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Options to pay your remaining balance

September 2026

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What you’ll learn today

Paying for college basics
Explore student loan options
How to fund the remaining balance
Tips and recommendations

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Paying for college basics

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Generally, there are two types of costs

Direct costs are assessed by the school but can vary a bit from student to student and are billed by the college:

Tuition
Housing and food (if living on-campus)
Required fees (health center, student activity, lab fees, etc.)

Indirect costs are expenses that vary by student and are typically not included on the tuition bill:

Books and supplies
Equipment (art supplies, computers, etc.)
Transportation
Personal living expenses
Housing and food (if living off-campus)

Direct costs

Indirect costs

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Net price

All undergraduate institutions are required to offer a net price calculator that provides students an estimate to attend their college

Net price is the difference between the “sticker” price (full cost) to attend, minus any grants and scholarships for which the student may be eligible

Key point: The sticker price of a college is not usually what families end up paying

SOURCE: https://collegecost.ed.gov/net-price

What’s next…visit collegecost.ed.gov to find a specific college’s net price calculator and estimate your net price.

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Families’ out-of-pocket contributions covered 48% of spending
Scholarships and grants covered 27%
Borrowed funds covered 23%
Relatives and friends helped with 2%

Families’ out-of-pocket contributions covered about half of college costs

SOURCE: How America Pays for College 2025

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Helping students create a plan to pay for school

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Start with money that won’t have to be paid back—apply for scholarships

Apply for federal and state aid—complete the FAFSA^®

Still need money for school? Consider a responsible private student loan

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The FAFSA^®(Free Application for Federal Student Aid)

Used to determine eligibility for all federal student financial aid programs and most state and college aid.

The FAFSA^® application is available in the fall each year.

Some financial aid is awarded on a first-come, first-served basis—so apply as soon as you can.

Deadlines vary by state

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76% of families relied on scholarships and grants to cover school costs

On average, families that used scholarships received $8,004 and families who used grants received $6,180.
Among scholarship users

63% received them from the school ($9,791 on average)
33% from the state ($3,479 on average)
32% from non-profits or companies ($2,520 on average)

SOURCE: How America Pays for College 2025

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Scholarships—the what, when, and how

Free money that does not have to be paid back!

What are they?

Start in your junior and senior year of high school (typically) and continue throughout college.
Be aware of individual scholarship deadlines!

When do I apply?

Scholarships tend to have their own, individual online or paper applications.
Requirements and deadlines will vary based on scholarship.

How do I apply?

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Scholarships are financial aid awards that do not have to be repaid—FREE MONEY!

A scholarship might cover the entire cost of your tuition, or it might be a one-time award of a few hundred dollars. Either way, it’s worth applying for, because it’ll help reduce the cost of your education.

Wondering when you should apply for scholarships? Each scholarship has its own unique requirements that indicate who qualifies and how to apply. It also depends on the scholarship deadline dates. Some deadlines are as early as a year before college starts, so if you are in high school now, you should be researching and applying for scholarships during the summer between your junior and senior years. But if you’ve missed that window, don’t give up! Look at scholarship information to see which ones you can still apply for now.

How to apply? Each scholarship has its own requirements. The scholarship’s website should give you an idea of who qualifies for the scholarship and how to apply. Make sure you read the application carefully, fill it out completely and meet the application deadline date.

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Scholarship misconceptions persist

32%

say it’s not worth applying if parents make ‘too much’ money

46%

say scholarships are just for students with exceptional skills or abilities

36%

say students can only apply before their freshmen year

SOURCE: How America Pays for College 2025

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In addition to these reasons, there are also misconceptions that exist. For instant: 46% of families believe that scholarships are just for students with exceptional skills or abilities (so, valedictorians and jocks). That is entirely untrue. There are scholarships for left-handed people, for tall people, for people who are into animation or sci-fi…

Further – and this is a new data point that we collected in the 2025 report – 36% of college families think that students can only apply for scholarships before freshmen year! Of course, we all know that students should apply for scholarships early and often – it’s an activity to be undertaken throughout the college journey!

And finally, 32% of families thought it’s not worth applying for scholarships when the parents make too much money. While some scholarships are need based, many others don’t consider the financial situation of a family at all.

In all, I believe the point is that we all need to do more to create awareness of scholarship opportunities and tools that students can use to find scholarships they are more likely to qualify for!

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Scholarships are awarded for a variety of reasons including:

Academic achievement
Financial need
Community involvement
Organizational membership
Sports
Talent or skill
Leadership or school activities
Ethnicity
Religious affiliation
Parent affiliation with work, club, or activity

Types of scholarships

Scholarships do not require repayment and are typically awarded on an annual basis

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Scholarship resources

There are many resources for scholarships:

Local or community-based scholarships
Federal and state agencies
College-specific scholarships offered by the colleges your students are interested in attending
Religious organizations
Employers
Libraries
Private organizations or major companies
Online search engines that aggregate scholarship offerings and allow users to be matched to scholarships based on a personal profile

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Turn the things you love into scholarships

Scholly Scholarships by Sallie

Easily find and sort through thousands of college scholarships.

Find the right scholarships for you.
Just start browsing.
No need to register and it’s free!

sallie.com/scholly

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Explore student �loan options

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Types of federal student loans

Direct Subsidized Loans

Direct Unsubsidized Loans

Available to eligible undergraduate students with demonstrated financial need
Interest is paid by the federal government while the student is in school at least half-time and during their six-month grace period

Available to undergraduate and graduate students
Students are not required to show financial need
Payments are not required while the student is in school and during their six-month grace period, but interest does accrue

Source: https://studentaid.gov

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Federal direct subsidized and unsubsidized loans for undergraduate students

Undergraduate borrowing limits:

$5,500 first year
$6,500 second year
$7,500 third and final years
$31,000 aggregate maximum

FAFSA^® is required
Six-month grace period after leaving school, graduating, or dropping to less than half-time enrollment
Flexible repayment options with terms of up to 10-25 years
Various deferment options are available
Loan forgiveness options and income-based repayment
Military members may be eligible for special interest benefits regarding their federal loans

Loan type	Interest rate (7/1/2025-6/30/2026)	Fee� (10/1/2020-9/30/2026)
Subsidized	6.39% Fixed	1.057%
Unsubsidized	6.39% Fixed	1.057%

SOURCE: https://studentaid.gov

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The U.S. Department of Education has annual and aggregate limits on how much you can borrow through these programs.

Review borrowing limits:

Undergrad aggregate of $31,000—only $23,000 can be subsidized

(For reference: Graduate aggregate - $65,500 sub, $138,500 unsub and includes undergraduate borrowing)

Also, borrowers are charged an origination fee. These fees are subtracted from the loan prior to disbursement. However, the borrower will have to pay back the entire loan amount including the origination fee. Schools receive the loan proceeds minus this origination fee, so the borrower does not get the full amount that they borrowed.

Borrowers are also afforded one 6-month grace period: Interest accrues throughout the grace period and is capitalized at end of grace. Borrowers can pay the interest at any time up until end of grace and avoid interest capitalization.

There are various repayment periods, anywhere from 10-25 years, and there are several deferment options, including in-school, economic hardship, military, etc., depending on your situation.

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Federal Direct Parent PLUS Loans

Loan that allows the parent of a dependent undergraduate student to borrow funds to cover the remainder of what a student owes after financial aid is applied.

FAFSA^® required
The parent is the borrower for the life of the loan
Students must be enrolled at least half time
Generally, is paid back over a 10-year period
Maximum loan amount is the cost of attendance (determined by the school) minus any other financial aid received
If parent applies and is not eligible, a dependent undergraduate student may receive an additional $4,000 unsubsidized loan
As of July 1, 2026, $20,000 annual limited per student and a $65,000 aggregate

SOURCE: https://studentaid.gov

Interest rate (7/1/2025-6/30/2026)	Fee (10/1/2020-9/30/2026)
8.94% Fixed	4.228%

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Pros

PLUS Loans for Parents are taken out by the parent and can cover the entire financing gap—up to 100% of the school certified cost of attendance minus any other financial aid received

Parents can request deferment of payments while the student is in school

Considerations

Credit history is considered. To qualify for a PLUS loan, you must meet additional requirements if you have an adverse credit history.
Borrowers are obligated for the life of the loan and cannot be released from the loan.
May have to borrow additional funds to cover the loan fees

Alternate speaker notes:

Presenter: There is a federal loan program, called the Federal Direct Parent PLUS Loan, designed for parents to help pay any remaining balance. These loans are taken out by the parent and can cover the entire financing gap up to 100% of the school certified cost of attendance minus any other financial aid received. Parents can request deferment of payments while the student is in school, or they can start payment immediately.

Moderator: Is this like the federal student loans where parents automatically qualify?

Presenter: This is different. Credit history is considered, and parents must complete an application in addition to the student completing the FAFSA. Parents must also meet additional requirements if they have an adverse credit history.

Some other things to consider this is a parent loan, so the parent, not the student, is obligated to the loan. Also, parents may have to borrow additional funds to cover the loan fees.

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Types of federal student loans for graduate students

Available to eligible undergraduate and graduate students
Students are not required to show financial need
Payments are not required while the student is in school and during their six-month grace period, but interest does accrue

Available to graduate students
Students are not required to show financial need
Payments are not required while the student is in school and during their six-month grace period, but interest does accrue

Direct Unsubsidized Loans

Direct Graduate PLUS Loans

Source: https://studentaid.gov

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Private student loans

Loans funded by banks, credit unions, or other financial institutions based on the credit of the applicant and/or cosigner.

Borrower is the student, and if necessary, cosigner
FAFSA^® not required
Repayment period can range from 5 – 20 years
Offer a variety of in-school repayment options that include:

Immediate repayment (pay now)
Deferred repayment (pay later)
Fixed repayment
Interest repayment

Cosigners may help increase the chance of approval and may help the student get a better rate
Terms and costs vary widely between lenders
Private student loans may help a student build credit – especially if scheduled to make payments while in school

* Based on an 8/1/2025 review of national private loan programs offered by Sallie Mae and its publicly-traded competitors.

Private student loan rate example*
APR	Fee
Variable: 4.13% - 17.99% � Fixed: 3.04% - 17.99%	0% typically

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Presenter: A responsible private student or parent loan is another source of “gap financing”. These loans are funded by banks and credit unions, not the federal government. A FAFSA® is not required for these loans, and they are credit based. The repayment period and terms are going to vary from lender-to-lender, so we again encourage families to do their research to determine which lender and repayment terms best fit you and your situation. Private loans can cover up to 100% of the school-certified cost of attendance minus other aid received and, because most private loans have zero (0) origination fees, you need not borrow extra to cover those fees.

Moderator – I know you’ve mentioned previously that a cosigner may be necessary. What exactly is a cosigner? Is that a parent? Are they responsible for the life of the loan like a Parent PLUS Loan?

Presenter – great questions! The cosigner is any responsible 3^rd party, so it can be a parent, grandparent, aunt, uncle, etc. The cosigner is someone who would help secure the loan and would only be responsible if the student fails to meet the obligation. In many cases, lenders offer a cosigner release option after meeting certain requirements.

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Weighing repayment options on private student loans

Repayment options will vary depending on the loan program and lender

In school payments may:

Help build credit if making scheduled monthly payments on time
Reduce capitalized interest (unpaid interest that is added to a loan’s principal amount)
Lower the total loan cost

Deferred payments may:

Allow for more flexibility while in school
Increase the total loan cost due to capitalized interest, and as illustrated below some lenders may offer a higher interest rate for deferred repayment

Example assumes a $10,000 loan to a student borrower who will be in school for 4 years and have a 6-month grace period.

In-school repayment option	APR	In-school monthly payment	Post-school payment	Post-school payment �term (months)	Total amount paid
Deferred Repayment Option	10.47%	$0	$207.26	120	$24,796.79
Interest Repayment Option	10.48%	$87.50	$135.50	120	$20,504.77

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When students are applying for a student loan, they should weigh their repayment options. Should I make payments while in school or defer my payments?

Some advantages to paying while in school:

- Build credit: Signing up for a payment plan where monthly payments are due will help a borrower build credit. The credit report will reflect payments due/payments received, thus showing a payment history. With a deferred loan, families can also make payments, however, this will not build a payment history on their credit report.�- Lower total loan costs: Paying the interest every month while in school allows families to avoid interest capitalization and thus lower the total loan cost. Let’s look at an example:

(Cover info in the table – this example is for a $10,000 loan, to a first-year borrower with fixed interest rate, no disbursement fee.

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Key things to consider when shopping for education loans

How much should I borrow?

Type of interest rate?

Benefit programs offered?

Other features

Consider your financial situation
Consider expected starting salary and debt load

Fixed interest rates – stability but often more expensive
Variable interest rates can be less expensive, especially in the short term

Rewards contain activities such as paying via ACH or paying on time

Repayment term
Fees (if any)
Cosigner release
Death and disability waivers

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Interest Rates: �Fixed interest rates have a certain appeal to consumers as they convey a sense of stability. While a variable rate can go up, it can also go down. Fixed rate loans may be most beneficial for loans with a long lifetime, as they can provide stability through extended periods of time

Variable interest rates are more beneficial in a low interest rate environment—especially if the goal is to pay the loan off sooner rather than later. Commonly, fixed interest rates are higher than starting variable rates since the lender absorbs the risk of rates increasing

�We encourage schools and borrowers to evaluate both fixed and variable rate loan options.

Another element often considered when shopping for private loans: Benefit programs offered – they vary vastly by lender.

The most standard benefit is probably the “automatic debit” or “ACH” benefit. This benefit is offered in form of a rate reduction (0.25 or 0.5 percentage points).

Some lenders may also offer a loan credit upon graduation; requires documentation of successful degree completion.

Some also offer benefit for on-time payments. Note that the criteria for these types of benefits vary a lot.

Other loan features that are sometimes not considered at all but have a much bigger impact are:

Repayment term. Longer repayment terms may result in more interest being paid and a higher total loan cost. Paying off early can help.
Cosigner release. Many students who apply for a student loan in their first or second year of college don’t have enough credit to qualify for a private loan on their own. Adding a cosigner is often a hairy subject, as the legal obligation for the loan is now shared. Some lenders offer borrowers the opportunity to apply for cosigner release after graduating, making a set number of on-time payments, and meeting additional credit requirements. Many parents cited that cosigner release made the decision to cosign up-front much easier.
Death and disability waivers are standard with federal loan programs, but not with private loans.

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How to fund the remaining balance

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What are families spending money on today that can help pay for college later?

Private school tuition

Travel

Activities

Groceries

Utilities

Other

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Tuition payment plans

Pay tuition in manageable monthly payments using household income
Can provide an interest-free funding option
Helps reduce the need to borrow money to pay the bill

Some plans have fees or other charges
May incur penalties for late payments

SOURCE: http://www.finaid.org/otheraid/tuition.phtml

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Schools themselves will often offer tuition payment plans to help cover any remaining balance. These plans allow you to spread your payment out over time, typically a semester or academic year. These plans may have fees or interest charges that vary by school, so check with your school regarding their particular plan(s). For parents, keep in mind that you may have costs today, while your student is home/in high school that you can allocate towards college costs. Think costs associated with sports or extracurricular activities that you can allocate toward college. Plans typically allow you to make monthly payments over a number of months (determined by the school) rather than make a lump sum payment. There is typically a fee to participate in the program, which varies by school.

Question: I can see how this could help some families, but what if I can pay part of my balance with a payment plan, and cover the rest with a private loan or Federal Parent PLUS Loan: is that an option?

Answer: That is an option, but you’ll want to coordinate something like that with the school’s financial aid office and student accounts/cashier’s/bursar’s office. They will most likely want the loan approved and in place before the payment plan so they can accurately calculate your payment.

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401(k) plans

Pros

Cons

Lose future growth

Potential tax implications**

May have early withdrawal penalty

Access

No credit check or application

**Consult a tax advisor.

Risky BUT you can still dip into retirement funds to help pay for college**

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Long term investments

Pros

Cons

May be sold at a loss

Lost future growth

May be intended for future retirement

Access

No credit check or lengthy application

Funds can be pulled out of investments such as mutual funds, stocks, bonds to pay for college without borrowing

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Home equity loans or lines of credit

Pros

Cons

Closing costs may apply

May be needed in future

Need to pay back loan to sell home

Access

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Credit cards

Pros

Cons

Can be most expensive

Card limits

Processing fees

Fast

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Private student loans

Pros

Cons

May help build credit

Most lenders offer no origination or disbursement fee

Student and cosigner are equally responsible for the loan

Terms and costs vary by lender

Deferred payments may result in interest capitalization

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Tips and recommendations

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Have a checklist

Make a plan for who will pay

Do your research, use free tools, and keep learning about your options

Determine the combinations of funding sources you will use

Get the help you need from:

School counselor
Financial aid office
Admissions office

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Evaluate your options

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To continue your college bound journey

sallie.com/scholly

sallie.com/fafsaguide

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Borrow responsibly

We encourage students and families to start with savings, grants, scholarships, and federal student loans to pay for college. Evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan.

The information contained in this presentation is not comprehensive, is subject to constant change, and therefore should serve only as general, background information for further investigation and study related to the subject matter and the specific factual circumstances being considered or evaluated. Nothing in this presentation constitutes or is designed to constitute legal or financial advice.

Sallie Mae does not provide, and these materials are not meant to convey, financial, tax, or legal advice. Consult your own financial advisor, tax advisor, or attorney about your specific circumstances.

External links and third-party references are provided for informational purposes only. Sallie Mae cannot guarantee the accuracy of the information provided by any third parties and assumes no responsibility for any errors or omissions contained therein. Any copyrights, trademarks, and/or service marks used in these materials are the property of their respective owners.

FAFSA^® is a registered service mark of U.S. Department of Education, Federal Student Aid.

SALLIE MAE RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS, SERVICES, AND BENEFITS AT ANY TIME WITHOUT NOTICE. CHECK SALLIEMAE.COM FOR THE MOST UP-TO-DATE PRODUCT INFORMATION.

SLM Corporation and its subsidiaries, including Sallie Mae Bank, are not sponsored by or agencies of the United States of America.

©2025 Sallie Mae Bank. All rights reserved. Sallie Mae and the Sallie Mae logo are service marks or registered trademarks of Sallie Mae Bank. Scholly, Sallie, the Sallie logo, other Sallie names and logos and all related names, logos, product and service names, designs, and slogans are the property of SLM Education Services, LLC, our affiliates, or licensors. All other names and logos used are the trademarks or service marks of their respective owners.

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Questions?

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