It seems like these days students are having to take out more and more in student loans. College is getting more expensive and the government is certainly not giving out more and more money.
Students have to rely on student loans to get through college and earn a degree. It is very hard to get grants and scholarships, as they are reserved for people with very little income.
There are great federal student loan programs out there like the Perkins loan and the Stafford loan. The Stafford loan is is the most popular option for students these days.
The big question is, are student loans based on your credit?
Most students come into college with zero credit and it is pretty stressful thinking you have to have credit to get a student loan.
The answer is no; federal student loans are not credit based. Your school will not even check your credit and unless you have another student loan in default, you will be approved.
WAIT....
Just because the loan is not based on credit does not mean that it will not affect your credit report. Your federal student loan WILL be reported to the credit agencies. This is good though, as paying it back will help you build great credit for your future.
If you decide not to pay back your student loan, your credit can be ruined for a long time. Additionally, any tax refunds or stimulus checks due to you will be intercepted to pay off the debt, so make your payments.
Wednesday, June 04, 2008
Tuesday, June 03, 2008
Scholarship entry fees
I have been asked several times over the past week or so about paying an entry fee for a scholarship.
This is a very touchy subject that gets lots of attention from school administrators and government officials. There is no right answer to the question and there are pros and cons to the situation.
First of all, there are legitimate scholarship granting companies that offer scholarships and don't charge an application fee. They are hard to find and you must do your research. There are also companies that charge an application fee to enter the scholarship contest and give tons of scholarships, as well as companies that charge and never give a single one.
Lets say you enter a scholarship contest where there is a $5 entry fee. The company says they are going to give out 5 $1000 scholarships. Well this is fine if only 1000 people or less enter the contest, but this is usually not the case. What happens if 10,000 students enter the contest? Looks like the company will make a hefty $45,000 profit for not really doing much.
I have found scholarships that do give 100% of the money from application fees back to students. Of course everyone who enters will not receive a scholarship.
There might also be issues with this type of scholarship being a lottery or game of chance. Those are generally illegal in the United States. This is why most companies require that you submit a scholarship essay of some sort. This takes away the element of chance in the contest.
Whether the application fee is $1 or $100, please conduct research on the company you are applying to. Also, you can always check the BBB in your state.
This is a very touchy subject that gets lots of attention from school administrators and government officials. There is no right answer to the question and there are pros and cons to the situation.
First of all, there are legitimate scholarship granting companies that offer scholarships and don't charge an application fee. They are hard to find and you must do your research. There are also companies that charge an application fee to enter the scholarship contest and give tons of scholarships, as well as companies that charge and never give a single one.
Lets say you enter a scholarship contest where there is a $5 entry fee. The company says they are going to give out 5 $1000 scholarships. Well this is fine if only 1000 people or less enter the contest, but this is usually not the case. What happens if 10,000 students enter the contest? Looks like the company will make a hefty $45,000 profit for not really doing much.
I have found scholarships that do give 100% of the money from application fees back to students. Of course everyone who enters will not receive a scholarship.
There might also be issues with this type of scholarship being a lottery or game of chance. Those are generally illegal in the United States. This is why most companies require that you submit a scholarship essay of some sort. This takes away the element of chance in the contest.
Whether the application fee is $1 or $100, please conduct research on the company you are applying to. Also, you can always check the BBB in your state.
Sunday, June 01, 2008
FAFSA Dependancy Override
I get questions every day from students who believe they should be considered an independent student in the eyes of the FAFSA. Unless a student is 24 years old by January 1st of the school year they are going to attend, have a child, are married, have a 4 year degree, have other dependents, or are a military veteran, then the student must provide parental financial information on the FAFSA. I know this does not sound fair because some students are on their own after high school. Your parents are not going to help you with college, or maybe you just want to get out and want to do everything on your own. Well, this is not the case most of the time. Even if your parents are not claiming you on their taxes anymore, you still need their financial information.
There is an exception to this rule called Dependency Override. A dependency override is when the financial aid office at your school determines that you should not have to use your parents information on your FAFSA. This sounds really great, but in all actuality, it is very hard to get a dependency override from your school.
Here are some reasons why your school will NOT give you a dependency override:
1. A student says that they are on their own and the parents do not help out at all.
2. A parent is unwilling to give the student any financial information
3. A parent no longer claims the student on tax forms.
Here are some reasons why your school would grant a dependency override:
1. You are or were living in an emotionally or physically abusive household.
2. You left a household that was unsafe.
3. Parental abandonment of the student.
3. The custodial parent is incarcerated.
4. The student was removed from the parent's house by court order.
The first step in applying for an override is to talk to the financial aid office at your school. You should do this before attempting to file your FAFSA. The financial aid office will review your dependency override case and tell you what steps you need to take to file your FAFSA.
Most financial aid offices are going to ask for detailed documentation regarding your situation and will probably ask for letters from adult mentors in your life to back up your story.
The school has the final word on your override and you can not appeal it to the school or the federal government. If you truly are in a situation where a FAFSA dependency override is necessary, then your school will give you one.
All schools might have different criteria on granting the override, so if you had one at one school and then change schools, it is not automatic that you are going to be granted one at your new school.
There is an exception to this rule called Dependency Override. A dependency override is when the financial aid office at your school determines that you should not have to use your parents information on your FAFSA. This sounds really great, but in all actuality, it is very hard to get a dependency override from your school.
Here are some reasons why your school will NOT give you a dependency override:
1. A student says that they are on their own and the parents do not help out at all.
2. A parent is unwilling to give the student any financial information
3. A parent no longer claims the student on tax forms.
Here are some reasons why your school would grant a dependency override:
1. You are or were living in an emotionally or physically abusive household.
2. You left a household that was unsafe.
3. Parental abandonment of the student.
3. The custodial parent is incarcerated.
4. The student was removed from the parent's house by court order.
The first step in applying for an override is to talk to the financial aid office at your school. You should do this before attempting to file your FAFSA. The financial aid office will review your dependency override case and tell you what steps you need to take to file your FAFSA.
Most financial aid offices are going to ask for detailed documentation regarding your situation and will probably ask for letters from adult mentors in your life to back up your story.
The school has the final word on your override and you can not appeal it to the school or the federal government. If you truly are in a situation where a FAFSA dependency override is necessary, then your school will give you one.
All schools might have different criteria on granting the override, so if you had one at one school and then change schools, it is not automatic that you are going to be granted one at your new school.
Sunday, May 25, 2008
Back to the FAFSA Blog
Wow, I am amazed to see that it has been over 2 years since I have posted a blog! I am back now and ready to start writing about the FAFSA and financial aid again.
Stay tuned..
FinAidGuy
Stay tuned..
FinAidGuy
Friday, April 14, 2006
CHEAP ENTERTAINMENT FOR THE COLLEGE STUDENT
How to Have Fun Even if You are Broke.
You’ve gone to classes, studied, folded laundry and checked your e-mail. Now what do you do? You’ve only got $10 dollars cash in your pocket and you’re looking for some fun. Here are some ideas for entertainment on the cheap:
1) Go to the library. College libraries are generally open all night long, and many college town libraries have great selections of VHS and DVD movies. Enjoy a movie night, and the best part is it’s free!
2) Call your friends over and play some cards or board games. Learn to play chess. Nothing takes care of boredom like a good friend! A game that I have found interesting is trying to challenge your friends to see how much they know about you. You’ll learn interesting things about your friends and hopefully spend hours having a blast!
3) Check out local museums and attractions. Many are free on certain days of the month, and others offer cheap student discounts. Enjoy some art or a zoo for an afternoon!
4) Concerts and sporting events at your college again offer deeply discounted tickets to students. Spend an evening hearing some good music or attending a game. To make it even more memorable, go with a group of friends.
5) Take a walk around your town. Visit the tourist spots, the historical spots you usually just pass right by. You may discover a small shop or little-known attraction that will spark your interest!
6) Spend the night star-gazing. Pick up an astronomy book at the library; bring a friend and a snack. See if you can find new constellations!
7) Swap old magazines with friends. You both get something new out of the deal.
8) Go to the mall, but leave your cash at home. You can window shop, go with a friend and try things on, but don’t buy! Get ideas for Christmas instead!
9) Lift weights. Most universities offer free access to exercise equipment. You’ll keep busy while you improve yourself.
10) Go bowling. Bring friends, of course!
11) Invite some friends over, turn on the radio, and spend the evening dancing!
Having fun when you are broke in college isn’t too hard, as long as you’ve got friends who are broke too and looking for fun! Try these ideas and figure out some of your own.
You’ve gone to classes, studied, folded laundry and checked your e-mail. Now what do you do? You’ve only got $10 dollars cash in your pocket and you’re looking for some fun. Here are some ideas for entertainment on the cheap:
1) Go to the library. College libraries are generally open all night long, and many college town libraries have great selections of VHS and DVD movies. Enjoy a movie night, and the best part is it’s free!
2) Call your friends over and play some cards or board games. Learn to play chess. Nothing takes care of boredom like a good friend! A game that I have found interesting is trying to challenge your friends to see how much they know about you. You’ll learn interesting things about your friends and hopefully spend hours having a blast!
3) Check out local museums and attractions. Many are free on certain days of the month, and others offer cheap student discounts. Enjoy some art or a zoo for an afternoon!
4) Concerts and sporting events at your college again offer deeply discounted tickets to students. Spend an evening hearing some good music or attending a game. To make it even more memorable, go with a group of friends.
5) Take a walk around your town. Visit the tourist spots, the historical spots you usually just pass right by. You may discover a small shop or little-known attraction that will spark your interest!
6) Spend the night star-gazing. Pick up an astronomy book at the library; bring a friend and a snack. See if you can find new constellations!
7) Swap old magazines with friends. You both get something new out of the deal.
8) Go to the mall, but leave your cash at home. You can window shop, go with a friend and try things on, but don’t buy! Get ideas for Christmas instead!
9) Lift weights. Most universities offer free access to exercise equipment. You’ll keep busy while you improve yourself.
10) Go bowling. Bring friends, of course!
11) Invite some friends over, turn on the radio, and spend the evening dancing!
Having fun when you are broke in college isn’t too hard, as long as you’ve got friends who are broke too and looking for fun! Try these ideas and figure out some of your own.
Saturday, April 08, 2006
Lunch on a Budget: A College Student’s Must-Know!
Like many other college students, you’re famous for being short on cash almost all year long. Unfortunately, this state of perpetual poverty doesn’t relent just because you’re trying to eat. Sometimes you only have enough cash to hit the vending machines: a bad idea if you’re trying to give your brain fuel that it can use for studying.
Here are a few things that you can do to get a decent meal despite your tiny budget.
-Avoid your university’s food court. Snacks, meals and most beverages tend to cost more at these on-campus locations. Unless you’re forced to eat there – i.e. you’re in a dorm that comes with a meal plan – go off campus for lunch. Prices are often cheaper, and many restaurants and fast-food places near campuses offer student discounts to save you even more money.
-Check out your school’s campus organizations. Some offer free or very cheap lunches once a month or more often. In many cases, these are religious organizations. If you’re part of that faith, you can have the added bonus of finding a convenient place to socialize.
-Bring your lunch from home. If you live on campus, you can walk back to your place for lunch. This works best if your class schedule includes a break around lunchtime. Even if you didn’t think of this when the semester began, you can work things out. Put fruit, a sandwich or other small food items into your backpack or purse so that you can eat them on the run between classes. This will eliminate the temptation to hit the vending machines.
-Buy larger packages of food instead of single-serving packs. Example: if you know that you can return to your place for lunch, don’t stock up on single-serving bags of chips. Instead, buy a large bag and reseal it after you’re finished. You’re getting more chips for the same price as the smaller packages.
-If you have to grab lunch on the go, buy re-usable containers that fit in your bag and re-fill them from larger packages. Many snacks, from cheese crackers to bite-sized cookies, come in plastic containers that you can seal and re-use many times. Instead of throwing that handy little thing away, buy a big package of your favorite snack and re-fill the small container from that.
-Drink more water. If you have a filtration system – even a standalone pitcher that you can buy for ten dollars or less – you can re-use the plastic bottles of water that you’ve already bought. This is cheaper than buying twenty-ounce sodas a couple of times every day.
-Find a public microwave on your campus. Many schools provide microwaves in or near cafeterias so that students can nuke things they bring from home. This is handy not just for leftovers, but for Ramen noodles and other packaged meals too.
Thursday, March 23, 2006
How to spot a scholarship scam
With students scrambling for more money to attend college these days, more scammers are out there to try to steal it from you.
The most recent scam is you getting a phone call and the operator tells you that you have won a federal scholarship or grant, usually in the amount of about $8000. All you have to do is pay the small processing fee and they send the money right away. This is wrong, you should never have to pay money to get a scholarship and of course, the money is never sent.
You can read the FTC information page about scholarship scams.
You can read the FTC information page about scholarship scams.
Wednesday, January 25, 2006
New site about PLUS Loans
If you are a parent looking for money for your student in college, or you are a student in need of money, you will really want to check out PLUS loans. PLUS loans are parent loans for undergraduate students. Parents take out PLUS loans for students who just need the extra money for college. You can find out more at a new PLUS Loan site.
Saturday, January 14, 2006
Congress expected to pass fixed Stafford Loan rate
In a new financial aid bill that is expected to pass through congress there are quite a few changes students need to be concerned about. Among other cuts, totaling billions from college financial aid over the next 5 years- is a fixed rate for Stafford Loans.
This fixed rate will be set at 6.8 percent. This is a major ordeal, as loan rates are now variable and change every year. Currently they are linked to the ninety-day treasury bill, which is as low as 4.7 percent.
In the past Stafford Loans interest rates have been as high as 8 percent, however, right now they are much lower than the proposed 6.8 percent lifetime rate.
This bill passed the senate, is expected to pass the house, and the president is expected to sign it into law.
There are several other important parts to the bill that will be dissected soon.
Stay Tuned.
This fixed rate will be set at 6.8 percent. This is a major ordeal, as loan rates are now variable and change every year. Currently they are linked to the ninety-day treasury bill, which is as low as 4.7 percent.
In the past Stafford Loans interest rates have been as high as 8 percent, however, right now they are much lower than the proposed 6.8 percent lifetime rate.
This bill passed the senate, is expected to pass the house, and the president is expected to sign it into law.
There are several other important parts to the bill that will be dissected soon.
Stay Tuned.
Monday, December 26, 2005
How to get FAFSA help
If you are one of the many students who needs help filling out the FAFSA, you are not alone. This 101-question form is more comprehensive than most tax forms. The questions can be confusing and it might get a little frustrating filling out the FAFSA online.
In the near future, you will have no other choice but to file your FAFSA online. The government is going to do away with paper applications and online will be the only way to go.
So, you need help while filling out the FAFSA, and you have several places you can go for help.
The main place people go for help is the Federal Student Aid Information Center. This call center is staffed by several call takers who should help you fill out the FAFSA. They should also answer any questions you have and walk you through the form. The issue that I have with calling this number is that the center is staffed with lots of underpaid, uneducated, and untrained people. The management always pushed the call takers to keep their "talk time" low so they can take as many calls as possible in a shift. If you want someone to walk you through doing the entire application online, the person on the other end might do everything possible to get you off the phone so they do not get yelled at. If you want to contact them, call 8--433-3243.
Another way to get help is to take a look at the FAFSA tutorial at fafsaonline.com. This tutorial takes you through the FAFSA step-by-step and really leaves you with no questions on what to do. You can find this tutorial at:
FAFSA Online Tutorial
No matter what, you should never get frustrated filling out this form with the help described above.
In the near future, you will have no other choice but to file your FAFSA online. The government is going to do away with paper applications and online will be the only way to go.
So, you need help while filling out the FAFSA, and you have several places you can go for help.
The main place people go for help is the Federal Student Aid Information Center. This call center is staffed by several call takers who should help you fill out the FAFSA. They should also answer any questions you have and walk you through the form. The issue that I have with calling this number is that the center is staffed with lots of underpaid, uneducated, and untrained people. The management always pushed the call takers to keep their "talk time" low so they can take as many calls as possible in a shift. If you want someone to walk you through doing the entire application online, the person on the other end might do everything possible to get you off the phone so they do not get yelled at. If you want to contact them, call 8--433-3243.
Another way to get help is to take a look at the FAFSA tutorial at fafsaonline.com. This tutorial takes you through the FAFSA step-by-step and really leaves you with no questions on what to do. You can find this tutorial at:
FAFSA Online Tutorial
No matter what, you should never get frustrated filling out this form with the help described above.
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