07.24.13 | 5 Ways to Cover College Costs

Posted in College Life, FAFSA, financial aid tips, Scholarships, Student Loans by Student Loan Network Staff

Paying for CollegeWhether you’re a soon-to-be freshman or second semester senior, it is never easy to figure out how to cover the costs of college. With tuition and hidden fees of private colleges averaging out to about $40,000 per year, many of you are still wondering how your family is expected to pay for $35,000 of your education, even after having received your Student Aid Report (SAR) three months ago. To help you out in your pursuit of a college degree, here are 5 ideas for paying for college when Federal aid comes up short.

Befriend the Financial Aid Office

If you are disappointed by the amount of financial aid that you receive, try talking to your financial aid office. Many colleges have an appeal process for financial aid, so get on a first-name basis with someone in the financial aid office and see what else can be done.

Search for Scholarships

There are millions of dollars in scholarships that go unclaimed every year, so why not spend a few days this summer searching and applying for as many scholarships as you can find? On average, you will win 1 out of every 10 scholarships that you apply for, so don’t get discouraged. For starters, try visiting our recommended scholarship search website, or try winning scholarships through the ScholarshipPoints program. (more…)

07.19.13 | College Costs Out of Control

Posted in Private Student Loans, Student Loans, Uncategorized by Student Loan Network Staff

Today, 20% of adults owe money on student loans, and 57% are worried about repaying these loans. Many have expressed concern about the recent legislation which increased the interest rate of subsidized loans to 6.8%, but the problem is not the cost of student loans. As stated by Mark Kantrowitz in a recent article published by MarketWatch, this will not double loan payments, but rather, will lead to about a 17% increase in monthly payments.

The real problem is the rising cost of college, and decline in government grants. A recent study by Gallup indicates that only 15% of Americans think that it would be reasonable for colleges to charge students more than $20,000 per year. Yet, many schools, such as MIT, Cornell, and Harvard, charge over $50,000 per year, after tuition and living expenses are taken into account. (more…)

10.03.12 | What color is the FAFSA form this year

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.

05.03.12 | Should you borrow from your 401k to pay tuition?

Posted in financial aid tips, PLUS Loans, Private Student Loans, Student Loans by Student Loan Network Staff

Retirement ahead signThis week, many student nationwide are rejoicing in their college decisions, having just sent their deposits to their chosen colleges. Simultaneously, parents everywhere are worrying about how to pay the upcoming tuition bill. If you’re one of these parents, you may be weighing the pros and cons of tapping your 401k for those funds. In this instance, it may be more beneficial to be a little selfish. Here’s what I mean…

Tapping your 401k to pay for college tuition is usually not a good idea. Whether you’re thinking about withdrawing funds, or borrowing against your 401k or IRA, both options end up leaving you with less funds for retirement. Anytime you withdraw funds from your account, the money will be slapped with a hefty 10 percent penalty AND subject to taxes. If you’re looking for a deal, this really isn’t your best option.

02.11.11 | To Claim or not to Claim: College Loans and Taxes

Posted in Financial Aid, financial aid tips, Scholarships, Student Loans by Student Loan Network Staff

Student Loan Taxes Can be ConfusingIt’s tax season again and one of the most common questions from students right now is whether or not they have to claim their financial aid (grants, loans, or scholarships) on their taxes. So to clarify, students have to claim on their IRS tax forms any money gained from services for which they received payment, investments, and self-employment income. Generally, amounts spent on education, scholarships, grants, and loans are non-taxable, though there are some exceptions. To note, most tax-free treatment of income, credits, and deductions require the student to be a degree candidate, but not all. (more…)

02.22.10 | Right Now Blog: College Tuition Edition

Posted in College Life, Financial Aid by Student Loan Network Staff

Without a doubt, one of the biggest anxieties about going to college or graduate school is the pricetag. Depending on the school, it can go anywhere up to $60,000 a year (including most fees, room & board, etc.), and what is more scary is the fact that those prices grow every year. The practice of taking out private student loans and performing loan consolidations is commonplace now in the higher education industry, alluding to continued growth in school costs and heavier financial burdens on incoming and returning students.

College Tuition Growth, 1990-2009

According to CollegeBoard, the popular college prep and testing website, the average tuition growth percentages are as follows for the USA:

  • Private four-year schools: +4.4%
  • Public four-year schools: +6.5%
  • Public two-year schools: +7.3%

There is no denying that this is alarming. Education costs are already sky high as is and if you do the math, an average student in a public four-year program will pay roughly $31,000 in tuition costs alone over the length of their program (not including the other myriad expenses a student encounters while in school.)

As a result to this, online education options have begun to gain more traction — not just because of their flexibility, but also their lower overall cost due to savings on overhead from not having to maintain entire campuses. If you find yourself struggling, they might be an excellent option to advance your education while still allowing you to work and making living pay.

What is being done? At the moment, there is a lot of talk about schools going as far as freezing tuition growth or severely capping the increases. They do understand that the costs are spiraling and it impacts their retention rates, as well as new admissions. In addition, some schools implement tuition freezes as a merit-based “scholarship” to those with an arbitrarily-set GPA or higher. You should consult your college’s financial aid department to see if there is such a program and try to earn it, if you aren’t already.

08.03.09 | Two Year Plan, Four Year Result

Posted in Financial Aid by Student Loan Network Staff

A two year college serves as the perfect cost effective gateway for those looking to one day obtain a bachelors degree.

I can tell you I have never had a potential employer ask me if I any of my undergraduate work was completed at a community college. They have no idea if I spent all four years at the school listed on my resume or transferred 70 credits over from a less expensive two year school. And quite frankly I don’t think they’d even care, but you know who should care, you!

It’s your pocket (or your parents) you are draining when you enroll in a four year college right out of high school. It just doesn’t make sound economic sense unless you are being offered scholarships and grants that place the cost of tuition on par with a community college.

Of course this “two to four” year game plan I am recommending is contingent on your four year institution accepting the transfer credits. You should speak to an admissions officer at both schools to confirm that the classes you are planning on taking will transfer without issue. That is really the only thing you should be weary of. Saving a nickel today may save you a dime tomorrow.

If you need a Stafford loan for school (click here).

For a private loan options (click here).

03.05.09 | Cost Of Education Up 439%

Posted in Financial Aid by Student Loan Network Staff

Want to hear a frightening statistic? According to the National Center for Public Policy and Education the cost of attending college has risen 439 percent from 1982 to 2006. 439 percent!!!

Now I know I’m singing to the choir here, and that all of you are well aware how much education costs these days, but even I was shocked by this outrageous statistic and felt obliged to pass it on. It really makes you wonder, doesn’t it? I mean real estate, automobiles, the Dow, and all kinds of merchandise has dropped in price over the past several months, but not the price of education. In fact, it’s news worthy when an institution just freezes tuition rates.

I will say this though, in defense of the colleges, many are allocating more funds to financial aid during these difficult times, but how about a tuition break too? Not all students qualify for financial aid.

What do you think about this outrageous statistic? Let your voice be heard.

Five most recent student loan help blog posts:

08.22.08 | Is College Worth the hefty price tag?

Posted in Student Loans by Student Loan Network Staff

That is the million dollar question, and I mean that literally not figuratively these days. Education costs have soared in recent years at a rate far greater than inflation. And with the U.S. population continuing to grow more students are seeking higher education. As a result Universities reap the financial benefits. The demand is high and the supply (number of seats) is low.

I’ve been having the great college debate with my buddy Brian, 33 years old, who recently went back to school. He thought a Bachelors degree from a premier school would unlock the door to a fat salary, but so far that has not been the case. In fact, in a well-known paper by Princeton economist Alan Kruegar and researcher Stacy Berg Dale at the Andrew W. Mellon Foundation they discovered the school itself did not translate to a higher salary.

It was discovered that salaries from students accepted to a top-tier school but electing to attend a less selective/more affordable institution, were similar. Bottom line, if you’re bright you’re bright and the cream will always rise to the top. Brian, for a smart guy, made a dumb decision and now has astronomical student loan bills from his “name school.”

Still, some will argue the name school attracts the most distinguished professors, and that your education is second to none. Also, the contacts you make during your college career can play a pivotal role in where you land in your professional career. At upper echelon schools you tend to rub elbows with dignitaries, royalty, and future industry leaders. So much of life is who you know and not what you know sadly.

Implicit benefits aside the price tag is still staggering for both students and parents even with scholarships and grants. It is a vicious circle. If you don’t go to school you have little chance of landing that high paying job, and if you go to school you may face so much student loan debt you default on your loans.

Another friend of mine entering his senior year at Boston College will graduate in May with just over $100,000 in student loans (both private and federal). He’s already reserved to the fact that he’ll either be living with Mom and Dad for the next several years or won’t be able to buy a house until he’s 40.

With a bachelor’s degree serving as this generations High School diploma it has certainly put students and parents in a precarious position. When my Dad reminisces of yesteryear he speaks of simpler times when everyone had a shot at the American dream. Today the American dream has turned into an unattainable nightmare for so many. Something needs to change.

06.13.08 | 529 College Savings Plan – Part II

Posted in Financial Aid by Student Loan Network Staff

Last month I blogged about the 529 college savings plan and received some excellent questions that I felt would be beneficial to share with everyone (along with the answers of course).

I pretty much just gave a snapshot overview of what a 529 plan was , but I’m going to get down to the nuts and bolts of it for you today.

Q: David, you are obviously very smart on financial matters and I would appreciate more details about the 529 plan if you get a chance. I live in Vermont; do I have a good plan here? If not, can I get into another state plan?

A: You’re right, I am a financial master, and semi-good looking too. To answer your question Vermont is a Top 5 plan based on performance over the past 3 years. They even offer a tax credit to the residents of the great state of Vermont. Your state’s 529 plan is certainly solid, however, it is perfectly within your province to open a 529 plan in another state if you’d like. Just because you live in Vermont doesn’t mean you can not open a 529 plan in Oregon. Also, your child would not then be required to attend a school in Oregon either as many assume – this would simply mean your 529 account was located in that state.

Q: What are some of the main differences between state plans?

A: One of the biggest differences between plans is who is running the plan. For example in Massachusetts you have but one option, Fidelity. In Nebraska it’s the Union Bank and Trust Company of Lincoln, Nebraska, and in Indiana it’s JP Morgan.*

Another thing to keep in mind is what types of fees are involved with each plan. Are there monthly/yearly maintenance fees, program management fees, or start-up fees? Obviously the higher the fees the less desirable the plan, unless of course that plan is performing at a very high level to overcome said fees.

Q: Is their a contribution minimum? I can only afford to put $50 per month away?

A: These differ greatly from plan to plan and for residents vs. non-residents. For example in Kansas the minimum contribution is $1,000, but only $250 for a Kansas residence. Each subsequent contribution is $50 per month, but just $25 for Kansas residence. In Louisiana it’s just $10 total to open an account while in Illinois, Nebraska, & Utah there are no minimum payments at all! Keep in mind that some states also offer lower contribution minimums if you set up ACH.

Other things to keep in mind are state tax deductions. For example, residents of Arkansas have a deductible in computing Arkansas taxable income up to $5,000 ($10,000 for married taxpayers) when they contribute to their state 529 plan.

Also, about half of the state 529 plans offer rewards programs as well. For example, Massachusetts has partnered up with American Express and offers rewards points that go directly into your child’s 529 plan.

I hope this information is helpful! If you still have further questions or just want to tell me how fabulous I am, fire away! I love to hear that I am a financial mastermind, look out Bernanke – I have some thoughts on this countries monetary policy too.  Happy Saving.

*This information was accurate as of June 13, 2008 – but is subject to change.