A state known as “Vacationland” sounds like an ideal place to attend school. Although, you’ll likely be spending more time in the library than going for seaside strolls. This quaint east coast state has plenty of educational opportunities worth pursuing.
When it comes time to fund your education, there are some helpful Maine student loan forgiveness programs to consider. There are also Maine grants for college students that you can apply for, and scholarships in Maine that can help lighten your financial load. Keep reading to learn more about your student loan options in Maine.
It’s understandable why students want to attend school in this great state. It’s also understandable that they may want to learn more about Maine student loans. In 2017, 56% of Maine college attendees had student loan debt, and on average owed $31,364.
When it comes to student loan default rates, as of 2015 (the most recent federal data available) Maine has a default rate of 10.5%, with a little over 2,100 loan borrowers in default. Both Maine and South Dakota have a similar number of student loan borrowers who entered repayment. Maine has 20,516 and South Dakota has 20,692
But Maine students come out on top in regards to paying those loans off. While Maine has a default rate of only 10.2%, South Dakota has a default rate of 12.9%.
If your goal is to attend school in Maine and you’re looking at ways to finance your education, you have options. And both federal and private student loans may be worth considering when researching how to pay for your college degree.
Federal student loans are all provided by the U.S. Department of Education’s William D. Ford Federal Direct Loan (Direct Loan) Program. If you take out a federal loan, the U.S. Department of Education is your lender.
To see which type of loan you may qualify for, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA®) form to apply for financial aid for college or grad school. You can review your state’s deadline and the federal FAFSA deadline here.
You should also review the deadlines for each college you are considering, as each college may consider the date that they receive your FAFSA form, or the date your FAFSA form is processed, as their final deadline. FAFSA will then offer you a financial aid package, dependent on your college, that may include grants, work-study opportunities, and federal student loan options. It is important to note that not every student will qualify to receive federal aid.
Direct Subsidized Loans: For eligible undergraduate students who demonstrate financial need; helps cover the costs of higher education at a college or career school. The federal government pays the interest on Direct Subsidized Loans while a student is in school at least half-time; interest starts accruing on these loans only after a six-month grace period once students graduate, or if they drop below half-time enrollment.
Direct Unsubsidized Loans: Eligible undergraduate, graduate, and professional students may qualify for these loans. Eligibility is not based on financial need. Interest on these loans begins accruing immediately after funds are disbursed.
Direct PLUS Loans: These loans are for graduate or professional students, and parents of dependent undergraduate students who need help paying for education expenses not covered by other financial aid. Eligibility for this loan is not based on financial need, but requires a credit check.
Direct Consolidation Loans: This type of federal loan combines all of your eligible federal student loans into a single loan, with one loan payment. Students generally use this loan if they have taken out multiple federal loans and want to combine them into one loan for repayment. The interest rate on these loans are the weighted average of the interest rates on all of the loans that a student is consolidating, rounded to the nearest one-eighth of 1%.
NOTE: All federal student loans have fixed interest rates, and generally they have lower interest rates than private loans.
Private loans are funded by private organizations such as banks, online lenders, credit unions, some schools, and state-based or state-affiliated organizations. Federal student loans have interest rates that are regulated by Congress. Private lenders, follow a different set of regulations, so their interest rates can vary widely.
Private lenders may (but don’t always) require you to make payments on your loans while you are still in school, whereas you don’t have to start paying back your federal loans until after you graduate, leave school, or change your enrollment status to less than half-time. Their rates will usually differ too. Private loans have variable or fixed interest rates which may be higher or lower than federal loan interest rates, which are always fixed.
Unlike federal loans which can only be applied for within certain deadlines (once a year, and states have their own deadlines), private loans can be applied for on an as-needed basis. Even if you suspect you may need to take out a private loan, it’s still a best practice to submit your FAFSA before applying to see what federal aid you may qualify for first.
If you’ve missed the FAFSA deadline and you’re struggling to pay for school throughout the year, private loans can potentially help you make your education payments—as long as you have enough lead time for your loan to process and for your lender to send money to your school.
Who doesn’t love a gift? You may sometimes hear grants and scholarships referred to as “gift aid”. That’s because while grants or scholarships may have certain academic or other requirements to keep them, you usually don’t have to pay them back like you would with a loan.
There are a few instances where you may have to pay back grant money, but typically only if certain requirements aren’t met. Generally, grants are need-based and scholarships are awarded based on merit.
There is no one-size-fits-all grant or scholarship amount or requirements, and both scholarships and grants can come from a variety of entities (including private organizations and federal or state governments).
Some scholarships or grants can be for a small amount that may help you pay for your books or research supplies, but others can cover the entire cost of your education. Who knew parking passes could be so expensive?
If you need help paying for your education, you may be in luck. There are some really valuable scholarships for Maine students that you can apply for, as well as Maine college grants. Consider applying for these options if you need a little help in the finance department.
This program offers a need-based grant designed to help eligible Maine undergraduate students. Part-time and full-time students may be eligible for funds, and students are automatically considered when they file their FAFSA®.
Residents of the state of Maine may apply for this scholarship if they are enrolled in an accredited college or vocational technical school and their parent or grandparent is a veteran. To be considered, an applicant must meet certain character and income requirements.
Each recipient of this scholarship will receive an award for $10,000 in order to assist eligible Maine students attain higher education. Students must plan to attend either a two- or four-year degree program at a college either in- or out-of-state, and must demonstrate “academic potential, community impact, and financial need” to be considered.
Certain foster children and adopted children/wards under subsidy from the Maine Department of Health and Human Services may qualify for this program, and are selected by the Finance Authority of Maine (FAME). This waiver program is first-come, first-served; the renewable award covers the actual amount of tuition waived at the college or university a recipient attends.
If you are the child or spouse of a Maine firefighter, law enforcement officer, or emergency medical services provider killed in the line of duty, you may qualify for this tuition waiver program. The award amount covers the tuition waived at participating Maine public colleges and universities.
Graduating high school seniors who are also Maine residents, and intend to study civil engineering, can potentially receive this $2,000 scholarship. This scholarship is awarded based on academic performance, extracurricular activities, and completing a statement of interest in civil engineering.
This program is need-based, and assists eligible Maine students as they pursue postgraduate medical, dental, or veterinary education. Available funding determines how many will receive this award each year.
If you’ve taken out student loans to attend a school in Maine, it is never too early to start thinking about your repayment plan. And guess what? You have quite a few repayment options at your disposal.
Take a deep breath—you’ll have time to pay off your loans once you leave school. The standard student loan repayment term is 10 years, but allowances are made for eligible loan borrowers who need more time to pay off their loans (up to 25 years).
Federal student loan interest rates vary based on what year you receive the loan, and change annually in July. Between July 1, 2018, and July 1, 2019, interest rates for federal student loans ranged from 5% to 7.6%, depending on the type of loan.
For private loans, terms and conditions such as interest rates are set by the lender and vary due to many factors. Federal student loans typically offer the lowest interest rates and more flexible repayment options as compared to private student loans.
Standard federal student
loan repayment term.
Allowances can be
made for borrowers.
Up to 25 years.
Just like there are several types of loans to explore, there are also different kinds of repayment plans. You can learn more about your repayment options for federal student loans here, but the following high-level summaries can give you an idea of which repayment plan may work for you.
Most borrowers are eligible for this plan and may often pay less over time than with other plans because the loan term is shorter. (Typically, less interest accrues over shorter loan terms than longer ones if payments are made in full and on-time.) There is a 10-year repayment period with this plan.
Most borrowers are eligible for this plan, which allows them to pay their loans off over a longer period than the Standard Repayment Plan. Payments start relatively low, then increase over time (usually every two years).
To qualify for this plan, there are income thresholds for certain loan types to qualify, and you won’t qualify for Public Service Loan Forgiveness (PSLF) if you choose this loan. Monthly payments are typically lower than under the 10-year Standard Plan or the Graduated Repayment Plan and borrowers may have a longer period to pay them off (and therefore make more interest payments).
Direct Loan borrowers (and all Consolidation Loan borrowers) with eligible loan types may be able to choose this plan. Monthly payments are 10% of discretionary income, and any remaining loan balance will be forgiven after 20 years (for undergraduate studies) or 25 years (for graduate or professional studies).
To qualify for this plan, borrowers must have a higher debt relative to their discretionary income. Payments for this plan are capped at 10% of discretionary income (and never more than what would be paid on the Standard Repayment Plan), and any remaining balance will be forgiven after 20 years.
IBR is designed for borrowers who have a high debt relative to their income in order to qualify. Monthly payments will not usually be higher than the 10-year Standard Plan amount. Generally, however, borrowers may pay more over time than under the Standard Plan.
Direct Loan borrowers with an eligible loan type may want to consider ICR. This plan is different from IBR because there is no financial hardship requirement. But, it may cost more over time when compared to the 10-year Standard Repayment Plan, and any remaining balance will be forgiven after 25 years.
Borrowers can expect to pay more over time than under the 10-year Standard Plan. Monthly payments are based on annual income, but loans will be paid in full within 15 years. This repayment plan is only available for FFEL Program loans, which are not eligible for PSLF.
Another option to potentially help accelerate student loan repayment is to refinance your student loans with a private lender. Some private lenders, like SoFi, will let you consolidate and refinance both your federal and private student loans into one loan and interest rate.
Consolidating your loans (aka combining them) under one lender gives you the opportunity to refinance your loan and get a new term and interest rate. If you have an improved financial profile compared to when you took out your original loan, you may be able to lower your interest rate when you refinance, or even shorten your term to pay off your loan more quickly!
But, it is important to remember that if you refinance federal student loans with a private lender you will lose access to federal programs such as the income-driven repayment plans mentioned above, as well as student loan forgiveness and forbearance options.
At first glance, student loan forgiveness looks appealing, but it may not be as easily attainable as one might think. For example, 98% of those who applied to the Public Service Loan Forgiveness (PSLF) Program were denied due to issues such as not meeting the program requirements or mistakes made on their forms.
That being said, there are state-specific and federal Public Service Loan Forgiveness programs that certain student loan borrowers may be eligible for.
Before you review your options, it’s important to know that the terms forgiveness, cancellation, and discharge essentially mean the same thing when it comes to federal student loans, but are applied in different scenarios. For example, if you are no longer required to make loan payments due to your job, that could fall under forgiveness or cancellation.
Or, if the school you received your loans at closed before you graduated, this situation would generally be called a discharge.
Even if you don’t complete your education, can’t find a job, or are unhappy with the quality of your education, you must repay your loans. But there are circumstances that may lead to federal student loans being forgiven, canceled, or discharged. Here are some of those options:
The PSLF Program may forgive the remaining balance on eligible Direct Loans, after making 120 qualify monthly payments under a repayment plan (and working with a qualifying employer).
Those who teach full-time for five complete and consecutive academic years in a low-income school or educational service agency (amongst other qualifications) may be eligible for forgiveness of up to $17,500 on select federal loans.
Cancellation for this specific loan is based on eligible employment or eligible volunteer service and the length of time applicants were in such a position, among other factors.
Qualification may relieve eligible borrowers from repaying a qualifying Direct Loan, a Federal Family Education Loan (FFEL) Program loan, and/or a Federal Perkins Loan or to complete a TEACH Grant service obligation.
Due to the death of the borrower or of the student on whose behalf a PLUS loan was taken out, federal student loans may be discharged.
Certain eligible borrowers may have federal student loans discharged if they file a separate action during bankruptcy, known as an “adversary proceeding.”
Borrowers who were unable to complete an academic program because their school closed might be eligible for a discharge of Direct Loans, Federal Family Education Loan (FFEL) Program loans, or Federal Perkins Loans.
Due to a variety of circumstances, borrowers may be eligible to discharge Direct Loans or FFEL Program loans due to issues such as identity theft or mistakes made by a school.
Certain borrowers may be eligible for partial discharge of Direct Loans or FFEL Program loans if they withdrew from school, but the portion of a loan that the school was required to return to the borrower wasn’t returned.
Federal loan forgiveness programs are a logical place to start, but it can be smart to also consider other student loan forgiveness programs, too. There are forgiveness programs tailored to loan borrowers who live in certain locations, or have an in-demand and service-based vocation.
This loan repayment assistance program helps dentists who practice in underserved areas in Maine. Award amounts go as high as $20,000 annually, up to $80,000 total.
This forgivable loan program is merit-based, and for current eligible Maine resident students who are pursuing education or child care careers. They must also plan to work in Maine for a certain period of time after they graduate. Award amounts vary, but can go as high as $12,000 for undergrads and grads who meet certain academic requirements.
The Alfond Leaders Program is a student debt reduction program for those who live and work in Maine. They must be employed in a STEM- (science, technology, engineering and math) designated occupation while working for a qualifying Maine-based employer. Recipients can get up to half of their student loan balance repaid (not to exceed $60,000).
In the spirit of complete transparency, we want you to know that we believe you should exhaust all of your federal grant and loan options before you consider a SoFi private student loan.
We believe that it is in each student’s best interest to look at federal financing options first in order to find the right financial aid package for them.
If you do decide a private student loan is the right fit for your educational needs, we’re happy to help! SoFi’s private student loan application process is easy and fast. We offer flexible payment options and terms and, don’t worry, there are absolutely zero fees.