Responsible borrowing for college

00:00 Congratulations. You’ve enrolled at the University, and now you’re on the path to reaching your goal of completing your program. 00:08 An important step on the path is creating an educational financial plan. 00:12 Having a financial plan allows you to estimate and understand the full cost of tuition and fees for your program, as well as your year-by-year funding. 00:22 It is important to plan from the beginning by knowing how you will pay for the full program and what payment options are available. 00:30 At University of Phoenix, we know that each student is unique, and we know that every student’s financial situation is different. 00:37 Each student will be responsible for paying tuition, and that’s why it’s important to know the funding options that are available. That’s what this short video is about. 00:46 So, what exactly is financial aid, and where does it come from? Financial aid is funding assistance that comes from a source outside of a student’s ways and means, including scholarships, state grants and employer programs. 00:59 Federal financial assistance comes in the form of either loans or grants. Let us break that down for you. 01:06 A loan is borrowed money. Loans need to be paid back with interest. The more you borrow, the higher your standard monthly payment will be. 01:14 This is why we suggest borrowing only as much as you actually need and finding non-loan funds to pay for some or all of your tuition. 01:23 University of Phoenix participates in the Federal Direct Loan Program, which includes two basic kinds of loans: subsidized and unsubsidized. 01:33 Subsidized loans are for undergraduate students with demonstrated financial need. The student pays no interest while either in school or during deferment periods. 01:44 Unsubsidized loans are not based on financial need. Interest starts to accrue as soon as the loan is disbursed. 01:51 If you have the ability to reduce your loan requests, start by reducing or eliminating your unsubsidized loans. 01:58 The Direct Loan Program limits what you can borrow each year and in total. 02:02 The total lifetime loan limit for undergraduate students is $57,500, and if you have previous student loans, it is important that you plan how you can complete your program before reaching that limit. 02:16 Typically, you must begin repayment on student loans when you successfully complete your degree program or if you withdraw from the University. 02:24 Some loans also provide a grace period between the completion of your program or withdrawal and the beginning of repayment. 02:32 Payments are not required while you’re enrolled at least half time, but the good news is that federal loans can be prepaid. 02:38 If you’re able to make payments of interest or principal while in school, your future standard monthly payment will be lower. 02:46 Financial aid also comes in the form of grants. 02:50 Generally speaking, students are not required to repay their grants. Anyone can apply for a grant, but not all applicants are eligible. 02:58 Once your application is complete, processing typically takes six to eight weeks before your funds are awarded. 03:04 Remember that a lack of attendance or failure to start a course as scheduled may delay, cancel or interrupt funding altogether. 03:12 Review your financial plan or contact your finance advisor with any questions. 03:16 We recommend that you borrow wisely. This means assessing your educational expenses and other requirements so you borrow only what you actually need. 03:26 The less you borrow, the lower your standard monthly payment. Thanks for watching. 03:32 We wish you every success as you pursue your educational opportunities at University of Phoenix.