College Financial Aid Advisors

Taking out a student loan, whether it is from the federal government or through a private lender, is almost a given part of the college process. It seems like an easy source of money and, in most cases, you don’t have to worry about making payments until after graduation. But, when these loans are combined with revolving credit card debt that builds up during the college years, some graduates quickly find out how difficult it can be starting their post-college life with a large amount of debt. To keep that from happening, be sure to avoid these student loan mistakes that could hurt your financial future. 1. Not Thinking About Each Loan First: In the very old days, if you didn’t have the money for something you didn’t buy it. The advent of credit cards took the thought process out of borrowing. When it comes to student loans, though, it’s important to think about what you are doing. Realize that you are incurring a debt that will have to be repaid, and make sure that fits into your future plans. Plan to work during college breaks and over the summer so that you can earn as much money as possible, and need to borrow less. 2. Borrowing More Than What Is Really Needed: Some students get a student loan and use the money as a sort of piggy bank, instead of restricting those funds to be used only for college-related expenses. Going out for pizza, putting gas in the car, and getting your nails done are not college expenses. With interest accruing over four years, you could end up paying a very high price for what should have been an out-of-pocket expense. 3. Not Understanding Debt Consequences: Most college students are young, and don’t realize the effect debt could have on their lifestyle. Parents or financial advisors need to make these young adults understand that the federal government is quite serious about collecting on student loans. Although there are income-based repayment plans, failure to make any attempt at payment could result in a bad credit rating, garnishment of pay, or loss of any federal income tax refunds. Private lenders can also be very persistent in their efforts to collect on their loans. 4. Overburdening Co-Signers: Asking someone to co-sign a student loan can be tricky. Students may ask an older relative to co-sign in all innocence, not realizing what the consequences of such an action may be. That loan then shows up on the co-signer’s credit report, and may make it difficult for him or her to obtain any other credit. Failure to repay the loan on the student’s part may result in the co-signer being forced to repay loans, often at a time when they have the least amount of financial flexibility. Student loans can be great, if you know what you are doing. Don’t make these mistakes, and you should be able to avoid repayment problems down the road.

If you haven’t decided which college financial aid package to accept, you haven’t got much time left as most college decision deadlines are May 1. If all other factors are equal among a select number of college choices, the final decision might come down to cost. Here are some tips to help you discover which financial aid package is best: • Compare Apples to Apples: Don’t just pick the college which offers the most financial aid. Get your calculator out and analyze how much it really costs to attend each school. Be sure you understand whether you will receive the full amount of your award for the entire four years you attend. Reread your financial aid letters and determine how much of each package is in federal student loans. Remember that you will eventually have to repay that money, so it doesn’t really lower your costs; it just defers a part of them. • Calculate a Bottom Line: See if any schools are expecting you to participate in a work-study program that will provide money, but could reduce the amount of time you have available for your studies. List out everything you will have to spend money on including tuition, room and board, fees, travel expenses, and cost of living at each college. Then subtract out the grants and scholarships from individual schools, along with any scholarships you won on your own, for a bottom line net cost figure. You will be expected to pay for anything that is not covered by financial aid or federal student loans. You may decide to use private lenders, such as Discover Student Loans, to help bridge this final financial gap. • Contact When Appropriate: If the bottom line is very close between two schools, but the one you are leaning towards will cost a bit more, consider contacting the financial aid office. Politely explain your situation, tell the school how much of a difference there is between your two top choices, and ask if there is anything else they can do to help you. If they can’t, you will have to decide if it is worth the extra expense to attend this college. • Consider Earnings Potential: If you have to take out federal or private student loans to attend a particular school, it may be worth the extra investment if you are able to graduate in four years and land a high-paying job. Check the schools’ websites to compare details about graduation rates, employment percentages, and starting salaries. Another potential indicator of a college’s success at turning out viable job candidates is their student loan default rate. Visit College Navigator and type in the name of a potential school. Hit “Show Results” and scroll to the bottom of the list to find something called “cohort default rates.” A high default rate may suggest graduates having trouble finding adequate employment upon graduation.  You are almost to the finish line – good luck and keep up the great work!

Every trip to the mailbox or visit to the email inbox brings news from potential colleges for parents and high school seniors. Sometimes the news is disappointing but, when the student has been accepted to a favored college, it can be very exciting. And sometimes, when the mail contains a financial aid award letter, it can be downright confusing. The final choice of college could affect the finances of your family and your student for many years to come, so you want to make sure you make a decision that’s just right for you. Here are several things to keep in mind as you are taking these last few steps: • What your financial aid award letter is telling you: The letter will give you a good idea of what it costs to attend that institution. It should list an expected Cost of Attendance, or COA. These are costs the college believes the average student incurs to attend. The COA might include tuition, room and board, books, fees, and living expenses. You will then see the financial aid package the college is offering your student. Read it carefully, as you must be certain that you can distinguish between grants and scholarships that do not have to be repaid, federal student and parent loans that do have to be repaid, and federal work-study programs where your child will be required to work a certain number of hours to earn money towards an education. • Compare financial aid award packages: Create a budget worksheet with a column for each college, and start filling in the Cost of Attendance for each. Use some of the figures provided, but think about whether your child’s expenses will be different from what is listed. Calculate travel costs back and forth for all holidays and breaks. If your child will live off-campus, add in rent and utilities. Put together a meal budget if your student won’t eat on-campus, and estimate out-of-pocket expenses for each location. Add up the total costs, and then subtract each school’s grants and scholarships, as well as any outside scholarships. Explain the work-study commitment to your child. Then subtract the federal student and parent loans to determine how much money you will need to come up with from other sources. • How to bridge the gap between “free” monies and costs: Make sure you understand that, although student loans are included in the financial aid package, they will need to be repaid. This cost should be figured into your calculation. If there is still money outstanding, you may need to find additional money through 529 savings plans, private student loans from lenders such as Discover, or additional outside scholarships. Try to estimate how much your child will be able to earn upon graduation so you can determine what will be involved in repaying student loans. The final choice also depends on intangible factors, but make sure you know what you’re getting yourself into financially before accepting any offer.

This could be a big year for the Millennial generation. As a group, those born between 1981 and 1997 could finally overcome the number of Baby Boomers and become the most dominant force in the economy and society. Sometimes they get a bad rap for being too into their digital worlds, or staying at home too long with their parents. But they might be smarter than you think with some of the actions they are taking. Here are four surprising facts you might not know about the up-and-coming Millennial generation: • They’re Learning to Save Money: You thought they were crazy for living at home, but they are wisely using that opportunity to put a little money in the bank. According to the Consumer Federation of America’s ninth annual America Saves Week survey, the percentage of Millennials who saved at least 5% of their income increased from 50% to 56%. They are learning to develop savings plans and are sticking to them – not bad for a bunch of “slackers”! • They’re Pretty Good Workers: Millennials don’t seem to mind working; they just want to do it within their own parameters. Many of Fortune’s 100 Best Companies To Work For seem to agree, and are willing to adapt their policies to attract these younger workers. Pew Research also found that millennials value job security, even more than their elder boomers. They just won’t stay at a job they don’t like. • They Like to Be Challenged: Because they have grown up being able to quickly adapt to changing technology, they don’t mind being challenged on the job. They like things that go beyond the routine, enjoy learning new techniques, and want to have some variety. • They May Not be As Far Behind on Their Student Loans as We Think: A great deal has been made of the student loan debt burden the Millennials are carrying. On the surface, it might seem like they are shirking their responsibilities to repay their student loans, but there is actually a very small percentage that is in outright default. Instead they might just be taking advantage of income-based repayment plans, or they could be deferring their payments while they get more education or serve in the military. Some could be working toward loan forgiveness by teaching or working in the public sector. Parents, educators, and employers may have to do a little learning to deal with this new generation of adults. They’re definitely not your grandmother’s idea of by-the-book disciplinarians, but that doesn’t mean their way of doing things is wrong. It’s just different. For all the hand-wringing the older generation likes to do about this generation, perhaps the Millennials aren’t as bad as they are being made out to be. They are certainly going to do things their way but, when it comes right down to it, they are turning out to be a generation of money-saving, hard-working, loan-paying adults. And that’s not such a bad thing after all, is it?

March is the time of year when high school seniors and their parents start receiving financial aid award letters from the various colleges to which the student has applied. In these letters each college will list out a variety of financial aid awards that can help reduce the family’s out-of-pocket costs for college. Once you start lining the letters up and trying to compare them against each other, though, it can get a bit confusing. All financial awards are not created equally, so it is important to understand their differences. Here are some of the variations you can expect to see in financial aid award letters: • Merit-Based vs. Need-Based: There are different types of grants and scholarships your student may be eligible to receive from a school based on academic or other performance. These are merit-based awards. If you feel that your child’s achievements have not been properly recognized through the merit awards, you can ask the financial aid office if you can supply supplemental information. Need-based awards are based on the financial information you provided when completing the FAFSA. If these amounts seem low compared to your income, check your FAFSA again and correct any inaccurate information, or try to submit additional information which might justify an unusual financial situation. • Grants and Scholarships vs. Loans: Grants and scholarships are monies that do not usually have to be repaid, unless the student fails to meet the specified criteria. Some colleges also list student loans as part of the financial aid award package. Be sure you understand how much of the award is in loan form, as this is money that will have to be repaid once the student graduates or leaves college. • Work-Study Program: This technically doesn’t fall into either category as “free” money or money that will have to be repaid, as it is money that will have to be earned. Make sure your student understands that he or she will be required to set aside a certain amount of time from studying or extracurricular activities in order to meet the requirements of the work-study program. • Federal and Private Student Loans: Most college financial aid award packages will include information on federal student loans for which the family is eligible. While amounts and interest rates are standard for all federal student loans, there can be a wide variety of terms available from different private student loan lenders. Information on federal student loans is easily available, but you must draw up a list of criteria and carefully weigh any private student loans before making a final borrowing decision. Financial aid isn’t the only thing which should affect your choice of college, but it does play an important role in the decision-making process. Be sure you understand all of the financial aid opportunities clearly, and then take into account such intangible factors as school fit, course selection, and potential earning power to find the college that’s just right for you.

Attending college can make a huge difference for your child. It can lead to a higher paying job and better quality of life. There is a lot riding on the Student Air Reports which high school seniors and their parents should be receiving now. If you completed the FAFSA in January, this report will summarize that information and provide your Expected Family Contribution, or EFC. Based on this, your child’s potential colleges will put together their financial aid award letters for you, which will finally reveal the amount of scholarships, grants, and loans you can expect, and give you an indication of how much money you will be required to pay out of pocket. But, what if the federal financial aid doesn’t cover all the expenses, and your family just doesn’t have enough money to pay for the rest – is there anything else you can do? Here are a few suggestions: • Contact the Financial Aid Office: If there is a school that particularly appeals to your student, you can contact the financial aid office and ask if there are any other options for receiving more financial aid. The school may have additional funds for low-income students or may be able to point you in the direction of other scholarships. It could also help to let the school know that you will be interested in finding part-time work in addition to the federal work-study program. • Explain Any Unusual Circumstances: Sometimes the FAFSA doesn’t give a real picture of your family’s financial situation. If there are exceptional medical bills, or a sudden drop in income, put together a short letter that documents your specific situation, and ask the college if you can appeal the financial aid award. • Keep Looking for Scholarships: Be on the lookout for all late deadline scholarships. This money does not have to be repaid if your child stays in school and meets any scholarship requirements for grades. Scholarships can make a big difference in your child’s ability to pay for textbooks, lab fees, and other miscellaneous expenses. Parents can also ask their employers if any funds are available to help with college expenses such as computers. • Consider Private Student Loans: While there are some differences between federal and private student loans, this could be the final piece in your financial aid puzzle. Many private lenders, such as Discover Student Loans, offer competitive interest rates and other incentives that can help reach your college education goal. They may also offer other benefits, such as a reduced interest rate for automatic payments, and may even provide an incentive for good grades. The SAR and the financial aid award letter are definitely good indicators of how much financial aid you will receive, but they don’t have to be the last word on the subject. If you feel the amount just isn’t enough, take steps to find additional aid, and you could still be attending college in the fall.

With deadlines rapidly approaching, it’s time for high school seniors and their parents to check off more items on their college financial aid to-do list. Very soon you will be reviewing the financial aid offers you receive from potential colleges and trying to make the best choice for your family and your student. Here are some things you can do in February to make that decision easier: • Take a Moment: First, just breathe and relax. You have come a long way in a short time, and should be very proud of what you have already accomplished. Don’t put more focus on what has yet to be done than on what you have already completed. Spend some “down” time with your child, too. This has been very stressful for him or her as well, and there is still a lot of uncertainty on the road ahead. Let your child know how proud you are, and that you are happy to be participating in this next grand adventure. • Review the FAFSA One Last Time: That is probably the last thing you want to hear after putting all that work into completing the FAFSA in the first place. But take a few moments to review your application one more time. Make sure you have supplied the correct tax information for 2014, check that the name and social security number match official government documents, and review the list of schools that have been selected to receive your information. • Get Financial Aid Savvy: A better understanding of the financial aid process will help you make smarter choices. The FAFSA is only the first step, the application. Based on the information you supplied you will receive a Student Aid Report (SAR), which will list your Expected Family Contribution (EFC). This will give you an idea of the amount of money you will be expected to pay, but it is not the final answer until you receive a letter of acceptance and financial aid award letter from each prospective college. • Start Calculating: Each college should supply you with an estimated Cost of Attendance (COA), which is based on what it costs most students to attend that school. Make sure their figures are accurate for travel expenses from your home, actual living arrangements, and miscellaneous out-of-pocket expenses. The financial aid award letter will inform you of any grants and scholarships the college is offering. Subtract this from the total costs, and also subtract any other scholarships you acquired. The remaining amount is a good indicator of your out-of-pocket costs for each college. • Learn About Loans: Many colleges include student loan estimates in their financial aid package, but you don’t have to just take what is offered. Learn about the differences between federal student loans and private student loans. Start researching what private lenders, such as Discover Student Loans, have to offer. You’re in the home stretch. Use February to give yourself a financial aid education and you’ll make more informed college choices.

According to Pew Research Center tabulations of Census Bureau population figures, the generation known as the “Millennials” is facing a milestone year in 2015. During this year, the population of people roughly born between 1981 and 1997 will officially overtake the “Baby Boomers” as the nation’s largest living generation. Bookended by students entering college and adults facing family and job pressures, the Millennials are taking on life’s challenges with their own unique spin. With the U.S. economy beginning to pull out of its tailspin, here are a few of the money and mental factors that will affect the newest majority generation: • The Student Loan Elephant: It’s the elephant behind every discussion about Millennials and their need for an advanced education to get a better paying job. Much of this education is being funded by a strong reliance on student loans. Not that there is anything wrong with using student loans as part of a college financial aid package, but a huge portion of this generation graduated just as the job market collapsed. Unable to find high-paying jobs they were unable to deal with their student loans. Now that there is over a trillion dollars outstanding, a great deal of attention is being paid to the entire student loan process. Millennials who have already graduated will need to familiarize themselves with income-based repayment plans, while parents of students who are just entering college will have to keep an eye on changing regulations. • The Itch to Switch: Once older Millennials do manage to find a job, they often get bored easily. Contrary to their older colleagues who find a job for life, they often believe that they should only stay with a company for a year or two before moving on to the next opportunity. This constant need to find something new may impact their ability to pay off their student loans or to save money for a home. Instead of moving from one company to another, though, some Millennials are now searching for job diversity within their current organizations. • Communication is Hard: For a connected generation that likes selfies, Facebook, and Twitter, Millennials often find it difficult to communicate in person with their co-workers. PR News says that they should not fall victim to Millennial-shaming, but should instead learn to bolster their statements with facts and learn to communicate better in-person in order to increase collaboration with older co-workers. An attitude adjustment and a willingness to learn can go a long way towards establishing and building workplace relationships. What lessons can the older Millennials impart to their younger cohorts? Perhaps they might recommend taking steps to maximize college financial aid and scholarships, or learning to compare the pros and cons of federal and private student loans. They might say that building people and communication skills in college is just as important as learning about your major. These lessons are important, as they will have an impact on individuals and society as well.

As a high school senior, let’s face it – it’s been a tough few months. You had to figure out the college application process, sweat out completing the FAFSA (Free Application for Federal Student Aid), and even participate in a few hair-raising college interviews. But now all of that is behind you, so it’s time to sit back and have some fun in your last few months at high school, right? Well, not exactly. If you feel a sudden urge to skip homework assignments, drop out of after school activities, and generally just “sit back and have some fun,” you could be suffering from a condition known as senioritis. According to the College Board, though, this could be a disastrous strategy. Read your acceptance letter carefully and you might notice a small disclaimer which states that the college can rescind its offer if your senior grades drop. Colleges can and do request copies of your final grades and can revoke their offers as late as July or August, even as you’re packing to get ready to attend! Even if the college does still decide to let you attend, your senioritis could mean that you start out on academic probation or with less of a financial aid package than you were anticipating. Instead of starting out on an exciting new journey, you may have unknowingly placed unnecessary roadblocks on your path to success. What can you do to avoid these potentially negative situations and ease yourself down the road to college? Here are a few suggestions: • Keep Up With The Class Work: There are only a few more months to go, and you have already demonstrated that you are capable of handling this amount of work. Besides, it will keep your brain in shape for your coming college classes. • Participate Responsibly: There is nothing which says you cannot enjoy all of the activities of your senior year once you have been accepted into college, but try not to take things too far. An “epic” senior prank that ends up in misdemeanor charges will probably not turn out to be so funny after all. • Plan Ahead: Think about what you can do this summer that might give you a head start on your college career. Perhaps there are some courses at a local community college, an internship, or a travel opportunity that will help broaden your horizons. • Be Aware of Money Issues: Spend some time talking to your parents about the results of their FAFSA application, the Student Aid Report, and the financial aid offer from your college. Try to understand the financial impact your college career will have on you and your family. Start thinking now about what you can do to help lessen the financial load. This is the home stretch and you have almost reached your goal of graduating from high school and moving on to college. Don’t let a case of senioritis derail everything you have worked so hard to achieve.