Category Archives: Student loans

Student Loan Grace Period

While searching for ways to pay for college, it can be encouraging for students to discover that federal loans help ensure their ability to fund higher education. Many student loan borrowers have questions about how loans work, different loan types, repayment options, and the grace period. It’s important for them to be well-educated on this process before they enter repayment. Here we will provide information on understanding the grace period.

What is a grace period?

One of the advantages of a federal student loan is the six-month grace period. Borrowers usually aren’t required to make a payment on their loan until six months after they graduate, withdraw from school or drop below half-time enrollment status. The grace period gives borrowers time to find employment and adjust their budgets accordingly.

How does a grace period work?

During a grace period, interest will accrue on Direct Unsubsidized Student Loans, and sometimes subsidized loans (see the ‘Interest’ section of the Master Promissory Note, or MPN). Borrowers are strongly encouraged to make interest payments on their loans while in school and during the grace period, if possible, in order to keep the interest from being capitalized (added to the principal balance of the loan). Be sure to visit ReadySetRepay.org to see how making interest payments while in school and during the grace period can help you Save Money on Student Loans.

Here’s something else you should know. A borrower could possibly have more than one grace period to monitor if they’ve dropped below half-time status at their school for any reason. This scenario could take place if a borrower had loans at one college and then borrowed again when they transferred to another college. Dropping below half-time status at one or both of those schools would change the timing of their grace period, thus starting the six-month timeframe at different intervals. It’s important that student loan borrowers talk to their school’s financial aid office, or their loan provider, to confirm repayment start dates on each of their loans.

More information about successful loan repayment can be found at ReadySetRepay.org.

Student Loans: How To Borrow Smart from the Start

When you receive your financial aid offer from a college you may be interested in attending, it’s quite possible that one or more student loans will be included in the offer. If you need a student loan(s) to help cover the costs of college, you’ll want to borrow smart from the very start of your college experience to minimize your debt after graduation. Here are some things you need to know as you consider student loans.

  • Use ‘free money’ first. Take advantage of all the gift aid you’re offered—grants and scholarships—before deciding how much you’ll need to borrow.
  • You don’t have to accept student loans. You can decline any amount of financial aid that is offered to you. If you must borrow to pay college costs, only borrow what you’ll need to get you through one year of college. Review your finances each semester, and keep that commitment to borrow only what you need to cover school expenses.
  • Do your research. Some experts recommend that your monthly loan payment should be no more than 8-10% of the monthly income you expect to earn during the first year after graduation. To estimate your loan payments, try the Loan Calculator found at ReadySetRepay.org.
  • Subsidized = less expensive. Interest won’t be added to a subsidized federal student loan balance until after you graduate, withdraw or drop your class load to less than half-time status.
  • Make interest payments. Students who borrow federal unsubsidized loans are responsible for all interest on the loan as soon as their institutions receive the first disbursement. Student loan interest payments are generally affordable, even on a college student’s budget. If possible, keep the interest paid down while you’re in school and during your grace period. To help you think it through, see how two students took different paths to repay their student loans.
  • Keep in touch with your lender(s) and loan servicer(s). Always make sure you let them know your current address, and contact them if you’re having trouble making your payments. You can find contact information for your lenders/servicers at StudentAid.gov under Manage Loans. Be sure to have your FSA ID handy—it’s the username and password you created when you submitted your FAFSA. You’ll need it to access your federal student loan information.
  • Stay informed. Find more information and FAQs at ReadySetRepay.org and StudentAid.gov.

Financial Aid Awareness Month

Happy Financial Aid Awareness Month! February is the time to learn how you can fund your education with various financial aid options. In order to receive federal financial aid, you must submit a Free Application for Federal Student Aid, or FAFSA. Once your FAFSA has been submitted, your school’s financial aid office will notify you of your aid eligibility. Before you decide which options you’ll accept, take time to learn about the different kinds of aid that are available to you. Since they’re all beneficial, here’s an overview of each type of financial aid.

  • Scholarships. Potentially the most significant type of financial aid available is a scholarship. It’s free money you can earn from your own hard work, financial need, merit, family history, skills, hobbies or athletics. The more scholarship applications you complete, the more likely you are to win an award. While you don’t have to submit a FAFSA to apply for a scholarship, some programs may request that you do. Scholarship applications could ask you to write an essay, submit a video, take a photograph or complete a service project. To make sure your application matches the scholarship requirements, read all directions carefully before you start the process. If you’re not sure where to look for scholarships, UCanGo2.org and OKcollegestart.org are great places to start your search. Remember that scholarships can be the additional assistance you need to help you reach your educational goals.

  • Grants. Sometimes referred to as free money since they usually don’t have to be repaid, grants are given to those who demonstrate financial need. A common type of grant is the Pell Grant. The Federal Supplemental Educational Opportunity Grant, or FSEOG, is not as common since it is only given to students who show extreme financial need. For students interested in becoming teachers, there’s the Teacher Education Assistance for College and Higher Education Grant, or TEACH Grant. Students interested in the TEACH Grant should carefully read all guidelines. If the grant requirements are not met, the money could turn into a loan that must be repaid with interest. Additionally, there’s the Iraq and Afghanistan Service Grant for those who’ve lost a parent or guardian due to military service in Iraq or Afghanistan after 9/11. As with any type of financial aid, be sure to speak with your financial office if you have questions about grants.
  • Work-study. Also called earned aid, work-study allows students to work and earn money for college expenses while they’re in school. Work-study positions are part-time jobs that can be on or off campus. The supervisors over these positions tend to recognize that school is a priority and are usually mindful of your class schedule. Take advantage of these positions because they can give you work experience and time to focus on your academic responsibilities. Each school will have different ways to apply for a work-study job, so talk with your school to learn more about the application process.

  • Student Loans. While this type of aid is borrowed money that must be repaid with interest, student loans can help you bridge the gap between grants and scholarships. When it comes to borrowed money, it’s important that you borrow only the amount you need to pay school expenses! Federal loans can be beneficial due to their fixed interest rates (it will not change over time) and flexible repayment options. One type of federal student loan is the Direct Subsidized loan. This aid is for undergraduate students who demonstrate financial need. The government will pay the accruing interest on a subsidized loan while the student is enrolled in school at least half-time. Another federal loan, the Direct Unsubsidized student loan, is for students who do not show financial need. With this loan, the interest will always be accruing on the loan and students will be responsible for paying the interest. For those who need extra financial assistance there’s the Direct Parent Loan for Undergraduate Students or the Direct PLUS loan. Parents of dependent undergraduate students can apply for the PLUS loan to help cover additional college expenses for their child. In order to receive a Direct PLUS loan, parents must complete the loan application and meet certain credit requirements. Students will have six months from the time they graduate, drop below half-time enrollment or leave school to start repaying Direct Subsidized and Unsubsidized loans. Those who take out a PLUS loan will have to start repayment once funds have been disbursed.

Now that you know a little more about financial aid, use this month to decide which options could be right for you. For more financial aid information, go to StudentAid.gov.

New Year, New Habits

The new year often comes with fresh enthusiasm for a renewed lifestyle. Whether it’s working out regularly, eating out less or resisting the snooze button, there is no time like the present to commit to new habits.

In addition to health and financial goals, there are some helpful academic goals that will prove beneficial from this school year to the next.

Scholarships: By completing the Free Application for Federal Student Aid (FAFSA), you’re considered for a variety of state and federal financial aid. We encourage you to “start” with FAFSA, and then continue seeking scholarship opportunities throughout the year. Check out UCanGo2.org for new scholarships by category and by deadline. Make a profile on OKcollegestart.org to view scholarship applications that are the perfect fit for you. It’s important to apply for as many scholarships as possible year-round, so make a habit of applying for 2-3 scholarships a week.  

Study Habits: While your grades and GPA are not taken into consideration with your FAFSA, schools will look at your academic achievements when deciding academic scholarship offers as well as acceptance to their school. Your grades in college will also determine if you maintain certain scholarship offers from year to year. To start or keep up good study habits, check out these study tips: https://ucango2.org/publications/student/Perfect_10.pdf

 Extracurricular Involvement: Many schools take more than just your grades into consideration. Join a club or volunteer in your community after school hours. Your involvement will look impressive on a college application. Are you already in college? Join a club or find opportunities in your community to share the skills and knowledge that you’re developing. It looks great on resumes for future employers. Whether you’re still in high school or you’re headed into the career field, extracurricular involvement is a good commitment to make in the new year.

What’s a Student Aid Report?

After you complete the Free Application for Federal Student Aid (FAFSA), be on the lookout for your Student Aid Report (SAR). The SAR is an electronic or paper document that summarizes the data you put on your FAFSA. It also provides some basic information about your eligibility for federal student financial aid. If you completed, signed and submitted your FAFSA electronically, this document will be sent to your email address within 3-5 days. If you did not include an email address, a paper version of the SAR will be mailed to your postal address in approximately 2-3 weeks. You can also access your SAR by logging in to your account at FAFSA.gov.

The SAR contains important information, like your Expected Family Contribution (EFC) and your Data Release Number (DRN). The EFC is a measure of your family’s financial strength and is calculated according to a formula established by law. It’s based on the information provided on the FAFSA, but the EFC is NOT the amount of money your family will have to pay for college. It’s a number used by your school to calculate the amount of federal student aid you’re eligible to receive.

Your DRN is located below your EFC on the SAR and is necessary if you want your college or career school to change certain types of information on your FAFSA. Speak with someone at your college financial aid office if there has been a significant change in income for you or your parents or you have a special circumstance you need to discuss with the aid administrator.

Your SAR might indicate that you’ve been selected for verification. This is a process schools use to confirm the information on your FAFSA is correct. Your college financial aid office will notify you if additional paperwork is needed to fulfill this requirement.

Review the remainder of your SAR for any errors. If you find anything that should be corrected, log back in to FAFSA.gov, access your FAFSA, and make the necessary changes. Then enter the appropriate FSA IDs and submit your FAFSA again.

What’s The Big Deal About The FAFSA?

The FAFSA (Free Application for Federal Student Aid) is the key you need to unlock money that will help you pay for college, vocational school or other education after high school. It’s simply a statement about a family’s financial situation, and it’s used to determine how much federal financial aid a student may be eligible to receive. You have an 85% chance of getting money for college just by completing this important form.

A new FAFSA is available October 1 each year. For high school seniors, this means yours will be ready for you to submit in October, almost a year before you begin college! You can submit your FAFSA even if you haven’t applied to any colleges yet. In fact, if you’re not sure which college you want to attend, you can request that your FAFSA information be shared with up to 10 different campuses that you may want to learn more about.

The current FAFSA is available online at fafsa.gov. If you’d like a sneak peek at the FAFSA, there are two options you may want to consider.
• The FAFSA4caster can give you a free early estimate of your eligibility for federal student aid. Visit fafsa.gov and scroll down to Early Aid Estimate.
The FAFSA on the Web (FOTW) Worksheet lists most of the questions from the FAFSA, giving you an idea of what information you’ll need to have with you when you begin to fill it out.

Please keep in mind that neither of these tools is a replacement for the real FAFSA. You’ll still need to complete the actual form online after October 1 in order to apply for financial aid.

During the 2018-2019 school year, $2.6B dollars in federal financial aid for college was left unclaimed by students who would have been qualified to receive the aid, simply because they didn’t submit a FAFSA. You’ll never know what you’re eligible for unless you submit the application.

Grants, Loans & Work Study

By now you probably know that it’s important to submit the Free Application for Federal Student Aid, or FAFSA, but do you know what you’re actually submitting? This application allows colleges to see which types of financial aid you’re eligible to receive. Financial aid can help you cover educational expenses and comes in the form of grants, work-study and student loans.

Grants, sometimes referred to as gift aid, are need-based aid that usually don’t have to be repaid. The most common federal grant is the Pell Grant. This form of financial aid is available for undergraduate students (those who haven’t received their first bachelor’s degree). The maximum amount of Pell Grant a student can receive is $6,195 for the 2019-2020 school year. Financial aid offices will determine students’ financial need and inform them of their Pell eligibility. Another federal grant that’s available is the Federal Supplemental Educational Opportunity Grant, or FSEOG. Only students who have extreme financial need are eligible to receive this grant. Other grants require students to meet certain criteria. The TEACH (Teacher Education Assistance for College and Higher Education) Grant is an example of aid that has conditions attached to it, as it requires students to take certain courses and work specific jobs. There is also the Iraq and Afghanistan Service Grant that’s available for students who lost a parent or guardian as a result of military service in Iraq or Afghanistan after the events of 9/11. Eligible students should contact their school if they have any questions. Some states offer grants to their residents as well. Oklahoma has the Oklahoma Tuition Aid Grant, or OTAG, for eligible state residents who will be attending an Oklahoma public or private institution.

Work-study is also a type of financial aid that can help with the costs of college. Eligible students who receive this aid will have the chance to work a part-time job and earn money for educational expenses. Undergraduates and graduates with financial need are able to receive a work-study opportunity. Talk with your financial aid office to learn about potential places, on or off campus, that are hiring.

Student loans are another type of financial assistance. Different than other aid, student loans must be repaid with interest. There are various federal loans available for students. One type is the Direct Subsidized Loan for undergraduates who demonstrate financial need. The maximum amount for freshmen in the 2019-2020 school year is $5,500, with a fixed interest rate of 5.05 percent. A fixed interest rate means that the interest won’t change over time. The federal government will pay the interest on a subsidized loan while the student is enrolled in school at least half-time. In contrast, Direct Unsubsidized Loans are not based on financial need and are given to undergraduates and graduates. Students are responsible for the interest on this loan during all periods. The interest rate on an unsubsidized loan is 5.05 percent for undergraduates and 6.6 percent for graduate students. Other borrowed aid that isn’t based on financial need is the Parent PLUS Loan. This is available for parents of dependent students who need extra assistance with college expenses. In addition, parents must also be credit worthy to qualify for this type of aid. PLUS Loans have a 7.6 percent fixed interest rate. Speak with your financial aid office to learn more details.

There are a variety of resources available to help you pay for college. Not all schools offer each program, so be sure to contact your financial aid office with any questions. For more information about grants, student loans and work-study go to studentaid.ed.gov.

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.

Have You Applied Yet?

Any student that needs money for college expenses in 2017-18 should complete the Free Application for Federal Student Aid (FAFSA) now! The FAFSA underwent a lot of changes this year, including moving the application start date from Jan. 1 to Oct. 1. Since the FAFSA is available now, students should submit the form as soon as possible to maximize opportunities for financial aid for college. Get ahead of the game and set a reminder to submit the FAFSA Oct. 1 of next year, too!

Many types of financial aid are awarded on a first come-first served basis. This includes various types of federal aid as well as some aid through the state of Oklahoma. For example, this year, the Oklahoma Tuition Aid Grant (OTAG), does not have a deadline for FAFSA completion. Instead, students are told it’s important to apply early. Typically, OTAG receives more eligible applications than can be awarded with available funds and how early a student applies can be the deciding factor in whether that student is offered an OTAG award.

The FAFSA is THE application for federal grants, college work-study and many student loan programs including:

Grants:
Pell Grant
Federal Supplemental Education Opportunity Grant
Teacher Education Assistance for College and Higher Education Grant
Iraq and Afghanistan Service Grant

Work Study Program:
Federal Work-Study

Federal Student Loans:
Direct Subsidized Loan
Direct Unsubsidized Loan
Direct PLUS Loan
Federal Perkins Loan

So submit the FAFSA now. You may qualify for money for college!

Grants and Work-Study and Loans! Oh My!!

As you prepare for college, you will start to learn all sorts of new words and acronyms like Pell, FSEOG, and OTAG. Applying for college and financial aid is confusing enough, so how do I make sense of these crazy words?

Federal and state financial aid programs are great, but what’s the difference in each type and what do they mean? You should receive information from your college financial aid office explaining these programs, but here’s a brief rundown for you.

Federal Pell Grants are awarded to eligible undergraduate students who haven’t earned a bachelor’s or professional degree. The Pell Grant doesn’t have to be repaid and the maximum amount awarded for the 2016-17 academic year is $5,815.

Federal Supplemental Educational Opportunity Grants (FSEOG) are awarded to students who also receive a Federal Pell Grant and usually have the highest financial need. These grants do not have to be repaid.

A Teacher Education Assistance for College and Higher Education (TEACH) Grant is a little different from the Pell or FSEOG grants because you must take certain classes and then work at a certain type of job to receive this money. If you don’t, the TEACH Grant can turn into a loan and then it must be repaid. These programs can offer students up to $4,000 a year if they qualify.

Iraq and Afghanistan Service Grant provides money to college or career students that do not qualify for a Pell Grant and lost a parent or guardian, who was a member of the U.S. armed forces and died in military service performed in Iraq or Afghanistan after 9/11.

Federal Work-Study provides part-time jobs for eligible students on a college campus or in an approved nonprofit organization or public agency. Students work a specified number of hours each week and typically earn minimum wage.

William D. Ford Federal Direct Loan Program offers Subsidized and Unsubsidized Loans. Direct Subsidized Loans are made to eligible undergraduate students who demonstrate financial need. The Direct Unsubsidized Loans are also made to eligible undergraduate students, but the student doesn’t have to demonstrate financial need to be eligible for the loan.

The Direct PLUS Loan is offered to parents of dependent undergraduate students to help pay for their educational expenses.

The Oklahoma Tuition Aid Grant (OTAG) is offered to eligible Oklahoma residents who attend eligible college and career technology centers in Oklahoma.

All federal and state programs are awarded based on eligibility provided on the FAFSA application. Be sure to apply as soon after October 1 as possible.

Check with your school’s financial aid office if you have questions or to determine if they participate in these programs. For more information, visit UCanGo2.org or StudentAid.ed.gov.