Loan Programs that allow you to finance all or part of college costs, including the cost of purchasing a personal computer.

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1 Financing Options

2 An education at one of the nation s top art colleges is an investment in your future. Once you have determined that MICA is the place for you, our staff will work with you to help make your education managable. Many families, even those not eligible for financial aid, consider a variety of ways to finance the costs of attending MICA. Both those who choose not to apply for financial aid and those who want to finance the gap between their financial aid award and the total cost of attending MICA will find this guide helpful. It provides descriptions and toll-free numbers for a variety of financing options, including: A Monthly Installment Payment Plan that allows you to make monthly payments for semester college expenses rather than two lump sum payments each year. Loan Programs that allow you to finance all or part of college costs, including the cost of purchasing a personal computer. Federal Tax Benefits such as the American Opportunity Tax Credit or Lifetime Learning Tax Credit, or deductions for interest on loans to students and parents. All the plans detailed in this guide are reputable. Each company has an excellent customer service department staffed with accessible personnel who will be happy to answer your questions. Contents Monthly Installment Payment Plan 1 Loan Programs: An Overview 2 Federal Parent Loan for Undergraduate Students (PLUS) 3 Private Educational Loans 4 Federal Tax Benefits 5 American Opportunity Tax Credit 5 Lifetime Learning Tax Credit 6 Student and Parent Loan Interest Deduction 6

3 Monthly Installment Payment Plan If you select this payment program, you will pay semester college costs tuition, room, and board in monthly installments beginning in July, rather than in a lump sum each semester. There are no interest charges. There is a semester $35 application fee. Applications for this plan are due in June, and monthly payments begin in July. MICA offers the Tuition Payment Plan administered by Higher One.. This monthly payment plan is not a loan program. There is no interest charge, only a semester application fee of $35. This plan is designed to provide families with a manageable option for paying college bills. Rather than paying tuition, room, and board in a lump sum each semester, participants in the Tuition Payment Plan pay the academic semester costs in monthly payments. These payments can be automatically deducted from your checking account monthly or paid via a monthly bill. You should apply by June; payments begin July 15. If your application is received after July 15, the initial payment will be higher. For example, if your application is received in August, your first payment will be for both July and August. Your monthly payment amount will vary from year to year, depending on the educational costs at MICA, as well as the amount of financial aid and scholarships received. For an application and additional information on the Tuition Payment Plan administered by Higher One, contact MICA s Office of Student Accounts at or Higher One directly at tuitionpaymentplan.com/mica or Veteran Benefits MICA has been selected as a top military-friendly school. If you are eligible for Post 9/11 veteran/family benefits, please advise the Financial Aid Office and you will be directed to our veteran s benefit coordinator. Families receiving Yellow Ribbon benefits together with a MICAsponsored match often receive full tuition and fees awards. 1

4 Loan Programs: An Overview A loan program lets you borrow all or part of college costs and pay them back over an extended period of time. Interest is charged, and eligibility is determined by credit worthiness and/or debt-toincome ratio. Allow plenty of time for processing. Through a loan program, all or part of your college costs are borrowed now and paid back over an extended period of time. Most companies include life and disability insurance to assure the continuation of payments in the event of death or disability of the parent or sponsor (ask the firm when you contact them). As an added service, these loan programs will accommodate borrowing for any required personal computer. In determining which program you should select, consider: Whether you can defer payment on the principal. If you choose to do this, your costs will be reduced while attending college. Number of years over which payments can be extended. The maximum is 30 years. Differences in interest rates and fees. Minimum and maximum loan amount available. For more information on any of the loan programs described here, use the contact number provided with the plan description. To make arrangements to borrow for a required personal computer, contact MICA s Office of Financial Aid at

5 Federal Parent Loan for Undergraduate Students (PLUS) Amount You Can Borrow Fees $1,000 up to the total cost of education, less financial aid received 4.292% fees Current Interest Rate Fixed 7.21% What Can Be Deferred Maximum Term of Loan How Often You Need to Apply Principal can be deferred in certain cases 120 months (10 years) Annually The Federal PLUS program is available to parents of dependent undergraduate students regardless of income. Eligibility is determined by credit worthiness, and payments can be deferred, though interest will accrue. The amount a parent may borrow is the total cost of education minus any financial aid a student may be eligible to receive. There are combined fees of 4.292%, with a fixed interest rate of 7.21%. Sample PLUS Loan Plan Monthly Payment Example (at an interest rate of 7.21%) Amount Borrowed Freshman Sophomore Junior Senior Year 1: $5,500 $6 $64 $64 $64 Year 2: $5,500 $64 $64 $64 Year 3: $5,500 $64 $64 Year 4: $5,500 $64 Total Monthly Payment $64 $128 $192 $256 Total Amount Borrowed $5,500 $11,000 $16,500 $22,000 Years to Repay For more information on the PLUS program, contact MICA s Financial Aid Office at

6 Private Educational Loans A private educational loan features the student as a borrower. Private educational loans can be more expensive than Federal PLUS loans and students should first maximize any eligibility under the Federal Stafford programs. Private loan fees and interest rates vary among lenders. All lenders will review the borrower s credit history and most require a cosigner. All students should carefully consider repayment obligations before borrowing. There are many reputable Private Education Loan companies. MICA provides the following lender tools as a good place to start the search. Both tools can be accessed at in the private education loan section. Many students start by using the Maryland Student Loan Marketplace or the Great Lakes loan selection tool FASTChoice. These private loan comparison tools empower you to take control of the process and make an informed decision in selecting the best private loan for your individual situation. When using the Maryland Student Loan Marketplace, you are able to securely submit your personal information only once, and the Marketplace will present personalized loan products and terms for you to sort and compare. The Marketplace keeps your personal information private, so only the lender that you select will contact you. FASTChoice, powered by Great Lakes loan guarantor and processor, provides data for lenders that do not participate in the Maryland Student Loan Marketplace. Great Lakes FASTChoice provides comparison tools for the following private lenders Sallie Mae, SunTrust, Wells Fargo, Discover, PNC, and Citizens. In the current economic and credit market climate, private educational loan companies are in a state of constant change. Make sure to check all lenders websites for the most current information regarding credit criteria and interest rates. 4

7 Federal Tax Benefits Tax laws include a number of very substantial provisions beneficial to many MICA families. The following information is provided to give an idea of what these tax benefits could mean for you. 1. American Opportunity Tax Credit The American Opportunity Tax Credit is actually a tax credit, not a scholarship. Tax credits are subtracted directly from the family s federal tax liability. The maximum American Opportunity Tax Credit a taxpayer may claim for a taxable year is $2,500, multiplied by the number of students in the family who meet the following eligibility criteria: Must be a MICA degree-seeking undergraduate and have incurred outof-pocket costs (paid directly or with student and/or parent loans) for tuition and fees; tax credit calculated at the rate of 100% for the first $2,000 paid plus 25% for the second $2,000 paid. Must be enrolled at least half time. If the student is claimed as a dependent on the parent s tax return, the parent must meet the following modified Adjusted Gross Income (AGI) criteria. If the student is not claimed as a dependent, the student must meet the following modified AGI criteria: Single Return: Modified AGI is less than $80,000 Joint Return: Modified AGI is less than $160,000. For more information, contact your tax advisor or refer to the IRS website: 5

8 2. Lifetime Learning Tax Credit This is a family-based tax credit ($2,000 maximum per family per year) rather than student-based tax credit like the American Opportunity Tax Credit. The Lifetime Learning Tax Credit can be combined with other educational tax credits and deductions. Eligibility: Available for all years of post secondary education and courses to acquire or improve job skills. Limits on modified Adjusted Gross Income (AGI) of $130,000 if married, filing jointly; $64,000 if single or head of household. Students must have incurred out-of-pocket costs (paid directly or with student and/or parent loans) for tuition and fee expenses; tax credit calculated at the rate of 20% of the first $10,000 of tuition fee expenses paid. 3. Student and Parent Loan Interest Deduction A deduction is now available for interest paid on student and parent loans that were used for educational expenses. The maximum deduction is $2,500. Borrowers must meet the following modified AGI criteria to qualify for the Student and Parent Loan Interest Deduction: Single Return: Modified AGI is less than $80,000. Joint Return: Modified AGI is less than $160,000. For the most current information and more specific details of each program, contact your tax advisor or refer to the IRS website 6 Maryland Institute College of Art Office of Financial Aid 1300 West Mount Royal Avenue Baltimore, Maryland (410) (410) fax finaid@mica.edu