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All week long on wealth we're covering the student loan application, acceptance and repayment process. According to the common app which processes applications for over 1,000 colleges and universities, the number of college applications increased about 6% from the same time a year ago. The number of total first time applicants ticked up by about 4% for total of about 1.4 million. And those students will soon be receiving acceptance letters and their financial aid offers. Here to help break down what they need to know is Jack Wang, innovative wealth advisory group college planning strategist and wealth advisors. So, when those acceptance acceptances start rolling in, how can parents and students figure out how much each offer is worth, Jack and weigh them on a relative basis?

Now each offer uh really parents need to really look at the numbers closely. It can be very confusing, especially because sometimes schools only put on what are called direct costs, which are things like tuition fees, housing and food, but other schools will include those direct costs as well as indirect costs such as like books, miscellaneous, transportation. And so you want to make sure you're doing an apples apples comparison because sometimes those costs can vary significantly by thousands of dollars.

So there's the types of costs that people need to think about. And there's also the types of loans that students might be offered. You have federal subsidized loans, you have federal unsubsidized loans and then parent plus loans. So talk to us about the biggest differences between those.

Yep. So the the federal subsidized loans or sub loans or and federal unsubsidized loans or unsub loans, those are to the student themselves, right? So the parents do not have to cosign for those. Those are just to the student and the differences between those two loans are just that the unsubsidized loans accrue interest while the students in school, whereas the subsidized loans, the the interest is waved. So effectively it's a 0% loan while the students in school. And so if you qualify for that, that's the best one to get, you know, obviously that's the best one to get because it's basically 0%. On the other hand, parent plus loans are always unsubsidized, meaning that they do accrue interest while the students in school. But the parent plus loans are to the parent, right? And this is one of the most important points I want to emphasize is that the parent is the borrower, not the student. And so for some reason, uh you know, the parents are trying to make the student pay the student's actually not legally obligated to pay on a parent plus loan because they are to the parent, not to the student.

That is very important to know for sure as uh someone whose kids are going to be heading to school in the next few years. Um what about the difference between private and public loans, Jack?

So what I like to say is private loans are through various banks, uh credit unions, different national lenders and there's plenty of them around. The private loans offer a lot of options upfront, whereas federal loans provide all the options on the backend. So for private student loans, the difference is people can choose who the borrower borrower is. For example, could be the parents or it could be the student with the parents co-signing. They have their choice in terms of interest rate fixed or variable. They have their choice of uh repayment amount options. For example, you can do interest, you know, no payments during school interest only or fixed payments, you know, full payments I should say during school. But they carry fewer of the legal protections. So there are no income driven repayment plans and no forgiveness programs. Now on the other hand, federal loans, everybody gets the same terms up front, right? No matter how good or bad your credit is, everybody gets the same terms, but you have all of the things that have been in the news recently, which are all the different types of income driven repayment plans and forgiveness programs and stuff that may that you may be eligible for. And so really the difference between two loans is do you want your choices on the front end or do you want your choices on the back end?

Gotcha. Lots of different choices, period. Um and and once people weigh all of this before they decide whether or not to accept the loans, are there any ways to appeal for more or different aid if they don't necessarily like the selections they have?

Yeah, absolutely. So parents and families can always appeal for more aid. The worst thing a school can do is simply say, no, we're not giving you more money. But you have to be sure in terms of why you're asking, right? Is it because you're asking due to a significant financial change? Like, you know, you lost your job or something like that, right? Those tend to go to the financial aid department. On the other hand, if you're asking for what I call the just because like I just would like some more money to make this more affordable, those tend to go to the emissions group. At most schools, right? Not always. But you want to be sure about why you're asking and and really have a good rationale. And if it's because of a significant financial change, obviously you're going to have to provide documentation. And the other point on this is it has to be something that has already happened. So for example, someone got notice that they're going to be laid off six months from now, that's not sufficient reason versus someone who has already been laid off where that obviously would be more of a basis for the appeal.

Jack, really helpful information. Thank you so much.

Thanks for having me on. Appreciate it.