Student Loans : News, Updates and Blog Posts

It’s 7:30 on a monday morning and your alarm clock goes off. You turn it off and roll over for 5 more minutes of sleep. When you finally roll out of bed and look at the clock, it’s 11:30 and you’ve missed your class. Not a big deal, right? As it turns out, skipping class might cost you more than you think.

According to the recent infographic from StudentScholarshipSearch.com, skipping just one class is a waste of $20 if you attend a public college, or $50 if you’re at a private school. This may seem like it’s not a big deal, but wasted money can add up fast! If you’re paying for college with loans, you’ll be paying interest on that class’s cost too!

Still not convinced you shouldn’t skip class? What if i told you that “those who wasted time in college are 3x more likely to be unemployed”? That got your attention, didn’t it?

To find other ways skipping class can hurt you, check out the True Cost of Skipping Class infographic.

This week, many student nationwide are rejoicing in their college decisions, having just sent their deposits to their chosen colleges. Simultaneously, parents everywhere are worrying about how to pay the upcoming tuition bill. If you’re one of these parents, you may be weighing the pros and cons of tapping your 401k for those funds. In this instance, it may be more beneficial to be a little selfish. Here’s what I mean…

Tapping your 401k to pay for college tuition is usually not a good idea. Whether you’re thinking about withdrawing funds, or borrowing against your 401k or IRA, both options end up leaving you with less funds for retirement. Anytime you withdraw funds from your account, the money will be slapped with a hefty 10 percent penalty AND subject to taxes. If you’re looking for a deal, this really isn’t your best option.
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When I was in college, the last thing I wanted to do was keep track of my expenses and create a budget. Booooooring. But now that I’m an adult (though it rarely feels that way) I’m finding it more and more important to keep track of money going in and out of my accounts. I wish this was something I paid attention to in college, because for someone with my level of disorganization, these skills could have been immensely beneficial.

While budgeting has not come as naturally to me as it does to others, here are a few helpful tips that have ensured I stay profitable over the years:

Needs vs. Wants

This one I learned at a young age. Growing up, my parents made sure I understood the difference between needs and wants (to the point where I now get anxiety if I splurge on a “want”). Without going this far, it’s important to realize what is considered a need vs. a want. Is it something that is absolutely necessary for school/living? This is probably a necessity if it will help you survive at college. While you may want the top-of-the-line technology, can you make do with something less expensive? Probably. Reign in the expenses by sticking to the lower-cost necessities.
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April is financial literacy month and this blog kicks off our financial literacy blog series! In keeping with this spirit, I wanted to break down some common student loan terms so that students and parents can be better informed about the student loan choices they make.

Basic Terms

The following are a few basic loan terms that are imperative to know when taking out a loan for the first time:

Principle – The total amount of the loan when you take it out. Interest accrues on this amount.

Origination fees – These are fees charged by the lender for the “creation” of the loan.

Interest – The amount charged for use of the loan money.

Capitalized interest – An amount of interest that is added to your principle. This means that if you have a loan of 10,000 with $100 in interest, once your interest is capitalized your loan principle becomes $10,100. It’s always best to avoid capitalizing interest because any interest that accrues after is going to be based on this new, higher principle balance, so you will end up paying more over time.

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Student loans can be a crucial part of paying for college, but don’t forget there are other options that should be exhausted first- like scholarships. Many students know they should apply for scholarships, but either don’t have the time or get frustrated when they don’t win. We want to help, because let’s face it, free money for college is better than high-interest money for college.

StudentScholarshipSearch.com has developed an awesome infographic to help students win money: The Top 5 Scholarship Application Mistakes. Learn about some of the most common reasons why students are unable to snag a scholarship, and what you can do to turn your luck around.

While you may not win all of the scholarships you apply for, hopefully the tips from this infographic will get you on your way! And remember, apply apply apply!

We’re in the midst of FAFSA season, and while some of you early birds may have already filed and gotten your Student Aid Report, there’s still plenty of time to file before the federal FAFSA deadline of June 30th.

So if you procrastinate like I do, and have not filed your FAFSA yet, this tutorial may be a great asset for you. UC Santa Barbara developed this great video series to help students answer the FAFSA questions that might not be so straight forward. Take a look, and make sure to get your FAFSA filed before your state or school deadlines!

According to the Gallup poll, the U.S. unemployment rate sits at 8.6% with underemployment (those working part-time but who want to work full-time) at 18.1%. Are you a recent or soon-to-be college graduate? Do you worry about unemployment and whether your skills will land you the job you’ve hoped for (or the job you trained for)? Are you or your friends blaming the economy for the fact that the job market looks scarce for recent grads?

Recent bachelor’s undergraduates have an unemployment rate of 8.9% while those with only a high school diploma have a unemployment rate of 22.9%, and high school dropouts are at 31.5%, so a degree is some comfort in this market. What are you going to do about it?

Well you could chalk it up to the economy, the fact that big businesses made bad decisions before you even graduated, and now you can’t get a job. OR you could show potential employers that you are action-oriented, and that you not only want to work, but you want to find your passion through said work. Sounds nice right? But how do you do that?

There are several different paths one could take to evaluate their potential job prospects while still in, or just out of school.
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With all of the recent changes made by the Department of Education, the FAFSA has gotten easier for families to file. Having said that, there are still some questions that remain difficult to answer for many students.

One question I see a lot from dependent students is “whose information do I use for the FAFSA?” With all of the different family situations out there, it can be difficult to tell who the FAFSA considers a parent, and unfortunately, it’s not always who claims you as a dependent on taxes! If you’re not sure whose financial information to enter on your FAFSA, take a look at this flow chart to help you determine the answer!
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Misty makes some excellent points in this video, especially for families who are applying for financial aid for the first time. She mentions that the FAFSA is free, and we can’t stress this enough! For families who have questions about the FAFSA, feel free to pose a question to the financial aid experts at FinancialAidForum.com, or check out some of the other common questions from families.
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It’s FAFSA season again, and thanks to FAFSAOnline.com, we’re providing students and families with a downloadable FAFSA Help Guide to the online form. This detailed guide will answer the most common questions about filing the FAFSA, as well as provide some useful tips to help you get the most financial aid. Best of all, it’s free!

What information can you find in the FAFSA guide?

• Filing your FAFSA before taxes
• Tax credit information
• Determining a student’s dependency status
• Defining a parent
• Using IRS Data Retrieval

And much more!
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