Other Financing Options
While the financial aid package is intended to meet the demonstrated need of each family, most families must finance the "expected family contribution" over a number of months or years.
Monthly Payment Plan:
- Families can spread their payments out over 10, 11 or 12 months
- Hamilton partners with the TuitionPay! by Sallie Mae Payment Plan
- $45 annual fee
- No interest charged
- Consider financing through a payment plan before taking additional loans
New loan information for 2010-2011
For the 2010-2011 academic year the Financial Aid Office will change the way we process student and parent federal loans. Prior to 2010-2011, we participated in the Federal Family Education Loan Program (FFELP), which was a lender-based process. Effective with the 2010-2011 academic year, all schools have been mandated to participate in the
Direct Lending program. FFELP-based loans will no longer be available. With Direct Lending, the lender is the U.S. Department of Education; there are no banks or other financial institutions.
Parent Loan for Undergraduate Students (PLUS):
- Parent loan available to cover the difference between the cost of attendance and financial aid
- Borrower must be a U.S. citizen or permanent resident
- Borrower must pre-qualify (pass a credit check)
- 7.9% fixed interest rate
- An origination fee (4%) will be removed prior to disbursement
- An up-front 1.5% rebate is offered to borrowers as a repayment incentive
- Borrowers must make their first twelve monthly payments on time to retain this rebate
- Parents must initiate the borrowing process by completing the Hamilton College Parent Direct PLUS Loan Request Form and online Master Promissory Note
- If parent's credit is denied, the parent can re-apply with an endorser. As an alternative, the student is eligible to borrow an additional unsubsidized loan in the amount of $4,000 for 1st and 2nd year students, $5,000 for 3rd and 4th year students. The parent must denote this on his/her application (Section III). In addition, the student must complete the appropriate section of the Hamilton College Student Direct Loan Request Form (Section II).
- Loan proceeds will be creditted directly to the student account within 10 days prior to the start of classes for both semesters
- Interest begins to accrue on the loan from the date of the first disbursement
- Repayment begins within 60 days after the second disbursement of the loan
- Parent can request loan deferment from the U.S. Department of Education to postpone repayment for up to 6 months after student graduates
- Additional information is available via the Direct Loan Website and the Direct Loan Basics for Parents brochure.
Combination Plan:
- Calculate the amount your family can afford to pay per month and sign-up for the monthly payment plan
- Take the maximum amount of Direct Loans for the student (subsidized and unsubsidized)
- Bridge any remaining gap with a PLUS Loan and defer payments
Alternative Loan:
- Students should borrow the maximum amount allowed in a Direct Loan before an Alternative Loan
- Parents should explore a PLUS Loan before an Alternative Loan
- Compare rates, benefits and repayment options
- Students will usually need a co-signer (i.e. parent)
- Before the Financial Aid Office will certify an alternative loan, federal law mandates that we counsel a student on the benefits of federal loans over an alternative loan
Other Options (best to consult a Financial Advisor):
Home Equity Loans
pro: interest is typically tax deductible; long repayment periods
con: dependent on equity in home; home is collateral; may have closing costs
IRA Draws
pro: early withdraws for qualified education expenses usually not subject to tax penalties
con: future interest lost on investment; potentially putting retirement at risk
Life Insurance
pro: usually borrowed from cash value or dividends of whole life insurance; usually low fixed interest rate
con: if not repaid, reduces the investment earnings and death benefits; not usually tax deductible
Retirement Savings (401k and 403b)
pro: withdraws may be allowed for qualified education expenses
con: future interest lost on investment; potentially putting retirement at risk; taxed on withdrawal
Credit Cards
This is not recommended. Do not finance any costs associated with college on your credit card. Educational loans offer better rates and advantages than credit cards.
