Once you have made the decision to advance yourself through the acquisition of higher education, the cost of such education can be one of the primary barriers to getting started. There are a great many options available to pay for your education, ranging from loans to grants, scholarships, savings, and debt. Often, borrowing is essential, and when going into debt to pay for higher education, it is important to choose wisely from amongst the many options available on the market. In this article, we'll answer the question "what does APA stand for" while exploring debt management techniques for higher education. 

What Does APA Stand For?

APA is an acronym for the American Psychological Association. The APA is the leading scientific and professional organization that represents psychology in the United States, and is comprised of over 115,700 researchers, educators, clinicians, students, and consultants. What does APA stand for beyond the acronym? The APA is concerned with advancing their mission of the creation, communication, and application of psychological knowledge in order to benefit society and improve upon the lives of the people in it.

To achieve the mission of the APA, the organization encourages the development and application of psychology in a broad way to expand upon its applicability and benefits. Through the promotion of research in psychology, the APA hopes to improve upon research methods and conditions, as well as the application of research findings. The improvement of the qualifications and usefulness of psychologists is also a key focus, which is provided for through the establishment of high standards of conduct, ethics, education, and achievement.

Why the APA cares About Debt Management

The APA cares about debt management as it is something that the majority of the institution's members will encounter. The ability to pay for higher education out-of-pocket is rare, so most students will be required to assume some level of debt to achieve their educational goals. In the healthcare industry in particular, the level of debt carried by students can be nearly twice the amount of debt of research and teaching students. The higher costs of attendance for health-related industries add to the cost experienced by members of the APA.

To support the ability of current students to graduate, and future students to attend school, the APA offers financial advising services. What does APA stand for? Students and student achievement. Without students, educated fields will eventually dwindle, and thus the APA is concerned with debt management to enable current and future students to gain the education necessary to work in and contribute to the field of psychology.

What Is an Unsubsidized Loan?

When choosing which loan option to pursue for higher education, the two primary options are subsidized loans and unsubsidized loans. For Direct Subsidized Loans, the federal government pays the interest while the student is in college or while their loans are in deferment. Comparatively, Direct Unsubsidized Loans begin accruing interest the moment the loan is taken out. For subsidized loans, the maximum amount that can be taken out is $3,500 for freshman, $4,500 for sophomores, and $5,500 for juniors and seniors. 

When an undergraduate is not eligible for direct subsidized loans, they can borrow an identical amount from the direct unsubsidized loan option. Undergraduates can borrow an additional $2,000 in a direct unsubsidized loan if they have exhausted their initial subsidized/unsubsidized eligibility. Graduate students are able to take out a direct unsubsidized loan of up to $20,500. Undergraduate students are not allowed to borrow subsidized loans in excess of their financial need, and no student may borrow unsubsidized loans in excess of their cost of attendance. 

When to Choose an Unsubsidized Loan

Choosing an unsubsidized loan is a natural choice when the subsidized option is not available. FAFSA applications for unsubsidized loans are essentially guaranteed for all individuals seeking funding for higher education. The unsubsidized loan is thus less risky, as the student will most likely be approved, even if they have poor credit. The purpose of FAFSA is to provide members of American society access to essential funding to secure higher education and thus increase their earnings potential. A more educated workforce earns more money and thus can be taxed more, for the betterment of society. 

How to Apply For an Unsubsidized Loan

To apply for a federal subsidized or unsubsidized loan, you should visit studentloans.gov to begin your FAFSA application. FAFSA is the Free Application for Federal Student Aid. The FAFSA application must be completed each academic year to determine which loans, if any, you might be eligible for. Upon the determination of eligibility, the student then must complete a Master Promissory Note, or MPN, for the loan, and often must undergo credit counseling to ensure they understand the loan and the implications for its repayment

Is There a Need for Unsubsidized Loans?

graduate students

There is an essential need for unsubsidized loans as not all students qualify for subsidized loans, and subsidized loans are not available to graduate students. Because the federal government provides support with such loans, citizens have a greater chance for upward mobility and the average earning potential of the population increases. In this way, the whole of American society benefits from the availability of subsidized and unsubsidized loans alike for hopeful students of higher education.

What Can You Use an Unsubsidized Loan for?

An unsubsidized loan can be used to pay for the cost of education. The cost of education is not simply the cost of tuition but includes room, board, and incidental expenses. Room and board includes the cost of housing, utilities, and food expenses. For students living in the dorms, the cost of living may be as simple as adding the cost of the dorm for the semester plus the cost of the meal plan, so for on-campus residents, the calculation of the cost of education is markedly simpler.

For off-campus residents and graduate students, the cost of education covered by an unsubsidized loan is a little more complicated. The cost of tuition is the initial and usually the most significant element. The cost of living for off-campus residents is more complex because it includes the cost of rent, utilities, travel, food, and other essential expenses. The maximum amount that can be borrowed through an unsubsidized loan, however, is capped, so the borrower can only take so much before reaching the maximum. Refer to your intended institution's financial aid department for specifics as to what your cost will be.

What Are the Limits on Unsubsidized Loans?

Unsubsidized loans are limited by the cost of education, meaning the overall cost of education including tuition, rent and food, books, and living expenses. However, the amount that is available to each student is also capped. This amount will vary depending upon whether the student is an in-state resident or out-of-state resident and whether they are enrolled full or part-time, as well as how far their commute to campus is. Such factors must be taken into account carefully when determining the cost of higher education.

The Best Ways to Use an Unsubsidized Loan

happy mom holding a piggy bank

The use of an unsubsidized loan is limited to the cost of education, and thus the best way to use the loan is in the direct advancement of one's education. The cost of books can be quite cumbersome within the context of higher education funding, and so it can be wise to simply rent books or check them out from the library, then the monies taken for books can either be omitted, or put towards more productive uses such as investment or the decreasing of one's credit card debt.

How to Choose a Lender

For federal unsubsidized loans, your lender will be determined through filling out the FAFSA application and there is no particular choice as to which institution to go with.

What Loan Repayment Plans Are Available?

Before considering repayment plans that are available, it is essential to note that loans come due 6 months following the graduation of the student. In general, direct subsidized loans cannot be received for greater than 150% of the published length of the program, meaning undue delay may disqualify one from receiving further subsidized loans. This is referred to as the "maximum eligibility period". The required repayment begins 6 months following graduation, with payments are made monthly, and the student has 10 years during which to repay the loans. 


When it comes to the funding of higher education, subsidized and unsubsidized loans present a guaranteed option to fund students' higher education. The superior choice is subsidized loans given the lack of interest during school and during deferment periods, but not all individuals are eligible for this option. The unsubsidized option will get you into the institution and on your way to acquiring your preferred degree. Higher education is an investment for the future, and it must be treated as such. The cost of loans can be substantial, and thus it is important to assess the earnings potential before investing. 

Check back to College Funding Informer for ongoing information on how to align loans, grants, and scholarships for higher education, all while saving money and effectively managing your money. Higher education is an investment and a risk, but through effective management, the benefits can be realized while carefully managing the risks.

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