Funding Your Future Archived Articles
Changes to the Pell Grant
The Pell Grant is a federal student aid program that provides need-based grants to low-income undergraduate students and certain graduate students. Pell Grants are highly sought after because, unlike a loan, a grant does not have to be repaid.
Two significant changes to the Pell Grant have been made under the Obama administration. First, the maximum amount of money that can be awarded as a Pell Grant has been increased from $4,700 to $5,350. A significant amount of funding ($15 billion) for the Pell Grant program was set aside from the stimulus package passed in February of 2009. Starting in the 2010-2011 academic year, the maximum Pell Grant will be even higher at $5,550.
Second, job status is now a factor used in determining an applicant's eligibility for a Pell Grant. That means, for students who have recently lost a job, it will be easier to obtain Pell Grant funding. Rather than waiting until you can prove that your household income has decreased, you just need to show proof of your unemployment.
For more information on the Pell Grant program, visit http://www2.ed.gov/programs/fpg/index.html.
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Coverdell Education Savings Account (ESA)
Looking for a way to save money for college and get a nice tax break in the process? Then check out the Coverdell Education Savings Account (ESA).
An ESA is an account that helps parents and students save money for education expenses, from elementary school all the way to college. A total of $2000 in contributions per beneficiary can be put into the account each year.
Money deposited in an ESA grows tax-free . Plus, if the distributions are less than the beneficiary's qualified education expenses, they'll be tax-free, too!
Contributions can be made up until the beneficiary reaches the age of 18. Any balance in the ESA must be distributed within 30 days when the beneficiary reaches the age of 30.
Coverdell ESAs can be found in section 530 of the Internal Revenue code.
For more information about Coverdell Education Savings Accounts, visit http://www.irs.gov/newsroom/article/0,,id=107636,00.html
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Prepare to Complete the FAFSA with the FAFSA4caster
Now is the time to start filling out your FAFSA - make the process quicker and easier by using the FAFSA4caster!
The FAFSA4caster is an online tool offered by the federal student aid program. You can use the FAFSA4caster to get an early estimate of your eligibility for federal student aid. This information will be highly valuable as you decide which schools to apply to.
Another benefit of using this tool is that you can transfer all of your FAFSA4caster data to your FAFSA on the Web application when you're ready to officially apply for student aid. You'll also have the option to apply for your federal student aid PIN which you'll need to submit your FAFSA electronically.
As you use the program, you'll also be provided with FAFSA4caster Tips. These are quick tips that provide you with information that will make the financial aid application process easier.
To learn more about the FAFSA4caster, visit http://www.fafsa4caster.ed.gov/.
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The Three Types of Federal Student Loans
If you're looking for money for college, then you'll want to learn more about federal student aid. One way that many students pay for college is with federal loans.
There are three major types of federal student loans:
Here's a quick look at the basics of each type of loan:
Stafford loans are fixed-rate student loans available to both undergraduate and graduate students who are enrolled at least half-time at an accredited school. Almost all students are eligible to receive Stafford loans.
Depending on your level of financial need, a Stafford loan may be subsidized, which means the government pays the interest while you are enrolled in school and for six months after you leave.
PLUS loans, which stands for Parent Loan for Undergraduate Students, are federal student loans taken out by parents to finance their children's education. The loans are available to parents of dependent undergraduate students who are enrolled at least half time in an eligible program.
Perkins loans are low-interest loans available to both undergraduate and graduate students who demonstrate an exceptional financial need. Perkins loans are made through your school's financial aid office, so your school, rather than the government, is your lender.
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FAFSA Facts: What is a Data Release Number?
A Data Release Number (DRN) is a four-digit personal identification number assigned to each FAFSA applicant by the Department of Education. Your DRN can be used to make changes or corrections to your FASA. You can also use it to release your financial information to schools you did not previously list on your original FAFSA.
For paper applications, the DRN is located in the lower left-hand corner of your Student Aid Report. If you filed electronically, you'll find your DRN in the upper-right corner of your Student Aid Report. You'll need your DRN to request additional copies of your Student Aid Report.
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Top Tips for Filling Out Your FAFSA
No matter what college you plan to attend or what type of financial aid you hope to receive, it all starts with the FAFSA.
A lot is riding on these forms, so you want to be sure that you get it right. To make completing your FAFSA a bit easier - and to ensure you get the most aid possible - follow these 10 top tips:
1. Read all of the instructions before you starting filling out the forms.
2. Use black ink if you're filling out a paper copy.
3. Have the following items on hand when you begin filling out your application:
- Driver's license
- Social security card
- Income tax returns
- W-2 forms
- Current bank statements
- Documentation of any untaxed income
- Current mortgage information
- Documentation of investment assets, such as stocks and bond
4. Use your legal name as it appears on your Social Security card when filling out the forms.
5. Use whole dollar amounts when answering questions. For example, $1889.92 would be rounded up to $1890.
6. When asked about your interest in different types of aid, such as work-study and loans, always say yes to keep your options open. You're not obligated to accept the work-study position or loan if it is awarded.
7. Don't skip questions. Answer each question as you come to it to ensure that you don't leave anything blank.
8. Don't forget to sign the application. You'll use a PIN to sign if you submit the form online.
9. Make a copy of your form before mailing it off. If you completed the form online, then print yourself a copy.
10. Pay attention to the filing dates - complete and submit your FAFSA as soon as possible after January 1st and not before.
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Apply Fast With a FAFSA PIN
According to the U.S. Department of Education, using a PIN is the fastest and most reliable way to sign your FAFSA.
Your Federal Student Aid PIN is much the same as your ATM pin. It's a four-digit number that uniquely identifies you (along with your Social Security number and birth date) and serves as your signature when you submit your FAFSA electronically.
In addition to signing your FAFSA, you can also use your PIN to access your personal records online and make binding legal obligations related to your federal student aid. Your PIN remains the same for the duration of your education and beyond, so you only have to apply for your PIN once.
For more information on the Federal Student Aid PIN, visit http://www.pin.ed.gov. It's your one-stop shopping for all things related to your PIN, including how it's used and how to apply for your own PIN.
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Top 5 Scholarship Mistakes to Avoid
Scholarships are free money for college, and there's nothing better than free money, right? Increase your chances for getting as many scholarships as possible by avoiding these 5 common scholarship mistakes.
1. Not applying for enough scholarships: Don't stop at just one or two and hope for the best. Apply for all of the scholarships for which you qualify.
2. Applying for scholarships for which you don't meet the qualifications: Speaking of qualifications, be sure you read the guidelines for each scholarship carefully. You don't want to waste any of your time applying for a scholarship you don't qualify for.
3. Not proofreading the application before you send it: Typos and grammatical errors reflect negatively on the applicant, so put your best foot forward and always proofread your applications - twice!
4. Missing the deadline: Here's an easy way to ensure that you don't miss out on a scholarship by missing a deadline: Create a simple calendar and make a note of the deadline for each scholarship you're applying for. Post the calendar in a highly visible place and check it each day.
5. Starting the application process too late: The early bird gets the worm when it comes to scholarships. You don't want to miss out on money simply because another applicant got their application in first.
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Using the FAFSA on the Web Worksheet
Are you someone who prefers to write things down on paper before filling in online forms? Are you a bit harried by the FAFSA application process? Looking for a way to simplify all those forms? Then the FAFSA on the Web Worksheet is exactly what you're looking for!
The FAFSA on the Web Worksheet is a question-by-question duplicate of the actual online FAFSA. You can download and print out the FAFSA on the Web Worksheet and complete the questions before you enter the information online. The questions on the worksheet are in the exact order as they appear on the online application.
Another benefit of using the FAFSA on the Web Worksheet is that it tells you all of the documents, such as your tax returns, that you'll need in order to answer the questions on the FAFSA.
The worksheet is a completely optional tool, but it can be a huge help in making the application process go more quickly and smoothly and in ensuring that you answer all of the questions fully and accurately.
The worksheets are available in both color and black-and-white. To download a FAFSA on the Web Worksheet, visit http://www.fafsa.ed.gov/before012.htm.
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Mistakes to Avoid when Filling Out Your FAFSA
You want all of the help paying for college that you can get. That's why correctly completing and submitting your FAFSA is so important.
To be sure you get all the financial aid available to you, and to avoid any delays in processing your application, watch out for these seven common FAFSA mistakes:
1. Leaving a question blank: If a question doesn't apply to you, enter a "0" or "not applicable."
2. Forgetting to list one of the college you applied to: Make sure you have the Federal School Code for each school you plan to apply to.
3. Writing down an incorrect Social Security number or driver's license number: Always be sure to double-check these numbers.
4. Forgetting to sign the application: Electronic applications are signed using a PIN.
5. Using the wrong address: Remember to use your permanent address, not your campus address.
6. Not rounding numbers up to the nearest whole dollar: Don't use decimal points or commas when listing numbers and dollar amounts.
7. Using your W-2 forms instead of your income tax return for listing your federal income tax paid amount: Use your 1040 federal tax return to answer these questions.
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How to Read Financial Award Letters
A financial award letter tells you how much financial support that particular school is able to provide you with for the upcoming school year. Sounds simple enough, but sometimes award letters can be a bit tricky to decipher. To help make all those terms and numbers a bit more clear, we've put together this mini how-to guide for reading financial award letters.
First, there are four terms you need to know and understand:
1. Grants: Money that doesn't have to be repaid.
2. Scholarships: Money that doesn't have to be repaid.
3. Work-study: Money you earn by working.
4. Loans: Money that does have to be repaid.
The financial aid you receive will come in the form of one or more of these sources of funding. Don't just look at the numbers - be sure you understand the source of the funding. The less you have to take out in loans, the better!
For scholarships and grants, pay close attention to requirements, such as a minimum GPA, for retaining the funding. Also note whether they are one-time or renewable annually.
In order to compare financial aid offers from various schools, you'll need to first answer these questions for each school:
1. What is the total amount of financial aid I'm being offered?
2. How much of the aid has to be repaid?
3. How much out-of-pocket expenses am I going to be left with?
Last, look at the deadline for accepting your award. You don't want to miss out on any money because you've replied too late!
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Busted: Myths about Financial Aid
Don't let myths about college financial aid hold you back from attending the school of your dreams. Read on to get the straight facts on financial aid:
Myth: I just can't afford college.
Fact: This is perhaps the most pervasive financial aid myth of all. Students at most levels of financial need will qualify for some type of federal aid - that's why filling out your FAFSA is critical. Don't discount the possibility of working while in school (see the next myth), and be diligent about applying for each and every scholarship you qualify for.
Myth: Working while I'm in school will kill my grades.
Fact: Working students have to practice excellent time management skills, which means they are more adept at making the most of their study time. It sounds contradictory, but working students actually tend to do better in their classes than non-working students.
Myth: I have to be a straight - A student to qualify for scholarships.
Fact: Not all scholarships are merit-based. There are numerous scholarships with unique qualifications that aren't based on grades. For example, you can find scholarships awarded based on need, essays, contests, community service, cultural backgrounds and personal achievements.
Myth: There's no way I can afford a private college.
Fact: Private colleges are interested in attracting a diverse array of students, which means you are often more likely to get generous financial aid from a private school than a public school. Also, the more a college costs, the more financial need you can demonstrate when seeking federal aid.
Myth: My parents make too much money for me to qualify for financial aid.
Fact: Schools offer financial aid packages that meet the needs of students from all financial backgrounds. Also, keep in mind that there are numerous loans available that aren't based on financial need. Additionally, as mentioned above, scholarships are awarded based on a number of different factors. Many don't take financial need into account.
When it comes to affording college, where there's a will there's a way! With scholarships, federal student aid, the option of working and school financial aid packages, you're likely to get the help you need to afford the college of your dreams.
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The Surprising Benefits of Working Your Way Through College
Uncle Sam wants to give you a break for going back to college! And he's doing it with the Lifetime Learning Tax Credit!
The Lifetime Learning Tax Credit is a tax credit you can qualify for when you take college classes. Depending on your income level, it may allow you to claim a credit of up to $2000 on your individual income tax returns for qualified tuition and related expenses. The benefit of the Lifetime Learning Tax Credit is that it reduces the amount of taxes you may have to pay.
You can claim the Lifetime Learning Tax Credit for either yourself, your spouse or a dependent. Another benefit of the Lifetime Learning Tax Credit is that there is no limit on the number of years for which the credit can be claimed for each student.
For purposes of the Lifetime Learning Tax Credit, qualified tuition and related expenses are the tuition and enrollment fees you must pay in order to enroll in and attend an eligible education institution. Yet another reason the Lifetime Learning Tax Credit is so cool is that non-credit courses to attain or improve your job skills may also qualify!
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The Lifetime Learning Tax Credit
Some college students might think of working their way through school as a last resort to turn to once all of their financial aid options have been exhausted. However, you might be surprised to learn that working while you're in school actually offers lots of benefits. Check it out:
1. Take out fewer student loans: By working your way through school, you'll limit the amount of student loans you have to take out - which means less to repay in the future!
2. Earn money: This one sounds obvious, but consider the fact that earning a salary in addition to what you get in student aid will give you extra pocket money for fun stuff!
3. Learn to budget: You're likely to be more careful with money that you have to earn, which can teach you valuable money management skills that will equate to financial stability in the future.
4. Learn time management: Balancing work and school will force you to learn how to use your time more wisely.
5. Get better grades: Less time for studying means better grades? Surprisingly, the answer can be yes! When your study time is limited, you'll make the most of it and actually apply yourself more than if you had tons of free time on your hands.
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Stafford Loan Interest Rates
When it comes to student loans, the interest rates and terms of Stafford Loans are usually the best. Stafford Loans are student loans made by the federal government. There are two types, subsidized and unsubsidized, each with their own interest rate.
For the 2009 to 2010 academic year, the interest rate for a subsidized Stafford Loan is 5.6% and 6.8% for an unsubsidized Stafford Loan. Graduate Stafford Loans, both subsidized and unsubsidized, have a fixed interest rate of 6.8% through the year 2013.
Note that interest rates on subsidized Stafford Loans will be decreasing over the next few years. For the 2010 to 2011 academic year, the interest rate will be 4.5%, and for the 2011 to 2012 academic year it's 3.4%
Quick tip: Interest accrues on your Stafford Loans while you're in school, and you have the option of paying the interest every month or deferring it until you graduate.
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FAFSA Follow-Up
The accuracy of your FAFSA is critical to ensuring that you receive the most financial aid possible. Once you have submitted your FAFSA electronically, there are several steps you can take to follow up and ensure that the information on your application is up-to-date and accurate.
One of the first things you should do is check the status of your FAFSA. If you used a PIN to sign your application, you can check your status one week after submission. If you opted to print and mail your signature page, you should check up on the status of your application 2 to 3 weeks after submitting it.
Once your FAFSA has been processed, you can print out a copy of your student aid report. This will give you an opportunity to carefully review the information on your FAFSA. If there are any mistakes, you have the ability to correct your FAFSA, even after it has been processed. These corrections can be made online using your PIN.
Last, if you change which schools you decide to apply to, you have the ability to add or remove the school codes listed on your FAFSA. This also requires a PIN to complete.
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5 Tips for Paying for College in Tough Times
Don't let the tough economy keep you from attending college. Here are five simple tips for paying for college even in a recession:
1. Apply to both private and public schools: While private schools have higher tuition rates than public schools, they sometimes offer very generous scholarships that can amount to little to no money out of pocket for you.
2. Spread the word: Let absolutely everyone know that you're looking for money for college. You never know what relative may be able to chip in or who might have a lead on a great scholarship.
3. Be upfront with your school's financial aid office: Let the financial aid office know about your situation and simply ask what they can do to help.
4. Apply early for scholarships: Some forms of financial aid are handed out on a first-come, first-served basis, so get started early in applying for both scholarships and in filling out your FAFSA.
5. Hit the books hard: Merit scholarships are more plentiful in general than need-based scholarships, so get those grades up and participate in extracurricular activities.
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American Opportunity Tax Credit
For students seeking sources to help fund their college education, the American Opportunity Tax Credit is a partially refundable tax credit, in effect for 2009 and 2010. This credit is to be used for the first four years of a student's college education and is 40% refundable. It increases the Hope Scholarship Credit to cover one hundred percent of a student's qualifying tuition and materials during the year (not over $2,000) plus twenty-five percent of the next $2,000 on qualifying tuition and materials. No matter what, the total credit cannot exceed $2,500.
Full credit is available if your annual income is less than $80,000 ($160,000 for married couples and other joint filers). If your annual income falls somewhere between $80,000 and $90,000 ($180,000 for married couples and other joint filers), you can receive a partial credit. This tax break will also be partially refundable, which means that if you are part of a lower income family with little or no tax liability, you are now eligible to claim some of the credit.
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Prepaid Savings Plans: The Basics
A Prepaid Education Arrangement (PEA), also sometimes known as a "prepaid savings plan" or a "prepaid college tuition plan," allows a student's family to pay for part or all of a future college education at the current price. The student's home state guarantees to meet or exceed any annual tuition inflation, which currently ranges from five to eight percent, and the overall cost for the pan itself may vary.
There are two types of PEAs: a units plan, which lets you purchase units of tuition, and a contract plan, which sets up contracts for anywhere from one to five years of tuition. Prepaid Education Arrangement are a virtually safe investment, allowing families to prepare for their children's futures while ultimately saving a ton of money, and for those attending an in-state college, your investment is guaranteed by the state. Keep in mind, though - almost every PEA is based on your student attending an in-state university, and if he or she decides to attend elsewhere, there are often cancellation fees. Other restrictions may also apply.
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Federal loans: Income-Based Repayment (IBR) Program
When it comes to paying for college, one of your smartest bets is a federal loan... and the good just got even better with the new Income-Based Repayment (IBR) option. For most borrowers who are eligible for IBR, loan payments will amount to less than 10% of their income. And, under this new payment plan, any remaining debt will be forgiven after 25 years of qualifying payments!
The Income-Based Repayment option covers most types of federal student loans, but not loans made to the student's parents. A standard formula, based on the federal poverty level, is used to determine whether your current income level qualifies you for IBR. Basically, IBR uses a sliding scale to determine how much a person can afford to pay on their federal student loans.
IBR is a brand-new program - it only became effective as of July 1, 2009. IBR is an alternative to, rather than a replacement of, the income sensitive repayment and income contingent repayment plans. The goal is to make it easier for students to repay their loans should they choose to go into a career field, such as public service, that tends to offer lower pay.
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Federal Discretionary Grants
Discretionary grants are financial awards given out by the Department of Education to the applicants deemed most deserving. Unlike other educational grants that are based on financial need, discretionary grants give the Department of Education the ability to select among the applicants based on individual scores.
Discretionary grants are awarded in accordance with a competitive review process, which, with the help of subject matter experts, enables the Department of Education to find the applicants that best meet the requirements of the program.
Applying for a discretionary grant begins with obtaining an application package. These packages, which can be ordered online at http://www.edpubs.org, contain all of the forms and information you need to apply for a particular grant.
Information about the currently available discretionary grants is accessible online through a number of different sources:
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CKSF Intern Challenge
Like game shows? Then you'll love the CKSF Intern Challenge! Simply register with the Common Knowledge Scholarship Foundation and take quizzes on a wide variety of subjects. The student who earns the most points by getting the highest number of correct answers and completing the quizzes in the shortest amount of time wins a scholarship which varies in amount.
Ready to test your knowledge? Visit http://www.cksf.org/.
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Got Sticker Shock? Ask For a Tuition Discount
One of the biggest concerns for students about to attend college - and their families - is, of course, cost. When setting out to begin to fund a college education, students and their families must examine all options, one of which is a "tuition discount." By understanding exactly what this type of financial assistance is, you can better your chances of getting the most beneficial discount to your situation.
So, how do you receive a tuition discount? Well, there are two types of these discounts: "Eligibility-based" and "Incentive-based." Those receiving an Eligibility-based discount must meet very specific criteria, such as having a parent or family member who is an alumni or employee of the school, being an employee of the institution yourself or even being of a certain age. Incentive-based tuition discounts are based on a school's need for YOU, because of something unique you may have to offer to the college's landscape.
By understanding tuition discounts and which type you may be eligible for, you may be able to initiate competition between schools looking for your particular qualities and award yourself the luxury of choosing between the "best offer" made.
Remember - tuition discounts ONLY apply to your tuition. For example, if your total cost for a year of college, all expenses included, is $50,000, but your ACTUAL tuition comes out to $35,000, a 20% tuition discount will only apply to the lower number - though that's still a big chunk of change that is worth the effort of research!
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Tips for Using Online Scholarship Search Engines
If you're on the hunt for ways to pay for college, an online scholarship search engine can be your best friend. Most search engines work the same way - you set up a free account and fill out a detailed profile (GPA, SAT score, intended major, etc). The search engine then cross references the information you provide in your profile and compiles a list of the scholarships for which you are eligible.
Scholarship search engines are one of the most efficient ways to locate scholarships, and you can make your search even more fruitful by following these 5 tips:
1. Come back often: Search engines are constantly adding new scholarships to their database. Check back frequently to make sure you don't miss out.
2. Play the "what if" game: Your GPA, school of choice or SAT score may change between now and the deadline for a given scholarship. See what comes up if you search for scholarships based on this information so you'll know what's available if you bump up your GPA or retake the SAT and get a higher score.
3. Declare yourself undecided: There are many scholarships out there available to students regardless of their major. Run a search as an "undecided" to be sure you learn about the general scholarships.
4. Brainstorm your attributes: Scholarship search engines sometimes give you the option to search for scholarships based on your extracurricular activities or talents. Before you start searching, come up with a list of your special skills and achievements to have handy when you fill out your profile.
5. Double-check the information: Don't rely 100% on the information you get from these searches. Always do follow-up research to be sure that you've got the most up-to-date information about application requirements and deadlines.
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Federal Supplemental Educational Opportunity Grants
Federal Supplemental Educational Opportunity Grants are a type of financial assistance provided by the federal government to low-income undergraduate students. The purpose is to help ensure that those with financial difficulties are still able to receive a postsecondary education.
The maximum amount awarded to a student is $4000. Priority is given to students who have also received a Federal Pell Grant and have an "exceptional need." The U.S. Department of Education uses a set formula to determine a student's financial need.
For more information on Federal Supplemental Educational Opportunity Grants, visit http://www.ed.gov/programs/fseog/index.html.
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What is the Federal Work-Study Program?
The Federal Work-Study program (FWS) is a federal financial aid program. With the Federal Work-Study program, the student earns their funds through part-time employment. FWS is available to both undergraduate and undergraduate students.
FWS is a need-based program. In order to qualify, you must complete the FAFSA. Be sure to mark "yes" to the question that asks whether you are interested in FWS.
FWS encourages students to choose jobs that are community service oriented or are related to the student's major. Jobs can be either on-campus or with private employers, and students typically work 10 to 15 hours per week.
Work-study program participants must be paid at least the hourly federal minimum wage. However, some students earn higher hourly pay. Note that the pay you receive is considered taxable income, and the total amount of money you earn can't exceed the total of your FWS award.
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Find out About Your State's Tuition Assistance Programs
Virtually every state has some type of scholarship or tuition assistance program. There could literally be free money from the state government just waiting for you!
One common type of state scholarship are merit-based scholarships, which are awarded based on a student's academic performance. For example, your state may award scholarships to students who graduate from high school with a 3.5 GPA or higher. Typically merit-based scholarships are renewable annually as long as you maintain a certain grade point average.
Some states also offer scholarships to students planning to go into a "high need" field of study. These types of scholarships are commonly awarded to students who are planning to become teachers.
A third type of scholarship offered by some states are need-based scholarships which are awarded to students who can demonstrate a financial need. There might also be a GPA requirement for need-based scholarships.
For more information about the scholarship program in your state, check out the listings, arranged by state, at http://www.collegescholarships.org/scholarships/states.htm.
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Off the Beaten Path: Creative Places to Look for Scholarships
The more scholarships you apply for, the better chance you have at earning some big bucks to help pay for college. The trick is simply knowing where to look - and there are lots of places to look besides online scholarship search engines.
Here are 5 places to dig up some great scholarship opportunities:
1. Corporations: Lots of big-time businesses like Coca-Cola and Target offer scholarships. Scholarships are usually featured prominently on their corporate website.
2. Chamber of Commerce: Your local chamber of commerce can tell you if any area businesses offer scholarships.
3. High school counselor: School counselors are a highly under-utilized resource. Your high school counselor likely has stacks of information about a wide variety of scholarships.
4. Public library: A librarian will be happy to direct you to your library's scholarship guides and resources.
5. Professional organizations: Know what you want to study? Contact professional organizations in your chosen career area and inquire about scholarships for related majors.
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What is Title IV Financial Aid?
Title IV financial aid is a blanket term that encompasses the various financial aid programs administered and backed by the federal government. Specifically, it is federal financial aid that is authorized by Title IV of the Higher Education Act of 1965.
The following are Title IV federal student financial aid programs:
- Federal Pell grants
- Federal Perkins loans
- Federal Stafford loans
- Federal Supplement Educational Opportunity Grant Program
- Federal PLUS loans
- Federal Work Study
To receive Title IV financial aid, start by filling out the Free Application for Federal Student Aid (FAFSA). The amount of aid you are eligible to receive depends on both your financial need as well as the availability of funds.
For more information about the different Title IV financial aid programs, visit http://studentaid.ed.gov/.
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Expected Family Contribution: What it Is and Why it Matters
Just as the name suggests, your Expect Family Contribution (EFC) is the amount of money your family is expected to contribute to the cost of your college education for one year. As a general rule, the lower your EFC, the more financial aid you are going to receive.
Basically, the purpose of the EFC is to determine your financial need. The calculation is pretty simple: your EFC is subtracted from your cost of attending college. The leftover amount is considered your financial need.
Your EFC is calculated through a specific formula created by the federal government. Factors that go into the calculation include the size of your family, the number of family members currently in college, current earnings and family savings.
So, where can you find your EFC? On your Student Aid Report (SAR), which you receive after your FAFSA has been processed.
The federal and state governments use your EFC to determine how much financial aid to award you, but they're not the only ones who use your EFC. Your EFC will also be sent to the financial aid offices of the schools you listed on your FAFSA, which the schools will then take into account when determining what type of financial aid package to award you.
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Ruckus Nation International Competition
The Ruckus Nation International Competition is a contest that asks participants to create an idea for a new product that would improve the lives of children all around the world. Contestants can participate as individuals or as part of a team.
The awards given to winning contestants are potentially quite large, with a maximum award of $50,000 and an average award of $25,000. Just under 50 awards are given out each year.
You can find out more by visiting www.hopelab.org or emailing a request for information to info@ruckusnation.com.
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The Skinny on Private Educational Loans:
When Scholarships and Financial Aid Aren't Enough
You've got some scholarships, and you've got some federal loans... but it's still not enough to cover all the costs of college. If you're finding yourself in this situation, a private educational loan might be the answer.
Private educational loans, also called alternative educational loans, are loans offered by private lenders, such as banks. Eligibility for a private educational loan depends on your credit score or the credit score of your co-signer.
Interest rates of private educational loans are higher than those of federal loans, so it's always wise to use up all your federal financial aid first - and borrow only what you need from a private lender. But private educational loans are less expensive than credit card debt, making them a good way to bridge the gap left after you've sought federal financial aid and scholarships.
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Federal Financial Aid: What is a Student Aid Report (SAR)?
A Student Aid Report (SAR) is a summary of the responses you gave on your FAFSA. You will be sent a copy of your SAR, and an electronic copy will be sent to the schools you listed on your FAFSA.
While the SAR does not tell you how much money you can expect to receive, it does tell you whether or not you are eligible for federal financial aid.
It is very important that you carefully review your SAR to make sure that all of the information is correct. If you come across any mistakes, simply correct them by writing the answer on the "Information Review Form" on the back of your SAR.
To learn more about the FAFSA and the SAR, go here.
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Federal PLUS Loans: A Quick, Straightforward Guide
PLUS Loans, also known as Parent Loans, allow your parents to take out a loan for the purpose of helping you pay for your education. To qualify, you must be a dependent of your parents, and you must be enrolled at least half-time as an undergraduate student at a qualifying university. These loans are provided by the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program.
It is possible for your parents to receive either the FFEL or Direct Loan, but not both. To apply for the Direct PLUS, they will need to fill out a one-page form application and a promissory note; to apply for a FFEL PLUS Loan, your parents must fill out an application, and your school must fill out an application as well. These applications and more information are available from your school's financial aid department. For either loan, your parents will also need to pass a credit check.
For more information on how much your parents can borrow, current interest rates, repayment policies and more, please visit the Parent PLUS Loan website.
Do you have more questions? Get them answered directly from qualified schools!
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Everything You Need to Know About the Federal Academic Competitiveness Grant
The Academic Competitiveness Grant is a scholarship provided by the federal government. Those who receive the grant can get up for $750 for their first year of undergraduate studies and up to $1300 for their second year of undergraduate studies.
The Academic Competitiveness Grant is a need-based scholarship that is available to undergraduates who completed a "rigorous high school curriculum." Specific criteria are used to determine what qualifies as a rigorous high school curriculum. That information can be found here.
There are several requirements that must be met in order to be eligible for this grant. One of the most important requirements is that you have also have received a Federal Pell Grant. A full list of the requirements, as well as information on how to apply for a grant, is available at the website listed above.
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5 Ways to Cut the Costs of College
Everyone loves to save money... and no place is a savings more appreciated than with the cost of college! We show you how to cut college costs with these 5 tips:
1. Start out at a community college: Tuition costs at community colleges are significantly lower than those of 4-year schools. You can save thousands of dollars by attending a community college for your first year or two of college and then transferring to a 4-year school.
2. Take advantage of tax credits: Check out the Hope tax credit and the lifetime learning tax credit for thousands of dollars worth of deductions on your federal taxes.
3. Buy used textbooks: In addition to local textbook dealers and your school's bookstore, don't forget to check for good deals online. Some textbooks are also available at a discounted price in an electronic version.
4. Negotiate a better deal: It's possible to appeal a financial aid offer from your college and get a better deal. Contact your school's financial aid officer if you receive a better offer from a competitive school or if your financial situation has changed.
5. Get credits anywhere you can: Take Advanced Placement courses in high school or pass College Level Examination Programs to get credit for college classes without ever taking the class.
Search by your desired degree for the perfect school that meets your interests!
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What is the Federal Supplemental Educational Opportunity Grant (FSEOG)?
The Federal Supplemental Educational Opportunity Grant (FSEOG) is a need-based educational grant provided by the federal government to low-income undergraduate students. Around 4,000 postsecondary institutions across the nation participate in the FSEOG program.
The financial aid administrators at these schools are given a great deal of leeway in determining how to make the awards. The main determining factor is that priority should be given to students who demonstrate an "exceptional need" and students who are also recipients of the Federal Pell Grant.
Like the Pell Grant, the FSEOG does not have to be repaid. Also like the Pell Grant, a student's financial need is determined by the U.S. Department of Education according to a formula set by Congress.
The grants range from a minimum of $100 to a maximum of $4000. To apply, simply complete a FAFSA. You can download a FAFSA by visiting http://www.fafsa.ed.gov/.
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Common Scholarship Scams... Don't be a Victim!
There are many scholarship opportunities available, so it is important to know the difference between a legitimate scholarship and a scam in order to avoid doing financial damage to yourself. Here are some scholarship scams to be aware of:
1. Scholarships for profit: It looks like an actual program but asks for a fee along with the application
2. Scholarship prize: Even though it tells you that you have won a scholarship, it requires you to pay something before you get the money.
3. Advance-Fee Loan: This scam asks you to pay a fee before you get the loan, which it offers to you at a low-interest rate and then ultimately fails to give you. Real loans take fees out of disbursement payments.
4. Guaranteed Scholarship Search Service: Avoid these services because they will promise a scholarship and then take your money without another word.
These are some hints that the Federal Trade Commission advises people to look out for:
- "The scholarship is guaranteed or your money back."
- "The scholarship will cost some money."
- "We'll do all the work."
- "I need your credit card or bank account number to hold this scholarship."
Check out some of our quality, featured Scholarships!
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How to Create a College Budget
To stay on track (stay out of debt!), you should prepare a college budget before you ever set foot in a classroom. Believe it or not, it's not nearly as bad as it sounds! You can create a college budget in these four simple steps:
1. Determine your income: Total up the amount of money you will have to spend over the course of the semester. Include job income as well as grants, scholarships and loans.
2. Determine your fixed expenses: Fixed expenses are the expenses that stay the same from month to month, such as rent and car payments.
3. Determine your variable expenses: The amount you spend on these items will be different each month. Variable expenses include things like groceries and entertainment.
4. Compare your expenses to your income: Add up all of your sources of income and subtract the grand total of all your expenses. If the two match up, great - you're done! If not, you'll have to do a bit of adjusting (i.e. rethink the daily $5 lattes).
Request tuition information directly schools that you can afford!
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The Federal Perkins Loan: Everything You Need to Know
The Federal Perkins Loan is a low interest loan made by the federal government to college students (both undergraduate and graduate) who demonstrate a financial need. To be eligible to receive a Federal Perkins Loan you must be enrolled at least half-time in a school that participates in the program. Note that not every college and university participates in the Federal Perkins Loan program, and the schools that do participate each have their own application process and deadline. Request information directly from qualified schools!
You actually apply for the loan in your school's financial aid office. Rather than the federal government itself, the school serves as your lender. Once you either graduate or leave school, you must begin repaying the loan after 9 months. Loan recipients have as many as 10 years within which to repay their Federal Perkins Loan.
Learn more about the Federal Perkins Loan.
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Top 5 Ways to Finance Your Education
Moolah, dough, greenbacks... whatever you want to call it, you've got to have it to get through college. We're talking about money, of course, and there are more ways to finance your college education than you might think.
So, did you recently find out there's no magic college trust fund waiting for you? Not to worry. Here are 5 ways you can finance your college education:
Scholarships - No surprise on this one, but do keep in mind that not all scholarships are based on academics. Some are based on extracurricular activities, leadership, skills or financial need.
Check out our featured scholarships!
Grants - Like scholarships, grants do not have to be repaid. Also like scholarships, eligibility can be based on any number of factors.
View a list of open grants!
Get a job on campus - The benefit of working on campus is that your supervisor will be willing to work around your class schedule...and there's no commute!
Search schools in your area!
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Top 5 Tips When Applying to Scholarships
Apply early and apply often - Scholarship applications have deadlines, and the easiest way to make sure you meet those deadlines is to submit your applications early. Also, apply for every scholarship for which you qualify. In today's tough economy, every penny counts.
Proofread your application and have someone else proofread it, too - One way to make the best impression and increase your odds of winning the scholarship is turning in an application that is 100% error-free. Typos, misspelled words and formatting problems don't make a good impression.
Read the instructions carefully and then follow them to the letter - If you don't comply with the instructions, your application might get thrown out. Another reason to read the instructions carefully is that every application is different. For instance, Application A may ask for 3 essays each 500 words in length, while Application B only asks for one but it should be 1000 words long.
Make sure your application is neat and clean - Print out (or obtain) two copies of the application. Practice with the first one because making a few mistakes the first time around is inevitable. Once you know exactly what to say and where to say it, then fill out the "official" application.
Be completely honest - Knowing that we're up against tight competition can sometimes create the temptation to embellish our accomplishments. If you are selected as a finalist, however, it is very likely that the selection committee will follow up on the information you provide. Dishonesty is a sure-fire way to lose out on scholarship.
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