ShortCuts in This Guide

• Interview a Financial Aid Advisor about Financial Aid Requirements

  Take the time to meet with your college’s financial aid adviser to ask questions about financial aid requirements and student loan information. Don’t be embarrassed: it’s their job to explain this complex topic and to help you (not prevent you) from attending their college.

  1. What is the total annual cost to attend this college?
  2. Are there any extra costs that I need to plan for?
  3. What employment opportunities (including work-study) are available for students?
  4. What scholarships might I be eligible for?
  5. What reduced cost, sponsored student loans am I eligible for?
  6. What loans have the lowest interest rates and fees?
  7. When would I have to start paying back the loans, and how flexible is the repayment plan?
  8. Will the school reduce my financial aid or loans if I also get a private scholarship?
  9. What would cause me to lose my financial aid?
  10. Depending on what degree I earn, what kind of loan forgiveness programs are available? Would the loans I’m considering be eligible for loan forgiveness?
  11. Based on the amount I’m borrowing, what will I owe at the time I graduate? What will my monthly payments be?
  12. How much does the average student owe when at graduation?

  
  
  Source: Christine MacDonald, The Detroit News.

• Interview a Financial Aid Advisor about Financial Aid Requirements

  Take the time to meet with your college’s financial aid adviser to ask questions about financial aid requirements and student loan information. Don’t be embarrassed: it’s their job to explain this complex topic and to help you (not prevent you) from attending their college.

  1. What is the total annual cost to attend this college?
  2. Are there any extra costs that I need to plan for?
  3. What employment opportunities (including work-study) are available for students?
  4. What scholarships might I be eligible for?
  5. What reduced cost, sponsored student loans am I eligible for?
  6. What loans have the lowest interest rates and fees?
  7. When would I have to start paying back the loans, and how flexible is the repayment plan?
  8. Will the school reduce my financial aid or loans if I also get a private scholarship?
  9. What would cause me to lose my financial aid?
  10. Depending on what degree I earn, what kind of loan forgiveness programs are available? Would the loans I’m considering be eligible for loan forgiveness?
  11. Based on the amount I’m borrowing, what will I owe at the time I graduate? What will my monthly payments be?
  12. How much does the average student owe when at graduation?

  
  
  Source: Christine MacDonald, The Detroit News.

• Ace the FAFSA

  Making mistakes on or leaving information out of your FAFSA could delay your application and possibly make you lose out on some financial aid for school. The National Association of Student Financial Aid Administrators (NAFSAA) has compiled a list of the most common errors people make on the FAFA.
  
  As you and your child complete the FAFSA, try to avoid these mistakes:

  • Leaving blank fields–enter a "0 or "not applicable" instead of leaving a blank. Too many blanks may cause miscalculations and an application rejection.
  • Using commas or decimal points in numeric fields; always round to the nearest dollar.
  • Listing incorrect social security number or driver's license number; check these entries and have someone else check them too. Triple check to be sure.
  • Entering the wrong federal income tax paid amount; obtain your federal income paid amount from your income tax return forms not your W-2 form(s).
  • Listing adjusted gross income as equal to total income; these are not the same figure. In most cases, the AGI is larger than the total income. This mistake is particularly common.
  • Listing marital status incorrectly; only write yes if you're currently married. If you're separated, you're considered married. Enter your marital status on the day you sign the FAFSA or Renewal FAFSA.
  • Listing parent marital status incorrectly; the custodial parent's marital status is needed; if they've remarried, you'll need the stepparent's information too.
  • Leaving the question about drug-related offenses blank; If you're unsure about something, find out before you submit your FAFSA instead of leaving a blank. A conviction doesn't necessarily disqualify you from getting aid.
  • Forgetting to list the college; obtain the federal school code for the college you plan on attending and list it, along with any other schools to which you've applied.
  • Forgetting to sign and date; if you're filling out the paper FAFSA, be sure to sign it. If you're filing electronically, be sure to obtain your PIN from www.pin.ed.gov. Your PIN is your electronic signature and will always be assigned to you only.
  • Entering the wrong address; this is the student’s permanent address, not a campus or summer address.

  Here is a list of materials that will help you and your child complete the FAFSA:

  • Your child’s and your social security numbers (can be found on social security card)
  • Your child’s and your driver's license (if any)
  • Your child’s W-2 forms for the previous year and other records of money earned
  • Your child’s most recent federal income tax return—IRS Form 1040, 1040A, 1040EZ, 1040Telefile, foreign tax return, or tax return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federated States of Micronesia
  • Your (the parents’) federal income tax return for the previous year (if your student is a dependent student as defined by federal criteria)
  • Your child’s untaxed income records for the previous year —Social Security, Temporary Assistance to Needy Families (TANF), welfare, or veterans benefits records
  • Your child’s current bank statements
  • Your child’s current business and investment mortgage information, business and farm records, stock, bond, and other investment records
  • Documentation that your child is a U.S. permanent resident or other eligible noncitizen.

  Bonus tip: If you apply online, your application will be processed faster and will likely be more accurate because your application will be processed on the FAFSA Web site to catch errors. The online application also provides worksheets that will calculate amounts and enter them into the field for you. You can save and continue the FAFSA at any time online and then sign your application electronically using a personal identification number (PIN) which you can get from the Federal Student Aid PIN Web site.

  There are resources available if you decide you need assistance filling out the FAFSA. Check the FAQ section on the FAFSA Web site, or call the Federal Student Aid Information Center at 1-800-4-FED AID (1-800-433-3243). You can also participate in College Goal Sunday in your state for personal assistance completing the FAFSA. College Goal is held every February at a college campus near you.
   

• Ace the FAFSA

  Making mistakes on or leaving information out of your FAFSA could delay your application and possibly make you lose out on some financial aid for school. The National Association of Student Financial Aid Administrators (NAFSAA) has compiled a list of the most common errors people make on the FAFA.
  
  As you and your child complete the FAFSA, try to avoid these mistakes:

  • Leaving blank fields–enter a "0 or "not applicable" instead of leaving a blank. Too many blanks may cause miscalculations and an application rejection.
  • Using commas or decimal points in numeric fields; always round to the nearest dollar.
  • Listing incorrect social security number or driver's license number; check these entries and have someone else check them too. Triple check to be sure.
  • Entering the wrong federal income tax paid amount; obtain your federal income paid amount from your income tax return forms not your W-2 form(s).
  • Listing adjusted gross income as equal to total income; these are not the same figure. In most cases, the AGI is larger than the total income. This mistake is particularly common.
  • Listing marital status incorrectly; only write yes if you're currently married. If you're separated, you're considered married. Enter your marital status on the day you sign the FAFSA or Renewal FAFSA.
  • Listing parent marital status incorrectly; the custodial parent's marital status is needed; if they've remarried, you'll need the stepparent's information too.
  • Leaving the question about drug-related offenses blank; If you're unsure about something, find out before you submit your FAFSA instead of leaving a blank. A conviction doesn't necessarily disqualify you from getting aid.
  • Forgetting to list the college; obtain the federal school code for the college you plan on attending and list it, along with any other schools to which you've applied.
  • Forgetting to sign and date; if you're filling out the paper FAFSA, be sure to sign it. If you're filing electronically, be sure to obtain your PIN from www.pin.ed.gov. Your PIN is your electronic signature and will always be assigned to you only.
  • Entering the wrong address; this is the student’s permanent address, not a campus or summer address.

  Here is a list of materials that will help you and your child complete the FAFSA:

  • Your child’s and your social security numbers (can be found on social security card)
  • Your child’s and your driver's license (if any)
  • Your child’s W-2 forms for the previous year and other records of money earned
  • Your child’s most recent federal income tax return—IRS Form 1040, 1040A, 1040EZ, 1040Telefile, foreign tax return, or tax return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federated States of Micronesia
  • Your (the parents’) federal income tax return for the previous year (if your student is a dependent student as defined by federal criteria)
  • Your child’s untaxed income records for the previous year —Social Security, Temporary Assistance to Needy Families (TANF), welfare, or veterans benefits records
  • Your child’s current bank statements
  • Your child’s current business and investment mortgage information, business and farm records, stock, bond, and other investment records
  • Documentation that your child is a U.S. permanent resident or other eligible noncitizen.

  Bonus tip: If you apply online, your application will be processed faster and will likely be more accurate because your application will be processed on the FAFSA Web site to catch errors. The online application also provides worksheets that will calculate amounts and enter them into the field for you. You can save and continue the FAFSA at any time online and then sign your application electronically using a personal identification number (PIN) which you can get from the Federal Student Aid PIN Web site.

  There are resources available if you decide you need assistance filling out the FAFSA. Check the FAQ section on the FAFSA Web site, or call the Federal Student Aid Information Center at 1-800-4-FED AID (1-800-433-3243). You can also participate in College Goal Sunday in your state for personal assistance completing the FAFSA. College Goal is held every February at a college campus near you.
   

• Find Free College Money on the Web

  Scholarships provide millions of dollars of free college money to students that they don’t have to pay back. The Web makes searching for the right scholarship easy—but it helps to know where to look:

  1. www.fafsa.ed.gov
     In addition to being the place to fill out the FAFSA online, this site provides worksheets, information on financial aid requirements and scholarships, a college savings calculator, and more.
  2.  www.fastweb.com
     This is a thorough database featuring thousands of scholarships affiliated with Monster, an online career finder. Match your profile to scholarships to save time.
  3. www.scholarshipexperts.com
     Want to search 2.4 million scholarships worth $14 billion? This is the place.
  4. http://apps.collegeboard.com/cbsearch_ss/welcome.jsp
     The College Board (the folks who run the SATs) provides a search for $3 billion worth of scholarships.
  5.  www.collegetoolkit.com
     This site features a searchable scholarship database as well as cool features such as “Can I Get In?” Type in your dream college and qualifications and this feature will calculate your chances of getting accepted.
  6. www.collegenet.com/mach25/app
     This allows you to search scholarships by keyword. Try using keywords that describe your interests and background.
  7. www.mappingyourfuture.org
     Run by the National Association of Student Financial Aid Administrators (NASFAA), this site lists loans, grants, scholarships, and work-study programs with helpful links to other resources.
  8. www.finaid.org
     With information on financial aid and search tips, the site is a complement to www.fastweb.com
  9. www.scholarshiphelp.org
     If you're looking for a breakdown of the process—from writing scholarship application essays to rating scholarship search sites—look no further.
  10. www.collegegoalsundayusa.org
      Another site by NAFSAA where you can find links to College Goal Sunday sites by state. Go to College Goal Sunday and let the pros help you get it done, for free, on time.

  
  
  Content by Susan J. Demas, a 2006 Knight Foundation Fellow in Nonprofits Journalism.

• Find Free College Money on the Web

  Scholarships provide millions of dollars of free college money to students that they don’t have to pay back. The Web makes searching for the right scholarship easy—but it helps to know where to look:

  1. www.fafsa.ed.gov
     In addition to being the place to fill out the FAFSA online, this site provides worksheets, information on financial aid requirements and scholarships, a college savings calculator, and more.
  2.  www.fastweb.com
     This is a thorough database featuring thousands of scholarships affiliated with Monster, an online career finder. Match your profile to scholarships to save time.
  3. www.scholarshipexperts.com
     Want to search 2.4 million scholarships worth $14 billion? This is the place.
  4. http://apps.collegeboard.com/cbsearch_ss/welcome.jsp
     The College Board (the folks who run the SATs) provides a search for $3 billion worth of scholarships.
  5.  www.collegetoolkit.com
     This site features a searchable scholarship database as well as cool features such as “Can I Get In?” Type in your dream college and qualifications and this feature will calculate your chances of getting accepted.
  6. www.collegenet.com/mach25/app
     This allows you to search scholarships by keyword. Try using keywords that describe your interests and background.
  7. www.mappingyourfuture.org
     Run by the National Association of Student Financial Aid Administrators (NASFAA), this site lists loans, grants, scholarships, and work-study programs with helpful links to other resources.
  8. www.finaid.org
     With information on financial aid and search tips, the site is a complement to www.fastweb.com
  9. www.scholarshiphelp.org
     If you're looking for a breakdown of the process—from writing scholarship application essays to rating scholarship search sites—look no further.
  10. www.collegegoalsundayusa.org
      Another site by NAFSAA where you can find links to College Goal Sunday sites by state. Go to College Goal Sunday and let the pros help you get it done, for free, on time.

  
  
  Content by Susan J. Demas, a 2006 Knight Foundation Fellow in Nonprofits Journalism.

• Choose the Right Student Loans for College

  Student loan information can seem overwhelming. Here is a quick review of the five types of student loans for college and the pros and cons of each.

  Perkins

  Best federal government need-based loan for students.
  Pro: Lower fixed interest rate. No fees. Credit history not a factor unless you are in default on prior student loans. Subsidized, so interest doesn’t start until after graduation.
  Con: Funding limited to those with greatest need.

  Stafford

  Most common federal student loan.

  Pro: Fixed interest rate better than PLUS loan. Can be subsidized depending on need. Repayment is more flexible for disability or job loss than most private loans.
  Con: Limit on how much can be borrowed using this loan.

  PLUS (Parent Loans for Undergraduate Students)

  Most common federal parent loan. Also used by grad students.
  Pro: Fixed interest rate. Can cover full cost of attendance minus other aid.
  Con: Subject to credit approval. Not as good a deal as Perkins or Stafford.

  Sponsored

  Provided by some colleges, states, employers, and scholarship groups.
  Pro: Can be a better deal than some federal loans.
  Con: Harder to find. Ask around and use scholarship directories. 

  Private

  Provided by banks and credit unions independent of the federal system.
  Pro: May cover expenses beyond aid award.
  Con: Subject to credit approval. Read the fine print—some private loans may compete with PLUS loans, but some are way more expensive than federal loans.

• Choose the Right Student Loans for College

  Student loan information can seem overwhelming. Here is a quick review of the five types of student loans for college and the pros and cons of each.

  Perkins

  Best federal government need-based loan for students.
  Pro: Lower fixed interest rate. No fees. Credit history not a factor unless you are in default on prior student loans. Subsidized, so interest doesn’t start until after graduation.
  Con: Funding limited to those with greatest need.

  Stafford

  Most common federal student loan.

  Pro: Fixed interest rate better than PLUS loan. Can be subsidized depending on need. Repayment is more flexible for disability or job loss than most private loans.
  Con: Limit on how much can be borrowed using this loan.

  PLUS (Parent Loans for Undergraduate Students)

  Most common federal parent loan. Also used by grad students.
  Pro: Fixed interest rate. Can cover full cost of attendance minus other aid.
  Con: Subject to credit approval. Not as good a deal as Perkins or Stafford.

  Sponsored

  Provided by some colleges, states, employers, and scholarship groups.
  Pro: Can be a better deal than some federal loans.
  Con: Harder to find. Ask around and use scholarship directories. 

  Private

  Provided by banks and credit unions independent of the federal system.
  Pro: May cover expenses beyond aid award.
  Con: Subject to credit approval. Read the fine print—some private loans may compete with PLUS loans, but some are way more expensive than federal loans.

• Save Money on Your Student Loans for College

  Finding your way through the maze of loan choices can be intimidating but it will pay off in the long run: the difference between the best loans and the worst can be thousands of dollars.
  Use the following seven tips from the experts offer important student loan information to keep you out of trouble and on the path to saving money:

  1. File the FAFSA federal aid form as soon as possible in February after you get your tax forms. The ShortCut “Ace the FAFSA: Tips and Lifesavers for Maximizing College Student Financial Aid” will show you how. For background on the benefits of filing the FAFSA, read “FAFSA Helps Families Access Four Types of Financial Aid for School.”
  2. Don’t borrow more than you really need. Your financial aid award letter will tell you how much loan aid you qualify for. Some students borrow less than the maximum to save themselves future payments; some borrow more. Before doing either, ask for advice from a financial aid counselor at your college. Note: Borrowing more than the standard maximum without the approval of your school’s financial aid office can put your other aid at risk.
  3. Investigate sponsored loans. Some colleges, states, employers, and scholarship groups provide special private loans at rates that are even better than some federal loans. But you’ll have to check scholarship directories to find them. A good place to start looking is the ShortCut “Find Free College Money on the Web: The Top Ten Sites.”
  4. Apply for loans accurately and on time, or you might not get the money before your first college payment is due. Also, if you’re applying for private loans or the federal PLUS loan, make sure there are no errors on your credit report that can affect the rates you’re eligible for. You can get your report free at Annual Credit Report.com.
  5. Consider career choices in your loan plan. Some careers will pay better than others and make it easier to make your monthly payments. And some service opportunities such as the Peace Corps, Teach for America, and the military may provide loan forgiveness programs for special public service.
  6. Compare loans. Knowing how much money you can borrow may seem like the most important piece of student loan information you need, but consider all these factors to save the most money in interest and fees over time:

  • Interest rate. The lower the better, but also consider whether the rate is fixed (stays the same throughout the life of the loan) or variable (can increase or decrease based on federal interest rates and other factors)
  • Interest accrual. Subsidized loans don’t begin to accrue interest until graduation, which saves a lot of money. Subsidized loans are awarded based on need, however.
  • Fees. Some lenders charge processing fees that you either pay up front or that are taken out of the amount that you’ve borrowed. So make sure you know the exact dollar amount of your fees.
  • Repayment options. For some loans, repayment starts sixty days after the first loan check is sent, but others can be delayed until months after graduation—or longer if the borrower encounters an economic hardship. Flexibility is good, but it comes at a price: find out how much this option adds to the loan amount. When comparing  repayment options, be sure to ask the following questions: When does repayment start? Is the date flexible? How long will I have to pay off the loan? Are there any penalties for paying off the loan early? And are there any incentives for on-time payment?

   
   

  Source: Christine MacDonald, The Detroit News.

• Save Money on Your Student Loans for College

  Finding your way through the maze of loan choices can be intimidating but it will pay off in the long run: the difference between the best loans and the worst can be thousands of dollars.
  Use the following seven tips from the experts offer important student loan information to keep you out of trouble and on the path to saving money:

  1. File the FAFSA federal aid form as soon as possible in February after you get your tax forms. The ShortCut “Ace the FAFSA: Tips and Lifesavers for Maximizing College Student Financial Aid” will show you how. For background on the benefits of filing the FAFSA, read “FAFSA Helps Families Access Four Types of Financial Aid for School.”
  2. Don’t borrow more than you really need. Your financial aid award letter will tell you how much loan aid you qualify for. Some students borrow less than the maximum to save themselves future payments; some borrow more. Before doing either, ask for advice from a financial aid counselor at your college. Note: Borrowing more than the standard maximum without the approval of your school’s financial aid office can put your other aid at risk.
  3. Investigate sponsored loans. Some colleges, states, employers, and scholarship groups provide special private loans at rates that are even better than some federal loans. But you’ll have to check scholarship directories to find them. A good place to start looking is the ShortCut “Find Free College Money on the Web: The Top Ten Sites.”
  4. Apply for loans accurately and on time, or you might not get the money before your first college payment is due. Also, if you’re applying for private loans or the federal PLUS loan, make sure there are no errors on your credit report that can affect the rates you’re eligible for. You can get your report free at Annual Credit Report.com.
  5. Consider career choices in your loan plan. Some careers will pay better than others and make it easier to make your monthly payments. And some service opportunities such as the Peace Corps, Teach for America, and the military may provide loan forgiveness programs for special public service.
  6. Compare loans. Knowing how much money you can borrow may seem like the most important piece of student loan information you need, but consider all these factors to save the most money in interest and fees over time:

  • Interest rate. The lower the better, but also consider whether the rate is fixed (stays the same throughout the life of the loan) or variable (can increase or decrease based on federal interest rates and other factors)
  • Interest accrual. Subsidized loans don’t begin to accrue interest until graduation, which saves a lot of money. Subsidized loans are awarded based on need, however.
  • Fees. Some lenders charge processing fees that you either pay up front or that are taken out of the amount that you’ve borrowed. So make sure you know the exact dollar amount of your fees.
  • Repayment options. For some loans, repayment starts sixty days after the first loan check is sent, but others can be delayed until months after graduation—or longer if the borrower encounters an economic hardship. Flexibility is good, but it comes at a price: find out how much this option adds to the loan amount. When comparing  repayment options, be sure to ask the following questions: When does repayment start? Is the date flexible? How long will I have to pay off the loan? Are there any penalties for paying off the loan early? And are there any incentives for on-time payment?

   
   

  Source: Christine MacDonald, The Detroit News.