{Updated on October 27, 2011 with President Obama’s Student Loan Plan Debt Relief Information}
~ Financial Aid, Grants, Scholarships, Loans, Bankruptcy, Jobs and Career Information ~
Financial Aid
Financial Aid is an allotment of funds that assist students with their higher education expenses that do not have to be paid back.
To apply for financial aid, you need to complete a Free Application for Federal Student Aid (FAFSA). The information you provide determines whether you qualify for federal and state grants and federal loans based on your financial needs.
Financial Aid Overview. ed.gov
Federal Work Study Program. ed.gov
Grants
Grants are awarded by federal, state and institutional sources and do not have to be paid back. Grants are based on financial need and require that you complete a FAFSA.
Academic Competitiveness Grant
Federal Supplemental Educational Opportunity Grant
Loans for Students:
A guaranteed college loan that many students qualify for; depending on their living arrangements, income, and other financial responsibilities. A student loan usually has a lower interest rate and a specified repayment date usually up to a year after graduation.
* Please review all information about loans before deciding to borrow and to borrow only what you need.
Federal student loans: Loans designed to ensure affordable financing for higher education, training, and are considered a form of financial aid. Borrowers can count on fixed, affordable interest rates, low fees, consumer protection, repayment options, and forgiveness programs from the federal government. Federal loan terms and conditions are set by Congress and are the same for all borrowers regardless of their income, credit score, living arrangements, or where they go to school.
Private student loans:
Student loans that provide a choice when a situation necessitates it. A private loan is not recommended and is usually a person’s last resort when they have explored every other option because private loans are ten times harder to pay off in the long run. Private student loans are offered by a variety of banks and other lenders and generate profits through higher variables rates and fees.
Private student loans do not have the fixed rates, consumer protection, flexible repayment options in comparison of federal loans, and usually are based on creditworthiness. In 2008, interest rates for private student loans were as high as 18 percent, based in part by the borrower’s credit score. Fees can vary with the same lender with different borrowers and “Promissory Notes” usually gives the loan holder authority to increase the borrower’s costs and raising interest rates in response to late payments. Another difference between federal vs. private student loans is consumer protection in distressed situations. It is the discretion of the private lender as to what kind of relief is extended to the borrower who is having difficulties in meeting their loan payments.
Compare Loans and Information sites:
Student Loan Assistance, Guidance, and Resources:
AmeriCorps.gov/postponing student loan payment
National Student Loan Data System-Student Access
Pros and Cons in consolidating your student loans:
Pros
- Locks in interest rate
- Combines loans into one monthly payment
- Borrower has a longer repayment time
Cons
- Locks in the interest rate
- May increase the amount of the loan due to the elongated repayment extent of time and interest rates
- Forfeit all or a portion due to the grace period
- Borrower could lose borrowing benefits and certain deferments related to the current loans
Student Loans, forgiveness.ed.gov
The U.S. Department of Education released the Cohort Default Rates-Data in December 2010.
The Cohort Default Rate data is calculated based on borrowers and the 2-year window after entering repayment and based on fiscal year. The overall cumulative lifetime default rate for 2008 calculated based on “Student Loans”, including defaults occurring from the time loans entered repayment through 9/30/10 was at 9.8 percent, up from 2005/2006, but lower than 2004/2007. The U.S. Department of Education places 2-4 year proprietary schools at the highest-46 percent, and 2-year public & private non-profit schools at 31 percent. It is estimated that 67 percent of all students who graduate from four year colleges now have loans and that the common average loan debt is $23.000.00. Many undergraduates do have federal student loans and that a growing number are taking private student loans in addition to, or instead of, safer federal loans.
*Update October 27, 2011 on President Obama’s Student Loan Plan Debt Relief~ “Pay as you Earn Plan”, key points:
The goal of the President Obama Student Loan Plan Debt Relief is to provide an instantaneous motivating effect on the economy.
The Debt Relief Plan will help make higher education more affordable by assisting current college students to not only consolidate their loans but lower their monthly payments.
The Debt Relief Plan will give conscientious, honest, hard-working and responsible people who pursued a higher education hundreds of extra dollars per month to use, which could fuel the economy at this time.
What do student loans cover?
- Tuition
- Housing, yes even off-campus
- Books
- Lab fees
- Computers
- Cost of living
- Food
- Anything related to your college attendance
Usually federal student loans are only eligible for the cost of tuition and do not allow a student to borrow for rent and miscellaneous expenses- in general. Private loans can be tenable for all costs associated with college such as your rent, books, food, etc.
- According to the new study of The College Board, the increase in average tuition and fees at public four-year institutions has rapidly increased as comparable to private nonprofit institutions for the fifth year in a row. Public in-state tuition rates at four-year institutions are 8.3 percent higher than they were in 2010-2011. Tuition and fees at private colleges and universities increased by 4.5 percent. For more information: CollegeBoard.org
- The U.S. Department of Education announced on September 12, 2011 that the cohort default rates increased for all sectors. Public institutions went from 6.0 percent to 7.2 percent. Private institutions progressed from 4.0 percent to 4.6 percent. And For Profit schools advanced from 11.6 percent to 15 percent. The FY 2009 cohort consisting of borrowers whose first loan repayments came due between Oct. 1, 2008, and Sept. 30, 2009, and who defaulted before Sept. 30, 2010. More than 3.6 million borrowers from 5,900 schools entered repayment during this window of time, and more than 320,000 defaulted. Those borrowers who defaulted after the two-year period are not counted as defaulters in this data set. ED.gov Default Rates Rise Federal Student Loans
- Many for profit colleges that bestow students degrees online at an accelerated rate have produced a high rate of default among its students. According to the New York based College Board students left public universities with an average of about $22,000 in debt, up from $15,000 a decade ago. At private colleges, they were burdened with about $28,000, up from $17,000.
- Private student debts which may be provided by lenders Sallie Mae and Citibank are not included in President Obama’s plan. Private loans are subject to considerably fewer shelters than federal loans and on average have variable interest rates.
- The total amount of the outstanding student loan debt is over the $1 trillion mark and actually has exceeded credit card debt. With the President Obama Student Loan Relief Plan approximately 8 million borrowers will be effected by debt relief of their student loans.
- President Obama will hasten the law passed by Congress that lowers the maximum required payment on student loans from 15 percent of discretionary income annually to 10 percent for eligible borrowers; and will forgive the remaining debt after 20 years.
- The new plan lets the nearly 8 million borrowers combine two student loans into one at a lower interest rate with a 0.5% reduction. To be eligible borrowers must have direct government student loans and government-backed private loan.
- If you are already in Default you will not qualify for this relief. The component of the income based repayment plan only applies to borrowers who take out a loan in 2012 or later, and who also acquired a loan sometime between 2008 and 2012.
- According to a White House fact sheet, a teacher $25,000 in debt and earning $30,000 a year will see their payments reduced to about $114 a month. Another example from the Obama Administration is a nurse earning $45,000 a year with $60,000 in federal student loans. Under the current income-based repayment (IBR) plan, he or she would pay $358.00 a month, but under the new plan announced by Obama, payments would be reduced further, to $239.00. Income-Based Repayment (IBR) is a new payment option for federal student loans. It can help borrowers keep their loan payments affordable with payment caps based on their income and size of family. For most eligible borrowers, IBR loan payments will be less than 10 percent of their income – and even smaller for borrowers with low earnings. IBR will also forgive remaining debt, if any, after 25 years of qualifying payments. IBR is available to federal student loan borrowers in both the Direct and Guaranteed Loan programs and will cover most types of federal loans to students only. For more information: StudentAid.gov IBR Plan
- Those who want to participate in the consolidation initiative don’t have to do anything yet. Early next year, the Department of Education will contact qualified borrowers and provide more information.
- Consolidation may not be for everyone. If you have the capability to repay your student loans and you want to expedite your payments on the most expensive loans; you can only accomplish this if they are separate.
- President Obama’s plan will go in effect next year 2013 / 2014.
Articles on President Obama’s Student Loan Plan Debt Relief and College Tuition:
Wall Street Journal-Education.com
Student Loan Bankruptcy Information:
Bankruptcy due to outstanding student loans is usually the last alternative and not one to take lightly. You should always talk over all other options before making this crucial decision with a Financial Advisor.
For more information regarding the BAPCPA of 2005 and Bills/Hearings regarding a proposed amendment to the Bankruptcy Act should be discussed with a bankrupt attorney who would be able to go over your current rights and responsibilities regarding your specific student loans.
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 – public law
In 1978, Congress gave student loan creditors more favorable treatment regarding bankruptcy than any other unsecured creditors in order to protect the viability of the Federal student loan program and in actuality, the public’s money.
The reform act of 2005 amended that “Any and All” educational loans (private & public) cannot be discharged through bankruptcy due to unproven “Exorbitant” hardship”.
Many courts use the “Brunner Test” to evaluate hardship. This test requires the borrower to show and prove:
1. The debtor cannot maintain the payment, based on current income and expenses. And will have a minimal standard of living
for the debtor and/or their dependants if they have to repay the loans.
2. The debtor has significant other existing circumstances that will persist throughout the length of the repayment period of the student’s loans.
3. The debtor up until this decision has made payments on the student loans in good standing.
Outside of bankruptcy, a defaulted private or public student loan can be rehabilitated, consolidated, elongated out, or discharged due to a proven disability. The most that bankruptcy could do in many cases is wipe out the other debts the student has incurred.
The BILL, H.R. 5043 Private Student Loan Bankruptcy Fairness Act of 2010: Hearing before the Subcommittee on Commercial and Administrative Law of the Committee on the Judiciary House of Representatives, One Hundred Eleventh Congress, second session on H.R. 5043, April 22, 2010.
Private Student Loan Bankruptcy Fairness Act of 2010, pdf
Variety of Scholarship Websites:
American Foundation for the Blind
APA Scholarships and Fellowships
Bank of America Joe Martin Scholarship
College Board Scholarship Search
Create a Greeting Card Scholarship Contest
Executive Women International.org
Federal Supplemental Educational Opportunity Grant
Foley & Lardner Diversity Scholarships
Global Automotive Scholarships
Jeannette Rankin Foundation.org
Microsoft Careers-College Scholarships
National Association for the Self-Employed Scholarships
National Restaurant Association Scholarships
NCAA Scholarships and Internships
PBA/NCA Sally Beauty Scholarship
Publix Pharmacy Career Program
Richard A. Freund International Scholarship
Ronald McDonald House Scholarships
Student Conservation Association
Study Abroad School AIFS.com Scholarships
The Google Anita Borg Memorial Scholarship
Walmart Foundation Scholarships
Xerox Technical Minority Scholarship
* The College institution that you are interested in will likely have their own scholarships to apply for; which will be presented on their main website.
Avoid Scholarship Scams
Please watch out for scholarship scams. Every year, many families lose money at the hands of fraudulent scholarship companies who claim to have access to billions of dollars in private funding. They will state that these monies are unclaimed student aid. Before you use a scholarship service, please make sure a reputable company backs the service.
A scholarship service may be a scam if they tell you:
- the scholarship is guaranteed or your money back
- you can’t get the information anywhere else
- they will do all the work
- the scholarship will cost money
- they need your credit card or checking account number in advance
- you are a finalist in a contest that you never entered
Scholarship Scams Information:
*For more information on scholarship scams: Federal Trade Commission
Get the most for your money by choosing the right Institution:
The most essential item to think about when determining a school’s credibility is to make sure that the school is accredited by
appropriate organizations. Degrees from unaccredited schools do not have the same status that degrees from accredited schools do, something that many students discover too late.
Regional & National Accreditation
When searching for higher education you will want to know if the institution is accredited regional or national.
CHEA.org Directory of Higher Education Accreditation
CHEA.org Search for Accredited Institutions & Programs
1. Regionally Accredited is the most distinguished accreditation. Agencies only work with academically oriented, not for profit institutions. All institutions must meet strict standards. Regional accredited will only accept credits from regional accredited schools.
2. Nationally Accredited are mostly for profit schools and are usually more expensive. Nationally accredited will accept
transfer credits from regionally accredited institutions.
- Approximately 65% of educational institutions will accept transferred credits of regionally accredited colleges; but only 15% will accept nationally accredited credits.
What do you want to be when you grow up?
Websites of Jobs / Careers in Demand and Career Advice:
Accounting.com – accounting and financial resource/job search
After College – employment
AOL Jobs – jobs and career information
Bank Jobs – banking career site
Broker Hunter – employment
Career Builder – advice, employment, resources
Career Intelligence – career tips
Career Journal – career information
Career Key – career advice
Career Magazine – job postings and career resources
Career Overview – career and job search resources
Construction Jobs – jobs and career information
Dice – career tips, employment
Diverse Jobs – higher Education jobs/career resources
Eco Jobs – environmental employment
Employment Spot- articles/tips/job search
Execu-Search – job search
Fashion Job Search – job listings
Flipdog – job search
Global Corporate Careers – international employment
Government Careers – government employment
Guidance Counselor Jobs – guidance counselor job opportunities
Health Careers – healthcare resources, employment
Health Management Jobs – employment listing
Higher Education Jobs – higher Ed career tools, employment
Hound.com – employment search
IEEE.org – career resources, employment
Indeed – employment search
Insurance Jobs – insurance employment
International Jobs – International employment
Job Bank USA – career tools/tips, employment
Job Circle – career resources, employment
Job Hunt – job search strategies/networking, employment search
Job of Mine – job search/career advice
Jobs in Sports – job search
Job Star – resume tools, employment search
Job Web – career information, employment search
Jobvertise – USA & Canada job search
Just Jobs – employment search
Kforce – employment search
Krop – design employment
Linkedin – jobs
Marketing Jobs – job search
Media Bistro.com – job listings
Military.com – career advice/resources, overseas employment
Monster – career advice/tools, employment search
My Future – Career search
National Restaurant Association – jobs and careers
Nation Job – employment search
Nursing Jobs – jobs in nursing
Overseas Jobs – global employment
Public Relations Society of America – public relation/communication employment
Quick Online Jobs – employment search
Quint Careers – career tools/resources, employment
Resume Logic – resumes for engineers, by engineers
Resume Submit – resume writing/tips
Retirement Jobs – career resources/advice, employment
Riley Guide – career and employment information
Sales Gravy – career tips, employment in sales
Sales Jobs – positions in sales
Science Jobs – employment in science
Simply Hired – employment search
Six Figure Jobs – employment search
Snag A Job – employment search
Social Service – social service job listings
Sustainable Business.com – green job listing
Talent Zoo – career information/tips, employment search
Techie Jobs – employment search
The Ladders – employment/career advice
Think Energy Group – employment search
US Dept. of Labor – career information/resources, employment
USA Jobs – employment search
Vault – career information/tips, employment
Vet Jobs – career tips, employment search
Wall Street Journal/Careers – career tips/tools, employment search
Worktree – career tips/information, employment search
Xemion – web design job search
Written by: Judy Steeg
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