In this issue:
- Welcome & Introduction
- Featured Scholarships
- Featured Sponsor
- Financial Aid News in Brief
- Getting Started With Federal Student Aid
- Introducing the Parent PLUS Loan
- A Word From Our Sponsors
- Conclusion
Welcome & Introduction
Welcome to the November issue of Financial Aid News. As you may have noticed, we've undergone some significant format changes in the last couple of months, and we're pleased to say that things are settling down, which means we can focus more on delivering the kind of timely news you're looking for. This month, we provide some new scholarship information, important information for financing the upcoming spring semester, and a few words from our sponsors.
As always, we look forward to your feedback. Contact us at newsletter@financialaidofficer.com with any suggestions you may have.
Best regards,
The Staff at FinancialAidOfficer.com
Featured Scholarships
Jackie Robinson Foundation Scholarship : US$6,000 annually to a deserving minority student with demonstrated financial need, attending a US university or college. SAT combined score of 900 or better, ACT of 21 or better.
Apply at: http://www.jackierobinson.org
Morris K. Udall Foundation Scholarship Program : Each year, the Foundation awards 80 undergraduate scholarships of up to $5,000 to juniors and seniors in fields related to the environment, and to Native American and Alaska Natives in fields related to health care or tribal policy. Thirty students will be named "Honorable Mentions" and receive awards of $350.
Apply at: http://www.udall.gov
Third Wave Foundation Scholarship : Available to all full-time or part-time students age 30 and under who are enrolled in, or have been accepted to, an accredited university, college, vocational/technical school or community college. The primary criteria to qualify for a Third Wave scholarship is vigorous engagement in activist work and financial need. The Scholarship Committee prioritizes applicants who have limited access to financial resources and whose civic, community, or cultural work shows a commitment to social justice.
Apply at: http://www.thirdwavefoundation.org
Featured Sponsor
iCallAbroad.com : The calling card service you can trust. Make domestic and international long distance calls for as low as 6 cents per minute with no connection charges, no hidden fees, no tricks. Just reliable service over our state of the art fiber-optic network. This month, sign up for iCallAbroad.com with a $20 purchase and receive an additional $5 free. It's like getting 20% off your phone bill! Plus, use it with your existing cellular or regular phone, no need to switch services at all!
Visit: http://www.iCallAbroad.com/consumer/
Financial Aid News In Brief
College more expensive than ever : The Chicago Sun Times reports that the average cost of tuition and fees at state-supported four-years schools is now 47 percent higher than it was 10 years ago. The average cost of tuition and fees at private colleges and universities has grown by 42 percent over the same period.
Complete article here : http://www.suntimes.com/output/education/cst-nws-coll221.html
Senate debating financial aid boost : A proposal sponsored by Senate Democrats is passed during the next congressional session. Still in a senatorial committee, the bill could increase federal financial aid grants for up to $700 per student each year. To get the extra funding, states must maintain 90 percent of their previous year's state higher-education funding.
Complete article here : http://www.dailynorthwestern.com/vnews/display.v/ART/2003/10/31/3fa2802492b53
Your tax dollars at work, hopefully fewer of them : In an admirable act of bipartisanship, Rep. Rush Holt, D-N.J., and Rep. Phil English, R-Penn., have sponsored a bill that will make paying for college less arduous for young people and their families. The Higher Education and Affordability and Equity Act, as a whole, provides needed tax relief to students and parents paying for college. Currently, the Student Loan Interest Deduction caps the amount of interest on student loans that can be deducted from a person's taxes at $2,500. If passed, the Higher Education Affordability and Equity Act would expand the Student Loan Interest Deduction to allow borrowers a full deduction of the interest on their student loans.
Complete article here : http://www.thebatt.com/news/547860.html
Getting Started with Federal Student Aid
The first step you'll need to complete on your road to school is to fill out the FAFSA. You can do so online (http://www.fafsaonline.com) or by paper; obtain the paper FAFSA at the Department of Education. Once you receive the SAR (Student Aid Report), you will have a better idea of what federal aid you qualify for prior to applying for loans.
If you have received your SAR, apply for the loans to the financial amounts that you require for schooling.
Not sure what to apply for or how to apply? Here's a quick guide!
1. Apply first for grants and scholarships. These are "free money" and generally do not ever require repayment. They are the best option for students with demonstrated financial need. For a nominal $30 fee, consider engaging the services of our Scholarship Search. Visit http://www.FinancialAidOfficer.com/scholarship_search for the scholarship search.
2. Next, apply for Federal Subsidized Loans. These include the Subsidized Stafford Loan, Perkins Loan, and SLS. Subsidized loans do not accrue interest while you are in school, and are the best choice for students. Complete your FAFSA, then visit http://www.StaffordLoan.com for this type of loan.
3. After subsidized, apply for Unsubsidized Loans. These include the Unsubsidized Stafford Loan and Parent PLUS Loan. Unsubsidized loans accrue interest while you are in school. Visit http://www.ParentPLUSLoan.com and http://www.StaffordLoan.com for these types of loans.
4. Apply for a private alternative student loan. These loans can close the gap between federal funding and cost of education. Visit http://www.alternativestudentloan.com to see some options for private loans.
5. If your existing aid is insufficient to cover the cost of school, or if you have expenses that are ineligible for student aid and loans, consider refinancing a mortgage or taking out a home equity loan.
Introducing the Parent PLUS Loan Program
The spring 2004 semester is coming up fast, and financing for the spring semester has never been easier. With interest rates of 4.22%, now is a great time to investigate the Parent PLUS Loan program!
The federally sponsored Parent Loan for Undergraduate Students (PLUS) is a low-interest education loan for parents of undergraduate dependent students. PLUS loans let parents fund the entire cost of the student's education (minus other student financial aid). This includes books, supplies, living expenses, as well as direct costs like tuition and room and board.
The current PLUS interest rate is 4.22% for loans disbursed between July 1, 2003 and June 30, 2004. The interest rate for the PLUS loan is variable and may change annually, but will never exceed 9%.
Advantages of the PLUS Loan
- PLUS loans are not based on income or financial need.
- PLUS borrowers do not need collateral, unlike a mortgage or home equity loan.
- PLUS loans offer a low variable interest rate that will never exceed 9%, unlike some private education loans,
- PLUS loan interest may be tax deductible.
- Parents may take up to 10 years to repay the loan - 15 or more if you consolidate after the student graduates.
- There is no pre-payment penalty!
- Can have additional co-signers to increase the likelihood of receiving the loan.
Requirements
- U.S. citizen or permanent resident
- Parent of a full-time or half-time undergraduate
- Good credit (i.e. no defaults, bankruptcies, etc.)
- Check your credit online for a nominal fee!
Loan Limit
Up to the total cost of the student's education (minus other aid received).
How do parents apply?
Simply log on to http://www.ParentPLUSLoan.com and download an application or submit an online request to speak to one of our Parent PLUS counselors. The application can be directly downloaded here:
http://www.parentplusloan.com/apply/plusloanapp.pdf
Although it's not a requirement, parents are encouraged to have their dependent children file a FAFSA, so their children can receive the maximum student aid they're eligible for.
Parents are also encouraged to check their credit prior to applying for the PLUS loan. A credit check can be done for a nominal fee by visiting:
http://www.parentplusloan.com/go.php?id=89
Who gets the money?
We send the loan funds to the school. Your school might require parents to endorse a disbursement check and send it back to the school. In most cases, the loan will be disbursed in at least two installments, and no installment will be greater than half the loan amount. The funds will first be applied to tuition, fees, room and board, and other school charges. If any loan funds remain, parents will receive the amount as a check or in cash, unless they authorize the amount to be released to the student or to be put into the student's school account. Any remaining loan funds must be used for education expenses.
Can my parents cancel the loan if they change their minds?
Parents may cancel all or a portion of their loan if they inform your school within 14 days after the first day of the payment period, whichever is later. If parents receive PLUS Loan funds directly by check, they may refuse the funds by not endorsing the check.
What happens if the loan is denied?
PLUS loans are usually denied for credit reasons. When a PLUS loan is denied, there is a silver lining - with a copy of the denial letter, students can then file for an additional unsubsidized Stafford loan, $4,000 for freshmen and sophomores, $5,000 for juniors and seniors.
Other than interest, is there a charge to get a PLUS Loan?
Parents will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made. This fee is charged by the federal government to help reduce the cost of the loans. Also, if parents don't make their loan payments when scheduled, they may be charged collection costs and late fees.
When do parents begin repaying a PLUS Loan?
Generally, repayment must begin within 60 days after the final loan disbursement for the period of enrollment for which you borrowed. There is no grace period for these loans. This means interest begins to accumulate at the time the first disbursement is made. Parents must begin repaying both principal and interest while the student is in school.
Are there any tax credits available for paying back these loans?
Yes, there are tax incentives for certain higher education expenses, including a deduction for student loan interest for certain borrowers. This benefit applies to federal and nonfederal loans taken out to pay for postsecondary education costs. The maximum deduction is $2,500 a year. IRS Publication 970, Tax Benefits for Higher Education, explains these credits and other tax benefits. You can find out more by calling the IRS at 1-800-829-1040. TTY callers can call 1-800-829-4059.
Is it ever possible to postpone repayment of a PLUS Loan?
Yes, under certain circumstances, parents can receive a deferment or forbearance on their loan, as long as the loan isn't in default. Generally, the conditions for eligibility and procedures for requesting a deferment or forbearance that apply to Stafford Loans also apply to PLUS Loans. However, since all PLUS Loans are unsubsidized, parents will be charged interest during periods of deferment or forbearance. If they don't pay the interest as it accrues, it will be capitalized.
A Word From Our Sponsors
In this issue, we introduced the Parent PLUS Loan. Did you know, however, that Parent PLUS loans can be consolidated? It's true. By consolidating Parent PLUS loans, parents can lock in today's unbelievably low rates and extend their repayment window anywhere from 15 to 30 years. In doing so, the monthly payment can be shrunken considerably, making the time AFTER college a little more affordable for everyone.
Consolidate your Parent PLUS loans today : http://www.studentloanconsolidator.com/
Considering a mortgage, refinance, or home equity loan? The Student Loan Network is pleased to present a partnership with First Capital Mortgage Group to help you get the best agreement possible. FCMG has some of the best, most customer-oriented mortgage brokers in the country, dedicated to helping you meet your needs.
Visit our Mortgage Center : http://www.studentloan.net/mortgage_center/
Traveling abroad? Your baggage may get through Customs, but your insurance probably won't. Consider purchasing Short Term Travel Medical Insurance to ensure that your safety and health are protected no matter where you go*.
Insure yourself at : http://www.InternationalStudentInsurance.com **
* Exceptions apply, such as countries at war. See site for details.
** You do not need to be a student to obtain Travel Insurance.
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