Financial Aid: Unsubsidized Federal Direct Loan

What Is An Unsubsidized Federal Direct Loan?


Acceptance into college is a happy time with students breathing a sigh of relief that they got their first choice, maybe second or even that they’re going at all. Maybe a student is pursuing a dream that doesn’t just involve textbooks and term papers, but pots and pans in culinary school. But with the decision to pursue a culinary education comes the question of how to pay for it.


According to statistics, some 20 million Americans go to college each year and about 12% of them — or about 2.4 million — pay their tuition through borrowing. Student loan options are plentiful and one of the most common choices is an unsubsidized federal direct loan. Another option for parents borrowing on behalf of their child in college is the Parent PLUS Loan.


What is an unsubsidized federal Direct loan?


An unsubsidized federal direct loan is an option for college students to cover the cost of tuition at a variety of schooling paths: four-year college or university, a community college or junior college, trade, career or technical school (i.e. financial aid for culinary school). The loan comes from the U.S. Department of Education for schools and students that are eligible.


Just like any loan, the money must be paid back but an unsubsidized loan begins to accrue interest while the student is still in college. Subsidized loans, on the other hand, don’t collect interest during that period because the government pays the interest.


How do I get an unsubsidized federal Direct loan?


While some loan programs depend on the student’s income, unsubsidized loans can be borrowed depending on how much money a student makes. Unsubsidized loans can also be used for the undergraduate and graduate level; there is no time limit in place for how long college students can get an unsubsidized loan.


You can receive an unsubsidized federal Direct loan each academic year.


To be an eligible borrower, a student needs to:


●     Enroll at least half-time in a degree or certificate program at a school that is participating in the Direct Loan program

●     Complete and file the Free Application for Federal Student Aid (FAFSA). Your school will use this information to determine how much you could receive from the Direct Loan program.

How much can I get through an unsubsidized federal Direct loan?


The annual loan limits are:

●     Freshman Year: No more than $5,500

●     Sophomore Year: No more than $6,500

●     Junior or Senior Year: No more than $7,500

●     Professional or Graduate Student: No more than $20,500


What about a Parent Direct Plus Loan?


There are options for parents to take out Direct loans to pay for their children’s college education. To be eligible to secure a Parent Plus loan, the parent must:


●     Be the parent (whether biological, adoptive or step parent) of a dependent undergraduate student who is enrolled at least half-time at a school that is participating in the Direct Loan program.

●     Have a child who completes and files a FAFSA.

●     Have a child who meets the bare minimum for financial need.

●     Have a cosigner who is not the student if they have a bad credit history.


What if my parents can’t get a Direct Plus Loan and I need more money?


Students whose parents are denied the Parent Plus loan may be eligible to receive an additional funds from an unsubsidized federal Direct loan.


When do I have to pay an unsubsidized federal Direct loan back?


The first thing to understand is that if you take out a loan, you will have to pay it back. An unsubsidized federal Direct loan is not a scholarship, grant or gift for which you are no longer responsible.


You can start repaying your loan when the payment is fully disbursed and that can be either after the academic year you needed the loan or, if you needed loans during your entire school career, after graduation. However, you may place your repayment on deferment for six months after you stop going to school at least half-time.


Is this loan a good option?


If you thoroughly research your options and make solid plans for repayment, the unsubsidized federal Direct loan can be a sound choice to help finance your education.


If you still need more information

Check out our Financial Aid Fact Book, or contact us via email at or by phone at 802-225-3243

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Financial Aid: The Parent Plus Loan

Should I Take The Parent Plus Loan?

The parent plus loan basically allows parents to pay back their child’s college fees through higher education. The loan has a low fixed rate and repayment terms which are considered to be very favorable. However, the loan will be in your parents name rather than yours. So, if you have been offered a Parent Plus loan, you might be curious about whether or not you should take it. Is the parent plus loan worth it?

In The Name Of Parents

One of the problems a lot of parents have with the loan is that while the award letter is addressed to the child or student, the Parent Plus Loan is put in the parents’ name. Even if you pay the loan on behalf of your parents, their credit history won’t be affected by the fact that it was successfully repaid.

Credit History Is Not Considered

The Parent Plus Loan scheme approves the vast majority of people unless they have an extremely large credit delinquency. If you’re worried about how your credit history may affect your ability to receive a loan, you might be interested to know that, the cut-off point is usually at 90+ day delinquencies outstanding. The Federal Loan scheme does not, however, take into consideration either debt-to-income or the parents actual credit score when they are awarding loans.

Reduced Rates Aren’t an Option

The problem with the Parent Plus Loan is that, there is no direct method of refinancing the loan available. There is absolutely no way that parents can get a reduced rate on the loan. In some cases, parents use home equity with a much lower rate to pay off their loan.

Repayment Begins Immediately

Before you take out the Parent Plus Loan you should be aware that you begin full repayment from the moment the Parent Plus loan is disbursed. Parents should be ready to start making full payments on Parent Plus as soon as they are disbursed.

One Child Over Another

If your family has a large number of children attending college, you should make sure that you do not over-extend on the Parent Plus Loans and end up favoring one child over another. In some cases, parents may have to decide which child to send to college.

Less Than Expected

When the loan is disbursed, the origination fee (4.288%) is removed from the loan so a $10,000 loan will only disburse $9,571 to the account holder

Fixed Rate

The Parent Plus Loan scheme operates on a fixed rate (6.41%) basis. For parents with a bad credit score, this is good news as their credit score is not taken into consideration so, they won’t get a higher rate due to excessive borrowing in the past. However, for parents with a good credit score, the news isn’t greeted with happiness as they are unable to get a lower loan rate despite having a better credit score than other parents.

If you’re looking for financial aid for culinary school, you might be considering a Parent Plus Loan but, before you accept any of the terms, you must decide whether or not the Parent Plus Loan is right for you. After all, you are going to have to pay back every penny so, if it’s not for you, don’t push yourself to take it. Before you consider taking out a Parent Plus Loan, you should make sure that there are absolutely no scholarship opportunities available. If there are scholarship opportunities available, you should apply for as many as possible in the hope that you might be awarded one of them. Scholarships will always be a better option.

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Financial Aid Basics for Culinary School

Financial Aid Basics for Culinary School

Now that you have gotten serious about pursuing your culinary education, you’re going to need to determine exactly how much this education is going to cost – something that is nowhere near as simple or as straightforward as most people have hoped.

Sure, the New England Culinary Institute has done absolutely everything it can to simplify and streamline this process. Each and every student has a unique financial situation, wants to pursue different degree programs, and may or may not have the crystal clear idea about how they want their culinary education to unfold – all key factors that will impact the overall cost of culinary school.

At the same time, if you are planning to take advantage of financial aid for culinary school you will need to come to as close to a “concrete number” as possible as far as your tuition is concerned – and this quick guide gives you a bit of extra insight into the process.

How much is attendance at NECI?

If you’ve been wondering whether or not you’re going to be able to afford tuition at the New England Culinary Institute, you’re going to need to figure out exactly how much it will cost for you to attend. We’re committed to providing a top notch culinary education at a value. For the years of 2014 & 2015, we’ve frozen our tuition rates, and we have a committed financial aid team that is here to assist you in finding the money you need to attend culinary school.

Depending entirely upon what you hope to study, whether you’re looking for a certificate in the culinary arts or a bachelors of arts in culinary arts, and a number of other critical factors, your tuition can vary greatly. The difference at NECI is that we

-          Have a great student to teacher ratio, this means personal attention

-          At NECI you “Learn By Living It” – our students learn in real restaurant kitchens. This makes them highly sought after candidates.

-          Job Board – We help our graduates to find employment so the ROI (return on investment) of your education comes quick

You’re going to need to look at the specific programs that you hope to attend, how you want your culinary career to unfold before you, and the specific educational opportunities that you’ll need to pursue your culinary career.

With that, you will know how much your culinary education will cost, and after that you can figure out exactly how much financial aid for culinary school you will need.

Can I afford culinary school?

Again, this is a next to impossible question to answer over the Internet, if only because every individual student will have different educational requirements and different financial means with which to pay for school.

The odds are fantastic, however, that you will be able to afford culinary school – especially when you decide to attend the New England Culinary Institute. The financial aid department at NECI has helped thousands of students get the high-level culinary education they’ve always wanted without “breaking the bank,” and is a fantastic chance that you’ll be able to enjoy the same kind of help and assistance moving forward.

3 ways to get money for culinary school you may not have thought of!

If you’re still wondering “can I afford culinary school,” you want to look at a couple of different ways to get money for culinary school that you may not have thought of previously.

New England Culinary Institute has a number of “on campus” positions that pay a reasonable wage, but also include financial aid for culinary school built right into them – maybe one of the best chances for you to attend this high-level culinary arts program.

Finally, you’ll want to look into obscure or lesser-known scholarships specifically designed for culinary arts students to help you get extra money that you’ll need for culinary school. It’s likely that restaurants, successful businessman, and other organizations in your local area provide exactly these kinds of scholarships, and you may be the only one to inquire about them – allowing the bulk of this funding to go directly to you!

You can start your search here:

-          College Board

-          Finaid

-          Fast Web


-          Scholarship America

-          Princeton Review Scholarship Database

-          Vermont Student Assistance Corporation (Scholarships for VT residents only)

Scholarships For A Culinary Education

-          James Beard Foundation General Scholarship

-          American Hotel and Lodging Educational Foundation

-          Hospitality Sales and Marketing Association International Foundation

-          American Institute for Wine and Food Culinary Scholarship for Vermont Students

-          National Restaurant Association Educational Foundation

-          National Restaurant Association First-Time Freshman Scholarship


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Financial Aid Through AmeriCorps

Guide to Financial Aid Through AmeriCorps

Most people are well aware of the fact that joining the United States Armed Forces comes with a number of very attractive benefits, including a considerable amount of money to be used towards a higher education after (or during) the terms of enlistment have concluded.

At the same time, millions and millions of people are completely unaware of the fact that there are other federal organizations that are willing to provide considerable financial aid and scholarships to those that sign up and work closely with them – including the AmeriCorps federal service.

If you’ve been looking for an opportunity to secure extra financial aid to help you pursue your dream of becoming a culinary professional, you’ll want to look into the AmeriCorps for culinary school opportunities that are provided by this amazing organization.

What is the AmeriCorps organization?

A lesser known organization dedicated to providing public services, educational opportunities, and hands on mentoring to the youth of America, AmeriCorps was designed and developed from the ground up to help create future leaders that would take America boldly into the future and continue to instill the tradition, culture, and drive in future generations.

By becoming a member of AmeriCorps you’ll be asked to volunteer your time to help meet the needs of your local community, acting as a community organizer, helping assist and mentor young people, creating neighborhood watch or local crime prevention programs, building homes or parks for those in need, or lending a helping hand to your neighbor.

The terms of service are nowhere near as “severe” as those you would be locked into when you decide to enlist in the armed forces, but you’ll still have the opportunity to take advantage of AmeriCorps scholarship for culinary school financial aid programs all the same.

Why would I want to take advantage of an AmeriCorps scholarship?

There are a seemingly endless number of reasons that you might be interested in taking advantage of this kind of scholarship program, but the most obvious is that you’ll be able to make a real and lasting impact in your community while working closely with this organization – and earn serious amounts of money towards your college education.

You can really start to build up a comfortable “nest egg” that will help you figure out how to pay for culinary school with AmeriCorps, an opportunity many millions of people aren’t even aware of.

Can I use an AmeriCorps scholarship or financial aid to pay for culinary school?


When you decide to become a volunteer member of the AmeriCorps organization, you’re going to be able to lock in some very generous benefits – one of which is the ability to get federal financial aid and scholarships that you can easily apply to your culinary education.

How can I apply for an AmeriCorps scholarship or financial aid program?

The first stage of securing AmeriCorps scholarship for culinary school opportunities is actually signing up for a term of service with this amazing organization.

From there, you will be presented with a number of forms and applications that you will be required to fill out – as well as an eligibility determination for the Segal AmeriCorps Education Award. Once you are determined to be eligible for that particular block of financial aid, you’ll be able to go through the necessary paperwork process required to apply it to your culinary education.

If you’re wondering “will I get money for school from AmeriCorps”, the answer is unequivocally yes – and you’ll also get a considerable amount of financial aid (at very favorable terms) to help offset any extra costs you may incur. You’re definitely going to be able to figure out how to pay for culinary school with AmeriCorps opportunities.



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The American Opportunity Tax Credit

What Is The American Opportunity Tax Credit?

There are two things which are certain in life; death and taxes. We all know that taxes are a pain especially if you, as a family, are having to fork out a lot of money putting your kids through school. However, for people who are having to spend money on education, there are now options to increase a tax refund by claiming education benefits. If you are enrolled in school, there may now be another, better opportunity to save money other than claiming interest costs on your taxes. This is American Opportunity Tax Credit.

So What Is It?

American Opportunity Tax Credit is basically a program which covers certain expenses, certain fees, and course materials such as course-related books; supplies and equipment which may not be funded by the college you are studying at. The tax credit is a form of refundable tax credit for undergraduate college student expenses. The tax credit can be used by students to pay $2500 in credits for the first $4000 of college expenses which have qualified. 40% of the credit ($1000) of the credit is refundable and, even if no taxes are owed, you can claim the credit to create a refund.Tthe tax credit is currently scheduled to last until 2017 unless Congress decides to extend the tax credit scheme.


If you think that you might be able to qualify for the American Opportunity Tax Credit, you will need to research whether or not you qualify. There are three requirements which determine your eligibility: you pay the qualified education expenses of higher education, you pay the education expenses of an eligible student, the student is either yourself, your spouse or a dependent which you claim exemption for on your tax return.

Income Limitations

There are some limitations on the American Opportunity Tax Credit when it comes to income. The full amount ($2500) is available only to people with a modified AGI of $80,000 or less or, if you’re a married couple who are claiming a joint return, you are eligible if your AGI is less than $160,000. If your income is higher than these amounts, you are not eligible for the American Opportunity Tax Credit.

What Is 1098-T?

Colleges tend to record the expenses on 1098-T. It’s a statement compiled by the institution summarizing the tuition and required fees which is sent out annually. You will need to check your 1098-T so, if have not received yours, you must check with either the bursar at your institution or the enrollment management officer.

Some of your expenses won’t be listed on the 1098-T. For example, a computer will not be listed on 1098-T and so it won’t qualify for the American Opportunity Tax credit. There are is a list of expenses which don’t qualify for the tax credit and, as a rule, it includes: room and board, transportation costs, insurance, medical expenses, some student fees and some expenses which are paid with tax-free educational assistance. If are not sure what qualifies and what doesn’t, speak to someone who is well-qualified in the financial area to avoid any misunderstandings

For Enrolled Students

Tax credits for enrolled students can be claimed but, before you claim the tax credit, you must make sure that you are yet to complete your first four years of post secondary education before the start of the tax year. You must also make sure that you have not claimed either the Hope credit or the American Opportunity Tax Credit in four other tax years and also be enrolled at least half-time for more than a quarter of the year. You must also be enrolled in a course which will eventually lead to a degree or a recognized certificate.

The American Opportunity Tax Credit can seem completely and utterly baffling at first, but once you get your head around it, it really isn’t all that bad. If you need someone to explain it to you, either contact your accountant (or whoever manages your tax returns) or someone who you know to be qualified on the subject to ensure that you qualify for the American Opportunity Tax Credit.


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How Do PAYE Loans Work?

How do PAYE (Pay as you Earn) loans work?

PAYE (Pay as you Earn) federal loan programs are becoming more and more popular at colleges, universities, culinary schools, and other higher education organizations all over the United States.

It’s no secret that more and more college students are graduating with a mountain of debt placed squarely upon their shoulders, and because of the crippled modern economy and the depressed job market it’s a financial obligation that many of them aren’t able to meet right out of the gate.

At NECI, we work to help you reduce those costs with our dedicated Financial Aid department, career services, and a superb job board to help you find employment after you complete your education.

We also understand that some students may need a little more assistance with the financial burdens of pursuing a culinary education.

Designed and developed from the ground up to remedy that problem (or at least help students that are dealing with debt), PAYE loans offer a unique opportunity. We are going to break down the basics of these loans below, as well as give you a bit of “inside information” as to whether or not this is the kind of financial aid for culinary school you should be looking for – or something that you should ignore completely!

Ready to get started?

What are Pay as you Earn Loans?

The big promise behind Pay as you Earn Loans (PAYE loans) has always been geared towards creating a loan repayment plan that makes sense for everyone on the surface – you only have to pay back a specific amount of money towards your loan depending upon the amount of money that you make, which seems (on the surface) to tremendously lighten the burden of debt that recent graduates are carrying around today.

But in practice, that’s just not the way that this system works.

Instead of helping everyone looking for financial aid for culinary school, college, or university degrees equally, PAYE loans are more focused in geared towards helping those that have a ridiculous amount of student debt and a very low income.

Also, even though Pay as you Earn loans extend your repayment plan term out to 20 years (instead of just 10), all of the loan forgiveness that you’ve been taking advantage of becomes a taxable event at the conclusion of that term.

That means you would need to prepare yourself for a “big hit” on your taxes later down the line!

Why would I want to use PAYE loans?

This is not to say that PAYE loans should be avoided at all costs.

In fact, nothing could be further from the truth. For some students (especially those that anticipate taking on a lot of debt because they weren’t able to get extra financial aid), Pay as you Earn loans could make the most sense moving forward.

They give you the opportunity to protect yourself from default, while at the same time giving you some financial flexibility depending upon your household income over the next 20 years. It gives you a little bit of financial security, pushes back your repayment term 10 years, and allows you to have a flexible repayment schedule that works with the amount of money you’re making during any given year.

Are there any disadvantages to using PAYE loans?

As mentioned above, there are definitely some drawbacks to using PAYE loans – especially if you expect to take on financial aid for culinary school as well. These kind of loan terms really only work well for those with a high debt to income ratio. If you don’t expect that much debt in the first place (because of extra financial aid for culinary school), or if you expect to land a cushy position right out of school that pays well this probably isn’t the kind of program for you.

Is a PAYE loan the best way to get financial aid for culinary school?

At the end of the day, it’s impossible to say whether or not a PAYE loan is the right move for you moving forward in culinary school.

You’re going to need to really look at the amount of student debt you’re going to take on, the amount of money that you anticipate making right out of school and in the first 10 years after graduation, and whether or not you’d feel more comfortable with a stable repayment plan or a variable one through Pay as you Earn loans.

Only then will you know how to move forward securing the right financial aid for culinary school!

If you need a little more guidance or want some more information, contact us via email at or give us a ring at 802-225-3243. We’re here to help.



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