This week has brought a flood of news on gay rights as Supreme Court justices review the Defense Of Marriage Act (DOMA). The repeal of DOMA would bring many benefits to same-sex families, such as death benefits, tax incentives, and health insurance coverage.

What does this have to do with financial aid? A lot, actually.

An increasingly common issue in the financial aid application process is how LGBT families file the FAFSA.

Because of DOMA, financial aid for same-sex families is determined differently and can lead to non-uniform aid awards. When filing the FAFSA, both parents (if married) are required to provide their financial information. In the case where marriage is not federally recognized, only one parent would be able to file for the student, leading to increased financial aid for the family. What’s more, any financial support from the other parent would be reported as untaxed income and subject to different treatment in the aid calculations. The same logic applies to married students.

If DOMA is repealed, the application process would be streamlined for all married couples. Financial aid would take all financial support for the student into account, and the question of “which parent should file the FAFSA” would be eliminated for these families.

This also means that same-sex families might get less financial aid, because financial awards would be based on both parents’ income and assets, not just one.

Clearly DOMA has far-reaching impacts for college students and their families, as repealing DOMA would mean uniformity in the financial aid process for all married couples.

The financial aid process can be tough to navigate, and like many students out there, you may not know all of the ins-and-outs. To help you make the most of your financial aid, we compiled a list of some noteworthy facts.

1. You must maintain Satisfactory Academic Progress (SAP)

To stay eligible for financial aid, there are certain criteria you have to maintain. Many students know about the qualitative measures such as minimum GPA, but there are also quantitative criteria students must meet. For example, a student must not exceed 150% of the credits required for their program of study, and this includes attempted credits. This means that too many withdrawals, failed, or incomplete courses can impede your eligibility for financial aid. Make sure you know your school’s SAP policy to keep your financial aid on track or check out this example from the University of Minnesota.

2. Males must register with the Selective Service

Some students don’t realize this until it’s too late, but in order to receive financial aid, male students 18 and older must register for selective service. If you don’t register by the time you’re 26, you will be unable to receive federal financial aid funds. After that, it’s incredibly difficult to regain eligibility, if at all.
(more…)

As you may have heard by now, the recent sequestration has huge implications for education across the board, and Higher Ed. is no exception. The budget cuts that took effect on March 1, 2013 will affect most types of federal student aid, including Federal Work Study (FWS), Federal Supplemental Education Opportunity Grants (FSEOG), Service Grants, TEACH Grants, and the Direct Student Loan Program. Fortunately for many students, Pell Grants were specifically exempt from the budget cuts.

Here’s a brief overview of what to expect from student aid programs going forward:

Federal Work Study and FSEOG Programs

Budget cuts of $86 million do not only mean a reduction in the FSEOG program, it could also mean a loss of on-campus employment for as many as 33,000 students if colleges do not step in with funding. While these campus-based programs are funded through the remainder of this year, program cuts will take affect for the 2013-2014 academic year.

Iraq – Afghanistan Service and TEACH Grants

For both of these federal grants, funding has been reduced for any award first disbursed during the sequester. It should have no impact on grants first disbursed before the cuts took effect.
(more…)

Every year we get the same question, so here is your answer:

For the 2013–2014 year, the FAFSA will be green, with a purple section for parents.

For the current year, 2012–2013 the FAFSA is orange.

In previous years:

• 2011–2012 FAFSA was Yellow
• 2010–2011 FAFSA was Blue

For detailed information on completing the FAFSA, visit FAFSAonline.

Students who have received financial aid in the past know the drill – the financial aid office receives the funds, applies them to the student’s account for tuition, room and board, and other expenses, then returns the remainder to the student. In the past, students have been given the option of receiving the refund by check or direct deposit, but this year, there’s a new option across many campuses – a pre-loaded debit card.

The problem

These debit cards (often endorsed by the school) may seem like a great idea up front (easy, right?) but students are warned to be cautious if selecting this method. These cards can come with high fees that can eat into your federal aid funds! Not ideal for cash-strapped students. Fees include things like “$0.50 to swipe the debit card using a PIN number, inactivity fees of $10 a month starting as soon as six months and overdraft fees as high as $38 per transaction” according to the Huffington Post.
(more…)

This week has seen some interesting news in the financial aid community. From a new private loans report to a college shopping sheet unveiling, here are some of the hot topics in financial aid right now:

CFPB’s “Private Student Loans” Report Released

Last week, the Consumer Financial Protection bureau released a 131 page report on the state of private student loans. This is the first time a report like this has been issued and it has produced some interesting findings. Read the full report or check out some highlights of the report below:

Stats:

• 90% of all student loans in 2011 were cosigned and required school certification
• In 2008, 42% of undergrads at for-profit schools received private loans, compared to 14% of all undergrads – Less than 15% of all outstanding loans are from private student loans
• More than 40% of students don’t exhaust their federal aid before seeking private loans
• The mean interest rate for private loans in 2011 was about 8.5% (down from about 10% in previous years)

(more…)

Recently, the U.S. Senate rejected President Barack Obama’s plan to maintain the 3.4% interest rates on federal student loans. If both parties are unable to agree on terms by the July 1 deadline, the rate will jump to 6.8%.

Both parties agree that the rates should remain at 3.4%, but paying for an extension of this proposal would cost $6 billion. So the question is, where will this money come from?

The Democrats are proposing the money come from shutting down a Medicare loophole that business partners can currently use to save money, while the Republicans suggest that eliminating a preventative health fund could provide the funding.

Background

In 2007, when interest rates on subsidized Stafford loans were 6.8%, the Senate approved a law that temporarily reduced the rates to 3.4% for low and middle-income students. While the rates are expected to return to 6.8% on July 1, President Obama is urging legislators to keep those rates at a more affordable level for students and their families.

Learn more about Stafford loans so you can prepare for the upcoming semester.

It’s 7:30 on a monday morning and your alarm clock goes off. You turn it off and roll over for 5 more minutes of sleep. When you finally roll out of bed and look at the clock, it’s 11:30 and you’ve missed your class. Not a big deal, right? As it turns out, skipping class might cost you more than you think.

According to the recent infographic from StudentScholarshipSearch.com, skipping just one class is a waste of $20 if you attend a public college, or $50 if you’re at a private school. This may seem like it’s not a big deal, but wasted money can add up fast! If you’re paying for college with loans, you’ll be paying interest on that class’s cost too!

Still not convinced you shouldn’t skip class? What if i told you that “those who wasted time in college are 3x more likely to be unemployed”? That got your attention, didn’t it?

To find other ways skipping class can hurt you, check out the True Cost of Skipping Class infographic.

Student loans can be a crucial part of paying for college, but don’t forget there are other options that should be exhausted first- like scholarships. Many students know they should apply for scholarships, but either don’t have the time or get frustrated when they don’t win. We want to help, because let’s face it, free money for college is better than high-interest money for college.

StudentScholarshipSearch.com has developed an awesome infographic to help students win money: The Top 5 Scholarship Application Mistakes. Learn about some of the most common reasons why students are unable to snag a scholarship, and what you can do to turn your luck around.

While you may not win all of the scholarships you apply for, hopefully the tips from this infographic will get you on your way! And remember, apply apply apply!

Misty makes some excellent points in this video, especially for families who are applying for financial aid for the first time. She mentions that the FAFSA is free, and we can’t stress this enough! For families who have questions about the FAFSA, feel free to pose a question to the financial aid experts at FinancialAidForum.com, or check out some of the other common questions from families.
(more…)