Understanding Federal Student Loan Changes

Webinar Transcription

2026-2-26-Understanding Federal Student Loan Changes

Anna: [00:00:00] Hello everyone. Good evening or afternoon or morning, whatever time it is from wherever in the world you’re joining us, we are so happy you are here for our webinar on, “Understanding Federal Student Loan Changes” with our partner Juno. My name is Anna Vande Velde and I’ll be your moderator today. I’m a senior advisor at CollegeAdvisor where for the past four and a half years I’ve worked with students one-on-one in advising sessions and have been a co-captain of our essay review team.

Anna: You don’t need to know all that about me. So let’s move right along. To orient everyone with the webinar timing, we’re gonna start off with a presentation, then answer your questions in a live Q&A on the sidebar. You can download the slides and you can start submitting questions in the Q&A tab anytime.

Anna: [00:01:00] We’ll get to as many as we can. Um, towards the end, please also note that this is being recorded and the recording will be emailed to everyone who registered and it will also be available on our website. Alright, without further ado, is my pleasure to introduce your speaker for the evening. Eddy, could you please introduce yourself and say a bit about your background?

Eddy: Absolutely. Thank you for having me. Hello everyone. Good evening, good afternoon, and good morning wherever you’re tuning in from. It’s a pleasure to be here with you today. Uh, my name is Eddy Ciobanu. I am on the undergraduate team at Juno here. Uh, I love working with and presenting with CollegeAdvisor. Um, I used to work in admissions myself.

Eddy: Uh, so I used to work in the admission office at Williams College at Yale University, and I was a former college counselor, uh, at Phillips Academy in Andover. So I’ve seen both sides of the desk. I’ve, uh, I’ve lived this for the last decade of my [00:02:00] life. Um, I understand kind of all of the nuances of the college process and then certainly the anxieties that families may have around the.

Eddy: Tail end of that, which is actually, once you’ve been admitted now, how are you going to pay for it? Um, so I’m really excited to dive into that with all of you today. There are a lot of important updates that are critical for families to know as you’re navigating through the next stages of, uh, of this timeline.

Eddy: Um, so I want to jump into that. Um, I speak from personal experience as well as professional experience. I’m currently, uh, in an MBA program at the Kellogg School of Management. Uh, I am taking out loans for my degree. Uh, I actually heard about Juno out of necessity. Uh, so I use Juno for my, my current grad school loans.

Eddy: That’s how I first heard about the organization. Um, I am actually saving a, a lot in [00:03:00] terms of my interest rate, um, what I, the interest rate that I got. So I’m, I’m, I’m preaching from experience here, uh, and as, as a happy customer myself, um, who was able to actually get a better rate. So we’ll talk a little bit more about that, um, towards the end.

Eddy: But I really wanted to dive in to the, the purpose of our time together, which will be focusing on some of the important changes. Um, before we do jump in, um, just wanna get a sense of who’s in the audience. It’s always helpful for, for us to know. Um, whether you are, uh, an eighth grader, ninth grader, 10th grader, 11th or 12th grader, uh, or anyone else.

Eddy: There may be college students or maybe parents in the audience. There may be other counselors in the audience, or uncles or aunts, whomever. Um, we’re curious to know a little bit more about who is joining us here.

Anna: It looks like our results are slowly trickling in. Uh, but the, the trend is, Eddy, that a [00:04:00] majority of folks are in 11th grade, uh, around 70%, uh, 20% in 12th grade.

Anna: Uh, those both make sense to me. Seniors might right now be thinking about their offers and juniors are looking ahead. Um, and then about 20% said others, so presumably guardians, parents, educators, that sort. Um, I’m gonna close the poll and then hand it over to you, Eddy, for your presentation.

Eddy: Yeah.

Eddy: Excellent. So that’s, that’s helpful to know. Um, I will share some specific, um, thoughts for, uh, the current high school students. Of course, this is gonna be relevant for the juniors who are in the audience for whom this will be. Your process in a year’s time. Um, I’m also gonna address a couple comments towards, uh, the other categories.

Eddy: So I’m gonna assume it’s parents or guard, guardians, uh, maybe even other, um, counselors or [00:05:00] whomever, school maybe school officials, uh, who maybe joining us. Uh, so, uh, couple comments that I’ll just say here and there, um, related to. The current process and what is going to be moving forward. Um, I mentioned a little bit about my background already, so I won’t get into that.

Eddy: Um, but effectively the work that we’re doing here at Juno is something that I personally believe in. I’ve worked in college access and affordability. That was a big part of my, my work while I was an admissions officer. I’ve traveled across the entire country, um, recruiting students, uh, from a wide variety of backgrounds and ensuring that we can make college affordable, uh, and accessible for, uh, every student and every, uh, every background that student is coming from, um, that mission carries forward to the work that I’m doing now and that we are doing as a collective at Juno.

Eddy: It really started as a student led initiative, um, where we are banding together, we’re leveraging, um, group negotiation, collective bargaining really [00:06:00] to, uh, work. Uh, at, in tandem with one another to actually get better rates, uh, in student loans, if that is relevant, uh, for families. So I’ll share a lot more about that in a moment.

Eddy: But really wanted to lay the foundation here for us to understand first the cost of college. Um, I understand some folks may have been in some of our presentations before. If so, that’s great. I wanted to reiterate some concepts that are still going to be relevant and to lay the foundation for our time together tonight.

Eddy: Um, folks may be just joining us for the first time, so if any of this is new, that’s okay. Uh, I will still walk through it. You are welcome to review any of our past materials as well, uh, that you can access through CollegeAdvisor. Um, but thinking about different ways to pay for college as well as how the loan process works.

Eddy: Um, federal Direct Loans. Parent plus loans, private loans, if that’s relevant. Uh, and then thinking [00:07:00] about ways to get the best rates possible. Um, and then of course we have some fairly substantial changes in the market, uh, which I’ll spend some time talking about. Um, that will take place starting this July 1st, so it’s gonna be relevant for all of the seniors and anyone younger.

Eddy: And then of course, we’ll save some time for Q&A if we are not able to get to all of the questions, well, I’ll say, first of all, we’ll get to what, as many as we can. Please post your questions in the Q&A. If we don’t have time or are not able to get to, uh, all of the questions. Um, uh, we will download the Q&A uh, section and I will go through and make sure that there are responses for every single question that comes in.

Eddy: So please put your questions there. I wanna make sure that they’re answered, uh, and that we’ll get that sent out to you as well to all of the registrants of the webinar. Now, we’ve talked in the past, again, if you’ve joined us, this is familiar. We’ve talked [00:08:00] about, um, the FAFSA, how to submit it. We’ve talked about the student aid index, uh, what that is, how it’s calculated.

Eddy: Now, many seniors who are in the audience have already applied to college. The vast majority. There are still colleges that are accepting applications now. Um, but a very traditional deadline for many colleges is January, February. And so I imagine many of the in within the audience here have already submitted college applications.

Eddy: And now we’re sort of in phase two, right? Phase two is you’ve. Also presumably submitted, if not very soon, uh, will be submitting your financial aid documentation in order to receive your financial aid package in March or April. Sometimes those dis uh, those admission letters and financial aid offers get sent at the same time.

Eddy: In that case, that’s great ’cause you understand exactly whether you’re admitted and then if you’re [00:09:00] admitted, how much it’s gonna cost. There are also cases in which you may receive your financial aid offer a few days later, or maybe even a couple weeks later. It does depend on the school. So just be mindful to know when those timelines are at the institutions to which you’ve applied.

Eddy: Now, really importantly to know is that. The financial aid letter or offer that you receive is not always the final offer. I’m gonna spend a lot of time talking about this, but you can appeal your financial aid award, uh, and many families don’t know that or don’t know how or how to phrase it. So I wanna spend some time addressing that.

Eddy: And then ultimately, families will decide, students will decide where to attend on May 1st. So from there, um, then we’ll figure out how to pay for school. And then the tuition due date, which is usually due August or September. [00:10:00] We’re gonna focus today on some of the federal changes that are impacting how families will pay for college.

Eddy: Again, if you have questions on any of the previous webinars we’ve done, they are accessible. You can send me an email, I’ll be happy to share the materials with you and, um, college Advisor will be happy to share the materials with you. Uh, we wanna make these resources as available as possible. The more informed you are throughout this process, the better the better decisions you’re gonna make.

Eddy: Um, the less you are gonna get taken advantage of by, by, um, poor products or, or, or, you know, uh, sort of, uh, not the best loan situations, if that’s relevant in your case. So we always wanna make sure that families have all the information that they need to make the best decision possible. Now, let’s dive in As we think about what the cost of attendance is, that is the number that you’ll see.

Eddy: Which is typically or [00:11:00] oftentimes called the sticker price, the price that the family, uh, sees when you’re scrolling through the materials on website, on the college pamphlets. And sometimes it can be a little bit shocking, right? The numbers can be high, can be surprising, but what’s important to know is that the cost of attendance isn’t always the final cost to every family.

Eddy: So there are a number of ways in which we are gonna talk about how this cost of attendance gets reduced, the different metric, the different ways, uh, and opportunities to have that number go down Now. If you think about all the different components that go into it, you’ll have tuition and fees, you’ll have food and housing, you’ll have, uh, health insurance or personal expenses, um, and then books.

Eddy: All of this is meant to encapsulate the entirety of what you might be expected to pay for. Your college degree. Not, not all of these items are [00:12:00] build expenses, so please be mindful that, um, on financial aid letters or offers, oftentimes admit, uh, financial offices will say, these are the build expenses. So things like tuition and fees are bill expenses.

Eddy: Food and housing. If you’re living on campus, if you’re eating in the campus, dining halls will be billed directly to the student. Um, but other things, um, health insurance, you can vary because the family can actually waive health insurance if you already have health insurance that covers the region, uh, the state or the location that the student will be attending college in.

Eddy: So this is not always a, a fixed charge on, on the cost of attendance. Um, but colleges do incorporate it in the case that a family, um, does need it and doesn’t have coverage to within that, uh, that locality to, uh, to support the student. Now other things like personal expenses and books are not necessarily billed [00:13:00] by the university, but there’s still charges that the student will likely incur.

Eddy: And so with that, these aren’t fixed, uh, one student’s personal expenses might be a little bit less than others. It’s just included as an average in order for students to have and families to have a general realistic expectation, right? You’re gonna have to do laundry while you’re on campus if you might wanna go out to eat a couple times, right?

Eddy: These are the ways in which personal expenses factor in to the cost of attendance. Now, what’s really important to know is that this is only for one year. The cost of attendance will change year to year. It gen will usually it increases by a little bit, uh, each year, but, uh. Overall we’re, we’ll look at UCLA as an example, uh, for our time together.

Eddy: Now, how can you minimize that or slowly reduce that overall cost of attendance, that sticker price [00:14:00] that you then see on the website? First, you always wanna access grants and scholarships, right? This is the free money that doesn’t have to get paid back. There are various different ways in which you, various different funding sources that are available from the federal government, from the state government, and from institutional or school resources.

Eddy: So first, the Pell Grant is a federal grant that’s based on the FAFSA, the free application for federal student aid. Um, this is one of the app, this is the application that determines. Federal eligibility for financial aid. Some schools may also have what’s called the CSS profile, which is used to determine institutional aid.

Eddy: Um, the FAFSA is free. The CSS profile does have a fee to it. Um, and so just be mindful of that. Um, but students can qualify for up to $7,395 through the Pell Program. That’s the maximum. Um, not [00:15:00] every student will qualify for that amount. It de it will be determined based on your Student aid index number.

Eddy: Um, but that is the maximum amount that is available. Um, other grants through the federal government are the, uh, federal Supplemental Education Opportunity Grant. Uh, and this is typically reserved for students that come from the lowest income backgrounds or who have the highest need. It’s an additional grant.

Eddy: Funding source that can be upwards of $4,000. Now, you know, a student may qualify for 1000 or 2000, um, but the maximum is 4,000. This is additional funding that is given to the university, um, through the federal government. These funds are limited. And so once the money is gone, the money is gone. Um, col colleges do try to allocate, uh, FSEOG grants equitably to the students for whom they’ve determined have the highest need.

Eddy: So typically we’ll have the lowest [00:16:00] student aid index number. Um, and then work study is also considered a form of, uh, of aid, uh, this in this, uh. Program a student does have to exchange their labor for the funding. Um, but the federal Gov federal, uh, work study program actually does subsidize in part, uh, the student’s employment on campus.

Eddy: And so it’s a benefit to the university, it’s a benefit to the student ’cause they’re able to work and earn, earn some, some money while they’re in college. And then also it’s partially subsidized through the federal government. Um, there are also opportunities for state aid. This will vary based on the state.

Eddy: Uh, and they’re typically reserved for in-state residents. Um, we’ve mentioned this in past presentations as well, but please make sure you’re mindful if your state has any requirements on the FAFSA for. Priority listing. So for [00:17:00] example, um, there are some states for whom you, uh, for which you have to list that a public state, public institution from that state in the number one spot on your FAFSA form or in the, or in the top three spots of your FAFSA form.

Eddy: Um, be aware of that, um, because that can impact your eligibility for state aid. And then of course, institutions have their own funding. Um, this is where their own financial aid program come, comes in and can cover any other remaining amount. Um, again, typically schools will use the FAFSA. Some schools will also use the FAFSA plus the CSS profile.

Eddy: Um, but financial aid is calculated every single year. And so that’s meant to account for any changes in the family circumstance. So if you have had a, a lower year or a higher year, and then there is variability in income, again, there are reasons to consider. Um, so applying [00:18:00] every year accounts for that, but if there are any particular changes or any any swings, um, we can talk about the opportunities that a family has to appeal their financial aid award if, if a number one year is not necessarily reflective of the current family circumstances.

Eddy: So we always wanna maximize that grant and scholarship pool. First and foremost, um, your financial aid award letter is not the final draft, and I wanna emphasize this, uh, because some students and families are hesitant. But it’s important to know that this happens all the time. Uh, a college, uh, college financial aid officers are used to the appeals process.

Eddy: They expect the, the appeals process. And if you’re going through it for the first time, and you have never done this before, it’s very new to you. You might not exactly know how to approach it. Just know [00:19:00] that they will not hold it against you. Um, right. A school will not rescind your acceptance just because you ask for additional aid or additional funding.

Eddy: Um, if you really, really wanna go somewhere, a school is your top choice, or among your top choices, and a little bit of extra aid is gonna help you make that decision to, to lean that the direction of that school. Colleges do consider that, and they do wanna make it possible to bring that student to their campus.

Eddy: Um, again, we have a full presentation on appealing financial aid, so I won’t go too, too much in depth there. Um, but once you have ma uh, exhausted any kind of grants and scholarships, so in the case of this presentation, um, we’ll just use $5,000 as an example. What’s left after that is about $38,000. And so if you do need any loans or this is gonna be the amount that a family is expected to pay afterwards, um, this will, this will constitute the [00:20:00] maximum borrowing limit that a family has, uh, which is the total cost of attendance, minus need, grants, or scholarships received.

Eddy: Now, I need to include a really important caveat here, so this is true for students who are currently. Um, college first year students or older. Now I wanna talk specifically to any of the parents who are in the audience. Um, because if you do have a, a child who is a current college student, you may have someone who’s a high school student as well.

Eddy: Uh, if you have a student who is a current college student, then you are still eligible to borrow under this existing limit that you see on the screen right now. I’m gonna talk about the changes to this, uh, in just a few moments, but for any col current college student, if you’ve, if they’ve taken out a federal direct loan, and I’ll spend some time talking about what that exactly is, uh, if you’ve, if they’ve taken out a federal direct [00:21:00] loan, then they can be granted the legacy exception as it’s called, it’s almost, you can think about it as like being grandfathered in to the old terms of the parent plus borrowing limit, which is the cost of attendance minus any grants and scholarships.

Eddy: Now, let’s hold off on that for a moment. Um, let’s say in this example, a family has $10,000 in savings that they then use to reduce the amount that they, uh, to contribute to the cost of college. And so the remaining amount that the family needs to borrow then is about $28,000. There’s various different ways to figure out how to fill this gap.

Eddy: That can include federal loans that the student borrows. It can include federal loans that the parent borrows, and it can also include private loans.

Eddy: So for the undergraduate process, there are three main loan [00:22:00] types for students and families to consider. We always encourage a student to use the direct loans first and foremost. Now, why is that? The direct loans are loans that are specifically in the student’s name. Uh, they have a, a for freshman year.

Eddy: There’s a $5,500 limit maximum limit, uh, has a little bit of a lower, uh, interest rate than the parent plus loan. A significant, uh, two per over 2% lower interest rate than the parent plus loan. Um, but what’s important here is that gen and they are gonna be lower fixed rates. There are federal repayment benefits to this.

Eddy: So, uh, and also loan forgiveness options. If a student does work in the public sector for 10 years, then they have the opportunity to get their loans forgiven. And so you may not know exactly what your career outcomes are. You may not know where you’ll end up, but it’s a great benefit to have in your back pocket where your loans could be forgiven if [00:23:00] you work in the public sector.

Eddy: Uh, and then. In addition to that, the Parent Plus Loan program is also available. Now, this does have changes which we’ll talk about, uh, because there are substantial changes to the Parent Plus loan program. They do have a higher interest rate as well as a, a high origination fee. Um, but it is the same rate for every family across the board.

Eddy: So it’s a blanket rate. It doesn’t matter what your credit score is, as long as you qualify, then you have access to their Parent Plus loan program. So, again, I’ll talk about the changes in a moment. Um, but previously a family was able to borrow up to the cost of attendance. Now, outside of the federal programs, you have private loans, which can come from banks, credit unions, any other lender.

Eddy: Um, these usually don’t have any origination fees. Um, but they also have fewer protections in the way that federal loans have protections. Typically, private loans don’t have as [00:24:00] many now. What’s important to know as you’re navigating through this process are considerations on both the financial and the non-financial components, right?

Eddy: We talked about some of these already. We talked about things like the origination fee. What is that? It’s, it’s the cost of just taking out a loan to begin with. So, parent plus loan program has a 4.228% origination fee. Uh, and so if you’re borrowing a hundred dollars, then uh, you actually have to borrow $104 and 22 cents, right?

Eddy: Effectively, it’s, it’s charges, it, it charges you just to take out the loan effectively. Um, a lot of families will look at the interest rate, uh, the rate type, uh, which is, uh, you know, fixed rate, uh, variable rate, interest loan, and then any kind of borrowing limits or borrowing caps, the amount that’s available to the family.

Eddy: Now, other important considerations, does the family qualify? [00:25:00] Right. Are you able to actually take out the loan? And whose name is the loan in? Is it the student? Is it their responsibility? Is it the parent? Uh, is it both? Um, what is the timing in which you have to make the payments? That is a huge consideration for a lot of families.

Eddy: And then what does happen if there are any hardships? If if circumstances, life circumstances arise and you’re not able to make payments, what are you able to do? So let’s talk about the direct loans. I do wanna jump in, uh, dive in deeply here and we’ll talk about the plus, uh, parent plus loan programs, as well as private loans as well.

Eddy: Um, with the direct loans, again, these have a 6.39% fixed rate. It is lower than the Parent Plus program. It has a lower origination fee. There is a maximum borrowing of $5,500 for a student’s freshman year. Students can be eligible to have a portion of that as [00:26:00] a subsidized direct loan. So a maximum of $3,500 can be subsidized by the federal government.

Eddy: Effectively, what that means is that the government is paying the interest that accrues on the loan while the student is in college. So the student is still responsible for that $3,500 loan, but they’re not responsible for the interest that accrues. So that’s a great thing. Um, students can also borrow, uh, up to $2,000 in the unsubsidized loan.

Eddy: So in that case, the loan is the student’s responsibility, and it does in, uh, it does get added to the amount of your total loan. Um, generally there’s, uh, there’s no, there’s no credit check here. It’s a, it’s a loan that is specifically designed for students who are going to college. Uh, and payment begins six months after graduation.

Eddy: So this is generally the best option that we encourage. First and foremost for students, uh, you don’t need a co-signer here. [00:27:00] Um, and there are low limits, but if you only need less than $5,500, it’s a great place to start.

Eddy: The, the term limits do increase each year, $6,500 to sophomore year, and then $7,500 junior and senior year as the cap. Now, that’s for dependent students. If a student has, um, uh, is considered a dependent for FAFSA purposes, now there are cases in which a student is. Also is also an independent student.

Eddy: Now, this is very different than whether or not a student is claimed on taxes. Uh, independent status for purposes of the FAFSA is a very strict definition, and you’ll see the criteria on the right side of the screen. So a student is over 24, they’re married, they’re a graduate student, a veteran, or a member of the armed services.

Eddy: They may have been an orphan. Um, uh, they may be at risk of [00:28:00] homelessness or an emancipated minor. So there are very strict criteria that do require documentation in order to prove that a student is independent. And if that’s the case, the federal government allows a student to borrow more because they don’t have parental support.

Eddy: Uh, and so a student can borrow up to $9,500 for freshman year instead of the $5,500. Now we will talk a little bit about this, uh, next with Parent Plus. But if a student, if a parent is actually denied the Parent Plus program, um, because of an adverse credit event on their, on their profile, then the student could borrow up to the, uh, the independent student limits.

Eddy: We’ll talk about that in just a moment here. Um, so with the Parent Plus Loan Program, it is a higher interest rate loan at 8.94% with a 4.228% origination fee. Um, these numbers will change in May. Um, these, they get updated every single May, and [00:29:00] so it, it went down, uh, 0.1% from last year. Hopefully it will continue to decrease.

Eddy: Um, we’ll keep an eye out and see what happens. Um, but again, uh, under the old terms of the Parent, parent Plus program, which is still into, in effect today, so this is still, uh, this is still open to any families who have a college. Aged students right now, you can still borrow the Parent Plus Loan program.

Eddy: You can borrow up to June 30th for the the year, and so you can borrow up to the cost of attendance. Um, generally, again, un uh, you, you can’t have an adverse credit event on your profile. Um, otherwise it’s very, it’s fairly easy to qualify, uh, and everyone gets the same rate. Um, the student is solely responsible for this loan.

Eddy: The student, excuse me, the parent, I, I believe I just said this, the parent is solely responsible for this loan. The student has. Um, no place. There’s nowhere that the student’s name is included on this. [00:30:00] Uh, and so I wanna make sure that families are aware of that. Um, the payment does begin generally 60 days after the loan is dispersed, but a family can request deferment until six months after graduation, which is what is available for the student’s side, the federal direct loan in the student’s name.

Eddy: Um, we generally recommend this after a student has borrowed that direct loan first, that $5,500 freshman year. And so from there then you can think about, um, how much you might need and what the, what the limits are, uh, for your family.

Eddy: Now, just to address a few questions, uh, that we generally get, and again, I’ll make sure we look at, um, we review the, uh, questions and answer section at the end. Um. Who is eligible for the Parent Plus program? Um, it’s, it’s open to parents who have an undergraduate [00:31:00] student who is enrolled at, in at least a halftime program.

Eddy: So over, uh, it’s halftime to full-time program you can borrow to support the child in their educational endeavors. Um, children cannot get this loan. Um, they’re not, it’s not open to them. Um, they’re not responsible for it. Uh, you apply. Um, we’ll include, uh, I mentioned, uh, we’ll share these slides. You can actually click these links, uh, you can follow them to, uh, the application.

Eddy: You’ll then sign the massive promissory note. Uh, and then from there, uh, you’ll be able to get access to the federal funding. Now I mentioned if there are cases in which parents might be denied the Parent Plus program. So if you had a recent bankruptcy, any large debts that are delinquent, um, for more than 90 days or if you’ve have any kind of, um, wage garnishment or a tax lien, um, those are circumstances in which a, a parent can be [00:32:00] denied the Parent Plus program, and so a student would then borrow under the $9,500 independent student status, if that’s relevant.

Eddy: Not always the case, but we also wanna make sure that families are aware of that. Now, everything that I described up to this point was what is currently in place until June 30th of this year. Starting July one of the summer, um, as a result of the, um, the a provision in the big beautiful Bill Act that passed this PA that passed last summer.

Eddy: Um, there are changes to federal loan policy. So if a student is currently in college, so again, I’m speaking to the, any parents here who may have a child in college, then you can pay attention to everything that I just shared. Your borrowing limits are up to the cost of attendance. Uh, and you don’t have to worry about these caps.

Eddy: Now we have mostly seniors and juniors in [00:33:00] the audience. So in your cases, for any incoming, for any, uh, seniors and juniors. You’ll fall into this next bucket because you will start college after July of 2026, and so your families will only be able to borrow a maximum of $20,000 per year through the Parent Plus program.

Eddy: So what used to be a limit of up to the cost of attendance is now a $20,000 annual limit. On top of that, there’s also a lifetime cap to the Parent Plus program of $65,000. And so what this might mean is that a student is, or excuse me, a parent might be able to borrow $20,000 for the freshman year of college, $20,000 for the sophomore year, $20,000 for junior year, and then [00:34:00] what’s remaining is only $5,000 left.

Eddy: Right. And so you, you will hit that, that cap well before, or you won’t well by your senior year. And at that point you’ll only have a limited amount. Now you don’t have to borrow the maximum amount. If you chose to, you could distribute this evenly across all four years. So $65,000 divided by four, you would borrow $16,250 every single year.

Eddy: But I wanna run through a situation in which you can see how this cap is gonna impact the family’s borrowing.

Eddy: So let’s use the case of UCLA again, and we had that $43,000 cost of attendance. If you remembered, we’re gonna subtract the $5,000 scholarship and then the $10,000 in savings. So the amount left to borrow is $28,000. The student will would then get a $5,500 direct loan, which is the [00:35:00] maximum for freshman year.

Eddy: And then let’s say a parent does borrow the maximum $20,000 for that, for that first year of college, there is still going to be a gap of $2,700. So the family will have to figure out how to meet this gap. Now again, it may not be as large. Now maybe you, maybe you can use additional savings or maybe parents are, might work a little bit of overtime.

Eddy: Maybe the student works a little bit of overtime while they’re in college to help fill this gap. There are many ways in which, uh, a student, uh, and family can fill this. You could borrow, uh, in, in the private loan market. You don’t have to. But these are all the different options that families have as they’re considering how to make this work.

Eddy: Now, let’s look at year two. You’ll see the direct loan increases by a thousand dollars. So the total unmet need and de, uh, decreases by a thousand dollars. [00:36:00] So in this case, a family would need about $1,700 as that gap. If we look at year three, similar scenarios again, um, the maximum for junior and senior year to the direct loan is $7,500.

Eddy: The parent borrows that $20,000 cap annual cap. Again, there’s only a $719 difference, so again, it’s getting smaller and smaller, but here’s where we really wanna emphasize the important point. Now what’s gonna happen senior year? So senior year, you’ll have already borrowed $60,000 through the Parent Plus program.

Eddy: You only have $5,000 left. Given the new cap to the Federal Parent Plus loan program of $65,000, you’ll only be able to borrow $5,000. Now this cap is per child. It is not per parent. So it’s not like one parent can borrow [00:37:00] $65,000 and then the other parent can borrow $65,000 and then they combine that together for $130,000.

Eddy: Borrowing limit for the child. That’s not how it, how the law has been written. It is per child, so whomever, borrows, doesn’t matter if it’s uh, one parent or the other. It is per student. And so that cap is going to be in place. Now, there are some schools, um, there are schools out there for whom this may not be an issue, and your borrowing won’t exceed anything close to the parent plus cap.

Eddy: But we also, and I’ve had direct conversations with many families, uh, over the last few months for whom their cost of attendance is, is going to require. Support beyond what the federal program offers. And so this is why we wanna make sure all families are aware, because this has implications on [00:38:00] your decision making process, whether that influences which schools you’ll ultimately matriculate to.

Eddy: Um, we have seen, and again, I’ve, I’ve spoken with families who have focused solely on the admissions process and then after the fact they just said, we’re gonna figure it out. We don’t know how we’re gonna pay for it, but we’re gonna figure it out. And. In the past, that was okay. It could work because again, you could borrow up to the cost of attendance in the Parent plus loan program.

Eddy: Um, it wasn’t a great loan, but it wasn’t the worst that you could get, right? Especially in the marketplace. Now, it is a little bit more exp it is more expensive to borrow money than it was pre COVID. And so, you know, it’s not a, it’s not a great rate, but it’s not a terrible rate. Um, and the parent plus served as the, as the fallback plan.

Eddy: That’s not gonna be the case anymore. And so it’s no longer the fallback plan, um, because of [00:39:00] that, that annual limit and the lifetime limit. And so from there, I really encourage families to be really mindful and strategic about how they approach their college conversations. It’s gonna be even more important.

Eddy: Again, I’m speaking as a, a former college counselor myself. It is always important to think about academic fit, social fit, the environment that you wanna be in. We always, I’ve always talked about financial fit and I hope you’ve been hearing that message as well. I know you have, uh, ’cause I know the, the work that CollegeAdvisor does with their families.

Eddy: And so if you have, if you have not paid as close attention to those, uh, that feedback, I encourage you to, to. Um, to allow this information to sink in because it is the reality of where we are now in 2026 and the changes that are coming [00:40:00] in July. And so this is where financial fit is going to be even more important, where a student and a family and their counseling support has to have that conversation because a family can no longer just say, we’re gonna figure it out.

Eddy: We’re gonna do what we have to do. You have to be mindful, you have to be strategic because I would not want, um, families to be in a really difficult situation of having to borrow extraordinarily high interest rate loans, um, and have trouble paying those off over the course of the next 10, 15 years.

Eddy: Right. So this is why I, I don’t. I wanna encourage a, a level of seriousness in this conversation because I know the, the extent to which this will impact families. I, I think about families that I’ve worked with in the past, uh, for whom this will have major implications. Um, and so think about the ways in which, uh, you can prepare for these [00:41:00] changes.

Eddy: Again, if you have a current student who is in college, I’m speaking to the parents here, then the new limits won’t apply to you. Um, as long as a student has taken out a direct loan before June 30th of this year, they’ll be fine. You’ll be granted the legacy exception, and you’ll continue to be able to borrow over the next, over the, uh, maximum of, of three years.

Eddy: Um, but for the duration of the students, um, undergraduate program, with a maximum of three years, you’ll continue to be able to borrow under the old terms. Of the program. So up to the cost of attendance. Now, again, if the student starts college this fall, so any current seniors and anyone younger, then you have to plan accordingly.

Eddy: You’re not gonna be able to borrow up to the cost of attendance anymore. Uh, and you’ll have to consider the restrictions that are gonna in place moving forward. In either case, it is really important to understand [00:42:00] what private loan options exist and if that’s gonna be relevant for you in order to fill that funding gap.

Eddy: So lemme just spend a moment here, and then again, I wanna be, um, a little bit mindful of time here. Um, feel free to put, uh, put your questions in the Q&A. Um, thanks so much Anna. I see you, I see you’re answering, uh, answering them. So I really appreciate your help. So as we think about both the federal landscape and the private landscape.

Eddy: What are your options? Um, on the private side? Just to give you a quick overview, generally there aren’t any origination fees. The interest rate is not the same across the board though, so this is gonna be dependent on your credit. It’s gonna be dependent on your income, your credit score, your debt to income ratio.

Eddy: Many of the factors that, uh, that lenders consider in their underwriting criteria. And so the student is [00:43:00] generally the primary borrower on the loan, and then they have a co-signer. So it could be a parent, it can be a grandparent, uncle or aunt. Anybody who is, uh, credit worthy can sign as a co-signer and you can borrow up to the cost of attendance, uh, for the private market.

Eddy: These are not in, uh, influenced or impacted by the federal loan changes. Uh, the federal loan changes are for the federal loans only. They’re not for the private loans. So you can, you for fed, for private loans, you can borrow up to the cause of attendance minus any financial aid that you’ve received. Uh, you can take out either fixed or variable rate loans.

Eddy: Payment terms are, uh, are up to the student to decide the student and the family to decide. There’s a wide, lenders offer a wide range, five years, seven years, 10 years, 15 years, 20 years. So there’s a range of options that make that. Allow you to choose what works for your family. [00:44:00] Um, you can also choose when payment begins.

Eddy: So as you see on the bottom right, you can either start immediate repayment so you start paying right away. A lot of families won’t do that. Uh, if, if that’s, if you are able to make those payments great, you will generally qualify for the lowest interest rates if you start immediate repayments and have a shorter LA shorter payment term.

Eddy: So five year loan payment terms with full repayment will, will almost always see the lowest rates possible ’cause the lenders are, are getting their money back faster. And so they’re considering that a lot less risky. And so they give, um, lower interest rates as a result. Now, families can also fully defer.

Eddy: Payment. So that means you don’t pay until a student graduates college. Now the interest will still accrue, be mindful of that, but there’s also other options in between. So lend, uh, private lenders will generally offer interest only payments. Um, so if you’re able to pay off the interest, that’s great, ’cause that will not get added.[00:45:00]

Eddy: That will not get capitalized to the end of your loan and it added to your, your overall principle. Um, you can also have options like a fixed payment, like a $25 a month. So it may not fully cover the interest, but you’re doing a little bit. You’re chipping away a little bit at a time as you can. Then after a student graduates, then that’s, or six months after, usually that’s when the full payments begin.

Eddy: Now, should you consider a private loan option? Um, again, we encourage all students to use the direct loan first and foremost. Before any other consideration, it has federal protections. It generally has a lower rates, uh, and it’s, it’s a favorable option for the student. Now, other circumstances where families have made the decision to actually go the private market, uh, over the federal market, um, if you do want the loan to be in the [00:46:00] child’s name with a parent as a co-signer, then this can be an option.

Eddy: Again, federal direct loans are in the student’s name. Parent plus loans are in the parent’s name only. Private loans are the student is the primary borrower with the parent as a co-signer. Now, other scenarios in which this might make sense is if you have good credit, uh, and you might qualify for lower rates to the private market than what you see in the federal market.

Eddy: So Parent Plus is at 8.94%. If you have good credit and you’re able to get a. 7% interest rate loan. Right? Almost two full percentage points lower. Absolutely. That’s, that’s gonna make a lot of, um, sense and that’s gonna save you a lot of money over the course of a 10 year, uh, repayment term loan. Right? And you could save quite literally in the amount, in the amount of thousands of dollars, if not tens of thousands of dollars with that difference in, in interest rates.

Eddy: So other scenarios in which a parent might need to borrow is if, [00:47:00] again, the policy changes that we’ve been describing where a family has hit that parent plus borrowing limit. And so this is important information for families to consider on whether or not you should go into the process or maybe if you are even forced into the private loan market.

Eddy: Now a lot of lenders will allow you to check, uh, pre-qualified rates. Um, this is a soft inquiry check. It is not going to go on your credit. Uh, it’s not gonna impact your credit. Um, the only time that it will impact your credit is if you actually apply and they do a hard credit poll on your, on your credit.

Eddy: And so generally, many lenders will allow you to do a rate check, uh, to see the rate, the rates that you would qualify for and that won’t impact your credit. So just a quick comparison point here. Um, if you were to borrow the Parent Plus program, uh, at 8.94%, [00:48:00] again using the UCLA example versus a private loan at 8%, right?

Eddy: So I mentioned earlier 7% here, let’s just actually talk about 8% loan so you can see the difference. Uh, and you’re borrowing $22,700. This is the scenario, uh, the difference is going to grow over the course of a 10 year loan. So that’s gonna be actually about a, a, excuse me, um, about a $5,000 difference in terms of the total interest paid.

Eddy: Now, of course, we always wanna, we always wanna minimize loans as much as possible and maximize grants and scholarships. But if you do need to borrow, then this is the reality that we’re in. So you are, you can the, based on the interest rate that you qualify for and that you can get, you might literally save thousands of dollars just solely based on that fact.

Eddy: So I strongly encourage you to shop around when you [00:49:00] can, um, at least explore and see what, what rates you might qualify for. Um, you don’t have to take out a loan and throw a lender if you do a rate check, for example, but check and see what rates you might qualify for. Um, ’cause if it’s lower than the Parent Plus program, uh, again, it’s it.

Eddy: You may choose to go to the private loan market anyways and completely ignore the Parent Plus program. Or you might have to explore the private loan market if you’ve exhausted the options through the federal program. Um. Now, let me just go through this really quickly. I, I do wanna be mindful of time here and so we can get to questions again.

Eddy: We started Juno, uh, over eight years ago now by essentially bringing students together who needed to borrow and to say, is there a better way to do this? Can we get better rates as an entire group as a collective than if we were to go shop around individually? And that was true. It actually happened, it worked out.

Eddy: A group of 700 students were able to get a lower rate and the [00:50:00] rest is history. And we’ve been going ever since then. And so what I would really encourage families here is if you have, uh, if, if you’re willing. If you can join the negotiation group, uh, that we have going on, that is gonna be the most tremendous help to us.

Eddy: Now, there is no cost to join. Juno will not ask for you for money ever. Um, where there’s no place for you to input your credit card information or anything on our website. All we’re asking for is families to join this group and then by April 30th, um, because then we start our negotiations with lenders and then after our negotiations, we release those negotiated deals to the entire, uh, to the public.

Eddy: And so if you are within, uh, the negotiation group, that is tremendously helpful for us because we can then say, Hey, lenders, look at us. Look at the size of the Juno group here. [00:51:00] Um, this past year we had 15,000 families, but it would be awesome for us to have. 20,000 families, 25,000 families, 30,000 families, because the more families we have, the better, the more attractive that’s gonna be to lenders and the more they’re willing to trade in terms of the margin to secure that volume of the 30,000 families that we come.

Eddy: Right. So effectively what happens is we are able to save these lenders on a lot of their marketing costs. Um, and trust me, they spend a lot, I’m, I’m speaking from experience ’cause I’m, again, I’m a current grad student. So like the moment you apply alone, you’re just gonna get bombarded with all these ads.

Eddy: And so effectively what we’re doing is we’re, we’re actually a lot helping lenders save on a lot of their marketing costs. And then that gets passed to Juno and we send that to families. So the better the cheaper rates that families see through Juno is actually a direct result of that collective [00:52:00] bargaining power.

Eddy: We can say, Hey, X, Y, Z bank, there are 30,000 of us. Together. If you want our our collective business, you have to, you have to offer a better deal. Otherwise we’re gonna go to this other bank. And so it’s a fairly simple model. It is extremely helpful to us. Again, I’m a junior member myself if I’m in grad school, and so I’ve directly benefited from this.

Eddy: Um, you don’t have, you’re not obligated to take out a loan. It is effectively signing up for a mailing list such that if you might need a, if you might need a loan, then it will serve as an option. And, and the more families that we have together, again, it just, it, it serves the collective benefit. It helps everyone else out.

Eddy: And so that’s why we’re really, uh, pushing for this so that we can come together as a collective, uh, in order to secure the lowest rates possible. I mentioned again earlier, really quickly, there’s no cost to sign [00:53:00] up. Um, there’s no hard credit check. We will never ask for your money. Um, Juno has always been free for families.

Eddy: We don’t, you know, there’s, you don’t have to worry about any of that. We, we value transparency. We understand that families are making a really big decision and also have potentially been burned by other financial institutions in the past. So Juno is not a lender. We partner with lenders, um, but we are sort of like a union for student loans where we bring in families together.

Eddy: Now, if you do have any questions, I’m more than happy to meet one-on-one with families, uh, on any of the financing related questions that you might have. Um, and it’s not just me. We have our whole team who’s available. Um, I work specifically on with undergraduate families, so you can always reach out to me.

Eddy: Uh, I’m happy to share my email or if CollegeAdvisors, uh, has my email can share it out. Um, but we wanna be available to help with any questions you have because again, the more informed you are, the better decisions you [00:54:00] are gonna make if this is relevant to you, if you do need to borrow at some point in time.

Eddy: One last quick thing that I’ll say, because this is a, a really helpful tool. I’m gonna speak specifically to the seniors here and then, um, also any parents who have current college students. So Juniors, you’re welcome to, to play around with this tool. I encourage you to play around with it. It’s not gonna be as relevant for you just now, but we just created this, uh, financial aid appeal generator tool two weeks ago.

Eddy: I mean, we, it’s been in the works, but we launched it two weeks, two weeks ago and we supported families last year. Um, manually by reviewing financial aid, appeal letters, providing comments and feedback in order to lead to the, the most successful appeal, uh, appeals. Um, we’ve created this tool to do all of that.

Eddy: And so I ple, I encourage seniors because you are gonna be getting your, um, your financial aid, uh, materials very, very soon. Um, [00:55:00] please use this tool. I was just looking quickly, I’ll, I’ll, I’ll head to Q&A right after this. Please use this tool, uh, in order to know what documents you might need in order to speak the right language that resonates with financial officers and then ultimately to.

Eddy: Letter of appeal to ultimately send to the financial aid office. So this is free. This tool will always be free for families. Um, please use this. Uh, we wanna make sure that families are minimizing, um, loans as much as possible. Again, I recognize we work in student lending, but we want families to borrow as little as possible.

Eddy: We want you to actually maximize grants and scholarships. First and foremost, get all the free money. You can get all the free money from federal sources, from state sources, and then especially from the schools that you’re applying to. And then at that point, that’s gonna put you in the best position financially to succeed as [00:56:00] you go through the next four years of college.

Eddy: Okay, I’m just gonna jump to Q&A as well here. Um.

Anna: Great. Thanks Eddy. Do you want me to help volley some questions to you?

Eddy: Um, I can see, I can see them here in the chat. Uh, just give me, in the Q&A section, there might be some in the chat. I’ll, I’ll take a look there. Um, so, uh, talk about financing for inter uh, for an international school.

Eddy: Um, congratulations on your son’s acceptance at Oxford. Um, not pro, uh, private loan options available. Uh, there are certainly options for schools abroad. Oxford is a very common one. Um, I’m pretty, I’m almost sure I can double check, but I’m almost sure that, um, our partner lender, uh, will lend to Oxford. So lenders will have various.

Eddy: They may have different, uh, lists of schools abroad that they are able to lend to. Uh, and [00:57:00] so if, um, Migel, I’m happy, I I can actually send you, uh, I’m happy to send you the list, uh, a list that at least we have, and you can check with each specific lender, uh, as well. But there are lenders that are willing to lend for students who are attending school internationally.

Eddy: It will depend on the school though. I do wanna give that, that caveat.

Eddy: Is the federal direct loan dependent on family income? No. The federal direct loan is dependent, is a fixed amount. Uh, let me go back. Great question. So we, well, we actually may have covered this. I don’t remember when the timing came. But, uh, it’s $5,500 for a student’s first year, $6,500 for a student’s sophomore year, and then $7,500 junior and senior year.

Eddy: So this is available to students across the board. Uh, it’s not based on income. And so a student is eligible for, again, there’s no credit check. Um, it’s a, [00:58:00] it’s available through the federal government to help a student pay for college.

Eddy: Would the schools now be discouraged from hiking their tuition rates knowing that students can’t borrow unlimited amounts to fund their education? Great question. Um. Hopefully, um, I think that is the, I think that is the spirit of what would of, or the intention here, um, behind the, behind the federal changes.

Eddy: Um, because again, historically families were able to borrow up to the cost of attendance. If the cost of attendance continues to increase and families, you know, colleges can charge increasing cost of attendance and then that just families can continue to borrow that increasing amount. Um, we will see how this plays out.

Eddy: And so again, I hope to see tuition freezes. We will, we’ll actually see this, uh, this coming August and September. Um, let, we’ll stay tuned. Um, there are, there are many colleges that, that [00:59:00] spend more per student. Than what they charge tuition. And they’re, they’re, they leverage other sources of funding to help fill the gap.

Eddy: So they leverage federal funding sources, for example. Um, they leverage endowment funds. They leverage, um, fundraising, uh, to help operational expenses. So it varies and it will vary school to school. Um, we will see and, and monitor how this, how this might change, uh, tuition increases though. Is it too late to join if grad school starts July 1st?

Eddy: And you have to join again in the fall. Um, you, if I’m curious if this is, uh, it’s not too late to join, at least in terms of joining Juneau, if that’s where the question is going, um, families can join at any point in time. Um, what’s most, so what’s most helpful to us is if you join before April 30th, before we do our negotiations.

Eddy: Now families can join at any point after that. [01:00:00] Um, but again, the benefit is when we come together, right? As I mentioned, let’s say. I would love for us to have 30,000 families this year. ’cause that gives us so much more bargaining power as a group to go to these lenders and demand more, demand, more savings from them.

Eddy: That again, we then will pass the entire collective. Um, you don’t have to join before April 30th, but that’s when it’s most helpful. Um, and if you are here specifically for grad school, um, uh, that’s also, okay. So we work with undergrad students and graduate students. I mentioned myself. I’m a Juno member, I’m a grad student myself, so, um, that’s totally fine.

Eddy: Uh, you can join throughout the summer as well. You can, you can leverage ju um, Juno’s negotiated deals at any point throughout the year. Um, but generally lenders will wanna. Lenders try to incentivize summertime rates. Um, or like early, like early June, uh, kind of rates. So just be mindful that interest rates [01:01:00] will change month to month.

Eddy: Um, so you might see some, some options that are available earlier on that the rates may change as you get deeper into the summer. I do just wanna mention that ’cause the rates will not be consistent, at least in the private loan market. They, they will fluctuate. So just please be mindful of that. Um, you made a deposit for, uh, daughter’s number one choice.

Eddy: Does this limit your power to appeal the financial aid package? Great question, Isabella. Yes. I’m sorry to say, um, you have more leverage before you submit the deposit. If it is a need-based appeal, colleges are likely to be more sympathetic to that. So maybe if you made a, a mistake on your financial aid documents, um, it’s much less likely if, I mean it is [01:02:00] possible, but it’s much less likely.

Eddy: ’cause you, you would, you could lose your deposit. You don’t have to go. Right. You could lose your deposit and I hope it wasn’t a large amount. Um, but it’s much less likely if you have deposited somewhere that they would then, um, be more incentivized to offer you more. ’cause they know you’re already coming.

Eddy: And if you don’t, they’ll, you’ll lose your deposit, which is a bummer. Um, it is possible, but I’m, yeah, I am sorry to, to share that, that tough news.

Eddy: Do you need to be formally denied for the parent Plus, in order to, to get the independent student benefit amount, you either a student actually either needs to be an independent student. Uh, so again, those the qualifications of an independent student or Yes. A stu um, uh, a family of or a family has to have an adverse credit event on their [01:03:00] history, uh, and not qualify for the Parent plus loan program.

Eddy: There are other, so if a parent, um, a parent can still be denied the Parent plus Loan program and there is sort of like a co-signer for the parent process that is possible. Um, so there is, there is a workaround if a parent is denied, but if you don’t have that option, then the student would then be eligible to borrow $9,500 for freshman year if a parent is denied.

Eddy: The parent plus. Great question.

Anna: Thanks so much Eddy. I think that’s all of the questions. Um, really helpful presentation folks. Please note that in the chat I put two links. One is to a webinar Juno’s done with this us in the past unappealing financial aid, and another link to the, um, where you can sign up for Juno and join, um, that group that’s gonna be [01:04:00] negotiating, um, after April 1st.

Anna: So we hope you are able to check out both of those resources. Um, Juno’s a fantastic organization. They have a lot to offer, so we hope you take advantage of that. Um, this has been recorded. It will be emailed to you. I think that’s all the housekeeping on my end. Eddy, do you have any? Send off words.

Eddy: I just appreciate all of you, uh, your time and your willingness to engage here.

Eddy: Um, and so, uh, I see one final question actually just come in. Great. Uh, great question, Jennifer. I’ll just clarify that if, if we have one more moment here. Absolutely. Are direct loans written in the student and parent’s name? The direct loan is the federal direct loan is specifically for the student. The Federal Parent plus loan is exclusively and only for the parent.

Eddy: So they are separate. Great question and an important clarification there. Now again, [01:05:00] the, in the private loan market, the student will be the primary borrower in most cases, and then the student will need a co-signer. Uh, usually it’s a parent. It doesn’t have to be a parent. Uh, as I mentioned, it could be a grandparent, uh, an uncle or an aunt, or anyone who’s willing to co-sign loan who has strong credit.

Eddy: It could be a family friend. Uh, and so that restriction is not the same, but that person also is effectively guaranteeing the loan in the case that the primary borrower, the student does not pay. So it’s a huge responsibility, um, but a very important clarification. Great. Um, if anything else does come up, feel free to to send me an email.

Eddy: I’d be more than happy to answer those questions, but ultimately, again, I think I’m, I’m excited for, uh, for especially all the juniors who are so curious about this process and the parents who are, who are tuning in here, this is really important information to know for the seniors. This is [01:06:00] directly gonna impact you this upcoming year and so thank you for your time and attention.

Eddy: Uh, I really appreciate it. And please lemme know if there’s any other questions I can help with.

Anna: Thank you so much Eddy, and thanks to everyone for your questions and for joining. Have a great night and best of luck with your applications.

Eddy: All right. Good night everybody. Bye.