August 30, 2007
When it comes to loans, this is the real deal. The Perkins Loan program is a government
and school funded program with the smallest interest rates, only 5%. Compared to
other low-interest government loans and their high-interest private counterparts,
the Perkins Loans are ideal for students who need on-the-spot funds.
Of course, the best of loans are not available to all. Seeing as these loans have
the lowest rates, they are usually reserved for the neediest students. Luckily,
needy graduate students are also eligible. They may have gotten the cold shoulder
when it came to Pell Grants, but graduates still have options when it comes to low-rate
Even though the government puts forth a large amount of funding for Perkins Loans,
the loans are still considered campus-based. This is because schools match some
government contributions and are in charge of loan administration. They even have
to apply to participate. Not to worry, most schools do participate in the program.
Approximately 1,800 schools across the country provide students with financial aid
in the form of Perkins Loans.
Students who are interested in the Perkins Loan should submit their FAFSA. Whether a student qualifies and how
much aid they qualify for is based on their determined financial need and their
school of choice. Undergraduates with the greatest need may be eligible for up to
$4,000 in yearly aid; graduates may receive up to$6,000. Over the course of their
education, undergraduate may borrow up to $20,000 and graduates can borrow up to
$40,000 (this includes undergraduate loans.) Thankfully, if these loans add up,
students have up to 9 months after graduating, withdrawing or dropping below part-time
status to find repayment funds.
Perkins Loans are a good option for quick aid, but before applying, students should
take advantage of free funding options. Performing a free scholarship and grant
search at Scholarships.com
and browsing through school websites may eliminate the need for loans altogether.
August 29, 2007
Some of the best things in life are free, especially when it comes to financial
aid. Students who fill out a FAFSA will quickly realize that a world of financial assistance is at their fingertips.
Of all government aid, Pell Grants are definitely the sweetest. Providing aid to
millions of undergraduate students each year, the Pell Grant is the largest grant program in the U.S.
Used loosely, a grant is a monetary award that does not need to be repaid. Graduate
school grants tend to come with some research strings attached, but not the Pell
Grants. All students who submit a FAFSA will be automatically considered for Pell
Grants, and all they need to do is to fill out the admittedly pesky form. Information
about whether they qualify for aid and how much aid they qualify for will be sent
to students by their respective colleges. These school "award letters" will usually
arrive sometime between March and April, though dates do vary.
Students who got into college by the hairs of their chinny chin chin need not worry
about being ruled out for aid. Pell grant money has nothing to do with GPA, athletics,
involvement, talents, and all other things that make the average student shudder.
These awards are based mainly on financial need.
If you are raising your eyebrow suspiciously, you deserve a pat on the back: Pell
Grants are not perfect. The government can help you, but only to a point. Aside
from the financial aid eligibility issue, Pell Grants have fairly low caps. For
the 2007-2008 year, the maximum Pell Grant award is $4,310, and this is not the
award most students will receive. The amount of aid a student will receive depends
on financial need, the cost of school attendance and the length of stay. The hourly
status of a student is also considered. Students who can fit their schoolbooks into
a purse will receive less aid than those who attend full time. Graduate school students,
unfortunately, are not even eligible. Students who cannot attend with
under $5,000 in grants may need to look elsewhere for financial aid. Students who
show extreme need, graduate from a competitive school or plan to major in the math
& sciences may be eligible for additional government grants. Those who don’t
should consider applying for scholarships, non-government grants and fellowships.
A great place to perform a financial aid search is Scholarships.com. With 2.7 million
scholarships & grants worth over $19 billion, Scholarships.com has something
For more information on Pell Grants, visit Student Aid on the Web.
For additional information on financial aid, visit the Resources Section of Scholarships.com.
You will find that, as you go out in search of money to fund your post-secondary
education, a lot of questions are going to surface. Naturally, being that
we are the largest independent and dedicated resource to scholarships and financial
aid on the web, we have a lot of answers. Below, we have a list of some of the most
common questions, along with their answers. If you don't find an answer to your
question below, check out our Scholarship F.A.Q. page.
August 28, 2007
In the world of financial aid there are many different forms of assistance available
to students and each serves a slightly different purpose than the other. Many students
assume that words like scholarship, grant, fellowship, internship, and student loan
are interchangeable. They are not, however, and the consequences of misunderstanding
which form of financial aid you are looking for or receiving can be far reaching.
For each variety of assistance there are different tax stipulations, service requirements,
and repayment expectations attached. Any student on the hunt for financial aid should
know what he’s looking for, what he’s found, what the award requires and how it
will help him achieve his college goals.
are financial awards given to eligible students with no strings attached. Typically,
if you win a standard scholarship, unless it is renewable, your interaction with
the donor ends the day you receive your check. According to the IRS, if you are
not pursuing a degree, the entire scholarship is taxable. For those students using
the scholarship for college, any portion used for tuition, fees, books, and supplies
is not taxable. Any funds remaining after your expenses are paid for, however, are
subject to tax. There is not typically a service requirement or other stipulation
attached to the scholarship upon receipt of the award, however, you should check
to be certain. Scholarships are offered in many varieties—sweepstakes, essays, competitions—for
traditional and non-traditional students alike. Occasionally scholarships require
that you do a specified amount of community service after receiving the award.
Like scholarships grants are a cash award that does not need to be repaid. There are federal
grants, state grants, and grants issued by private businesses and organizations.
Many undergraduate students greatly depend on government grants to get them through
college. Why shouldn’t they? As long as students qualify financially, all they need
to do is fill out a FAFSA. Aside from the
government sponsored grant program, most grants are awarded to graduate students
who need help funding research or who intent to enter a specific field. Grant amounts
range greatly. They may be $100, $100,000, etc. Graduate school grants are not typically
used toward tuition, but rather, they are usually used for any expenses necessary
to complete your research.
Fellowships are typically awarded to pursuers of graduate or doctoral degrees. Although
providers don’t seek repayment, they will frequently ask that students perform research
work as a part of the deal. The work may be tedious, but it is usually worth the
effort; it is not uncommon for stipends, in addition to tuition coverage, to be
a part of the fellowship package. Fellowships tend to be lucrative, and they can
get pretty competitive. Students who demonstrate exceptional merit are usually the
Most students know the difference between a scholarship and an internship, however,
for those that need clarification an internship is an opportunity to work within
a business or organization that you would otherwise need a degree to hold a position
in. While some internships offer monthly stipends for students participating in
their programs, others are unpaid. There are many professions that require students
to have participated in an internship program before they can be hired as an employee.
It’s a good idea to find out how most professionals in your field of interest secured
a position in their field because you will likely discover that without the help
of an internship most would not be where they are today. When you are considering
an internship there are several things to think about before you accept a position.
Ask yourself: How will it help me? What is the time commitment? Is there a stipend?
And of course, is there a possibility for employment after the internship?
Believe it or not, student loans qualify as financial assistance; however, loans are a form of low-interest debt that must eventually be repaid. There is a limit to how much financial assistance
a student can receive from student loans which is usually determined by how great
the financial need of the student is. For the students who do not qualify for a
need-based grant but do not have enough cash to pay for tuition, student loans are
a good option. An added benefit is that most loans do not begin accumulating interest
until 6 to 12 months after you graduate and monthly payments are also delayed until
There are so many things to think about when entering college. Financial aid for
room & board and book expenses initially come to mind, but many forget
another important expense—medical insurance. Before students head off to college,
they need to seriously consider future medical aid options. Those with a history
of ailments are likely to explore their options, but so should the poster children
for health. Unfortunately, a large portion of health-related issues surface during
adolescence. The fact that college students are frequently stressed out and sleep-deprived
sure doesn’t make things better.
In more ways than one, students who enter college are better off than those who
finish school at 18. Those who are considered dependents under the health insurance
plans of parents are frequently given the boot on their eighteenth birthday - a not-so-nice
way to be welcomed into the adult world. Those who head off to college, however,
continue to be dependents under their parents’ plan for a few more years (usually
until they turn 23 or 25). This typically applies to full-time students only. Those
who are enrolled part-time may be ineligible or forced to hand over additional cash.
Schools typically offer their own college insurance plans for those who choose to
take advantage of them. Oftentimes, students are automatically charged for this
service unless they let schools know they are uninterested. Some states require
entering students to be medically ensured. If that is the case, students who choose
to reject school offers must show proof of alternative coverage. The costs of college
insurance vary greatly, but they are frequently less expensive than private options.
This tends to come at the expense of quality.
You may have noticed that full-time students can retain a parent plan until they
turn a certain age—a few states extended the eligibility age to 30. More often,
however, students may be cast aside during their low and mid twenties. According
to a Commonwealth Fund report, about 30 percent of the nation's estimated 44.4 million
people without health insurance are 19-29 years old. This makes them the largest
group of newly uninsured. Graduates students with no income and plenty of expenditures
are not pleased. Schools do take graduate school students into consideration, but
they do so at a cost. For example, the University of Illinois Champaign insurance
policy for the 2007-2008 year is $180 for undergraduates; graduates have to pay
$256. College students do have options, but they need to be prepared.
When putting aside college funds, expect the unexpected. Scrapping together additional
529 plan money and applying for a few more scholarships may be in order.
August 27, 2007
With an increasing number of students taking and passing AP tests during their senior, sometimes junior, years of high school, early college graduation is an option for many. At numerous schools, entering college with AP credits is the norm—and I’m not just referring to the Ivy Leagues. When students enter their freshman year with sophomore status, they may have to decide if early graduation is a good option for them. Here are some things to consider before deciding whether to leave or to hang around.
FinancingLet’s start with the practical. For some students, financing is not a problem. They can afford to stay the whole four years—or will choose to stay, regardless of financial need. For others, this is not the case. Students who are already burdened down by loans may want to seriously consider early graduation. Yes, the college experience is important, but so is the post-college experience. Travel issues may not be a big deal until you find that a college bus doesn’t circle your workplace every seven minutes. You will need a car and your may want a new place to stay. Students should also remember that additional expenses kick in after college. You may be unable to claim dependency on medical insurance and tax returns, you don’t get good-grade discount on car insurance, and your movie tickets will cost more than $8—at least in the city.
College is a great place to take classes that are odd and interesting, even if they require additional work. I wish I would have taken that class on Middle Eastern relations. It may sound odd to you, but it sounded cool to me. It would have made my hard life harder, but when am I going to get that chance again?
If you like college and want to explore options before leaving, you should do so. Just don’t stretch your reasoning for doing so. When I spoke to my counselor about leaving early, she was adamantly opposed to it. “Think of all those things you wanted to do,” she said. “You can take those ice skating classes you have always dreamt about.” Ice skating? I don’t want to skate, especially if it costs $13,000 per year.
Those who have their minds made upIf you’re reading this article because you know what you want but need help getting there, here are my suggestions. Know that to graduate early, you need to stay organized: you need to plan ahead.
August 23, 2007
Effective October 15, 2007, College Board will no longer accept student loan applications. College Board, best known for administering the SAT and AP tests, announced its decision to leave the lender industry on August 22nd. In a press release, College Board stated that legislation aimed at curbing unethical relations between lenders and colleges made it too difficult to cover costs associated with education professional meetings.
The legislation was created as a result of findings that numerous lenders made payments to colleges in exchange for spots on college preferred lender lists. Legislation included a more concrete definition of a lending institution—which categorized College Board as a lender—and restrictions on lender payments to financial aid officials. Although College Board does not itself lend money to students, it receives payments from lenders for allowing students to sign up. As it is now considered a lender, it can no longer offer funds to the financial aid officials it works with.
The meetings College Board convenes for education professionals are now subject to strict regulations. Under new rules, College Board would no longer be able to reimburse members for travel and lodging expenses. Edna Johnson, a College Board spokeswoman stated, “If we no longer reimburse the educators, then only those educators from schools, colleges and universities with the financial resources to pay for the travel and the accommodation would attend.” The meetings held by College Board include discussions of practices for assisting families in paying for an education and tactics for effective administration of financial aid programs.
The new decision is likely to affect lenders more than it does College Board and the students who search for financial aid. According to the Washington Post, College Board issued 74,000 loans valued at $400 million in 2007, and the year is not over. However, less than 1 percent of College Board’s revenue comes from the lending sector.
Students who signed up with College Board aren’t the losers in this decision either. Those who wish to take out loans with companies represented by College Board may still do so by contacting lenders directly. They may be forced to do some extra research, but that’s a good thing.
August 21, 2007
That I needed to fill out a FAFSA
was a given. All counselors advised students to search for aid, and it seemed wrong
to miss out on the opportunity—especially when other students came home with awards.
Admittedly, applying was a bit confusing (but worth it). After receiving my FAFSA
award letter, however, I was totally mystified. There were columns for college grants,
Stafford Loans, Perkins Loans and Federal Work Study. I didn’t know if I had to accept
all financial aid, if I could request more or if this was just my receipt. Out of
fear for signing away my future home, I was almost ready to not sign anything. Thankfully,
things became much easier after the first year (although the FAFSA part was still
confusing). Knowing the basics made the award letter much easier to read.
Using the information provided in your FAFSA, the amount your family can potentially
contribute to your schooling is weighed against the actual cost of attendance. The
award letter will reflect all federal, state and university offers of aid. This
includes scholarships, college grants, and student employment. Financial aid gifts
such as tuition waivers, assistantships, fellowships, resident hall advisor compensation
and scholarships from organizations may not be listed until a school is notified
about them. Your award letter is not a receipt. You will not take on a $5,000 loan
by not responding, but you may lose some award money if you don’t. You can take
advantage of as much or as little of this money as you wish.
If you see any college grants in your letter, that’s a good sign. Government grants
are basically free money, and you should take advantage of it. Student loans are
also common. Students may see awards for Stafford, PLUS, and Perkins Loans. While government loans are not free awards, they
are a good bet for students who need to take out additional funding. The government
provides students with interest rates that beat those offered by private loan companies.
Federal Work Study is another pseudo award. Many colleges and universities will
find work for students who would like to earn money. While such work is unlikely
to make a student rich—much of it close to or commensurate with minimum wage—it
is easy to find, and it is flexible. You are not required to accept any or all aid
offered.Students may choose to decline some or all of their financial aid. Those
who only wish to take advantage of free grant money may turn down the loans and
federal work study funds. If a student needs $3,000 but is only offered $1,000 in
grant money, they may use up their entire grant award as well as some or all of
their loan award.Students unsatisfied with awards still have options.
Students who feel they need more may speak to financial aid officials and request
additional funds. Sometimes, schools may offer additional aid to coveted students
or to those with new financial difficulties. Schools are not required to do this,
so going in with a temper is not the best approach. Those who find no luck may still
apply for additional scholarships, college grants and loans. Free grant and
scholarship money is best, but additional, government-subsidized or private
loans are available. Schools usually have a preferred-lender list for those who
need to borrow, but it is important for students to conduct personal research on
Depending on the hands it falls into, a credit card may serve as an ultra-convenient
money stack, or it can—if I may be overly dramatic—lead to financial suicide. For
those who can manage their expenses and pay their monthly balances in full, owning
a credit card is a great idea. Walking around with large amounts of cash is dangerous,
and buying online is quite a hassle a without a credit card. Emergencies that necessitate
fast funding also come up, and when they do, a bit of debt pales in importance. As
you probably know, building up a credit report is one of the biggest incentives
for taking advantage of credit cards. Credit card companies know that many parents
will take care of student debt, and they’re not shy about making application offers
to students. Booths with pizza and t-shirt giveaways fill up campus corners and
busy sidewalks on sunny days. According to CBS, the average student is offered eight
credit cards during their first college semester—no job required. Once
students graduate, they are less likely to receive financial backing from their
parents. With new expenses and student loans kicking in, graduate fledglings are
considered to be bigger liabilities to credit card companies. Ironically, just when
credit cards become most important, they become most difficult to come by. Renting
an apartment involves a credit check, as does taking out a car loan and a home mortgage.
People with bare credit reports are big question marks to sellers, landlords and
credit card companies. If there is little or no credit history on your report, you
may find yourself staring at bigger bills or doorknockers. I’m not saying
it’s impossible to make it without a credit card, but having one sure does help.
Good track records with a national credit card such as Master Card, Visa, and Discover
(lesser-known store cards may not contribute to credit ratings) give lenders some
evidence of dependability. Unfortunately, many students have a hard time creating
a positive track record, and therein lays the problem. Students frequently
look to credit cards for tempting pick-me-ups and tuition aid. Don’t get me wrong,
not all indebted students are shopoholics, but those who look to credit cards for
financial aid might want to look elsewhere.
Scholarships, grants, jobs and less expensive student loans are a student’s best
bet because late payments may hurt in more ways than one. They will show up on credit
reports, result in $20-$25 late bank fees, and lead to increases in credit card
penalty charges. If you handle your credit card wisely, you won’t need
to worry much about penalties and annual percentage fees, but you should definitely
shop around before applying. Search for a card with the lowest fixed annual
percentage rate (APR). Numerous cards will start you off with a low APR but raise
the rate after 6 months. Also, be on the lookout for standard annual fees. There
are cards that charge standard usage fees, regardless of payment history. Look for
those that don’t. Once you build a good payment history, you may receive
credit card offers galore. Little cards with your school logos may arrive in your
mailbox. Yes. That’s cute. Chase knows that you go to the University of Illinois,
but you already have a card. Refrain from getting another one. According to the
United Marketing Service (UCMS), the average Joe carries 2.8 credit cards in his
wallet: don’t be Joe. When you apply for a new card or loan, a credit inquiry will
be recorded on your report. The more inquiries are made, the lower your credit score.
I know, just because you want a discount on American Eagle jeans does not mean that
you will not pay your bill in full. Unfortunately, lenders may assume that credit
inquiries suggest financial need—even if they don’t. If you can stay
on top of your expenses and limit the number of credit cards you own, you should
take advantage of college application offers. As long as you can control the card
before it takes control of you, using a credit card can bring you one step closer
to a secure financial future.
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