01.07.10
A Parent’s FAFSA Checklist
As a parent in the midst of FAFSA season you are probably wondering what your role in the financial aid process should be. Here is a quick checklist to make sure you are on the right track:
- Obtain your own FAFSA PIN number at www.pin.ed.gov. Your PIN will act as your electronic signature on your child’s online FAFSA.
- File your taxes as early as possible, but do not delay the FAFSA due to your taxes not being done. You can estimate your financial information on the FAFSA, but you will have to finalize it later.
- Help your child complete everything on their “to do” list.
- File the FAFSA online- it is much easier and faster and your information is 100% safe.
- Examine the bill from the school your child chooses and make she you understand all of the fees and how they will be paid.
12.22.09
Use Christmas to teach your children about budgeting
This morning I read an interesting article on CNNmoney.com about using Christmas as an opportunity to teach children about budgeting. In my opinion, budgeting is a skill that far too many kids go to college without.
Many children off all ages believe that Christmas is a time to get everything and anything they want. However, it is important to instill the concept of limits in them. Children should know that their parents do not have an unlimited amount of money and they will probably not get everything on their Christmas. Teach them how to prioritize what they really want.
You can also teach your kids how to budget their money when buying gifts for others. Teach them to set aside an ultimate amount of money they can spend and divide it among the people they want to buy for.
Hopefully after years of Christmas budgeting they will take the lessons of moderation with them to college and into their adult life.
12.21.09
Are you ready for the FAFSA?
FAFSA season is right around the corner! Are you ready? If not FAFSA4caster is a website that will help you prepare. FAFSA4caster allows you to essentially do a test run of the real FAFSA. After you have gathered and submitted all of your information it will give you an estimate of your eligibility for financial aid. This FAFSA trial will help you cut down on costly FAFSA errors. After January 1, 2010 when you are ready to apply or you can conveniently transfer all of your information over to FAFSA on the Web. FAFSA4caster also gives you the option to apply for a FAFSA PIN and helps you increase your knowledge of the financial aid process.
12.15.09
Take Advantage of Financial Aid Workshops
The 2010-2011 FAFSA will be available after January 1st. That is just two weeks away! If you are the parent of a high school senior it is important for you to take some time out of your schedule to learn about financial aid and how to properly fill out the FAFSA.
Mistakes on the FAFSA can cost you thousands of dollars in financial aid. If you have lingering questions about how it works make sure you talk to people who have been through it or financial aid experts. Luckily, this is the time of year when high school and communities hold financial aid workshops to help families of prospective college students understand the process better.
Contact you child’s high school guidance department to find out when they are holding a workshop. After you attend you will feel a lot more confident about the process and ready to help your child obtain financial aid for college.
12.03.09
Can I Cancel My Parent Plus Loan?
YES. You can cancel a PLUS loan the same way a borrower would cancel a Perkins or a Stafford loan. In fact, even after the funds have been disbursed to the school you can still cancel your loan. You would just contact a financial aid officer at the school and let them know that they can send the funds directly back to the lender, provided your request is received within the designated add/drop period. Keep in mind, however, that in some instances you can not get back the origination and default fee of 4% back.
Does A Parent Plus Loan Have Fees?
YES. Parent Plus loans do have fees.
The standard fees attached to a federal Parent Plus loan include a 3% origination and a 1% default fee. That 4% can be quite significant too if you are taking out a great deal of money for your student. It’s also important to note that those fees are taken right off the top as well. So if you need $10,000 you should apply for $10,400. That way $10,000 will make it’s way over to the school.
You may also find that some lenders are willing to waive the default fee. If this is the case jump on that deal. A 3% fee is obviously better than a 4% one.
11.24.09
Parent Plus Loan Tax Exemption
Did you know that any federal loan, including Parent Plus loans which are used to pay for postsecondary education costs, are eligible for tax exemptions? Qualified borrowers are allowed to deduct the loan interest. The maximum education loan interest deduction is $2,500.
There are conditions like income limits that apply to the education loan interest deduction. Consult your tax advisor for more details to see if you qualify.
Signing off
Well, after 4.5 years I’m leaving the Student Loan Network to pursue other career opportunities. Dave and Kristin and possibly a few others will continue to post and provide you with the best info possible on how to survive the student loan process.
I wish all of you the best of luck in your endeavors. It’s been a pleasure gathering and presenting information to you for the last 4 years.
Monique
11.23.09
Substitues for a Parents Signature
Although parent information must be provided for a dependent student when completing the FAFSA, a high school counselor or a college aid administrator may sign the application in place of a parent if:
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the parents are not currently in the United States andcannot be contacted by normal means,
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the current address of the parents is not known, or
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the parents have been determined physically or mentally incapable of providing a signature
The signer must provide his or her title in parentheses next to their signature and briefly state the reason (only one is needed) why they are signing for the parents. The signer assures a minimum level of credibility in the data submitted, however, they do not assume any responsibility or liability in this process.
11.18.09
Parent Plus Loan Credit Requirements
When a lender determines a borrowers eligibility for the Parent Plus loan they must examine their credit history, but what is considered adverse credit history you ask? What are some of the markers they look for when rendering a yay or nay decision? Let’s delve into what adverse credit history actually is.
Adverse Credit History
Adverse credit history is defined as an applicant being 90 days or more delinquent on a debt or having been subject in the last five years to a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of an FSA debt. The absence of any credit history is not considered adverse credit. FFEL lenders may establish more restrictive credit standards for determining adverse credit.
When determining whether a borrower is ineligible for a Plus loan based on an adverse credit history, the lender, or the Department of Direct Loans, must obtain a credit report on the borrower from at least one national credit bureau. To provide a more accurate determination of adverse credit, the report must be obtained within a time frame “reasonably” related to the loan period.
