Student Loan News, Updates and Blog Posts

The answer is yes and no. It just depends on which federal loan you have been awarded.

For the Perkins loan, which are federal loans provided thru your school, the answer is no. There are no additional fees. If you are awarded $2,500 than the entire amount is yours.

If you have a Direct Subsidized or Unsubsidized Loan a 2% origination fee is attached which is taken right off the top of the amount you were approved for. For example if you are awarded $5,500 than $5,390 will be sent to the school when you deduct the 2% fee.

The Direct Plus loan has a 4% origination fee.

FFEL loans have fees as well, but they vary from lender to lender. They can range from 2% on the Stafford Subsidized and Unsubsidized loan to 4% on the Plus.

Here at Staffordloan.com we have zero fees for Stafford loans and 3% fees for Plus loans. For a Stafford loan (click here) and for a Grad Plus loan (click here) and for a Parent Plus loan (click here).

According to Staying the Course: Online Education in the United States ’08 over 3.9 million students were taking at least one online course during the fall 2007 term; a 12% increase over the number reported the previous year.

When you consider the overall growth rate for higher education is only up 1.2% it makes that online enrollment figure of 12% even more significant. No doubt about it, online education is now a large piece of the education puzzle.

I actually took an online class over the summer for the first time. It was a Selected Topics in Mathematics class. For cost consideration factors I decided to enroll in the class at a less expensive school and transferred it over to my school. I only needed to score a –C for the grade to transfer. I’m happy to say I earned a B+ for my efforts.

It was great because I didn’t have to leave my apartment. My lego man pajamas could only be scrutinized by my cat. I didn’t have to dash to class, spend money on a parking sticker, or use gas money. I know I will be going this route again.

If you are interested in getting more information about online programs please (click here).

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For those of who don’t keep up the happenings in the financial aid world…there have been a few changes recently. The Higher Education Act of 1965 was reauthorized in August of 2008, with some interesting amendments within it…keep reading because these changes could affect you directly. 

Tuition Transparency List

The US Dept of Ed is going to release 6 lists annually regarding cost and cost increase in colleges:

1. Top 5% of schools with highest tuition increase in the recent year
2. Top 5% of schools with highest tuition increase in the past 3 years
3. Top 5% of schools with highest net price in the recent year
4. Top 5% of schools with highest net price in the past 3 years
5. Top 10 % of schools with the lowest fees
6. Top 10 % of schools with the lowest net price

The purpose of doing this is to hopefully keep tuition increases from  continuing…school’s obviously do not want appear on lists 1-4, and so hopefully will keep costs down, which will benefit future and current students

Changes in Student AID

1. The Pell Grant max will increase by $400 every year until 2014-2015
2. Convicted sex offenders will NOT be eligible to receive financial aid
3. As of July 1, 2009 a student will receive an automatic $0 EFC if a parent or guardian died in Iraq or Afghanistan after Sept. 11, 2001.
4. The work study program was continued through 2014
5. Community Service now can include helping a community recover from a natural disaster
6. If a student is displaced because of a natural disaster, the college can continue to compensate the student for their “work study”, limited to one school year.
7. Federal Perkins Loan was increased to $5000 for undergraduate students and $8000 for graduate students
8. People who have been convicted of a drug charge, can now regain their eligibility if they pass 2 unannounced drug tests (no word yet on how the gov’t plans on executing this piece of the legislation)

Changes in Need Analysis (how your school determines your aid package)

1. military housing is no longer considered an asset
2. veterans benefits are no longer counted as an asset effective July 1, 2010
3. A FAO (financial aid office) now has the ability to use tax returns from 2 years prior to the school year to determine an aid package
4. FAO’s can now award Dependent students whose parents refuse to fill out the FAFSA or does not help financially for college, the full unsubsidized amount (same amount that independent students get)
5. Students from the Federated States of Micronesia and the Marshall Islands now must have a ssn in order to receive aid for a college.

This question pertains the marital status of the STUDENT, not the parents of the student. Marital status is one of the determining factors of who is considered an independent student. If you are married, you are automatically an independent student for financial aid purposes. You must report that you are married if you are indeed hitched!

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I can’t tell you how many students wind up with a defaulted student loan simply because they never got their monthly payment reminder in the mail. And by falling into default they end up having to pay back thousands more in late fees and interest. Don’t fall into this trap!

It is so easy in life to make excuses – to pass the buck – to blame someone else. It takes a person with character to stand up and take responsibility. Just because your lender or servicer has not sent your monthly invoice doesn’t mean you don’t have to pay your loan back. When you borrow stafford loans to finance your education you are also promising to pay them back. That is what your master promissory note is for. Billing statements are merely sent as a convenience. Sure, ignorance may be bliss for a while, but when they finally catch up with you it won’t be pretty.

Just remember your loan repayment begins six months after you either take a leave from school, fall below a half time status as defined by your school, or graduate. For most they graduate in May so by turkey time those graduates should be receiving a bill, but again, not all will.

We are defined by the choices we make in life. Don’t get off on the wrong foot by letting your loans fall into default and then blaming your lender. Be proactive instead of reactive and make it happen!

If you are unsure who your lender is you can contact the Department of Education at 800-433-3243 or log on to http://www.nslds.ed.gov/nslds_SA/.  Please note you will need your 4-digit FAFSA pin number to access your information online.

If you are in need of a stafford loan (click here).

Who is eligible to receive Federal aid? This includes federal grants (money that does not have to be repaid and federal loans (money that is repaid).

• US citizens and eligible non-citizens (permanent resident, asylum, etc.) are eligible to receive federal financial aid.
• International students typically are not eligible.
• Students who are legal citizens/eligible non-citizens but whose parents are
  illegal immigrants may qualify for financial aid, but will likely need the assistance of a
  financial aid officer.

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We’re about to give our FAFSA website, FAFSAonline.com, a makeover, including updating it for the 2009-2010 FAFSA which will be finalized soon. As part of that process, I’d like to invite you to add your comments and feedback about the site, about what you like about it and what you think needs to be improved, what things you use the most and what things are missing that you really need. While I can’t guarantee that every suggestion will be implemented, I can guarantee that every suggestion will be read and given weight.

A few things that will not change:

- We will never charge for the FAFSA. It’s free for a reason.
- We will be keeping and updating our guide to become a true line-by-line guide.
- We will continue answering your questions in the comments on our FAFSA blog.

What can we do better here to help you?

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As most everyone knows the FAFSA is the key that opens the financial aid door, but which parent gets listed on the FAFSA for a dependent student after a divorce is the million dollar question.   Is it the parent earning the most money?  How bout the one earing the least?  What about both?

The answer is…drum roll please…the parent you lived with for the greater amount of time during the 12 months preceding the date you file your FAFSA application.

If you didn’t live with either parent, or you lived with each parent an equal amount of time, then use information about the parent who provided the greater amount of financial support during the 12 months prior to the date you file your FAFSA application.

If you didn’t receive any financial support during that time than you must report information about the parent who most recently provided the greater amount of parental support.

NO. How bout that? You just read the world’s shortest blog. I may be a man of few words, actually just one word, but my words are even more powerful than the semi-popular teenage alien superhero duo of Zan & Jayna. That’s right, the Wonder Twins! Actually, by boasting about my one word blog I have now far exceeded that loneliest number, darn!

Consolidation is merely shifting your loans from piles A, B, and C and condensing them into pile D. That doesn’t hurt your credit at all, in fact in many cases it helps because your monthly payment is a lot lower after consolidation and your credit report will reflects a Paid status next to each loan involved in the consolidation which adds points to your FICO score.

Now if you were to do a debt settlement where a third party was involved in negotiating your amount of debt down, than that could impact your credit negatively. Instead of a Paid status it would carry a Settled or Settled for Less than Full Balance status.

When you sit down with Mom and/or Dad and make a short list of schools you’d like to visit make sure not to exclude the pricey institutions like I did.

Now you should know I’ve always been conscious of the dollar. My parents divorced when I was three and my mom raised my brother and me by herself with no financial assistance. Funds were tight. We had enough for the bare essentials and nothing more, and that played a factor in my decision making process. I certainly didn’t want my Mom burdened with more debt nor did I want her to feel guilt over not having the financial means to send her son to school. I instead elected to work and attend a community college. And while I’m not saying that was a mistake by any means, I failed to explore all possible options.

What I should have done is apply to all the schools on my wish list, even the 40K per year ones. The rich schools can afford to give out more money, and thus, offer more attractive financial aid packages to lure students in. In many cases the more expensive sticker price ends up being closer to a wholesale price. I didn’t understand how the whole process worked at the time. I didn’t even know what the word endowment meant. By the way for those who don’t know an endowment is funds that are donated to an institution.

So don’t cross schools off your list the first go-around. Put them all on there. Princeton, Stanford, and even a few choice schools overseas if you feel so inclined. Keep all doors open until someone else shuts them. Don’t ever shut any doors on yourself.

Complete your FAFSA and see what kind of financial aid package you qualify for.