Private Student Loans Guide – Eligibility, Costs, Repayment, & Warnings

Private Student Loans as a Tool to Pay for College

With the rising cost of a higher education, more and more students are taking out loans each year to help finance it. In fact, 7 out of 10 students who graduated in 2015 had student debt—with the average amount being just under $30,000.

While there are other ways to help pay for education, such as scholarships and grants, these are almost never nearly enough to cover the huge price tag of a college degree. Though it isn’t necessary to attend college to be successful, many jobs that are attractive to young adults require a college degree.

Though many people see student loans as negative, when it comes down to it, they are truly an investment in your future. Having a college degree opens up countless doors that would otherwise be locked to those who only a high school diploma. Many jobs won’t even look at the applications of those without one—no matter how intelligent they may be.

If students are smart about their debt and take their education seriously, they don’t have to be the lifelong burden that so many people try to make them out to be. However, because these loans are a risk, those entering into college should strongly consider there future career options and what major is necessary to obtain that career.

Under most circumstances, you will have to pay back all of your student loans. It is crucial to have a plan on what you will do after college and how you will pay pack your student loans. Thinking about all of this before you even step foot in your freshman dorm will give you a leg up on other borrowers and will put you on track for a (relatively) stress-free repayment process.

It is easy to get caught up in the seemingly countless number of options when it comes to the best places for student loans. Though this guide will mainly focus on private student loans, we will first go over how they are different from federal student loans and the basics of each.

Federal Student Loans vs. Private Student Loans

There are two types of educational loans—federal and private. Each of these have their own perks and downfalls but both can help students and their families pay for their higher education. It is important to understand both before determining which is best for you. Though the government is typically considered the best place for student loans, private lenders do have some benefits as well.

The following video gives a quick overview of the steps you should take when paying for college.

Federal student loans are given by the Department of Education, which as mentioned, is typically considered the best place for student loans. These usually are the student loans with the lowest interest rates. In order to receive these loans, students and their parents must fill out the Free Application for Federal Student Aid, or the FAFSA. This form takes in basic information about the financial situation of families, such as income. Based off of this, the government determines the Expected Family Contribution, or EFC for short.

After the EFC is calculated, the government may offer students grants, scholarships, and/or loans. The lower the EFC, the more likely students are to receive need-based help in the form of scholarships and grants. Everyone who fills out the FAFSA will be offered some type of federal educational loan.

There are two main categories of federal student loans—subsidized and unsubsidized. Students with a low EFC are typically offered subsidized loans. For these, the government pays the accrued interest while the student is in school. This means that the principal will stay the same as long as the borrower is enrolled. The government does not pay the interest on unsubsidized loans, leaving students and their families responsible for paying it. These are typically reserved for families who can afford to contribute more towards tuition payments.

As of June of 2016, most federal student loans have an interest rate of 3.76% for undergraduates. These are low interest student loans that private lenders typically can’t compete with. This rate is typically lower than what is offered by private lenders. Usually families only turn to private student loans after they have exhausted all of their federal options.

Banks, credit unions, and private lenders all may offer private student loans. The main difference of private student loans is that they are, in most cases, based solely on the credit of the borrower and, if applicable, his or her cosigner. Private lenders perform a credit check to determine if customers are eligible for loans and, if they are, what they’re interest rate is.

So now you know the federal government is, in most cases, the best place for student loans first. After you use all federal student loans, you can then turn to private student loans.

Click Here to visit for more information.


If you have a child that is in the Junior or Senior year of high school, he or she may be considering attending college to obtain a more advanced education. While it is certainly exciting to see your child getting ready to this step, the huge price tag of college may cause some stress and anxiety, and rightfully so. The costs of college have increased steadily for decades, and don’t look to be slowing down anytime soon.

No parents want to see their child struggle financially due to having to pay for college alone, or even worse, have their child not be able to attend because of insufficient funds. Though there is no requirement to pay, or help pay, for their child’s higher education, many parents want to contribute as much as possible.

In this guide, we will go over the costs of college, the options for financing it, and what options you have to help as a parent. In addition, we recommend that you have your child check out our Financial Aid, Scholarships, and Student Loans 101 Course so he or she has an idea of the various ways to pay for college.

Click Here to read more.



The worldwide web can be a big help in helping students research for college. KSL published a list of 7 key sites than can help students with their college applications. Here is a quick summary:

1. LinkedIn University Finder: LinkedIn is a handy tool that can help your students choose the right schools to apply to. They tell the website what they want to study, where they want to live, where they want to work and what career they want to have, and LinkedIn will pop out a list of schools that will give them the best path.

2. Petersons: Petersons offers a comprehensive list of undergraduate and graduate programs, as well as online programs that they can compare and contrast to find the right program for them. They can also find test prep, study resources, a scholarship search, essay writing assistance and resume help.
3. EssaysCapital: Need help writing their admission essay? If so, the professional writers at Essays Capital can help. All the writers have advanced degrees and can help workshop your students writing. They will also do a professional edit before the student attaches his/her essay to their application.

4. is a free website that guides them through the application process. One fun tool is the college finder. Unlike LinkedIn’s finder, which is based on practical factors like career goals and ideal location,’s finder tool focuses on more specific, personal preferences like their religion and their feelings about tattoos and piercings. The site also includes over 200 lessons with advice on things like essay writing and SAT prep.

5. Stat Fuse: Is your student worried about their chances of being accepted to their dream school? Stat Fuse will tell them how likely they are to get past the application process. If their not happy with the results, they can either ignore them and apply anyway or decide to put their efforts into a school that offers better odds.

6. College Confidential: College Confidential is the largest college forum in the world. The discussions on the forum will give your students insights and help them decide which college they should attend, what will matter the most to them during the search process and answer their financial aid questions.

7. BigFuture: BigFuture is a convenient website where they can find college application information, financial aid, guidance on scholarships and a personalized step-by-step plan for getting through the entire college search and application process. The tailored college plan is based on students’ interests, their current grade level, their financial need and what they are most looking forward to about the college experience. There’s also a section that explains different college majors so they can begin to get an idea of what interests them.

The college application process is going to be stressful; there’s no getting around it. But with these websites, at least you’ll have a little help along the way.


Free Virtual College Fair

Picking a college just got a whole lot easier! Join us for All Access Day March where you can get honest feedback from current students at schools you’re considering attending, chat with admissions reps, and get expert tips on finding the college that’s just right for you. This is one of the biggest online college fairs of the year, with hundreds of colleges & universities participating!

Date: Thursday, March 31st

Time: 10 AM – 10 PM

Bonus: Visit five schools during this free online event & you’ll be automatically entered to win a $5,000 scholarship!

Click Here to sign up!

College Board’s Net Price Calculator

The Net Price Calculator is a tool that students can use to estimate their “net price” to attend a particular college or university.  Net price is the difference between the “sticker” price (full cost) to attend a specific college, minus any grants and scholarships for which students may be eligible. Sticker price includes direct charges (tuition and fees, room and board) and indirect costs (books and supplies, transportation, and personal expenses).

How does it work?

  1. First, the Net Price Calculator looks at the sticker price.
  2. Then, using the financial information you enter into the calculator, the Net Price Calculator estimates the amount of money your family would be expected to contribute to pay for college.
  3. Finally, the Net Price Calculator evaluates your eligibility for financial aid at specific colleges by matching your financial and personal characteristics to the criteria that schools use to distribute financial aid (need-based grants as well as merit-based scholarships).

CLICK HERE to find your school’s net price calculator!

FAFSA Tips and Common Mistakes to Avoid

-Modified from NASFAA

The best way to complete the Free Application for Federal Student Aid (FAFSA) is early, online, and without any mistakes. If you aren’t yet ready to file a FAFSA, the Department of Education’s FAFSA4caster tool can help you estimate your eligibility for federal student aid by providing some basic information.

Apply Early

Many states and colleges use the FAFSA to determine eligibility for nonfederal student aid funds that may have early deadlines or limited funding. The sooner you complete the FAFSA the more aid you could be eligible for.

Completing your taxes early will help you get a jump on the FAFSA, but you don’t need to complete your taxes in order to apply for federal student aid. You can use data from previous tax years to estimate figures needed to complete the FAFSA, but you’ll need to correct these figures on the form later by going to the corrections page on the FAFSA website. If you know you will be late filing your taxes, it is better to complete your FAFSA with estimated information than to wait until your taxes have been filed.

Apply Online

Online applications are easier to complete because it uses skip-­‐logic to only ask relevant questions. In addition, online applications will be processed faster and will likely be more accurate because the FAFSA website is designed to catch common errors. The U.S. Department of Education provides a Pre-­Application Worksheet that will help you collect and proofread information for your application before you submit it. You can create a FSA ID that will allow easy access to your electronic FAFSA application. Additionally, this will enable save options, electronic signature and timely submission of your application. You can obtain your FSA ID and get more information on the FSA website.

IRS Data Retrival

When you apply online, you will be given the option to retrieve your IRS Data to automatically populate the FAFSA. This option simplifies the application process, helps reduce errors and lowers your chances of being selected to verify the information on your FAFSA. To take advantage of this feature, you’ll need to complete your taxes first. It will take roughly two weeks for your taxes to be processed. After this time, you should be able to retrieve this information to automatically populate the corresponding questions on the FAFSA.

Avoid Common Errors

Mistakes can delay your application and limit the amount of aid you are eligible to receive. To avoid errors, carefully read all of the questions on the FAFSA. Some of the most common FAFSA errors are:

  • Leaving blank fields: Too many blanks may cause miscalculations and an application rejection. Enter a ‘0’ or ‘not applicable’ instead of leaving a blank.
  • Using commas or decimal points in numeric fields: Always round to the nearest dollar.
  • Listing an incorrect Social Security Number or driver’s license number: Double-­‐check and triple-­‐check these entries to ensure accuracy. If your parents do not have Social Security Numbers, list 000‐00-­0000. Do not make up a number or include a Taxpayer Identification Number.
  • Failing to use your legal name: Your name must be listed on your FAFSA as it appears on your Social Security card. Don’t enter nicknames or other variations on your name.
  • Entering the wrong address: Don’t enter a temporary campus or summer address as your permanent address.
  • Entering the wrong federal income tax paid amount: This amount is on your income tax return forms, not your W‐2 form(s). If you haven’t filed your taxes, you can estimate this amount using previous tax year information and correct the amounts later on the corrections page of the FAFSA website.
  • Listing Adjusted Gross Income (AGI) as equal to total income from working: AGI and total income from working are not necessarily the same. In most cases, the AGI is larger than the total income from working.
  • Incorrectly filing income taxes as head of household: If there is an error in the head of household filing status, the school will need an amended tax return to be filed with the IRS before paying out aid awards.
  • Listing marital status incorrectly: The Department of Education wants to know your marital status on the day you sign the FAFSA. If you are in a legally recognized same-­sex marriage, you will need to provide your spouse’s information as well.
  • Listing parent marital status incorrectly: If your custodial parent has remarried, you’ll need to include the stepparent’s information on the FAFSA. If you have two parents in a legally­‐recognized same-­‐sex marriage, you’ll need to list both parents (one as Parent 1, and one as Parent 2)
  • Failure to list both parents if they live together: If both your legal parents (defined as biological or adoptive parents) live in the same household, you are required to list both parents on the FAFSA even if they are not married.
  • Failure to report unborn children: If you have a child that will be born before or during the award year and you will provide the child with more than half of his or her support, count that child as a member of the household.
  • Failing to count yourself as a student: The student completing the FAFSA must count himself or herself as a member of the household attending college during the award year.
  • Failing to register with Selective Service: If you are a male, aged 18 to 26, you must register with Selective Service. Failure to register will make you ineligible for federal student aid.
  • Forgetting to list the college: Obtain the Federal School Code for the college you plan on attending and list it along with any other schools you’ve applied to attend.
  • Forgetting to sign and date: If you’re filling out the paper FAFSA, be sure to sign it.
  • Sending in a copy of your income tax returns: You do not need to include a copy of your tax returns with your FAFSA. Any information sent with your FAFSA will be destroyed. In addition, do not write any notes in the margins of your FAFSA.

What you Need to Complete the FAFSA

  1. Social Security Number (can be found on Social Security card)
  2. Driver’s license (if any)
  3. W-­2 Forms for the previous year and other records of money earned
  4. Most recent Federal Income Tax Return – IRS Form 1040, 1040A, 1040EZ, 1040Telefile, foreign tax return
  5. Records of child support paid (if applicable)
  6. Records of taxable earnings from federal work-­‐study or other need-­‐based work programs
  7. Records of any grants, scholarships, and fellowship aid that was included in your or your parents’ adjusted gross income (AGI)
  8. Current bank statements
  9. Current business and investment mortgage information, business and farm records, stock, bond, and other investment records
  10. Documentation of U.S. permanent resident or other eligible noncitizen

Get Help

Check the Help section of the FAFSA website or call the Federal Student Aid Information Center at 1-­800-­4­‐FED AID (1-‐800-‐433-‐3243). The Department of Education also provides answers to frequently-­‐asked questions about the FAFSA, and FAFSA on the Web Live Help, a secure online chat session that allows you to ask questions of customer-­‐service representatives.

Look for a free FAFSA event in your area to get professional assistance filling out the FAFSA. Financial aid administrators across the country participate in these free FAFSA events to help students and families fill out the form accurately.

10 Rules For Decoding Financial Aid Award Letters

-Modified from “”

If you’re a high school student whose family income doesn’t qualify for the 1% club, there’s a very good chance that the most important day of your college application experience won’t be the day you turn in all of your applications or the day you get accepted to your first school. Now, if you’re part of the 99%, the crucial day in this drawn out process will be when you receive your last “student aid award” letter, allowing you finally to compare the true cost of attending the (hopefully) many schools that were smart enough to accept you.

According to student loan servicer Sallie Mae, nearly two-thirds of families (65%) used grants and scholarships to pay for college in 2013, up from 61% in 2012 and up from only half of families five years ago. What’s more, 49% of parents say they’re not regularly setting aside money to college savings, and 70% of those parents say the reason they’re not saving is because they simply can’t afford to. In other words: more and more families are counting on grants and scholarships (including tuition discounts from the school itself) to pay for college.

This, in turn, means the “financial aid award” letters that usually arrive within a few weeks of college acceptances could well determine where you spend the next four years.  Unfortunately, an aid award isn’t as easy to decipher as an acceptance or rejection letter.

“Parents should not need a PhD in economics to read financial aid award letters,” says Mark Kantrowitz, a student aid expert and senior vice president and publisher at “But until Congress decides to make the college shopping sheet mandatory, they’re going to need help.”

The college shopping sheet Kantrowitz praises was dreamed up by the Consumer Financial Protection Bureau and the Department of Education in 2011 and has been adopted by over 2,000 schools across the country. It breaks down grants, loans and other financing and gives a financial snapshot of the school offering the aid, including its graduation rate and its students’ loan default rate as compared to the national average. If every college were to adopt this sheet, it would be a lot easier for parents and students to understand and compare financial aid offers across schools, and then choose the best one.

That’s the theory. Problem is, the 2,000 schools who claim to have “adopted” the sheet (the list of them is here) represent just 44% of the nearly 4,500 degree-granting post-secondary institutions in the U.S. and 40% of the adopters only offer the shopping sheet to students who are military veterans. (The Consumer Financial Protection Bureau does have a very handy online tool that mimics the college shopping sheet and even compares offers from different schools, but unless you fully understand the contents of your aid letter, there’s a chance you’ll misinterpret the data.)

So, until every school starts to give a uniform financial aid notification letter to every student, or until you get that PhD in economics, listed below and within the slideshow are the ten most important things you need to know about decoding financial aid award letters:

  1. That number next to the word “financial aid award”? It’s not all a gift.  This is the single biggest point of confusion, financial aid experts say. There may be a line at the bottom of your letter that reads, “this is your award amount,” and the number next to that phrase could look like a lot of dollars. However, you have to look at the lines above the “total aid award” number to figure out what went into calculating that total – and chances are, there are some loans mixed in. Since loans need to be paid back with interest, these are hardly a “gift.”What’s worse, Mark Kantrowitz says, you may not be able to quickly tell which items are grants and which are loans. “There’s no interest rate, no monthly payment listed, and they may not use the word loan. They set up a character limit for the name of the award and they use lots of abbreviations. Sometimes they’ll say L or LN instead of using the full word for loan,” he says. So, for instance, you may see “Fed Staff L,” and there may be a “sub” or “unsub” afterwards. This stands for “federal Stafford loan,” a loan that comes from the government and whose current interest rate is 3.9%. “Sub” stands for subsidized, which means the interest does not accrue while you’re in school; “unsub” stands for unsubsidized, which means the interest does accrue while you’re in school so the amount you owe upon graduation will be larger than the amount you borrowed (unless you pay down the interest while you’re in school).

    Stafford loans are loans that go in the student’s name, but parents need to be careful to scan the award letter for the addition of loans that will be in their names, too. Troy Onink, CEO of college planning service (and a FORBES contributor), says that some schools will even include a Parent Plus loan into the “award” mix. Though this item is just a suggestion — you’re not required to take out a Parent Plus loan, whose interest rate was 6.41% this past academic year and whose 2014-2015 interest rate has not been set yet –some schools include a parental loan to inflate the “award” and make it look better than it is.

    “Parents should also be aware that if they borrow this year and the next and the next that their loan payments will increase each year as debt accumulates, and they may not be able to handle the increase in monthly loan payments, especially if they have more children enrolling in college in subsequent years,” he adds.

    For those who need a visual example of this mixing practice, take a look at thefirst page of this sample financial aid award letter that Collegeboard created: you’ll see that the total awards line makes it look like you’ve been awarded $39,000 for a full academic year at the sample university. But if you look at the components of the award, the sample school has counted a federal Perkins Loan, a Federal Subsidized Stafford, a Federal Unsubsidized Stafford and money from a work-study job (more on that in a bit) Bottom line: $30,500 represents the school’s discount (called “college grant” and “college scholarship” here), $2,000 you’re expected to earn and another $6,500 you’ll have to pay back.

    This letter from the University of Portland, on the other hand, is much clearer about how your aid package is constructed: they’ve broken out what the “gift aid” is and have a separate category for “self-help aid.” While the phrase “self-help aid” is a bit flowery – “money YOU’RE responsible for” might be more appropriate, if casual – the breakdown on this sheet does a good job of showing that you would get $20,100 in free money for the year and need to supply $27,360 from your borrowing, your parents contributions or borrowing, and some work-study.

  2. The net price is more important than the overall cost of attendance.Sure, the total cost of attending a school might look high, but when you factor in scholarships and grants, Pricey University might actually turn into the College of Affordability.

    While the cost of attending a school is the sum of tuition, housing, meals, books, travel and other miscellaneous fees (Princeton, for instance, bills you for activities fees, class dues and a one-time transcript fee), that’s not the number you should dwell on. The best question to ask yourself, says Kal Chany, author of “Paying For College Without Going Broke,” is what is the number left over after you subtract all your grants and scholarships from the “cost of attendance” sum. “That’s the nut you have to come up with, whether you borrow, pay from savings, etc,” Chany says. As for why it’s bad to compare packages on a loan-by-loan or grant-by-grant basis, Chany says this: “it’s great if you can get a subsidized loan, but if you get a $3,500 subsidized loan at one school versus another school where you don’t get that loan but you get a $3,500 in grant, you’re better off taking more grant money.”

  3. The amount of money you receive in grants could start to decrease after freshman year. Financial planners often talk about how much you should borrow over four years of undergrad (“don’t borrow more than your first year starting salary,” goes the party line), but if you’re a high school senior, the best way to guess at that number is to multiply the difference between the net price and what you can afford to pay by four. Right? Not so fast, says Kantrowitz. Some schools practice what he calls “the frontloading of grants,” wherein the college includes more grants to a student during freshman year and then slowly dials back the amount of free money it’s giving to that student in subsequent years of school. This could happen, in part, because Stafford loan limits are lower for freshmen and sophomores, or if you view the school in a benevolent light, to minimize the amount of debt a student takes on at the start in case he or she drops out after freshman year. Or, of course, it could just be to entice a student to a school with a seemingly low net price – one that will not look so affordable by the time that student is a senior.

    “You need to find out if the college practices the frontloading of grants. What is the real cost of this college over four years not just one year?” Kantrowitz says. “There are a couple ways to find out. One: just ask. ‘Do you practice the frontloading of grants?’ Some colleges won’t give straight answer, he cautions, but notes that if you ask a half dozen upper classmen how their junior and senior year grants compared to their freshman year grants, it should become clear, based on their answers, whether the school you’re considering does frontload the free money.

    The last approach, he says, it to consult College Navigator, a free tool provided by the National Center for Education Statistics. In College Navigator, you can pull up the school you’re considering and see that school’s financial aid information. Within the financial aid category, there are two sections: typical financial aid for beginning undergraduate students and financial aid for all undergraduates. If the average grant in the “beginning” students is significantly higher than the average grant size for all undergraduates, it’s a sign that school frontloads its grants.

    Keep in mind too that even if a college’s grant or discount stays the same each year while the college’s tuition and other costs rise, you will in effect be forced to borrow more (or your parents will have to pay more) in the later years.

  4. Beware the strings on scholarships, Pinocchio. If the school is giving you merit-based scholarship or grant, it’s important to read the fine print and see exactly what strings are attached. “What’s it based on?” Chany asks. “If the GPA is very high, it could just be a bait and switch, and you may not get it after freshman year because the GPA is so high and the school knows not all kids will have that.”

    Rohit Chopra, student loan ombudsman and assistant director of the Consumer Financial Protection Bureau, adds that it’s not always clear to students that even if they maintain a required GPA, the school still has the right to reduce the scholarship amount in subsequent years. “It’s at the discretion of the school. There’s not always a consistent set of terms and conditions,” Chopra says, noting that one exception could be a public state school system, where the system has its own guidance about renewable scholarships. But because policies can differ from school to school, students “should inquire as to what they need to do to keep that scholarship each year. They don’t want to be surprised and get a higher student loan amount” at the end of four years, Chopra advises, adding that if you ask about this, schools should be able to provide an answer about the likelihood of a scholarship declining or disappearing altogether.

  5. Your expected family contribution is subject to change – especially depending on whether you have siblings in college, too. Parents often think that having two kids in college at the same time is twice as expensive as having one, but that isn’t true. Both school aid and federal grants (but not unsubsidized loans) are based on expected family contribution (EFC), and if there are multiple siblings in college at the same time the EFC is divided by the number of college-aged kids. That’s how the Free Application for Federal Student Aid (FAFSA) formula for assessing your need works.  But if you’ve applied to one of a few hundred elite and pricey schools – including Ivies, Bowdoin, MIT, etc. – you’ve likely need to fill out the College Board’s CSS Profile in addition to FAFSA. Schools using that form and what’s known as the “institutional aid” formula typically expect a family to kick in 120% of the EFC if two siblings are in school at the same time — or 60% of the EFC for each.

    The EFC split can lead to big swings in aid as the number of siblings attending college rises and falls. For instance, Chany explains, if you have one child who is a college freshman and another child right behind her – say, a son who’s a high school senior, “You might be paying X-amount the first year, but the second year you might be paying Y, with Y being half of X because you have two in school.”  Conversely, if your older child is going to be a college senior next year, you might be  offered a generous grant for your younger child’s freshman year, only to see it disappears in his  sophomore year– when the older sibling  has graduated and parents are expected to devote their entire EFC to the younger kid’s schooling.  To make sure you understand what might happen to an award, ask the college what formula it uses and whether any grants your child is being offered will adjust up or down as siblings enroll or graduate from college.

  6. The expected student contribution assumes you’ll put summer earnings towards college costs — but if you worked an unpaid internship, you could need to borrow the difference. While both the CSS Profile and FAFSA form ask about a student’s finances in addition to his or her parent’s, financial aid award letters coming from CSS Profile schools automatically include an expected student contribution of at least $1,800 — and sometimes a lot more—whether the student has earnings and assets or not,  says Troy Onink. Even if a student doesn’t earn money in the summer (maybe he spent the time doing an unpaid internship or research), the family has to make up that amount somehow, through either parental contributions or more loans.

    “In some cases, they (students) spend down savings. Other cases, like low income students, are stuck,” Mark Kantrowitz adds, noting that a student from a lower income family might be working just to put food on the family’s table and can’t use their summer money for school expenses. Also, Kantrowitz notes, “they might not be able to borrow the money because it’s harder for them to qualify (for an extra private loan). Often times,” he says, “the student has no way of getting that money.”

  7. The number in that “work study” line? It’s not guaranteed income.Your work study money might be listed as a financial aid “award,” but just as a Stafford loan isn’t a gift, neither is this money. You have to find a job on campus and then work the hours. “There’s no guarantee that you’ll get one, or that the one that you’ll get is appealing,” says Kantrowitz. “You might be shoveling books in a library, as opposed to working with a professor on a research project.”

    Onink, who has seen kids look at their “work study award” and then sit idly by, not looking for an on-campus job, says that work study jobs are first come first serve, and to get one you want you have to act fast. “You need to get on that as quickly as possible – call the university and say, ‘how do I get this job?’” he advises. “Sometimes you have to make the campus rounds and ask the different departments, ‘do you have an opening?’”

  8. Don’t take the school at face value in regards to your book and travel expenses; what they say is the bottom line cost might be a lot less than your bottom line cost. A school may give you an estimate of what your expenses will be, but you shouldn’t take that estimate at face value. If they say books will cost $500 per semester and you’re in two chemistry classes where the textbooks cost $250 apiece, that’s your book budget right there—and presumably, you’re taking other classes. Likewise, if the school estimates your travel budget will be $1,000 per semester but you’re flying from L.A. to New Haven – and planning on going back for Thanksgiving  in the fall and spring break in the spring – the roundtrip totals of getting to and from school will likely tally more than $1,000.

    On the flip side, the school’s estimates could be way more than what you’d actually spend. Maybe you’re an English major who was able to buy her all her 19th century lit novels on and spend just $200 on books for the whole semester, or your parents can drive you to and from the Connecticut suburbs to New Haven just for the cost of a tank of gas. If you need loans to cover your expenses, taking the school at face value in this scenario would cost you an extra thousand bucks, at least.

    “Budget before you borrow,” Kantrowitz says. “You don’t want to get that refund of the credit balance after they subtract tuition and then spend it all on entertainment, dining, eating out, specialty coffees and Jamba Juice.”

  9. If you experienced an unusual financial circumstance, you can apply for professional judgment. College is just about the only big purchase that, despite what some may tell you, comes with virtually no negotiating power. You can haggle with a car salesman, bandy back and forth with the sellers of that home you desperately want, but when it comes to higher ed, you can’t easily say, “here, we’ll pay you in cash if you drop the price by 20%!” However, if your family has had an extraordinary financial circumstance – a high unreimbursed medical bill, the loss of a job for the primary wage earner, even tuition expenses for a private K-12 program for a sibling – you’re not only allowed but encouraged to let the school know.

    “Make sure every single college knows about those circumstances, because that can make a difference in the aid package,” Kantrowitz says. “Provide documentation. Ask them for an adjustment. These are called professional judgment reviews. The school reviews the circumstances, if they believe the circumstance merits an adjustment, that adjustment will be driven by the financial impact [of the extraordinary circumstance] on the family.”

    Just whatever you do, don’t call it negotiation. “There’s this myth that colleges will negotiate or that you can treat them like a car dealership. You can’t,” Kantrowitz says, resolutely, adding that unless you have something the school wants, like money, or you’re really strong academically compared to typical students at the school, you’ll probably not going to get a more generous financial aid package. At second and third-tier schools that offer merit scholarships, you can apply for one of those, but it won’t be based on financial need. “There are colleges that say ‘if you got a better offer from someone else, send it and we’ll take a look.’ But in most cases, they’re looking for information that was provided to one college and not to them. Most negotiation is professional judgment in disguise,” Kantrowitz explains.

    So if you get wildly different net prices (that is, a significant difference in grants and scholarships) from two schools with a similar cost of attendance, it could be a sign that one school has more information about your financial situation than the other – and professional judgment could be in order.

  10. Outside scholarships won’t automatically reduce your net price (what you owe). The natural reaction to a large net cost is, “let’s see if we can get some outside scholarships to cover this!” So you go on or to see what random scholarships you qualify for, and try to nab as many as you can get your hands on. This is another thing that sounds good in theory, but is trickier in practice, because some schools treat outside scholarships as a reason to reduce the grants and scholarships they are giving to you.

    “You need to find out what the college’s outside scholarship policy is,” Kantrowitz says. “If the scholarships reduce your loans, you are reducing the net price. You’re getting a net financial gain. But another school might reduce the grants, so there’s no difference in net price. That can mean a difference in two schools that look similar.”

    The CFPB’s Chopra, however, cautions parents and students not to allow worries about scholarships reducing other grant money to keep them from pursuing outside scholarship.  “I sometimes feel like a lot of media outlets concentrate on this issue too much. We shouldn’t do anything to discourage people from applying for scholarships,” he says. “A scholarship is money that doesn’t need to be paid back. Often it will lead to fewer loans you need to take out.” Just make sure you know what rules each school is playing by so you can truly compare costs.

February is Financial Aid Awareness Month

Modified from: (NASFAA)The National Association of Student Financial Aid Administrators

Each winter, students across the country begin the process of applying for financial aid through the Free Application for Federal Student Aid, or FAFSA. Throughout the month of February, the higher education community, including NASFAA (National Association of Student Financial Aid Administrators), celebrates Financial Aid Awareness Month, in an effort to provide crucial information to students and families about access to federal, state, and institutional student aid.

This Week’s Topic: Types of Aid

There’s more to financial aid than student loans. Grants, scholarships, and work-study awards can all help you afford a college you might have thought was out of reach. This week, learn more from NASFAA members about how you can get aid from federal, state, institutional, and community resources, as well as others that might apply for certain student populations. We’ll take your questions about the differences between different types of financial aid, and how to make sense of shows up in your award letter. Join us this week for our Twitter Chats (@NASFAA):

  • Wednesday Feb. 10, 7:00 – 8:00 pm ET
  • Friday Feb. 12, 1:00 – 2:00 pm ET

Stay tuned to our Twitter feed (@NASFAA) each week in February for weekly discussions on the following topics:

  • Week 3: Budgeting and Managing Debt(Limiting borrowing, sticker price vs. net cost)

    • Wednesday Feb. 17, 7:00 – 8:00 pm ET
    • Friday, Feb. 19, 1:00 – 2:00 pm ET
  • Week 4: Financing After College (Finding the right repayment plan, avoiding default)

    • Wednesday Feb. 24, 7:00 – 8:00 pm ET
    • Friday, Feb. 26, 1:00 – 2:00 pm ET