Monday, September 24, 2012

Selective Service and FA (Part 1)

Your Financial Aid may be complicated in relation to Selective Service. Males are required to register between the ages of 18-25. If you don't register before age 26, then you cannot register. The Selective Service registration is a very well-known procedure for men, and claiming "I didn't know" isn't a good reason anymore, especially in the information age we are currently in.

But you have to register with Selective Service to be eligible for Financial Aid. What if you didn't register? There are certain situations where a person is exempt from registration. These reasons are:
  • males currently in the armed services and on active duty (this exception does not apply to members of the Reserve and National Guard who are not on active duty)
  • males who are not yet 18 at the time that they complete their applications (an update is not required during the year, even if a student turns 18 after completing the application)
  • males born before 1960
  • citizens of the Republic of Palau, the Republic of the Marshall Islands, or the Federated States of Micronesia (unless being a citizen of the Republic of the Marshall Islands or the Federated States of Micronesia and you live in the US for more than a year for any reason other than being a student or employee of your homeland government, then you do have to register)
  • noncitizens who first entered the U.S. after they turned 26
  • noncitizens who entered the U.S. as lawful nonimmigrants on a valid visa and remained in the U.S. on the terms of that visa until after they turned 26
There are a few odd scenarios that can occur where registration isn't required. The problem with the following is that you have to have had these scenarios occur the entire time between your age of 18-25:
unable to register due to being hospitalized, incarcerated, or institutionalized
  • enrolled in any officer procurement program at The Citadel, North Georgia College and State University, Norwich University, Virginia Military Institute, Texas A&M University, or Virginia Polytechnic and State University
  • commissioned Public Health Service officers on active duty or members of the Reserve of the Public Health Service on specified active duty
  • Confused yet? That's understandable. The government has tried to come up with every possible scenario that could occur. Some of these change a little from year to year. The information above is from the 2012-13 FSA Handbook.

    Check back next week, as we dive a little more deeply into what happens if you don't register as well as some documentation.

    Monday, September 17, 2012

    IBR and Other Repayment Options (Video)

    Here is a recently made video from FedLoan Servicing (PHEAA) about IBR. IBR stands for Income-Based Repayment, which has become a great and helpful option for students in repayment to help avoid default. At first IBR might seem a bit complicated, but the simplest way to explain it is basing your repayment on your income. The video will explain much more detail about this, as well as a quick overview of the other payment plans available.

    Monday, September 10, 2012

    Plans for the 2013-14 Verification

    I've said many times that the FA rules from year to year are very much like a new car: each year a new model that comes out and sometimes resembles the previous model, but sometimes is very different. It seems there are plans in the works for the new Verification procedures for next year. Originally, the plan was for the 2012-13 year to be one that had a simplified Verification procedure in which if one item had to be verified, then you only had to verify that one item (and not all the items). That didn't exactly happen. But with the IRS Data Retrieval System, a sharp decrease of verifications have occurred, and if the IRS Data Retrieval System had been used correctly, then only a few things would have to be verified.

    So, progress has been made. The goal then was to make 2013-14 the year which would make individual items only be verified. However, it doesn't look quite like that will happen again. The Dept of Ed is transitioning into a new kind of Verification, and 2013-14 will be the hybrid year. As of right now, FAFSAs that come back to be verified will fit into one of five verification categories (V1-V5), with each one carrying a certain amount of items that would have to be verified. It could only be one item (V2 is Food Stamps, V3 is Child Support Paid), and it could be many items (V1 is Household Size, # in College, Child Support Paid, Food Stamps (SNAP), Income Earned from Work, AGI, Tax Paid, Untaxed Individual Retirement Account Distributions, Untaxed Pensions, Education Credits, IRA Deductions, and Tax-Exempt Interest). As of right now, it looks like the Verification requirements could be different in some cases for tax filers and non filers.

    On top of the changes in Verification, it appears as though the FAFSA could have new questions like High School Completion Status and Statement of Educational Purpose/Identity. We have a lot of time before the new FAFSA takes over next July, and even before it becomes available in early 2013. Hopefully there will be more available before then.

    Monday, September 3, 2012

    Free Financial Literacy on Repayment Webinar

    Nelnet is one of the federal student loan servicers handling the workload of the federal Direct Loan Program. They often have good and helpful information. In fact, in September there is a series of financial literacy webinars that Nelnet is offering.

    On Monday September 10 and Monday September 24, Nelnet is offering free webinars that are focusing on student loan repayment. They are being offered at 1:00 Central Time and at 3:30 Central Time on both of those days.

    Some of the information that will be provided include helpful tips to managing your loan repayment, developing a financial plans like a budget, helping you find your servicer, how to avoid delinquency or default, and learning about repayment plans.

    To find out more information about these free webinars, click here. There will be some great information presented, so I'm sure you'll learn a lot!