Addressing Financial Aid Myths

Have you heard that applying for financial aid isn’t worth it because your parents earn too much or because it takes too long to complete? Don’t be tempted by these common myths to skip completing the Free Application for Federal Student Aid (FAFSA). You could be passing up free money. And that’s the last thing you want to do when it comes to paying for college.

FAFSA-Myths-Image

Financial Aid Myth: You need to have your taxes filed before starting the FAFSA.

The FAFSA now requires tax information from the “prior prior” tax year, so the deadline for filing the required taxes is the April before completing the current FAFSA. If you or your parents missed that tax filing deadline and you still need to file taxes, you should estimate tax and income information for the FAFSA and correct that information by logging in and updating your FAFSA after filing the appropriate tax return. For help with questions about required income information, call (800) FED-AID.

Financial Aid Myth: You won’t receive financial aid because of how much money your parents earn.

Income is not the only determining factor when it comes to whether or not you’re eligible for federal student aid. And there is no income level that automatically disqualifies you for aid. Taking the time to complete the FAFSA is the only way to qualify for federal student aid and you won’t know if you qualify until you do that step, so completing the FAFSA every year you are in school is important.

Also, did you know that the FAFSA is used for more than just federal financial aid? State and school aid is also awarded based on your FAFSA results. If you don’t complete the FAFSA, you could also be missing out on these other sources of financial aid.

Financial Aid Myth: The FAFSA is difficult to complete.

The FAFSA has changed a lot since it was first introduced, and the application is revised often to make the process smoother. The online process uses logic to limit questions to ones that are relevant and completing it online instead of filling out a paper application lessens the chance for mistakes. According to the federal government, completing the FAFSA now takes less than 21 minutes on average. That’s not too bad if the outcome is grants, scholarships and other funds to help lower your college expenses, is it?

Financial Aid Myth: You only need to complete the FAFSA once.

If you complete the FAFSA before starting college, you may think you don’t need to file it ever again. But you should file the FAFSA every year as soon after Oct. 1 as possible if you intend to enroll in classes during the next academic year. This is especially important if your family’s circumstances change because you may be eligible for new or more aid next year. Even if there are no major changes to your family, though, other factors such as how financial need is calculated may mean you are eligible for different options next year. And, once you complete the FAFSA the first time, it will take even less time to complete the following years.

Financial Aid Myth: Your parents are not supporting you financially in college so you don’t have to include their information on the FAFSA.

Unfortunately you may still be considered a dependent student for federal student aid purposes, even if you are paying for all your college expenses yourself. You will need to answer questions in the FAFSA to determine if you are considered a dependent student or an independent student. If you are considered a dependent student, you will need to report your parents’ information on the FAFSA. If you are unsure how what type of student you are, contact your college or university’s financial aid office for assistance.

By: Iowa Student Loan

Tips to Study Smarter

Tips-to-Study-Smarter

You’ve probably heard how you have to study more and learn to manage your time better to keep up with college work. It’s easy to say “study smarter,” but how do you actually accomplish that? Try out some of these tips to up your studying game.

Use a daily planner and block off time each day for studying and homework

Whether you have a test or assignment due the next day or not, use that time every day to study. Sticking to the routine will help ingrain the habit of studying well ahead of deadlines.

Review your class notes daily and fill in missing details

You might want to compare notes with a friend to see what each of you picked up on for clues about what is most important or to look for differences to make sure you didn’t miss anything. Don’t wait until the night before a test to look at your notes, they might make no sense weeks after you’ve written them down.

Set goals

If you’re reading a novel for a class, figure out how many chapters you need to read per day to finish on time and aim for that goal each day. Set a goal to memorize 25 new terms a day for weekly tests. Or, plan to concentrate on one math formula so that you understand not only the “how” but the “why” and can complete the formula with several different figures.

Study for 35-45 minutes and then take a break, no more than 10 minutes

Giving your brain and yourself a short break will give you time to digest what you have just reviewed or worked on. Plus, it will help you concentrate better when get back to work.

Try studying in different places

If the weather is nice, think about doing some reading outdoors. Need to really concentrate? Head to the library. If you want to be comfortable, find a good spot in your room; just make sure there are no distractions while you review your class notes. Studying in different places can help reduce boredom.

Do more with the material

Try turning headings into questions and answering them after each section. Or write down answers to focus questions instead of just skimming the questions before reading the sections. You might connect the topic to your own experiences, such as connecting a family vacation at Yellowstone National Park to President Woodrow Wilson creating the National Park Service in 1916, and writing a few notes for yourself. By engaging other areas of your brain, you may remember the material longer than the 30 minutes it takes you to read a chapter.

After tests, compare your notes with what was included in the exam

If your notes included information about what was asked, you’re on the right track. If your notes were lacking details that were covered in a number of questions, don’t be afraid to ask for help or advice from the instructor, a teaching assistant, a tutor or even a friend who is doing well in the class.

Try different study methods to find the one that works best for you

Some students thrive on reviewing flash cards while others need to reread entire chapters of their textbooks. See which method works best for you while your workload is lighter; it will pay off when you have more work to do.

By: Iowa Student Loan

High Schoolers: Start Saving Today

Start-Saving-Today

Whether you’re planning on college next year or just starting your freshman year in high school, you can take steps to save money today that will help you with college costs in the future.

Open a Savings Account

If you don’t have your own savings account, now is a great time to get one. Ask your parents for advice or visit with an account specialist at a local bank or credit union. You will need to deposit some money to open a savings account, but that amount can often be as low as $5.

Even if you don’t add to your initial deposit, as long as you haven’t taken it out, that amount will increase by the time you’re ready for college simply because of interest accrual. This is one time interest will work in your favor.

You can save more, though, if you deposit gift money you receive into your account. If you really want to give your account a boost, deposit all your gift money to earn interest on every penny. If that seems like too much, think about depositing half of any gift money you receive. That way you can still spend some, but you’ll also earn interest on a bit.

Save Your Change

If you use cash for all your spending money, saving your change can really add up over time.

Take a jar, glass bottle or even a cleaned-out laundry soap container and put any loose change you have every day into the container. Once your change gets heavy, or if you are tempted to spend it, deposit it into your savings account. You’ll probably be surprised at the amount of money you’ve accumulated in just “spare change.”

Have a Sale

Look around your room. Do you have some childhood toys collecting dust or video games you never play anymore? What about clothes you haven’t worn in more than a year hanging at the back of your closet?

If you have no need for the items and your parents are OK with it, think about having a garage sale or putting items on a website like eBay. Do some research before you sell anything to see what prices others are getting for items sold online. Then decide where to sell.

If you want to have a garage sale but don’t think you have enough to sell on your own, see if your friends would like to sell some of their stuff too. To keep track of where the money goes, use different colored price stickers to indicate whose item is being purchased. After the sale, proceeds can be easily divided up between the different color stickers.

Get a Job

The easiest way to save money is to earn money. If your grades and extracurricular activities allow, get a summer job or a part-time job during the school year. Look for places that are willing to work with your schedule and then be responsible for showing up on time. Working while going to school is a great way to learn how to balance different responsibilities.

Having a job also means earning a paycheck. This is another way to take advantage of a savings account. If you set aside some of the money you earn for your savings account on a regular basis, it will start earning interest as soon as you deposit it.

Think about setting a savings goal too. If you get paid every two weeks and are able to put away $40 each payday for two years, you can save more than $2,000 to put toward college expenses. If you don’t work during the school year, what about trying to save at least $250 a month during the summer? In two summers, your savings can increase $1,500.

However you accomplish it, any money you save now is money you won’t have to borrow (and pay back with interest) in the future.

By: Iowa Student Loan

How Much Should You Save for College?

How-Much-Should-You-Save-for-College

At the start of your senior year in high school, how you’ll pay for college may not be a high priority yet. It’s something you should be thinking about, though, as you consider different colleges and the costs associated with attending each one.

A national study, How America Pays for College 2017, shows that the average student contributes 11% to the total cost of his or her college education. That is money from the student’s income and savings, not student loans.

So, how much should you plan to save for college this year?

That answer depends on a multitude of different factors, but the easiest response is “as much as possible.”

If you want a more precise number, though, there are things you can do now to determine how much you want to save during the next 12 months.

Create a Budget

Use an in-school budget tool to start forming an idea of how much money you’ll need to live on each month. It’s OK to guess right now and try out different calculations. How much will you cover with grants, scholarship and student loans, and how much will you need to have on hand each month for your extra costs?

If you live on campus in a dorm during your freshman year at college, many of your expenses will be set and you’ll be left with a smaller number of variable categories. But if you’ll be living off campus, you will have to calculate additional costs like your portion of the monthly rent, gas and car maintenance, and how you will fill a refrigerator.

Figuring out how much you will need each month can help you set a goal for the amount you definitely want to save during your senior year.

Compare Costs

While you’re creating different in-school budget scenarios, be sure to consider the costs needed for different schools you’re considering. Less-expensive schools might seem like the way to save money, but many times those institutions also have less money to offer in terms of scholarships and grants compared to more-expensive colleges or universities.

Anticipate that you will need more spending money than you think to ensure you don’t greatly underestimate how much you will need to save.

Reduce Expenses

Is your budget a lot higher than you expected? Check out these ideas for ways to save on supplies. Will any of those options help reduce your monthly budget?

You can also consider options such as:

  • Living at home and attending a community college for your first year or two to meet your general education requirements.
  • Planning to work part-time during college to help you cover some monthly expenses.
  • Cutting back on entertainment or other non-necessities to reduce the amount needed for spending money each month.

It may seem like a daunting task, but the more you’re able to save for college today means less that you will have to borrow in the future.

By: Iowa Student Loan

Crossing the Line: Improve Academic Standing for Financial Aid

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Good grades and test scores typically mean more scholarship opportunities. Did you also know that a small margin can sometimes push you over the line for eligibility, or even for higher awards? Here’s a look at how small improvements matter.

PSAT/NMSQT

The Preliminary SAT (PSAT) is also the National Merit Scholarship Qualifying Test (NMSQT). If you take the PSAT as a junior, you’re automatically screened for the National Merit Scholarship Program. The top scorers in each state receive special recognition.

  • About two-thirds receive Letters of Commendation and become eligible for special scholarships sponsored by corporations and businesses.
  • About one-third become Semifinalists, and most of those complete several steps to become Finalists. Finalists are eligible for:
    • Merit Scholarships from the National Merit Scholarship Corporation, corporations and colleges.
    • Special scholarships up to and beyond full tuition from certain colleges.

The difference between a Commended student’s score and a Semifinalist’s score could be a single point in a metric called the “Selection Index,” which is based on your PSAT scores.

How to Cross the Line

Preparation is key for the PSAT.

  • Take the PSAT 10 as a sophomore to become familiar with the test format and see where your strengths and weaknesses lie to better prepare yourself for the PSAT as a junior.
  • Use practice tests to review the test concepts and learn which answers are considered correct or incorrect and why.
  • Be sure to practice in timed test-taking situations.

ACT and SAT

Most colleges require you to attain a specific minimum score on either the ACT or SAT before admittance. Once you have narrowed down your college choices, review their scholarships pages. Many academic scholarships are based either entirely or partly on those test scores, and one or two more points may push you into a category for a more substantial award.

How to Cross the Line

Many of the same techniques above for the PSAT apply when taking other standardized tests like the SAT and ACT. Keep these additional pointers in mind:

  • While the PSAT and SAT are both offered by College Board and have many similarities, the ACT comes from another provider and the format and content areas may be quite different. Use specific practice tests for the SAT or the ACT, depending on which test you plan to take.
  • Check to see if the colleges you’re applying to require or recommend that you take the optional essay portion.
  • You may retake either the SAT or ACT to try to improve your score.
    • Concentrate on preparing for the areas in which you want to improve, but continue to practice all parts of the test so your other section scores don’t fall.
    • Consider your options for sharing your scores with colleges. You may want to wait to see your new score before you submit it to a college, but an additional fee could be required.
    • If your score improves in some parts of the test, but you have a lower composite score because of lower scores in other sections, see whether your college will superscore, or consider your best score for each section of the test separately.

High School Grades

While you’re checking the test score requirements for scholarships, pay attention to the required high school GPA as well. Will bumping up your overall GPA a fraction of a point move you into another scholarship category and make you eligible for hundreds or thousands of additional dollars?

Increasing your GPA may also make you eligible for increased money from outside scholarship sponsors. When you search for scholarships, try a search with an additional 0.1 or 0.15 added to your actual GPA to see if you get more results. (Don’t lie on scholarship applications; improve your GPA before you apply.)

How to Cross the Line

Increasing your GPA may take some extra effort, but if it nets you additional cash for college, it’s worth the work.

  • Don’t wait. Take steps to improve a specific grade early in the semester or year. Later, you’ll have fewer opportunities to earn points, and a perfect final test can only offset so many earlier mistakes.
  • Take advantage of every extra credit opportunity.
  • Ask your teachers how you can improve your grade. Some may be willing to provide credit for an extra project or paper if you explain why you need the grade boost. (This is most effective if you’re an engaged student who generally completes all work on time, even if you don’t always get an A.)
  • Improve your study habits. See these tips for studying smarter.

By: Iowa Student Loan

Maximizing Summer Earnings for College

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About this time of year, panic tends to set in for new high school graduates looking at their upcoming college costs. If you’re planning to work this summer to offset some of your college expenses, consider these tips.

1. Know How Earnings Affect Your Financial Aid

Although your financial aid has already been determined for the upcoming year, your annual income can affect future aid.

The Free Application for Federal Student Aid, or FAFSA, provides an income protection allowance — the amount you can earn during a calendar year before your financial aid package is affected. For the 2015–2016 year, this amount was $6,400.

You shouldn’t necessarily try to limit your annual income to less than the income protection allowance, however. The income tax you pay on your earnings is also taken into account, and the type of aid you receive makes a difference. Offsetting student loans with income is beneficial, while earning enough to reduce need-based grants isn’t so great.

If you have questions about how your earnings will affect your future aid, talk with a financial aid officer.

2. Make a Plan for Your Earnings

The amount you need to save from each summer paycheck is determined by your goals. Are you planning to offset specific expenses, such as clothing, books or entertainment, for the school year? Are you planning to earn enough to make interest payments on student loans?

Use your goals to determine a percentage of each paycheck to put into savings. Don’t forget that you may need to use part of each paycheck to cover current expenses, such as work clothes, gas and car insurance, and that you will have taxes and other deductions removed from each check. You may also want to plan on spending a little each month on summer entertainment as well.

3. Simplify Your Saving

It’s often tempting to use cash in hand, and sometimes students find they’ve spent the money they intended to save without really thinking about it. Avoid the cash crunch by:

  • Depositing your pay right away. If you have the option to have your check direct-deposited into a checking account, take advantage of it. If not, or if you are paid in cash, deposit it directly after you receive it to avoid unnecessary spending.
  • Automating your savings. Set up an automatic transfer from your checking account to your savings account that corresponds with your pay date. For example, if you are paid by direct deposit every other Friday morning, have an amount equal to the percent of your check you want to save automatically transferred to your savings account on those Friday afternoons. Time the transfer as close to the deposit as you can without risking overdrawing your checking account.

4. Stick to Your Goals

Once school starts in the fall, remember what you worked so hard for over the summer. If you intended to use your summer earnings for books, don’t let the desire for new clothes or evenings out distract you from your goal. If you haven’t already considered it, think about a part-time job during the school year to pay for other items you want or need.

By: Iowa Student Loan

Maximize Your Graduation Money

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Your high school graduation is an occasion to reflect on past accomplishments and prepare for a new adventure in college. It can also be a veritable gold mine.

As college becomes increasingly expensive, many of your family and friends may opt to give you a gift of cash to help you offset your costs. While it might be tempting to use that newfound cash to upgrade your phone or gaming system, you could use that money in ways that will better help you prepare for college. Here are some ideas to make the most of monetary gifts you receive.

If you have: You could:
$50–$100
  • Get a haircut.
  • Have the oil changed in your car.
  • Buy a few dorm or personal care items.
  • Pick up an interview outfit.
  • Buy paper, pens and other supplies.
$100–$500
  • Rent some of your required books.
  • Pay for a campus parking permit.
  • Buy a bike to get around campus.
  • Pay program fees or club dues.
$500–$1,000
  • Get a computer or other electronics you need.
  • Put money toward your tuition bill.
  • Buy plane tickets to come home at the semester break.
  • Save for a rental deposit if you plan to live off campus next year.
  • Pay major- or activity-specific fees.
$1,000–$5,000
  • Save to use toward future tuition and fees.
  • Buy textbooks and supplies for one year.
  • Pay a summer’s rent for an off-campus house or apartment.
  • Cover fraternity or sorority dues and other expenses.
  • Cover insurance deductibles for a car or medical emergency.

By: Iowa Student Loan

Iowa Families Can Win Cash for Educational Expenses

Iowa high school students and their families can enter weekly drawings for two $250 awards, and Iowa high school seniors can enter a grand prize drawing for two $1,500 awards by completing a free online tool that helps them estimate the total cost of a four-year undergraduate degree.

Learn more and enter the giveaway today!

Iowa high school students, and their parents or guardians, can enter their information for the drawings after completing the College Funding Forecaster until May 11. The free online tool provided by Iowa Student Loan uses information from students’ freshman year financial aid award packets, as well as outside scholarships and grants and family savings and earnings, to project estimated costs, funding gaps and potential student loan debt over four years.

“We want to help families make the connection between first-year costs and the total financial investment in a college education,” said Steve McCullough, president and CEO of Iowa Student Loan. “This tool helps them see how their costs might increase, what happens when one-year scholarship awards are exhausted, and how the family and student contributions can play a role in reducing overall costs.”

The tool allows families to customize both expenses and available funding to adjust results for changes in students’ situations over the four years. The results show yearly and total estimated costs of attendance, available funding and projected funding gaps. The tool also provides informational tips on how to reduce costs and potential debt.

After viewing their results, users have the opportunity to enter the drawings. Two names will be drawn each week to receive $250 awards for educational expenses. In a grand prize drawing, two names will also be drawn to each receive $1,500 for the students’ college expenses in fall 2017. The grand prizes will be paid directly to the students’ colleges.

For details and complete rules for the giveaway, visit www.IowaStudentLoan.org/Giveaway. Or, to begin the College Funding Forecaster and enter the giveaway, go to www.IowaStudentLoan.org/Forecaster.

By: Iowa Student Loan

Minimize Your Student Loan Debt: Declining Awarded Student Loans

Colleges sometimes include the maximum available federal student and parent loans on financial aid award letters to bring the amount of awarded financial aid closer to the total cost of attendance. It’s not always clear that students don’t need to accept the full amount of all loans.

Reducing expenses or increasing earnings to offset awarded loans will mean less debt after graduation. Not only would the amount of the student loans need to be repaid, but so will interest that accrues daily on those loans. And, it won’t matter if college doesn’t result in graduation, a job or the anticipated earnings. Once the loan has been accepted, the student (or parents in the case of a federal PLUS Loan for parents) is responsible for repaying it.

If the awarded loan amount seems like more than the student will really need, it’s important to decide exactly how much to borrow.

Need some, but not all, of the awarded federal student loan amount? Students can always accept only the loan amount they need. To take a partial loan amount:

  • Fill in the desired loan amount on the document to be returned to the financial aid office if a paper copy needs to be signed and returned.
  • Choose the electronic option for accepting or declining each applicable loan, or for taking out a partial loan amount, when accepting financial aid online.
  • Contact the financial aid office if it’s not clear how to accept a partial award.

Can all loans be declined? Many students have the goal to attend college loan-free. Even if some loans will eventually be needed, declining all loans for one semester will save capitalized interest later on. To decline the offered loans:

  • Cross out the loan amount or select the “decline” option on the document to be returned to the financial aid office.
  • Choose the electronic option for declining each applicable loan if financial aid is accepted online.
  • Contact the financial aid office if it’s not clear how to decline loans.

Considering PLUS Loans? Although PLUS Loans may appear to be part of the awarded financial aid, they are not automatically paid to the student or institution. Parents need to request these loans. Your family may wish to compare the terms and benefits of a PLUS Loan with those, like our College Family Loan, offered by private lenders. These loans may have different fees or interest rates. Be sure to discuss repayment expectations as a family if parents will be responsible for repaying the PLUS or other loan debt.

By: Iowa Student Loan

What to Do If a Financial Aid Award Is Inaccurate or Incomplete

When that financial aid award notification arrives, check it carefully. Here are some circumstances you may run into and what you can do.

Situation What to Do
Contact information is incorrect. Contact the financial aid office with updated information. The student should also log in to the FAFSA portal to update information.
Financial information has changed since you submitted your FAFSA. Contact the financial aid office about drastic financial changes due to loss of a parent’s job or other circumstances.
The student wants to be considered independent for financial aid purposes due to a severed relationship or abusive situation. Students with extenuating circumstances in regard to their relationship with their parents may contact the financial aid office to clarify the situation and determine the dependency appeal process.
An expected federal or state award is not listed. If the student qualifies for but didn’t receive a federal or state grant or scholarship, first determine if the award is automatically granted to all eligible applicants.

  • If an automatic award wasn’t received, contact the agency responsible for administering it and notify the financial aid office.
  • If the award is not automatic, funds may not be available for all applicants. You may try contacting the agency administering the award to see if any remaining funds will be awarded later.
An expected institutional award is not listed. Not all awards are automatically granted to all eligible students. If the FAFSA was filed by the college’s priority deadline, contact the financial aid office to determine if any institutional awards are still available. If the award was offered by a specific department, ask a financial aid representative if the office has been made aware of the award.
A state or federal award was submitted to the wrong college. Contact the agency responsible for administering the award. Also notify the financial aid office and the financial aid office at the other institution of the mistake.
An unexpected award is listed. Many colleges consider an application for admission to also be an application for other institutional awards. If the student doesn’t meet the qualifications for an award, contact the financial aid office to clarify.
A grant or scholarship awarded by an outside entity isn’t shown. Tell the college about all grants and scholarships received. If an award is missing, contact the financial aid office.
A work-study award is listed. This award may be dependent on the student finding a work-study position and earning a paycheck based on hours actually worked. Start with the financial aid section on the college’s website. If that doesn’t contain information about how to locate and apply for work-study positions, contact the financial aid office.
Not enough aid was awarded to cover costs of attendance. If there is a large difference between aid and costs, some options to consider are:

  • Contacting the financial aid office to inform them of the situation and see if any additional aid is available.
  • Increasing student employment to earn income to cover the shortfall.
  • Asking about monthly payment plans.
  • Exploring less expensive education options, such as a public university or community college.
  • Relying on gifts or federal PLUS Loans for parents to help pay for college.
  • Taking out private student loans to cover the remaining expenses.

By: Iowa Student Loan

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