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.
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….
Please watch this video and see how nerdwallet.com offers a FAFSA tutorial in it’s education section that is the most complete I’ve seen. There are other good tutorials out there and I’ll link you to one that I think is very user friendly further down in this week’s blog.
As I write this entry, it is just a few days before Christmas 2014. Doesn’t it feel like you haven’t gotten everything done yet? But if you are on the hunt for college financial aid, then you’ll need to keep your mind on just one more thing: January 1st at the stroke of 12:01am you can start filling out the 2015 FAFSA form! WooHoo! Just what you wanted to do on New Year’s Eve, right?
Okay, last FAFSA season I wanted our family to be at the head of the line for financial aid, so I actually started my FAFSA in the early morning of January 1st. I ran into a whole lot of website trouble, which compared eerily to the healthcare.gov launch. Nothing was working correctly and my progress would simply disappear for no apparent reason. I slogged on for hours, saving after each tiny entry. Eventually, I wrestled the FAFSA to the ground and made it submit, literally! Not very fun.
So, my advice is to wait for January 2nd, which is not a holiday. Government offices will be open and the website elves will have the gears oiled up and running smoothly.
Take a moment in the days between Christmas and New Year’s Eve to study the nerdwallet.com video, and another great tutorial produced by the University of California system. Here’s that link: http://www.finaid.ucsb.edu/fafsasimplification/ and here’s a screenshot of it:
College student voices guide you through a series of mini-tutorials on each major section of the FAFSA form. You’ll need to launch each part by clicking the tabs at the top of the page. Notice how well my dog can draw a big red arrow pointing to the tabs!
Yes, I know you don’t have your 2014 taxes done yet. Never mind that little concern. Just go right ahead and use your 2013 tax return. If it’s likely to be nearly the same as this years’ return then you will be just fine. It’s important to get in line for college financial aid early. The FAFSA helps you qualify for more than just federal aid. State aid is linked to this form as well, and funds can run out the longer you wait. Not only that, but colleges that also use the CSS Profile form to hand out their institutional funds, will want to see the results of your FAFSA to help guide their decisions. So don’t wait!
When you are eventually able to file your taxes, you can log back into your FAFSA and use the IRS Retrieval Tool. With slightly disturbing ease, the Retrieval Tool connects the FAFSA directly to the IRS (!), which will kindly merge your new tax return information into the FAFSA form.
Filing out the FAFSA early assures your place in line. Using the IRS Retrieval Tool almost always keeps you out of the verification process. Do this and the schools that you named to receive the results of your FAFSA will not require you to send them your actual tax returns! One less step for beleaguered parents and students.
Preferential Packaging Matches Financial Aid to Your Child’s Achievements!
It’s simple. Just research which schools would want to snap up your student and offer big bucks for those high or comparatively high ACT/SAT test scores. That’s preferential packaging and your student might as well get some of that financial aid dough for their efforts. My fellow blogger and data wizard Michelle Kretzschmar – DIYCollegeRanking.com – helps us understand the practice of preferential packaging and suggests parents use it to good advantage. After getting all the dreamy, idealistic pamphlets from colleges that proclaim their undying love and dedication to selfless goals of academic achievement, it’s hard to square that with the harsh reality: colleges need to climb the rankings ladders. U.S. News, Princeton Review and Forbes are part of a system that is rigged in many ways. Preferential packaging is just part of the effort by colleges to game the system. The trick for parents is to find out which schools value their child’s achievements and steer away from schools that don’t.
If you wanna go, you gotta know! Don’t get ripped off in the pursuit of a degree.
Thank goodness for IPEDS, the data bank of collegiate information that was created by congress some years ago. All schools have to report certain categories of information every year to this slow-moving federal behemoth (it’s about 3 years behind, but who’s counting!) Without IPEDS and a Department of Education website called College Navigator this information would not be very accessible for the public. In my video this week, I show how to use this information to detect whether an online for-profit college is doing a good job or not before a potential student makes the decision to attend it. We are in a major shake-up of the for-profit college industry (and believe me it IS an industry) and with some luck only the righteous will survive. Some of the biggest BIGS are going down in flames even as I write. Ha HA! We shall see. Meanwhile, let the buyer beware!
Work-study means money in a college student’s pocket for doing campus jobs (or even off-campus jobs) that are not too demanding and possibly interesting! Students must visit their school’s financial aid department to view a list of available jobs. Then, just like with any other job, the student must apply and be interviewed. Once hired, the student will spend 10-12 hours a week earning money that has been set aside for him or her by the federal government. The college will administer the program for the government and will usually send
the student’s paycheck directly to his or her bank account.
Most students report that the work-study experience is pleasant, but if not, the student can change to another job. Some jobs allow students to study while manning an information kiosk or reception desk.
So, students should not let this valuable opportunity pass them by. I mean, where else can you get a job which must adjust itself to your schedule rather than the other way around!
Please watch my video to hear more about work-study!
Born just last week, the ever-charming CSS Profile for 2015-16 is online now!
Most colleges are satisfied with the financial information they get from the FAFSA form, which is not available until January 1st of each year. But over 250 colleges and universities, the ones with big endowments, are looking for the best students they can get and they will use their funds to make it possible (or desirable) for those students to attend their institutions. The College Board administrates the CSS Profile financial aid questionaire on behalf of these schools and has a list of them at their website, https://student.collegeboard.org/css-financial-aid-profile . So whether you are applying for the first time to one of the colleges that require this form, or whether you are applying for the next school year of college financial aid, this is the time to start getting familiar with this complex form. Current high school seniors will need to start now to fill out the CSS Profile if they are going for any kind of Early Decision or Early Action. Others may have until April 15th of next year.
It’s important to understand that while the FAFSA form asks the same questions of every applicant, the CSS Profile is customizable by each participating college. Each is able to ask different specific questions to elicit the kind of detail their financial aid administrators need to dispense aid in the best way for their institution’s enrollment goals. The College Board charges a fee for each CSS Profile application, while the Federal government’s FAFSA form is free. Watch my video about the CSS Profile to get in the right mindset for this invasive, yet potentially valuable financial exercise.
Just when you thought getting college financial aid information was going to be a snap, it isn’t.
Getting that piece of information about grants in order to use my “Bucket Method” of comparing college affordability is, admittedly, a bit of a challenge. The unlovely Net Price Calculators now installed by law on the websites of most every college in the U.S. are, in some cases, a display of resistance and neglect by the host entities. On one hand, I am somewhat heartened by the efforts of the College Board to standardize the format of data entry and display of this online college financial aid tool. On the other hand, I am saddened by the efforts by other third party NPC providers to use clever marketing to hoodwink prospective students into making poor choices and falling headlong into giant craters of debt. Watch this video and become your own financial aid “detective”.
I challenged myself to do a video in which I attempt to explain the basic concept of the college financial aid system, such as it is, in under three minutes. I had to reduce it to a visualization of someone filling buckets with liquid numerical information. Please watch my video and decide whether I was successful. If, after watching, you feel more competent to meet the challenge of the college decision process, I will count that in the win column. If you feel like herding a bunch of tech-types into a windowless room equipped with computers, snacks and caffeinated beverages and telling them not to leave until they have come up with a better system for pre-determining the ultimate cost of a college for any given family, then I will want a cut of the resulting deluge of cash from crazed parental units across these fruited plains!
That is all…please watch and report.
The CSS Profile. Hard to live with, and harder still to live without.
Having just dropped off our daughter at her wonderful out-of-state college reminds me that soon it will be time again to fill out the dreaded CSS Profile form brought to us by the College Board folks. Without this form, about 250 mostly private colleges and universities would have a much harder time deciding how to use their endowments to attract the best students. And without this form, many of those students wouldn’t have a chance in the world of affording a school outside their own state’s public universities. For this we are grateful. But it doesn’t make the process any less difficult. The College Board does sincerely try to make understanding their CSS Profile possible, as my video will show. But some things still elude the comprehension of reasonably well-educated people. Even our accountant was confused by the meaning of some of the questions. So I can’t help but think that this should spawn an industry specializing in filling out the CSS Profile form. As far as I can tell, this hasn’t happened. At least not to any great extent. And, those who do offer the service are pretty expensive for those of us who actually need the financial aid. So, I (and others in the same boat) will slug it out with the CSS Profile for yet another year.