Kentucky offers dozens of private and public colleges to choose from. But, going to school in the Bluegrass State isn’t cheap. A full 64 percent of graduates of four-year institutions leave school with debt in Kentucky, according to reports from the Institute for College Access. And, it’s not a small amount of debt either – the average owed is $28,447.
Owing money for school can come at a significant cost. Paying off student loans can be hard, so you’ll want to borrow as little as you can and make sure you seek out loans that provide the most favorable terms you can find. Usually, this means exhausting federal loans before taking out private loans, but not before you’ve maxed out scholarships and grants that don’t have to be repaid.
If you’re not sure where to start, this guide to Kentucky student loans, scholarships, and grants will help you to explore your options.
On this page:
- Getting Financial Aid for College
- State-Based Student Loans in Kentucky
- Kentucky College Scholarships
- Kentucky Grants for College
Getting Financial Aid for College
The costs of academic programs vary in Kentucky, and your eligibility for financial aid will depend upon financial need, academic merit, the school you attend, and other factors.
To become eligible for many types of aid, including federal student loans and some scholarships, you’ll have to complete the Free Application for Federal Student Aid (FAFSA) online. Based on financial info you provide on the FAFSA about your family and your personal assets, an expected family contribution (EFC) will be calculated.
Your school will then put together a financial aid package with sources of aid to cover costs above what your family is expected to contribute. This could include government loans, grants, and scholarships. If it’s not enough funding, you’d have to take out private loans to make up the difference. Private loans don’t have all the borrower protections federal loans do, but many lenders offer loans at reasonable terms.
Always exhaust all free sources of funding first and look for scholarships yourself to supplement any grants and scholarships your school includes in your financial aid package. Federal loans should be the next source of funding, followed finally by private loans to fill in the gaps.
State-Based Student Loans in Kentucky
Kentucky students can obtain state-based loans from the Kentucky Higher Education Student Loan Corporation (KHESCL). KHESCL is an independent municipal corporation created by a 1978 Kentucky statute. It offers:
- Advantage Education Loans for Students: These are fixed-rate loans with APRs as low as 3.80% with auto pay. Interest rates are based on credit history, income, and repayment plan. Students can choose immediate repayment of principal and interest, paying interest only while in school, or postponing payments until after graduation.
- Advantage Education Loans for Parents: These also offer a fixed-rate as low as 3.80% APR, depending upon credit and other financial factors. Repayment options are the same as loans for students, but these loans are open only to parents or stepparents.
Students in Kentucky may also be able to obtain loans from the school they’re attending. For example, the University of Kentucky explains various departments provide loans to undergraduate and graduate students. Check with your school’s financial aid office to find out about any loans that may be available, as well as rates and terms.
Students should also consider Direct Loans issued by the Department of Education, and can explore options for private loans in Kentucky. Some possible sources for private loans include:
- University of Kentucky Federal Credit Union: Rates range from 7.50% to 9.50% for an undergraduate private education line of credit. Students may borrow up to $60,000, and there are no prepayment penalties or origination fees. Students also have a choice of repayment options, including deferring payments while in school.
- Greater Kentucky Credit Union: The Greater Kentucky Credit Union has partnered with Sallie Mae to provide The Smart Option Student Loan. This loan has no origination fee or prepayment penalty. Undergraduate students have a choice between a variable-rate loan with a starting APR of between 4.37% and 11.23% and a fixed-rate loan with an ARP of 5.74% to 11.85%. Borrowers are also eligible for a 0.25% rate reduction for autopay and can choose a repayment timeline between five and 15 years.
>> Read More: Where to find state-based student loans
Kentucky College Scholarships
Kentucky students should apply for as many scholarships as possible because maxing out free sources of money means borrowing less. Fortunately, there are many scholarship programs in Kentucky.
The Kentucky Higher Education Assistance Authority administers some of these programs including:
- The Kentucky Educational Excellence Scholarship: This scholarship provides funding to students who attend certified Kentucky high schools and earn a GPA of at least 2.5. The scholarship amount depends on the student’s GPA. A student with a GPA of 2.5 would receive a $125 scholarship for each year of college, while a student with a 4.0 GPA would receive a $500 scholarship. Students can also earn bonus awards between $36 and $500 for ACT scores between 15 and 28+ and can earn additional awards for advanced placement courses, or scoring well on the International Baccalaureate or Cambridge Advanced International exams.
- The Early Childhood Development Scholarship: This scholarship is available to Kentucky residents pursuing certain degrees in child development, child education, or related programs. Students must be enrolled in up to nine credit hours per term and must be working at least 20 hours per week in an early childhood facility or a state-funded preschool program. Students are also required to agree to a service commitment based on the credential earned. Up to $1,800 in funding is provided annually.
- The Coal County Scholarship Program for Pharmacy Students: This scholarship is open to residents of Kentucky’s coal-producing counties who are attending an accredited school of pharmacy. The amount of the scholarship varies, and students are required to commit to working one year as a pharmacist in a coal-producing region for each year the scholarship is awarded.
- The Dual Credit Scholarship Program: Students in Kentucky who are in 11th or 12th grade can obtain this scholarship if they’re also taking classes at a participating Kentucky college or university. The scholarship award equals the dual credit class amount the college charges, and students are limited to taking two dual credit classes per year.
- Work Ready Kentucky Scholarships: These scholarships are available for Kentucky students who don’t yet have an Associate’s Degree, certificate, or diploma. Students must be Kentucky residents with at least a GED and must be admitted to a postsecondary institution in an approved course of study. Eligible students must complete an Associate’s Degree, certificate, or diploma in a high-demand workforce sector. In the 2018/2019 school year, this includes health care, transportation and logistics, business services or IT, construction, or advanced manufacturing. The scholarship pays for the remaining cost of the course minus federal and state grants and scholarships.
Students can also check with their school’s financial aid office for scholarship funding. For example, the University of Kentucky provides both need-based and merit scholarships.
Kentucky Grants for College
Grants, unlike scholarships, are typically based on financial need while scholarships could be awarded based on merit or need, or even based on participation in particular activities or groups. Students have many options for grants in Kentucky including:
- The Kentucky Tuition Grant: This grant, which is administered by the Kentucky Higher Education Assistance Authority is valued at up to $3,000 and is open to Kentucky residents with demonstrated financial need who are enrolled full time at eligible colleges. Students need to complete the FAFSA to become eligible.
- The College Access Program Grant (CAP): This grant is worth up to $1,900 and is open to Kentucky residents with financial need who are enrolled at least half-time in a program that’s at least two years long. Completing the FAFSA is also required.
There are also federal grants available, including Pell Grants, which are worth up to $6,095 in the 2018 to 2019 academic year. You should check with your school’s financial aid office to explore all possible sources of grant funding.
Bottom Line
There should be no shortage of funding options for Kentucky students. Now you know where to look for Kentucky scholarships, grants, and loans so you can pay for your education. Just remember to always try to keep borrowing to a minimum and look for loans with the most favorable rates and terms so you don’t leave school with substantial student debts to pay back.