Financial Aid and College Student Loans
Information for Students and Parents on applying and qualifying for financial aid for colleges, universities, and trade schools. Find out what you need to do
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Students and parents, already borrowing billions more than ever to pay for college education, have just 36 hours to dodge an expensive bullet. After midnight Friday, the interest rate on the two most popular federal loan programs goes up nearly 2 percentage points -- an increase of nearly 40 percent in some cases. The change could add thousands of dollars over the life of a 10-year loan. But there is a way -- through loan consolidation -- to avoid the increase and lock in current loans at a fixed interest rate, with the option of a longer repayment period. ``There are not many cases where you'll be worse off'' by consolidating loans, said Susan Gutierrez, financial aid director at Sonoma State University. Gutierrez stopped short of a blanket recommendation to consolidate loans, noting some student and parent financial arrangements may be complicated. ``Everybody needs to decide for themselves,'' she said. ``Consolidation will make sense for the vast majority of borrowers,'' said Erin Korsvall, spokeswoman for Sallie Mae, the nation's largest student loan holder. ``It's a no-brainer.'' But borrowers must act quickly, and snail mail won't cut it, she said. Consolidated loan applications may be filed online with hundreds of lenders, beating the July 1 interest rate increase by hours or minutes. ``Hit the send button (by midnight Friday) and you should be good,'' Korsvall said. Here's the deal: * On July 1, interest on Stafford loans to students and PLUS loans to parents goes up 1.84 percentage points. The new interest rates will be 6.54 percent for students in school and 7.14 percent for graduates, while parent loans will rise to 7.94 percent. * With consolidation, students and parents can lump their existing variable-rate federal loans into one package at a fixed interest rate that is more convenient and most likely cheaper to repay. Borrowers who do not consolidate will be subject to future rate changes for Stafford and PLUS loans, which are tied by law to the 91-day Treasury bill and adjusted each July. Before July 2005, college loan rates were at all-time lows in the 40-year history of the government's student loan program, with rates at less than 3 percent for borrowers in school, Korsvall said. Last July, the rates went up 1.93 percent. In the previous four years, the rates had dropped each July, Gutierrez said. The rate increases come as families are borrowing more than ever to pay for college. Federal loans totaled $63 billion in the 2004-05 academic year, a 141 percent increase over the past decade, according to the College Board's latest report on trends in student aid. Stafford loans amounted to $53 billion last year; PLUS loans exceeded $8 billion. For those who engage in 11th-hour shopping for a consolidated loan, the interest rates and terms are fixed by federal law and do not vary from lender to lender, Korsvall said. But many lenders offer ``borrower benefits'' that can cut the interest rate, such as making payments by direct deposit. The benefits ``can be very valuable,'' Korsvall said, ``but you need to make sure you qualify for them.''
Rising college tuition and room and board expenses have pushed students and parents to seek creative ways to pay for a college education, but many are falling prey to scholarship scams. Some unscrupulous companies guarantee or promise scholarships or grants in exchange for a fee. And most offer a ``money back guarantee'' but attach conditions that make it impossible to get a refund. Still others simply take the fee and do nothing else, while another group uses the old awards scam to collect an upfront fee. Some companies even ask for a student's checking account number to ``confirm eligibility,'' then debit the account without the student's consent. There are many legitimate companies offering access to lists of scholarships for a fee. Some charge an advance fee to compare a student's profile with a database of scholarship opportunities and provide a list of awards for which a student may qualify. The difference between the legitimate companies and the scam operations, is that companies on the up-and-up don't ``guarantee'' or ``promise'' scholarships or grants. If you're searching for scholarship or grant money through private search companies, the Federal Trade Commission suggests you look for these hallmarks of a scam operation: ``The scholarship is guaranteed or your money back.'' No one can guarantee that they will get you a grant or scholarship. Refund guarantees often have strings attached, so get refund policies in writing before you pay. ``You can't get this information anywhere else.'' There are many free lists of scholarships. Check with your school or library before paying someone to do the work for you. ``May I have your credit card or bank account number to hold this scholarship?'' Don't give out these numbers on the phone without getting information in writing first. It may be a setup for an unauthorized withdrawal. ``We'll do all the work.'' Don't be fooled. There's no way around it. You must apply for scholarships and grants yourself. ``The scholarship will cost some money.'' Don't pay anyone who claims to be ``holding'' a scholarship or grant for you. Free money shouldn't cost a thing. ``You've been selected'' by a ``national foundation'' to receive a scholarship, or ``You're a finalist'' in a contest you never entered. Before you pay to apply for a scholarship, check it out. Make sure the foundation or program is legitimate. To report a suspected scam, call the National Fraud Information Center's toll-free hotline, (800) 876-7060.
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college loans Books
by Ben Kaplan
Amazon Price: $14.96
Customer Review: Truth to be told, I bought two copies to give to two couples that are having children go off to college next year. So, I did not read them. The ordering and delivery were very good, just as advertised. Clayton Penhallegon
by David Rosen, Caryn Mladen
Amazon Price: $13.59
Customer Review: I originally borrowed this book from my local library but after reading through it a bit, I knew I had to have it! The information is good and easy to understand. I recommend it for anyone seriously looking into alternative ways of paying for college or just understanding what is going on around them.
by Princeton Review
Amazon Price: $13.60
Customer Review: This book had great advice in it and it made the process of filling out financial aid paperwork a lot easier. It helps you understand how to set up your finances so you don't sabotage your childs chances of getting scholarhips, grants & financial aid. The only problem is I should have read this years earlier instead of when my son was in 11th grade. Even then, I was still able to find helpful information and apply it to our situation. Advice - read when your child is young and then read the updated version every couple of years to see what has changed with the laws surrounding aid, trusts, 529's, etc.
by lynnette Khalfani
Amazon Price: $10.17
Customer Review: SO FAR SO GOOD - NOT ALL THE WAY THROUGH THE BOOK YET, BUT I DO THINK I FOUND UNCLAIMED MONEY ON THE RECOMMENDED WEBSITE AND HAVE ALREADY SUBMITTED MY CLAIM TO THE STATE TREASURER. GOOD TIPS INSIDE, WORTH THE READ FOR THE SMALL COST - ESPECIALLY IF YOU DON'T UNDERSTAND HOW YOUR STUDENT LOANS WORK.
by Anya Kamenetz
Amazon Price: $11.20
Customer Review: This book is very similar in style, thesis, and layout to "Strapped: Why America's 20- and 30-Somethings Can't Get Ahead." A notable difference is this book's more journalistic style relying more on neutral testamonials than sensational exercepts from seemingly more original testimonials. The book's thesis is not that younger generations are lazier and solely themselves to blame, but that systematic problems from sources far bigger than individuals are ALSO (but not only) to blame. Avoiding the usual binary (1-or-the-other) logic, the combination of individual and systematic issues creates a more indebted generation. The systems increasing our debt include the new ecnonomy (temp and consultant positions versus actual full-time positions, ever more stingy benefits, companies firing-and-hiring more aggressively to lower payroll expenditures), government (Reaganites' purposeful civic disengagement, conservatives dismantling government to chase free market profit, ever-more eliminating social-related government programs), social (friends use credit cards, consumer culture's "lifestyle" argument, mass media's materialistic bombardment), and financial (speculation, private investments, growing accceptance of debt-for-diploma). This argument against the conventional, conservative "it's your own fault, so get with the program" notion for why we've more debt makes this book a more anti-conventional, firebrand way to think of the problem of the US's negative (that's right, credit is big) national savings rate. The book's using testimonials caused me to have severe doubts about my own secuity: financial, emotional, psychological, and political. Stories of not "them" but "us" create a uniquely personal anxiety few books cause within me. The book's targeting the reader personally relevantly, not just theoretically, makes this book impactual in a way that enhances my savings, planning, and stress-avoidance.
by Nathan Brown, Sheryle A. Proper
Amazon Price: $10.17
by Daniel J. Cassidy
Amazon Price:
Customer Review: The world didn't begin with Adam, Eve and the PC with static IP's. In the land before time (Terminals with Internet and Monsterous E-commerce), you discovered various scholarships to apply for from books, magazines, and the news media. Students (like me) spent hours apon hours in 'scholarship listings' xeroxing every possibility that we would owe the government less after we graduated college.
Back when I started college (1998), the 'de facto' standard was this book by Daniel Cassidy. One year, a few of fellow High School students attended colleges out-of-state for free. Well, my guidence counselor fully believed in the power in this book.
Now, I'm out of school for three years and am starting to share my secrets on how I finish college for free (search for my name to read more on my website, if interested).
Long story short, this book is the standard in 'manual' scholarship searches. It features compact and succint listings seperated by your major and a section (general) that any student can qualify for. The print is readable, and it gives you the basic requirements for each scholarship along with contact information.
BUY THIS BOOK EACH YEAR UNTIL YOU GRADUATE! For the minimal cost of this book, the rewards you will get easily are reimbursed. The choice fore me is a no-brainer.
Do yourself some justice and get this book today; unless you want to pay 7% of 50k.
by Mike Lininger
Amazon Price: $14.95
Customer Review: I enjoyed reading this and passed it on to my kids who are visiting the Loire Valley this summer and living with a family there. Proper etiquette is always noticed, and a general knowledge of fine wines can only add to their experience.
Amazon Price: $31.86
by Brian OConnell
Amazon Price:
Customer Review: This is one of those marvelous books that schools should send home with kids so parents have a fighting chance to get their kids into a good school AND afford to keep them there. Easy to follow advice is there on every page. I recommend this to any family who has a kid coming of college age.
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