Kentucky Higher Education Assistance Authority

The Kentucky Advantage Education Loan is for students who have already applied for grants and scholarships, and maxed out their federal loans for the year, but still have a tuition gap.

It is a fixed loan, with amounts loaned from $1,000 to $75,000. (But your school has to certify that whatever you ask for is the amount you need to attend.)

To be eligible, you must:

• be a U.S. citizen or eligible non-citizen (at least 18 years old)
• have "acceptable" credit, or a good credit cosigner (Unless you're a nontraditional student with a good credit history, you'll need the cosigner.)
• make satisfactory academic progress (according to your school's standards)
• be either a Kentucky resident, enrolled half-time (at least) in any eligible school (in or out-of-state); or a non-state resident, going to an eligible Kentucky school at least half-time

Terms of the loan are:

• for immediate repayment (while in school)
• 7.25% interest rate
• 2% guarantee fee
• for postponed payment (until graduation or falling below half-time)
• 7.75% interest rate
• 3% guarantee fee

This loan compares favorably to the Parent PLUS federal loan (which has a 7.9% fixed rate) and has the added bonus of having the student listed as the main borrower.

Kentucky used to use the Federal Family Education Loan Program (FFELP) for its federal student loans .

The state established a lending agency called the Student Loan People to manage these and to offer their own alternative loan, the 'Student Loan People’s Advantage Loan'.

The student loan provisions in the health care bill ended the FFELP. All federal loans now come from the Direct federal student loan program.

Kentucky has partnered with the Student Loan Marketplace whose lenders offer private student loans to students with tuition gaps. Students can compare rates and benefits from these lenders, side by side. If you are looking for a different private loan lender, check out credit unions.

In addition to federal undergraduate and Direct PLUS loans, the KHEAA offers a Nursing Student Loan at a 5% interest rate and a Primary Care Loan (also at 5%) for students enrolled in schools of allopathic or osteopathic medicine.

Kentucky participates in the federal Stafford Teacher Loan Forgiveness Program with benefits of:

• up to $5,000 in loan forgiveness (for 5 years teaching)
• up to $17,500 in loan forgiveness (for being a secondary math or science teacher or a teacher of special education)
• loan cancellation if you have taught in a low-income school

Kentucky had participated in the Child Care Provider Loan Forgiveness Program, but the U.S. Department of Education is no longer accepting new applicants into the program. (although renewal benefits for participants continues)

• The award may only be received for two and a half years while in an Associate's program, or for four and a half years while in a Bachelor's degree program.
• The only application needed for the grant is your FAFSA.