Student Loan mistakes and warnings
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Loading ...The cost of college education in the US is a scary thing. It’s probably the second biggest expense of your life after buying a house but its interest rates are higher. The price of tuition for public college increased by 57% between 2000 and 2005 and it’s roughly the same with private colleges. Student loans are to be taken very seriously and unfortunately more often than not both parents and students are not well informed. Below are tips and warnings to be read carefully and used as guidelines in your search for student loans and financial aid.
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Be Quick
Whether you’re applying for grants, loans, scholarships, tuition, waivers or work study programs, don’t wait. The school has a limited amount of funding it receives every year that is redirected as financial aid to applicants. Find out the federal deadlines for applying as well as the school’s, which often differ from school to school and federal. Respect them, they’re important. Remember the old saying; the early bird catches the worm, well it’s no joke.
Put the right price on College
Use the financial aid office of the school(s) you hope to attend to assist you in calculating how much college will cost including books, tuition, fees, housing and so on. Why?
Because many students and parents over estimate the cost of college when applying for loans which in the end they are stuck paying in the form of interest and monthly payments. Knowing what the annual will be is also a preventative measure. Some elite schools like Stanford, Harvard and Princeton even waive tuition fees for low-income students. Applicants also tend to overestimate because they don’t pursue other financial options offered found at the financial aid office.
Make sure to fill-out the FAFSA
Every year financial aid is left with millions of dollars that could have been given to students in need because they fail to fill-out the FAFSA (Free Application for Federal Student Aid). Despite the fact that the majority of the money goes to low-income students not all of it does. FAFSA remains a concise way to evaluate any student’s eligibility to government grants, subsidized loans, scholarships and work-study programs. It must be filled out on a yearly basis and the sooner the better. Fill out the form correctly; failure to do so could be a costly delay. A common error; parents often enter their income and tax info in the student section and vice versa.
Don’t be afraid to search for scholarships
Too many assumptions are made that scholarships are only tailored for the brightest and most talented. This is false. Scholarships exist for a number of needs, many of them not merit based but need based and targeted towards particular situations such as; career-specific and demographic-specific for students of a certain nationality, gender, religion or family situation. Some scholarships are even decided upon by a drawing or a written essay. There are many scholarships out there and even if you’re only in high school start doing some research now, don’t wait till the last minute
Ask for all the potential lenders
In June 29, 2007 the U.S. Department of Education sent a letter to 900 colleges and universities across the country for what seems to have been an unhealthy relationship between the schools and federal lenders. It was estimated that 80 percent of student loans were funded by the same lender. Financial aid officials were warned of the possible penalties the school could face if they do not present students and parents with all possible lenders and steer them towards a particular one.
be careful when applying to attend an elite school
If a student is permitted to apply months before the majority on a promise to attend if admitted they are being given better odds attending, but at the same time they are committing and therefore loosing all power of negotiation when it comes to getting aid. This is to the schools advantage and they know it, be careful.
In conclusion
organization, an early start, respecting timelines and research can go a long way in getting a realistic handle on costs and your eligibility for loans and financial aid. Don’t forget to ask for timeframes on answers for financial aid packages especially if you have applied to several schools. Inform yourself ahead of time on how the school, federal loan or private loan lenders expect to be paid. The financial aid office is there to inform and assist you, take advantage of it.
