Student Loans : News, Updates and Blog Posts

The cost of a college education is rising every year. This year the average cost of a private four-year school was $26,273, up 4.4% from last year, and the average cost of a public school was $7,020, up 6.5% from last year. For most families, paying for college is a struggle. If you feel like you do not have all the pieces of the financial aid puzzle, you are not alone.

On January 1st the 2010-2011 FAFSA (Free Application for Federal Student Aid) was released. The FAFSA is probably the most important part of the financial aid puzzle. If you are planning on attending college in the fall of 2010 you should be in the process of submitting this form. The FAFSA determines how much federal financial aid you are eligible to apply for. There are three basic types of federal student aid:

• Grants: Grant money is financial aid that does not have to be repaid. Most grant money is based on financial need.

• Work-study: Work-study money is earned through a job or near campus. Work-study money does not have to be repaid.

• Loans: Loan money, including subsidized Stafford loans and unsubsidized Stafford loans, is awarded by the government and must be repaid with interest.

Federal financial aid can be a huge help when paying for college, but since most federal financial aid is awarded based on need, not everyone who files a FAFSA will be awarded sufficient aid to cover their education. So what happens when your federal Stafford loans and grants are not enough? Luckily, there are other pieces of the financial aid puzzle that can help you pay for college.

PLUS Loans are federal student loan options that are not based on financial need, but rather on credit. There are two types of PLUS loans; Parent PLUS loans and Graduate PLUS loans. If you are an undergraduate student, your parents can apply for a PLUS loan to help supplement the cost of your education. If you are a graduate student you can apply for a PLUS loan for yourself. With the federal PLUS loan you can borrow up to 100% of unmet financial need. PLUS loan money can also help you pay for educational costs not covered by your tuition including housing and supplies.

Some students choose to add private student loans to their financial aid puzzle. Private Student Loans are an alternative student loan option. Although you should always apply for federal financial aid before pursuing this option, private student loans have a few advantages. Private student loans are awarded based on credit rather than on need. You can use private student loans for any education related cost including textbooks, housing and transportation. If you are looking for a private student loan, the new private student loan comparison tool on PrivateStudentLoans.com can help you determine which lender and loan best meets your needs.

Because private student loans are based on credit, most students need a parent, family member, or close friend to cosign the loan. A cosigner is an individual who agrees to pay any debts if the primary account holder is unable to do so. This ensures to the lender that the loan will be paid back even if the student borrower does not have the funds to make payments.

The final, and quite possibly the best, piece of the puzzle is scholarships. Scholarships are favorable because unlike loans they do not have to be repaid. Hundreds of thousands of organizations around the country award scholarships to students based on their backgrounds, interests and accomplishments. StudentScholarshipSearch.com is a website that helps you find and apply for scholarships that you qualify for.

Every student’s financial aid puzzle is put together differently. Many students take advantage of all of these financial aid options while some students only need to use one or two. Some student might qualify for more financial aid while other students might be awarded more scholarship money. Whatever your financial situation is, remember that all of these options exist to help you complete your education.

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Is it to early to apply for federal financial aid? The answer is no. In fact, you should apply for federal financial aid by filling out and submitting your FAFSA as soon as possible. Some financial need is awarded on a first come first serve basis so applying early is crucial. Even if you have not been accepted to any schools yet, you can still file for financial aid.

If you have not already filed the 2010-2011 FAFSA you are probably getting ready to start it. Many people wonder what you have to do to be eligible for financial aid. The following is a list of the basic eligibility requirements:

• You must be a U.S. citizen or an eligible noncitizen
• You must have a valid Social Security number
• You must show that you are qualified to obtain a postsecondary education by having a high school diploma or GED certificate, passing an approved ability to benefit test (if you do not have a diploma or GED), meeting federally approved standards your state establishes, or completing a high school education in a homeschool setting approved under state law

If you meet all of these requirements you have a very good chance of being approved for some form of federal financial aid.

Many college students and prospective college students will be ringing in the new year with the  FAFSA. This is because the 2010-2011 FAFSA will be available starting on January 1st which is just two short days away! Are you ready?

If you are a college student you should file a FAFSA whether you think you will be eligible for federal aid or not. In addition to need-based aid, the FAFSA helps financial aid officers determine eligibility for scholarships, unsubsidized loans and federal work study.

It is important to file you FAFSA as close to January 1st as possible because some financial aid is awarded on a first come first serve basis. If you have not already applied for a FAFSA PIN and gathered your financial information you should do so as soon as possible. If you have any questions or confusion about the FAFSA visit out 2010-2010 FAFSA Form Guide.

Happy New Year and good luck with your FAFSA!

FAFSA season is right around the corner! Are you ready? If not FAFSA4caster is a website that will help you prepare. FAFSA4caster allows you to essentially do a test run of the real FAFSA. After you have gathered and submitted all of your information it will give you an estimate of your eligibility for financial aid.  This FAFSA trial will  help you cut down on costly FAFSA errors. After January 1, 2010 when you are ready to apply or  you can conveniently transfer all of your information over to FAFSA on the Web. FAFSA4caster also gives you the option to apply for a FAFSA PIN and helps you increase your knowledge of the financial aid process.

Before you are able to file your FAFSA this January you must obtain a FAFSA PIN. Your PIN is a four digit number, much like an ATM PIN, that serves as an electronic signature on your FAFSA application and provides access to your personal information in various Department of Education systems.

If you are a dependent student both you and your parents must apply for separate PIN numbers. This will allow you and your parents to both have access to your FAFSA information and make updates to your information, but on separate accounts.

You can obtain a PIN on the Federal Student Aid PIN website. Here you can also check the status of your PIN application, activate your PIN, update your PIN e-mail and mailing address, and request a new PIN if you think that yours might have been compromised.

It is that time of year again! A time for holiday parties, trimming the tree, wrapping presents, and financial aid. The 2010-2011 FAFSA will be available after January 1^st. Call me Scrooge, but if you are a high school senior, the parent of a high school senior, or anyone attending college for the first time it is important to take a little bit of time away from all of the holiday cheer to learn about the FAFSA form and how to properly fill it out.

Mistakes on the FAFSA can cost you thousands of dollars in financial aid, so if you have lingering questions about how it works make sure you talk to people who have been through it or financial aid experts. Luckily, this is also the time of year when high schools and communities hold financial aid workshops to help families of prospective college students understand the process better. Contact your school’s guidance department to find out when they are holding a workshop. After you attend you can finish all or your last minute shopping and Christmas cookie baking feeling relaxed and ready to conquer the FAFSA in January!

What is a FAFSA Verification?

It is basically an audit of your information.  Either the Department of Education or the school you are enrolled in can request a verification from you.

Why were you chosen?

The reason you were chosen may vary, but some of the most common reasons include;

• Random selection
• The submitted FAFSA application has incomplete data.
• Information on the application contradicts itself
• The FAFSA application has estimated and not actual information in some places

If you do have errors, which are corrected through the verification process, that may affect your federal student aid. If that is the case the school will issue you a new awards letter outlining what you are eligible for with your new FAFSA details.

Note: Some schools elect to do a 100% verification for all students.

Generally speaking, a student cannot update information, such as income or assets, that was correct as of the date the application was signed. However, three items, household size, number in college, and dependency status must be updated in certain circumstances.

Dependency status

A student must update their dependency status any time during the award year unless it changed because his or her marital status changed. This update is required whether or not the student was selected for verification.

Household size and number in college

Unlike dependency status, household size or number in college cannot be updated unless the student is selected for verification. If the student is selected, these items must be updated to be correct at the time of verification unless they changed due to a change in the student’s marital status, in which case updating is not permitted.

If you suspect that a student, employee, or other individual has misreported information or altered documentation to fraudulently obtain federal funds, you should report your suspicions and provide any evidence to the Office of Inspector General. Below you will find a list of OIG’s throughout the country.

OIG Address and Phone Numbers
Boston, MA (617) 289-0174
New York, NY (646) 428-3861
Philadelphia, PA (215) 656-6900
Atlanta, GA (404) 562-6460
Chicago, IL (312) 730-1620
Dallas, TX (214) 661-9530
Denver, CO (303) 844-0058
Kansas City, MO (816) 268-0530
Long Beach, CA (562) 980-4141
San Juan, PR (787) 766-6278
Washington, DC (202) 245-6911