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How Does the PLUS Credit Check Process Work When There Is a Credit Freeze?

14 Nov

The following is from the November 3, 2017 COD Processing Update:

Credit Check Processing for Borrowers who have requested a “Credit Freeze”
As a result of recent data breach events and heightened security concerns, many consumers are understandably taking steps to protect their personally identifiable information (PII). One of those steps may be placing a “credit freeze” on their credit profile at one or more of the credit bureaus, which prevents further credit activity from occurring without additional consent.

Because a credit check is part of the process when a borrower or endorser completes a Direct PLUS Loan Request or an Endorser Addendum on the StudentLoans.gov website, borrowers or endorsers with an active credit freeze may not be able to fully complete either process and may receive an error message when the credit check is run. The borrower or endorser must remove the credit freeze first; this action cannot be done by the school or Federal Student Aid. Note: Federal Student Aid can process an inquiry at two of the three main credit bureaus (currently Equifax and TransUnion). If a borrower or endorser places a credit freeze at only one credit bureau, Federal Student Aid could still receive a credit determination based on information provided by the secondary credit bureau.

Federal Student Aid implemented additional messaging on the StudentLoans.gov website on October 29, 2017. The messaging informs borrowers and endorsers that those who have a credit freeze on their credit profile will need to remove it before completing a Direct PLUS Loan Request or the Endorser Addendum. Federal Student Aid encourages schools working with borrowers and endorsers who may receive an error during the credit check process to ask about a credit freeze as a possible cause for the error.

Schools using the “Quick Credit Check” on the COD Web Site could experience an error or “timeout” response as a result of a borrower’s credit freeze. In some cases, Federal Student Aid will not be able to return a credit check response with the origination record and will reject the record with COD Reject Edit 996 (Invalid Value). Again, when troubleshooting a credit issue with a borrower or endorser, schools may want to see if the credit freeze situation may apply.

If you have additional questions about credit check processing, contact the COD School Relations Center. ”

COD School Relations Center
1.800.848.0978 for Direct Loans
Email CODSupport@ed.gov

Releasing Your Cosigner from Private Student Loans

31 Aug

If you have a private student loan through a bank, credit union, or other lender odds are you will be part of the 90% of private student loans that require a cosigner. While the cosigner is meant to be an extra guarantee to the lender that the loan is repaid, it’s fair to assume that you’re no longer a risk for the lender not getting paid back after you’ve graduated, have a steady job, and have been steadily making on-time payments.Cosigner Release

Now that you’re on your feet, it would be nice to be able to release your cosigner from your private student loans. Releasing a cosigner from a student loan means that they are no longer tied to the loan and it won’t appear on any credit checks or leave them on the hook in the event of a catastrophic incident that leaves the student permanently disabled or dead. Not to mention, if your cosigner were to die or declare bankruptcy, it could automatically put your loan into default even if you are on-time with payments.

Remember, removing your cosigner from your loan won’t harm you as the student in any way! The loan will still have the same impact on your credit regardless of whether there is a cosigner or not. So whether your co-signer is a parent, or one of the 30% of cosigners who are a non-parent, releasing them of the liability is something nice you can do for them after they put their neck out for you.

Every lender has different methods to release cosigners, if they do so at all. There are, however, some standard things that most lenders like Sallie Mae or Wells Fargo will review when considering releasing your cosigner.

In addition to having graduated from college and being a US Citizen, they’ll take a look at your employment, income, payment history, credit score, and ability to assume full responsibility for the loan.

Remember that the release isn’t guaranteed, with the Consumer Finance Protection Bureau reporting a high number of rejections from lenders. But the opportunity to relieve you and your cosigner of the potential issues from unfortunate circumstances is worth contacting your lender and filling out some paperwork.

Do Student Loans Die with the Student?

29 Aug

Casey Doten, Purdue Financial Aid Administrator

Student Loan Death Discharge 2.jpg

What happens to my student loans if I die or are permanently disabled?

It’s not a thought most of us want to visit but, like many personal finance topics, you’ll want to be prepared in case of the unfortunate and unforeseen. If you have student loans, you should know if your loan burden could be passed on to someone else.

So do your student loans die with you? It depends…

There are a few different types of student loans you might have and many of them treat discharge for death or permanent disability differently.

Federal Student Loans

Federal student loans are the most common form of student loans, with 42.3 million borrowers totaling over $1.3 trillion between Federal Direct, FFEL, and Perkins loan programs.

Fortunately, federal student loans are also the most lenient in almost all situations – death forgiveness included. If you pass away, or suffer from total permanent disability, all federal student loan debts in your name are discharged.

In order for this to occur, you or your survivors will need to contact your loan servicer and make them aware of the circumstances. The servicer will likely request third party documentation of the circumstances such as a certified copy of a death certificate, a letter from a doctor, or proof of unemployment or disability benefits to go along with Total & Permanent Disability Discharge application in the event of disability.

This applies to all federal loan programs, including Federal Direct Stafford Loans (both subsidized and unsubsidized), FFEL Loans, Perkins Loans, and Graduate and Parent PLUS Loans.

Of note to Parent PLUS borrowers: If either the parent or the student the loan was borrowed for become eligible for a death discharge this benefit can be applied to the Parent PLUS loan. Just note that in the case where a parent borrower has the loan forgiven for their student they will receive a 1099-C form from the IRS and the cancelled debt will be treated as a taxable income. While better than repaying the debt, you will want to prepare for what may be a large tax bill.

Private Student Loans

This is where things get tricky. All private student loan lenders have their own rules when it comes to their own loans. While there are some protections that are mandated by the government, discharge due to death or total permanent disability is not one of those.

Some lenders will seek to recoup the loan from your estate. Others, like Wells Fargo, Sallie Mae, NYHELPs, and some other lenders do offer loan discharge in the event of the death of the student. Next time you speak to your lender, you may want to ask them if they have a similar program.

What About Cosigners?

Your lender will likely seek payment from your cosigner in the event of your death or any other circumstances that render you unable to pay on your student loan. Cosigners are legally responsible for the debts they sign on to and unless the lender discharges the loan, they will be on the hook for the sum – possibly on an accelerated repayment schedule.

However, you can head this off a couple of ways. After being out of college a couple years, you may want to look into a cosigner release from your lender which removes their name from the loan. Once that takes place, the loan will solely be in your name.

A second option would be if your cosigner is one of your parents, for them to take out a life insurance policy for the amount they are cosigned on to. This can be a low-risk way to hedge against the possibly terrible combination of losing a child then being given a large bill immediately after.

How Does Marriage Impact?

If your spouse takes out student loans and passes you are likely in the clear unless you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, Texas, Washington, and Wisconsin). If you live in one of the states listed, you may be liable for your partner’s debts after their passing.

Most of the time, however, unless you are a cosigner on the loan neither you not joint assets in the estate will not be held liable for the loan if your partner passes away.

All in all, it’s a situation none of us hope we ever have to confront. Thankfully there are some protections built in for many student loans that can keep a terrible situation from becoming even worse. Even if your lender doesn’t have discharge written into their loans, it is always worth giving them a call and seeing if there is anything that can be done in the event this unfortunate situation becomes a reality.

 

 Student Loans: Responsible Borrowing

29 Jun

Melissa Leiden Welsh, Ph.D., CFCS, CPFFE | University of Maryland

responsible borrowing.jpg
If you are planning to attend college, a trade school, or some type of post-secondary training after high school, you will also likely apply to obtain student loans. The challenge is to select loans that match your financial needs, not only when you are a student but also when you are earning an income following graduation.

Student loan debt has generally been considered “good debt” due to a borrower’s increased earning ability upon graduation. However, the amount of outstanding debt should be proportional to a student’s projected earning ability. Check out the following suggestions to keep from falling into student debt traps.

1. Evaluating Post-Secondary School Options

There are many things to consider as you look at educational opportunities and the decision should not be taken lightly.

Do

  • Look at different types of post-secondary school and make sure you fully understand the costs (i.e., tuition and fees, room and board) associated with each one. It’s okay to “shop around” for schools.
  • Complete a Free Application for Federal Student Aid (FAFSA). The FASFA is the gateway to federal student loans.
  • Examine and evaluate federal loan options. Federal loans will almost always offer lower interest rates than private loans, and you may be eligible for loan forgiveness programs, or more flexible repayment options.
  • Shop around for private loans if you don’t qualify for enough federal student loans. Even a slightly higher interest rate of 0.5% to 1% more can add up over extended repayment periods.
  • Examine potential career earnings upon graduation specific to your field of study. Some fields of study do not pay as much upon graduation as other fields. You may struggle to pay loans from an expensive post-secondary institution with a low paying career.
  • Get a copy of your free credit report at www.annualcreditreport.com to check for unauthorized action with your personal information. You may not even have a credit report at this time, but checking it will ensure you have not been a victim of identity theft.

Don’t

  • Overlook public in-state colleges and training facilities as they often charge lower tuition with degrees matching your career goal and financial budget.
  • Select colleges or post-secondary training sites due to a friend’s enrollment. While it is difficult to change social settings in life, it is far worse to study for a degree/certificate in a field you are not truly interested in studying.

 

2. Before Signing Loan Documents

Student loans are ultimately your responsibility to repay, so make sure you are paying attention when borrowing.

Do

  • Limit borrowing to the amount you need to cover tuition, books, and educational supplies.
  • Keep a running total of loans accruing from year to year. Only looking at semester or yearly totals may leave you surprised and overwhelmed with the final summary loan total at graduation. You can use the National Student Loan Database System (NSLDS) to check your Federal loan balances.
  • Keep a folder of all student loan related forms and information brochures, preferably both physical and digital. It is not only convenient to be able to find everything in a single folder, but also can be helpful when planning and evaluating repayment options.
  • Some loans require actions to keep loans in deferment/forbearance (no payments required) while remaining as an enrolled student.
  • Keep your contact information current with each lender. It is your responsibility to report a change in your address to the lender. A lack of current address is NOT an excuse for missing a loan payment.
  • Understand the terms of the agreement in regards to how loan amortization works, how interest will be charged, and if interest will be added to the principal of the loan, commonly referred to as capitalization. Some private loans capitalize more frequently than federal loans.

Don’t

  • Turn to the signature page and sign without reading all the text of the contract you are signing.
  • Use extra funds from the refund check for pizza nights, spring break, drinks with friends or shopping trips. These expenses will cost you more because of interest.

 

3. Searching for Jobs and Preparing to Graduate

It is important to consider your student loans as you near graduation and begin looking for your first post-secondary school job.

Do

  • Work hard to graduate on time. Extra years at school mean additional student loan costs and lost years of earning. 
  • Make a spending and saving budget to follow after graduation. Determine potential costs to help guide your financial decisions such as housing. It is important to look at the interest rate of each loan and work to pay off higher interest rate loans first versus small loans with low interest rates to potentially save thousands of dollars in interest costs.
  • Visit the Student Loan Estimator to determine your estimated loan repayment totals.
  • Examine and evaluate various repayment plans. Schedule an appointment with your university loan department to determine available options.
  • Read all correspondence from loan providers thoroughly before deciding to consolidate loans – some loans are ineligible for loan forgiveness programs once consolidated with non-eligible loans and loan consolidation does not necessarily lower interest rates.
  • Be cautious when deciding to pay for loan consolidation as many federal programs and some private banks offer free loan consolidation. You may receive solicitations via the mail that offer to do it for a free, but it is always free to do yourself for federal loans.
  • Explore tax credits for student loan interest payments.
  • Choose to sign up for automatic draft payments from your bank account. Automatic payments reduce the possibility of late payments and are often rewarded with lower interest rates too.

Don’t

  • Consider not paying your loans on time. Default on student loans can greatly impact your credit report. Lenders and other businesses use the information in your credit report to evaluate your applications for credit, loans, insurance, employment or renting a home.
  • Extend loans to a longer repayment time to simply have a lower monthly payment. Those extra months and years will quickly add additional interest costs beyond the principle.

 

Resources

U.S. Department of Education Blog

Student Loan Hero

Edvisors Network

Top 5 Things This Financial Aid Counselor Wants You to Know

13 Apr

 

Whether you are an incoming freshman or a returning senior, financial aid can be confusing. As financial aid counselors, there are things we really want all students to know. Here are the top five things this financial aid counselor wants you to know.

There is a limit to how much financial aid you can receive.

Every school will give you something along the lines of an “Estimated Cost of Attendance” or “Budget.” This is your limit on financial aid at your university and students cannot have financial aid over this amount. This amount will vary at different universities because it takes into account your tuition, room and board, and other estimated expenses that are specific to each university.5 Fin Aid things.jpg

There is a difference between your Estimated Cost of Attendance and your bill.

Your Cost of Attendance is a term that is interchangeable with ‘budget.’ It will include estimated costs for expenses like books and supplies, transportation, housing and food, miscellaneous costs, etc. . (Consider either using all double quotations or single quotations. Double quotations are used above for “Estimated Cost of Attendance” and “Budget” – which is also capitalized – but single quotations are used here for ‘budget’ – which is also lowercase in this instance.)

The university is not going to bill you for estimated miscellaneous costs. If you’re not living on campus, you will not be billed the amount for ‘room and board’ (quotes) on your Estimated Cost of Attendance. Your budget is a list of estimated expenses you may have for the year. Your bill is what you will actually owe. Your budget doubles as your financial aid limit, as mentioned previously, but it’s also a way for you to “budget” (quotes) for expenses that may pop up during the year.  In actuality, your bill will only be tuition and fees (and housing and food if you stay in a dormitory).

Financial aid counselors want you to understand this difference because we often see students taking out loans to cover their entire budget. In reality, these students could have saved themselves thousands of dollars had they known they wouldn’t be billed for their entire Cost of Attendance.

You can get a refund.

So why does your Cost of Attendance/budget even bother to include expenses you won’t be directly billed for? The answer is simple. It’s so you can get financial aid to help cover extra expenses, and this is done with a refund.

Since your budget includes costs like miscellaneous expenses, you may find that you have a budget of $20,000 when you only have a bill of $17,000. This means you potentially have financial aid $3,000 in excess of what you need to cover your bill. In a situation like this, the Bursar’s Office will issue you a refund check. This refund can be used to help cover any of your academic expenses that you won’t be automatically billed for such as: books, supplies, transportation, and miscellaneous expenses. If you are staying off campus in an apartment, fraternity, or sorority, instead of living in a dormitory, this refund can also be used to help cover your off-campus rent.

Your grades really matter.

Believe it or not, grades actually matter when it comes to financial aid. Students must meet Satisfactory Academic Progress (SAP) in order to remain eligible for financial aid. SAP is measured at the end of every semester, even if you didn’t take classes, and Purdue notifies you by email of your new SAP status. Purdue’s SAP Policy can be found online on the Division of Financial Aid website.

There are no dumb questions.

We are here to help! We understand that financial aid is very confusing, especially if you are brand new student. It’s our job to answer any financial aid questions or help explain things that may seem confusing. Above all, we hate seeing a little issue turn into a big issue just because a student was scared or embarrassed to ask us a question. We’ll be excited that you are seeking more information, and you’ll never know unless you ask.

Are you a student at Purdue who has questions about financial aid? Please feel free to contact the Division of Financial Aid via email or phone.

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: Choosing a Loan Repayment Plan

28 Feb

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

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 it 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

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.

Financial Aid February: Understanding your Award Notice

9 Feb

If you — as a newly accepted student — applied for financial aid and submitted all verification information that was requested you should expect to receive an award notice from Purdue Division of Financial Aid (DFA) in late February.

This will be sent to your Purdue.edu email address, which you gain access to by activating your career account. The email notification directs students to view their financial aid offer online in their myPurdue system under the Financial tab. Notifications will also be sent to parents who supplied a parent email address on the FAFSA.

First-time students at Purdue will receive an award letter through postal mail. Families can review the recorded Paying for Purdue Award Notice Webinar online as an additional resource.

Award letter example

While the first place that your eyes will look is undoubtedly the Free Money section, a better place to start is by looking at the estimated Cost of Attendance (COA) on the right side. The COA is not your bill! Rather, it is an estimate of the costs of being a full-time student and living in West Lafayette for the school year. It also shows the maximum amount of aid you are allowed to receive for the year, not what you ought to be taking. Your actual bill will come later once you’ve signed up for courses. The only costs you will owe Purdue directly are for tuition/ fees, a meal plan (if you have one), and housing costs if you live on campus.

Now that you know that maximum amount of aid you can receive, the free money awaits. If you have any grants or scholarships, they will appear here. If you have an outside scholarship and have not reported it yet , you can do that via your myPurdue. Grants and scholarships are the ideal form of aid since you do not have to pay them back!

If you subtract your gift aid from the Cost of Attendance, you are left with your remaining “Net Cost”. You can look to cover this amount with the “self-help aid”, using money you already have, or a combination of the two. This is the amount you must cover with money you either have now or in the future.

The self-help aid section is where your offered loans and work study will show up. While these options aren’t as preferable as free money they are a better option for many than trying to pay out of pocket.Fin Aid Feb Award Notice.jpg

It’s important to know that while work study is a form of financial aid, it does not credit your account like the other forms of aid do! Having work study opens up many employers on and around campus who will only hire work study students. The student still needs to find a job and earn the money which is paid via a bi-weekly paycheck. If you don’t work enough hours to receive your entire work study amount, you don’t receive it. Work study is a good way to be able to supply yourself with spending money throughout the year, but it is not a reliable way to pay your Purdue bill since you receive it after the bill is already due.

The other type of self-help aid is the loan. Every loan is slightly different, both in interest and in the steps you need to take to receive it. Federal loans typically are preferable to private loans and often offer more flexible repayment options as well.

As you review the award notice and look up different Financial Aid Terms, keep in mind that grants and scholarships are types of gift aid that do not need to be repaid. Loans and work-study are types of self-help financial aid that must be repaid either in money or labor.fin_need.png

One question that often comes up is where the FAFSA fits into all of this? The FAFSA’s primary job is to create the Expected Family Contribution (EFC) number, which reflects a family’s anticipated financial strength. The formula for financial need is made by subtracting the EFC from the Cost of Attendance. The remaining amount is the maximum amount of need-based aid a student is eligible for. This can be scholarships/ grants with a need requirement, subsidized loans, or Federal Work Study. It is not guaranteed that your financial need will be filled with need-based aid.

Remember that even if you don’t think you will be eligible for need-based aid, you should still file the FAFSA as some scholarships have it as one of their requirements!

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:

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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.

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