For many college graduates dealing with student loan debt, the early days of budgeting loan payments on top other costs of living can be difficult. Finding where rent, food and other discretionary expenses fit into their finances often means that recent grads are skipping their loans, which can often lead to snowballing that impacts both credit and future finances.
In order to help better adapt to this difficulty, the federal loans (and many private loan companies) offer students a variety of loan repayment programs. One common type, income-based repayment, helps grads by capping their loan payment amounts at 15 percent of their discretionary income (based on the difference between adjusted gross income and 150 percent of the poverty guideline for family size and state of residence).
While these types of programs provide a payment amount that is lower than a standard 10-year repayment plan, income-based repayment plans lead to paying more than the original loan amount due to the accrued interest over time.
A new program called Revised Pay As You Earn, or REPAYE, looks to offset some of these drawbacks by capping monthly student loan payment amount at 10 percent of a borrower’s monthly discretionary income. Further, the plan will forgive remaining debt after 20 years for those who borrowed only for undergraduate study and 25 years for those who borrowed for graduate study. This will help with the extended amounts of accrued interest that borrowers pay under other income-based repayment plans.
Another benefit for borrowers under REPAYE further addresses accrued interest by giving a new subsidy benefit to prevent ballooning loan balances for those whose income-driven payments cannot keep up with accruing interest.
The new program goes into effect in mid-December, 2015. For more information on the REPAYE program and how to enroll, please visit the U.S. Department of Education’s website
After completing their applications during College Application Month, students looking toward the next step in their education face an even more daunting challenge: finding the best way to afford that education. A wide array of both state, federal and private financial aid and scholarships is available for students either starting or continuing their journey after high school, but frequently a great deal of those scholarships go unclaimed due to students not applying. Often students avoid scholarship applications because they think that scholarships are only for those students at the top of their classes or for other students whose families are in the most dire economic need.
While many organizations create scholarships to help specific types of students based on any number of factors including interest, background or ethnicity, other organizations, such as the Jack Kent Cooke Foundation, offer scholarships to a wide array of students looking for assistance in affording their college education.
Three programs available to students from the Jack Kent Cooke Foundation reflect the variety of students who can benefit not just from the organization’s scholarships, but from many other private scholarships. Jack Kent Cooke Foundation proclaims that their group provides “the largest scholarships in the nation to high-performing students with financial need.” The foundation considers household incomes of up to $95,000 as being in “financial need,” noting that many applicants for their scholarships will also be eligible for Pell Grants.
The Foundation’s two most notable scholarships are the College Scholarship Program and Undergraduate Transfer Scholarship, both offering awards of up to $40,000 per year to students to help afford tuition, living expenses, books and other required fees at a 4-year college or university. The College Scholarship Program is available to U.S. high schools students graduating in the coming spring and intending to enroll full time at an accredited 4-year college the following Fall. The Undergraduate Transfer Scholarship is for current students at a community college are already enrolled in a 2-year institution with plans to transfer to a 4-year college or university the following fall. Both programs seek students who have a 3.5 GPA or better and, in the case of the College Scholarship Program, score in the top15% on standardized tests.
In hopes of creating students who can best take advantage of these programs, Jack Kent Cooke Foundation also offers a Young Scholars Program that provides individualized academic advising and financial support through an on-staff educational adviser who works closely with students in the program and their families to help tailor student interest and strengths while developing unique goals that will help them succeed in college. Each year, the Cooke Foundation selects up to 65 Young Scholars from a nationwide applicant pool based on a variety of qualifications that include high academic achievement and financial need, but also leadership skills, drive and persistence and the desire to help others.
For more information on these programs, or to learn more about the Jack Kent Cooke Foundation, visit their website at http://www.jkcf.org/.
As Iowa’s economy continues to grow strong, a new term is becoming increasingly prevalent in the conversations about preparing students for the workforce: “Skills Gap.” For many of Iowa’s industries, the education and training that students receive during high school, and even from colleges and universities, doesn’t prepare them for many of the technical jobs that are available for students today. In order to help meet this demand, Gov. Terry Branstad’s “Goal 2025” stresses the need to parlay Iowa’s nationally-renowned high school graduation rate into an equal increase in degrees and credentials by 2025.
Registered Apprenticeship Programs are one such route for students looking to enter the workforce after high school while still finding the long-term financial benefits of a credential or degree without the demands of student loan debt. A national movement to recognize the benefits of Apprenticeship Programs and encourage students to take a closer look at what such programs offer is taking place November 1-7 during National Apprenticeship week. Iowa’s Registered Apprenticeship Program offers many options for students looking to help bridge the “skills gap” and be part of a thriving workforce.
Registered Apprenticeship is a proven system for training employees in a variety of occupations that require a wide range of skills and knowledge. Combining supervised on-the-job learning with technical related instruction in subjects related to the apprentice’s chosen occupation, Registered Apprenticeship offers a way to meet the demands of Iowa’s growing workforce while providing students of all ages a training that allows them to start earning a living right away.
Registered Apprenticeship is highly active in traditional industries such as construction and advanced manufacturing and is also instrumental in the training and development of high demand industries such as healthcare, energy and information technology. The “Earn and Learn” training model provides a unique combination of structured learning with on-the-job training from an assigned mentor in one of more than 1,000 apprentice occupations, with new occupations being added. Related instruction, technical training or other certified training is provided by apprenticeship training centers, technical schools, community colleges and/or institutions employing distance and computer-based learning approaches.
Upon completion of a Registered Apprenticeship program participants receive an industry issued, nationally recognized credential that certifies occupational proficiency and is portable. In many cases, these programs provide apprentices with the opportunity to simultaneously obtain secondary and post-secondary degrees.
Programs are operated by both the public and private sectors. A sponsor may be employers, employer associations and labor-management organizations. Recently, community colleges and workforce development centers have collaborated with business and industry to develop Registered Apprenticeship programs through sponsoring employer-participation agreements.
For more information on Iowa’s Registered Apprentice Programs, visit Iowa Workforce Development’s website.
Earlier this Fall, President Obama renewed interest in College Scorecard a searchable online database that allows students to compare schools from across the country based on more than just tuition. Combining the impact of financial aid, repayment rates and more, College Scorecard is a great tool for students looking to research their options for continuing their education after college.
But in the weeks after the release of the updated service, College Scorecard has faced criticism that reflects the need for a broader approach to helping students with college “fit,” finding the college that is right for their needs, both academically and financially. From concerns about how colleges report loan repayment rates to claims that community colleges are being given a lesser presence in the College Scorecard system, a reinvigorated interest in providing information to make better informed students has highlighted not only the cracks in College Scorecard, but also major issues in higher education that have long needed national conversation.
A recent report by Priceonomics reflects another issue: dealing with the tendency of College Scorecard to highlight highly-selective schools for lower-income students. In “Ranking the Best (and Worst) Colleges for Low Income Students,” the group not only addresses the political nature of the recent changes to College Scorecard (and where they feel changes were made that benefit colleges over students) it discusses the reality of facing low income students who choose a school without factoring in elements such as “cost” over “tuition” and low-income graduation rates.
By creating a new formula, Pricenomics creates a significantly different list of schools that are the best economic fit for low-income students. The University of Iowa lands at number 12 among their top 25 schools, where it does not crack the list in College Scoreboard’s. The report does go on to suggest the obvious impact of public schools in their list, writing that they did not factor in the difference between in-state and out-of-state tuition which likely impacted the list.
However, when applying the same formula to private colleges and universities, the list again skews significantly from College Scorecard, with only two of College Scorecard’s top schools for low-income students (University of Pennsylvania and Duke University) making the list, at numbers 1 and 3.
The end result of such work being done in light of the increased presence of College Scorecard shouldn’t be seen as a condemnation of the federal website. Rather it should be celebrated as organizations expand information and address the issues that many students face as post-secondary education becomes increasingly vital both on state and national levels.
Read the complete report here.
As we come to the conclusion of College Application Month, many students are putting the final touches on applications that will lead them to the next step in their educational journey. While the national conversation around the importance of continuing education past high school gains much attention, so to does the issues surrounding paying for it. Regardless of politics, the fact remains that paying for college stands as one of the biggest challenges for students and their families.
Getting a head-start on putting together a financial plan is always a good idea for any prospective student. Here are some tips for families to consider now to ensure that they limit the amount of student loan debt accrued while still in school:
Borrow only the amount you need
Many borrowers make the mistake of taking out more loans than necessary. To avoid doing this, create a budget to determine how much loan money will be needed and avoid using loan money to pay for unnecessary expenses, such as trips to the movie theater or expensive dinners.
Consider a part-time job
If a student’s academic schedule allows, they should consider finding a part-time job on campus to help supplement the cost of unexpected expenses. Be sure to check with the financial aid office to see if students qualify for work study, which gives the opportunity to work on campus.
Compare award letters
Once a student receives their financial aid award letter, compare loan offers by reading the fine print. If federal loans are not enough to cover the cost of education and a student is considering private loan offers, be sure to shop around for the best interest rates and repayment options.
Take college credit while in high school
Taking AP, dual credit or college credit courses while in high school can give students a head start on achieving your intended major. Find out the general education requirements at the college a student plans to attend and take courses that will fulfill those requirements. Doing this can help students graduate from college early, which means borrowing less in student loans.
Consider paying loan interest while still in school
Students who start making interest payments on their student loans while still in college will reduce the total amount they have to repay after graduation. Interest payments are usually manageable. By paying off interest as they go, students can keep outstanding interest from capitalizing on any balances. Allowing interest to capitalize increases loan balances essentially requiring students to pay interest on the interest that has been accrued!
Apply for scholarships
Scholarships can pay for portions or all of a student’s education during an academic year. But students can’t earn scholarships if they don’t apply! Find scholarships specific to a school or department by talking to a representative from the school’s financial aid office or department chair. In addition, the following sites are just a few places to check for scholarships:
- I Have A Plan Iowa® – www.IHaveAPlanIowa.gov
- Fast Web – www.FastWeb.com
- Big Future by the College Board – https://bigfuture.collegeboard.org
- Sallie Mae Scholarship Search – www.salliemae.com/scholarships
- Scholarship America – https://scholarshipamerica.org/
Choose a school that fits into the family budget
Review the financial aid packages from the colleges where students applied and consider how much needs to be borrowed in order to attend each. Keep the goal in mind and select a college where loan debt can be kept at a reasonable level against future income potential
How can students avoid leaving college with unaffordable levels of student loan debt? With the rising cost of tuition at Iowa’s colleges and universities outpacing median household income in Iowa, it is not surprising that families are seeking ways avoid high debt levels. Earning college credit while in high school is one way to reduce the length of time it takes to graduate from college, thus reducing the need to borrow additional student loans. In Iowa, school districts offer a variety of programs designed to provide high school students access to courses that have the potential to generate college credit through the Iowa Department of Education’s Senior Year Plus programs¹.
Senior Year Plus programs include:
Community college courses are offered to classes of high school students in the 9th through 12th grades through the concurrent enrollment program. The classes are college classes even though they may be held in a school district classroom. The instructor may be a community college instructor or a high school instructor employed by the school district who meets state and college faculty standards and requirements. Students earn both college credit and high school credit which applies to high school graduation requirements.
Advanced Placement (AP®)
AP® courses are college-level courses available to high school students, most often in their junior or senior years. Students choose among 34 classes provided through The College Board. Many colleges grant credit, advanced placement or both to students with high AP® exam scores. Students interested in taking AP® classes should talk to an AP® teacher or coordinator at their school to talk about courses they want to take.
Students who attend Iowa schools that do not have the capability to offer AP® classes on-site can still take advantage of AP® courses offered through the Iowa Online AP Academy. Students can enroll in the online courses through their local school district. Students enrolling in Iowa Online AP Academy classes are asked to designate an on-site student coach, through which their school can provide on-site support and encouragement to each student or group of students. Student grades are awarded by the student’s home school, based on the recommendation of the Iowa Online AP Academy instructor.
Postsecondary Enrollment Options (PSEO)
PSEO allow students in the 11th and 12th grades (as well as 9th and 10th grade students identified as talented and gifted) to enroll in college courses. Students who successfully complete a course earn college credit, and also high school credits for those courses that meet district graduation requirements. School districts pay for the cost of the course or $250, whichever is lower. Parents or guardians are responsible for transportation to and from the postsecondary institution. Iowa Regent Institutions (Iowa State University, University of Northern Iowa, and the University of Iowa), Iowa community colleges, and certain accredited private colleges and universities are eligible institutions in Iowa’s PSEO program. Students interested in the PSEO program should check the process established at their school district.
Career academy programs in Iowa integrate academics and technical instruction which utilizes work-based learning where appropriate. The goal is to prepare students for entry and advancement in a high-skill career field. These programs combine a minimum of two years of secondary education with an associate degree in a career preparatory program. Students in career academy programs graduate from high school with the class in which they were enrolled.
In-state students who take longer to graduate from one of Iowa’s public universities typically owe, on average, over $16,500 for each additional year in tuition, fees, room and board, books and supplies. Students attending private colleges or universities who take longer than four years to graduate might incur over $32,000 for each additional year it takes to earn a bachelor’s degree². The Senior Year Plus programs described above provide students with the opportunity to earn college credit while in high school which helps them to stand out in the college admission process and ultimately reduces their college costs.
Students can learn more about the programs available at their school through their high school counselor or designated AP® coordinator.
¹Iowa Department of Education, “Senior Year Plus Guide for Educators and Educational Administrators,” 2009.
²Iowa College Student Aid Commission, “Typical Full-Time Undergraduate Student Expenses at College and Universities in Iowa,” 2011-2012.
As students complete their applications to schools during College Application Month, a major step toward standing out from the crowd of applicants at your preferred college is a strong resume. You know you’re a great catch for any school, but how can you let schools know? A killer college resume can show admission officers all the hard work you’ve done in and out of the classroom over the years. And just like you, a college resume is a living thing, able to be changed and updated at a moment’s notice. Having a strong resume doesn’t just give schools a clear picture of what makes you you, but will also help you find new roads to potential scholarships based on your interests and experience.
It’s always best to start your resume ahead of time as keeping track of your activities over the years will make it easier to have your list of activities at your fingertips come senior year. But for those starting their resumes under the gun, don’t fear. Keep these tips in mind to help your resume stand out:
Extracurricular activities aren’t just for school
Outside-of-the-classroom activities doesn’t just mean sports, clubs or programs connected with your school. The things that make you unique can be as diverse as playing in band with friends, starting your own community service group or doing work with your church. The more a college sees that you are engaging with the world around you, the more they will see you as an ideal candidate
Take pride in your achievements
No one likes a braggart, but a resume is not the place to be humble. You don’t have to be winning State Championship trophies, though, for accolades to make the cut on your resume. Make sure to point out any achievement from Dean’s List, honor roll or team MVP to Eagle Scout, high honors or first chair. Even awards like “most improved,” “most inspirational” or regional qualifier will stand out because it shows that even though you weren’t a “champion” you still worked hard and excelled. Don’t have many (or any) items in this category? Don’t worry. Just make sure you have items to list in other sections.
Hobbies and interests can be just as important as work
Colleges know that students can learn a lot from working in either paid or unpaid jobs during school and/or over summer vacation. Getting real world experience putting the skills learned in school is invaluable. But don’t be afraid to also include the things about you that make you unique, especially if they don’t fit into other categories. Like to help rebuild classic cars? Add it! Never miss a cooking show and have a knack for making a mean souffle? Let them know. Sometimes you may be using your interest in volunteer situations without even knowing it. So consider the things that you love doing as things colleges will love about you, too.
Keeping your resume up to date each semester is a great way to not let any of your experiences slip through the cracks. Over time, your resume grow and give you the opportunity to whittle it down, removing some things and letting the things that are the most important stand tall.