Posts tagged student loans
Posts tagged student loans
In April, many colleges and universities begin sending offer notifications to students who have been accepted for their incoming freshman class and have applied for financial assistance. Offer notifications list the cost of tuition and fees plus the amount of financial aid available through the school. When you’ve been accepted and receive financial aid offers from more than one school, you need to compare the offers, make a choice, and accept the offer that best fits your needs - and your budget.
How do you compare offers? Follow these guidelines and make a list of pros and cons of each school and the key reasons for your decisions. Most families need to consider the annual net cost of attending each school and the annual cash outlay required of the family. To figure these out, you can make a chart listing each school and include the following:
(A) Estimated Annual Expenses
(B) Total Gift Aid (aid that does not need to be repaid)
(C) Net Price = A - B (Each college participating in federal student aid programs should have a net price calculator on their website.)
(D) Work Study / Job Offers
(E) Loans to be Repaid
(F) Cash Outflow = (C - [D + E])
Once you’ve completed the chart, consider the pros and cons of each school along with the financial considerations. Consider the nontangible factors (your feelings about the school and the environment) as well as the tangible factors (cost, course offerings). Listen to your parents but realize that the decision is ultimately yours.
Understanding the Financial Aid Award Notification
Once a financial aid administrator at your school(s) reviews your SAR, you will be notified regarding your eligibility and the amount of aid you may receive.
Financial Aid Awards
There are two types of financial aid awards: gift aid and self-help aid. Gift aid does not have to be paid back. Self-help aid must be repaid through money or labor.
Remember that the financial awards listed above do not have to be paid back.
Remember that any self-help aid must be repaid through money or labor. For more information about Subsidized and Unsubsidized Stafford Loans, PLUS Loans, and private student loans visit the Student Loan section of this site.
Comparing Financial Aid Award Packages
Once you receive financial aid award notifications from the schools to which you have applied, it’s time to compare the financial aid packages offered by each school. In order to make comparisons, you should follow these guidelines:
Although very important, the amount of financial aid you receive isn’t the only factor you should consider in choosing a college. Neither the school that offers you the most financial aid nor the most popular school among your friends is guaranteed to provide the right fit for your personal and academic goals, so try to keep an open mind when weighing your options. There may be several schools on your list of choices that balance academic, personal, and financial needs.
After Receiving the Financial Aid Award Notification
After reading the financial aid award notification, you may realize that the awards listed are not enough to cover all expenses. However, there are other loan options that may not be shown on the notice. Your parents may be eligible for the Federal PLUS Program or you could consider getting a private student loan.
After receiving the financial aid award notification, you must let the school know whether or not you are accepting or declining the awards. Not everything that is offered has to be accepted. Declining an award will neither help nor hurt the award. Pay close attention to deadlines for accepting the award package. Deadlines are usually within two weeks after receiving the award notification. If a deadline is missed, you may risk losing a scholarship, grant, or loan assistance.
For more information about the financial aid award notification, contact the Financial Aid Administrator from the college.
College Goal Sunday
College Goal SundaySM is a free program that helps students and their parents complete the Free Application for Federal Student Aid (FAFSA), which is the form required by students applying for state and federal aid. This program specifically targets low-income, first generation students, although any student who needs assistance with the FAFSA is encouraged to attend.
Importance of Attending
Submitting the FAFSA is the first and most important step in getting aid for college (i.e. grants, scholarships, work-study, and student loans). You should attend a College Goal Sunday program in your area so you can get assistance from financial aid professionals with filling out your FAFSA. Financial aid administrators will go over each line of the FAFSA in-depth, and you will have the opportunity to ask specific questions. You will also be informed of all filing deadlines. It is crucial to submit your FAFSA as soon as possible, so you won’t miss out on potential aid.
When and Where
College Goal Sunday programs are held during financial aid season. Most states offer the program in February. There are some states that offer the program on Saturdays or even on weekdays. Many states also offer the program at several different locations. Click here to see if/when/where your state is offering a College Goal Sunday program.
While many states do not require pre-registration, some states ask that students register to attend College Goal Sunday, so administrators can provide the best possible service to students and parents. Visit collegegoalsundayusa.org to begin the registration process. Once you are on the College Goal Sunday site for your specific state, look for a student registration link to register for the program at a location near you.
Materials to Bring
To make the process flow smoothly, be sure to bring the following with you on the day of the program:
College Goal Sunday is sponsored by the Lumina Foundation for Education, and with the help of various agencies, this program should be offered to residents of every state in the near future. If your state does not offer a College Goal Sunday program or you are unable to attend, contact the Financial Aid Office at the school you plan to attend for resources or help filling out the FAFSA.
The College Goal SundaySM program was created by the Indiana Student Financial Aid Association with funding from Lilly Endowment, Inc. and with supplemental support from Lumina Foundation for Education.
Preparing To Submit the FAFSA
The Free Application for Federal Student Aid (FAFSA) must be completed by students applying for state, federal, and institutional financial aid. Even if you don’t think you’ll qualify for need-based financial aid, you should still complete the FAFSA to be eligible for student loans. The FAFSA can be completed online at www.fafsa.ed.gov as soon as possible after January 1st of the year for which you are requesting aid. Here are the steps you should take when preparing to submit the FAFSA.
Find out the FAFSA priority deadline for your college(s). Financial aid is awarded on a first-come, first-served basis. Therefore, it is crucial for you to submit your FAFSA in a timely manner. Many priority deadlines are as early as February. Although priority deadlines do not affect a student’s eligibility for federal student loans, if you don’t file early, you may miss out on possible aid opportunities such as money awarded directly from the institution.
Request a Personal Identification Number (PIN). If you file the FAFSA online, both you and one of your parents (if you are required to submit parental information) will need to register for a PIN number at www.pin.ed.gov. PIN numbers are required to sign the online FAFSA application. You can also use your PIN to:
Register with Selective Service. If you are male and at least 18 years old, you must register with Selective Service before you can submit the FAFSA.
File your taxes. Since the FAFSA requires current tax information, try to file your taxes early. If you can’t, you can still submit the FAFSA using estimated taxes. Just keep in mind that you must update your FAFSA using the IRS Data Retrieval Tool once you file your taxes.
Find your school codes. You will need school codes so your FAFSA information can be sent to the schools to which you want to apply. Schools use your FAFSA info to create your financial aid package. Click here to find school codes.
Complete FAFSA on the Web Worksheet. If you are filing the FAFSA online, be sure to complete the FAFSA on the Web Worksheet so you can organize your information. This worksheet allows you to read and complete the questions before entering your information online. The questions are listed in the same order as they appear on the website.
Attend a financial aid workshop. Be sure to attend a financial aid workshop at your school or in your community to learn more about filling out the FAFSA. Financial aid professionals will be able to answer any questions you have regarding the application.
Gather required forms. You will need the following information when you fill out the FAFSA:
Know your history. If you filed a FAFSA last year, you can use your PIN number to complete the online Renewal FAFSA. Since many elements of the FAFSA do not change (i.e. your name and date of birth), the online Renewal FAFSA will ask you to confirm last year’s info and provide updated info for other entries such as your grade level.
Most of the above-mentioned steps can be completed before January 1st, which is the earliest you can submit the FAFSA for that upcoming year. By being prepared, you can help ensure that your FAFSA will be filed in a timely manner so you can get as much aid as possible for your financial situation.
To learn more about the financial aid process, you should attend your school’s financial aid night or workshop with your parent(s). The following is a brief overview of various topics discussed at a workshop.
Financial Aid Overview
By attending a financial aid night, you will learn about the different types of financial aid including:
A financial aid workshop should provide you with information about student aid opportunities from the federal government, the state, postsecondary institutions, and private sources. You will be able to ask questions about the different types of aid, and you should also receive handouts to take home for reference.
Applying for Student Aid
To apply for federal financial aid, you must fill out the Free Application for Federal Student Aid (FAFSA). It can be completed online at www.fafsa.ed.gov as soon as possible after January 1st of the year for which you are requesting aid. At the financial aid workshop, speakers will go over important aspects of filling out the FAFSA. Topics may include:
Determining Financial Need
If you are confused about how colleges determine a student’s financial need, attending a financial aid night will help clear up that confusion. A financial aid professional will explain the factors that go into determining financial need, including:
Financial aid speakers will specify what you and your parents need to do in order to prepare for the federal financial aid process. You will also learn about the responsibilities of the financial aid office and where you can go for help.
Attending a financial aid workshop will give you the opportunity to find out information about the financial aid process and ask any questions you may have. Even if you think you will not qualify for federal financial aid, you should still attend and learn how you might benefit from applying. Contact your high school counselor to find out when and where a student financial aid workshop will be held in your area.
Financial Aid 101
Are you clueless about the financial aid process? Here is an overview of the financial aid basics you need to know.
The first and most important step in the financial aid process is to fill out the Free Application for Federal Student Aid (FAFSA). The FAFSA is the form you need to complete in order to see if you are eligible for any kind of federal financial aid. You should submit the FAFSA as soon as possible after January 1st of the year for which you need aid. Every college-bound student should submit the FAFSA. Even if you think your parents’ income is too high to qualify for aid or you plan on getting a lot of scholarship money, you should still fill out the FAFSA. Income is only one of the criteria on which financial aid is based; and although not every student will qualify for grants or need-based scholarships (gift aid), every student is at least eligible for participation in the Federal Student Loan Program (self-help aid). Furthermore, even if you plan on getting a lot of scholarship money, you never know when there might be more grant or loan money that could cover incidental qualifying expenses, such as room and board, textbooks, computers, etc.
You can fill out the FAFSA for free at www.fafsa.ed.gov. If you file the FAFSA online, you will need to register for a PIN number. You must reapply for financial aid each year by filling out a renewal FAFSA.
Please note: Some schools require other financial forms (in addition to the FAFSA), such as institution-specific forms or the CSS Profile. Schools using the Profile are mostly higher cost, highly selective institutions. Check with the schools you want to attend to see if they require financial forms in addition to the FAFSA.
The Student Aid Report (SAR) summarizes the information you report on your FAFSA. If you file the FAFSA online and provide a valid e-mail address, you will receive an e-mail within a few days of filing that contains a secure link so you can access your SAR on the Web. You can also check the status of your FAFSA and print a copy of your SAR at www.fafsa.ed.gov. If you file a paper FAFSA or do not provide a valid e-mail address, you will receive a paper SAR in about three to four weeks after submitting the FAFSA. In whatever form you receive the SAR, it is crucial that you review it and make sure it is accurate and complete. If you find anything that needs to be corrected, you can make those changes on the paper SAR and mail it to the Central Processing Center, or you can log into your FAFSA at www.fafsa.ed.gov and make corrections online. The schools you listed on your FAFSA will receive your SAR information electronically. The financial aid office staff at your school(s) will review your SAR and use the information to determine if you’re eligible for aid. One other note: you may notice on your SAR that your application has been selected for verification. (If there is an asterisk next to your EFC, then you’re selected.) If you have been selected for FAFSA verification, read more information on what you need to do.
Once a financial aid administer at your school(s) reviews your SAR, he will put together your financial aid package and send you an award notification. The award notification will include the financial calculation that determines the amount of aid you receive: Cost of Attendance (COA) minus Expected Family Contribution (EFC) = financial need. It will also list the financial aid awards that the college has determined you are eligible to receive. Financial aid awards may include:
Once you receive the different financial aid award notifications from each of the schools to which you have applied, you need to compare the financial aid packages offered from each school. For more information on comparing the award notifications and for more thorough info on the different types of financial aid awards, please read Understanding the Financial Aid Award Notification. Once you have decided on a school, you should take action by accepting or declining the offered financial aid. Pay close attention to deadlines for accepting the award package. Deadlines are usually within two weeks after receiving the award notification. If a deadline is missed, you may risk losing a scholarship, grant, or loan assistance. If you find that the college you want to attend offers less aid than your financial need, be sure to look into ways of filling that financial aid gap.
If you choose to accept a student loan, you must sign a Master Promissory Note (MPN). A Master Promissory Note is a legally binding contract in which by signing you agree to pay back the student loan(s) you borrow and agree to all terms and conditions included. Once you sign your MPN, a new one is not required for any new loans (unless required by your school). You can sign a new MPN each year if you want to do so. You can electronically sign (e-sign) your MPN or complete a paper copy. The electronic process is the fastest and most efficient method of meeting the MPN signature requirement. To e-sign, you will need a PIN number assigned by the U.S. Department of Education. (If you filed the FAFSA online, you will use the same PIN number to e-sign the MPN. If you completed the paper version of the FAFSA, you should have been mailed a PIN number by the federal aid processor. If you forgot, do not have, or wish to change your PIN number, go to www.pin.ed.gov.) Your school will provide you with specific instructions on when and how to complete your MPN.
Loan Entrance Counseling
If you choose to accept a student loan, you must also complete entrance counseling. Loan entrance counseling applies only to first-time borrowers. Federal regulation requires that you complete an entrance counseling session before you get your loan (and an exit counseling session before you graduate or drop below half-time attendance). Counseling will show you how to manage your loans during and after college. Your school will provide you with instructions on when and how to complete your student loan counseling.
For more extensive information about the financial aid process, please review all the articles in the Paying for College section of this website. If you have any questions, contact the college’s Financial Aid Office.
When you take out a Stafford loan, you will have certain responsibilities and rights as a borrower. Make sure you are familiar with the following responsibilities and rights before you sign the promissory note.
Be sure to read your promissory note for a more detailed description of your rights and responsibilities.
If you will be taking out student loans to pay for college, it is imperative that you borrow responsibly and make sound investments in your education.
Be sure to research the different types of student loans and make note of interest rates, eligibility, repayment terms, etc. eCampusTours offers several articles and resources about student loans to assist in your research:
It is important to remember that you must repay your student loans even if you do not graduate from college. Use the following budget worksheet to help you determine how your estimated student loan payments might fit into your current budget:
After graduation, hopefully you will secure a job in your field of study. Please keep in mind that student loan repayments should not exceed 15% of your monthly income. Use the following budget worksheet to help you determine your financial situation after college graduation:
As you begin and continue through your college career, please realize that taking out student loans is a commitment. Educate yourself on the implications of student loan debt and make the best decisions for your present and future financial situation.