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Master of Financial Aid: 101
Financial Aid Definitions:
According to the dictionary: Money to support a worthy person or cause.
According to a high school council: Government loans you’ll be expected to pay back with interest upon graduation.
According to a recent college graduate: The reason I can’t sleep.
According to a high school senior: The topic of that boring presentation I was texting the entire way through…
Perspectives on financial aid are about as plentiful as college majors. They can range from knowing nothing on the subject at all, to consuming your brain like that continual nightmare where you show up to class stark naked.
The topic may seem intimidating, coming from serious-looking people in suits, armed with paperwork and a no-nonsense powerpoint. Or, it may seem daunting coming from your high school social studies teacher who announced to the class that he’s just finished paying off his loans. (OMG…what is he, 30?) Even the term “financial aid” sounds heavy with importance. But, if you arm yourself with a full understanding of what financial aid is and how it works, you’ll find it less scary, and you won’t be surprised six months after graduation when you receive your first bill. Here’s a quick overview to set you on the path of becoming a Master of Financial Aid.
What is Financial Aid, Really? The term financial aid in the college setting typically refers to government programs such as federal loans, grants, and work-study positions, but it can also refer to private loans and scholarships. Eligibility for financial aid often depends on financial need. This money can be used for tuition and other school related expenses such as textbooks.
Stafford Loans: Stafford loans are the most common type of federal loan. They have lower interest rates than private loans, and don’t require payments to be made until students drop below half-time, or have been out of school for six months. Stafford loans can be subsidized or unsubsidized.
Subsidized: The government pays the interest while you’re in school, and for the six month grace period after you’ve left school or graduated.
Unsubsidized: You’re responsible for the interest you’ve accumulated during school and your grace period.
Visit www.direct.ed.gov/ and www.staffordloan.com/ for more information on Stafford Loans.
How to Apply: The first step in the financial aid process is applying by filling out a Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov. This assessment will determine your need for government assistance. It is advised that this form be completed upon its availability for the upcoming academic semesters, as government funds are issued on a first come, first serve, basis.
Next Steps: If you qualify for financial aid, it is up to you to determine if you want to borrow all that is offered. Remember, everything you borrow must be paid back, and then some. While “after I graduate” might seem like lightyears away from now, the time will come quicker than you think. Keep track of how much you’re borrowing.
If you don’t qualify for financial aid, but still need assistance, don’t be discouraged. You can still look into private loans and scholarships!
Californian community college to offer two-tier pricing
Officials at a community college in California recently announced that they will offer two tiers of course pricing to help more students earn their qualifications, reports the Bellingham Herald.
Santa Monica College proposed that high-demand classes such as English and math be provided to students from low-income families at a cost of $46 per unit. A nonprofit foundation will be established to provide students from more privileged backgrounds with the same classes, but at a higher price.
Students will be able to use financial aid to pay for classes, although officials at the community college confirmed that they are seeking private funding to create scholarships for students in need.
"It shows some attempt to be innovative," Dan Hurley, director of state relations and policy analysis at the American Association of State Colleges and Universities, told the newspaper. "At a four-year school it might turn some heads, but it makes sense at a community college level, where the tuition is low and the capacity issue is especially acute."
According to The Los Angeles Times, community college units are currently priced at $36 each, and many two-year schools have had to raise their prices by $10 to counteract necessary budget cuts across the state.
If you're filling out college applications for a community college, make sure to check if classes are available at the lowest possible rates to keep your costs down.
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New Student Loan Complaint System
Lenders provide BILLIONS of dollars in private loans to undergraduate students, and yet there has never been much oversight, leaving borrowers (you students) without a reliable resource to seek help when it comes to private student loan lenders.
Many students who take out loans from private lenders don’t realize that once they graduate and have to pay back the loans, have very little wiggle room. A late payment can have disastrous effects on their credit, and lenders have never really had the motivation to respond to borrowers’ concerns before.
But good news: The Consumer Financial Protection Bureau (CFPB) announced on Monday that it has opened a student loan complaint system for issues regarding, you guessed it, private student loans. Now there is a system in place for students to air out their issues with lenders and actually have the resources to do something about it.
While previously, private student loans were overseen by a patchwork of government agencies, there is now one central agency for private student loans within the Consumer Financial Protection Bureau to assist borrowers with private student loan complaints. So, instead of a bunch of decentralized and separate agencies trying to keep track of private student loans, there is now one single federal agency now responsible for watching out for all students and families who choose to borrow private student loans.
Why is this important? Well, unlike federal student loans, private student loans don’t necessarily carry the same consumer protections as federal student loans and borrowers can wind up hurting their financial futures.
According to CFPB, borrowers (you students or recent grads) can file a complaint, and they will then work with your lender to get a response–something that is awfully difficult to get without some backup. Obviously, the new agency can’t just wave a wand and make your debt disappear–that’s not what it’s been created to do–but they can make your voice a lot louder and get the attention of the financial institution.
The Consumer Bureau is dedicated to “gathering facts and providing tools” for students who need to take out private students loans. An online tool you can take advantage of now is the Student Debt Repayment Assistant, to help students understand the labyrinth of student loan repayment options.
Complaints can be filed at the Web site or by calling (855) 411-CFPB toll-free.
And remember, scholarships can be a big help in keeping down the amount of loans you might have to take out.
Do you think this is an effective answer to problems with private student loans? What’s your experience with taking out loans? Leave a comment in the section below!
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Second White House college affordability meeting planned
The White House will host a second meeting of academic leaders and university presidents to discuss how to make higher education more affordable, reports Inside Higher Ed.
The news source received an email from an associate of an official who was invited to the event earlier this week. The message revealed that "administration officials will engage presidents and chancellors in exploring constructive solutions to bringing down college costs, making higher education more affordable and attainable, and regaining America’s global leadership in higher education attainment."
Details have not yet been released about who has been invited to attend.
Making college more affordable and accessible for students has been a cornerstone of President Barack Obama's education policies. According to the official White House website, the president vowed to change how universities are funded to reflect how much they are doing to make it easier for students filling out college applications to attend.
Measures outlined by President Obama during his State of the Union address earlier this year included the introduction of a $1 billion initiative to encourage colleges to keep tuition costs down and increase the number of students enrolling from low-income and minority backgrounds.
If you're doing a college search, don't forget to look into aid programs like scholarships. There is a lot of financial aid available for students who need it.
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Friday College Town Hall
In Friday College Town Hall, we post a question about college or education, and you leave an answer in the comment field.
Today’s question comes in light of the upcoming 2012 presidential election:
For those voting in the upcoming 2012 presidential election,
how important is the issue of higher education?
Is there a candidate currently in the running you think is
better or worse for higher education?
Have a thought or an answer? Leave a reply below.
We’ve also asked our @Cappex Twitter followers to chime in! Here’s what people are saying on Twitter:
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SAT and ACT Test Date Deadlines and Helpful Tips
With spring SAT and ACT test dates around the corner, it’s important to remember your deadlines and test dates!
While you’re sitting at home taking practice tests, going over a mountain of vocabulary cards, and trying to decide where the comma should be in a sentence, you do not want to forget the most important thing: actually signing up for the test before the registration deadline! The logic is simple here. If you don’t sign up, you can’t take the test!
Here is the breakdown for approaching test dates:
March 10th SAT
Registration for this date has passed; however, if you’re taking that test, good luck! Remember to eat a good breakfast, bring enough number two pencils, and show up early to the testing facility. You can expect your scores back around March 30th.
May 5th SAT
If you missed registration for the March test, you still have time to register for the May SAT. Regular registration closes on April 6th, and late registration ends on April 20th. Remember, all deadlines expire at midnight (Eastern Standard Time) on the day of the deadline.
April 14th ACT
The next registration deadline for the ACT is approaching quickly. If you would like to take the April 14th ACT test, and not be subject to a late fee, you must register by March 9th. That’s this Friday!!!
June 9th ACT
If you are not ready to take the April 14th test, sign up for the June 9th test. To register without a late fee for the June test, you must register by May 4th at the latest.
Have you taken either test already and received your scores? With the Cappex What Are My Chances (TM) Calculator you can get a handle on what are realistic admissions options for you with those scores and help you narrow down where you should be applying. It is always important to have combinations of safety, realistic and reach schools. Utilizing Cappex along with your guidance counselor is a great way to figure out where you should be applying.
Remember, the results of your SAT/ACT tests are not the end of the world. If you do not do as well as you hoped on your first or second try, you can always take the test again! So do your practice tests, study your vocabulary words, and walk in to the test with confidence and a calm demeanor! Don’t stress!
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Free tuition bill proposed in Michigan
Michigan students who are planning to fill out college applications could be in for some good news. According to Fox News, lawmakers in Michigan are expected to announce a proposal that would provide free tuition for students in need.
Known as the Michigan 20-20 Bill, the proposal could provide free college tuition for students who spend their K-12 years in schools throughout the state. The bill is expected to cover the full median cost of tuition, or up to $9,500 per year. Officials in Michigan acknowledged the importance of education to the future of the state and the country.
"We can find the $1.7 billion to pay for kids to go to college because we know education is economic development and they did it in Minnesota and Kalamazoo and we can replicate that here," Senator Gretchen Whitmer told the news source.
According to WLNS News, the bill – which is sponsored by Democratic senators in the state – still has to pass approval by Republican lawmakers before it is passed. Senators have recommended that certain tax loopholes be closed in order to free up the money needed to fund the plans.
Even if you're not from Michigan, there may still be financial aid available to help you pay for college, such as scholarships. Talk to your college admissions adviser about which programs you might be eligible for.
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Student loans – who’s borrowing them?
Filling out college applications and earning a degree can be a real investment in your future – but it's never been more expensive, either. Millions of students rely on financial aid packages such as student loans to help them pay for school, but who's borrowing them? New data from the Federal Reserve Bank of New York reveals who is borrowing, how much they are taking on, and how many people are making their payments.
According to the data, almost 40 percent of the 37 million student loan borrowers in the U.S. are under 30 years of age. This works out at just over 33 percent of the $870 billion total outstanding loan balance. Approximately 43 percent of students borrowed up to $10,000, with an additional 29 percent taking out loans of between $10,000 and $25,000.
Despite an uncertain economy, many students are keeping on top of their repayments. The data suggests that almost 40 percent of borrowers had no past-due payments, and their balances were smaller in the third quarter of 2011 than the second. For students thinking of filling out college applications and taking out a student loan, this could be encouraging.
College-bound students can use the savings calculator at studentloans.gov to get a better idea of how much they need to put away to make their repayments. If you're considering going to school, talk to your college admissions adviser about the various types of financial aid that are available before you commit to any decisions. According to the website, the government provides more than $150 billion per year in scholarships, student loans, grants and other financial aid packages to students who want to earn their degrees
Another option that can help you pay for academic costs are work-study programs. These initiatives provide undergraduate students with part-time jobs that help them pay for educational expenses. Students are paid by the hour, and many schools offer individuals jobs on-campus to make it easier to balance their studies with part-time work. Some colleges might have arrangements with private companies, too. If this is something you're interested in, talk to your school's financial aid officer.
Financial aid, student loans and paying for college can be daunting. However, with some careful planning and help from your college admissions adviser, it doesn't have to be. When you're doing a college search, think carefully about how the cost of earning your degree will affect you further down the road.
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Senators protest cuts to higher education in Pennsylvania
Despite proposals to cut higher education funding in Pennsylvania, many senators and education officials have spoken out against the reductions, reports The Citizens Voice.
In his budget for fiscal 2012-2013, Governor Tom Corbett suggested that funding to Pennsylvania State University be cut by 30 percent, and that state-owned colleges should have funding reduced by 20 percent. Corbett's budget also planned to cut money to community colleges by 5 percent.
However, several senators have spoken out against the plans, including Jake Corman, the Senate appropriations chairman, who said education funding should not be cut at all. Democratic Senator John Yudichak also voiced his concerns over the proposals.
"There's definitely a consensus, Republican and Democrat, who want to see those cuts minimized," said Yudichak, as quoted by the news source. "If you are going to win the jobs race, you have to win the education race."
According to the Pittsburgh Post-Gazette, Susan Gobreski, executive director of Education Voters of Pennsylvania, has called on students, parents and taxpayers to contact their state representatives to urge them to maintain education funding.
State funding is used to provide scholarships to students in need. When you're doing a college search, ask your admissions adviser about scholarships and other need-based financial aid.
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What every high school senior should know about financial aid
The process of applying for financial aid can be confusing. With so many deadlines and forms to submit, students filling out college applications can often get overwhelmed. However, applying for student loans, grants and scholarships is one of the most important parts of the entire college application process. Here are five things to think about when you're considering applying for financial aid.
• Figure out exactly how much your degree will cost: Don't leave anything to chance when it comes to financing your education. Before you submit any college application or financial aid paperwork, you should know exactly how much you'll need to pay to earn your degree. Tuition isn't the only expense you should take into account – don't forget to factor in other things like course materials and room and board if you're planning to live on campus. Know exactly what you're getting into before you start.
• Know your definitions: One of the most confusing things about financial aid paperwork is knowing what the specific terms mean. You'll probably encounter phrases such as the "cost of attending" (CoA), which is the full estimated cost of one year of school. The "family contribution" (FC) is how much your family will be expected to contribute toward the cost of your education, based on data provided in the FAFSA. "Need" is the difference between the CoA and the FC.
• Not all financial aid forms are created equal: Although they may look similar, financial aid forms can be very different. For example, the FAFSA may ask for some information that a university's own application form might not. Financial aid paperwork can also vary from one state to another, and this can be especially confusing if you're filling out college applications for several schools in different parts of the country.
• Deadlines are very important: If there's one form you don't want to submit late, it's your financial aid paperwork. Sending in an application after a deadline can affect how much money you'll receive, and some agencies won't disperse any money if they don't receive your application on time. Get the forms filled out as soon as possible.
• Everyone should apply: Even if your family is paying for most, or all, of your education, you may not be aware of merit-based financial aid packages such as scholarships unless you submit an application. If you don't need student loans, you don't have to accept them – but you might miss out on a scholarship if you don't apply.
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