Auto Loans Spur Rise in January’s Consumer Borrowing

The Federal Reserve said Monday that total borrowing rose at an annual rate of $5 billion in January, or 2.5 percent, the fourth consecutive gain. Strong car sales drove the increase. The category that includes auto loans rose 6.9 percent.

Credit card debt fell 6.4 percent in January, the 28th decline in 29 months. Americans increased their use of plastic in December for the first time since the financial crisis. But they cut back in January, even though a Social Security tax cut is giving most households an additional $1,000 to $2,000 this year.

Combined, total consumer credit equaled $2.41 trillion, a slight 0.7 percent above a three-year low hit in September. Consumer borrowing is 6.6 percent below the high reached in July 2008.

Analysts predict that consumers will borrow more in the months ahead, responding to the strengthening economy, a brighter outlook for jobs and the tax cut. The government reported Friday that the unemployment rate fell to 8.9 percent in February, the first time it had been below 9 percent in nearly two years.

Households began borrowing less and saving more as they struggled to cope with the deep recession that began in 2007. People trimmed their spending, which accounts for 70 percent of total economic activity, when the jobless rate began to rise.

The rise in auto loans was the sixth consecutive month of increases, reflecting a rebound in auto sales.

Even if economists’ forecasts are accurate and borrowing increases this year, analysts are not predicting that consumers will increase debt the way they did during the housing boom.

During that time, households felt wealthier because of soaring home values. But when home prices fell, they cut back on borrowing. The trend accelerated after job losses mounted and many people struggled to get their debt under control.

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3 Tips for Saving Big Money on Grad School

As a recent graduate, I say with utmost certainty that the major thing keeping me from doing masters degree right away is the crazy price tag. Well, that and I want to work a few years beforehand.

If there is one trend that has continued unabated by the economy, it is the growth of tuition costs in education. Schools have announced hikes of anywhere between 4-8% for their students to meet next year; this is a staggering jump on a product that many argue is already overpriced.

So, how can we beat the high cost of an advanced degree?

There are a number of different paths you can take toward trimming down your academic expenses, let’s go over them.

1) Consider a public (state) college instead of a private one.

I know the allure of a prestigious-sounding private school can be hard to overcome, but in reality, there are an absolute ton of public schools that offer an education just as robust, at a much lower cost. Although prices are set individually by each school, it isn’t a long shot to expect at least a 30% decrease in school costs, assuming in-state status.

In addition, online degree schools can sometimes be less expensive than private schools. Above all else, make sure the school you plan to attend has exactly the major and concentration you want for your advanced degree; don’t settle for a school that is cheap over a school that is targeted for your career.

2) Scholarships, scholarships, scholarships!

If you thought you were done with scholarship searching when you graduated with your bachelors, think again! Scholarships and grants remain the best money you can possibly get to pay for school, because, well…. you don’t have to pay it back.

There are a bunch of different websites you can use to find said scholarships, including ones like StudentScholarshipSearch.com and ScholarshipPoints.com. FastWeb.com and Scholarships.com are excellent excellent resources too. Bottom line, plan to set aside some time each week to look for free money.

3) Build your credit history beforehand.

Did you know that you can save thousands of dollars during your loan repayment period(s) if you can qualify for a low interest rate? If you are planning to undergo a graduate degree, financial planning is key to reducing your overall debt burden by the time you are finished.

If you’re interested in learning more about how to build your credit and what all the terms mean, check out Student Platinum’s credit education center.

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Selective Service and Financial Aid

Guys, I’m sure most of you are well aware of the option to register for Selective Service (yup, the draft) once you turn 18, but did you know that it could have severe financial repercussions if you don’t? Unfortunately, many students either do not sign up on purpose or simply forget to, however this can affect how much money you get for school!

There is a federal rule that states that “Any man required to register with Selective Service at any time must have done so to receive aid.” If you’re 25 or younger, make sure to register because after this age, it is impossible to register and you will be unable to receive federal aid from that point forward (or at least until the law changes).

Even if you’re not planning to go to school right now, still register! You may want to go back for your degree later in life.Don’t assume you’ve automatically registered when you register to vote, not all states do this!Double check that you are registered and get paper confirmation! Government offices do make mistakes, don’t allow yourself to fall through the cracks. You can go to the selective service website to find your name on the list of registered males, and while you’re there, print off a copy to have on hand.

You’ll have to prove that your lack of registration was not knowing and willful. This means providing as much information as possible as to why you did not register. For example, if you were living abroad at the time, this would be a legitimate reason why you may have forgotten to register. In order to go through with this process, you should contact your financial aid office.

If you are still unable to get federal aid for school, private student loans can be another good way pay for school.

For more information on these Selective Service rules, read this publication from the Department of Education.

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Most popular student loans for college

Not everyone is aware of all the loan options available to pay for college. Here are just a few to consider:

1) Federal Stafford Loans – These are federally guaranteed student loans. You can apply for subsidized Stafford loans and the government will pay the interest for you while you are enrolled. This is a great option for students and the most popular loan program available.

2) Parent PLUS Loans – The Parent Loan for Undergraduate Students allows parents to borrow through the federal loan program to pay for their child’s education. The loan is in the parent’s name.

3) Private Student Loans – Private college loans are not sponsored by the government but offer an alternative sources of funds for those that may not qualify for federal aid or who need additional funds. Private school loans are often in the students name with the parent acting as a cosigner.

4) Perkins Loan – Perkins loans are another federal loan for low income students based on eligibility. These loan funds are limited so apply early.

5) Credit Cards – Believe it or not, approximately 30% of students/parents put a portion of the tuition bill on their credit card. While we don’t recommend this option, it is a reality. To find and compare the best student credit cards, visit www.StudentPlatinum.com.

Once you graduate, consider consolidating your student loans to lower your monthly payment. The downside is you will pay more interest over the life of the loan by extending your repayment period. For additional resources, visit: www.studentloans.com, www.collegeloansolutions.com and www.gradloans.com.

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1040 Form – How to File your FAFSA before your Federal Tax Return

Did you know you are not required to complete your IRS federal tax return before filing your FAFSA? It is a common misnomer that it is required when it is simply encouraged. However, there will be a question on the FAFSA about which IRS Tax Form you will fill out in the future, if you haven’t already, and that is where the 1040 Form comes up.

Why you should fill out the 1040 while preparing your FAFSA form:

Having your federal tax return complete will save you a lot of time when filling out your FAFSA. However, some of you will want to file your FAFSA form earlier than you are able to complete your IRS federal tax return. In some cases, federal aid, grants and scholarships are awarded on a first-come, first-served basis and you’ll want to get the ball rolling early in January before you receive your income reports from the previous year.

So what are your options? You can fill out a 1040 form using estimated income amounts, either using your previous year’s tax return or your current pay stubs. You are allowed to report estimated tax data on your FAFSA, as long as you correct the estimates once you finish your taxes.

What is the 1040? Well, it is actually your Federal Income Tax Return form. There are a few different versions of this form and it is important to determine which you will be filing. The FAFSA-on-the-web application will populate other parts of the form for you based on qualifications you would have in order to file the specific types of federal return.  This should help guide you:

To qualify for the 1040EZ:

Your total income is under $100,000Your interest income is under $1,500You have income only from wages, interest, unemployment compensation, and Alaska Permanent Fund dividendsYou and your spouse are under 65 years oldYour filing status is single or married filing jointly.You do not have any adjustments to incomeYou are claiming only the standard deductionYou may claim the Earned Income CreditYou are not claiming any other tax credits

If you meet all of these conditions, you are eligible to file the 1040EZ, and you will note this on your FAFSA. Most students are eligible to file the 1040EZ.

To qualify for the 1040A:

Your total income is under $100,000Any age, any filing statusYou have income from wages, interest, dividends, capital gain distributions, IRA or pension distributions, unemployment compensation, or Social Security benefitsYou can claim the following adjustments to income: penalty for early withdrawal of savings, IRA contributions, student loan interest, and jury duty pay given to your employerYou can claim the following tax credits: Child and dependent care credit, Credit for the elderly and disabled, Education credits, Retirement savings contributions credit, Child tax credit, and Earned income credit.

Completing one of the 1040 tax forms will give you a better idea of what adjustments can be made to your income, such as tuition and fees deductions and student loan interest. And you’ll be a step ahead on filing your federal taxes when you are able to.

Filing your taxes online? Most tax software will determine for you which form you are to file, and then you may note that on your FAFSA. In addition, part of preparing for the FAFSA is gathering your tax and financial information – so you’ll need to complete that anyway!

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Maximize your Financial Aid With a CD Account

Some students are lucky enough to have money of their own to contribute to college tuition, and even luckier if they can get help from their parents and grandparents as well.  There are a number of ways that grandparents can put away some money toward helping their children’s children pay for college.  You might have heard of trust funds, and 529 plans, but one of the best options is quite a bit simpler than that: a CD. No, not a “compact disc” but a “certificate of deposit.”  A CD account is essentially a savings account with a fixed term and a fixed interest rate.  If you are lucky enough to have grandparents who are willing to help you pay for college, a CD can be one of the best options because these accounts are almost risk-free.  In addition, if the account is in the grandparent’s name, it does not need to be included on the FAFSA!  One of our new forum members shared his experience on the Financial Aid Forums this week.

We discuss topics like this and other financial aid secrets on FAFSA Online.

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Appealing your FAFSA Dependency Status

One of the most common issues students deal with revolves around the FAFSA filing status. Many students feel they should be considered independent, yet the FAFSA still requires them to file as dependent. Under special circumstances, students have the ability to appeal their dependency status. For those students who believe their circumstances qualify them for financial independence (for FAFSA purposes), I’m going to walk you through how to do this, including what documents you may need. If you don’t know your current status, read our post on Dependent VS. Independent Status.

First thing’s first, if your sole reason for filing an appeal is that you support yourself or that your parents refuse to support your education, then you will not qualify for an appeal. However, other circumstances are considered. Some common reasons for appealing dependency include:

AbandonmentDanger of physical or mental abuseYour parents (or parent for single parent family) are incarceratedYour supporting parent is deceased and you have no contact with the other

Keep in mind, these are not the only reasons that are accepted as schools differ in their requirements. If you’re not sure if your particular situation qualifies, you should contact a financial aid officer from your school.

Each school has specific guidelines for the appeals process, and in some cases, there are school-specific forms you will need to fill out. Most of the time you can find the qualifications and forms on the school’s website. However, the one thing that most schools ask for is a letter from the student explaining their circumstances. In this letter, make sure to be specific! After all, you’re arguing your case, so the more information you provide, the better. Included in this letter should be 1) why your parents aren’t helping 2) information regarding your income and what your money is allotted for and 3) your educational goals, explaining why more money is necessary to achieve them through your institution. Each situation is different, so tailor the letter to you and what your needs are. Along with this letter, it is important to provide as much documentation as possible to back up your claim. Acceptable documentation includes (but is not limited to):

Letters attesting to a student’s situation: Most schools require students to submit letters from independent sources. These can be from almost anyone who knows your story- ministers, friends, non-parental relatives, guidance counselors, attourneys etc. These letters should explain the writer’s relationship to the student, and like the student’s letter, provide as much detail as possible about the student’s situation. Depending on school guidelines, these may need to be notarized.Bank statementsW2sCourt documents/ police reportsDocumentation of parental incarcerationDeath certificates

Once all of your required documents have been submitted, all you can do is wait. Depending on your school, your appeal will be reviewed by a financial aid officer or panel of officers who will work with the Department of Education to change your status (hopefully). It is possible that more documentation may be required, and if this is the case, you will be contacted. If you do need to provide more, don’t panic! Simply provide the requested documents and wait it out. Note: If you are approved for a certain year, this does not mean that you are approved for upcoming years as well. For future academic years, you will need to appeal again!

Navigating the FAFSA to get adequate financial aid can be a nightmare for some students, so appealing dependency status may be the difference between going to school or not. If you have any specific questions about your school’s process, they should be directed to your financial aid office. Good luck!

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Top 5 End of year financial aid strategies

Source: FAFSA blog

As we approach the end of calendar year 2010, it’s a good idea to turn our eyes to the future and start thinking about our 2008 financial aid efforts. Here are 5 strategies to help you make the most of the waning days of 2010 with payoffs in the year to come.

1. See an expert. Most community banks and credit unions offer access to a certified financial planner for little or no charge, making them a great, hidden resource for figuring out your finances. Take the opportunity and an hour or two on a weeknight or weekend to see one and review your personal finances. Get a sense for where you are and how your finances are currently set up.

2. Start writing scholarship essays. Scholarship season really starts in earnest in January of each year, and the sooner you can get your applications in to a scholarship foundation, the sooner you can move onto the next application. Do your research for which scholarships would be appropriate to apply to, and download their applications. The most time consuming part of the scholarship search is the essay, so start writing now!

3. Do your budget. January is often thought of as the time to embark on resolutions, but now is the time to plan for those resolutions so you can hit the ground running after the champagne’s gone.

4. Set goals. Set measurable, achievable goals for yourself in 2011, like a scholarship application a weekend. Be sure to have a calendar set up so you don’t miss any deadlines.

5. Get ready to file your FAFSA. The FAFSA process kicks off on January 1, but having your IRS 1040 mostly done will speed up the process, as will doing the FAFSA worksheets. Run through our FAFSA tutorials here on FAFSAonline.com and make notes of where you have questions – then contact your financial aid officer or attend a College Goal Sunday event to get those questions answered!

The FAFSA blog is sponsored in part by:

Five most recent FAFSA form help blog posts:

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What is a CSS Profile?

While the FAFSA Financial Aid Application is the quintessentially required form in the financial aid world, it’s not the only form you’ll be expected to fill out, especially if you are applying to any private colleges. Several hundred private colleges and some public colleges also require another form originated by the College Board, the CSS Profile: The College Scholarship Service Profile.

The profile is college specific, and is used to determine aid eligibility for non-federal financial aid, such as institutional scholarships and grants.  This form tends to be more detailed than the FAFSA, and focuses on information needed pertaining to specific programs at each school. Having a separate form allows the school to ask more tailored questions.

Unlike the FAFSA, the CSS Profile is not free. The cost for filing your CSS Profile is $24 for the first college, which includes a $5 registration fee and $18 processing fee). There is an $18 processing fee for each additional college.

Deadlines: The FAFSA can be submitted beginning on January 1 (or first business day of the new year). The CSS Profile can be submitted prior to January 1.

Each financial aid application uses different needs analysis formulas.  Among other differences, the methodology used takes into account home equity, and also assumes contribution from the student. The CSS Profile asks you to separate your income throughout the year by season, and requires detailed reports of your assets, medical expenses, tuition reimbursements, scholarships and family gifts. There also exists a Prospective Spouse Form if you plan to marry before October 2011.

Visit the College Board to sign up (if you don’t already have an account) and download the various CSS Profile forms.

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Understanding the Financial Aid Roadmap

Applying for and receiving financial aid can be a long and confusing process, but don’t fret, we’re here to help! We’ve compiled information on all of the steps necessary for receiving financial aid to help answer your most common questions. The financial aid roadmap outlines all of the steps you should take, from how to fill out your FAFSA to tips on comparing financial aid packages.

So, what are the steps?

Prepare for, and fill out your FAFSA formReview your Student Aid Report (SAR)Compare your award letters and financial aid packagesReview your federal loan options and applyApply for additional aid to cover your full cost of tuition

Now that you have the entire process at your fingertips, make sure to start early! It’s important to file your FAFSA as soon as possible so that you can receive maximum aid and be on your way to that college degree.

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Stafford Loan Interest Rates Lowered

As I’m sure many of our readers out there know, the interest rate for subsidized undergraduate Stafford Loans has recently lowered for the 2010-2011 year. As of July 1, 2010, the interest rate dropped from 5.6% to 4.5% which was a major step forward for federal loans.

Well, lucky for all the students out there with Stafford loans, because it’s scheduled to happen again. The Subsidized Federal Stafford Loan interest rate for the 2011-2012 academic year is planned to drop to 3.4%, hitting an all-time low!

For more information on student loan interest rates, visit Staffordloan.com where you can also read about loan repayment options.

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Applying for Federal Grants

Applying for federal loans is a common task for most college students, but did you know that when you file your FAFSA you’re automatically applying for federal grants as well? Unlike loans, federal grants do not need to be paid back and are both tax and interest-free. By submitting your FAFSA you are considered for a number of grants including:

Federal Pell GrantsFederal Academic Competitiveness GrantsFederal National Science and Mathematics Access to Retain Talent GrantsFederal Supplemental Education Opportunity GrantsTeacher Education Assistance for College and Higher Education Grants

While not all of the grants are need based, you still must qualify in order to receive aid. Eligible students will receive notice of all aid including grants in their Student Aid Report (SAR).

For more information on these grants, check out our page on Federal College Grants and Scholarships at FAFSAOnline.com.

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FAFSA 2011-2012 Summary of Changes

As many of you may know, the 2011-2012 Free Application for Federal Student Aid (FAFSA) will be available on January 1, 2011. In order to be prepared for this day, it is important that students, parents and financial aid officers become acquainted with the most recent changes.

The National Association of Student Financial Aid Administrators (NASFAA) recently released their “Summary of Changes” for the 2011-2012 FAFSA. This document covers everything from changes in design to changes in the way questions are worded. Whether you are a student filing the FAFSA for the first time, or a seasoned financial aid professional, this information will help you approach this year’s FAFSA with the right information.

Summary of Changes, 2011-2012 Free Application for Federal Student Aid (FAFSA)

Colors – The colors are yellow for student information and purple for parent information

Elements added – New question #27 is added, for applicants who indicate they have earned a high school diploma. The question is worded as follows: What is the name of the high school where you received or will receive your high school diploma? Write in the high school name, and the city and state where the high school is located.

Elements deleted – Enrollment status questions (formerly, #30) has been removed.  The question about plans to become a teacher (a.k.a. the TEACH grant question, formerly #32) has been removed.

Other changes – State Deadlines have been updated on the FAFSA application.  The new deadlines will be available on FAFSAOnline.com on December 30, 2011.  Deadlines have changes this year for Kentucky, New York, Oklahoma, South Carolina, and Tennessee.  The post office box for mailing a FAFSA has been updated.

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When are the 2011 2012 FAFSA Deadlines?

It’s January, 2011. So, what does that mean?  Well, for starters, Happy New Year!  I’m sure many of you have been thinking about your plans for the upcoming year, maybe even jotting down some of those resolutions.  There are two in particular that we might have in common: go back to school or finish up school, and save money.

Well, with that in mind, the team at FAFSAOnline.com has been working diligently to bring you the most current and most beneficial information about the new FAFSA form for the 2011-2012 school year.  If you’re not familiar with the FAFSA already, it is the Financial Application for Federal Student Aid and the first step in your financial aid process.  Federal grants and loans are the best source for financial aid, and private student loans can fill in the gaps.

We have recently updated the FAFSA deadlines pages for both federal deadlines and state deadlines.

The new FAFSA form was released this past week.  FAFSAOnline provides you with a free guide and eBook for help with the FAFSA form.  There are also a number of special financial aid tips we share, that can help you maximize your aid and avoid common mistakes on your FAFSA form.  You can also go to FAFSAOnline to get your Federal School Code, which you will need to identify the school(s) you are attending or applying to.

Stay tuned for a brand new 2011 eBook for the FAFSA form.

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Accepted Students Day

First of all, congratulations on getting into college! The stressful waiting is over, but now you have that life-changing decision of what school to choose. For many students, this is chosen based on financial aid awards, but picking the perfect school may not be so clear for everyone. Either way, attending a school’s accepted students day (or weekend) can be extremely beneficial. Read on to learn why…

Accepted students days are designed to help students choose a college. These days include programs, events and activities to help you get to know the school better. These activities might be mock college classes, or lectures from top faculty from various departments. (Read more about events at accepted students day by clicking here.) Depending on your school’s specific agenda, they can help students get more familiar with the college layout, faculty, and class styles. It’s also a great way to meet other future incoming freshman (should you decide to go).
While everything mentioned thus far is an important factor in the college decision process, perhaps the most beneficial aspect that many colleges offer is financial aid workshops (especially for financial aid newbies). These can play a crucial role in a student’s decision, which is why I’m here to help guide you through it. If your school offers a financial aid workshop, this is an excellent way to learn more about the financial aid package you were awarded. You can find out things like appealing your award amount or how to go about receiving a loan. Having the opportunity to chat with a financial aid officer is HUGE! But first, make sure to do your research. Learn as much as you can about basic financial aid like Direct Stafford loans and private student loans before you go, that way, you’ll have time to ask the not-so-obvious questions. (Find a list of suggested Financial Aid Questions to Ask by clicking here.)
So what if you cannot attend your schools’ accepted students days? Don’t sweat it. You can still get answers to all of your questions about paying for college. Some schools allow you to make appointments with financial aid officers to go over your award, or you can compile some questions to ask over the phone. Many schools also offer pages on their website dedicated to providing similar information for accepted students, which is worth checking out. If you have questions on financial aid, you can also post a question on the Financial Aid Forum, or see if it’s already been asked!
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Have you signed up for the ACT yet?

As another academic year begins to wind down, students should start thinking about college testing, specifically Juniors should consider registering for an upcoming ACT test (See test and registration dates below). The ACT is similar to the traditional college admissions test, the SAT, but some students may find the format is better suited towards their strengths in Math and Science. Unlike SAT tests, the ACT measures what you have learned and includes a section that consists of interpreting graphs.
At most colleges, students can choose to submit their ACT instead of an SAT, so many students will take both tests and send both scores, or choose the best of the two to send to prospective colleges. To find out if a college accepts the ACT, search for colleges by name on HowToGetIn.com.
If you’re looking to take the ACT soon, registration for the June ACT test is less than 1 month away! Here are the upcoming ACT test and registration dates:
Register by May 6, 2011 for the June 11, 2011 ACT TestRegister by August 12, 2011 for the September 10, 2011 ACT TestRegister by September 6, 2011 for the October 22, 2011 ACT Test
For those of you who plan on taking the ACTs, you should familiarize yourself with the format of the test. The ACT test is comprised of four sections- English, Mathematics, Reading, and Science Reasoning. Each section is scored on a scale from 1-36, plus a comprehensive score of all four sections. If you’re a student who plans on taking this, one of the best ways to prepare is by taking practice tests. Many students can do just as well preparing with the free ACT practice tests that can be found online, but there are also paid courses available to help students prepare for the ACT.
How early you start preparing for the ACT test is really up to you, but here is what we suggest, broken down by grade level:
Sophomores- It’s never too early to prepare. Getting this test out of the way early can be a big help come senior year. Your last year of high school is stressful enough, so if you start early, you’ll be way ahead of the game! Start taking practice tests and getting familiar with the format. This will be hugely helpful next year.
Juniors- If you haven’t started prepping yet, no worries. ACT tests are offered year round, so If you are not yet signed up for one, there is one scheduled for June 11, 2011. If you don’t feel prepared to take this so soon, spend your summer studying. This way, you will have had adequate time to prepare and can start off senior year on a high note.
Seniors- It’s a little late for the class of 2011, but typically, seniors need to take the ACTs during the fall of their senior year – at the latest – to ensure that colleges receive the necessary scores in time. Make sure you have your scores sent!
Whatever stage your at, practice practice practice! The more comfortable you get, the easier the actual test will be (and the better you’ll do)! If you have more questions about when you should be preparing for what, visit our college preparation calendar.
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How to Get Stafford Loans

While high school seniors are receiving their acceptance letters and financial aid award packages, they might be exploring the differences between the loans they are eligible for and wondering how to actually acquire these loans. Many students are lucky enough to qualify for Unsubsidized Stafford Loans, which have a lower interest rate than subsidized ones. There are also thousands of students who are only eligible for Subsidized Stafford Loans. If you are a student who is planning on taking out one of these two Stafford loans, there are some things you should know about the process…

(Read the whole article  Freshmen: How To Get Your Stafford Loans)

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Hey Students, Need Scholarships?

ScholarshipPoints.com just announced the winner of the March $10,000 Free Scholarship sponsored by HowToGetIn (Read more about HowToGetIn’s Annual Scholarships). Paolina Engibegian from Glendale Community College was the lucky winner! HowToGetIn’s next sponsored scholarship is the October $1,000 free scholarship, and students can enter starting October 1, 2011 (the winner will be drawn on November 1). There will be another $10,000 scholarship drawing on ScholarshipPoints on June 15, 2011. To sign up to win visit our page on “How to win scholarships.”

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Why Should I take Philosophy?

by Marcia Y. Cantarella, PhD,
Author: I CAN Finish College: The Overcome Any Obstacle and Get Your Degree Guide

Over the course of my career as a dean and senior administrator in a variety of schools I have heard the same question—usually in a plaintive voice and you can substitute any number of courses into that question—anthropology, history, art, literature. The assumption is that these are not practical courses. Having made the decision to go to college, presumably to become job-ready and more employable, then students look for the practical. Certainly if one is pursuing an online degree then time is precious. You don’t want to waste it with frivolity like philosophy.

But it may not be a waste at all. The question reveals the lack of understanding of the connection between what you get in an education and your future work life. Learning data entry is a good skill for the short term in a particular job. But critical thinking (such as what you would learn in a philosophy class) is a life-long skill that could actually get you out of the data entry pool.

So what does college prepare you for? College gives you skills that you can use in many career paths. Graduate school is where you most likely will specialize in the arena where most of your work life will be. Interestingly more leaders have liberal arts degrees as undergraduates than specialized degrees including undergraduate business degrees. The liberal arts are a strong preparation for the varied careers you may have along life's path. But what about preparing for a career? What you need for a career are skills. You also need evidence that you are intelligent and teachable. Your grades provide both.

We are in a fast-changing, information and service based environment. The field that is hot today may be gone tomorrow and replaced by something completely new. Think of social media’s impact on the advertising industry or ipods on the record industry. You need to show that you are smart in several areas. That would mean good grades in a variety of subjects and excellence in the majority of your courses. You need to show that you can find, absorb and integrate lots of information. Sometimes you may need to process it in different ways-"thinking out of the box." If you are engaged in a subject that you love then you will enjoy studying it. You will play with it. You will be more creative than if you are struggling to just understand the concepts of a subject area that you don’t really care about. And you just might find you love philosophy.

Employers also tell us that they seek, in addition to basic quantitative skills, really solid communications skills. You have to be able to write-presentations, memos, reports, speeches. They have to be clear, logical, literate (good grammar and spelling) and persuasive. Courses (like philosophy) that require you to read lots and to write many pages of papers are good practice for an executive career path. Firms want people who can come in and be good team players and can quickly learn how things are done. Translation: they seek people with good people skills and who are eager to learn and learn easily. If you majored in people centered subjects like Sociology, Psychology or Anthropology, to name a few, then you will know more about human behavior. But History and literature and Economics and Political Science are also studies in human behavior. All can help build skills useful in understanding situations and colleagues in the workplace.

Employers also seek people who have critical thinking skills and can solve problems even before they happen. Any major will enable you to develop those skills. All learning is about finding new knowledge and solutions to hard questions. Discovering how things work and why they work and how they have worked in the past is the essence of the work done in college. Engaging in research whether in the library or the lab is where the critical thinking skills are developed. The questions that professors ask to get you to think are designed to build this capacity. You must have some degree of quantitative aptitude. That means working with numbers. People come with varying degrees of skill in this area. Some is natural. You were born with it and would rather deal with numbers, spatial relations, or abstract quantitative concepts than read a novel or historical text. For others these are developed in school with varying degrees of success. Interestingly the field of logic which is highly mathematical is found in the philosophy department. However, whether you are managing a budget or developing a media plan based on data or designing a house you will need math in some form. Your future is in your skills—the ones that stretch your brain and can carry you for the long haul. Don’t stop with what looks purely practical. The people who get ahead don’t. Why Philosophy? It may be your path to the CEO’s chair that’s why. It’s all good.

For more go to www.icanfinishcollege.com (Chapter 4 of the book goes into this issue in detail)

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Why F is the Scariest Letter in the Alphabet

By Marcia Y. Cantarella, PhD, Author of I CAN Finish College: The Overcome Any Obstacle and Get Your Degree Guide

When we think of F the word that comes to mind is failure. (Then there is the other “F” word, but we will not go there here…) When you think of F in relationship to college life it is a screaming panic letter invested with all kinds of power. Who knew that your entire life was wrapped up in one little letter of the alphabet? But in reality F before it becomes failure (which is not, by the way, a terminal state) also can stand for Fear, Finances, and Fun. Those other F words are the ones that can lead to failing to complete college or to failing grades—which can also lead to failing to complete college.

Fear—the fear of looking dumb is one of the biggest barriers to college success that there is. This is the fear that translates to not asking questions whether in class or of advisers. It is the fear that means you will not get the help you need.

On many campuses first year biology is a course that is taken by students who think they want to go to medical school or enter the health professions (often not because it is a real passion but because of other pressures—more on that in a different blog post). In any event, a large number of students take bio and a large number fail. When I have spoken to these students after the fact it turns out that from day one they did not understand what was going on, but assumed everyone else did (since no one was asking for explanations) and so everyone sat with material flying over their heads and the Fear of being thought dumb keeping them from asking for the help and explanations they needed.

The faculty is there to teach you things you do not know and so asking is part of that process. No one will think you are dumb if you ask. They are more likely to be impressed. If you are in a strange town (hopefully) you do not wander around for hours and days looking for your hotel because you don’t know the way. You stop and ask someone. College is like that. You are the new dude in town and need to ask directions. And the nice thing about college is that there are lots of people there to answer the questions you have. The teachers, the advisers –called advisers because their job is to advise you --, the deans, upperclassmen, tutoring centers are all there to answer your questions and see that you get the information that you need to succeed. And on top of it you pay their salaries with your tuition dollars and so it would be dumb not to get your money’s worth. It would be like paying for the hamburger and leaving the meat behind. So if you want to avoid the F remember that Ask begins with A.

More on other words beginning with F to come...

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Don’t forget to sign up for the June SATs!

While the end of the year can be extremely busy for students, high school Juniors have the added strain of prepping for the SATs. If you haven’t registered yet, you should look into doing so for the upcoming June test. I know that June should be a relaxing end to the school year and studying for an SAT test might not be on everyone’s radar; however, getting it out of the way now can save you loads of time next year when you’ll be much busier applying to schools.

Students should also start thinking about taking the SAT subject tests (more commonly known as the SAT IIs). The end of the year can be a great time to get these out of the way as the information is still fresh in your mind. If you don’t feel up to the challenge of taking both the SATs and the SAT IIs in one sitting, get one out of the way soon and that way, you can spend the summer studying for the fall test!

Sophomores- Don’t think you’re off the hook from the SATs just yet. Summer is the perfect time to prepare for the PSAT test which will take place in October, 2011. Students must register for the PSAT test directly through their high school, as online registration is not available.

Here’s are the upcoming test dates that are open for registration:

May 7, 2011- Late registration is open until April 22June 4, 2011- Register by May 10th

Good luck everyone, (but don’t forget to study)!

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From our Archives: Consolidation

For students about to graduate, you may want to check out the article New Grads, Start Thinking About Consolidation. This will give you helpful tips on why consolidation can be a good option.

Conversely, the article What NOT to do when Consolidating your Student Loans tells you just that. It provides useful information on the types of situations where consolidation might not be the best option.

While consolidation for federal loans is usually a good idea, it may not be so black and white with private loans. In the current economy, private lenders have been reluctant to grant consolidation loans. Should I Consolidate my Private Student Loans can help students to decide how and where to go to consolidate their private loans.

Still have questions about consolidation? This post may be able to help. From Our Forums: Consolidation Question Quartet! answers a few common questions about consolidating federal loans. Maybe it’ll answer yours. If not, you can always check out the Financial Aid Forum’s consolidation help section.

Hopefully these articles will proves useful in the upcoming months. Remember, if you need more information regarding loan consolidation, visit StudentLoanConsolidator.com.

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Understanding the Financial Aid Roadmap

Applying for and receiving financial aid can be a long and confusing process, but don’t fret, we’re here to help! We’ve compiled information on all of the steps necessary for receiving financial aid to help answer your most common questions. The financial aid roadmap outlines all of the steps you should take, from how to fill out your FAFSA to tips on comparing financial aid packages.

So, what are the steps?

Prepare for, and fill out your FAFSA formReview your Student Aid Report (SAR)Compare your award letters and financial aid packagesReview your federal loan options and applyApply for additional aid to cover your full cost of tuition

Now that you have the entire process at your fingertips, make sure to start early! It’s important to file your FAFSA as soon as possible so that you can receive maximum aid and be on your way to that college degree.

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Appealing your FAFSA Dependency Status

One of the most common issues students deal with revolves around the FAFSA filing status. Many students feel they should be considered independent, yet the FAFSA still requires them to file as dependent. Under special circumstances, students have the ability to appeal their dependency status. For those students who believe their circumstances qualify them for financial independence (for FAFSA purposes), I’m going to walk you through how to do this, including what documents you may need. If you don’t know your current status, read our post on Dependent VS. Independent Status.

First thing’s first, if your sole reason for filing an appeal is that you support yourself or that your parents refuse to support your education, then you will not qualify for an appeal. However, other circumstances are considered. Some common reasons for appealing dependency include:
AbandonmentDanger of physical or mental abuseYour parents (or parent for single parent family) are incarceratedYour supporting parent is deceased and you have no contact with the other
Keep in mind, these are not the only reasons that are accepted as schools differ in their requirements. If you’re not sure if your particular situation qualifies, you should contact a financial aid officer from your school.
Each school has specific guidelines for the appeals process, and in some cases, there are school-specific forms you will need to fill out. Most of the time you can find the qualifications and forms on the school’s website. However, the one thing that most schools ask for is a letter from the student explaining their circumstances. In this letter, make sure to be specific! After all, you’re arguing your case, so the more information you provide, the better. Included in this letter should be 1) why your parents aren’t helping 2) information regarding your income and what your money is allotted for and 3) your educational goals, explaining why more money is necessary to achieve them through your institution. Each situation is different, so tailor the letter to you and what your needs are. Along with this letter, it is important to provide as much documentation as possible to back up your claim. Acceptable documentation includes (but is not limited to):
Letters attesting to a student’s situation: Most schools require students to submit letters from independent sources. These can be from almost anyone who knows your story- ministers, friends, non-parental relatives, guidance counselors, attourneys etc. These letters should explain the writer’s relationship to the student, and like the student’s letter, provide as much detail as possible about the student’s situation. Depending on school guidelines, these may need to be notarized.Bank statementsW2sCourt documents/ police reportsDocumentation of parental incarcerationDeath certificates
Once all of your required documents have been submitted, all you can do is wait. Depending on your school, your appeal will be reviewed by a financial aid officer or panel of officers who will work with the Department of Education to change your status (hopefully). It is possible that more documentation may be required, and if this is the case, you will be contacted. If you do need to provide more, don’t panic! Simply provide the requested documents and wait it out. Note: If you are approved for a certain year, this does not mean that you are approved for upcoming years as well. For future academic years, you will need to appeal again!
Navigating the FAFSA to get adequate financial aid can be a nightmare for some students, so appealing dependency status may be the difference between going to school or not. If you have any specific questions about your school’s process, they should be directed to your financial aid office. Good luck!
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Freshmen: How to Get Your Stafford Loans

While high school seniors are receiving their acceptance letters and financial aid award packages, they might be exploring the differences between the loans they are eligible for and wondering how to actually acquire these loans. Many students are lucky enough to qualify for Subsidized Stafford Loans, which have a lower interest rate than unsubsidized ones. There are also thousands of students who are only eligible for Subsidized Stafford Loans. If you are a student who is planning on taking out one of these two Stafford loans, there are some things you should know about the process…

In order to qualify for a Stafford Loan, students must first file their FAFSA. Once this happens, students will receive a financial aid award letter with the total amount they are eligible for. Just because a financial aid award letters lists Stafford loan options, this does not mean that you have actually accepted the award. This is merely the amount you are eligible for. To accept a Stafford loan, students should contact their financial aid office. Remember, just because you are eligible for a certain amount of money, this does not mean you need to use it all. If you only want a partial amount, you can send back the unwanted portion immediately or request a lesser amount from your financial aid office.

Stafford Loan funds are sent directly to your school’s financial aid office twice per year, once for the fall semester and once for the spring. The funds are applied directly to your account about midway through the semester- this ensures that students are still enrolled and have not dropped out of classes. Any money that exceeds tuition and fees costs will be returned to the student, or the student’s account will be credited accordingly. This extra money can be used at your disposal, for school-related items such as books, food, housing etc. Just remember that the loan must be paid back eventually, so if you don’t need it, don’t use it!

If you are one of those students who has not received enough funding through federal loans, consider taking out a private student loan. Private loans are a great way to fill the gap in your education costs. PrivateStudentLoans provides a lot of good information on how to get a private loan and even allows students to compare lender options.

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Evaluating Your Financial Aid

I’m sure by now most of you have been scouring your award letters to find the best deal, and for those of you who still have a few years left to go this information can also help you as you are searching for colleges and becoming informed about paying for college.

Comparing financial aid award packages is not always as easy as it seems. Most students will just look at which school offered the most money, but not necessarily the stipulations that go along with it. For example, the college admission letter one school sent may have offered you a good amount of work-study award money, but if that requires you to work too many hours, it may not be worth it.

When evaluating your award offers, make sure you not only factor in aid put towards tuition, but also add in any extra expenses associated with that school. Will you need to pay for a flight to and from school? Or, maybe buy a car to drive to classes? Extra expenses add up quickly, so factor in any commuting you may have to do, the supplies your major may demand, and calculate these costs into your decision from the beginning to ensure that you can afford to go!

If you have your heart set on a college but it’s out of your price range, don’t lose hope; there are still a few options available for students who come up short on financial aid. To find out your next steps, read the article Not Enough Aid: What to do Next. For those of you still in the college search, search for the school on HowToGetIn and see what types of federal aid programs they participate in, and you can call the financial aid office (number is on the college’s page on HowToGetIn.com under General Information) and ask the tough questions to a financial aid officer. For example, ask if they offer both merit aid and need based in their financial aid award packages.

When you determine which school’s offer to accept, it’s time to send in your deposit (yikes!). Most schools require a tuition deposit by May 1st, giving students roughly one month to decide where to go. Exact tuition deposit amounts vary widely by school, but most fall somewhere between $200 and $500. Keep in mind, this is a deposit to hold your place for enrollment purposes and is separate from any housing deposit you may have to pay.

As my last tip, I should stress that whatever aid you receive this year may differ from next year. Just because you can pay for freshman year, this doesn’t mean you should stop searching for scholarships. There are scholarships for every grade level, so if you continue to apply throughout your freshman year, it’s that much more you won’t have to pay out of pocket.

I hope these tips help those of you struggling with the financial aspects of choosing a college. For those of you making the decision this year, choose wisely and remember to take some time to enjoy the last months of senior year!

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Your Guide to Off-Campus Housing

The decision to move off campus is not one that everyone can make easily. There are a lot of factors that can affect where and when you move out of your school residence halls to your own place. Most schools require freshmen to live on campus their first year, and some even through junior year. Before looking into off-campus housing, make sure to check your school’s housing policy. If you’re going ahead with the process, here are some things for you to consider.

I’ll start with the most obvious, paying rent can be considered both a positive and a negative. On one hand, the cost of renting an apartment for the year is often less than room and board costs. But, you also have to factor in electricity, heat (where applicable), water, and internet/cable. These expenses can add up, though if you plan on having roommates, your overall costs will be less. Even with these expenses added in, getting an off-campus apartment or house is usually cheaper than paying room and board.
So that’s the positive of paying rent, but what’s the negative? If you’re like most first-time college renters, keeping up with monthly payments can be difficult, especially if you’re not the most organized person. If and when you get an apartment, make sure to keep track off all of your payments made and future due dates, not only so you stay up to date, but so you have records of when you paid your last bill. On a similar note, if you do sign a lease, make sure you can sublet during the summer months, otherwise you’ll be stuck paying rent when you wont be living there.
Oh, and yes, you can usually pay for off-campus living through student loans.
On campus housing typically includes the cost of a meal plan. Should you decide to move into your own place, make sure that you are okay with losing the convenience of school food. Some colleges do allow students to pay for meal plans separately, so before this makes or breaks your decision, check with your college’s policies on meal plans and payment.
Part of the college experience is sharing space with other students. Living on campus can keep students involved with others both academically and socially and can be a very positive aspect of college life. Moving off campus can hinder this because hanging out with friends becomes more planned rather than impromptu; not to mention arranging study sessions and group meetings can be more difficult. These won’t be problems for everyone, but could play a factor in your decision.
Similarly, when you move off campus, you can take your friends with you. But be cautious- who you live with can change everything. If you and a roommate have a falling out, you will still be living together for remainder of the year. If I have one tip, it would be choose your roommates carefully, as best friends don’t always make the best roommates. Go over living habits together- are you both neat? If not, do you mind a little mess? Talk it over to make sure that your living styles won’t clash.
While in dorms, maintenance and cleaning are part of the package. If you decide to move off campus, you’ll need to clean your own place (or not clean at all if yours is like some of the apartments I’ve been in). You’ll also need to contact your landlord if anything breaks or requires maintenance. This is not a bad process if you have a good landlord, but if you don’t, it can be a nightmare.
College students who live in close quarters are breeding grounds for sickness. It seems that once one students gets sick, MANY will follow. By moving off campus, you can potentially cut your risk of getting these illnesses simply by not sharing bathrooms and other communal living spaces.
So, you’ve decided to move off campus. How do you go about finding housing? Some schools have directories of properties available within the community, so it can be helpful to start your search here. Next, reach out to students who currently live off campus (especially seniors who will be graduating). Maybe you’ll be lucky enough to snag an apartment of one of these seniors, making the search process minimal. Plus, you can talk to the current residents to see if they were satisfied with the rental.
Now that you know some basics on how to find your own off-campus housing, here are some current trends you may start to see:
If money is the issue, some parents have taken to actually buying property for their student to inhabit through their college career. This can be a wise investment depending on the community as parents can lease it out to future students as well. But if it’s far away, parents will have to hire someone in the community to serve as the on-site manager, upping the overall cost.
With the recent economic crisis, students are finding themselves hit even harder. This is why some have taken to sharing rooms, just like in an on-campus housing environment. This way, total costs can be broken down even further and each student pays significantly less.
The number of students entering college has been steadily growing. Colleges are receiving more and more applications and as populations grow, so does off-campus interest. In a move to provide more students with better housing on campus, colleges are beginning to build residences that focus on what the students are looking for. This means less traditional dormitory styles will be replaced with newer community style living environments with more individual space.
I’ve thrown a lot at you in this post, but my main point is to just make sure you’re ready to commit to an off-campus residence. If you have decided to pursue living off campus, then hopefully this info will be useful and make the transition a little bit smoother for you.
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Volunteer Your Way Out of Debt?

If you could pay off your student loans by spending a few hours a week volunteering, would you? Well believe it or not, it’s possible. There are a couple of brand new organizations starting up that can help alleviate the burden of your student loans through volunteer work. Since the programs are relatively new, they are not yet nation-wide and are (or will be) based in Washington D.C., Dallas, TX and Pittsburgh, PA. These programs not only perform a service to people seeking student loan debt assistance, but are particularly noteworthy because they promote volunteerism and change within communities. The success of these pilot programs will be hugely influential both in local communities and for the millions of college graduates struggling to pay off their student loan debt.

Based in Pittsburgh PA, sponsorchange.org matches volunteers with local non-profit companies so that college graduates can use their unique skills to foster change. Payment for your services comes from generous businesses and donors who fund this noteworthy cause. Payment for a graduate’s services ranges from $10-$15 per hour and depends upon your skills and the skills required for the tasks being performed. Volunteering through Sponsorchange.org may not be for everyone, as “change agents” must meet certain criteria to apply. This includes
Being a college graduateAbility to prove student loan debtProven volunteer serviceLeadership skills
Additionally, change agents are required to write blogs on their service experience along with uploading accompanying pictures of their volunteer efforts.
This organization works in a similar fashion. College grads get paid through the donations of generous individuals and businesses for their volunteer efforts. Volunteers are placed with local non-profits seeking help and get paid roughly $15/hr. Currently Charity for Debt will operate in Washington, D.C. and Dallas, TX and will be restricted to offering programs in these areas (for now). Before you are matched with a company to work with, you will be able to provide a list of your top three activities and hopefully be chosen for one! A benefit for paying your loans through this volunteer program is that your compensation will be tax-free!
These two organizations are the beginning of change for student loan holders. With the success of these initial programs comes the expansion to other cities nationwide. We look forward to seeing these programs succeed and to seeing what they can offer communities! If anyone has personal experience working through one of these organizations, post a comment to share your experience!
Visit StudentLoanNetwork to learn more about student loan repayment options
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Choosing a Student Loan: Parent PLUS vs Private

Deciding on which student loan to apply for can be a headache for both parents and students. With so many aspects to consider, such as repayment plans, interest rates, and loan benefits, deciding on the best loan for you can be both confusing and difficult.
If a student is not eligible for federal loans, or is already taking the maximum, there are other loan options to consider. There is a variety of private student loans to choose from, or you and your parents may consider a Parent PLUS loan. However, these loans have some important differences to be aware of.
The most important aspect when choosing between a parent PLUS loan and a private loan is the borrower. A parent PLUS loan is taken out in the parent’s name and the responsibility legally rests on the parent to repay it. A student and parent can have an agreement where the student pays the loan, but remember, if it were to go into default, it is under the parent’s name not the student’s and is therefore the parent’s responsibility. Private loans, however, will be taken out in the student’s name and all repayment responsibility falls upon the student.
Another important difference to consider is financial disclosure. Private student loans do not require any parent or student information like which you would put on your FAFSA. On the other hand, Parent PLUS Loans require you to file a FAFSA which means you will have to provide financial information.
There are a number of other options to consider when deciding on a loan. Visit StudentLoans.com for more information on this differences between Private Student Loans vs Parent PLUS Loans.
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Financial Aid Terms: Definition of “Full-Time” in Graduate School

A number of loan contracts and details differ based on the enrollment status of the student. Unfortunately, each college and educational institution may define the terms of enrollment differently. In most cases, enrollment must be at least half-time to qualify for financial aid at all.
When looking at graduate schools, you may be wondering how many credit hours are needed to be considered a full-time student, versus a half-time student. Here are some guidelines based on information gathered from a few types of schools:
Semester-based school with mostly 3 credit hour courses: Most institutions are using 9 credit hours as full-time and 6 credit hours for half-time.
Semester-based school with mostly 4 credit hour courses: Institutions use 8 credits as full-time with 4 credit hours for half-time.
Quarter schools: These institutions indicated using 6 credits for full-time with anywhere from 3-5 credit hours as half-time.
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New Program! Innovation and Entrepreneurship at Stanford University

Hey graduates! If you were a business major for your undergraduate studies or are interested in business, check out this new certificate program offered by Stanford University:

The Stanford Graduate School of Business will launch a new 20-week evening Program in Innovation and Entrepreneurship in January. Applications for this certificate program are now available.
Aimed at industry participants who do not have an MBA, as well as entrepreneurial graduate students, the non-degree program will expose participants to fundamentals of business and practical aspects of moving a business idea forward. The 60-person program will bring together Stanford PhD and other non-business graduate students with Silicon Valley innovators, scientists, and engineers to gain greater understanding of the pathways to commercializing innovations and to learn general management skills. Since 2006, the business school has conducted a successful four-week program, the Summer Institute for Entrepreneurship, which teaches entrepreneurship to non-business graduate students in life sciences, engineering, and the humanities.

Cool sounding, right? If you’re interested in learning more, read up on Stanford’s website.
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Why Pick a Graduate PLUS Loan?

As a graduate student, the pressure is higher than ever and of course, your classes are likely more expensive than your undergraduate career. The majority of loan products available to you are graduate Stafford loans, graduate PLUS loans and private student loans.
Getting back to the primary question, why pick a graduate PLUS loan?
There are some differing schools of thought on this, but I’ll break down the benefits and differences so you can decide which makes more sense for your financial information.
Grad PLUS = 7.9% fixedPrivate = variable, based on the Prime or LIBOR + X%; can be very low with good credit or a creditworthy cosignerGrad PLUS = several repayment options including: Standard, Graduated, Income Based Repayment, Income Contingent Repayment and Extended RepaymentPrivate = Generally 1 or 2 standard repayment plans; often 15 yearsGrad PLUS = interest rebate for one year’s worth if you make every payment on time during the first year; 0.25% APR reduction for auto-debit paymentsPrivate = a variety of different options depending on the lender such as: APR reductions, graduation rewards, co-signer release and more
To learn more about the differences between graduate PLUS loans and private student loans, check out GradLoans.com’s “Comparing Graduate PLUS and Graduate Private Loans” page.
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Supplemental Student Loans for College

Often times, federal loans just aren’t enough to pay for the full gamut of education expenses in college. In my personal experience, federal aid usually covered about 70% of my tuition/fees, but I had to seek alternative financing for the other 30%.
A supplemental student loan (also known as a private loan) can help in this department by covering up to your full cost of attendance. This can include costs such as off-campus housing rent, books, lab fees, a computer and of course, your tuition.
A supplemental loan is different from federal loans because it has a variable interest rate, usually based on the LIBOR index or Prime Interest Rate. The vast majority of loans fall between 2.8% – 10% APR*.
In addition, to be competitive with federal loans, many private lenders offer specialized incentives to make their products more enticing to borrowers. Some select examples of these would be co-signer release, graduation rewards and interest rate reductions.
We always recommend that you pursue federal options first, but if you still need more money for school, compare your private student loan options.
*This range is completely dependent on how each bank calculates its rates. Your milage may vary.
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From Our Forums: Am I dependent or independent?

Ah yes, the ever nagging question of dependency status on the FAFSA. We know it well. Recently one of our financial aid forum users, Ssully, posted this question in regards to that exact topic:

I’m trying to determine whether I would be considered a dependent or independent student in applying for Stafford loans. One of the determining questions asks if I will be working on a master or doctorate program. I have just earned my bachelor’s degree, and I am considering returning to school for either a second bachelor’s or teaching certification.

Since neither of those programs are considered “graduate” or “post-graduate” level, he will need to meet one of the following criteria to be classified as independent:
24 years or older (as of 12/31 of the award’s year)Be marriedHave legal dependents (be a parent or pay more than 50% of another person’s living expenses)Be a veteran of the U.S. Armed ForcesBe an orphan (both biological parents deceased)
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Understand Your Graduate Loan Options

The Wall Street Journal had a great article yesterday explaining some of the problems that graduate business schools have been facing in regards to decreased applicant and attendance volume over the past few semesters.
The author, Diana Middleton, writes:

Many full-time programs have seen a drop in applications international students, partly due to increased competition from schools abroad and because of increased difficulty securing visas and student loans.

It’s no secret that student loans are more difficult to obtain for graduate students in the past few years due to the credit crunch and slow economic recovery. However, there are more lenders and programs than ever to assist post-undergraduates with their advanced degree programs.
Between the graduate Stafford loans and GradPLUS loan offerings, there is a substantial base of federal loans available to students attending accredited, Title IV-certified academic institutions. The interest rates on both loans are fixed (6.8% APR and 7.9% APR, respectively) and allow the safety of stable, unchanging payments.
Although the federal loans have fixed interest rates, private loans have the potential to much lower. At this moment in time, I have seen APRs start as low as 2.8% (August 2010). In addition, private student loans have many benefits and incentives that are not available to federal borrowers such as co-signer release and graduation rewards.
If you want to do your research find out what is available, take some time and compare student loans.
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Parent PLUS Loan Rejected. What Now?

Posted in Parent PLUS Loans tagged financial aid appeal, loan rejection at 10:49 am by plusloans
Getting a loan rejection letter can be very disheartening and exhausting after the work you put into helping your child(ren) pay for their education. However, there are still ways to gain more financial aid through what is called an “appeal” process.
Most schools have these in place and you can get the specific details through their financial aid department. The most common way this process is handled is by sending in proof of income and a formal letter stating exactly where your finances are at, and why you or your child needs more money for school. It is best to do this process as early as possible because as the months move forward toward the beginning of the academic year, the financial aid pie is allocated to students on a first-come basis.
Some things that you should definitely do/include in the letter:
Detail about change in finances — if you lost 20% of your income… say so. That would make a substantial change in your family’s EFC and could potentially net your child a lot more money.A brief description of you and your child’s efforts to raise money for school. Be genuine. If you show that you are making an effort (applying for scholarships, asking banks, etc.) you are much more likely to get more in return.Last, but not least: make the letter clean, grammatically-correct and professional. It makes your request look more polished and let’s face it… people are more inclined to read and give attention to something that is easily legible and compelling.
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Repayment Options for the Parent PLUS loan

Posted in Parent PLUS Loans at 2:46 pm by plusloans
If you are a parent who has taken out a PLUS loan to cover some of your child’s education, you might be wondering what methods of repayment are available to you. While many parents opt for standard repayment, there are other options as well:
The Graduated Repayment Plan allows you to start out with lower monthly payments that gradually increase over time until the loan is paid in full. The required monthly payment is calculated based on your loan debt and interest rate.
The Income-Sensitive Repayment Plan bases your monthly payment on your yearly income and your loan amount. You are eligible for this plan only if you monthly loan payment is greater than ten percent of your annual gross income.
The Extended Repayment Plan provides eligible loan borrowers with payment relief through an expanded repayment term of up to 25 years.
Visit ParentPLUSLoan.com for more information on repayment, and don’t forget to consolidate if you have more than one federal loan.

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Parent PLUS or a Private Student Loan? What should I pick?

Posted in Parent PLUS Loans, Private Loans tagged parent plus loan, private student loan at 1:38 pm by plusloans
If your child received their financial aid award letter and there weren’t enough digits on the page to cover tuition, you are definitely not alone. The cost of college continues to steadily grow every year, but financial aid has not kept the same pace. As a result, the gap between aid and cost continues to grow.
Once your child has exhausted the annual maximum for Stafford loans, the next step is to look at credit-based options to bridge the financial aid gap. Fortunately for you, there are quite a few lenders that all must compete with each other to make money and therefore give you an opportunity to minimize the interest rate on a new loan.
If you’ve read a few posts on this blog, you know the score on Parent PLUS loans, but what about private student loans? There are a few notable differences… and in some cases they can become more attractive than their federal counterpart.
Major Differences:
Private student loans have variable interest rates (meaning they change with the index they are associated with… most commonly LIBOR or the Prime)They come from banks instead of the Department of EducationMany banks offer special incentives to make a private student loan more worthwhile
At the moment, interest rates are quite low due to the Fed attempting to put the economy back on a growth track out of the recession. This means that the indices are at historical lows and with a creditworthy borrower, you can secure a great interest rate that can be as much as 5% lower than a Parent PLUS loan.
If you want to learn more about some of the incentives that private lenders offer, check out this blog on the Student Loan Network.
The bottom line is just do some research before you take out a loan. In many cases, you can save thousands of dollars in interest if you shop around.
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Can a Parent PLUS loan be transferred?

Posted in Parent PLUS Loans at 1:57 pm by plusloans
One question we get a lot regarding Parent PLUS loans is whether or not the payments can be transferred to a child. The answer, sadly, is no. Parent PLUS loans are federal-based loans taken out by the parent in his or her name, and will remain so throughout the duration of the repayment.
However, as a parent, there are options if you are unable to pay, or expect you will be unable to pay back a PLUS loan.
If you have yet to take out a PLUS loan, you might be better off applying for a private student loan if you are concerned about being unable to make payments in the long run. With a private student loan, you can apply to be released from the loan after a set number of consecutive payments and have the remaining sum transferred to the student.
If you are parent who has already taken out a PLUS loan, you could establish a payment plan with the student, whereby the parent pays the loan back directly to the lender, and then the student reimburses the parent.
Do you have any other questions about the Parent PLUS loan? Post them in our Financial Aid forum!
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Five websites to help pay for college

Posted in Parent PLUS Loans, Private Loans, Stafford Loans, Student Loan News, The Financial Aid Process, Uncategorized tagged best financial aid websites, college, financial aid, financial aid websites, paying for college, scholarships, student loans, university at 9:35 am by plusloans
Here is a list of 5 useful websites from Edvisors that will help you pay for college:
1) www.StudentScholarshipSearch.com – Offers a free open directory of scholarships for college.
2) www.ScholarshipSearch.com – A college student membership rewards program; join, earn points, win free scholarships!
3) www.StudentLoanNetwork.com – Everything you need to know about student loans and a great overview of financial aid in general.
4) www.FinancialAidNews.com – Daily news updates on financial aid, scholarships and paying for college.
5) www.FinancialAidForum.com – A financial aid discussion board discussing all things relating to paying for college.
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Can I transfer a Parent PLUS Loan?

Posted in Parent PLUS Loans, Private Loans, Student Loan News tagged parent loans, PLUS loans, student loans at 2:10 pm by plusloans
Many parents, who take out the Parent PLUS Loan, believe they could always transfer the loan to the child, once he or she has graduated and secured a reasonable income. Unfortunately, that is not the case. The PLUS Loan is the responsibility solely of the parent, and is taken out in the parent’s name. He or she is the borrower, not the student.
One option, if finances become an issue for the parent, is to simply have the student reimburse the parent for the cost of the monthly payment, but continue to make the payments in the parent’s name.
If, as a parent, you would prefer a loan that allows you to eventually transfer the repayment obligation, consider a private student loan. These loans are in the student’s name, and depending on the lender, generally have a cosigner release option. After a certain number of consecutive on time payments, the parent (as a co-signer) can apply to be released from the loan, making it entirely the student’s obligation for repayment.
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Parent PLUS Loans are the Best Alternative

Posted in Parent PLUS Loans tagged parent plus loan at 10:08 am by plusloans
If your child is in school, or will be entering school, the problematic financial aid “gap” between total cost of attendance and awarded aid can sometimes grow to a frustrating size. From personal experience at a private college in downtown Boston, I averaged about $7,000 to $10,000 in unmet expenses per year that had to be solved through alternate means.
There are a variety of options to handle this extra cost, including private student loans and personal loans, but based on feedback from parents and the economy, the best choice is a Parent PLUS loan. Here are a few reasons why this type of loan is more popular with families putting children through college:
1) They have a fixed interest rate.
In a turbulent and recovering economy, variable rate loans can be a ticking time bomb. Having fixed interest means that over the entire life of the loan, you will have stable payments and no surprises.
2) The credit check is easier to pass.
This one probably is debatable, but there is a general consensus that the credit check for Parent PLUS loans seems to be more relaxed than the inquiry most private banks use for private student loans. There have been many reports of parents who were declined private student loans being offered Parent PLUS loans, with sub-prime credit scores (620+) and higher.
3) They have flexible repayment plans.
This is arguably the best reason to take out a Parent PLUS loan versus a private offering. Between Income Based Repayment and several other very flexible and generous pay plans, the federal loan is a much more attractive option for most parents and families.
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5 Financial Aid Tips for 2011

Posted in FAFSA, Parent PLUS Loans, Private Loans, Scholarships, Stafford Loans, Student Loan News, The Financial Aid Process tagged FAFSA, financial aid, financial aid advice, financial aid tips, grants, paying for college, scholarships, student loans at 1:19 pm by plusloans
Here is another list – this time about financial aid:
Complete the FAFSA application to qualify for federal and institutional financial aid.  Applying early will increase your eligibility for aid.  Those who wait may loose out.Once you complete the FAFSA, apply for scholarships.  There are thousands of private and free scholarship programs.  Again, apply early to get the best chance of securing money for 2011.Research and apply for federal student loans.  These loans are great options.  The Stafford loan has a low rate and interest as well as payments are deferred until after graduation for the “subsidized” Stafford loan.Review private student loans and student loans from banks.  These loans offer some different options and may be at lower (variable) rates compared to the fixed plus loan rate.Dig deep into your savings – you’ll need it…
Good luck with funding the next year of school.  The costs continue to rise.
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Running Out of Time for the FAFSA

Posted in FAFSA, The Financial Aid Process tagged FAFSA, fafsa online, financial aid application at 3:33 pm by plusloans
Attention parents! Today marks March 5, and school financial aid deadlines are here, or very close. The majority of schools require all paperwork to be in during this month in order to fairly distribute financial aid and have plenty of time to assemble students’ award packages.
So, what can you do to make sure it all goes smoothly?
1. Make sure your taxes are filed.
This may be a “what?” moment if you are new to the FAFSA process and/or this blog, but in order for your child or ward to file their FAFSA, they need information from you. Specifically, they need your Annual Gross Income figure from your 1040 or 1040EZ form.
If you are the type to hold off on filing taxes until April’s cutoff date, you are putting the student in a diminished position to get the maximum amount of aid possible for the upcoming school year. If you absolutely must hold off, have them file with the previous year’s numbers and then submit an amended FAFSA as soon as your taxes are complete. You can find all the relevant forms and processes on FAFSAOnline.com.
2. Gently, but firmly remind your child.
Nobody likes paperwork. However, if you and your family need aid money from the government or school to pay for your child’s education, you can’t afford to let the FAFSA sit on the back burner. If necessary, you should put a day on your calendar (in the very near future) to sit down with them and help them complete it; this will ensure it gets done, and is filled out correctly.
If you need any advice, or would like to know more about how the FAFSA works, check out the FAFSAOnline.com blog for lots of relevant and interesting posts.
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A Parent’s FAFSA Checklist

Posted in FAFSA tagged a parent's FAFSA checklist, Parents role in financial aid at 4:14 pm by plusloans
As a parent in the midst of FAFSA season you are probably wondering what your role in the financial aid process should be. Here is a quick checklist to make sure you are on the right track:
Obtain your own FAFSA PIN number at www.pin.ed.gov. Your PIN will act as your electronic signature on your child’s online FAFSA.File your taxes as early as possible, but do not delay the FAFSA due to your taxes not being done. You can estimate your financial information on the FAFSA, but you will have to finalize it later.Help your child complete everything on their “to do” list.File the FAFSA online- it is much easier and faster and your information is 100% safe.Examine the bill from the school your child chooses and make she you understand all of the fees and how they will be paid.Permalink Be the first to like this post.
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3 Student Debt Reduction Strategies

Thanks to the credit crunch, the recent economic recession and the rising cost of education, student debt is more prevalent than ever. Between credit cards and student loans, many graduating seniors will have as much as $50,000 to $60,000 in debt that has to be repaid.
Here are a few strategies that can be used separately or together to curb your debt and get you on track to financial stability and better quality of life.
There are tons of services such as Credit.com’s free debt consultation service that match you up with a licensed and certified financial professional. We always recommend that you consult with an industry professional because they will know all options available to help you get control of your debt.
While most of us have a negative knee-jerk reaction to the word “budget”, the truth is it is ESSENTIAL to managing and reducing debt. Even something as simple as plotting out how much money you are willing to spend on basics like food and entertainment can free up a surprising amount of money in a month to go toward your debt.
To give a quick example, I recently decided that I would buy lunch no more than 3 times per week (I usually buy every day.) I’ve already saved about $50 per week (more if you don’t count groceries) — that’s $200+ a month!
If you aren’t familiar with loan jargon, “principal” is the physical amount of money you borrowed. Interest is figured out based on how much principal you have remaining, multiplied by the interest rate.
Thus, if you pay more than your minimum, the raw total the interest is based on goes down quicker and you pay less money overall. It’s a win-win.
Note — always specify that you want extra money going directly to principal. Otherwise, some banks will sneakily apply it to “future interest” and you won’t be slimming down your payments like you want to.
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3 Tips for Building Excellent Credit

It’s not exactly a secret that trying to build credit as a student is like power washing a house with toothbrush. There are a lot of hurdles, but having an established credit history is absolutely crucial for pretty much every big life event in the book.
For instance, did you know that in many cases you need to pass a credit check to rent an apartment? Or that for pricier cell phone carriers like Verizon, you need credit just to start a contract?
Credit is more widespread than you’d think, so here are some tips to bulk up your history and score:
Credit comes from more places than just cards.
If you thought that a credit card was the only way to build credit, you’re mistaken. Many accounts with monthly payments like student loans and utilities report to the credit bureaus regularly. This is an easy way to build your history while paying for normal, routine things.

Get a (prepaid) credit card.
So, obviously a normal credit card will boost your score with proper use, but have you heard of prepaid credit cards? They essentially are like gift cards… except you actually can build credit by using them and consistently putting money on them. Think of it like a checking account that builds your credit when you use it.
See some prepaid credit card options here »
Consolidate your loans for a small credit bump.
If you’re getting ready to graduate or already have, consider consolidating your loans early to get a nice boost to your credit score and history. When you perform a consolidation, you essentially are paying off all your current loans and opening up a new master loan. The credit bureau sees this as responsible finance and subsequently increases your score.
Aside from the ideas above, make sure to be careful with your spending and generally try not to charge anything that you can’t pay off within 3 months. I tend to disagree with the people that say, “Don’t buy anything unless you have cash for it right away” because there are plenty of necessary purchases that aren’t $200 or less.
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Check Out Our Credit Education Center

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We’ve done the legwork to make sure the information presented to you is accurate, practical and useful for everyday life. No deceptive practices, no sketchy content.
Here are some of our users’ favorite articles:


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