AZcentral.com
Sept. 15, 2004

University of Phoenix students received nearly $867 million in federal-aid dollars in fiscal 2003.

That's a huge number. In 2002, Arizona State University, which leads all Arizona public universities in the amount of money lent to students, lent only about $173 million, a year when University of Phoenix students received about $812 million in financial aid.

The sheer bulk of the University of Phoenix, the largest private university in the nation, makes for those huge numbers.

Financial aid is available to students at almost any private, private for-profit and public university or college in the country. Here's how it works:

A student applies and is accepted to a school but needs some financial help. The student submits his or her financial-aid form to the institution.

From there, there are various paths.

There's the Pell Grant, which is awarded to students with the greatest financial need.

Then there's the Stafford Student Loan, which comes both subsidized and unsubsidized. The current rate for the loans is 2.77 percent while a student is in school and 3.37 percent afterward. Staffords are made by private lenders but are guaranteed by the government.

A subsidized Stafford loan is a low-interest loan, awarded on financial need, in which the federal government pays the interest on the loan until the repayment period begins after graduation. An unsubsidized Stafford loan has the same low rate, but once a student graduates, he or she is responsible for paying the interest that has accrued while in school.

Some students can also qualify for the Federal Perkins Loan, issued through the school based on financial need.

Parents can take out PLUS loans, which are low-interest loans from private lenders that are guaranteed by the federal government.

University of Phoenix students get most of their financial aid, $804.5 million last year, through Stafford and PLUS loans, which fall under the Federal Family Educational Loan program. About $62 million of financial aid to University of Phoenix students comes out of the Pell program.

About 6.4 percent of University of Phoenix students defaulted on their loans in fiscal 2003, which is a higher percentage than at any of the three state universities but lower than at most of the community colleges in the state.

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