Here’s a great infographic that applies to the recent student loan news. The only “myth” that I might question is #5-Student Loans aren’t worth it. While the statistics show that college graduates do earn enough more over their lifetime than high school graduates, you have to be savvy about the amount of money you borrow and your ability to repay it.
Created by: Online Graduate Programs
I received this email from the Institute for College Access and Success. It was a press release issued on President Obama’s speech yesterday.
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Yesterday the Obama Administration announced important and timely new steps to help struggling student loan borrowers. We applaud the Administration’s steps to make more federal loan borrowers aware of Income-Based Repayment and to provide additional repayment relief for up to 1.6 million current students, including a lower monthly payment cap and loan forgiveness after 20 rather than 25 years of responsible payments.
IBR has already helped nearly half a million borrowers lower their payments and avoid default, but many more borrowers are struggling to keep up with their payments in these tough economic times and could benefit from IBR and the proposed Pay-as-You-Earn option.
By encouraging more borrowers to convert their bank-based federal student loans to more cost-effective Direct Loans, the changes announced today will also help more people qualify for Public Service Loan Forgiveness. Those working for a public or nonprofit employer could see their remaining debt forgiven after just 10 years of payments. Borrowers with bank-based federal loans must already convert them to Direct Loans for their payments to qualify for Public Service Loan Forgiveness.
The Administration took two additional steps to help students and families decide where to go to college and how to pay for it. The new model financial aid disclosure form, or draft “shopping sheet,” is designed to make it easier to compare the real cost of different college options. The new Student Debt Repayment Assistant will help current borrowers with both federal and private student loans, as well as those about to enter repayment, better understand their options.
With these changes on the way, it’s more important than ever to make sure that the millions of borrowers who could benefit from IBR know it’s out there. With the class of 2011 about to face their first student loan payments, there’s no time to waste.
IBR has been available to borrowers since July 2009. For more about how IBR and Public Service Loan Forgiveness work and how to apply, see our consumer website:www.IBRinfo.org.
For more on the Obama Administration announcement, please visit the White House website.
Here’s some advice from Ellie Kay, America’s family financial expert, geared specifically toward parents about how to help their students graduate from college debt-free. As we all know, student debt is a major problem for recent graduates across the country. Currently the total student loan debt in America exceeds 1 trillion dollars! It can be difficult to graduate debt free, but if you have the right advice and common sense it can be done!
Hearing from a financial expert is great, but hearing from a parent who has been able to apply wise financial advice and help her kids graduate debt-free is even better!
If you have kids, then chances are you’ve already thought about college affordability and how or if you’ll be able meet the expenses associated with higher education.
But you shouldn’t allow the worry of college costs to consume your life. There are many practical and successful ways to pay for college (without drowning in debt) no matter what your income level may be.
Many families labor financially to make ends meet and they feel like it will be impossible for their children to attend a 4-year university. This simply isn’t the case. I’m not saying it’s going to be easy, but there are ways to send your children to college on just about any level of income.
Anyone can save money for college; all you need is to remove the excuses from your life. Starting with financial basics, the best way to begin saving for college is to pay off all your debt (or at least live within your means and be actively involved in a debt payoff plan). Sound too difficult you say? That sounds like an excuse to me.
Living with debilitating debt and allowing bills to circle your life like a vulture is a surefire way to live paycheck to paycheck and never have the available funds to save for college. What I’m trying to say is this: paying for college isn’t some magical happenstance that you uncover on some random day. It’s going to take hard work, and in some cases, a change in your financial landscape.
Regardless of your current income level, you have the ability to save for your children’s college fund. You might have to trim your expenses, adjust your spending habits, and redirect your lifestyle in order to free up money for the college fund. But if you want to send your kids to college without financing 100% of their education with borrowed money, then you’ll have to decide what’s more important.
Think of it like this; if you can scrounge up even $100 a month to save for your child’s college when they’re born, you’ll end up with $21,600 (and that’s without interest or anything). Sure, that might not pay for 4 years of tuition, room, and board, but it’s definitely a great start.
A 529 Plan is a tax advantaged college savings account designed to encourage families of any income level to save for their children’s education. 529 Plans are “qualified tuition plans” sponsored by states, state agencies, and educational institutions and are authorized by section 529 of the IRS (hence the name 529 Plan).
The encouragement to save for college within a 529 Plan comes in two forms: the ability to save money free from Federal taxes and the ability to receive a deduction on State taxes. One benefit to a 529 Plan is that anyone, upon creation of the account, can be named the account’s beneficiary, regardless of age.
The 529 Plan is a lot like a Roth IRA for your college savings fund. The savings will grow tax-deferred and any withdrawal is tax-free as long as you use the money withdrawn for qualifying educational expenses.
A Coverdell Educational Savings Account (ESA) is another tax advantaged college savings account which is meant to inspire families to save for future educational expenses. The difference between an ESA and a 592 Plan is that an ESA’s beneficiary must be a student under the age of 18.
An ESA also has a maximum annual contribution limit of $2000 and the owner of the account has the freedom to choose what types of securities they would like to invest in (stocks, bonds, ETFs, mutual funds, etc.).
With both types of college savings accounts, you’ll incur a hefty 10% tax if you withdraw any amount of money from either account and use it for non-education related expenses.
No matter how much or how little you’re able to save for your child’s college education, you’ll always want to be aware of and informed about college grants and scholarships. After all, this is free money we’re talking about.
Scholarships are offered by high schools, colleges, and other organizations usually recognizing some sort of educational, athletic, or humanitarian achievement. Scholarships vary by amount and length. Some are one-time gifts and others are recurring payments made as long as grades and other collegiate performances are maintained.
Information about college scholarships is usually available from your high school, your hometown city hall, and the university you wish to attend. You can also search for scholarships on the web. Some of these scholarships may be smaller than a say a university’s alumni scholarship, but $500 here and $1000 there really starts to add up.
Grants are another “free money” option. The government offers need-based grants to families with a low income. Other organizations are free to offer grants to students that show academic promise or that meet other requirements.
There are numerous kinds of financial aid and student loan programs available, but these loans should be your last resort when it comes to financing college. I’m not saying student loans are bad, but financially responsible parents won’t rely solely on borrowed money to fund their children’s college. As I mentioned earlier, if you save even $100 a month, you can drastically cut the amount of money you need to borrow to send your child to college.
There are Federal Stafford Loans, Perkins Loans, Plus Loans, and numerous other student loans available from private institutions. If you qualify, you can apply for subsidized student loans that are basically interest free until you graduate and begin loan repayment. FAFSA is your Free Application for Federal Student Aid.
Jamie Scott from CreditDonkey also reminds you that while “student credit cards are a convenient option to help students pay for short-term small expenses such as groceries,” there are other options available for long-term larger expenses such as tuition.
The bottom line is that you’ll probably use two or three different sources to fund your child’s college expenses. Don’t give up just because of your low income and don’t think that your high salary will always be there for you. No matter where your income level is at, research, preparation, and responsibility will go a long way when it comes to saving and paying for college.
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Today’s guest post is from Jamie Scott, social media advocate with CreditDonkey. Jamie helps parents and students prepare for college by evaluating student credit offers. As a parent herself, she knows all too well the concerns most families have about responsible credit usage.
My good friend Jeff Sheely over at the College Money Insider created this amazing Infographic about the college admissions process and what it takes to accomplish your goal of attending college.
If you’re a parent of a college-bound teen you may be asking yourself the same question, especially as it relates to paying for the education. You might want to jump over to my blog at CollegeParenting.com (The #1 Question Parents Ask Me) to check out my suggestions and then take a look at Jeff’s infographic to help you visualize the process.
Being a College Prep Expert at CollegeExpertPanel.com has put me in contact with some other experts in the field of college admissions. This contact has given me the opportunity to once again, give you the BEST information from the BEST sources, helping you to help your student apply to college and get accepted.
When I find a product that can save you thousands of dollars on tuition, I get so excited because I know that you, as a parent, are in need of some financial relief. Let’s face it, even if you have saved and planned, who can’t afford to avail themselves of every opportunity to save money? On the other end of the spectrum, if you haven’t been able to gather a small fortune for college, tools that allow you to finance the education without parent loans are a godsend.
Monica Matthews’ “How to Win College Scholarships: A Guide for Parents in 10 Easy Steps” is one of those godsends. I have read this short, concise book and I can tell you she makes it EASY to hit the ground running, get organized, and help your student find those scholarships. She falls into a class that I like to call “parent advocates”. We are the ones who have done the leg work, succeeded, and want to pass on our parent related expertise to other parents. Monica has done the leg work in the scholarship search process. She found herself in that awkward place with her son–a promising student aspiring to college, and parents who wanted to support that decision financially.
Instead of taking out loans, or going back to work full-time, Monica opted to spend her time helping her son search, find and apply for scholarships. In 10 easy steps, she outlines the process she took, gives you bottom line tips along the way, and provides you with some “out-of-box” tools to help your student stand out with the scholarship committees. She addresses all the aspects of scholarship applications from essays, to recommendation letters, to transcripts, to the application completion and delivery.
The best part about Monica’s e-book is that it’s simple and easy to understand. If you follow her easy 10 step program, the scholarship process becomes doable for any parent and their student. You can sit back and hope that your student does all the work, or you can offer help and support by grabbing a copy of Monica’s book, reading it, and rolling up your sleeves.
Who wins? Your student will win by graduating without debt. You will win by helping your student find and win those scholarships for their undergraduate and online MBA degrees. Once those winning letters begin to flood your mailbox, you’ll be glad you took my advice and added Monica’s e-book to your college admissions library.
Grab yourself a copy TODAY–>How to Win College Scholarships: A Guide for Parents in 10 Easy Steps
FOR THOSE WHO ATTENDED (OR MISSED) THE WEBINAR LAST NIGHT
The recording of last night’s webinar is up. This webinar will remain up until February 1st for viewing.
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Tonight is the night that Paul Hemphill, college cost saving guru and parent advocate, teaches you How to Pay Less for College. As a parent advocate myself I appreciate Paul’s keen insight into the parent’s dilemma–Help! How can I send my kid to college and protect my retirement, assets and not go broke in the process?
A sidenote: You know I wouldn’t steer you wrong. The webinar is FREE. You will learn how to look at financial aid differently and learn how to take charge of the process. PLUS, Paul (just for me) is throwing in an amazing FREE bonus at the end of the webinar that you absolutely don’t want to miss out on.
It’s a win-win for you and an hour of your time that will be well-spent.
To go along with tonight’s webinar, I’ve also posted an article (just to wet your appetite): 10 Tips to Cut College Costs
Even though Christmas has passed and we’re thinking about New Years, I’m continuing my College Helper series because my decorations are still up! And…there are plenty more helpers to add to the list.
Today’s College Helper is Jeff Sheely of Overture Marketplace (who looks quite spiffy in his elf attire). I can’t say enough about the help this guy provides to students and parents of college-bound teens. His “Free Guide to Smart Borrowing” is a must read for every family. His blog is jam-packed with useful information about loans, making wise financial choices, and budgeting during college. His site is not just another site peddling student loans. It’s a site dedicated to helping parents understand the often overwhelming loan process. It provides the comparison tool that helps students choose which one is best for them. In fact, it’s the only comparison tool that shows students the actual rates and terms they’ll get from the lenders – everyone else shows “as low as” rates that can be very misleading.
If you’re a parent of a college-bound teen, bookmark Jeff’s blog, his site, and follow him on Twitter and Facebook. He’s a stand up guy offering you the best information about loans to help you make an informed decision.
In just under a month, it will be time to file your Free Application For Student Aid (FAFSA) for the 2011-12 school year. The FAFSA is the key to accessing your Federal Student Aid – including grants, work-study and Federal loans – and other valuable financial assistance. Whether or not you think your family will qualify, you should always apply for aid; you might be surprised at the results!
To help you make sure that you do everything necessary to get your college aid, below is a list of tips for preparing the FAFSA for submission. These are just the basics – there’s a much more detailed checklist at the bottom of this post.
If you have any questions, please feel free to reply in the comments and we will do our best to help you out!
Where to File
Starting January 1, 2011, the 2011-2012 FAFSA can filed online or downloaded at http://www.fafsa.gov. Some high schools may also have printed FAFSA forms available.
1. Determine Who Will File: You or Your Student?
The FAFSA is filed in the name of the student – the one who will be receiving the financial aid. You may submit the FAFSA on behalf of your student.
Regardless of who does the actual filing of the FAFSA, the student’s signature is always required, and if the student is considered a dependent, at least one parent must also sign.
2. Determine Dependency Status Ahead of Time
Every student who applies for financial aid with the FAFSA will either be considered a dependent or an independent student. There is a special worksheet created to determine dependency status.
To access the worksheet on the FAFSA website, click here.
NOTE: The current version is for the 2010-11 school year, but there are not likely to be major changes for 2011-12.
3. File Your Tax Returns Early
In order to complete the FAFSA fully, parents of dependent students and students who worked during the past year need to have their 2010 tax return information ready.
4. Gather Documents Before Starting
Filing the FAFSA will be much easier if you have everything together before starting. For the 2011-2012 school year, you’ll need the following documents:
5. Use the FAFSA on the Web Worksheet
The FAFSA on the Web Worksheet is a convenient way to organize all of the required information you’ll need to fill out the FAFSA. To access a PDF version of this worksheet, click here. (Note that the 2011-2012 worksheet isn’t available yet)
6. Apply for FAFSA PIN Now
In order to file your FAFSA form electronically online, you will need to sign it. This can be done electronically with a PIN, or you can print, sign, and mail in the signature page which will be provided to you when you complete the FAFSA. Both students and parents need to sign the FAFSA.
See the Department of Education’s FAFSA PIN website for more information.
Questions?
If you start preparing now, filling out your FAFSA on January 1st will be a breeze! If you have any questions or need additional guidance, feel free to reply in the comments below. We look forward to helping you!
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This guest post is contributed by Jeff Sheely, who blogs about financial aid and education financing at Overture Student Loan Marketplace, where students and parents can get information or compare private student loans to make more informed decisions about how to pay for college.
He’s happy to answer your questions in the comments, or you can connect with him on Twitter or Facebook.
The Center for Student Opportunity created the College Access and Opportunity Guide to help low-income and first generation college-bound students make their college dreams become a reality. As a parent, I found this guide informative and helpful in providing direct information about the college admissions process.
There are helpful tips on how to stay involved in the college process without overstepping your boundaries. The guide clearly sets out the steps to take from beginning to end, along with insider advice from college students and other experts. There is clear discussion about loans, scholarships and how to find the perfect fit college. Also included is an excellent section specifically directed towards parents helping them to listen, encourage and how to let their college-bound teen handle the process by guiding them through the process.
But the real meat of this guide is the college specific information. The guide features 284 colleges and universities highlighted for their outreach efforts, financial aid opportunities and student support services. Instead of focusing solely on the numbers, this guide helps students locate and find important programs at each school that can help prepare for college (Access Programs), locate schools that provide financial incentives for admitted students (Opportunity Programs), and support services for college students to help them persist to graduation (Success Programs).
Each of these colleges is committed to supporting first-generation, low-income, and minority students on their campus and in their community. Profiled colleges are included in light of the programs and opportunities they present for this group of students.
If your college-bound teen falls into this group who want to make their college dreams a reality, you should pick up a copy of this simple-to-read and understand guide.
For more information about the Center for Student Opportunity you can visit them on their website at www.csocollegecenter.org.