Category Archives: Financial Aid Award Letters

Difference between these two loans could means big bucks.

Subsidized and Unsubsidized Student Loans. What’s the Difference?

Watch this video and avoid MEGO:

 

And now, the story behind MEGO!

My Eyes Glaze Over. This used to be the trademark teenage response to all things dull and boring. Such as math, french literature, and especially money issues. Today’s approximation for MEGO would be “meh”.

So as I thought about making a video to explain the difference between Federal Direct subsidized and unsubsidized student loans….guess what happened…yep MEGO!

BUT WAIT! If you, dear reader, are in the hunt for more college money, you must understand student loans. Why? Because when college bills are looming, it may be that there is no choice but to take out some student loans.

If you were offered subsidized loans and unsubsidized student loans in your college’s financial aid award letter, then it’s time to know the difference between these loans. You’ll need to know how to use their attributes strategically.

Most importantly use these Federal Direct subsidized and unsubsidized student loans FIRST (they have certain dollar amount limits) before considering any private student loans.

These are the best student loans you can get. Here’s why:

Federal Direct student loans offer the best repayment programs. Watch some of my other videos on this subject for more info.

Here is an example:

Really, after all this, you could not be blamed for drifting into MEGO and thinking about cute puppy videos.

Here’s one:

You’re welcome!

FAFSA with use 2 year old tax data.

President Changes FAFSA to Give Families Better College Affordability Information.

This change in the FAFSA start-date starting on October 1st 2016, along with the recently announced College Scorecard system, are game changing aids for families with college-bound children.

All at once, families will have the information they need to make college lists that are actually affordable for their financial circumstances. The College Scorecard is a complementary tool that will allow a family to use their actual federal financial aid eligibility to compare school costs before their student applies.

Never before has this been possible, and it makes me wonder why the college financial aid system ever got to the point where students were applying blindly to schools they could not afford if they were accepted. When you think about it, that’s pretty much the definition of a disfunctional system. Hate to put it so bluntly, but there you have it.

There has been a lot of fear on the part of institutions of higher education everywhere. Changing the FAFSA start-date encountered a lot of political push-back. It took a lame-duck president, looking for legacy, to pull the plug on this systemic bottleneck.

This change will cause a rapid re-examination of business plans in colleges across the country. Recruitment, budget cycles, processing aid applications and issuing awards all must happen a lot earlier.

At this time we are in the one year countdown. Next year on October 1, 2016, if all goes well, the very first “early” FAFSA applications will be filed.

Will the FAFSA-only colleges be ready? There could be a tsunami of applicants, many of whom had never considered filling out the FAFSA because of it’s complexity. There might be a lot more Pell Grant recipients, who knows? The whole FAFSA system may slow down or even malfunction (like you know what!) under the weight of applications. But, in the long run processes will smooth themselves out. Meanwhile college students will be making “aid aware” college choices that might keep the Student Loan Monster at bay!
But still, the question remains: why did we, the parents, allow such a crazy system to persist for so long? Hmmmm….

How to understand financial aid award letters

Decode College Financial Aid Awards!

Okay, what the heck! Why can’t colleges just be clear about their financial aid offers.

All across the nation, high school seniors are receiving their financial aid award letters from the colleges to which they have been accepted.

Students and parents alike will be overjoyed as they take a first glance at these letters. After all, real professionals have carefully formulated these documents for maximum obfuscation.

Many who receive these well-crafted offers will believe that their top choice college dreams have been fulfilled.

The celebrations will commence. The heady feelings will go on for days. Then, someone may point out a questionable figure in the offer, and the clouds of doubt will move in.

The family will be confused, and as usual it will fall to Mom to interpret the meaning of the cryptic line item.

Mom, the detective, must now spend hours and days on the internet seeking out experts. She will repeatedly call the college or colleges asking questions, the answers for which she has no background to make an informed interpretation.

When, through enormous effort, the bad news is revealed, and it is determined that the dream college is unaffordable, there will be WAILING. And that’s not all…there will also be DOOR SLAMMING. Shall I go on? No, I think you get the picture…

Why, why, why can’t this information be made clear right away. Get the bad news out there and move on.

Do colleges really think that families will somehow make magic money appear? Well, yes. But it will probably be the magic money known as soul-crushing student loan debt.

It’s time for all financial aid award letters to be standardized to help consumers. So far, the only thing out there is the Education Department’s Financial Aid Shopping Sheet. Thankfully, it’s being adopted, albeit slowly, by some correct-thinking colleges.

My hope for the future is that all colleges and universities get on the transparency bandwagon!