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….
Brush up on the topic of Federal Work-Study programs by watching my video. Then please read my blog entry to get the latest info!
The Federal Work-Study program has been a feature at a large number of colleges for many years. But lately a report done by the student advocacy group called “Young Invincibles” and funded by the Bill and Melinda Gates Foundation, has called for reforming the system.
The report says that too much of the federal work-study money goes to large private colleges that have been in the system the longest. For-profit colleges get a hefty amount based on their numerous Pell Grant students. Newer community colleges get the least money, even though they also enroll low-income students.
The report studied how this large pot of Federal money (more than $1 billion) could be better used.
It recommended that the Federal Work Study program should reward schools that enroll low-income students, graduate them at high rates, and make sure they have the skills to get good jobs.
Read between the lines and you’ll find that the notorious for-profit colleges get righteously excluded from work-study funds, even though they “serve” more needy students than anyone else!
The Young Invincibles report also emphasizes the need for work-study jobs to better relate to a student’s field of study. If these reform recommendations were implemented, many of the jobs traditionally grabbed by students who want to work AND study at the exact same time, would disappear. No more manning desks in dorm lobbies or library entrances. Instead, work-study jobs might look more like paid internships where students get real-life career experience.
I can’t see a downside to this. Let me know what you think.
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.
Seems like the payments on your college loans will never end, right? Well they will someday, due in no small part to your diligent efforts to stay in touch with your federal student loan servicer. At least that’s what I hope you do, or what I hope you would tell your college-bound child to do! Check out my latest rant (I mean video) on this issue !
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.
If your student is just entering his or her freshman year of college, there is a lot of new information to absorb. It’s enough to give you a headache that even Aleve will not help! One of the first pictures your student will post on Facebook is a shot of his or her brand new Student ID card. If your student is attending one of the 40% of colleges now participating in the “One Card” program, this will not look at all like your old student ID card that now lives in a scrapbook under your staircase. This new-fangled card has a hologram headshot of your student, some barcode, a subway logo (not the sandwich shop), a clever logo intertwined with a dollar bill sign, an Obamacare logo, the school’s logo and name, the fuzzy yet buff mascot, AND LO AND BEHOLD – a tiny MASTERCARD Debit Card chip!
What is up with this? (Watch my video!) But suffice it to say that the banks have gotten in bed with the colleges and universities. And it’s a mighty comfy bed indeed. It’s even okay for your student to participate in fluffing up the pillows, if, IF, he or she knows the rules.
Knowing the rules gets your student a completely free bank account for the duration of college. This includes a free debit card and free checking account. What’s not to like? However, there are some complaints which I talk about in my video, so please watch it.
Student loan info is the new hot commodity among financial writers.
As students are going to college for the first time, or back to college for the second, third (or even tenth) year, the number of articles I see about the issue of student loan debt are multiplying faster than I can read them online. But when an exceptionally good article appears in a real live publication in my mailbox, it’s going to get my full attention. I might even read it twice…mostly while eating (low carb, of course!). This article appears in the Fall 2014 USAA magazine, Volume 50, Number 3. It’s title is “ Escaping the Shadow of College Debt”. Here is a link to read it online: >http://www.nxtbook.com/nxtbooks/pace/usaa_2014fall/#/12 . The article contains good stories about two women, who, for different reasons, got themselves into some serious student loan debt. It lays out the scope of the student loan problem and then engages the help of some of the heavy hitters in the college financial business, including Mark Kantrowitz of Edvisors Network and Lynn O’Shaughnessy, author of “The College Solution: A Guide for Everyone Looking for the Right School at the Right Price”. It also gets a lot of great info from the very same website I use in this episode of The College Money Mom. This website is brought to you by the Consumer Financial Protection Bureau, a relatively new department of the U.S. government. So watch this episode to learn about the different kinds of student loans in a really easy to understand way! And, once you have this knowledge, you’ll be able to steer yourself, and others, out of harms’s way.