Have you filed your FAFSA yet?

Have you filed your FAFSA yet? Don’t worry, I haven’t either. I’m still waiting on my mom to do her taxes. You’re allowed to file January 1 and it’s better to do it as close to then as possible so you can get everything squared away and have access to the most money. But if you can’t file until now or even the end of March, you’re still okay. It’s when you’re waiting until June or July that you should get worried.

Myth: If my parents make too much money, I can’t get any financial aid
Fact: You won’t qualify for nice things like Pell grants, but you can still qualify for federal loans. Depending on which year you’re in, you can get a nice chunk of tuition covered with a Stafford loan. I was able to get a subsidized loan, meaning the government pays the interest while in school. Unsubsidized you have to pay, but the interest rate is incredibly low.

Myth: I don’t have to worry about paying loan interest while in school.
Fact: Depends on your loan. If you get a loan with no accruing interest until after you graduate, then you don’t have to. But most loans do accrue interest. If you have a Parent PLUS loan, pay that interest right away. Better yet, don’t get another one of these loans unless you really really have to. They are a ripoff. The interest rate is incredibly high and if you let it build up while you’re in school, you’ll be amazed at the amount owed by graduation. Multiple that by four…ouch.

Myth: I don’t have to file scholarships and grants on my taxes.
Fact: Sometimes you do. It depends on what kind of scholarship. If you get mailed a 1099 form, you definitely do, if not, you still might. Always ask your financial aid office just in case.

Helpful websites

Repaying student loans

I’m still four years away from having to repay my student loans, but I know I should start thinking about it now. Get Rich Slowly posted a great guide to repay student loans.

If you have federal loans, your options are much simpler. The interest rate is lower, so it’s usually best to just pay them as scheduled. Private loans are a whole different ball park and very confusing because terms usually vary from provider to provider, while government-backed loans are stuck with the federal terms given, no matter who your lender is.

One option is consolidation, which is not the best option unless you seriously can’t afford the monthly payments. Consolidation leads to a higher interest rate because you’re extending the life of the loan and there are more complications with private loans. Depending on your financial plan, consolidation can be a good or a bad option.

There are also options for loan forgiveness if you are going to be joining the Peace Corps or the military (or other programs that are listed on the FinAid website). I personally don’t qualify for any of this, so I hope I’ll get a high-paying job with my really expensive fancy degree so I can pay my loans off quickly.

Also, you can’t simply just declare bankruptcy anymore and be done with your loans. Certain federal loans will go away, but not private loans. The government decided on this a few years ago because too many students were coming out of college and declaring bankruptcy right off the bat. There are certain circumstances surrounding the issue, which are covered in more detail here.

The FinAid website also has a Loan Calculator that just made me feel very sad about the amount of interest I’m going to pay just on my freshman Stafford loan. Bring on the next three years worth of borrowed money.

Student loans

Student loans are the answer to money problems these days, especially because you can defer payments until after graduation, unlike other loans. But if you aren’t careful, you can end up owing a lot more than you borrowed. I was able to get $4000 in scholarships, but the rest of my expenses are covered by loans. I was able to get a subsidized Stafford loan through Wells Fargo (the government pays the interest while I’m in school) for $3500, but all the rest is in a Parent PLUS loan, which has a high interest rate and although payments are differed, it accrues interest now. If you can get Stafford loans, even if it’s unsubsidized, I’d take advantage, even if you need another loan as well. Stafford loans are a great deal.

I didn’t have to get any private student loans, but for some people, this is what they choose to do for whatever reason. Think Financial offers student loans as well as financial advice and resources and a comparison chart. Think Financial is a well-known student loan provider in cooperation with Charter One Bank and their website is very helpful. They don’t require collateral, and you can apply and get an answer in fifteen minutes and you can use the money for all expenses, unlike some providers. Private loans also give you your money much faster than going through a university.

The biggest reason people choose to go this route is because the amount you can borrow is up to $40,000 for one year, which is a lot more than financial aid offices award students. There are other loan companies, such as Sallie Mae and My Rich Uncle, although I personally like Think Financial or Chase.

If you’re going to go this route, I definitely suggest doing a lot of research into the company and the rates. Be sure to read the fine print and make sure you’re getting a fixed rate. Some companies, such as Sallie Mae have allegations against them so beware of that. Also, private loans usually require good credit to be approved so it helps to have a parent or older family member that’s willing to help. But if they’re going to put their name on it, sometimes it’s better to take out a second mortgage or do a home equity loan with a better rate.

Find the best scholarships for you

One of the greatest things about college is the free money people will throw at you. Yes, that’s right, scholarships and grants. Unfortunately, your income has to be pretty low to qualify for most grants, I’m talking low enough that it’s hard to even live on. So, scholarships are your best friend.

The essay
Most scholarship applications include an essay. And it may not seem like a big deal, unless you’re applying for multiple scholarships, in which case it’s an extremely big deal because that means multiple essays. Not true. Usually, the scholarship essays are pretty generic and you can use the same essay over an over again. A good idea is to write one about your life and any obstacles you’ve overcome that made you a better person. Those are killer. But a better one is something that will tell the reader about you and what you really care about (your dog, Thumper or how you live to play baseball.) Did you really volunteer with the elderly because you live to help people or to put it on your college application? If you’re a funny person, let them know that. If you are a bleeding heart, bleed all over that paper. An essay is about selling yourself and if you really have to embellish, then go ahead. You have bigger problems anyway.

Where to find them
Your school advisers have the best collection of local scholarships, which give you a better chance. Also, most colleges have their own scholarships, which I think are just discounts since they’re the ones giving it to you. Either way, it’s money you don’t have to pay back. Most undergraduates with decent grades and a half decent essay can get something out of their school if they apply. After you’ve tapped those resources, online is the next step. Here’s three websites that were crucial for me.

Be careful though, when giving out personal information. Make sure it’s a legitimate scholarship before you give too much info. Stay away if they want some of your money.