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Career-Based Loan Forgiveness Programs Can Help With Student Debt

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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.

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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:

Education

  • 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.

Healthcare

  • 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

Public Service

  • 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.

Attorneys

  • 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.

 

Use Summer to Your Advantage to Save on College Costs

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The snow coats are finally put away in place of the short-sleeve shirts. Spring is here, with summer right behind. For high school seniors, the end of years of hard work are within your grasp with the goal of a college education just beyond it. But rather than coasting to the finish line, students looking to save money and hit the ground running once they get to college will find the next few months important.

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“Summer melt” is the term used in higher education to describe students that intend to go to college after high school graduation, but never make it to college in the fall. Their college plans have dripped away like an ice cream cone in the July heat. Here are some tips to stay on track and keep those college plans firm this summer, and even saving a few dollars once you get there:

  1. Don’t fall victim to “senioritis.” The end of high school is certainly in reach, but that doesn’t mean students should take their foot off the pedal when it comes to school. Completing AP or dual enrollment courses in high school can reduce the number of credits that need to be taken in college. Think of it as getting free classes that would otherwise be part of tuition costs.
  2. Plan ahead to avoid changing majors. It’s not out of the ordinary for students to get to college not knowing exactly what they want to do. But changing majors, even once, can add a year or more to a student’s time in college. Use this summer to explore areas of career interest as a volunteer or intern to get a taste of what the day-to-day life in a particular job will be like. It might lead to reconsidering a college major before too much time and money is committed.
  3. Consider summer courses. Just like taking the AP, any courses that can be taken before college will help later. General education, or underclass, units can be taken at local community colleges, often with smaller class sizes and for less money than when a student gets to a college or university. Math is math, no matter where you take it. Why not get a head start now?
  4. Take a part-time job. Working during college can help reduce the amount of money that needs to be borrowed, in addition to providing valuable job experience. Use the summer to help build a nest egg for college expenses.
  5. Research textbook and supply rentals. Course books can be one of the biggest expenses for students once they get to college. While many colleges allow students to rent textbooks instead of buying them, online sites such as chegg.com, eFollett.com, textbooks.com and others can provide other options and the opportunity to compare prices. Getting to know the options ahead of time in school can lead to saving hundreds of dollars come fall.

Finding Free Money for College: A High-Paying Part-Time Job

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There’s no way around it: getting the degree or certificate that will connect you with your future costs money. No matter the type of education students pursue after high school, cost will often play a factor in not only determining where students go to school, but, in many cases, impact whether or not they complete their degree and find the career they’ve long sought.

Many students and families rely on private student loans which come with interest rates that can feel daunting not only during school but in the years after. However, thanks to the Free Application for Federal Student Aid (FAFSA), students are discovering many roads to free money that can help reduce their student debt and help them succeed.

Completing the FAFSA arms students with a tool, a baseline of financial information and need for aid that can be used for a variety of state and federal grants, as well as private scholarships. There are many ways for students to find free money that require nothing more than the time to research and apply in order to receive some financial help for their education. Here are few places to start:

State Grants and Scholarships

The state of Iowa provides funding for grant programs to help with higher education costs. Students who receive Iowa-funded grants and scholarships must be Iowa residents, attend an eligible Iowa college or university and meet other criteria specific to each program. Scholarships and grants do not have to be repaid and can significantly reduce college expenses. The chart below provides an overview of the application requirements for each scholarship and grant administered by Iowa College Aid. For specific criteria, go to IowaCollegeAid.gov.

Private Scholarships

Every year, MILLIONS of dollars in private scholarships go unclaimed; not because no qualified candidates applied, but because no candidates applied at all.

Scholarships are available from private sources including businesses, foundations, religious organizations, community groups and fraternal organizations. High school counselors are excellent resources for scholarship information, as are libraries and college financial aid administrators.

Web searches also allow students and families to explore scholarship possibilities. Reputable organizations will NOT charge fees for scholarship searches.

Think of finding scholarships like a part-time job. If you spend 5 hours researching and applying for scholarships that lead to a $1,000 scholarship, you’ve just made $200 per hour. That’s pretty good money for working part-time! Here are some ways to track down private scholarship opportunities:

  • Work: Have your parents ask whether their employers offer college scholarships to children of employees.
  • School networks: Many high schools offer scholarships for graduating students. Also check with the area alumni association of your college.
  • Community organizations: Many community organizations sponsor local scholarships. Check your city’s website or call your local community center for lists of organizations in your area.
  • Religious organizations: Find out if your place of worship offers scholarships. If not, it might partner with other organizations.
  • Field of study: Your college might offer scholarships specific to your major. Contact your program department.

College and University Scholarships

Your college or university might provide scholarships or financial awards from its institutional funds. Often, institutional scholarships go to recipients who meet specific requirements related to particular areas of study, academic achievements, outstanding talent, leadership, athletic ability or other criteria. Contact the financial aid office and ask about institutional programs available through the college or through on-campus organizations.

Federal Grants

Federal grants are awarded to both Iowa resident and non-resident students. Eligible students can receive these federal grants for attendance at any postsecondary education institution participating in the program. Federal grants include:

  • Pell Grants
    Pell Grants are funded by the federal government to assist the neediest undergraduate students. The maximum award is $5,920 for the 2017-18 award year.
  • Supplemental Educational Opportunity Grants
    Federal Supplemental Educational Opportunity Grants (SEOG) are based on financial need. Eligible recipients receive between $100 and $4,000 per year. Not all colleges participate.
  • Teacher Education Assistance for College and Higher Education Grants (TEACH Grants)
    The Teacher Education Assistance for College and Higher Education (TEACH) Grant program helps students in teaching preparation programs. In exchange for a TEACH Grant, recipients agree to serve as full-time teachers in high-need fields in public or private non-profit elementary or secondary schools that serve low-income students. These grants are available to eligible undergraduate, post-baccalaureate and graduate students for a maximum amount of $4,000 per year. Students must meet academic standards.

Taking the time to track down free money for school now may seem like hard work, but the impact it will make in saving students from debt as they start their careers will be an even greater reward as they start their careers.

 

Understand The True Cost of College Attendance by Decoding Award Letters

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They’ve waited. They’ve watched the mail for weeks. Finally, the letter arrived: Students are getting notice that they’ve been accepted to the school of their dreams! But after the moment of excitement and congratulations wears off , the realization sets in: it’s going to cost money to go to school.

Even if a family has prepared for years, saving money, investing in 529 plans and being on top of completing their student’s FAFSA, now is a crucial time to pay attention to information from schools and have a clear understanding of the financial aid award letter.

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Financial aid award letters are sent to students in the weeks after receiving their acceptance letter to a school and reflects the cost of attendance as well as the financial options available to families to help pay for their student’s education. As the letters state, a student’s place in the schools incoming class cannot be reserved until a deposit is received based on the financial award letter. But families should take the time to understand their award letter before submitting any form of deposit, as these deposits are not refundable if a student decides not to attend a particular school.

Currently, there is no standard format for schools to report the financial aid being offered to a student. So families should use these tips to better understand what is being offered and make a smart comparison between what different schools will cost. The school with the lowest tuition fees might not always be the best financial choice thanks to financial aid awards. Knowing how to read the financial aid award letter can make all the difference.

  1. Find “free money”
    Many schools offer students institutional scholarships or grants. These types of funding can be seen as “free money” because students and families don’t have to repay this money after graduation. Make sure to look for words such as “scholarship” or “grant” in the name of the financial award. These awards are often given to students based on the information in the Student Aid Report created when completing the FAFSA, based on income or family responsibility. Families may miss these awards because they do not technically apply for them separately.
  1. Consider loans and work study options separately
    To help show families how they can meet the cost of attendance at their school, award letters will also include options that require repayable loans or other options that require further action by the student, such as work study programs. Since there is no standard format for separating these options from other “free money,” families need to recognize that any loans taken out, be they private or federal Stafford loans, will require repayment by either the student or parent (depending on the loan) after graduation. This is not funds being offered by the school, but money that will require repayment.
  1. Know the difference between “direct” and “indirect” costs.
    Attending college features a variety of costs, but not all of them will necessarily be covered the financial aid offered in the award letter. The “cost of attendance” on a financial aid award letter applies to direct school costs, such as tuition, room and board. Indirect costs, such as books for classes or travel to and from school are not considered in an award letter. These costs are those that the student and family will have to bear personally.
  1. Determine if awards are for one year or more.
    Many families fall into the trap of thinking that the financial award letter reflects the costs and awards for all four years of school when, in reality, the letter reflects the cost for one year of school. While many of the loans listed on an award letter will be available to students each year, many of the grants or scholarships listed may require a new application each year or, in some cases, are only available for one year. Determining which of these awards are renewable, or the length of the award, can help families avoid an unpleasant surprise.
  1. Make sure the award letter is final.
    In some cases, an award letter might not reflect the final amount of aid being offered to a student. If any section of the letter uses words such as “estimated,” “tentative” or “pending,” the school may not have all the information from a student’s FAFSA or other document needed to make a final determination of aid. Once this information is provided, it may have an impact on the amount of aid that the student is finally offered.

Understanding the financial award letter that students receive can lead to some difficult decisions about where a student should go to school. By making the best effort to compare award letters from all schools that have accepted a student, families can make an informed choice of which school fits best with a student’s goals while creating a financial plan that will avoid any bad surprises or unexpected debt down the road.

Don’t Let Student Loan Repayment Myths Cost You Time, Money

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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.

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As we conclude #FinancialAidAwarenessMonth, 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.

Being Smart About Money Helps Get More Out of Financial Aid

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Since November is Financial Aid Awareness Month, we’re providing students and families with tips and information for helping pay for college at all ages: high school senior, current college student, adult learner and more. While finding ways to get financial help with your college education is important, making sure students use that money wisely is possibly even more important.

Getting the most of your money in school is vital to keeping your finances under control. Scholarships and grants might only be allowed for specific school costs, while student loans will have to be paid back (with interest) after graduation. So having a good game plan when it comes to finances in college can pay off not only in school, but for years after graduation.

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  1. Make a budget. Commit to creating a monthly budget AND live within your budget each month.
  2. Utilize a calendar. A calendar is not just for plotting your class schedule, campus organizational meetings, and social events. A calendar can be an effective tool for managing the due dates for your monthly bills—rent, cell phone bill, car payment, utility bill, etc. Making note of due dates helps to ensure that you will not miss a payment and potentially harm your credit history.
  3. Shop around for text books. Many bookstores, as well as online retailers, offer used textbooks for much cheaper than buying a “new” textbook. If you won’t want to keep your textbook for future reference after a class has concluded, consider renting a textbook for the semester.
  4. File the FAFSA on-time, every year. If you plan on attending college in the upcoming school year, be sure to file your Free Application for Federal Student Aid (FAFSA) prior to your college’s priority deadline. Doing so will ensure you are considered for all financial aid opportunities the school has to offer.
  5. Get a part-time job. A part-time job can allow you to meet your basic needs, as well as reducing the amount of student loans you need to borrow. Working 15 hours per week at a part-time job can dramatically reduce your need for student loans to cover living expenses. Additionally, most colleges have numerous on-campus employment opportunities for students.
  6. Plan early for a summer internship. During the first week of the spring semester, visit your college’s career placement office and discuss your desire for an internship during the upcoming summer with a career advisor. Career advisors can provide information about companies looking for interns, as well as information regarding career fairs on campus. Many internships  pay a stipend or salary which can help pay for expenses while you’re in college and can lead to a job after graduation.
  7. Know your financial aid options. Visit the Financial Aid office on your campus during the first three weeks of the spring semester to discuss your current year’s financial aid and to check into scholarships and grants available for next year.
  8. Be a savvy shopper. At the grocery store, opt for the store-brand product. It is often significantly cheaper than its name-brand counterpart, and the money you save can be used to pay interest on your student loans or keep you from having to borrow more loans next year.
  9. Protect your Personal Information. If you aren’t already, start safeguarding your Social Security Number, credit card and bank account numbers, along with any other non-public personal information. Shredding sensitive information will ensure it doesn’t fall into the wrong hands and can help protect you from identity theft.
  10. Separate Needs from Wants. Although it may seem like you need that morning latte from the local coffee house to start your day; at $3.50 per day, that adds up to $1,277.50 per year! Make your financial choices based on what is necessary to meet your basic needs, and avoid wasting money and borrowing more to satisfy your wants.

Even implementing some of these tips into your regular routine will turn you into a smarter consumer when it comes to money and help set you up for a bright financial future.

Enjoy The Holidays Without The Financial Stress With These Tips for College Students

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Black Friday has come and gone, leaving us in the middle of the prime holiday shopping season. Studies show that consumers will spend an average of $749.51 on gifts, decorations and other holiday items this year¹. Are you prepared? The following pre-holiday shopping tips can help to keep you out of debt, reduce stress, and ensure a merrier holiday season.

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Create a budget.

If you already have a monthly budget, then you have an idea of what you can afford to spend. If not, you can easily create a budget by subtracting your monthly bills such as rent or mortgage payments, car payments, utilities, etc. from your monthly income. The remainder of your income gives you an idea of your holiday budget, plus any money that you had stored away throughout the year. Why stop there! This is a great opportunity to initiate a budget for next year, setting aside money each month for holiday spending. Another idea for budgeting money: if you are paid every other week, create a monthly budget based on two paychecks. This will leave two months out of the year with three paychecks! Put these “extra” paychecks away for savings or retirement, or save them for special events such as the holidays or family trips and large purchases.

Make a list and check it twice.

This statement is relevant for the holidays in more ways than one! Make a list of all the people you need or want to give a gift to, including family, friends, co workers, etc. Write down an estimate of what you plan to spend on each person, also including money that you plan to spend on holiday wrappings, decorations and holiday food and parties, and then add it up. How does this compare to your budgeted amount? Rework your list, spending less on things that you don’t really need, until your list number matches your budget number. Now stick to the list!

Look for holiday deals and be creative.

Holiday sales are everywhere. Do your research and shop around for that perfect gift at the best price. Also, remember that the perfect gift is not always sold in stores; putting together a gift basket of goodies or making something by hand demonstrates that it truly is the thought that matters! Pinterest.com is a great place to find creative holiday gift and goodie ideas.

Track your spending.

Most experts advise to pay with cash to help prevent you from over spending. Whether you use cash or plastic, keep your receipts and track what you spend. If you do use a credit card for holiday purchases, sticking to your list will ensure that you have the cash to pay the credit card bill entirely, avoiding high interest rates while possibly earning cash back points on certain types of cards.

¹Survey conducted by BIGinsight, for the National Retail Foundation. www.reuters.com