The “new normal”. Hopefully the new normal includes seeing many more students, safely back on campus, enjoying the higher education journey. With that being said, we are happy to announce that this year, RISLA is offering our lowest student loan rates in our history of offering non-federal, private student loans for students attending school.
We are pleased to offer our low fixed rates for the 2021/2022 academic year, starting as low as 2.99% APR 1,2 for our 10-Year Immediate Repayment Student Loan for Rhode Island Residents or out of state students attending Rhode Island Schools with the auto-pay discount. For complete details on additional loan program and rates for undergrads, grads, and parents visit risla.com.
Even with rates being lower than ever this year, we always advocate for borrowing wisely and knowing all of your available options. Borrowing for college isn’t always bad - as long as it is done responsibly. Think about how what you borrow now, will impact you after yo leave school and what will be affordable based on your chosen career track.
Only borrow what you absolutely need. You don’t need to borrow the full amount listed on your financial aid award letter. It is tempting to borrow a little extra for something you want (the newest video game console for your dorm room) but don’t actually need. When you borrow money, you pay it back with interest, increasing your total costs. Only borrow what you absolutely need and no more.
How much will you earn? Be sure to conduct your research on entry level salaries for your chosen career path. Will you be able to afford your monthly payments with the salary you will earn leaving school? Remember to account for all four years of your education when estimating your total borrowing needs. Too many students have a “borrow now, figure it out later” attitude that ends up getting them into trouble. A good rule of thumb is to borrow (for all years of education combined) no more than your expected starting salary after graduation and preferably less. Use our calculator to estimate how much you will be able to comfortably afford to repay.
Research all of your options.
Grants and scholarships. It is not too late to continue your search for money that does not have to be paid back. Visit your school’s website for scholarship and grant opportunities, as well as the free online search tool at RIScholarships.org.
Tuition Payment Plans. Most schools offer a tuition payment plan to help you budget tuition monthly over the course of the school year. Even if you cannot pay the full amount due in monthly payments, you may be able to reduce your borrowing need with a payment plan.
Federal Loans. Federal student loans, whether they are in the student’s name or the parent’s name, are funds that must be repaid with interest. Students should consider the Federal Direct Subsidized and Unsubsidized Loan prior to turning elsewhere for loans. To see if you qualify for federal education loans, complete the Free Application for Federal Student Aid (FAFSA).
Comparison factors to consider.
Here is a list of things to consider when comparing student loans to ensure you get the best option for your personal circumstances.
What is the interest rate on the loan? Is the rate fixed or variable? A lower rate is better, but be careful to pay attention to other factors too. For example, a low rate on a variable rate loan may not be low in a few years when you enter repayment. Assess your family's appetite for risk before taking on a variable rate loan, and make sure you understand how the index that rate is based on can change over time.
The Annual Percentage Rate. APR is a rate that expresses the total cost of a loan, including the interest rate and any additional fees or other finance charges. You can use the APR to get a better cost comparison of private loans than looking at the interest rate alone. Note: Federal student loans are exempt from APR disclosures.
Fees. Are there any upfront fees? Lenders often refer to these as application fees, origination fees, processing fees, documentation fees, or something similar. Similarly, be aware what the back-end fees are. Back-end fees are those fees that are completely avoidable if you manage your repayment. Fees for returned payments, late payments, and defaulting are back-end fees. While you don't want to plan on being delinquent on your loan, it is good to know how it will affect you should unfortunate circumstances prevent you from making payments as agreed.
Deferment and Forbearance. These options are ways of delaying your student loan payments. First, you want to know if the loan will be deferred while the student is in school. If so, is there a maximum amount of time the loan can be deferred? Keep in mind, deferring payments while in school increases the total amount you pay over the life of your loan so if you can make payments now, do it! Next, ask about whether the loan can be deferred again if the student re-enters school after graduation or takes a break. Lastly, find out what the forbearance options are and how much time you can get if you can't make payments due to your financial circumstances. Remember, interest is still accruing during Deferment and Forbearance periods, adding cost to you loan.
Repayment Term. How long will you have to repay your loan? A shorter term typically results in less finances charges, but a higher monthly payment. A longer repayment term will cost you more in the long run but may make your monthly payments more manageable.
Monthly Payments. Ask the lender to estimate what your payments will be based on the amount you are considering borrowing. Take into account all four years of borrowing (or more) when determining if the monthly payment amount will be affordable. Also take into account the rate type. The estimate for a variable rate loan is just that, an estimate, and as the index rate changes, so will your monthly payment.
Cosigners. Most non-federal loans will require a cosigner. If a cosigner is not required, the interest rate is typically higher. If you are the cosigner on a student loan, make sure you understand your obligation and read the fine print before you sign the Promissory Note.
- INTEREST RATES: Rates are for loans first disbursed on or after July 1, 2021 for the 2021/22 academic year and include 0.25% reduction for making automatic monthly payments (auto-pay feature). Each repayment option is subject to funds availability. Funds will be awarded on a first-come, first-served basis. Interest begins accruing after each loan disbursement. The rates and terms disclosed above are available while funds last. New funds may be subject to different rates and/or terms.
- APR: The Annual Percentage Rate (APR) reflects the estimated total cost of the loan, including origination fees ($0), accruing interest, and the effect of capitalized interest. Interest begins accruing after each loan disbursement. Rate shown includes the 0.25% interest rate reduction for using the auto-pay feature. If monthly payment is calculated to be less than $50 per month for full term, lowest payment is $50 per month with term reduced.