Student Loan News, Updates and Blog Posts

When it is time to head off to college your parents will probably try to put every penny they have into your education. You may notice your parents going out to dinner less, postponing household projects, and even jeopardizing their retirement fund so you can go to the college of your choice.  However, no matter what income level you fit into it is important to take on some of the financial responsibility of your college education so that mom and dad are not searching through the couch cushions for spare change.

Your parents might have told you that they make too much qualify for any federal student loans. This is not true. What many people do not know is that not all loans are need based. In fact, anyone is eligible to take out an unsubsidized Stafford loan. These loans are federally guaranteed and not based on need. Interest starts accruing at the time that the loan is disbursed to the school, but the loan has a low fixed interest rate and payments do not have to start until six months after graduation.

An unsubsidized Stafford loan will not by any means cover the entire cost of your education, but it will make a dent and take a little bit of the pressure off of your parents. Though you will be making monthly payments on the loan after you graduate you will feel like you own a piece of your education. Your parents will also be extremely grateful that they did not have to give up their retirement dreams to send you to college.

One of the most common statements I hear from my college friends is that their parents never let them fill out a FAFSA. This is a frequent and sometimes costly mistake that students and their parents make when financially planning for college. The following are a few of the main reasons why people do not file the FAFSA and why you should not fall into the same trap.

Reason #1: I will not be eligible for financial aid.
According the Department of Education, approximately 1.5 million students who would be eligible for the Pell Grant do not complete the FAFSA. Could you be one of these people? The only way to even be considered for Pell Grants, Perkins Loans and Stafford loans is by filling out a FAFSA. Additionally, many colleges offer other kinds of financial aid that is not need based, but you still might need to submit a FAFSA to qualify. Some of these scholarships and grant programs are strictly designed for students who have been denied federal aid.

Reason #2: My parents do not want to disclose personal financial information.
This is probably the excuse I hear most often. The good news is that the information that you submit with your FAFSA is strictly confidential. Only a handful of people ever see the information. Try to be proactive in helping your parents understand the benefits.

Reason #3: The FAFSA is long and complicated. Filling it out will not be worth my time.
Although the FAFSA involves gathering a lot of information and can take a significant amount of time you should not dismiss it. College is going to be hard so the FAFSA will be good practice! In all seriousness, the FAFSA is free so why not take a couple of hours to talk to your parents, gather the necessary information, and fill out the form online. You could find out that you are eligible for a lot of financial aid. Also, changes are coming for FAFSA in 2010 so it will be shorter and more manageable than it was before.

Tuesday Observation

I’ve heard from hundreds of malcontent students about the bailout packages the government has been handing out like beads at Mardi Gras this year. It’s not that they disagree with the plans necessarily, but rather, are asking where’s mine? I even blogged about the cash for clunkers plan last month and how those funds would be better served through the Pell grant program. But it appears some crafty scholars could wait no longer to see if the federal government would throw them a life line. They took the bull by the horns and made their own bailout plan.

Whether by keen instinct, dumb luck, or fantastic legal counsel students in financial peril have watched gleefully as their federal loans have been charged off. So how are they doing it? They are filing for bankruptcy. But that in itself is not the bailout of which I speak. The bailout is tied to the fact that these are currently enrolled students. What that means of course is that their debt is not due while they are in school, but bankruptcy courts have been rolling these good standing loans in with all of their other financial discharges.

So basically these students are getting a free education (or partly free) while their lender receives a bankruptcy claim on their non-defaulted student loan. Schools are not too happy about this because it goes against their cohort default rate, but students are skipping in the streets. In addition, because their loans never officially fell into a default status they remain eligible for more student loans in the future.

These students are clever little devils.

Tuesday Observation
I’ve heard from hundreds of malcontent students about the bailout packages the government has been handing out like beads at Mardi Gras this year. It’s not that they disagree with the plans necessarily, but rather, are asking where’s mine? I even blogged about the cash for clunkers plan last month and how those funds [...]

As you head back to school, some back to school financial aid tips…

1. Avoid credit reps on campus. You don’t need that free t-shirt, and a lot of inquires can hurt your FICO score.  (Your FICO score is used to determine your eligibility for student loans and other credit products.)
2. Make a budget BEFORE the semester begins. Figure out what kind of money you’ll be able to earn and what you’ll be spending – and stick to it.
3. Team up with a roommate, dormmate, or friends to enforce each others’ budgets. The power of the group works. Social financial apps like Wesabe, Mint, and Geezeo can help with this, too. Set a goal that you publish among your friends and stick to it. Set rewards for achieving those goals.
4. Take a class online while everyone is out partying – or during a break.  If you take one class during one spring break and one class each summer – you can graduate a semester early!
5. Go for a lot of walks on campus. You’ll meet a ton of new people, and you won’t have to spend money to do it. Being visible is the easiest way to meet new people. Want to meet lots of new people really, really fast? Volunteer at any kind of event, work at the help desk, etc. Be helpful and you’ll make amazing, fast connections that often endure long past college.
6. Everything marked free isn’t. Beware of any free offer that requires you to sign up for anything. Not saying it’s bad, just know what you’re signing for – like a stealth student credit card application.
7. Some of the best conversations you’ll have are on playgrounds. Hang out at places like that vs. cafes or other money-spending venues. Want to make your own game socially? Go off campus, wander around (with safety in mind) and find the best hangout spots in the town, then share them with friends. Museums, galleries or the city gardens as examples.
8. Check your campus email every day. Financial aid offices often send notices to campus email addresses. Don’t miss a bill. If you’re technically savvy, just forward it to your webmail account.
9. Buy and bring to campus an indoor dryer rack. You’ll cut your laundry bill in half and the rack will pay for itself in weeks, especially if it’s around $18. You can find magnetic and closet-based systems for as little as $10 online.
10. Bring resealable containers. I’m not saying bring them into the dining hall or anything… but, you know. Make sure you don’t skip meals if you’ve paid for them. That’s just throwing money away.
11. Have a small lockbox in your dorm room. Keep your checks, debit card, etc. in there and locked up. Make it a combo lock so that if you lose your keys, you’re not out of luck, and if you’re drunk, you can’t get at the good stuff until you’re sober enough to remember the combination. Seriously.
12. If you have a student ID card that’s tied to any kind of financial account, punch a hole in it, stick it on your keychain, and put your keychain on a lanyard.
13. Opt out of as many fees and unnecessary bills as possible, such as campus phone and TV service. Seriously, you have the Internet. What else do you need? Use free applications like Skype, change your mobile plan to unlimited calling if you call home a lot (and you probably will if you’re a first year student), use Hulu.com for television, and avoid those extra, unnecessary expenses.
14. Shop around online for better textbook prices. We have a free eBook on the topic.
15. If you’re living off campus and on a partial or no meal plan, sign up for the supermarket loyalty card plans, coupon hunt online, and get a decent meal plan together. Planning ahead a little will save you hundreds, if not thousands of dollars on food.
16. Set up an affiliate program during college and get your personal professional web presence going as soon as you can. You’ll have more free time in college than you will after college, so take the time to set up your blog, web site, etc. and develop professional contacts early. By the time you graduate, you’ll be way ahead of everyone else playing the resume cannon game. Get known for something in your field of study or focus early on.
17. Keep hunting for scholarships! Pick a time each week, 1 hour per week, and apply for a new scholarship each week. I guarantee after a year you’ll be happy you did. Better yet, get some friends together and make it a social thing.

Financial Aid Tips – Audio Version, Listen now:

FAP923: Back to school financial tips special

Scholarship Update

Are you working towards a marketing degree that will take you through the constantly evolving world of multi-channel marketing (mobile, web, email, virtual worlds, social media networks, podcasting) in the 21st century?

How would you like to earn a $500 Scholarship and real world experience at the same time?

We will award one (1) $500 scholarship to the person with the highest number of referred sign-ups to ScholarshipPoints as of midnight, September 30.

Details at Scholarship Points.

We are often asked: What loans are available for students with bad credit?”.  In short, your options are limited.

We would always recommend you work on building your credit.  Visit www.studentplatinum.com to learn more about credit, how to build good credit and how to repair your credit if it goes south.

For some detailed information on Bad Credit Student Loans, visit:

http://www.studentloannetwork.com/resources/bad-credit-student-loans.php

There are three primary student loans available – Stafford, PLUS and private student loans.

Stafford Loans do not require a credit check – so you are good there.

PLUS loans for undergrads are in the parents name.  If the parent has bad credit, then ask the lender if you can add a cosigner to the PLUS Loan application.  Generally, the PLUS Loan has lower credit criteria so you may be eligible for the PLUS loan even if you have been denied for another type of loan.

Private Student Loans do require good credit – now more than ever.  This loan is generally in the students name and a parent will act as a cosigner.  If the parent does not have good credit, anyone with a job and good credit can be a cosigner.  Regardless of the cosigner, if the student has very poor credit, the chances of approval are very low.

As always, talk with your financial aid office about your options and other sources of financial aid, including scholarships, grants and work study.

A two year college serves as the perfect cost effective gateway for those looking to one day obtain a bachelors degree.

I can tell you I have never had a potential employer ask me if I any of my undergraduate work was completed at a community college. They have no idea if I spent all four years at the school listed on my resume or transferred 70 credits over from a less expensive two year school. And quite frankly I don’t think they’d even care, but you know who should care, you!

It’s your pocket (or your parents) you are draining when you enroll in a four year college right out of high school. It just doesn’t make sound economic sense unless you are being offered scholarships and grants that place the cost of tuition on par with a community college.

Of course this “two to four” year game plan I am recommending is contingent on your four year institution accepting the transfer credits. You should speak to an admissions officer at both schools to confirm that the classes you are planning on taking will transfer without issue. That is really the only thing you should be weary of. Saving a nickel today may save you a dime tomorrow.

If you need a Stafford loan for school (click here).

For a private loan options (click here).

In sports it seems the focus on talent has been getting younger and younger. In my lifetime I’ve witnessed the focus on student athletes shift from college to high school and now to (gulp) middle school. I’ve actually been joking with friends recently that my 18-month son has some powerful thighs and would make a great fullback with his low 28-inch center of gravity. Maybe he could even get a free ride to a choice nursery school! But all joking aside, middle school is an important time in a students life, athletics aside.

Middle school ushers in a new set of challenges for parents as kids become more interested in social life. It’s these impressionable years that can set the stage for future success or failure in the world of academia. Making your presence felt is key.

Parent/teacher conferences are good, but are not nearly enough. Volunteering for field trips and school dances are a way to make yourself known within the school community. When teachers know the parent they tend to form a better relationship with the student. It’s also important for the teacher to know they have your support, and that you all stand together on a united front as to what is best for your child.

Serve as your childs scout, even if they don’t have a killer jump shot. Assess their strengths and weaknesses and help them be the best they can be.

When you hear the term “federal student aid” that can be classified into one of three categories.

Grants: Free money that doesn’t have to be repaid, except in some cases when you withdraw from school.

Work-study: You earn money to pay for your education.

Loans: You borrow money for school, which you must repay with interest.

“Republicans haven’t given up on the guaranteed-loan program, Rep. John Kline of Minnesota said today. They have just been preoccupied with health care and other pressing issues,” The Chronicle of Higher Education reports. “‘I remain hopeful we can keep some private capital in this and keep the private sector involved,’ the new top Republican on the House education committee told three higher-education reporters in an interview. ‘We’re not rolling over.’”