Navigating SCAD Student Loans: Options and Repayment Strategies
The Savannah College of Art and Design (SCAD) prepares students for creative professions, but the cost of attendance can lead to significant student loan debt. Understanding the available student loan options and repayment strategies is crucial for SCAD students and their families. This article provides a comprehensive overview of federal and private loan options, repayment plans, and resources available to help manage student debt effectively.
Understanding the Landscape of SCAD Student Debt
Earning a SCAD degree can be expensive. The Department of Education’s College Scorecard provides insights into college costs, graduation rates, and post-college earnings. SCAD student borrowers face median federal debt ranging from $24,500 to $27,000, with 47% of students taking out loans. Parent PLUS borrowers at SCAD carry an average debt of $91,960, and 15% to 25% of parents borrow PLUS loans. SCAD has one of the highest Parent PLUS Loan balances in the country, making it essential for families to carefully consider their borrowing options.
Federal Student Loan Options
The primary source for federal student loans is the Department of Education’s Direct Loan Program. This program offers low-interest loans directly to students and parents.
Direct Loans for Students
Dependent first-year students can borrow up to $5,500 in combined federal subsidized and unsubsidized loans. The amount disbursed is reduced by a loan fee assessed by the Department of Education. SCAD utilizes active confirmation on all student direct loans before crediting the student's account.
PLUS Loans for Parents
Parents can also obtain PLUS loans to help cover the cost of their child's education. If you have questions about your PLUS loan, contact the Student Loan Support Center at 800.557.7394. You can inquire about disputing your credit report, clearing up adverse credit, or obtaining paperwork for an endorser.
Read also: SCAD Course Syllabi
Private Student Loan Options
Institutional scholarships, outside scholarships, federal/state aid programs, and personal funds may fall short of a student's anticipated budget for educational expenses. Alternative (credit-based) loans from private lenders are one source of funding that may help compensate for any shortfall. Credit-based loans from private lenders are one source of funding that may help compensate for any shortfall. Families should shop around and consider their options before applying. Families and students should be aware that private loans may be a more expensive way of borrowing. Families should review and consider all federal student loan options first as federal loans are often more affordable and provide more flexible repayment options. The requirements that a private lender may have for a student loan vary, but typically borrowers must have a good credit history or a credit-worthy co-signer. Students usually must be enrolled at least half-time to receive loan funds (exceptions may apply). The best source of information for private education loans is the lender. If a borrower is approved for a private loan, federal regulations require lenders to provide borrowers with a 10- to 14-day right of rescission (or cancellation period) before the loan can be disbursed to SCAD. ELMSelect is a free online tool to help find and compare lenders and student loans that match your needs. This listing is neither exhaustive, nor an endorsement of any particular student loan lenders.
Sallie Mae Smart Option Student Loan
The Sallie Mae Smart Option Student Loan can help SCAD students in several ways. Firstly, it offers flexible repayment options that can help students manage their loan payments according to their financial situation. This means that students can choose to make payments while they are in school, or they can choose to defer payments until after graduation. In addition, the Smart Option Student Loan offers competitive interest rates, which can help reduce the overall cost of borrowing for SCAD students. The Smart Option Student Loan also offers a range of benefits for borrowers, including a graduation reward that provides a 2% reduction in the loan balance for borrowers who graduate or successfully complete their program of study. Finally, the Smart Option Student Loan has no origination fees or prepayment penalties, which means that SCAD students can borrow what they need without having to worry about any hidden costs or fees. Overall, the Smart Option Student Loan can help SCAD students finance their education in a smart and affordable way, giving them the resources they need to achieve their academic and professional goals.
Repayment Options for Federal Loans
Federal student loans offer various repayment plans to suit different financial situations.
Standard Repayment Plan
The Standard Repayment Plan involves fixed monthly payments over a 10-year period.
Income-Driven Repayment (IDR) Plans
Students with federal student loans have access to flexible income-driven repayment (IDR) plans. If you’re struggling to make payments, an IDR plan will cap your monthly payment at 10% to 20% of your discretionary income. Each plan has its own payment calculation and forgiveness guidelines.
Read also: Academics at SCAD Savannah
For example, if Dusty has $40,000 in federal student debt with an average interest rate of 6%, his monthly payment would start out at $85 and adjust each year based on his discretionary income and family size.
Public Service Loan Forgiveness (PSLF)
Borrowers working in the public sector, such as for a city or nonprofit organization, may be eligible for Public Service Loan Forgiveness (PSLF). Under PSLF, the remaining loan balance is forgiven tax-free after 10 years of qualifying payments.
Repayment Options for Parent PLUS Loans
Unfortunately, Parent PLUS borrowers aren’t eligible for these federal IDR plans.
Refinancing Student Loans
Refinancing is a great way to lower your interest rate, reduce your monthly payment or get better loan terms.
For example, if Isaiah took out $50,000 in Savannah College of Art and Design Parent PLUS Loans with an average interest rate of 7%, refinancing could lead to significant savings.
Read also: Tuition at SCAD
Additional Resources and Support
Inceptia
SCAD has partnered with Inceptia, a division of the National Student Loan Program, to give you a leg up on your financial future with Loan Summary and post-graduation loan outreach. Loan Summary allows students to view their student loan balances, understand and estimate repayment, and learn about resources to help make informed borrowing decisions. While you are in your grace period, their counselors may reach out to you to answer questions you may have on your repayment options. Inceptia's services are completely free and confidential. They will not be collecting money from you. Inceptia's nonprofit purpose is to help you find answers to your questions and solutions to your issues.
Loan Servicers
A loan servicer is a company that handles the billing and other services on a federal student loan. The loan servicer will work with the student on repayment plans and loan consolidation and will assist with other tasks related to their federal student loan. It is important that a borrower maintains contact with their loan servicer. If a borrower's circumstances change at any time during your repayment period, the loan servicer will be able to help.
SCAD Payment Plan
SCAD is pleased to offer students an automated payment plan administered by TouchNet. dollars from a credit card or bank account in three installments of the quarterly balance due. Students who choose to participate in the payment plan are strongly encouraged to enroll prior to the appropriate payment due date to avoid a late payment penalty of 5 percent of the amount due. Students who enroll in the payment plan are required to approve the contract with an electronic signature. The payer(s) can then access the account online in TouchNet, review payment plan status and deadlines, make a payment or schedule automatic payments. To enroll, visit the "Student account" channel on the personal info page on MySCAD. Click on the "Your student account" link in the channel to launch the TouchNet account in a new window of your Web browser.
Scholarships and Grants
SCAD accepts scholarships from outside sources to help fund your education. When searching for scholarship opportunities, identify reputable and relevant organizations to improve your results. Consider local community organizations, professional associations supporting your career field, and groups or companies specific to your major. Avoid any scholarship that requires an application fee or asks for sensitive personal information, such as your Social Security number. Many states offer vocational rehabilitation benefits to qualified students requiring these services.
Avoiding Common Misconceptions
It's important to avoid common misconceptions about student loans. Understand that unlike grants and scholarships, a loan is money that must be repaid with interest. Student loans can come from the federal government or from private sources such as a bank or financial institution.
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