There are certain mandatory forbearances. Examples include borrowers who:
Contact your lender or loan-servicing agent for more information on the mandatory forbearance benefit.
Given the interest rate drop which takes effect Wednesday, July 1 I’m expecting next week to be a busy consolidation week. Save yourself some frustration by having everything in front of you ahead of time. By the way, to find out if the rate drop impacts you or what the new rates are going down to you can read Consolidating After July 1 May Save You Thousands for more details.
Here is a punchlist of what you’ll want in front of you when you sit down to consolidate your federal loans, and what choices you will need to make.
1. 4-digit FAFSA pin number
2. Loan details such as servicer, disbursement date(s), and current amount owed
3. Know which loans you want to consolidate and which you don’t
4. You will have multiple repayment plans to select from which include standard, graduate, extended, income-contingent or income sensitive, and income-based
Keep in mind if you are enrolled in school half-time or greater as defined by the school you are not eligible for consolidation at this time. You will need to wait until you fall below half time status or graduate.
If you have other debt you need to consolidate such as credit cards, personal loans, utility bills, and cell phone bills get a free debt consultation quote today.
From Inside Higher Ed:
In part because of the FAFSA’s multiple pages and scores of questions seeking personal and financial information about students and their families, many policy experts believe, hundreds of thousands of potential recipients forgo many millions of dollars of federal college aid each year. the Education Department will, right now, make several changes that do not require Congressional approval. This summer, the department will take advantage of existing technology on the Web-based FAFSA to allow married or independent students to skip questions about their parents, among others. In January, the department will stop requiring students with low incomes to answer questions about their financial assets, and only returning students will be asked about prior drug convictions, since the question does not affect first-year students. Department officials said they would work closely with state officials to set up the electronic form to “make it easier to answer questions that the states need but the federal government does not.”
January will also mark the start of the department’s test of a system to allow students who apply for aid for the spring 2010 semester to retrieve relevant tax information from the Internal Revenue Service to help them complete the online FAFSA. “When you’re online filling out the FAFSA, there’ll be a button that says, ‘Want to go get your IRS data?’ ” said Shulman of the IRS.
Commentary
It’s good to see the first incremental steps towards making the FAFSA simpler. The IRS tax data import, if it works correctly, will be a giant timesaver for everyone involved, as those are the questions that students and families tend to get wrong.
A big part of next year’s FAFSA process, then, will be correctly filing your income taxes prior to filing your FAFSA in order to import your tax data. This might have the net effect of causing some folks to file later than usual, and for events like College Goal Sunday, push back the date a little so that families can get their taxes done.
For the 2010-2011 school year the FAFSA form will be 30% shorter in length. The plan is to cut the form down from 30 screen pages to just 10. This will make it a lot easier for people to fill out the form and understand it as they go. The hope is that not only will it save students and parents time, but it will also allow more people to fill out the form and take advantage of financial aid and federal student loans…meaning more students will go to college!
Many questions on the FAFSA apply to very few people and are impossible to verify. These types of questions will be eliminated, and existing questions will rephrased using simpler terms. In addition, there also should be an option to auto fill in many questions using your information from the IRS.
All of this is set to be in place as of Jan. 1 2010. Happy filing!
Important Note: The sooner you fill your FAFSA form out after the start of the year the better…there is only a limited pool of financial aid available per school year so if you wait to too long, you may miss out.
The FAFSA blog is sponsored in part by:
Five most recent FAFSA form help blog posts:
Tuesday Rant (a tongue-in-cheek observation)
Believe it or not it’s still possible in 2009 to get three squares a day, a roof over your head, and a college degree for the bargain basement price of $0. So how can you get a piece of this all American pie? Simple. Get arrested.
Correctional education, perhaps the greatest perk of all for inmates, involves vocational training or academic education as part of a prisoners rehabilitation and preparation for life outside prison. It’s these educational programs that allow many inmates to emerge from behind bars in better shape, financially speaking, than many law abiding citizens who are struggling mightily to make ends meet due in large part to sizable student loans payments. Most graduate students these days carry debt totalling over $40,000 and face monthly payments in excess of $400.
Between teachers volunteering their time and publishers donating books, as is the case at San Quentin State Prison in California, inmates are getting a top flight education for free. How fair is that? I’ve got the perfect slogan for a state penitentiary. “Commit the crime. Do your college time. All on the taxpayers dime.”
I guess all that’s left is to determine which non deadly crime will get you 4-5 years behind bars. I’d really hate to see someone paroled early prior to getting their bachelors degree in criminal justice, that would be just tragic.
An income-contingent monthly payment will be based on your annual income (and that of your spouse if you’re married), your family size, and the total amount of your Direct Loans.
Borrowers have 25 years to repay under this plan, the unpaid portion will then be forgiven. However, you may have to pay income tax on the amount that is forgiven.
This program takes effect July 1, and graduate and professional student PLUS borrowers in the Direct Loan program are eligible to use the ICR repayment plan. Direct Loan parent PLUS borrowers are not eligible for the ICR repayment plan.
Yes, your federal loan details can be accessed online through the Department of Education’s National Student Loan Data System (NSLDS) database.
The NSLDS database holds all your federal loan details. If you’ve just applied for aid, don’t expect to find any information on NSLDS yet. NSLDS gets its information from schools guaranty agencies and U.S. Department of Education programs after your funds have been disbursed.
The loan details you can expect to find include Pell Grant amounts, Stafford loan, Perkins loan, and Plus loan disbursements. You can log on to www.nslds.com. You will need your four digit FAFSA pin number to access your details.
Here is a list of documents/items you should have readily available when you are sitting down to complete your FAFSA.
1. Social Security Number
2. Driver’s licence (if applicable)
3. Previous years W2 and other records of money earned
4. Your (and your spouse’s, if you are married) 2008 Federal Income Tax Return
5. Your Parents’ 2008 Federal Income Tax Return (if you are a dependent student)
6. Your 2008 untaxed income records
7. Your current bank statements
8. Your current business and investment mortgage information, business and farm records, stock, bond and other investment records
9. Your alien registration or permanent resident card (if you are not a U.S. citizen)
10. Two aspirin
The FAFSA blog is sponsored in part by:
Five most recent FAFSA form help blog posts:
No, you are not permitted to use your Stafford loan funds to pay non school related bills.
The Stafford loan is to be applied toward your cost of tuition, which is why the funds get sent directly to your school. You can not apply those funds toward your cell phone bill, car payment, etc.
I do, however, know someone who received funds from the school (through Stafford) and used them to purchase an iphone, but that is not the intended purpose. That iphone will end up costing her almost double the cost over the next 10-years with interest.
I caution all to be responsible with your Stafford loans funds. Some schools may not safe guard as well as others, but using your funds in an inappropriate manner will literally cost you dearly on the backend.
Forget a big league contract. Sign your John Hancock to the bottom of a learning contract.
Did you know that many schools negotiate learning contracts with their students? The next thing you may be thinking is great, what the heck is a learning contract?
A learning contract is a formal, negotiated agreement between the student and the school , stating that if the student successfully completes certain tasks the school will award an agreed-upon number of credits. Ok, now you are wondering what I mean by “tasks?”
Tasks are very much the same as what you would be expected to do in a traditional classroom setting. You may have certain required reading, essays to write, labs or seminars to attend, or even a timed exam.
Learning contracts can be written for a few units, or an entire degree program. Often times a school or university will appoint a faculty member to guide the course of study.
For those with a hectic, unpredictable schedule this may work for you. I know years ago when I was working a rotating schedule this would have been ideal, though nowadays you also have online classes.
