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Monthly Archives: January 2014


Unless you plan to pay for your postsecondary education out of pocket, you need to fill out the Free Application for Federal Student Aid (FAFSA) to qualify for financial assistance. This application opens the doors to many kinds of financial aid—Federal Pell Grants, Federal Stafford Loans (subsidized and unsubsidized), Federal PLUS Loans for parents, GradPLUS Loans for graduate and professional degree students, Federal Supplemental Educational Opportunity Grants, Federal Work-Study, and Federal Perkins Loans.

You will need to file a new FAFSA as soon after January 1 as possible each year you go to school.




Repayment Amortization

You can estimate your payments with various interest rates and loan terms using this calculator.

Repayment Plan

You can estimate your payments under various repayment plans using this calculator.

Income-Based Repayment

This calculator can help you determine if you qualify for the Income-Based Repayment(IBR) plan. IBR is designed to make payments more affordable for borrowers.

Income Contingent Repayment

This calculator can help you determine if you qualify for the Income Contingent Repayment (ICR) plan.The Income Contingent Repayment plan is based on your Adjusted Gross Income.


A Break From Payments

Take a Break from Payments

Both deferments and forbearances give you a break from monthly payments for a set period of time. Many options are available to meet a variety of needs. If you are having difficulty making payments and want to see which options fit your specific situation, log in to your account and click Postpone My Payment to see which deferment or forbearance works best for you. Of course, you can also call us at 888.486.4722 to talk through your options.

  • Log in to your account and click Postpone My Payment to apply for deferment or forbearance. You can also call us at 888.486.4722.
  • Learn more about the difference between deferment and forbearance.
  • Calculate accrued interest while in deferment or forbearance. (To avoid capitalization, you may choose to pay accruing interest or even small payments toward the balance.)


Avoid Default With Deferment or Forbearance

About Deferment

If you are experiencing financial hardship, go back to school, are unemployed, or are on active duty military service, postponing payments with deferment may be right for you. Subsidized Stafford loans and subsidized consolidation loans will not accrue additional interest, so your balance after the deferment period will be the same as when it started. However, for unsubsidized Stafford loans, PLUS loans, SLS loans, or unsubsidized consolidation loans, interest will accrue during the deferment period, so it’s wise to pay at least the interest on your loan each month. This will prevent your interest from being capitalized, or added to the principal of your loan, essentially increasing your total balance and requiring you to pay more in the long run.

About Forbearance

If you work an internship, perform certain types of community service, or find yourself experiencing financial hardship, you may be qualified to postpone payments with forbearance. All loans accrue interest during forbearance, so it’s smart to pay at least the monthly interest during this period to avoid interest capitalization. Forbearance resolves any delinquency on the account—log in to your account and click Postpone My Payment to see if you’re eligible. You can also call us at 888.486.4722.

Available Deferments

The federal government has allowed for these deferment options. Read on to see if these situations apply to you. Remember—just because you are eligible for a deferment does not mean you are required to request it; if you feel you can make payments on your loan, you are encouraged to do so.

Armed Forces Deferment

If you serve on active military duty in the Armed Forces or National Guard, you may be eligible for this deferment or other student loan benefits for members of the military.


Are You Transferring?

Information for Transferring Students

When applying for a student loan as a transfer student, it is important to   keep in mind that if you received a student loan at a prior school, you will not   automatically receive a student loan at your new school.

If you completed the FAFSA during the   current academic year and you decide to transfer, your new school may require   you to provide a copy of your Student Aid Report   (SAR) – even if you did not receive financial aid at your previous   school.

When you transfer, remember to do the following:

At your old school: Cancel any outstanding loan   disbursements when you withdraw.

At your new school: Inform them   about the school you previously attended and provide your SAR. Additionally, if   you have not previously signed a Federal Direct Loan   MPN, you will be required to do so at your new school. All federal students   loans first disbursed on or after July 1, 2010 must be made by the federal   government.




Direct and indirect costs

There is more to college expenses than just tuition and housing bills. When you estimate how much college will cost, consider the direct and indirect costs.
Everything from books to supplies to trips back home adds to the overall price.
To estimate how much college costs, look at the direct and indirect costs.

Direct costs

  • Tuition: If your child has selected a state school, the tuition (cost of classes) will depend on his or her residency status. The difference between in-state and out-of-state tuition can be thousands of dollars a year. Some schools base tuition on the number of credit hours taken in an academic period. Others rely on enrollment status (full time versus part time). Get details from the financial aid or admissions office.
  • Fees: Most schools charge set fees for services such as activities or athletic facilities. Such fees usually appear on the tuition bill whether your child uses these services or not.
  • On-campus room and board: Your child may choose to live on campus and eat in dining facilities. Meal plans prices can vary significantly.

Indirect costs

  • Books and supplies: Textbook costs are similar from school to school, but they vary greatly depending on the courses taken. Students can save by buying used books, buying online, or sharing with classmates. Some classes require more supplies than others; others have printing, copying, or computer costs.
  • Computers: Many schools require students to have a personal computer. Check the admissions requirements to determine whether a basic PC will do or a more expensive laptop is required. Remember to add the costs of software, a printer, and — if your child lives off campus — connection to the Internet.
  • Off-campus room and board: This category includes rent, furnishings, utilities, and meals. If you haven’t taught your child how to cook, now is the time! Even if your child lives at home, there will be expenses related to food and commuting.
  • Transportation: If your student will commute to school, factor in the cost of public transportation, gas, car insurance, maintenance, and parking fees. Some schools provide free parking, while others require a paid permit. If the school is far away, don’t forget the cost of air travel to get home on breaks and holidays. Your child can lower these costs by carpooling and by shopping around for student rates on airfare.
  • Personal expenses: Students have lots of small personal expenses that add up and can make a huge difference in this category. Consider clothing, laundry, haircuts, cell phone, and entertainment. Teach your child to maintain a written budget since these expenses can easily spiral out of control.
  • Other costs: Count on extra expenses such as lab fees for science courses, fees for course changes, and expenses for participating in athletics or joining a sorority or fraternity. Try to keep a little extra money in the budget to cover emergencies.

Determining the cost of college

Now that you know what goes in your bill, see how much a college could actually cost.



Worksheets, Resources, and Tips

Budgeting Worksheet     Manage your budget and get on the right track using this itemized worksheet.

Budget Strategies     Good intentions aren’t enough. Try these strategies to save money for your future.

 Managing Your Money       Achieve financial wellness with these nine money-saving tips.

Credit Card Tips       Credit cards help establish and improve your credit score, but only when used responsibly. Make sound financial decisions with this info.

Identity Theft       Don’t be a victim. Keep your identity safe with these tips.

Explore Deferment and Forbearance       Trouble making payments? Discover how you could postpone them.

2013-2014 Federal Student Loan Programs       Compare your federal student loan options.

Financial Goals Worksheet       Healthy financial habits start by setting sound financial goals. Get started here.

Live Life Smart Guide Your complete guide to becoming financially savvy, whether you’re graduated or just starting your education.

Financial Literacy with the Department of Education Let the Department of Education help you find a balance between your income, financial aid, and living expenses.



Spending and Savings Plans

Creating and sticking to a spending and savings plan might not be your idea of  fun, but it can help you control your spending so you CAN have fun without getting  into money trouble.  If you don’t have  much money coming in, don’t worry—following a realistic plan CAN still allow you to  have some small luxuries, even if it is an occasional soda or movie.

  1. The first step towards creating a budget is  determining all of your recurring monthly expenses, such as rent, tuition, groceries, phone  bill, student loan payment, car payment, gas, insurance, necessary clothes, and other needs. You may wish to check out  the MDHE’s spending and savings plan worksheet to help get you started.
  2. Next total your monthly income including wages  from work (not including overtime) and any financial aid funds left  over for living expenses after paying your tuition and fees.  Calculate the amount of these financial aid funds you should use each month by dividing the  amount by the number of months in  your semester or term.
  3. Then, take your overall expenses total and subtract expenses from your income.  There may not be anything left over, or it  could be a negative number.  Based on the  results, examine each item in your budget and decide if you could cut back in  any areas.  Which line items are truly NEEDS and which are actually only the things you WANT? Additionally, if you are paying checking account or credit card fees, learn how to effectively take charge of your finances while to eliminate these expenses.

Congratulations, you’ve created a budget and taken the first  step to getting control of your money.

Now for the tough part—

  1. Find out if your actual spending matches your plan.  Tracking expenses and comparing them to your  plan will allow you to gain control over your monthly spending, allowing you  to keep student loan debt,  as well as other types of debt, at a reasonable level or non-existent,  especially while you are in college.

There are a number of ways to track your spending, such as  writing down purchases in a checkbook ledger or using a spreadsheet.  If you are comfortable  letting technology do some of the work for you, you can use an application like www.mint.com or www.buxfer.com, which can help you track and analyze your spending habits.

If you follow these steps, you should be able to  gain control over your money, save money for emergencies, and get out  of debt quickly.





Financial Aid Myths

 By now, you’ve probably heard a lot of advice regarding scholarships, deadlines, free money and loans. But while there are many sources offering tips on these topics, not all of them are reliable. Some might even be based on common financial aid myths. So before you take any advice — or make any major decisions regarding your financial aid for college — familiarize yourself with what’s reliable (and what’s not).

Myth: Our income is too high to qualify for financial aid.

Student and family income is not a factor when a school decides if a student qualifies for a federal unsubsidized Stafford loan. What about other aid? The only way to know for sure is to fill out the Free Application for Federal Student Aid (FAFSA).

The federal government has a formula that considers a number of factors — including number of college-age children, income, and children’s assets — to determine the amount a family is expected to contribute to a child’s college costs. Any costs above that can be covered by financial aid, government aid, or private loans.

One more reason to fill out the FAFSA: some schools will not consider applicants for college grants and scholarships if they have not applied for federal aid.

Even if you’re doubtful about your qualifications for financial aid, applying doesn’t hurt. You never know — you could get some help to finance your education.

Myth: We have money saved for our child’s college education, so we won’t get any aid.

False. Student and family savings is not a factor when a school decides if a student qualifies for a federal unsubsidized Stafford loan. And when it comes to other aid, the federal formula has allowances for savings and assets. You are not expected to sacrifice your home equity or retirement savings to pay for your child’s education.

Only a small percentage of parental assets are expected to be contributed for education.

Myth: Our daughter wasn’t eligible for much financial aid last year, so our son entering college this year won’t be eligible either.

On the contrary: The number of family members in college has a big impact on your financial aid eligibility.

Myth: Our child will be attending college part time, so he won’t be eligible for financial aid.

Financial aid is available for part-time students. Ask your college’s financial aid office for information on aid for part-time students.

Myth: You can get more federal money by shifting your assets around.

Almost anything you do to lower your Estimated Family Contribution (EFC) will have an impact on your personal income, assets, and taxes.

Don’t bother with financial strategies that may result in tiny increases in financial aid (and may be offset by higher taxes or lower asset levels). Instead, focus on getting your taxes done early and correctly.

Financial aid myths: the bottom line

Dig around and get the truth from reliable sources. High school counselors and financial aid administrators are professionals who are there to help your family — and they’re great sources to turn to for reliable information regarding financial aid