government. They are willing to risk
paying interest on $4,731 (the fresh-
man year maximum) for the next
four years to give you an opportunity
to attend college and play your cho-
sen sport. They also risk nonpayment
by the student athlete because they
guarantee the loan. When you begin
repayment, the government contin-
ues to subsidize the interest rate on
your loan, keeping it well below market rates. Most students
who accept loans subsidized by the Department of Education
are also required to participate in the federal work-study pro-
gram. Students usually work at on-campus jobs, are usually paid
minimum wage, and normally work 10 to 15 hours per week.
Many states offer education loans at below-market rates.
Check with your state’s treasurer’s office to see if a state loan
is available.
It doesn’t require a brain surgeon to recognize that a grant
(money given to you that you don’t have to repay) is a better
deal than a loan. But it is quite probable that a loan will be
part of a financial aid package. Loans are pretty good deals.
That’s why last year students borrowed over $32 billion in
subsidized loans.Loan Update
In 2001, Congress decided that you can deduct $2,500 of col-
lege educational costs from federal income taxes. And still
more good news: if you choose to work for a charitable orga-
nization or some type of governmental body, you could have
your loan forgiven with no tax consequences.22 The Sports Scholarships Insider’s Guide
You can claim up to $3,000
of tuition as a tax deduction.
But you can’t claim both
a credit and a deduction.
Remember that a deduction
only reduces income that is
eventually taxed. The aver-
age taxpayer can anticipate a
savings of about $800.