Student Loan Tips

National Facebook Status Report


The average U.S. Internet user spends more time on Facebook than on Google, Yahoo, YouTube, Microsoft, Wikipedia and Amazon combined.  Nielsen survey numbers confirm that Facebook is the web’s number-one time sink. What’s more interesting, though, is just how much more time we spend on the world’s largest social network today than we did six months ago.

Back in June 2009, Nielsen estimated that the average U.S. user spent four hours and 39 minutes on Facebook each month. In August 2009, usage rose to five hours and 46 minutes per month.  

Then in January 2010, the average jumped to more than seven hours, more than 14 minutes per day. Comparatively, the time spent monthly on Google (1:23), Yahoo (2:09), YouTube (1:02), Microsoft/Bing (1:35) Wikipedia (0:15), and Amazon (0:22), don't come close.

Here are 9 Great Facebook Apps to Make College Life Easier

  1. SkoolPool: Get the lowdown on schools, online and otherwise. 
  2. Rate My Professors: Find out what other students think of a professor before you register for his or her class.
  3. JSTOR Search: Find full text research articles on Facebook. 
  4. Notely: Organize your school life with an app that helps you wrangle your calendar, notes, assignments, and more.
  5. Study Groups: Get everyone together on your group project with this application.
  6. Notecentric: Take notes right inside of Facebook and share them with classmates.
  7. Class Notes: Find scanned notes for your classes on Facebook.
  8. Textbook Exchange: A great place to look for used books.
  9. Lexulous: One can hardly prepare for any test of verbal ability without this classic game.

FAFSA, two definitions



1.      Acronym for the Federal Application for Student Financial Aid. A form that can be prepared annually by current and prospective U.S. college students (both undergraduate and graduate) to determine their eligibility for student financial aid (including Pell grants, and work-study programs).

 

Despite its name, the application is the gateway to be considered for not only for the nine federal student aid programs, but also most of the 605 state aid programs - and most of the institutional aid available as well. The U.S. Department of Education begins accepting the application on January 1 of each year for the upcoming academic year. Each application period is 18 months.  However most federal, state and institutional aid is provided on a first come, first served basis. Students are advised to submit a FAFSA as early as possible. 

 

      2.      The paper equivalent of Rubik’s Cube.

One Less Moving Part


If you are applying to college or transferring as an undergrad, congratulations on learning how to juggle!

The Cooperative Institutional Research Program’s 2007 Freshman Survey found that 27 percent of high school seniors apply to six or more colleges, up 5 percent from 2002.  Part of the increase is due to the growing acceptance of one-size-fits-all applications among many campuses.  

Whether it’s The Common Application, The Universal Application, a state-specific form or the up-and-coming HBCU application from Edu, Inc., these services take a considerable weight off many students’ shoulders by eliminating a lot of repetition.

Questions you should ask about interest rates


What is the interest rate today, expressed as a simple numeric percentage?

Is the interest rate fixed or variable?
 
If it's variable, how often can it be changed?
 
If it's variable, what is the maximum (a cap) that it may not exceed?

One common peculiarity among U.S. student loans


For all U.S. student loans - government and private - a borrower has no bankruptcy protection. Later in life, if you experience financial difficulties severe enough to declare bankruptcy, by today's law you will not erase or liquidate any of your student loans.

Delinquent and defaulted borrowers who face a non-dischargeable balance that keeps growing with added interest and penalty fees refer to their circumstances as "Student Loan Hell."

For high school counselors ...


Here's a tool you may find useful to help students in the 10th through 12th grades learn about possible career paths.
 
The ASVAB Career Exploration website includes a test, an interest inventory and other career planning exercises.

 
asvabprogram.com

Talk about your loan shopping goals as you shop


Know your goals.  Don't hesitate to talk about them with salespeople. 
 
Are you looking for the cheapest loan? For yourself? For your parents?
 
Do you know your FICO score? Your parents' FICO, if applicable?
 
Are your career goals clear in mind? Or still in the works?
 
Is convenience important to you?
 
Do you want to pay some interest while you're in school to prevent a larger balance later?
 
Are you looking for a lender with a well-known brand?

Will you be using charge cards while you're in college?

A private loan may provide desirable flexibility


Many private loans will finance prior semester and prior year academic charges as well as current charges. 
 
A computer, its software and other accessories are often legitimate school-related expenses that a private loan will pay.

What's involved in borrowing responsibly?


Everyone's personal situation differs somewhat. But you'll certainly benefit from answers to the following questions ...
 
How much will I owe when I finish school?
 
What will my monthly payment be?
 
What will my monthly net income be?
 
Before I borrow, can I talk with someone currently in that situation to find out what it's like?
 

You should know about Perkins Loans too


Colleges and universities opt-in or opt-out of participation in 'campus-based' Perkins loans for students enrolled at least half-time.
 
A FASFA application is required. The campus financial aid office is involved in determining eligibility and amounts. The interest rate and payment terms are reasonable. Ask about them at your college financial aid office.  

Before you shop for loans, do two things


First, look for scholarships offered by your parents' employers, your employer and other organizations in your community. Do it annually, because availability may change each year.

Second, read all these Shopping Tips. Check out some of the helpful web sites that are mentioned. You'll be pleasantly surprised at how clear your loan shopping objectives will become.  Good lenders appreciate informed shoppers.  

Applying for Stafford and PLUS loans


Stafford and PLUS loans are government-backed and government-issued.  In general, borrower qualifications are relaxed, and just about every applicant is approved.  
 
However, the application process can be tedious.  You (or your parents) must complete a multi-page federal FAFSA application. The data you provide will be computer-matched and compared to your (or your parents') most recently filed federal income tax return.
 
And the interest rate may be higher than expected. 
 
Forms and information are available in any college financial aid office and at ed.gov.

Get More Bang For Your Book


·         Deferment - If you’ve done all the work it takes to get financial aid, you may be able to take it easy during the first few weeks of school when it comes to buying books. Many colleges offer deferment through the campus bookstore and possibly off-campus, as well. This allows you to order everything your professors recommend and let the school worry about payment whenever financial aid gets in - they’ll deduct it from your award.

·         Wait and see - Before you even think about putting out money for a textbook, attend the first few classes to see if it will be used regularly.  In courses where the book is just an occasional reference, there may be one available at the library on reserve.  You might even borrow a demo copy from the instructor. Perhaps you can  chip in with other students and share the book it in a study group or as needed.

·         Supplemental paperweights - Check twice before buying a new edition with lots of bells and whistles. The single greatest cost associated with newer versions are the supplemental materials: CD-ROMs, practice books, online study center access. If your instructor doesn’t care about any of that, choose an older version that’s less expensive.

·         Think local, buy global - Always check online for the best prices, and specifically search for an international edition. They’re flimsier and may take longer to arrive, but the savings can be immense.

·         Scout around online - Start in your own backyard on Facebook Marketplace and through your school website.  Then comparison shop with Amazon.com and Half.com. Sites like Chegg.com let you rent books for the semester and send them back.

Real-Life Dilemma


When money is tight, we all have to get creative sometimes. We ask for extensions here, pay the minimum amount there, and sometimes find ourselves selling off treasured possessions just to make ends meet.  But think twice before you make a student loan payment with a credit card.

Even when your Visa card interest rate is lower than your student loan, most credit card companies accrue interest on outstanding balances daily. If you are in a tight spot financially, call your lender, regardless of how awkward it may feel. The leeway they may offer will likely be less costly than the price of poor credit.

Top 5 FAFSA Mistakes and Mix-ups


Don’t let this be you or your family! The following errors are extremely easy to make when you’re in a hurry. 
 
5. Listing parental marital status incorrectly – the custodial parent's marital status is needed. 

4. Listing your marital status incorrectly. Your marital status on the day you sign the FAFSA is essential.  

3. Entering the wrong amount of federal income tax paid.   Report the amount from federal income tax forms (1040), not W-2 form(s).

2. Confusing Adjusted Gross Income as Total Income.   They are not the same.  This mistake is particularly common.

1.  Leaving fields blank.    Enter '0' or 'not applicable' instead of leaving a blank.

You're Not Alone


If you’re considering borrowing for school, you’re in significant company. 67 percent of four-year college and university graduates had student loan debt in 2008. The average debt level was $23,200.

Source: US Department of Education data, December 2009

270 days lateness can create 7 years of pain


Federal student loan figures show that 11.8 percent of borrowers, who began repaying their student debt two years ago, have defaulted. A student loan is considered in default if you haven’t made a payment in 270 days.  Default stays on your credit report for seven years, even if the debt is paid in full.

Viral Videos


Stand out.  Make a scene. Grab yourself a laughing baby and get ready for your closeup.  More and more universities are accepting personal statements in video form nowadays.

Even though Tufts University, College of William and Mary, George Mason University and Saint Mary’s College of Maryland all have encouraged applicants to send in video submissions, only about 10 percent of students give it a shot. 

$27,000: The magic Stafford loan number


Here are the current maximum Stafford Loan amounts for students classified as dependents:

That adds up to $27,000. Talk to your family and to the financial aid office if you think you may need more to get you to graduation day.

 

 

Two tax benefits for college students and student loan borrowers


 

Tuition and Fees Deduction.  Even if you do not itemize deductions on Schedule A, Form 1040, the Tuition and Fees Deduction can reduce the amount of your income that is subject to tax by as much as $4,000 for qualified taxpayers.

Remember that a taxpayer may not claim this deduction AND one of the following in the same tax year: the HOPE Scholarship Credit, the Lifetime Learning Credit, the tax-free portion of a distribution from an Coverdell Education Savings Account or a Qualified Tuition Program. You cannot claim this deduction for expenses paid with tax-free scholarships, grants, employee-provided education assistance or tax-free interest on U.S. savings bonds.

Student Loan Interest Deduction.  Borrowers paying interest on eligible student loans may deduct up to $2,500 of the interest actually paid. The loan(s) must have been used to pay for tuition or other higher education expenses, such as room and board, books, supplies, equipment and transportation.


Check also the HOPE Scholarship Credit and the American Opportunity Tax Credit.  

That's a Lot of Coffee


The projected total U.S. student loan debt outstanding for September 30, 2010, including public and private loans, is $763.4 billion.

 

Put another way, that's $2,704 for every person in the nation.  That equates to one two-day trip to Spain, or 18 visits to Disney World, or 676 Starbucks Frappuccinos or 135 copies of War and Peace for each and every one of us.


Those figures exclude credit card debt and personal loans. In 2009, 84 percent of students had at least one credit card, and half of them had at least four credit cards. The average undergraduate has $3,173 in credit card debt before graduation.

Grad school: financing the extra mile


Undergraduate degrees are much sought-after by employers in today’s job market, but specialization is even more in demand. Graduate studies can open doors in many lucrative careers -- at a price.

A quarter of graduate and professional students borrow more than $42,898 for a Master's degree; more than $75,712 for a doctoral degree; and more than $118,500 for a professional degree.

The career with the most indebted graduates continues to be medicine with an average student loan total of $136,474.

Billpay benefits


Save money and reduce your paperwork by signing up for an automatic withdrawal for your private student loan repayments. They will never be late, and many lenders offer interest discounts in return.  

Talk a little more. Borrow less.


Have you been offered student loans as part of your college's financial aid package?   Ask a financial aid officer if you might be eliglble for more grants. Perhaps your financial aid situation has changed since you first applied.  Perhaps there are relevant circumstances not reflected in your FAFSA.  Courtesy: The project on Student Debt

Where your money goes


"Budget" is not a dirty word. Think of your budget as a personal spending plan. It's a way for you to understand where your money goes, and to make sure you don't absent-mindedly buy things you don't really need.  Courtesy: blog.salliemae.com

When your address changes, don't keep it secret


When you move during school and after graduation, don't just notify friends and family.  Your lender needs your new address, email and phone number to send you important information.  If you miss a payment because your invoice or statement was mailed to your old address can affect your credit rating.  

Need cash?


Need cash from an ATM? Use your debit card rather than a credit card. Cash advances on credit cards incur serious charges: fees to get the money,and interest until it's  repaid.  Use your debit card and limit yourself to what's in your checking account. 

What difference does direct lending make?


Federal student loan reforms have been enacted.  What does it mean for students who borrow? 

You will fill out the same paperwork and pay similar interest rates. Annual repayments will likely capped at 10 percent of actual income. You'll apply for your Stafford or PLUS loan through your campus financial aid office.  The interest your pay will go to Unccle Sam rather than a bank.  Source: Derek Thompson in The Atlantic

4 Tips for maintaining good credit


Know your debts, know your due dates.  Roughly two-thirds of your credit score is based on paying your bills on time as well as the total amount of your debt.  Don’t miss monthly payments.  Be aware of your total debt before taking on more than you can handle.

 

Don’t be afraid to rate shop.  A common myth: you can damage your credit score by getting rate quotes from multiple sources.  Answer: not true.  Do your rate shopping in a focused period of time and for the same purpose.  Request car loan quotes from several lenders in the same week, for example.  Your credit score will not be affected.   


Get current, stay current.  The longer you pay your bills on time, the better your credit score will be. Even if you’ve had payment trouble in the past, bring your accounts up to date. Ask your creditor for assistance before you miss a payment.   

Respect all debt.  Missing a monthly payment on a small debt is just as damaging as missing one for a large debt. Don't let a single monthly payment obligation slip. A delinquency is a delinquency, regardless of the amount owed.
 
Courtesy: Charter One
 

Find $2,500


Keep good records.  During the first two years of college, you may be eligible for the Hope tax credit for education, which will be $2,500 for the 2010-11 school year. 

FICO?


Your FICO score is a large part of your credit rating. Lenders usually base their approvals and disapprovals on FICO.

FICO ranges from 300-850. A higher score is better and can result in a lower interest rate.
 
The median FICO score in the U.S. is 723.
 
FICO scores are calculated based on your rating in five categories: 
Payment history - 35% 
Amounts owed - 30% 
Length of credit history - 15% 
New credit - 10% 
Types of credit used - 10%
 
For more information, visit myfico.com While you're there, you may find the site's education section and student loan forum informative.

Security Alert


Many people will tell you to be careful about giving out personal information on the phone, by mail or online.
 
However, nobody gets a loan without furnishing considerable personal and financial information. And it can be furnished on the phone, online, by mail or in person.
 
Here are some of the best tips that we've heard for careful people.

Telephone. When a lender whose name you don't recognize calls you, ask for a name and phone number. Call them back to hear how they answer the phone.

Online. Be sure the URL that receives your information is HTTPS. The 'S' indicates a secure, encrypted connection. A padlock icon will display in your browser.

Paper. Buy a good shredder and use it daily.

U.S. Dept of Education site for counselors


Counselors ...

The U.S. Department of Education has a website directed to you. 
 
You'll find information on the FAFSA, scholarships, student FAQs and more at www.fsa4counselors.ed.gov

3 tips for snagging a scholarship


One: Don’t assume you won’t get one. There are scholarships out there for almost anybody. For example, an association affiliated with a hobby of yours may have scholarships available. A variety of contests can also win you money - even for dressing up in duct tape!

Two: Become skilled at writing essays. Hint: Many essay topics are similar. Keep everything you write, because you may be able to tweak one and use it again.

Three: If no one wants to do it, why don't you give it a try? Chances are greater you’ll win.

Tips for establishing good credit


Don’t go it alone.

 

1. The first line of credit you receive may be a credit card, a student loan or a car loan. In most cases, it’s best – and often necessary – to seek someone (usually a family member) with established credit to act as a co-borrower, co-maker, co-signer or co-applicant.

 

Start out small.

 

2. Building a good credit record takes time. It's easy to run into trouble by opening up too many accounts. It's often best to choose one credit card that carries a modest spending limit and charges no annual fees.

 

Know the traps.

 

3. Are you being offered a discount on an immediate purchase to open a department store charge card?  That discount probably pales in comparison to a 20% interest rate you’ll be charged each month on the balance if it's not paid in full immediately.

 

Pay on time, every time.

 
4. Much of your credit score is based on your repayment habits. Missing a monthly payment, especially when your credit history is short, will cause long-term damage.  

Don't pay down; pay off those credit card balances.
 
5. Pay your credit card bills in full each month. By paying the minimum your interest charges build surprisingly fast.  For example, let's say you bought a new $250 camera using a credit card that has a 20% interest rate.  If you pay just the minimum monthly payment - say $10 - it will take almost 3 years to pay for that camera.  It will also cost you $76.12 in additional interest charges!

 

You can kick the tires for 30 days


The lenders of private student loans are required to hold loan offers open at the same rates and terms for 30 days, in order to give students and parents time to compare loan offers.  Source: The New York Attorney General's Office

Should I use the money in my 529?


Wondering whether to use your 529 college savings plan if it has declined in value? Different financial advisors have different opinions on this.  If you qualify for subsidized Stafford loans, which do not accrue interest while the student is enrolled in college, it can make sense to avoid withdrawing from the plan to give it time to recover. 

A credit union may expand your options


Credit unions in your state may offer student loans. They may offer advantageous rates and terms to members.  Often, eligibility to borrow can be achieved by opening an account with a small deposit. 

Read your promissory note


Promissory note?  Most people's eyes glaze over at the mention of it.  Multiple page legalese with 6 point type is easy to avoid. For many borrowers, it's the document they must sign to get "The Money." e-signatures that speed the application process along also result in fewer borrowers actually reading the note's contents. This is unfortunate.  The promissory note unlocks many secrets of the private loan world.  And helps avoid unhappy surprises later.   

What you need to know about FAFSA


FAFSA stands for “Free Application for Federal Student Aid.”  You might want to think of it as “Financial Aid’s First Step Always.”

 

How It Works

You can file a FAFSA on paper or electronically—but it’s usually faster and easier to fill out online. Filing using FAFSA on the Web lets you complete, submit and track your application, and can reduce processing time by one to two weeks. And because your data is checked before being transmitted to the processing center, there's less chance of making an error.

 

You can download or fill out the FAFSA online at fafsa.ed.gov. If you plan to use FAFSA on the Web to complete and submit your application, we recommend getting a U.S. Department of Education PIN. The PIN will serve as your electronic signature, and gives you the fastest way to submit your application. Fill out the brief PIN application at pin.ed.gov. You select your delivery method, including email or postal mail, when you submit your request. You can still use FAFSA on the Web without a PIN; you'll just have to print out and

mail in your signature page.

 

Peer-to-peer lending


Some peer-to-peer student loan lending sites act as middlemen in transactions in which strangers agree to loan money to students. However, there are reports that nine out of ten students who apply do not receive loans.  Source: BaltimoreSun.com (Help for Families Waging the College Tuition Battle)

Scholarship smarts


Few scholarships can be "guaranteed."  Be wary of such descriptions.  Reputable organizations do not charge money for information about scholarships. Avoid those who do.  Source: ftc.gov/bcp/edu/pubs/consumer/alerts

Cut college expenses by 25%


Forget the five-year college attendance plan of yesteryear.  You can get on a three year plan by:
 
* Taking AP courses in high school and local college courses over the summer to build additional credits and cut down undergraduate calendar time.  
*  Taking the maximum course load possible each semester at college.  
*  Attending summer classes at local community colleges and transfering credits.
 
Graduating in three years can reduce college expenses by as much as 25 percent.
 
And you can begin earning a year earlier.
 
Source: Dr. Katherine Cohen in youngmoney.com

A glossary of some common student loan and credit terms


Annual percentage rate (APR)
The one-year rate that is charged for borrowing. For example, a credit card company might charge 1 percent a month, but the APR is 1% x 12 months = 12%.
 
Balance transfer
Moving a balance from one credit card to another. Some cards offer 0% interest for the first balance transfer, which means you can transfer the debt on one card to another without paying an extra dime.
 
Cosigner
Any person in addition to the primary borrower who signs a promissory note making him or her equally liable for repayment.  Some loans have 'cosigner release' provisions after a number of on-time payments have been made.
 
Credit limit
The maximum amount of money available to you on a credit card or promissory note. When this limit is exceeded, penalty fees may be charged and your credit rating reduced. 
 
FAFSA
The Free Application for Federal Student Aid is filed annually by students and/or parents to determine eligibility for federal student financial assistance including Pell grants, Stafford loans and work-study programs. The FAFSA consists of questions regarding the family's finances and is matched to federal income tax returns. The computed result is known as the Expected Family Contribution (EFC).

FICO Score
FICO is named after the publicly-traded Fair Issac Corporation that created the most widely-used U.S. credit score model. A person's FICO score is primarily used in credit decisions made by banks and other providers of secured and unsecured credit.

Graduate PLUS
Not to be confused with the Parent PLUS loan, GradPLUS is an unsubsidized federally-insured education loan with no annual or aggregate limits for graduate and professional students.

Merit aid
Financial aid awarded without regard for a student's family financial circumstances - usually scholarships or grants.

PLUS loan
Parent Loans for Undergraduate Students. A loan to a student's parents, which is federally insured, and for 2010-11, federally issued nationwide through college financial aid offices. The amount may be as much as the difference between total educational costs and other financial aid.

Private loan
An unsecured loan for college attendance with no federal involvement and various options for repayment. Interest rates and origination fees are set by the lender. A private loan can either supplement or replace federally-issued loans. They may offer forbearance and deferment options.

Stafford loan
A loan to student borrowers which is federally insured, and for 2010-11, federally issued nationwide through college financial aid offices. A borrower's interest payments may or may not be subsidized on the basis of family income and financial need (see FAFSA).

Subsidized loan Subsidized loans are available to low-income students. The federal government forgoes the interest specified in the promissory note while the borrower is in school and during a six-month grace period after enrollment ceases.

Unsubsidized loan
The borrower is responsible for the payment of the interest specified in the promissory note.

A High School Senior's Guide to Preparing for College


SEPTEMBER
OCTOBER
NOVEMBER
DECEMBER
JANUARY/FEBRUARY
MARCH
APRIL/MAY
JUNE

A High School Junior's Guide to Preparing for College


SEPTEMBER
OCTOBER/NOVEMBER
DECEMBER
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE/JULY
AUGUST

Forms can be tricky


A financial aid counselor from CUNY in New York Ciity had a laugh or two when helping a very literal-minded student fill out his student aid application. “The student took the form home for completion and, lo and behold, the form came back verifying the household size as follows:”
 
John Smith
 Dad 5'9"
Jane Smith Mom 5'3"
Peter Smith Brother  5'11"
Sarah Smith   Sister 20" (Newborn)

Take the guesswork out of applying for federal funds – look on the web for sample forms at sites like collegeanswer.com.

Savvy ways to save on school


Graduate on time. It sounds simple enough, but keeping your grades up and graduating on time can save you a bundle. While another year on campus might be fun, it may also mean incurring more student loan debt. Remember that many scholarships and grants require that you maintain a certain grade level or "satisfactory academic performance." 
 
Many colleges provide scholarships to the children of employees, and some support the children of alumni.

Do you qualify for a two-for-one tuition deal?   If you and a sibling attend the same college at the same time, you may be eligible for a sibling discount.

Consider your local community college.  It may be a great way to complete two years of education for less than one-third the price of a four-year college. Many four-year colleges offer automatic admission and scholarships to community college students who transfer to their schools.

Learn the difference between a list of monthly expenses and a budget


A list is a list.
 
A budget includes a well thought-out plan for paying all the expenses on the list.
 
If you have a budget you'll cut down credit card usage and interest payments.
 

Attention Price Shoppers


A subsidized Stafford loan is often the least pricey student loan, as low as 3.4% in 2010-11 for undergraduates from families with low incomes . And there is no credit checking.  
 
Unsubisdized Stafford loan interest rates are 6.8%. 
 
PLUS loans are easy to qualify for as well.  But even though PLUS is government-backed, the interest rate is as high as 8.5% these days. 
 
There are often some private loans available to creditworthy persons at rates lower than PLUS. 

Peace of Mind, attorney-style


The American Bar Association has a web site for families with legal questions about student loans, private and federal. 
 
www.safeborrowing.com/student/

Wouldn't That Be Nice?


A University of Utah financial aid administrator recounts this understandable misunderstanding.

 

A student called a lender and said, "I got my check for the Stafford Loan today. That was nice, thanks. Now, where and when can I pick up the check for my Family Contribution?"

A case of borrower leverage


Doctoral students who borrow large loans are completing their degrees more quickly than doctoral students who have smaller loans or no loans, according to a recent study. It's possible that large loans free people from the need to work part time, leaving more time available for graduate study.

Two researchers at the University of Kansas School of Education used data from the National Science Foundation's Survey of Earned Doctorates and examined data from 43,354 people who received doctorates between July 2004 and June 2005.

Offers to Pay Off Your Loans


Scared silly about graduating with a mountain of bills waiting on the other end? There are quite a few alternative loan repayment programs out there if you don’t mind rolling up your sleeves and working hard.
 
Here are some of the most popular ways to ease or escape student loan debt: