For families and high school students, having a good gameplan for getting to, paying for and succeeding in college is valuable. That’s why we’re here to help.
Iowa College Aid’s annual “Your Course to College” guide will ship to schools and families later this month, but we’re taking the opportunity to preview some highlights and some of our favorite tips found in the guide. This week, tips to finding the best sources of funding for your college education. To find more previews and sign up to receive your copy of “Your Course to College” in print or download, visit our “Your Course to College” page at IowaCollegeAid.gov.
There are many ways to pay for a college education, and the financial aid process is not as complicated as most people think. Most students attending Iowa colleges and universities receive some form of financial assistance.
After you submit your college applications, complete these four steps:
1. Submit the FAFSA
To qualify for most financial aid, you must complete and submit the Free Application for Federal Student Aid (FAFSA). The fastest and most accurate way to apply is online at fafsa.gov. The FAFSA will gather information about your finances, your family’s finances and your college plans. You can complete the FAFSA for 2018-19 beginning October 1, 2017, using 2016 tax information.
2. Submit the Iowa Financial Aid Application
The Iowa Financial Aid Application allows you to apply for multiple state-administered aid programs with one application. Click the Iowa Financial Aid Application button at IowaCollegeAid.gov.
3. Decide on a College and Accept Aid
All colleges that you list on your FAFSA will send you a financial aid award letter if you are offered admission. Award letters will describe the financial aid package each college can offer. When comparing aid packages, consider how much assistance is from scholarships and grants (which do not have to be repaid) and how much is from loans (which must be repaid).
To accept the financial aid package offered by a college or university, follow all instructions. This might involve entering aid amounts you intend to accept in an online form or signing and returning a paper award letter by a specified deadline. Talk to the financial aid office at the college or university if an unusual circumstance delays your response.
To officially accept a college admissions offer and reserve your place, submit your deposit by the college’s reply date. May 1 is the date for most colleges.
4. Apply for Scholarships
Continue seeking and applying for outside scholarships. Think of it as a part-time job. If you spend 20 hours on scholarship applications and receive one worth $1,000, you just made $50 an hour for your efforts!
Reputable education organizations will NOT charge for scholarship searches.
With helpful tips on preparing for, and succeeding in college, Iowa College Aid’s annual “Your Course to College” has become a valuable resource for students, families and high school counselors throughout Iowa. The 2017-18 edition of “Your Course to College” will be available later this month, so we’re taking the opportunity to preview some highlights and some of our favorite tips found in the guide. This week, ways to research college visits and get the most out of your trip to a prospective campus. To find more previews and sign up to receive your copy of “Your Course to College” in print or download, visit our “Your Course to College” page at IowaCollegeAid.gov.
Visiting a college is the best way to find out if a particular school is the right fit for your future. Attending a college that doesn’t meet your academic, financial and personal needs can create real challenges to achieving your educational and career goals. While a campus tour won’t tell you everything you need to know when trying to determine college fit, it will go a long way to letting you know both what college is like and what life would be like for you on that campus. Here are some tips to get the most out of your college visit:
- Some colleges might be too far away. Start with virtual campus tours. Check the college’s website or look into online sites such as ecampustours.com and campustours.com.
- Take a campus tour, check out housing options and explore the surrounding area.
- Schedule a visit with the financial aid office.
- Get a feel for college life by eating in a campus cafeteria and staying overnight in campus housing.
- Sit in on a class that interests you.
- Talk to a professor in your intended field of study.
- Ask current students about campus life.
- Read the campus newspaper.
- Visit with advisors and members of clubs and activities that interest you.
- Document each visit, including any feelings you have.
For most students graduating from college, financial aid debt is reality that can impact everything from buying a house to starting a family. Fortunately, there are a number of loan repayment and forgiveness programs that help those graduates in certain fields help pay down their student loan debt in return for their work.
Programs are available on both the federal level and in the state of Iowa for those in the education, public service, healthcare and legal professions. However, the qualifications for these programs are often specific or require that the employee work in a specific geographical or subject area in order to obtain the award. Here are some loan forgiveness and repayment programs open to Iowa graduates:
- The Teach Iowa Scholar (TIS) Program provides qualified Iowa teachers with awards of up to $4,000 a year, for a maximum of five years, for teaching in Iowa schools in designated shortage areas. Qualified teachers are those currently teaching in designated shortage areas who meet all eligibility criteria. Find out more here.
- The federal Teacher Loan Forgiveness Program offers forgiveness of a combined total of $17,500 from direct subsidized and unsubsidized loans in return for teaching full-time for five complete and consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families. Criteria and details can be found here.
- The Iowa Registered Nurse & Nurse Educator Loan Forgiveness Program offers qualified applicants an annual award of up to 20% of their total eligible federal student loan balance. Applicants must be registered nurses employed in Iowa or nurse educators teaching at eligible Iowa colleges and universities. Details here.
- The NURSE Corps Loan Repayment Program is a national program that supports registered nurses (RNs), advanced practice registered nurses (APRNs), and nurse faculty by paying up to 85% of their unpaid nursing education debt. Qualification criteria and details here
- The John R. Justice Student Loan Repayment Program is federally-funded program provides loan repayment awards to public prosecutors and defenders employed in the state of Iowa who agree to remain in their positions for 3 years. Details here.
- The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on Direct Loans after making 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying government or non-profit organization. Details and qualifying employer types can be found here.
- Lawyers working with the federal Department of Justice can have up to $6,000 of student debt forgiven per year as part of the agency’s Attorney Student Loan Repayment Program. Details and qualifying criteria can be found here.
Planning how to pay college debt can be difficult. It can be even worse when companies that might otherwise seem helpful are actually preying on those in need. Loan “rescue” or “consolidation” plans are one such instance where researching a company can make the difference between getting a helping hand or being placed in a worse situation.
While loan consolidation can lower student loan borrowers’ monthly payments, reduce interest rates or resolve other repayment issues, many of the services these companies charge a fee for can be done for free by borrowers if they contact their student loan service provider directly. To find your loan servicer for federal student loans, visit the National Student Loan Data System. Other companies offer these services in an attempt to steal consumer identities and money. The biggest red flag is if the company is making a promise that sounds too good to be true.
Some of the scams highlighted in the advisory include:
- Law offices or attorneys that charge fees ($300-$600) to file paperwork for borrowers that could be filed for free by the borrower if they contact the loan service provider directly.
- Companies that require access to the borrower’s bank account under the false pretense of using it to automatically deduct payments and steal money from the account. Also, any personal identification information, such as Social Security Numbers are used to steal the borrower’s identity or sold off to other scammers.
- Long-term scams in which the company charges consumers a service fee, down payments and collects a couple of monthly payments they claim are
going towards the borrower’s loan. The money is never applied towards the student loan and the borrowers face late fees and penalties from payments they didn’t know they were missing.
Do not fall prey to these scams. Some of these student loan companies will have professional looking websites and may claim to be associated with a government agency or that they are working for the U.S. Department of Education. If you feel you may have already fallen victim to one of these scams, file a complaint with the Attorney General’s Consumer Protection Division.
Summertime means freedom for students as they move into their final years of high school, prepare for college or embark for life after school. While the future stands open before them, these first steps can also be vital in establishing long-term financial health. Establishing a credit history provides benefits for future investments (house or car purchases). For that reason it’s important to use credit wisely so that students avoid creating negative credit histories that can make financial life even more difficult down the road.
New regulations have placed restrictions on access to credit cards by those younger than 21 and also put some limits on credit card marketing on campus. Nonetheless, students are still signing up for credit cards and using them. Often college freshmen are enticed into signing up for a card as they make the adjustment to social, and financial, life on campus. Here are some tips to bear in mind for high school or college students using credit cards.
Credit cards shouldn’t replace budgeting
There’s a reason so many people say “With freedom comes responsibility.” The first years out of high school offer many opportunities to make independent choices, often where money is concerned. But poor spending habits can cause long-term problems. It is all too common for students to exhaust all the funds allocated to them for the semester way before the semester ends because they fail to budget properly. Others have a reckless disregard for managing their money and spend like money grows on trees. By establishing a budget and looking for ways to save on everything from textbooks to groceries, students will learn how to stretch their dollars and not have to fall back on credit cards to make up for the difference.
Don’t fall in the minimum-payment trap
Those students who do use their credit card will often make minimum payments while continuing to spend with their credit card. Paying the minimum amount due might keep the amount from being past due, but students will end spending far because of interest applied to the balance each month, sometimes meaning that a credit card bill could take years to pay off. Read the information on monthly credit card statements to find out how long it would take to pay off the balance only paying the minimum amount due. It might shock students enough to adjust their approach to repayment.
Credit cards aren’t emergency loans
Many people get credit cards for use in “emergencies,” but a fashion emergency might not constitute the same need as a car crash. Being able to weigh the difference between “wants” and “needs” makes a big difference in creating a monthly budget. Placing restrictions on when and how to use credit cards within that balance makes students savvy about their credit
Don’t make credit cards an ATM
It may not seem like such a bad idea to use a cash advance from a credit card if things get a little tight. But cash advances come with a standard fee of as much as $35 or 3 percent to 5 percent of the total amount. Also, they often have higher interest rates than your card, and the interest starts accruing immediately, leaving you without a grace period to pay off the balance.
In the end, financial responsibility is a valuable part of freedom for students in high school or after. Few things can impact future finances than a poor credit score and burdensome credit card debt. Take the time to think about the long-term effects of using credit cards. Then make (and stick) to a plan for using them properly.
For students graduating from colleges all over the country this month, the thrill of earning a diploma is often being offset by fears of dealing with student loan repayment. While loan repayment is inevitable, many new grads will start on the wrong foot because of assumptions about their student loan responsibilities and ways to pay back their debt.
Here are four common myths that can be easily avoided to prevent students starting down the wrong path. It’s good advice for not just recent grads, but current students and those considering the impact of student loan debt on their educational plans:
If I need help understanding or dealing with student loans, my former college or university won’t help me. Even though a student may have graduated from a school, their financial aid office is still a great resource to help explain loan repayment options and connect students with loan servicers. Financial aid offices have a vested interest in helping students understand and stay on track with their loan repayment, as high default rates can negatively impact a school. So if a student starts to get confused by paperwork, the financial aid department is a great place to start..
I’ll never pay off my loans. Those first payments after graduation may feel a bit overwhelming, and will likely be a large part of any budget as a student gets started in their career. Salary increases, paying extra when budget allows and plain old perseverance will lead to progress. Income-based plans and automatic payments are just two options to “set and forget” loan repayment as a part of monthly budgeting.
Consolidating my student loans into one loan is a good idea. Loan consolidation may offer convenience, but often students will find themselves in situations which either are not eligible for consolidation or can actually negatively impact their repayment. Loan servicers will already use a combined billing for students with Federal loans so that the students have one payment to make and federal loans can’t be combined with private loans in a federal direct consolidation loan. In some cases, consolidating Perkins Loans can lead to students losing repayment benefits that the loan provides.
Filing for bankruptcy means not having to repay student loans. While Chapter 7 or Chapter 13 bankruptcy does help protect against some loans, most borrowers will not be able to discharge their student loans unless it can be proven that the loan repayment will cause an undue financial hardship. Rather than negatively impact a credit record with a bankruptcy, students should consider finding more flexible payment plans that best meet their needs during repayment.
For many college graduates, the grace period before they have to start making student loan payments is quickly coming to an end. November marks the first month many of these former students will be required to make a payment on the loans they received. The loan repayment process can be confusing and it is easy for many students to relocate without contacting their loan provider, making it even more difficult for their lender to provide them with important information and pressing deadlines.
To avoid future confusion and frustration with your student loans, follow these tips to make certain you are on track to pay off your debt with fewer headaches and in a shorter amount of time!
Understand your loans and your grace period.
There are several student loan options and you may have taken out more than one type. This can make it difficult to remember what loans your borrowed and the grace period associated with each one. It is important to contact your lender or servicer to find this information as soon as possible to avoid missing a payment. You can access information about your federal loans on the National Student Loan Data System (NSLDS), www.nslds.ed.gov (you will need your FSA ID), or by calling the Federal Student Aid Information Center at 800-433-3243. In addition, you can look back at your original promissory note you signed to find this information.
Don’t ignore your loans.
Failing to pay your student loans is commonly called ‘defaulting.’ Defaulting on a student loan will cause your credit score to drop rapidly, and will increase the amount you owe on the loan. Federal student loans go into default after you fail to make a payment for 270 days, but private education loans may go into default sooner. There are serious consequences to defaulting on your loans that will impact you for years. If you are struggling with your student loan payment, ignoring it is not a solution. Contact your lender or servicer immediately to discuss options for postponing or reducing your payments.
Be strategic when paying off your loans.
If possible, it is always good to pay off a loan ahead of time. If you have more than one student loan, you can save money by paying off the loan with the highest interest rate first. If you have both private and federal loans, you may want to pay extra on the private loans first as they tend to have less flexible repayment options and higher interest rates.
Choose a repayment plan that will work for you and your budget.
With federal loans, a variety of repayment options are available to help you manage student loan repayment. Plans such as Pay As You Earn and Income-Based Repayment have monthly payment amounts based on your income and family size. If you are unsure which repayment option is best for your budget, you can estimate the amount of your loan payment under different repayment plans. Repayment calculators can be accessed in the student loan section of www.IowaCollegeAid.gov. You can also discuss your options with your lender or servicer. Doing so will provide them the opportunity to ask questions and determine which options may be best for your situation.
Apply for loan forgiveness programs.
Depending on the field in which you work, loan forgiveness programs may be available. Federal programs such as the Public Service Loan Forgiveness Program and other similar options enable borrowers working in designated public service professions to have a portion or all of their federal student loan debt forgiven. In addition, Iowa has state-based loan forgiveness programs for eligible teachers and healthcare professionals. Check out the Iowa College Aid website to learn more about federal and state loan forgiveness programs available.
Know your lender.
Many borrowers lose contact with their lender or servicer when they move from one place to the next. If you plan to make a move, contact your lender or servicer and provide your current contact information and mailing address. This way, you will ensure you receive information about your loan and won’t end up late on your payment.
Whenever possible, lower your principal amount.
The principal amount on a loan is the actual dollar amount of the loan, it does not include interest or late fees. Each minimum payment is first applied toward any late fees and outstanding interest before reducing the principal balance. By paying more than the minimum payment each month, you can decrease the principle amount of your loan, therefore reducing the amount of interest that will accrue for the next payment. Paying as little as a few additional dollars each month can end up saving you hundreds or even thousands of dollars over the life of the loan depending on your balance.