As a student in Maryland, your college education might come at a hefty price. According to the Institute for College Access & Success, 55% of Maryland students graduated with debt in 2018, and the average amount of Maryland student loans was $29,178.
While you want to avoid borrowing too much money, a reasonable amount of student loans could be a way to cover college costs.
To help you navigate the process, we’ve put together all your best options for Maryland student loans, whether you’re looking to borrow one or you need to deal with the loans you already have. This can be broken down into three categories:
Maryland student loan options
Once you’ve completed the Free Application for Federal Student Aid (FAFSA) and are accepted into a school, you’ll learn how much money you’ll receive in federal grants, scholarships and loans.
For extra help, browse state-specific grants and scholarships for Maryland students. Some might require extra forms for you to be eligible, though.
The financial aid award letter you receive will detail your Expected Family Contribution. To determine how much money you’ll need to borrow, you have to know much aid you’ll receive.
Once you have an idea on whether you need loans (and if so, how much), you’ll have two main options: federal and private. Here’s a rundown on each:
Federal student loans
Your award letter also will tell you how much money you’re able to receive from loans. For Maryland students, there are a few student loan options for you:
- Direct subsidized loans: These loans are available to undergraduate students who demonstrate financial need. The government covers the cost of interest while you’re in school.
- Direct unsubsidized loans: These loans are available to students regardless of need. The interest starts accruing as soon as the loan is taken out.
- Direct PLUS loans: These loans are available to parents who want to help cover costs for their college-enrolled child, as well as to graduate students who are paying for advanced degrees.
Interest rates on federal loans are typically lower than for private student loans. Also, federal loans give you more flexibility in paying back your loans after school, including through income-driven repayment plans.
Private student loans
If you’re still coming up short on college funds, you can tap into private student loans.
Private student loans are more stringent than federal loans. They aren’t based on need, so other factors determine your eligibility.
Private lenders, such as banks and credit unions, check your credit when you apply for a loan. If you have poor credit, your interest rate could be higher than with a federal student loan. Since most undergraduate students can’t meet requirements on their own, they apply with a cosigner, such as a parent.
Private loans don’t have the same flexibility as federal loans. Income-driven repayment plans are available only through federal loan programs. And if you want to explore your private student loan refinancing options, you’ll have to work with a private lender.
Keep all this in mind when you apply. If you decide a private student loan is right for you, make sure to shop around and compare offers from multiple lenders, such as online lenders or credit unions. That way, you can find a private student loan with the lowest costs of borrowing.
Maryland student loan forgiveness programs
After graduation, you may get the chance to have your loans forgiven if you meet certain criteria. Besides federal student loan forgiveness plans, there are a few different programs just for Maryland students:
Janet L. Hoffman Loan Assistance Repayment Program (LARP)
To qualify for this program, you need to be a resident who provides public service to low-income or underserved residents in state or local government, or at a nonprofit agency in Maryland. Some eligible employment fields include lawyer, health care worker, social worker and teacher.
If you’re not in default on a loan and your gross income doesn’t exceed $60,000 a year, you might be eligible for a student loan repayment assistance award of up to $30,000.
Maryland Dent-Care Loan Assistance Repayment Program (MDC-LARP)
The MDC-LARP is a student loan repayment program for dentists. You must be a Maryland resident and a graduate of a U.S. dental school who serves Maryland Medical Assistance Program (MMAP) recipients (at least 30% of your patients must meet this designation). If you qualify, you could receive up to $23,740 per year for each year of obligated service up to a maximum of three years.
Nancy Grasmick Teacher Award
To be eligible to receive the Nancy Grasmick Teacher Award, you need to have taught in Maryland for the past two years and provide proof of your student loan debt, among other eligibility requirements. You must meet the Janet L. Hoffman LARP requirements to qualify. If you do, you could receive up to $10,000 a year for a maximum of three years.
To qualify for the Maryland SmartBuy homebuyer assistance and forgiveness program, you need to purchase a home owned by the state. If you have at least 5% for a down payment, the state of Maryland will provide up to 15% of the purchase price toward outstanding student loans for a maximum of $40,000.
But you must pay off all your student loans before you make your home purchase, as well as meet all the requirements for the Maryland Mortgage program.
Consolidating and refinancing Maryland student loans
If you’ve already graduated from college, it could be worth exploring refinancing your student loans for better rates and new terms.
Refinancing your student loans will replace multiple loans with a single loan. Depending on your credit (or your cosigner’s credit), you could qualify for a lower interest rate, which could save you a lot of money over the life of your loan.
Refinancing also gives you the opportunity to choose new repayment terms. You could choose a short term to get out of debt fast and save on interest or a longer term to lower your monthly payments.
Explore all your options when you’re planning to refinance your Maryland student loans. Consider the interest rate (is it fixed or variable?) and repayment term (is it five, 10, 15 or 20 years?) to make sure you’re getting the best deal.
And make sure you’ve weighed the pros and cons of refinancing. Even though it could save you money, refinancing federal student loans also means sacrificing federal repayment plans and protections.
If you don’t want to turn your federal loans private but still want to simplify repayment, you could look into federal student loan consolidation. Direct loan consolidation combines your federal loans into one streamlined loan for easy payment while letting you choose a new repayment plan.
Student loans don’t need to hold you back
Whether you’re exploring your options for Maryland student loans as you enter school or are looking for ways to alleviate your debt after graduation, you have ways to save on student loans.
Land as much money as you can through grants and scholarships before taking out student loans.
If you need loans, try federal student loans before you consider private options. It’s OK to get loans for school as long as you use them wisely and have a plan for paying them back after graduation.
Rebecca Safier contributed to this report.
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