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Who Owns Your Student Loans?

6 Jun

Carrie L. Johnson, Ph.D. | North Dakota State University

When leaving college, whether you are graduating or taking some time off, it is important to know how much you owe in student loans and who you will be paying back. You may have kept track over the years, or maybe you didn’t. There are two types of student loans: federal and private. This fact sheet will show you how to determine the amount of student loans you owe and who you need to pay.

Federal Student Loans

The National Student Loan Data System (NSLDS) website is the best place to start when looking for history on your federal student loans (Direct Loans and Perkins Loans). To access your student loan information, you need your FSA ID to log in.

nslds1-2.jpg

The main page is broken down into four sections:

  1. Summary information for borrower; this includes your enrollment status and the date that status became effective.

  2. The next section will have any “warnings” that may be on your account such as nearing your aggregate borrowing limit or if you are in default on your loans.

  3. The Loans section lists every federal loan you have ever had and totals for your federal loans.

  4. Section 4 shows your Pell Grants.

To identify your loan holders and repayment amounts, focus on the third section shown below.
nslds4

By clicking on the blue button with the number in the first column you can see even more details about your loan. You will be shown the type of loan, what school you were attending when the loan was obtained, various important dates, amounts, disbursements and statuses, and your servicer information. The servicer is who you contact about repayment.

There are currently ten servicers the Department of Education uses for Direct Loans; you can find a list here. The servicer on a Perkins Loan is typically the school that extended the loan. However, some schools do have outside servicers or assign your loan to Department of Education. The example below shows what the servicer section on NSLDS looks like.

nslds3

Private Student Loans

The best way to determine information about the status of private student loans is to obtain a copy of your credit report. The credit report will include will total amount owed and the name of your lender. A free copy of your credit report can be requested by mail, telephone, or online every 12 months from each of the three credit reporting agencies (Equifax, Experian, and TransUnion).

By going to AnnualCreditReport.com you can get access to information about your credit history, including student loan payments. You will need your personal information to log on and you will also be asked a series of security questions based on your report. You can also request your credit report by calling 1-877-322-8228 or by mail using this form.

Resources

AnnualCreditReport.com 

National Student Loan Database System

Saving for College

 

Federal Student Loans are Getting More Expensive This Year

15 May

Casey Doten, Financial Aid Administrator 

College can be an expensive investment. So it makes sense that many students have to take out loans in order to fund it. Unfortunately, borrowing federal loans for the 2017-18 just became a little bit more expensive.

The interest rates on all federal loans went up 0.69% for the 2017-18 school year. So undergraduates taking out Federal Direct loans for 2017-18 will be paying 4.45% on their loans, up from 3.75% in the 2016-2017 school year. This also impacts other types of federal loans: graduate Direct loans will increase from 5.31% to 6%, and PLUS loans for parents and grad students will increase from 6.31% to 7%.Interest rate increase.png

So how much more does this interest rate increase cost you?

A freshman taking out the federal limit of $5,500 in unsubsidized Federal Direct loans for the 2017-2018 school year will be impacted by the new, higher interest rate. Compared to those freshman who started a year before, the 2017-2018 freshman will accrue $161 over their four years of college, (plus their post-graduation grace period) before they even begin making loan payments. For a student who doesn’t take 15 credits every semester, that number will only grow higher.

Once repayment begins, interest is also applied to that $161 that accrued while the loan was in deferment. So that extra 0.69% in interest ends up costing $456 more over the life of the loan if the student uses the standard 10-year payment plan, which has the lowest total interest paid. The grand total repaid at the new, higher interest rate is $8,134 on the original loan of $5,500.

Unfortunately, this means paying $456 more than students who began only one year earlier for the same loan.

Keep in mind that this change only impacts loans which are being taken out for the 2017-2018 school year. Any federal student loans already taken out and disbursed before July 1, 2017 will not be effected by this change.

However, variable interest rate private loans from previous years may also be increasing. While the change in federal loan interest does not cause private loans to change, they both calculate their interest rates based off the Treasury Department’s auction of 10-year notes. This means that when federal loan interest rates rise, old private loans with variable interest rates can similarly expect to see an increase.

If you want to calculate your own loans for the 2017-2018 year, use a two-step process:

  1. Input your loan information into the Accrued Interest Calculator along with how many months until repayment begins (this is often years until graduation plus three months). This will give you the loan’s balance when repayment begins.
  2. Plus those loans into the Federal Student Aid repayment calculator and see what your repayment is, including information on the different payment plans available.

Even with the higher interest rates, Federal Direct loans are almost always a better option than private loans. They typically have lower interest rates and more flexible repayment plans to go along with fixed interest rates.

While this increase in interest shouldn’t dissuade you from making the investment in your education, hopefully it gives you the opportunity to think about how much you may borrow. Anything borrowed has to be paid back, with (higher) interest.

Which Student Loan Repayment Plan is Right For You?

12 May

All information on repayment plans is from this article by David Evans, Ph.D.
Additional info added by Casey Doten, Purdue Financial Aid Administrator

Congratulations on your graduation! It’s an exciting time as you move into new jobs and new places! However, something from your past will be coming back soon – your student loans. Six months after leaving school most student loans are due for repayment. By default you are put into the the Standard Repayment Plan (which is also the most aggressive repayment option), but you have more options! Choose which Federal Loan repayment plan is the best one for your life.

There are two main types of repayment plans you can choose from: traditional and income-driven. For borrowers that will qualify for Public Service Loan Forgiveness (PSLF), income-driven plans may be the better option. Income-driven plans will require an annual verification of income. This fact sheet describes each of the repayment plans as well as pros and cons of each. For more information about each of the repayment plans visit the Federal Student Aid website.

Traditional Plansstudent-loan-repayment-plans

Standard Repayment Plan

The Standard Repayment plan consist of equal monthly payments over a 10-year period of time. This repayment plan is good for those who can handle making their monthly payments and make enough money to afford them. This payment plan is best for those who have minimal other debts and start working right out of school.

The Pros: You’ll pay off your loan faster compared to other plans, and pay less interest as a result.

The Cons: Your monthly payments will be higher than those made through other plans.

Graduated Repayment Plan

The Graduated and Extended Repayment plans could be an option for you if your income is low when you graduate but will increase quickly. Under a graduated plan, payments start out low and increase during the repayment period, usually every two years. This is a good plan if you can’t afford your current payments but know you will make more money in the years to come.

The Pros: Your loan is still paid off within 10 years.

The Cons: You’ll pay more interest over the lifetime of your loan compared to the Standard Plan.

Extended Repayment Plan

An Extended Repayment Plan is an option if your loan amount is more than $30,000 and you want to stretch your repayment to 25 years.

The Pros: Smaller monthly payments (since they’re spread out over as many as 25 years) and more time to pay off your loan.

The Cons: You’ll be saddled with payments for a longer period of time as well as pay more interest.

Income-Driven Plans

If you qualify for an Income-Driven plan, these are often the most attractive options if you’re willing to recertify your payment each year (it’s not very difficult). However, some of these are contingent on when you took out loans! If you’re interested in student loan forgiveness*, you’ll need to be enrolled in any one of these plans.

Income Based Repayment Plan

If you’re not making enough money to cover all of your monthly expenses the Income Based Repayment (IBR) Plan would be a good option. There are two separate calculations for IBR which are dependent upon when you took out your student loans.

The Pros: The IBR plan takes into account your annual income as well as your family size. Your payment will be 10% of your discretionary income** if you were a new borrower on or after July 1, 2014. Otherwise it will be 15%. Any outstanding balance on your loan will be forgiven after 20 (for undergraduate loans) or 25 (for graduate loans) years.

The Cons: You will have to pay income taxes on any forgiven debt unless you qualify for PSLF (this is true for all loan forgiveness).

Income Contingent Repayment Plan

If you have a federal Direct Loan (other than a PLUS loan), you could opt for the Income Contingent Repayment (ICR) Plan. Your payments could be as low $5 or even $0.

The Pros: Your monthly payment will be the lesser of 20% of your discretionary income or on a repayment plan with a fixed payment over 12 years. You can have your remaining loan balance forgiven after 25 years of regular payments.

The Cons: You’ll pay more over the lifetime of your loan than you would with a 10-year plan, your payment could be lower than the monthly accrued interest and your loan principal will grow. You will have to pay income taxes on any forgiven debt unless you qualify for PSLF.

Income Sensitive Repayment (ISR) Plan

The Income Sensitive Repayment (ISR) Plan is only available for those with Federal Family Education Loan (FFEL) Program. Payments are based on your annual income, family size, and total loan amount. You would pay the loan off in fifteen years.

The Pros: Each lender has their own calculation, but generally it is between 4% and 25% of your monthly gross income, although your payment must be greater than or equal to the interest that accrues.

The Cons: It’s only available for up to five years. After that time, you must switch to another repayment plan. You must reapply annually, and there’s no guarantee that you’ll have continued enrollment in the plan.

Pay as You Earn Repayment Plan

The Pay as You Earn Repayment (PAYE) Plan is another option for those not able to afford their current monthly payments.

The Pros: The PAYE plan takes into account your annual income as well as your family size. Your payment will be 10% of your discretionary income. Any outstanding balance on your loan will be forgiven after 20 years.

The Cons: PAYE is only eligible to those who were new borrowers on or after October 1, 2007 and must have received a disbursement of a Direct Loan on or after October 1, 2011. You will have to pay income taxes on any forgiven debt unless you qualify for PSLF.

Revised Pay as You Earn Repayment Plan

The Revised Pay as You Earn Repayment (REPAYE) Plan is very similar to PAYE. This plan was created to allow more borrowers the opportunity to have their payments lowered to 10% of discretionary income.

The Pros: Not dependent upon when you took out your student loan, the payment will be 10% of your discretionary income. Any outstanding balance on your loan will be forgiven after 20 (for undergraduate loans) or 25 (for graduate loans) years.

The Cons: If you are married, your spouse’s income will be considered whether taxes are filed jointly or separately. You will have to pay income taxes on any forgiven debt unless you qualify for PSLF.

Summary

Federal student loans offer various ways for repayment. If you are in a situation (like so many others who have taken out student loans) that is not ideal for standard repayment of your loan, consider these options. There is a lot to consider when you are trying to decide which repayment plan to choose. Using the Federal Student Loan Repayment Estimator can help you make your decision by showing you what your payments would be under each of the plans described above.

*A note about loan forgiveness: There are two different kinds of loan forgiveness, Public Service Loan Forgiveness (PSLF) and loan forgiveness from your income-driven repayment plan ending. While both plans require you to be enrolled in an income-driven plan to reap the benefits there are some key differences:
-PSLF requires being employed at a qualifying employer in public service (non-profits, government, etc.) for 10 years/ 120 qualifying payments before forgiveness takes place. Standard forgiveness is after 20 or 25 years depending on your repayment plan.

-Any loan amounts forgiven under PSLF are tax-free, but not under standard forgiveness! So if you still have a balance on your loans after 20 (or 25) years, you will owe taxes on what is forgiven as if it is income. While it’s still better than paying the amount back, it’s important to know it will have ramifications.

**Discretionary income = Your income – 150% of the poverty level in your state for your family size

Dear Class of 2017, About Your Loans

10 May

From WiseBread New Graduate Help Center: Reyna Gobel, Student Loans Expert

girl surprised by letter

 

Dear Not-Yet-In-Trouble Federal Student Loan Borrower,

You might have heard that the Department of Education will be sending out letters to millions of student loans borrowers. The letters target borrowers whose grace periods are ending, as well as borrowers who exhibit signs of trouble that could lead to defaulting on their loans. If you haven’t started repayment yet but are fretting about how you’re going to possibly repay all that money — stop worrying.

I’m writing you this letter to not only give you important details about student loan repayment, but also to help you be aware of potential issues well before trouble starts.

I Defaulted — Here’s How to Avoid My Mistakes

I defaulted on a federal student loan simply because I didn’t know it existed. I had over a dozen student loans from different lenders; I forgot about one loan and went into default. It’s easy to do, but it’s also easy to avoid. Just log in to the National Student Loan Data System. You’ll see all your federal student loans on this site, along with contact information. Either arrange to pay each individually, or consolidate them into one loan. This is also a great time to get a free credit report – it can alert you to any problems you might have, like having missed a loan or bill payment.

Then, know yourself. If you can’t keep track of each individual loan, you really need to consolidate them into one loan to streamline payments (ask your loan servicer about consolidation options). Once consolidated, you can still choose a plan where payments are based on income, such as Pay as You Earn. And if you’re interested in the public service loan forgiveness program, know that it’s only available through loans originated by or consolidated with Federal Direct Loans.

Realize That Even With the Pay as You Earn Plan, You Might Have Payment Problems

The income-based Pay as You Earn repayment plan bases payments on your income and family size, but it doesn’t fully consider your expenses if your circumstances change. For example, at some point, you may have to help support a sick parent or child. You could also have bought a home when your income was higher. After a pay cut, a majority of your income could go towards your mortgage.

If you experience a financial setback, you have three options:

  • Call your servicer and see if your Pay as You Earn payment amount can be adjusted. You have to supply your income annually, and you may have forgotten to do so this year, causing your payments to set based a higher income level.
  • Ask for a deferment or forbearance, which are temporary payment breaks. Taking a break should only be done if the situation isn’t permanent. Always take a deferment when possible over a forbearance when any of your student loans are subsidized. The government pays the interest on subsidized student loans during periods of deferment.
  • If your income is lower because you took family leave for six months, you may not want to change your plan. However, for long-term pay cuts where your income-based repayment is too high for your budget, you should ask your servicer to also calculate payment options and see which payment option offers the lowest monthly payment.

Don’t Feel Embarrassed If You Don’t Know Something About Student Loans

I wrote two editions of a 240-page book on student loans, and I still don’t know everything about them. I read articles and play with the student loan repayment calculators every day. There’s always something new to learn. For instance, the public service loan forgiveness employer verification form wasn’t created until after the first edition was released. Now, thanks to that form, you can find out if you qualify for the public service loan forgiveness program right away and register for it right after you start working or after you’ve already started repayment — the choice is up to you. Never be afraid to ask your servicer questions about any of these programs.

Talk to Your Friends Who Are or Will Be in Repayment Soon

I’m not the only person who has experience with and advice about student loans. Talking to your friends can help you figure out repayment options and possibly pick better ones based on their choices and experiences. Just remember, they might have different circumstances than you, such as income level, children, or other debt that impacted their choices. Therefore, you shouldn’t copy their decisions. But you’ll be more informed and learn questions to ask your servicer. Plus, they may have missed payments, recovered, and now have advice about that. Learn from others’ student loan mistakes and victories.

The Most Important Part of This Letter?

The help you get doesn’t end here. You can tweet me anytime — @ReynaGobel— and ask questions. My articles will be posted here every week. You can ask me questions in my CollegeWeekLive web chats or get more helpful advice in my book CliffsNotes Graduation Debt.

Finally, remember you never want to receive a “dear troubled borrower” letter. The second you think you might miss a payment, talk to your loan servicer about options for a payment break or new repayment plan. With federal student loans, that one call will likely save your credit.

Reyna Gobel is a writer, author, public speaker, and student loans expert.  Her financial advice appears on Wise Bread’s New Graduates Help Center, in her video course How to Repay Federal Student Loans, in CollegeWeekLive newsletters and keynotes speeches, and in her audiobook How Smart Students Pay for School, now in its second edition. Be sure to check out her website for more helpful information on repaying your student loans.

So You’ve Graduated College: Now What?

3 May

Congratulations! You did it!

Graduated College NExt.jpg

As you’re taking your last finals, you can finally relax for a day before you start worrying about what comes next. You may have your future planned out perfectly, or maybe you were so focused on finishing you have no idea what comes next. Either way, that’s okay!

Searching for Jobs

The number one thing on most people’s mind post-college is the job search. The most common question during the job search: Which Jobs Should I Be Applying For? Between those tips and our Job Searching Pinterest board you should be good to go for all of your resume, cover letter and interviewing needs!

Where you live may be determined by your job search, or it might be the other way around! If you’re not sure where you’ll be laying your head, we help you weigh your options.

Student Loan Repayment & Forgiveness

Six months after graduation, your student loan repayment will come knocking. Even if you paid attention during your exit counseling, it’s likely you’ll run into questions you aren’t sure how to answer. Our first recommendation is not to panic, you’ll be okay!

You may be curious as to what your options are for student loan repayment and what might be best for you, but some inspiration from someone who is going through repayment might help your confidence.

If repayment starts to get away from you then you might have to deal with a default, which isn’t ideal but it’s not the end of the world.

If you became a teacher, you’ll probably want to check out the 4 loan forgiveness programs for teachers.

Grad School

Maybe instead of going into the working world, you’ve decided on grad school? Other than knowing your loans are going to stay in deferment (but gathering interest if not subsidized), you’ll want to stay on track of the graduate school application checklist.

Taxes & Credit

Nothing will make you feel more adult than having to pay taxes. But luckily your time in school has some tax advantages. Your school should provide a 1098-T form to use as an educational credit on your taxes for tuition you’ve paid, but once you start paying down interest on student loans you’ll also be able to use a 1098-E form!

Last, but not least, in the adult realm is credit! Luckily your student loan payments can help you build your credit. Understanding your credit score is going to be very important if you look into car loans or a mortgage for a house!

All in all, being in the adult world is pretty nice. You don’t have to worry about tests and homework, it’s a lot easier to find a nice life routine, and it’s a lot easier to have quality time with pets (or other humans). So use these resources well and make your transition into post-college as easy as possible!

Understanding Your Financial Aid Award Letter

28 Mar

This slideshow requires JavaScript.

Did receiving your financial aid award letter raise more questions than answers? Take some time to check out the slideshow above for a little bit more information. Keep in mind that you can pause it to read more thoroughly, or view it in PDF format with clickable links by clicking here.

If you have any questions about your financial aid, remember that you can contact the Division of Financial Aid a few different ways: stopping by in-person, giving us a phone call, or sending us an email.

Typically the quickest way to get answers to questions or solve problems is to stop by our office in-person. We always accept walk-ins as long as we are open Monday – Friday, 8 a.m. to 5 p.m.! Our office is in room 305 in Schleman Hall.

If stopping in-person isn’t an option, phoning in is usually a good choice too! Just call (765) 494-5050 during our open hours (Monday-Friday, 8-5) and we will be glad to help you out whether it’s just a quick question or fully advising you on your aid!

If you can’t stop or call in during our open hours, you can always send us an email to facontact@purdue.edu. While you won’t get the immediate assistance you might otherwise by visiting or calling, this works best if your schedule doesn’t match up with our open hours.

Financial Aid February: How to Accept Your Aid

13 Feb

After reviewing your award notice, all that’s left to do is to accept or reject your offers for the award year. The majority of grants — free money that does not need to be paid back — are automatically accepted on your behalf. However any loans offered will require your decision, and at this point you will need to report any private scholarships you received.

While no official deadline for accepting aid exists, keep in mind that financial aid will not credit to your Purdue invoice until aid is accepted. The Division of Financial Aid recommends you accept aid no less than four weeks before the start of the semester. Each type of aid has unique requirements for acceptance.

 

Federal Loans, Purdue Loans, and Work-Study

  1. Accept the offered aid on myPurdue under the “Financial” tab > “Award for Aid Year” > “Accept Award Offer.”
  2. Follow the directions based on type of aid below.

Subsidized/Unsubsidized Stafford Loans

You will need to complete a Master Promissory Note (MPN) and Loan Entrance Counseling at www.StudentLoans.gov. Sign into the website with the student information and click “Complete MPN” or “Complete Counseling.”

Purdue Loans

Complete a promissory note at ECSI — a third-party servicer Purdue uses for this loan. This is done each year you borrow a Purdue loan.

Federal Work-Study

  • Find a Work-Study job by searching through job postings for student life or other on-campus departments and contacting listed employers for the application process.
  • Once you have secured a Work-Study job, visit the Financial Aid office on campus for a Payroll Authorization Form (PAF). Give this form to your employer when you begin your job. Remember you can only work during the semesters you are enrolled and can pick up the PAF no earlier than the first day of the semester.

Parent PLUS Loans

  1. One parent needs to submit a Parent PLUS Loan application at www.StudentLoans.gov. Sign into the website with the parent information and click “Request PLUS Loan.”
  2. Once credit approved, the same parent, if a first-time Parent PLUS borrower, will complete a Master Promissory Note (MPN) at www.StudentLoans.gov. Sign into the website with the same parent information and click “Complete MPN.”
  3. If credit denied, the parent has several options: replace the Parent PLUS loan with $4,000-$5,000 Unsubsidized Stafford Loan and/or private loan up to the remaining cost, reapply for the Parent PLUS Loan with a co-signer, or reapply with a different parent borrower.

Graduate PLUS Loans

You will need to complete a PLUS Loan application at www.StudentLoans.gov. Sign into the website with the student information and click “Request PLUS Loan.”

Once credit approved, the student, if a first-time Grad PLUS borrower, will complete a Master Promissory Note (MPN) at www.StudentLoans.gov. Sign into the website with the student information and click “Complete MPN.”

Private Loans

  • Research your private loan options. Review our private loan information and search online for lenders. Complete a loan application with your lender. Most lenders have applications available on their website.
  • Once credit approved, contact your lender for the next steps necessary.
  • Your lender will contact the Division of Financial Aid for certification of your loan. Once certified, the loan will appear in your financial aid package on your myPurdue account.

Note that the private loan application process typically takes at least 30 days. Apply as early as you can so that funds arrive in time for the bill due date.

Private Scholarships

Report your private scholarship to the DFA on your myPurdue:

  1. Log in to your myPurdue account.
  2. Under the “Financial” tab > “Award for Aid Year” select current aid year from the drop down box.
  3. Select the “Resources/Additional Information” tab and report your private scholarships.
  4. Don’t forget to give your donor the Bursar address to send a paper check.

My Student Loan Journey Pt. 2: Climbing the Mountain of Debt

10 Feb

Casey Doten, Financial Aid Administrator – Purdue University

I knew going into college that I’d have to take out student loans to help finance my degree. While getting myself $48,600 into student loan debt was less than ideal for me, I was able to earn my degree. However thanks to the miracle of interest, my student loan debt had increased from the $48,600 that I had borrowed to $54,800 by the time that I began repayment.

The scary part? That $54,000 could have been even higher. Thankfully I had a couple of things going in my favor that helped to prevent that. A good portion of my federal loans are subsidized and did not accrue interest during school. I also had a loan which required me to make quarterly payments to help keep the interest from adding up (unfortunately these payments always hit me at the worst times in college). Had I not had either of those two factors, my loan debt would have been $59,900 when I finally started repayment.

So how have I gone about tackling this $54,800 debt? Being honest, it hasn’t been perfectly approached at all times but after a few initial mistakes I’ve come up with a plan and am paying it off as quickly as I can.

my student loan journey 2.jpgMaking mistakes early on

During my grace period of six months between graduation and my first payments becoming due, I had saved up a little money working two part-time jobs, but I never put anything toward my loans. As my grace period ended, I was able to get a full-time job along with working ten or so hours a week on the side.

So in November my repayment officially began. I had always heard people say “If you can afford to pay a little extra on your student loans, you should do it”. Getting rid of my student loans was a priority for me, so even though I wasn’t exactly swimming in money I paid extra on my loans. If my payment was $115 for a loan, I’d pay $150. The problem is that my approach of paying a little extra on every loan per month was one of the least efficient ways possible.

Pay more on loans with higher interest rates

What I should have been doing was approaching my repayment with a real plan rather than just tossing a few extra bucks at it.

I learned about the avalanche and snowball debt payment methods from some friends and after some research realized I could take my loans head-on with a plan. I started paying the minimum on every one of my loans except the one with the highest interest rate where I put all that extra money I had previously spread out between the other loans.

Using this avalanche method, I paid on the highest interest loan and then when that was finished up I took that money and started paying it to the next highest interest loan. This approach helps me pay the least amount of total interest possible.

Understand options & repayment plans

Despite the fact that I’ve been able to meet my monthly loan payments, I realized decided to enroll in an income based repayment plan. This brought my monthly payments on my federal loans down from over $300 to around $70 each month. Why did I choose an income based repayment plan when I wasn’t having troubles making my repayment? I found out that having a lower amount due each month could both help my repayment plan and allow me to be more flexible in my finances.

For my repayment, it allowed me to pay less on several of my loans and kept interest from my subsidized loans from accruing (the interest can be covered for up to three years). I took the $230 I wasn’t obligated to pay to all of my loans and rolled it into the extra I had already been putting toward my highest interest loan.

The other perk was that it gave me a lot more financial flexibility, so if unexpected events popped up I could just pay the minimum on my loans and use the money I would have paid to cover whatever emergency happened.

Luckily I never ended up needing this and I have been able to double down on my avalanche repayment and target my highest interest loan with the money I would have been paying otherwise been spreading out to my other loans.

Make payments right away… or make them automatic

Before I started making my loan payments, I felt like I was making just enough money to get by. I didn’t believe I could find $600 per month just for student loans, let alone money to pay ahead. The secret that I found was to make my student loan payments right away once I got paid. Rather than having to worry about what is left to make my loan payments, I prioritized them and made the extra payments part of my mandatory bill paying routine at the beginning of each month. I also found out that one of my private loans and my federal loans offered a small interest rate reduction for enrolling in automatic payments, which I promptly enrolled in to reduce the total interest I would pay over the loans’ lifetimes.

Roll over other debts

During my first year and a half of repayment, two things events had an effect on my debt: my college beater Jeep died on my commute to work forcing me to buy a different vehicle, and I got proposed to my then-girlfriend, now wife. This gave me another $450 per month in payments to make between the car and ring. This squeezed my personal budget to as thin as it could possibly get, but I still made sure to prioritize getting these payments in right away after getting paid. I realized I that I could make this new budget work, so after paying both off I took $350 of that and rolled it into my student loan payments helping me accelerate my impending pay-off even further.

Where I’m at Today

As of this moment, I still have $42,246.38 left to go. I’ve made great progress but I’m still paying over $200 every month on interest alone. It can be depressing to realize how much I’m losing every month to interest, but I know that my current life wouldn’t be possible without the degree I earned and the experiences I had. Rather than concentrating on how far I have to go, I prefer to reflect on how amazing it feels to know that I’ve paid my loans down more than $12,500 in student loan debt in 27 months in addition to over $9,000 between my car and wife’s engagement ring. The end might not be near but that doesn’t stop me from taking one step at a time toward being student debt free.

Financial Aid February: Applying for More Aid

7 Feb

The FAFSA registers you to be considered for aid from Purdue and the federal/state government. To be considered for additional Purdue/private scholarships or private loans, you need to take a few extra steps, such as completing a separate application. Additional information about eligibility and steps to apply for each type of resource are listed below:

finaical aid february 2 - applying for more aid.jpg

Purdue Departmental Scholarships

Incoming freshmen need to have a complete admissions application submitted by November 1 to be considered for Purdue’s merit scholarships.

In addition to having a complete admissions application by November 1, new students enrolling in one of the following colleges or schools should also complete the Purdue Supplemental Scholarship Application by January 1, 2017.

  • Agriculture
  • Health & Human Sciences
  • Krannert School of Management
  • Polytechnic Institute

The deadline for incoming freshmen to complete the Purdue Supplemental Scholarship Application is January 1st of the year they intend to enroll. The deadline for the 2017-18 school year closed on January 1st, 2017.

Scholarships awarded through the supplemental scholarship application are based on merit, need, or a combination of the two. If you wish to be considered for those scholarships with a need component you will need to file your Free Application for Federal Student Aid (FAFSA) by the January 1 deadline as well.

Current Students: There are different deadlines for different programs:

  • Agriculture — February 1
  • Chemical Engineering — April 1
  • Health and Human Sciences — January 1
  • Liberal Arts — February 15
  • Management — March 2
  • Polytechnic Institute* — March 1

*Polytechnic Institute Statewide students should complete the Supplement Scholarship Application and select Purdue Polytechnic as their school. Polytechnic Institute Statewide students may complete the application through August. 

What You’ll Do:

Go to the Purdue Supplemental Scholarship Application and follow the directions.

Other Purdue Departmental Scholarships

Some schools and departments use applications other than the Purdue Supplemental Scholarship Application. Find your department below to see if you qualify, and also check to see if you qualify for any other scholarships offered at Purdue.

Click here or on the chart below for access to clickable links!1page-0

Private Scholarships

There are many private scholarships available — especially for incoming freshmen — and you should definitely be applying for these as early as possible. Scholarship opportunities can be found in your local community and nationwide and will have different application processes. However, it is important to be wary of scholarship scams. You should not pay a fee to an organization to find scholarship opportunities for you or to complete an application for a scholarship that is offered.

We recommend talking to a guidance counselor or checking out free resources like FastWeb or scholarships.com to learn about opportunities you may be eligible for.

The Bursar’s Office provides details about mailing checks from donors, how they are applied to your bill, and other processing information for private scholarships that you receive.

Remember to thank the sponsor of your scholarship. Learn more here.

Parent PLUS Loans

A Federal Parent PLUS Loan can be taken out by a parent in the parent’s name to help their dependent undergraduate student help pay for college. This loan has the same interest rate for everyone regardless of credit. For more details and information read about Parent PLUS Loans here.

Private Loans

A large number of private education loan options are available to assist you and your family in meeting college costs. Loan applications are completed with your lender of choice and require good credit or a co-signer with good credit. We recommend applying at least 30 days prior to the date you need the funds and complying quickly to information requests from your lender. Read more about student loans.

Financial Aid February: Applying for Aid

1 Feb

To apply for federal, state and Purdue University student aid programs, you will file the FAFSA — this is something you’ll need to do annually to be considered for aid each year you’re in school. Purdue’s priority deadline is March 1.

financial-aid-february-applying-for-aid

If you are an admitted student to Purdue and submit your FAFSA by this deadline, you can expect to hear back about your award offering sometime in late March or early April.

Before completing your FAFSA, you’ll need to create a Federal Student Aid (FSA) ID. If parents are helping in the aid process, make sure one of them registers for an FSA ID too.

What You’ll Need:

  • A computer with Internet access
  • Your Federal Student Aid ID  (FSA ID)
  • Your Social Security number
  • Income information from the prior year (2015 income information for the 2017-18 school year, 2016 for the for 2018-19) for both student and parents (unless you qualify as an independent student)
  • A current, valid email address to be contacted with important information about your financial aid

You can also print a “FAFSA on the Web” worksheet at www.fafsa.gov to complete ahead of time and help prepare your answers before entering them online.

What You’ll Do:

  • Go to www.fafsa.gov and click “Start A New FAFSA,” then login using your name, Social Security number and birthday.
  • Select “Start New FAFSA” and then input the requested information. Remember that while you use income information from the past, your other information is meant to be a snapshot of the moment that you file the FAFSA.
  • Be sure to enter Federal School Code 001825 to allow your information to be sent to Purdue University West Lafayette.

Tips:

You can submit the FAFSA late, but there may be considerably fewer funds available to you for doing so.

If you start attending in the spring or summer, you should complete the FAFSA for the prior year. Example, if you start summer 2016, you should complete the 2015-16 FAFSA. 

You can apply for financial aid prior to applying for admission to Purdue. However, you must be admitted to a degree-seeking program (or a teacher’s certification program) before eligibility will be calculated and to receive financial aid.

You may be eligible, and if so we highly encourage you to use the IRS Data Retrieval Tool within the FAFSA to update the information after taxes have been filed. Information will be transferred from the IRS directly into the FAFSA with this option. Check out a short tutorial for help with this process.

We recommend printing the “FAFSA on the Web” submission confirmation page as proof of completion to keep in your records.

One of the most commonly requested documents is a tax transcript. Get your tax return transcript from the IRS.

If you have any FAFSA filing questions, you can contact FAFSA customer service agents at 800-433-3243, get online help or you can check out Federal Student Aid’s YouTube Channel for short, informational videos on the process.

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