TOPICS

AT SOME COLLEGES, THE OFFICE OF FINANCIAL GIVES THE FIRST DOSE (First semester or first year financial aid) CHEAPLY BUT THEN JACKS UP THE PRICE FOR ALL SUBSEQUENT DOSES.  Be wary of financial aid that is not guaranteed (or almost guaranteed) for four years (and make sure to get out in four years). A high-tuition college combined with a low-paying career choice (e.g. social welfare) could lead to high student-loan debt and payments.

SUMMARY: FINANCIAL AID SOURCES LINKS  ADVICE FINANCIAL AID AWARD LETTERS  RENEWING FINANCIAL AID  WORKING YOUR WAY THROUGH COLLEGE  BOOKS WHAT'S IN A DEFINITION: TWO IMPORTANT DEFINITIONS    THREE IMPORTANT DEFINITIONS

SUMMARY: FINANCIAL AID SOURCESS

FINANCIAL AID SOURCE   FIRST STEP       Federal Government    Submit FAFSA  State Government     Contact the State Higher Education Agency    Colleges You May Be Attending     Contact the college's financial aid office Private Scholarships   Use the scholarship search engines  Private Education Loans   Contact a private education loan source THIS IS ONE OF THE LOANS OF LAST RESORT

LINKS

Fund your Future Workbook provides a very impressive introduction to financial aid and is highly recommended. Read the workbook for residents of your state. If you are not from one of the six followimg states, choose exactly one of these states, making sure to omit PDF pages 19-22.     ARIZONA    CALIFORNIA    HAWAII  NEVADA    OREGON    WASHINGTON  National Consumer Law Center's Student Loan Borrower Assistance Project "is a resource for borrowers, their families, and advocates representing student loan borrowers. This site is for people who already have student loans and want to know more about their options and rights." This last statement may not be entirely true. There is a lot of information for someone wanting to GET ANSWERS about student loans. Omit the first question, "What type of loan do I have" if you have no student loans. PAY FOR YOUR EDUCATION provides concise information given by the Students.gov, an official U.S. government web site designed for college students and their families.

DO NOT GET SCAMMED WHILE LOOKING FOR STUDENT AID. THE FINANCIAL AID GAME follows the financial aid awarding process at Skidmore College (Saratoga, NY).   The Project on Student Debt warns you to LOOK BEFORE YOU LEAP and gives student loan shopping tips.      FEDERAL STUDENT LOANS: Learn the Basics and Manage Your Debt (Working Draft) covers financial aid from beginning to end. A nice touch is that they give definitions as appropriate. For example, what is a Federal Loan? It is a loan guaranteed by the federal government.    U. S. News & World Report provides information about PAYING FOR COLLEGE.       STUDENT LOANS: DON'T GET BURNED, by Penelope Wang, Money Magazine senior writer (April 16 2007) warns that, "Financial aid officers don't always act in the student's best interests" and advises on "How to protect yourself."     FUNDING EDUCATION BEYOND HIGH SCHOOL: THE GUIDE TO FEDERAL STUDENT AID (2009-2010) is said to be a comprehensive source of information about the student aid programs of the Department of Education including an overview of federal student aid and detailed information on the student loan application process. Whatever your questions about student aid, you will find the information you need in this publication.    HOW COLLEGE FINANCIAL AID WORKS offers fourteen webpages of financial aid information; each of which covers some aspect of financial aid.            FORMULAS AND APPLYING           A FINANCIAL AID EXAMPLE            WHAT HAPPENS IF I QUALIFY?           SCHOLARSHIPS: MERIT BASED           SCHOLARSHIPS: LOCAL AND NATIONAL Omit the NATIONAL part.           RESERVE OFFICER TRAINING CORPS (ROTC)               FEDERAL STUDENT AID   THE TOP TEN STUDENT LOAN TIPS FOR RECENT GRADUATES

ADVICE

If you are considering an out-of-state public university that very likely will accept you, in order to avoid paying out-of-state tuition, you may want to move to that state and wait a year in order to establish residency. Plan ahead, so that, as early as possible, you do what it takes to become a resident; the financial aid or registar's office at your intended state university should be able to tell you what you have to do to become a resident.        Maintain complete records of your loans; keep track of your debt.                            Increasing the number of colleges to which you apply and, hopefully, increasing the number of colleges that accept you may, with some effort on your part, increase the amount of financial aid you offered. This is because colleges are in competiton for highly-qualified students (or oftentimes just for students). When seeking more financial aid, putting yourself up for auction (although not necessarily to the highest bidder) may get you more financial aid. Note that if you are at the bottom of a college's entering class or, even worse, on the waiting list, wheeling and dealing may not be profitable.      For private loans, borrowers and consigners should maintain a good credit history; this implies a history of on-time payments.      Being poor but proud sounds better than it is; accept all offers of assistance.     For you occupational choice, estimate your your post-college annual income and expected job prospects (See OCCUPATIONAL OUTLOOK HANDBOOK).      Estimate your post-college monthly student loan payment using the LOAN CALCULATOR.

FINANCIAL AID AWARD LETTERS

See REAL FINANCIAL AID AWARD LETTERS that schools sent to admittees. Clicking on the letter will show you a "graded" version of this letter, with markings that show you what you should watch out for in the letters you receive from schools. This can help you make sense of the jargon in financial aid award letters and figure out how much money the school is really offering.

RENEWING FINANCIAL AID

For all financial aid (grants, scholarships, and loans) awarded and administered by a college (we are excluding federal and state financial aid), ask the college financial aid office what the renewal requirements are (for academic awards, the requirement might be a minimum GPA whereas for a performance-based awards, the requirement might be making the team or the band). Realize that a scholarship with a required 3.50 GPA for renewal is not the same as money in the bank. Renewal requirements for state and federal financial aid are usually quite explict.

 

WORKING YOUR WAY THROUGH COLLEGE

SHOULD YOUR KIDS PAY FOR COLLEGE THEMSELVES? The answer is NO."Parents may not realize how much times have changed," the author of a report says. (December 11, 2009)     Some college students have worked forty-hour weeks and have graduated college in four years but, in general, this probably makes for neither a good college education nor for a good college experience.       Some studies seem to indicate that students working more than fifteen hours per week are less likely to graduate in four years. Since graduating in four years is considered a noble goal and, without a doubt, is an expense-saving goal, one can conjecture that a full-time college student should work no more than fifteen hours per week. As we shall see, work may be less profitable and more time consuming than it seems.      As an example, let us assume that a student earns $12 per hour and works 15 hours per week; income before taxes, etc. would be 12*15=180 dollars. This $180 may only yield $160 after social security tax, income tax, possible loss of some finanacial aid, transportation, etc.. Also the 15 work hours could turn out to be 20 work-related hours (work-related hours are calculated from the instant you begin preparing for work until the instant you are able to begin your nonworking agenda). If our estimates ($160 earned and 20 work-related hours used is reasonably correct, the "true" numbers are $160 for 20 hours; that is $8 per hour.       Instead of working, consider living more frugally (cut back on latte, pizza, etc) or borrow from the federal government (Stafford or PLUS loan). Aavoid working your first semester.       Strongly consider colleges that are affordable (that is, you can attend and not work).      It is possible that you may be offered a job that is ideal for you (relevant to your major, flexible hours, on campus, etc.). Possible ideal jobs may include working in a lab or tutoring. Strongly consider saying Yes to an ideal job.

BOOKS

Michelle Singletary, a Washington Post business write, recommends the book           FastWeb College Gold: The Step-by-Step Guide to Paying for College           by Mark Kantrowitz with Doug Hardy (list price $21.95) She adds that "[Mark] Kantrowitz is a financial aid expert and publisher of FinAid.org. [Doug] Hardy is the general manager and editor-in-chief of MonsterCareers.com." Ms Singletary also recommends           Paying for College Without Going Broke           by Kalman A. Chany with Geoff Martz (list price $20.00) I do not want to put the authors of these two books down but these authors do not know the first rule of book publishing: Never split royalties unless you have to.

Sherri Winston, lifestyle columnist for the South Florida Sun-Sentinel, writes (February 6, 2008) that            Free $ for College for Dummies by David Rosen and Caryn Mladen is "a great organizaional tool ... ." and that            College Board Scholarship Handbook  "offers a highly usable reference of available scholarships."

FINANCING COLLEGE WHAT'S IN A DEFINITION?

If you want to "speak the speak" of student loans, you will need the help of a glossary. Two available glossaries are GLOSSARY FSA, hosted by Federal Student Aid (FSA), part of the U. S. Department of Education, and GLOSSARY EFP hosted by Education Finance Partners (EFP), a student loan lender. Which of these websites can you trust: Glossary FSA, a .gov website or Glossary EFP, a .com website. There are differences twixt these two glossaries. To keep this discussion short, we limit ourselves to the letter "D."       We have, for example, both FSA and EFP essentially define "Default" as "Failure to repay a loan according to promissory note terms" but FSA adds "This failure must persist for 270 days." whereas EFP, instead of mentioning this, plays bad cop by going on to say that "Defaults are recorded on your credit record and have long-term adverse consequences such as: ... .      As a second example, we see  that FSA defines "[LOAN] DISCHARGE" as  "The release of a borrower from the obligation to repay his or her loan" whereas EFP does not define  "Discharge."

 

FINANCING COLLEGE THREE IMPORTANT DEFINITIONS

COST OF ATTENDANCE. Each college has its own student budget or cost of attendance, which includes tuition, fees, books, supplies, housing, food, transportation, and personal expenses for the schools year. It may also include money for a computer. Your cost of attendance will vary depending on where you live (with your parents, on-campus, or off-campus) and the college you attend. EXPECTED FAMILY CONTRIBUTION (EFC) is a measure of the financial strength of a student's family. The U.S. Department of Education calculates a student's EFC based on information provided on the Free Application for Federal Student Aid (FAFSA). FINANCIAL NEED. Most financial aid for college is based on a the person's financial need where, by definition,            Financial Need = Cost of Attendance - Expected Family Contribution.