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Financial Aid 101

Maryland Student Loan & Scholarship Information

A small state with big opportunities. Maryland is known to some as “Little America” but there are some pretty big colleges worth attending in this state. Whether you’ve lived there your whole life, or are looking to make a move, the appeal of attending school in Maryland is obvious. History, nature, and culture all collide for an awesome college experience.

When it comes time to pay for that college experience, it’s fair that you might want a little help in the finance department. Whether that be by taking advantage of a Maryland student loan forgiveness program or by applying for scholarships. It’s fair that Maryland students might want a little student loan relief, so keep reading to see some options for funding your higher education.

Average Student Loan Debt in Maryland

Maryland students are likely curious about what their student loans might look like. In regards to the average student loan debt in Maryland, as of 2017 56% of Maryland college attendees had student loan debt. On average they owed $29,314.

When it comes to student loan default rates, as of 2015 (the most recent federal data available) Maryland has a default rate of 9.7%, with almost 7,000 loan borrowers in default. Not bad numbers when you consider that some states like West Virginia have default rates of 17.7%. The state with the most bragging rights? Vermont boasts the lowest default rate in the US at only 5.9%.

56%

of Maryland college
attendees had student
loan debt.

SoFi offers simple student loans that work for you.

Maryland Student Loans

If your goal is to attend school in Maryland 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

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.

There are four types of Direct Loans available:

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 Student 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.


For more information on private loans, you can check out our article:

Private Student Loans 101


Scholarships & Grants

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?

Maryland Scholarships & Grants

For those attending school in Maryland, it is likely worth pursuing your scholarship and grant options before you foot the entire tuition bill yourself or take out student loans. There are Maryland state-specific options that only Maryland students or residents are eligible for. So take a look at some of these scholarship and grant options!

Howard P. Rawlings Guaranteed Access (GA) Grant

This grant provides financial assistance to eligible in-state students who are currently enrolled as high school seniors and will complete a college preparatory program. Students who have obtained a General Educational Development Diploma (GED) and are under the age of 26 may also qualify. The award amount can be up to $19,100 and is based on need.

Learn more

Howard P. Rawlings Educational Assistance (EA) Grant

Current high school seniors and full-time undergraduates may be eligible for this grant—as long as they are enrolled at a two-year or four-year Maryland college or university as a full-time, degree-seeking undergraduate student. Candidates must demonstrate financial need and fulfill other select requirements to be considered.

Learn more

Howard P. Rawlings Campus Based Educational Assistance Grant

This need-based grant is designed to assist students that did not file their Free Application for Federal Student Aid (FAFSA®) by the Maryland state deadline, and therefore were not considered for the Howard P. Rawlings Educational Assistance Grant.

Learn more

2+2 Transfer Scholarship

This scholarship is designed to financially aid transfer students from Maryland community colleges to attend 4-year institutions within the state. To qualify, among other eligibility requirements, students must be enrolled at an eligible accredited postsecondary institution in Maryland.

Learn more

Graduate and Professional Scholarship Program

Maryland residents who demonstrate financial need and are enrolled as degree-seeking students at select schools may qualify for this scholarship program. Students must be studying in graduate and professional programs in dentistry, law, medicine, nursing, pharmacy, social work, and veterinary medicine.

Learn more

Delegate Scholarship

Students enrolled at a two-year or four-year Maryland college or university as a degree-seeking undergraduate or graduate student can apply for this scholarship. Students who attend certain private career schools may also qualify. ​This scholarship can be used at out-of-state schools, if a recipient’s chosen major isn’t available at any Maryland institutions.

Learn more

Get low-rate in-school loans that work for you.

Maryland Student Loan Repayment & Forgiveness Programs

If you’ve taken out student loans to attend a school in Maryland, 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.

10

Years


Standard federal student
loan repayment term.


Allowances can be
made for borrowers.

Up to 25 years.

Federal Student Loan Repayment Options

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.

Standard Repayment Plan

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.

Learn more

Graduated Repayment 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).

Learn more

Extended Repayment Plan

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).

Learn more

Revised Pay As You Earn (REPAYE)

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).

Learn more

Pay As You Earn (PAYE)

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.

Learn more

Income-Based Repayment (IBR)

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.

Learn more

Income-Contingent Repayment (ICR)

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.

Learn more

Income-Sensitive Repayment

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.

Learn more


Still not sure which payment plan is right for you?

For more information on repayment plans, check out our Student Loan Repayment Options article to help add some clarity.


Student Loan Refinancing

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.

Student Loan Forgiveness

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:

Public Service Loan Forgiveness (PSLF)

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).

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Teacher Loan Forgiveness

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.

Learn more

Perkins Loan Cancellation

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.

Learn more

Total and Permanent Disability Discharge

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.

Learn more

Death Discharge

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.

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Bankruptcy Discharge

Certain eligible borrowers may have federal student loans discharged if they file a separate action during bankruptcy, known as an “adversary proceeding.”

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Closed School Discharge

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.

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False Certification of Student Eligibility or Unauthorized Signature/Unauthorized Payment Discharge

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.

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Unpaid Refund Discharge

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.

Learn more

Maryland Specific Student Loan Forgiveness Programs

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.

Janet L. Hoffman Loan Assistance Repayment Program (LARP)

This is a program for Maryland residents who work in public service assisting low-income or underserved residents. They must provide public service in Maryland local government or nonprofit agencies.

Learn more

Maryland Dent-Care Loan Assistance Repayment Program

Maryland residents may qualify for this loan assistance repayment program, as long as they have graduated from an accredited US dental school. Recipients must practice full time in Maryland caring for Maryland Medical Assistance Program (MMAP) recipients. The maximum current award amount is $23,740 per year for up to three years.

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Maryland Loan Assistance Repayment Program (MLARP) For Foster Care Recipients

This repayment program is for former foster care recipients who are employed by Maryland state, county, or municipality government. They must also have graduated from an institution of higher education in Maryland in order to receive financial assistance.

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State Loan Repayment Program (SLRP) and Maryland Loan Assistance Repayment Program for Physicians (MLARP)

The SLRP requires a 1:1 match to MLARP. Both provide educational loan repayment funds to physicians and physician assistants who serve in a health professional shortage area (HPSA) or medically underserved area for two years, either in primary care or mental health.

Learn more

SoFi Private Student Loans

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.

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