Monday, July 29, 2013

Are Scholarship Search Companies Worth It?

No. No no no. No no no no no no...! I had a post some time ago about how to tell whether a scholarship is a scam or not. This is one of the top indicators of a scam. Scholarship searches are not something that you pay for. Scholarships themselves are free, and the means to find them are free also.

One common phrase says something like this: "thousands of dollars in unclaimed scholarships -- we can help you find it!" This is a big warning sign. No legitimate place will proclaim that there is money in unclaimed scholarships. Instead, they will just give the name of the scholarship and the info you need to obtain it, whether that be an essay or some special information you have to submit.

If you need to find scholarships, probably the best place to start is at fastweb.com, which is a free financial aid information website that specializes in scholarships and has a terrific scholarship search. Also, don't forget, it's never too early to start searching for scholarships. Remember, many scholarships are only active for parts of the year. Might as well start today! Just don't pay for the scholarships or information about them.

Monday, July 22, 2013

New 150% Rule for Subsidized Loans

Beginning July 1, 2013, the Department of Education is beginning a new rule for students with Subsidized Stafford Loans. This rule (called the 150% rule) deals exclusively with what are called "new borrowers". A new borrower is defined in this rule as anyone who does not have student loan debt on or after July 1, 2013. By that definition, you could become a new borrower three years down the line if you pay off your student loans then.

This rule only applies to Subsidized Loans, not Unsubsidized Loans. The Dept of Ed will keep track of the amount of Subsidized Loans so schools won't have to. It is unlikely that many will be affected by this rule until the 2014-15 award year next July.

What will happen is if a student goes beyond the 150% of a program's published length of time, then the student will lose the interest subsidies on the Subsidized Loan, which means interest will accrue on the loan as though it is an Unsubsidized Loan. If you are getting close or if you have gone over the 150%, then it should show up in NSLDS as well as on the student's SAR and ISIR.

There three things that student's need to keep in mind with this new rule:

  1. If a student switches programs, that will affect their 150%. If you are in an 18 month program, and at the end of the 18 months you are not finished, you will only have another 9 months to finish that program before losing the interest subsidies. But if you switch to a 12 month program then, you've already been enrolled for 18 months, so you'll lose your interest subsidies on the new 12 month program.
  2. This rule is not school specific. If you enroll at School A in a 12 month program, and switch to School B after 6 months, you've already used 6 months of eligibility. So if School B's program is 12 months, you have 12 months of eligibility, so hopefully you finish it on time.
  3. This rule does not take into account the number of credits you are taking or Leaves of Absence. It goes by the length of time that the program is published for, so if you take a term off, that's one less term of eligibility you will have. If you are taking 6 credits a term (instead of full time's 12 credits minimum) for a 12 month program, most likely it will take you 24 months to complete the program. At 18 months, you will lose the interest subsidies.
Most Satisfactory Academic Progress policies require students to complete the program in 150% of the length of program. Where this differs from the 150% rule is that Leaves of Absence and number of credits matter in the SAP calculation. 

Monday, July 8, 2013

What's the Skinny on Grants?

A grant is different from a loan in a very big reason: repayment. A loan requires you to pay the money back with interest, but a grant works much differently. By its very definition, grants are not repaid. So, obviously you want to receive as much and as many grants as you can. The problem with grants though is that usually they are very specific to which school they can be used at. The most known and used grant is the Pell Grant, which is a federal grant that is managed by Office of Federal Student Aid and overseen by the Department of Education. Since it is a federal grant, keep in mind that the funds used to pay for it comes from taxpayer dollars. The goal of it is to assist students in fulfilling their educational goals by receiving education and obtaining a job afterward. It's as if the American public is helping you to pay for your education, so make sure you make them proud!

Is there ever a time when a Pell Grant has to be repaid? Not directly. If you drop from your classes and you haven't completed enough of the term to earn the whole disbursement, then the school may have to refund part of your Pell Grant. This can cause a balance on your account that must be paid. In these circumstances, you are required to pay the school the difference of your remaining charges and the Pell Grant refund. This is a situation that is very much a case by case basis. Your best option is to not drop from your classes. But if you have to drop from your classes, try to make sure it's after a term is completed. And don't forget: if you have any questions, always be sure to talk to your financial aid office. In cases of drops, the school has 30 days to make the appropriate refunds. You'll get something in the mail, but it might take some time.

Grants are always the best bet for students since they don't have to pay them back. Unfortunately, you have to qualify for grants. Since it is federal dollars paying for your education, the government wants to make sure you jump through a few hoops to make sure you qualify. Currently, the FAFSA is the easiest it's ever been, and they want everyone to complete one, so give it a shot! It's free to complete! To complete one, go to www.fafsa.gov.