Using Loans to Pay for Culinary School

If you have stretched your resources to the limit, and have secured scholarships and grants, you may also need to borrow money to fill in any remaining gaps to pay for culinary school. Special programs are available to make culinary student loans more accessible and affordable. Knowing a little about the process can help you maximize your opportunities.

Federal Loans

Federal loans for culinary education are available in two categories: Stafford Loans for students and PLUS loans for parents.

You can obtain Stafford Loans from private lenders through the Federal Family Educational Loan (FFEL) program or directly from the federal government through the William D. Ford Direct Loan program, depending on which Stafford Loan program your culinary school participates in. These government-guaranteed loans offer:

• A favorable interest rate
• Interest paid while you are in school (subsidized loans only)
• A grace period before you must begin repayment (six months after you graduate, leave school, or drop below less than half-time enrollment)

Stafford Loans can be either subsidized or unsubsidized. Subsidized Stafford Loans are awarded based on financial need, while unsubsidized loans are not.

These Stafford Loan programs have borrower limits--both annual limits and total borrowing limits. If you still need additional funding for school, the PLUS loan is available for parents of dependent students. Your parents can borrow a PLUS loan for the total cost of education minus other financial aid.

To apply for federal loans and most other financial aid programs, you must complete the Free Application for Federal Student Aid (FAFSA) either online or on paper. Some state aid programs and private lender also require a completed FAFSA.

Private Loans

Private loans are also an aid option if your other forms of financial aid are still not sufficient to pay for culinary school. Private loans generally carry a higher interest rate than federal loans, but they generally are available with student-friendly features such as repayment schedules that don't begin until you leave school. Please note, however, that interest accrues and is added to your principal balance. Make sure you shop around for a private loan because different lending institutions may offer different interest rates and benefits.

What You Should Know About Borrowing Money

Besides helping you afford school, borrowing money can have two important long-term impacts: it can teach you about budgeting and can help establish your credit history--for better or worse. Budget carefully so you don't borrow more than you can repay and your culinary student loans can help you succeed in school and beyond.

Source

• U.S. Department of Education