Category Archives: Money Management

Apply Online, Financial need, Money Management, Students and Parents, Tax Information, UCanGo2 Resources

529 Plan on the FAFSA

A 529 Plan can be a huge benefit in paying college expenses. However, this college savings account can be tricky to report on the FAFSA. If the account is in the student’s name or in the custodial parent’s name, then the 529 Plan should be reported as a parent asset on the FAFSA. If the student is independent, meaning s/he doesn’t have to report parental information, then the plan should be reported as a student asset. The plan doesn’t have to be reported as an asset if someone other than the student or custodial parent owns the account, such as a grandparent or family friend.

Another aspect of the 529 Plan that can be challenging is distributions from the account. Distributions are funds taken from the 529 Plan for any reason. Students and parents only have to report a distribution from the account if the plan wasn’t reported on the FAFSA as an asset. Here are some guidelines to ensure that you accurately report any 529 Plan distributions:

  1. A non-qualified distribution – funds taken from the account for non-educational expenses – will be included in the Adjusted Gross Income (AGI) of the student’s federal income tax return. The AGI will be a part of the student’s total income, so the student will just need to report his or her income on the FAFSA.
  2. A qualified distribution – funds taken from the account for educational expenses – should be reported as the student’s untaxed income on the FAFSA.
  3. A distribution made from an account that the student or the custodial parent does not own must be reported as the student’s untaxed income on the FAFSA, as well.

The best option for reporting a 529 Savings Plan is to leave the account in the student’s name or in the custodial parent’s name. By doing this, the Plan will be reported as an asset and the family won’t have to report distributions made from the account. For more information on how to report the 529 Plan on the FAFSA, visit Edvisors.com/plan-for-college.

Apply Online, Deadlines, Financial need, Money Management, Types of Financial Aid

Submit Your FAFSA ASAP, OK?

It’s FAFSA time, so make it a priority to submit yours ASAP. The Free Application for Federal Student Aid (FAFSA) for the 2019-20 academic year became available October 1. The fall semester of 2019 seems far away, so why should you submit your FAFSA this early? Here are three good reasons:

  • Some forms of financial aid are first-come, first-served. When this type of aid is gone, you may have to wait for the next school year to apply for it again. Examples of this type of aid are the Oklahoma Tuition Aid Grant (OTAG) and scholarships offered by the college or university where you’re enrolling (institutional aid).
  • More and more colleges and universities are setting early enrollment and institutional scholarship deadlines in November and December. During the application process, they’ll want to know if you’ve submitted your FAFSA.
  • It’s not uncommon for a scholarship committee to ask for a copy of your Student Aid Report (SAR), which you receive after you submit your FAFSA. Completing your FAFSA early ensures that you won’t miss important deadlines.

For more information about completing the FAFSA, visit StudentAid.ed.gov.

Financial need, Grants and scholarships, Money Management, Types of Financial Aid, UCanGo2 Resources

November is National Scholarship Month

November is National Scholarship Month, and it’s an excellent time to begin applying for scholarships if you haven’t done so already. Many scholarship providers are posting new scholarship information and competitions for the next academic year, and November is also an ideal month to dedicate some time to finding scholarships for college (think Thanksgiving Break!).  Remember, scholarships are ‘free money’. They’re gift aid that doesn’t have to be paid back.

There are many ways students can qualify for scholarships. They are often based on a student’s talents, abilities, skills or participation in extra-curricular activities. They can also be given because of a student’s ancestry or religious affiliation, or for a variety of other reasons.

Apply for as many scholarships as you can. Many experts say that high school seniors should apply for 2-3 scholarships each week. But where do you begin? We suggest starting your search at UCanGo2.org and okcollegestart.org, where you’ll find hundreds of scholarship opportunities. Also, be sure to check out UCanGo2’s Scholarship Success Guide, where you’ll find many more websites that you can use to investigate scholarships of all types and helpful tips for maximizing your scholarship dollars.

For helpful information about all types of financial aid that are available, be sure to check out UCanGo2’s Are You Looking for Money? booklet.

Financial need, FSA ID, Grants and scholarships, Money Management, Student loans, Students and Parents, Types of Financial Aid, UCanGo2 Resources, Work Study

Grants, Work-Study and Student Loans

As you begin exploring different forms of financial aid, three terms will stand out: grants, work-study and student loans. These are the three primary forms of aid that the federal government distributes through the Office of Federal Student Aid (FSA). By completing the FAFSA (Free Application for Federal Student Aid), you’re applying to receive these various types of financial aid for school.

Grants and scholarships, which are given to eligible students to help them pay higher education expenses, are the best form of aid you can receive, as they typically don’t need to be repaid. The Pell Grant is the most notable federal grant; it’s awarded to undergraduate students based on financial need. Students can receive up to $6,095 from the Pell Grant for the 2018-19 school year. The OTAG is awarded to eligible Oklahoma residents enrolled in schools within the state and the FSEOG (Federal Supplemental Educational Opportunity Grant) is awarded to students with exceptional financial need. Some grants do have obligations attached to them, such as the TEACH (Teacher Education Assistance for College and Higher Education) Grant. This grant is designed to assist students who plan to teach and meet certain requirements for the grant. Not all campuses participate in this program, so students will need to check with their campus about available types of financial aid offered.

Work-Study is the form of federal aid that allows undergraduates to work part-time jobs on or off campus to earn money for school expenses. This program is administered by the school, and like grants, is based on your financial need.

The third type of aid is a federal direct student loan. A student loan is a form of aid the federal government provides to help students bridge the gap between family savings, scholarships and grants, and work study and remaining college costs. Unlike most grants or work-study, this money must be paid back with interest. While federal student loans need to be repaid, the interest accrued is often lower than it would be with a private lender, and federal student loans have more flexible repayment options than private or alternative loans.

The Direct Subsidized Loan program will lend students up to $5,500 annually depending on grade level, financial need and dependency status. The interest rate for subsidized loans first disbursed on or after July 1, 2018 is set at 5.05 percent, and the government will pay your interest costs while you’re attending school at least half time. The Direct Unsubsidized Loan is available to undergraduates (5.05 percent interest rate) and graduate students (6.60 percent interest rate). The government does not pay interest costs during school for unsubsidized loan borrowers, but students may make interest payments while in school to save money. If there is still a balance remaining after using all other available forms of aid, parents of dependent undergraduate students may apply for a Direct PLUS Loan. PLUS loan applicants must meet credit requirements, and the interest rate is currently set at 7.60 percent.

If you must accept a student loan to help pay for college, focus on federal loan options, and limit your borrowing to the amount you truly need to pay school expenses. For more information about paying for college, check out UCanGo2.org/pay.

Financial need, Money Management, Students and Parents

Oklahoma 529 College Savings Plan

The Oklahoma 529 College Savings Plan allows families to deposit funds into an account that will earn interest over time. When higher education costs arise, families will be able to use the funds from this account to help pay for their child’s education. It only takes a few minutes to set up an account online. There are a variety of low-cost investment options to choose from, and funds can be electronically deposited into the account or mailed in.

529 Plan funds can be used at most accredited colleges and universities in the United States. Expenses that the Oklahoma 529 College Savings Plan will cover include tuition, fees, books, supplies, certain room and board costs, and some technology equipment required for courses.

Saving for the future isn’t always easy, but being financially ready when your child goes to college will be well worth the investment. Here are a few things to think about when considering opening an Oklahoma 529 College Savings Plan:

  1. Contributions made to the 529 Plan grow as tax-free earnings in the account and can be deducted from your Oklahoma taxable income.
  2. Regular contributions, even if they start as small amounts, add up over time. Consider making small automatic contributions or direct deposits into the account every pay period.
  3. Don’t wait, and don’t panic if your child is closer to college than diapers. Whether your child is in pre-school or high school, start saving for higher education expenses today. Focus on saving as much as you can afford within your means.
  4. A 529 Plan account can be a community effort. Parents, grandparents, uncles, aunts, and family friends can contribute to your child’s 529 Plan account. Encourage family members to contribute to the fund for children’s birthdays and holiday gifts.

For complete information about the Oklahoma 529 College Savings Plan, visit OK4saving.org.

Apply Online, Deadlines, Financial need, Money Management, Students and Parents, Types of Financial Aid, UCanGo2 Resources

Summer Preparation for College

So you’re finishing up your senior year of high school and about to transition to life as a college student. It may be tempting to use your summer break as a time to relax and recover from your final year of high school, but it’s important to begin prepping for your upcoming college experience.

If you haven’t already filled out the FAFSA, it’s not too late. You will need to complete the 2018-19 form if you are starting classes in the fall of 2018. It can take a couple weeks for your college to send you your financial aid award letter, so complete your FAFSA as soon as possible.

The summer is also the perfect time to apply for scholarships. Use some of your extra time to complete scholarship applications. The more scholarships you apply for, the better your chances are of winning! Don’t forget about scholarships provided by your college or university, too. For more information on those, call the campus financial aid office. You can also find a list of scholarships at UCanGo2.org and OKCollegeStart.org

If you will be living on campus, you can use the summer to start coordinating dorm needs with your roommate. You should also take a look at the school’s website to start reviewing potential associations, clubs or activities to join. Make sure you don’t overextend yourself, though; transitioning successfully from high school to college takes focus.

For more tips on preparing for college, check out our primer for high school seniors, Your Transition to College.

Money Management

Paying for College: Should I Save Now or Borrow Later?

Experts have been saying for years that it’s much less expensive to save for college than it is to borrow money to cover the costs of your higher education. To see the huge difference between the two options, read the Saving vs. Borrowing page at OK4Saving.org.

One savings option you’ll want to check out is the Oklahoma 529 College Savings Plan (OCSP). Here are a few benefits of the OCSP:

  • It’s a tax-deferred account
  • Multiple family members and friends can contribute to the account on your behalf
  • It can pay for more than just tuition (it can cover fees, some room and board costs, etc.)
  • It can be used at any accredited college in the U.S., and even certain colleges abroad
  • There are several contribution options available that make adding to your OCSP easy and convenient
  • An OSCP can be opened with as little as $100
  • You and others who contribute to your account can save as much as $300,000 for  your education
  • Parents and grandparents can enter the Newborn Sweepstakes for a chance to win a $5,549 contribution to a newborn’s account. The sweepstakes ends April 14, 2018.

Visit OK4Saving.org to learn more.

Grants and scholarships, Money Management, Student loans, Students and Parents, Types of Financial Aid, UCanGo2 Resources

College Planning Tools for You!

StartWithFAFSA.org is part of the outreach initiative at the Oklahoma College Assistance Program (OCAP). OCAP provides college access, aid awareness, financial literacy and student loan management services that benefit students, parents, schools and community partners. OCAP’s initiatives include UCanGo2, Oklahoma Money Matters and Ready Set Repay, each of which offers resources and tools designed specifically for you, including:

College Planning Checklists – provide high school students detailed information about the steps they must take not only to gain admission to a college or university, but also to be successful in high school and college. From what classes to take to financial aid application guidelines, these checklists offer useful information for every high school student.

Your Money Matters Guides – designed to help students and adults manage finances, each guide is tailored to provide specific information based on your current financial situation.

Borrow Smart from the Start – provides information to help students understand the smart and responsible way to borrow student loans. Whether you’re preparing for college and considering student loans for the first time, in your grace period or currently repaying your loan, this publication provides everything a student loan borrower needs to know before borrowing.

Each of our initiatives offers a variety of information and resources designed to fit your needs. Check out our publications/resources pages at UCanGo2.org, OklahomaMoneyMatters.org and ReadySetRepay.org to find more useful tools and information.

Financial need, Grants and scholarships, Money Management, Student loans, Students and Parents, UCanGo2 Resources

Are You Looking for Money?

Well, who isn’t? Let’s rephrase to be more specific. Are you looking for money for college? If so, you should check out UCanGo2.org where you’ll find dozens of resources to help you plan, prepare and pay for college. Here are some of the highlights:

UCango2 Find Scholarships Buttong

Find hundreds of scholarships organized by deadline or category, and don’t forget to check back weekly for UCanGo2’s Scholarship of the Week!

 
Are You Looking for MoneyAre You Looking for Money is UCanGo2’s signature financial aid guide with specific information about Oklahoma’s programs. It offers information about grants, scholarships, work study programs, and student loans.

 

Finish the FAFSA in Five StepsFinish the FAFSA in 5 Steps is a step-by-step guide designed to help students and their parents submit the Free Application for Federal Student Aid (FAFSA) in just five simple steps.

 

College Planning ChecklistsWhether you’re in sixth grade or 12th grade, UCanGo2 is here to help you determine your next steps for preparing for college. From what classes to take to when to apply for financial aid, the high school and middle school checklists offer useful information for every student.

 

Bonus! A complete list of our FAFSA tools for students and parents, including FAFSA Facts and the Dependency Questionnaire, can be found in the resources section here at StartWithFAFSA.org/resources.

 

Apply Online, Deadlines, Financial need, Grants and scholarships, Money Management, Student loans, Students and Parents, Tax Information, Types of Financial Aid

Don’t Make this FAFSA Mistake!

Completing the Free Application for Federal Student Aid (FAFSA) has never been easier. However, there’s one mistake students and their parents continue to make.

Each year, many families don’t complete the FAFSA because they think they make too much money to qualify for aid. Counting yourself out before even starting is a huge mistake! Even if you think you won’t qualify for aid, you should still submit the FAFSA.

Here’s why:

    • You could be missing out. Billions of financial aid dollars are offered every year. Those funds will be awarded to someone… and that “someone” could be you. But you’ll never know if you don’t apply!
    • There’s no obligation. You’re not required to accept the aid offered to you. You’ll have the option to decline any aid offered, or you may choose to limit how much you borrow.
    • Your school might use the data. Some schools use the data on your FAFSA to award school-specific grants and scholarships. So, beyond federal funding, you could take yourself out of the running for school aid by choosing not to submit the FAFSA.
    • Federal student loans offer options. Even if you know you’ll only qualify for student loans and you’re unsure about borrowing money for school, federal loans could be your best option. Federal student loans often have lower interest rates than private or alternative loans, and they offer flexible repayment plans. They’re also a better option than high interest credit cards.