Federal Student Loans

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.

 

Researching Companies, Services Can Save Money During Loan Consolidation

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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.

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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.

Get the Truth About These 4 Loan Repayment Myths

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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.

Man looking at monthly statement glad to pay off bills

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.

 

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.

 

Finished FAFSA? Here’s What to Expect Next

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By now, students and families with an eye toward college, or any kind of education beyond high school, should have a pretty good understanding of just how important the Free Application for Federal Student Aid (FAFSA) is to helping them achieve their goals. If not, here’s a good place to get started with the FAFSA.

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Filing the FAFSA is crucial to getting money for school. But what happens after submitting the FAFSA? Here are some things for families to look out for, as well as some things to remember when dealing with information

Student Aid Report
After completing the FAFSA, the U.S. Department of Education will process the data and compile the Student Aid Report (SAR). The SAR will be sent to families and the colleges selected during the FAFSA. If an email address was provided during the application, instructions to access an online copy of the SAR will be emailed; otherwise it will arrive snail mail.

Typically, applicants can access their SAR within three to five days if the FAFSA was filed electronically (approximately three weeks if filed by paper). The SAR contains the Expected Family Contribution (EFC) as well as initial information about Pell Grant eligibility. Colleges and universities use the EFC to determine student eligibility for federal grants, loans, work-study and other financial aid programs.

How is the Expected Family Contribution Calculated?
Variables that determine a student’s EFC include income and net worth for the student and parents, family size, age of older parent, state and federal taxes and number of family members attending college. As a result, the EFC might change from year to year when the FAFSA is refiled.

Understanding Financial Need vs. College Costs
Each college or university listed on a student’s FAFSA application that accepts that student will determine financial need and present the applicant with an award letter describing the aid offered. “Financial Need” is determined by calculating the Cost of Attendance (COA) minus the EFC determined through the FAFSA.

The EFC will remain the same in a given year (unless an unusual family situation arises) regardless of which college or university the student attends. The amount of aid received cannot exceed the total cost of attendance at a college or university.

Award Letters
Each award letter will include federal, state and college-specific financial aid programs. It is likely that a student’s award letter will include one or more types of loans. These letters often don’t cleanly show which funds offered are scholarship or grant aid (free money) and which are loans (money which must be repaid). To get some tips on understanding award letters, check out our video series here and here.

A College Money Plan Now Helps Avoid Problems in the Fall

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Students have a lot to deal with as they prepare for college and figure out how to pay for their education. But what about once they get to school? Financial aid can help pay for the cost of school, but covering that distance between direct costs (tuition and school fees) and indirect costs (food, books… and just about everything else) is often the first chance for students to explore what it’s like to live with the same financial pressures as an adult.

Having a good game plan is important either planning for college or dealing with creating a budget and financial goals during (and after) college. Here are some tips to help students develop positive habits with money both now and throughout their life:

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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.

Keeping these 10 tips in mind can be difficult. But by doing even a few of these, students set themselves up for a financially fit future.

Avoid Getting Stressed Out Over College Decision With These Tips

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After years of hard work and months of waiting, students are starting to receive acceptance letters from colleges. Those students accepted into more than one college might face some difficult decisions to make when weighing the pros and cons of one school against another.

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“College  fit” means finding the school that best meets at student’s needs for the future, but there is no such thing as a “perfect school.” Students shouldn’t stress themselves out thinking that if they pick the wrong school, their life will be ruined. After all, college is what you make of it. But with a little research and effort, students and families can feel more secure about the school they pick. Here are some tips :

Compare financial aid awards

While cost shouldn’t be the only thing considered when deciding between schools, the financial aid offered can go a long way to giving one school an edge over another. The financial aid award letter often comes after the acceptance letter, and has many things to consider when reviewing. Check out our videos on comparing financial aid award letters for more tips (here and here).

Dig deeper with schools

Students already researched schools before applying, but now is a chance to get more detailed information to get a more complete picture of what a school offers, not only in education, but day-to-day life. Such questions can include:

  • What is the graduation rate? How many students return after their freshman year?
  • Are there work or volunteer opportunities that reflect a student’s major or interests?
  • What do students do for fun?
  • What student support services does the school offer?

Students can talk to college admissions counselors, current students, recent grads or even the college’s official website to research these and other subjects. It’s important to use only trustworthy sources of information and to recognize the difference between fact and opinion. A college’s official website and its admission officers are often the best sources of factual information about that college.

Visit — or revisit — the campuses

Now that a student has been accepted to a school, a college visit becomes even more important. Even if a family has taken a campus visit previously, going back with a more focused approach will help students see if they truly see themselves as a student at that school. Can’t visit a campus? Call or email the admission office with questions, reach out to professors in your areas of interest or ask to connect current students and recent graduates. High school counselors and teachers may also be a good source to recent grads or current students.

Think about it

Research and asking questions can provide the information that students need to make a decision, but asking and answering the important questions can only be done by a student with their family. How did the student feel during their campus visit? Did the school offer both the academic and social aspects that will lead to success? Will they be happy there? These basic questions might lead to some further reflection about each school.

Make your decision

The good news is that schools don’t need to hear back immediately. Many colleges don’t expect a final decision until May 1, so students and families have some time to make up their mind. Lay out the pros and cons and find the school that fits best with financial, academic and career goals. Remember, though, that colleges are serious about reply deadlines. Not sending a deposit by the deadline can lose a student’s place in the incoming class.