08.29.06
Do your research before you call
I spent the morning installing a new computer in our customer service area, listening to one of our representatives spend 10 minutes patiently trying to explain about Stafford Loans to a caller. And why they couldn’t simply fill out an application on our site and expect to get a Stafford Loan.
That’s one thing that amazes me about our customers – often times, they don’t know what they’re doing when they call. And what they don’t know CAN hurt them. It’s very important to learn about the different types of financial aid and how to get them, otherwise you could miss important deadlines and thus miss out on financial aid.
We get callers who want a Stafford Loan, but they haven’t even filled out the FAFSA yet. Without a FAFSA and an award letter from your school, you CANNOT get a Stafford Loan. It is not a loan you can simply apply for. I can’t stress this enough, because I see people who haven’t done research and thus lost out on several thousand dollars of federal financial aid because the schools have already allocated all their aid money.
Please research Stafford, Plus and Private loans. Do your homework so you don’t get burned.
If you have questions then please ask. Call your schools’ Financial Aid Office or leave a comment here and I’ll address your question in a post. Next post I’ll try to do a Stafford Loan 201 with more info that can help you.
08.24.06
Back again, and an interesting article
Hello again folks, I’m back after being ill. I hope you all had good luck with financial aid while I was gone.
Here’s an interesting article I wanted to share. As parents of college-bound students, many of you may have savings plans through Upromise. Upromise was reacently purchase by Sallie Mae, a student loan company. You can read more here.
08.11.06
Panel retreats on proposal to cut student loan aid
I found this article in the Boston Globe recently, and I though parents of college-age students would find this interesting:
By Paul Basken, Bloomberg News | August 10, 2006
WASHINGTON — A Bush administration panel has withdrawn a proposal to eliminate most federally backed student aid after protests from colleges, students, and banks.
“The current situation doesn’t allow the commission an opportunity to understand the details or defend the idea,” Charles Miller, chairman of the Commission on the Future of Higher Education, wrote yesterday to fellow commissioners.
A draft of the commission’s final report included a proposal that would allow federally backed loans only for low-income students. Miller’s withdrawal of the idea removes from consideration a plan that opponents warned could hurt 5 million students and veterans and cost them an estimated $32 billion in benefits.
Miller’s panel is due next month to issue its final report on ways of making college more affordable and relevant to US economic needs. It is to meet today in Washington to review the draft of its final report.
The draft proposed a 45 percent increase in the main federal grant program for college students. The plan also suggested the elimination of 75 percent of the federal loan programs that are not based on financial need.
University and student groups protested, saying the recommendation fails to understand that much of that lending comes at no cost to the federal government.
Even banks expressed concern, since the additional protections help lenders serve middle-income students who otherwise might not be eligible, said John Dean, special counsel to the Consumer Banking Association. The bulk of federally backed student loans are handled by banks that lend to students with a promise of government repayment in the case of default.”
08.08.06
Stafford Loans 101 – what parents need to know
Stafford Loans are a type of Federal financial aid that many students use to cover the cost of education. So what does this mean, exactly?
1) It’s a loan – it has to be paid back
2) Stafford Loans must be taken out in the student’s name, they cannot be taken out in the parent’s name
3) They are awarded by your school’s financial aid department. You cannot get a Stafford Loan unless your school has awarded you one.
4) There is a maximum amount you can borrower
5) The interest rates are fixed – so you don’t have to worry about Bernanke’s interest rate hikes. They can, however be raised by Congress. New rates normally go into effect on July 1st of the following year.
And most importantly – there are two types of loans: subsidized and unsubsidized.
Subsidized Stafford loans do not accrue interest while the student is in school (normally more than 12 credits). This means you save money in the long run. This also means that financial aid offices give these loans to people who need the most help.
Unsubsidized loans begin to accrue interest from the day the loan is disbursed. You pay more in interest over the life of the loan than in subsidized loans. Though because the government does not pay the interest, these loans are awarded to more people and can have a higher amount awarded each year.
So that’s it for Stafford Loans 101 – more in-depth next week.
08.07.06
Back in action
Hello there – after a much needed vacation to NYC, I’m back in action with Financial Aid news and advice for parents.
Keep an eye out soon for the next topic – Stafford Loans!
