even use it to invest into a company. 

    If you’re looking for a private lender with an autopay discount, Sparrow can help you find the best option for you. Sparrow makes it easy to find rates ideal for you and also makes it easier to configure an automatic payment schedule for each loan, saving you time (and as you now know, money!).

  • What is Public Service Loan Forgiveness?

    What is Public Service Loan Forgiveness?

    In October 2021, the U.S. Department of Education announced changes to the Public Service Loan Forgiveness Program (PSLF), adding a temporary period in which borrowers are able to receive credit for payments that did not qualify for this program in the past. With the new changes to the program, over 100,000 borrowers now qualify for loan forgiveness and the Biden administration could potentially forgive up to $6.2 billion in student debt. 

    You might be wondering what this program even is or who qualifies for loan forgiveness under Public Service Loan Forgiveness. In this article, we’ll dive further into what the PSLF program is, what loans the program covers, what jobs might make you eligible for this program, and how you could potentially apply for this program. 

    What is Public Service Loan Forgiveness?

    The Public Service Loan Forgiveness Program is a government program created under the College Cost Reduction and Access Act of 2007. The goal of the program is to ease the burden of student loan debt on qualified public service workers. It is also a way to encourage graduating students to enter careers that serve the public interest.

    How Does Public Service Loan Forgiveness Work?

    After making 120 on-time, qualifying, monthly payments on their Direct loans, or 10 years-worth of payments, while working for a qualifying employee, the remainder of a person’s federal student debt balance will be forgiven. 

    Unfortunately, private loans do not qualify for the program.

    What Jobs are Eligible for Public Service Loan Forgiveness?

    To qualify for the Public Service Loan Forgiveness Program, you’d have to be employed by a qualifying U.S. federal, state, local, or non-profit organization. Essentially, your job role wouldn’t be what makes you eligible for the program; whoever your employer is determines your qualifications. 

    Regardless, there are a plethora of full-time public service roles that will make you eligible. Here are a few examples:

    • Teacher, staff member, or administrator at a public school
    • Employee at a federal, state, or local agency 
    • Law enforcement officer at the federal, state, or local level
    • Military serviceman
    • Social worker in a public service agency 
    • Public health professional such as a doctor, nurse, or administrator
    • Employee at a 501(c)(3) tax exempt organization 

    Volunteering in a full-time role at AmeriCorps or the PeaceCorp also counts as qualifying employment for the program. 

    How Do I Apply for the Public Service Loan Forgiveness? 

    If you believe that you meet all the requirements for eligibility, you should fill out the Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification and Application annually or when you change employers to ensure that you’re on the right track. The PSLF Help Tool makes it easier to know if you qualify as well as what steps you can take to qualify for the program. 

    It’s important to keep in mind that the kind of loans that you have matters when applying for the PSLF program. As such, keep in mind that only Direct loans, including Parent PLUS loans and Grad PLUS loans qualify for the program. If you have any Perkins loans, loans issued by your college/university or Federal Family Education Loans (FFEL), you can consolidate them in order to make them eligible for the PSLF program thanks to the new waiver issued on Oct, 6, 2021. Consolidating allows you to combine multiple federal loans into one loan.

    However, if you qualify for the Perkins loan forgiveness program, we suggest you move forward with that program and refrain from consolidating that loan, since it requires you to work in any full-time public service role for five years. 

    Again, private loans do not qualify for the program.

    Also, keep in mind that in order to be eligible for the PSLF program, you must make 120 “qualifying” payments. Qualifying means:

    • A payment made after Oct. 1, 2007
    • Using specific income-based repayment plans 
    • While employed full-time by a qualifying employer

    As such, keep all of this information with you to ensure that you are indeed eligible for the program before applying. 

    How Much Can Be Forgiven With the Public Service Loan Forgiveness Program?

    There’s no set amount that the program forgives. The PSLF program forgives the remaining balance of your Direct loans after making 120 qualifying payments. 

    How Does COVID Impact the PSLF Program? 

    The U.S. Department of Education has issued many COVID-19 relief efforts that address the economic impact of the pandemic on students and paying for student loans. Here are a few ways that COVID is impacting the PSLF program. 

    Student Loan Repayment Pause

    In December 2021, the Department of Education extended the student loan repayment pause through May 1, 2022. This means that loan repayments are suspended until that date. At the same time, anybody making payments on their qualifying student loans through May 1 will face a 0% interest rate, allowing them to save money and pay back their loans faster. This wouldn’t be a good idea for those applying for the PSLF as not paying during this period will maximize the amount of debt that you can get forgiven. 

    Also, if an individual’s federal loans are in default, the Department of Education will stop collections on those loans through May 1.

    For those qualifying for Public Service Loan Forgiveness, if you have non-defaulted Direct loans and work full-time for a qualifying employer, you can continue to earn credit toward the program as if you paid regularly, essentially making $0 payments during this period of time. At the same time, if you made any payments during the payment pause period (March 13, 2020 through May 1, 2022), you can get a refund and still earn credit toward the program. 

    Keep in mind that the Biden administration is considering extending the student loan repayment pause again. 

    Limited-Time PSLF Waiver 

    Earlier, we discussed the Department of Education announcing changes in October that allowed borrowers to receive credit for previously ineligible payments as well as the potential impact it may have on borrowers. Let’s talk about what that means. 

    This change mainly affects anybody with any type of federal loans that didn’t originally qualify for the PSLF, such as FFEL program loans, Perkins loans, or older loans such as the Federally Insured Student Loans or National Defense Student Loans. Anybody who now qualifies for this waiver must consolidate their federal student loans by Oct. 31, 2022 in order to be eligible. 

    Qualifying payment plans are waived as well, meaning that until Oct. 31, 2022, periods of repayment under any plan count. At the same time, past periods of repayment before consolidation count toward the PSLF program, as well as other periods of repayment that were made late or for less than the amount due. 

    Individuals that received Teacher Loan Forgiveness are also affected by this waiver. Any period of service that led to eligibility will also count for the PSLF. In the past, those initial five years of full-time teaching couldn’t count for the PSLF, but they will now for a temporary period. 

    What if I Don’t Qualify for Public Service Loan Forgiveness? 

    If you meet the requirements but somehow get a notice that you don’t qualify for the PSLF program, don’t give up. The new waiver makes it easier for more borrowers to qualify. Sometimes, because of your employer, you may not be able to apply. 

    You could potentially find other loan forgiveness programs that you may qualify for. For example, if your school closes while you’re enrolled or soon after you withdraw, you may be eligible for discharge of your student loans.

    More resources and programs can be found on the federal student aid website.

    Is Public Service Loan Forgiveness Worth It?

    If you owe a large amount of student loan debt, this might be something to consider, as it will forgive a large amount of money after making 120 consecutive payments toward your student loan debt. However, 120 payments (or 10 years-worth of payments) is a long time and, over time, your loans will accumulate interest. At the same time, the program has received many complaints, since not many people have been able to receive student loan forgiveness under this program. 

    On the flip side, because of COVID-19’s impact on the student loan repayment process, it might be beneficial to at least consider this program, especially if you are passionate about public service. The PSLF program is worth it if you are truly invested in public service roles and intend to work in this sector in the long-run. However, deciding to work in public service simply to get debt forgiven under PSLF isn’t the most informed decision, since you won’t be passionate about this role and because, as is, 98% of PSLF applicants have found themselves rejected for forgiveness in the past.

    Final Thoughts 

    The Public Service Loan Forgiveness program is a great option for borrowers that are currently working in public service roles or for students that intend to after graduation. However, it’s important to weigh out the pros and cons of the program, whether or not you’re eligible, and the current climate around student loans, before deciding whether or not to go through the 10-year process of qualifying for the program. 

    As the student loan crisis continues in the middle of the COVID-19 pandemic, there are multiple efforts by the federal government to alleviate the economic burden of student loans. This is definitely a program to consider if you need help paying off your student loans and if you are passionate about public service and making an impact at the federal, state, or local level. 

  • How to Compare Student Loan Repayment Terms

    How to Compare Student Loan Repayment Terms

    If you’re considering taking out a private student loan to fund your education, it’s important to carefully review and compare the repayment terms offered by different lenders. Private student loan repayment terms can vary widely and can have a significant impact on the total cost of your loan, as well as your ability to manage your debt after graduation.

    In this post, we’ll dive further into the different terms that are available depending on your private student loan, how longer terms affect monthly repayment plans, and the tools available to you to easily compare student loan repayment terms side by side. 

    Private Student Loan Repayment Terms

    Private student loans accrue interest while you are in school. Federal student loans have the potential to accrue interest while enrolled in school, but it depends on the loan you take out, such as a federal unsubsidized loan. Regardless, most private and federal repayment plans don’t start until about six months after graduation. 

    Each lender is unique and as such, they will offer different repayment options. However, there are four common repayment plans. 

    Keep in mind that the repayment plan you select depends on your individual needs. Here’s a little more background on each one:

    Immediate Repayment

    With Immediate Repayment, you will be able to make monthly payments on your loan as soon as it is disbursed. Making monthly payments right after your loan is disbursed can help you minimize the amount of interest that accrues and save you money in the long run.

    However, you’d be a college student while making these payments. If the stereotypes of eating ramen and pizza pockets to make ends meet tell us anything, it’s that it could be really difficult for many students to make consistent monthly payments. If you plan on having a job while in college, it might make sense for you. 

    Interest-Only 

    Your lender would allow you to only make interest-only payments while you are in school. With an interest-only repayment plan, the borrower only has to worry about paying back the interest that has accrued on the loan each month while in school. For example, if a loan of $50,000 accrued $50 in interest that month, you’d only be responsible for those $50 that month. 

    After you graduate, it might be easier for you to make monthly payments toward your student loans. Because interest will compound, making interest-only payments will reduce the total amount of interest that you pay over time. At the same time, it might also be more manageable to pay off the interest of your loans compared to making payments going toward your student loans and the accrued interest. 

    Similar to immediate repayment plans, it might be a financial burden to enroll in an interest-only repayment plan while you are in college since you would still have to pay interest on your loans while studying. 

    Fixed Monthly Payments

    Fixed monthly payments, also known as partial interest repayment terms, allow borrowers to make fixed monthly payments while still enrolled in college. Fixed payments are typically between $20 and $50 and go toward your interest, helping you keep the overall debt amount lower by keeping the interest from accruing. For some students, this might be more manageable since they would have to pay a little bit of money that will go toward their interest rate, compared to other repayment plans.

    However, by the time you graduate, you’re still going to find yourself having to pay more than you borrowed due to the partial interest that you didn’t pay with your plan. Yet, you could expect your loan balance to not grow as much thanks to at least paying some of that partial interest. 

    Full Deferment 

    A full deferment repayment plan is similar to how federal student loans work, in which students can expect to start paying off their loans post-graduation. Under this plan, you wouldn’t be responsible for paying off your student loans while you’re enrolled in school, giving you time to plan. Many lenders offer a six month grace period after graduation, making it easier for recent graduates to find employment without having to worry just yet of their student loans. 

    This repayment plan does have its drawbacks, particularly that your loan will accrue interest while you are studying. As such, your monthly payments may be bigger, and thus, it could take you longer to finish paying off your loans.

    How is a Monthly Loan Payment Affected by a Longer Term?

    Student loan repayment periods range in length, roughly between 10 to 30 years. As such, you’d think that with the long period of time you have to pay off your loans, your monthly payments will be low. While that is true, keep in mind that loans accrue interest. If you find yourself with a long-term student loan, you’ll still be paying a lot since you’ll also be paying for the interest of the loan. The longer the term, the bigger the interest. Shorter repayment periods tend to attack debt more aggressively, and thus, the monthly payments will be higher than they would be on a longer repayment period. 

    Compare Standard Repayment Terms Side-by-Side

    How would a loan differ based on the repayment terms? Perhaps comparing terms side by side might be an easy way to see for yourself. 

    By using any student loan calculator online, you can determine how the standard loan repayment terms might affect your monthly payments, but also the long-term cost of the loan. 

    Let’s say you have a $30,000 loan with a 5% interest rate. Under a 10-year repayment term, you can expect to pay $318 a month. However, the lifetime cost of your student loan would be $38,184 paid over 10 years. 

    What if we use the same loan with the same interest rate but with a longer term, such as 20 years. While your monthly payments are significantly less, $198, the lifetime cost of your student loan would be $47,517 over 20 years. 

    What if we try one more, with the same loan, interest rate, but a shorter term, like 5 years? Your monthly payments will be $566. However, the lifetime cost of this student loan would be $33,968 paid over 5 years. 

    Since interest is compounded monthly, repayment plans with shorter terms will help you tackle more debt at a faster rate. Keep this in mind while you’re in the market for a student loan. 

    How to Figure Out Which Repayment Term Will Be Best for You 

    Aside from the loan simulator, there are many other resources that can help you find the best repayment plan for you. 

    The loan simulator, a tool created by the Office of Federal Student Aid, allows you to get a first-look at the federal student loan repayment plans you may qualify for if you’re looking to find repayment strategies, if you’re struggling with paying off your student loans, or if you want to potentially borrow more. 

    Sparrow, on the other hand, is a great resource if you’re looking into private student loans. Our platform gets you personalized rates and allows you to compare multiple loan offers from different private lenders side by side. Lenders on the platform offer a wide range of repayment options, such as immediate repayment, fixed monthly payments, interest-only payments, and full deferment payments. 

    Final Thoughts 

    Student loan repayment terms are complicated, regardless of whether you have public or private loans. The good news is that there are so many different options available to help you find the right repayment plans for you. It’s simply a matter of being able to compare your options and weigh out the right fit based on your needs as a college student and the loans that are available to you. 

    Take the next step in conquering your student loans by creating a free Sparrow account. Apply once and get real rates fit for your unique financial situation. The best part: the platform is completely free and won’t impact your credit score! 

  • What is Work-Study?

    What is Work-Study?

    There’s no feeling like the feeling of finally getting your financial aid package. Congrats! 

    As you’re going through your financial aid package, you might see something along the lines of “Federal Work-Study” and an amount attached to it. What exactly does that mean? 

    In this article, we’ll break down what federal work-study is and if it’s a good idea to accept it. 

    What Is Work-Study?

    Work-study is a federal aid program that provides part-time jobs to undergraduate and graduate students with financial need. While work-study aid won’t completely cover the cost of college, it can help you lower the amount you need to borrow.

    Who is Eligible for Work-Study?

    To qualify for work-study, you must demonstrate financial need, which is determined by the information you provide on the FAFSA. Both full-time and part-time undergraduate, graduate, and professional students are eligible for the work-study program. 

    That said, you may qualify for work-study but be ineligible to receive it if your school does not participate in the federal work-study program. Around 3,400 postsecondary institutions participate.

    Additionally, receiving federal work-study aid in your financial aid package does not guarantee you a job in the program. The funds will only be available to you if you secure a work-study job through your college or university.

    Jobs in the Work-Study Program

    If you receive federal work-study aid, it is your responsibility to find a job within the program if you actually want to receive the funds. The jobs available will differ from school to school, although most schools offer both on-campus and off-campus opportunities. 

    Some common on-campus opportunities include working as a library assistant, a department receptionist, or as a cashier at your school’s dining hall. Some common off-campus opportunities include working for non-profit organizations and public agencies, providing support in a variety of areas. That said, the exact work-study job you take on will depend on what your college/university offers and what off-campus opportunities are available to you.

    Remember, just because you received work-study aid in your financial aid package does not mean that you will automatically get a job. Some schools might match students with a job on-campus or off-campus, but most will require that you seek out these opportunities for yourself. You should speak to your financial aid office to learn more about what the process looks like at your school and what opportunities are available.

    How Much Does Work-Study Pay?

    The amount of money you make through a work-study job depends on when you applied for work-study, your level of financial need, and the funds your school has for the work-study program. 

    That said, jobs under the work-study program will pay at least $7.25 per hour, per federal regulations. If the state minimum wage is higher, you’ll earn at least that amount. According to a 2020 report by Sallie Mae, the average work-study award was about $1,847 for students with an eligible job. 

    Keep in mind that in order to receive the entire amount of work-study aid you are eligible to receive, you must work enough hours to earn it. For example, if you received up to $1,847 in work-study aid, and the wage of your work-study job is $7.25 per hour, you will need to work around 254 hours total to earn the entire aid award. That said, some colleges and universities may cap the amount of hours you can work per week, often to ensure that students can balance their paid work and their classwork. If you have questions about how much you can work, reach out to your school’s financial aid office.

    What Can You Spend Work-Study Aid On?

    Unlike other forms of financial aid, you’ll be paid directly by check or direct deposit into your bank account. However, you can always opt to have the money credited into your student account to cover the cost of tuition or housing.

    Regardless, there really isn’t a requirement to use your work-study funds for anything specific, so feel free to spend your hard-earned money on groceries or other expenses you need to cover. 

    Should I Accept Federal Work-Study Aid? 

    Before accepting any aid, weigh out all the financial aid offered to you and accept it intentionally. When it comes to it, accept your aid in the following order: 

    Scholarships/Grants (free money) → Work-Study (earned money) → Loans (borrowed money)

    Always accept loans at the end as they may be more costly in the long run with the accrued interest that will add up post-graduation. Work-study will at least give you an opportunity to fund your education by way of a steady job on or off-campus. The less money you have to borrow, the better. 

    Frequently Asked Questions About Federal Work-Study

    Is Work-Study the Same as an Internship?

    No, work-study is not the same as an internship. While work-study is a need-based, federally-run program. Internships are often conducted by public and private companies and do not consider your financial need when hiring. Also, while work-study jobs are always paid, internships are often unpaid opportunities.

    What are the Disadvantages of Work-Study?

    While there are few disadvantages of receiving work-study aid, some of the commonly reported ones are:

    • Jobs may be scarce or competitive to receive.
    • Compensation may be lower than other non-work-study jobs on or off campus.
    • There may be a cap on the number of hours you can work per week.

    Does Work-Study Count as Income on the FAFSA?

    Work-study funds are considered taxable income, however, it won’t be counted in the calculations that determine your financial aid eligibility in future years. So, make sure to report earned work-study aid as income, but rest assured that it won’t count against you when filing the FAFSA in future years.

    To Wrap Up 

    Sometimes, participating or not participating in the program might impact a student’s decision to attend a certain college/university. But, you’re taking an important step in trying to learn more about what your aid means before accepting it. Way to be proactive in your collegiate journey!

    If you haven’t already done so, fill out the FAFSA as soon as possible. Filling out the form sooner might mean more work-study aid. When it comes to the federal work-study program, it’s important to reach out to your college/university’s financial aid office to determine what jobs are available.