Student Loan News, Updates and Blog Posts

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.

I actually hear this question quite often, and in the interest of full disclosure I must admit that I didn’t know who my lender was when I took out my Stafford loan either.  Truthfully, you don’t really need to know unless their is a problem with the funds getting sent to your school.  But if repayment is now upon you it would certainly be beneficial to know who holds the note on your loan and ensure they have your updated address on file.  You don’t want to be delinquent with your first payment.

How to find out who your lender is…

1. Ask your Financial Aid Office. They have a record of who your lender or lenders were.

2. Contact the Department of Education.  You can either contact them at 800-433-3243 and request to speak with the borrower tracking department or visit the DOE online with your four digit FAFSA pin number.

A FFEL lender is prohibited from discriminating against an applicant on the basis of race, national origin, religion, sex, marital status, age, or disability. However, a lender may decline to make loans to students who do not meet the lender’s credit standards, to students at a particular school because of the school’s default rate, or to students enrolled in a particular program of study. A lender may also decline to make FFELs for less than a specified amount, for example, $500.

The good news is that there’s more than one FFEL lender available to disburse funds for students.  If one lender turns you down you should complete a MPN with a new one.  Check with your school for a list of lenders they work with.

Did you know that a student who is otherwise eligible for a subsidized Stafford loan and, after not more than two rejections, who has been unable to find an FFEL lender willing to make such a loan, should contact the guaranty agency in his state of residence or the guaranty agency in the state in which his school is located?

The guaranty agency either must designate an eligible lender to serve as a lender of last resort (LLR) or must itself serve in that capacity and must respond to the student within 60 days. An LLR cannot make a loan that exceeds the borrower’s need, and it is not required to make a loan for an amount less than $200. The LLR, as with any other lender, may refuse to make the loan if the borrower fails to meet the lender’s credit standards. Each guaranty agency is required to develop rules and procedures for its LLR program.

So if you are having difficulty finding a FFEL lender to work with now you know you can flash your lender of last resort card!

After you file your FAFSA and receive your financial aid package from your school either you or your parents might be unhappy with the results. When this happens your first instinct might be to write an appeal to the financial aid office. While this might be the right move in some situations other people should think twice before making a call to the college.

With so many families experiencing unemployment and salary reductions the number of appeals that financial aid offices are seeing is on the rise. Financial aid officers realize that this is a hard time for many families and they are doing everything they can to meet the need of every student. It is important to put your families’ financial situation in perspective. Although everyone has a different situation you should think about your income in the grand scheme of things. If you are a parent, see if there are places in their budget where they can make sacrifices to send their children to school. If you are a student, see if you can save a little bit of money from your summer job to put towards your education.

If you still need to make an appeal there are a few things you can do effectively communicate your situation. First, make sure you know what you are appealing. To some families an appeal is an automatic reflex. Often times parents do not know what they are appealing, they just know that the package is not enough. Secondly, try to peak with a financial aid officer over the phone Many schools encourage parent phone calls and will field as many calls as possible. This is much easier at smaller schools, but larger schools try to accommodate phone calls as well. A phone call will make it much easier for you to understand the financial aid officer and for them to understand you. Finally, make sure you have clear documentation as proof of your current income. A financial aid officer will not be able to guess your income so it is important to present your families’ current situation as clearly as possible.

If I had a dime every time I heard someone say, “I need more funds for school,” I would easily be able to send my entire family to Harvard…TWICE.  It’s just the way it is these days.  We’re turning over those stones, calling our rich uncle, and exhausting every avenue we know of to find those extra dollars.  Perhaps that classic Ben Franklin quote which reads, “The only thing in life that is certain is death and taxes,” should be amended to include running out of money for school.  But there is hope.  Private student loans do not have a yearly borrowing cap like federal Stafford loans do.

Now let me first start off by saying that federal Stafford loans are the bomb.  Max those out first.  The problem, however, is that there isn’t much to max out.  Depending on your grade level you are capped at a certain borrowing threshold.  Is it just me or does that sound absurd?  In fact, let me just go on record now and say that I think that is the lamest rule I have ever heard!  The cost of tuition is the same for a freshman as it is for a junior!  Why the disparity?!?  Ok, that is a different blog for a different day.  Back to private student loans.  Private student loans allow you to fill in the gap that federal loans leave, and that gap is extremely wide for some.

There is no FAFSA when you apply for a private student loan and no hassles whatsoever.  You can use your loan funds for tuition, room and board, a new laptop, you name it (assuming it is school related of course).  So don’t be discouraged.  There are options right at your finger tips.

APPLY FOR A PRIVATE STUDENT LOAN

Scholarship Points code: NOHANDS4U

Did you know the Stafford loan has fees attached to it?  There are two different fees attached to Stafford loans, an origination fee and a default fee.  Now here is the good news – those fees are coming down.

The Stafford loan program instituted a three year program back in 2008 to dissolve the origination fee’s completely and bring down the default rate.  In 2008 the origination fee was 1%, in 2009 it went down to 0.5%, and beginning 7/1/10 it will be 0%.  That’s sweet for students! Now what about the default fee?

The default fee is also coming down from 2% and will land at 1% beginning 7/1/10.  By the way, the default fee is not an absolute charge.  Lenders / guarantors are permitted to waive the default fee as part of their incentive package. This is important to know if you are attending a FFELP school.  FFELP schools allow you to choose your lender.

Last week I chronicled the various ways you can complete your FAFSA in a blog entitled FAFSA Applications.  One of those ways was mailing in your FAFSA.  But what happens next?  How long does it normally take to process when you mail in your FAFSA application?

Your FAFSA will be processed in two to three weeks. But, before mailing it, you should check to see if your school, or a school that you’re interested in, would submit your FAFSA electronically for you to speed up that process.

If you do not hear anything within three weeks of the date you submitted your application, check your status through FAFSA on the Web. You can also check your status by contacting the Federal Student Aid Information Center at 800-4-FED-AID.

File your FAFSA today!

One of the biggest shows for college students this fall is the new Melrose Place series. On the show actress Stephanie Jacobsen plays Lauren Yung, a medical student who is forced to come up with some unconventional ways to pay her tuition. Early in the season Yung finds out that her father has lost his job and will no longer be able to help her pay for school. To start making money quickly, Yung becomes a high-end call girl. She finds out that spending time with wealthy men is an extremely lucrative business and an easy way to pay off her medical school debt.

In my opinion, this plot line sends a horrible message to the show’s key demographic of young college women.  I have to admit that I do watch the show but I always find myself wanting to scream “student loans” and “scholarships” every time the story turns to Yung’s problems. Most college students are familiar with the hardships of making college payments; however there are ways to quickly get tuition money that are far less humiliating.  Private Student Loans are a simple, flexible way to get the exact amount of money that you need when you need it. Since circumstances can change quickly, private student loans can be borrowed at any time during the semester. As long as you and your co-signer have a healthy credit score you should be able to borrow up to the true cost of your education. The best part is that you can use private loan money for more than just tuition. The Student Loan Network can connect you with private lenders and even help you apply.

If you are frustrated with your financial situation know that there are plenty of resources out there can help you pay for your education. Do not put yourself in danger or disrespect yourself to make money quickly.  If you are just starting to explore your financial options visit the Student Loan Network for information on federal student loans, private student loans and scholarships. Finally, will someone please tell Miss Yung the same thing!

When it comes to free money for college most students will take what they can get, but how would you feel about accepting a scholarship from a chewing tobacco company? Scholarships are often given out by companies to improve their corporate image, but if a tobacco company shells out scholarship money is that sending the wrong message to college students?

This issue has recently been brought to the forefront at Cal Poly. The school is taking a lot of heat for allowing students to accept scholarships from the smokeless tobacco industry as prize awards in collegiate rodeo events. Doctors are upset that the tobacco companies are promoting their products to students so aggressively, but is it a problem if a student takes the money and is not swayed to become a consumer?

Many students do not receive enough federal financial aid to be able to afford college on their own. Scholarships are the ideal option for these students because unlike federal student loans and alternative student loans they do not have to be repaid. Most people would probably argue that college students are mature enough to make responsible life decisions and that they should accept whatever scholarship money they can get.  However, in this age of student activism, some students really do worry about where their scholarship money is coming from and what message it is sending.

If you are weary about where your scholarship money comes from we promise that Student Scholarship Search will only connect you with scholarships that we would be proud to represent. Also do not forget that Scholarship Points gives out scholarships (some as big as $10,000) to students every month.