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Financing 606: Loan Lessons

College is expensive. Annual price increases are far surpassing inflation, and many families will need loans to pay the bill. Here’s what you need to know:

Seek out alternatives to loans first. Never borrow if you can find gift aid, since loans come with interest. Good gift aid sources include grants (the federal Pell grant has been raised to almost $4,000), work-study programs, your Aunt Miriam, and the following:

• The JVS Scholarship Fund of the Jewish Vocational Service Agencies offers scholarships (amounts vary) as well as interest-free renewable loans. 

• The JCCs of North America Graduate Scholarship Program offers full-time students majoring in select subjects $10,000, so long as they agree to work for a JCC after graduation; part-time students employed by JCC are eligible for $3,000. 

• The Jewish War Veterans of the United States of America offers educational grants of $500–$1,000 to high school seniors who are direct descendants of members in good standing

• The United Jewish Federation Central Scholarship and Loan Referral Service (CSLRS) offers $1,000–$3,000 in the Pittsburgh area. 

• The Jewish Family and Children's Services (JFCS) offers up to $6,000 in California. 

• The Dallas Jewish Community Foundation offers scholarships of $300–$4,000 primarily to students from the Greater Dallas Metropolitan area. 

• The Jewish Social Service Agency of Metropolitan Washington offers scholarships and loans of $1,000–$6,500 to Jewish residents of Metropolitan Washington, DC. 

Explore these lower-cost federal loan options:

• Federal Family Education Loan Program. FFELP loans of up to $8,500 (depending on grade level) are available for U.S. citizens or permanent legal residents enrolled at least half-time in an eligible school (males must satisfy Selective Service requirements).

• Subsidized or Unsubsidized Stafford or Stafford Direct Loans of $3,500–$8,500 are awarded to students based on demonstrated financial need; the government pays the 6.8% interest during college and—depending on the amount—a short time after.

• Federal PLUS Loans of up to cost of attendance minus other aid can assist parents in paying for education-related expenses such as tuition, fees, books, and room and board. Financial need is not required. PLUS rates are capped at 8.5%; Direct PLUS loans are capped at 7.9%.

• Federal Perkins Loans ($4,000–$6,000) are borrowed from the school; students repay at 5%.

For information on these loans visit the Federal Student Aid website.

Apply for lower-cost loans issued by Jewish organizations:

The Hebrew Loan Society offers interest-free loans of up to $7,500 per year. Eligibility varies regionally; see the website for details. 

The Jewish Educational Loan Fund (JELF) provides education loans of varying amounts depending on need to Jewish students from Florida, Georgia, North Carolina, and South Carolina. 

Finally, consider the bank/ credit union loan option. If you’re already a member, banks or credit unions may offer special pricing. Rates and repayment options vary, so it’s always advisable to compare plans. Don’t simply take the word of a single loan officer.

May your search for funds be fruitful.

—John B. Boshoven, coordinator for the
Special Interest Group for Jewish Students and Schools for the National Association for College Admission Counseling



Union for Reform Judaism.