After College: Help! I Can’t Make My Student Loan Payments!

You’re repaying loans you borrowed to pay for college. But you often find yourself IMG_1086choosing between paying for essentials and making monthly loan payments. What should you do?

You’re in luck if, like 90% of today’s college borrowers, you borrowed federal loans. Washington offers multiple ways to get relief from your predicament. The question — which is best for you?

IMG_1087If you’ve not already done so, consider replacing your federal loans with a Federal Direct Consolidation Loan. These offer longer repayment periods and lower monthly payments if you owe more than $7,500. But look into consolidation’s advantages and disadvantages before going this route.

You can also tell your loan servicer will change your repayment plan. To check out how this’ll affect your payments use the Federal Student Loan Repayment Estimator. IMG_1090It already knows your loan balances and can tell you the repayment plans for which you’re eligible plus monthly payment amounts in each available plan. It can also determine how consolidation would impact your loan repayment.

If the reason you can’t afford monthly payments is temporary, look into getting a deferment to postpone your payments for up to a year. You’re entitled to deferment if you’re:

No deferment? Another temporary solution is asking your servicer for a forbearance. You’re not entitled to forbearance. It depends on your situation. But you can totally postpone or partially reduce your payments while in forbearance.

But be careful about deferment and forbearance. During the former, interest continues to build on your unsubsidized and PLUS loans. During the latter, interest keeps building on all your loans. Unpaid interest from these periods then gets capitalized (added to principle) when your deferment or forbearance ends.

If your trouble making payments is because of your monthly due date, ask your servicer if you may change your payment due date to another day that works better for you.

Act fast, because missed and late payments have really bad consequences.

College Affordability Solutions offers 40-years of experience working with various educational loan repayment strategies. Call (512) 366-5354 or email College Affordability Solutions for a no-cost consultation.

During College: Now’s the Time for College Students to Search for Summer Jobs

Seventy percent of student summer jobs are filled before June. So prompt your student to start searching now!

The payoff can be substantial — work experience, a chance to apply classroom learning, a stronger resume, funds for college. At average summer wages, a student working June 1 through mid-August can bank over $3,300 by saving two-thirds of his gross earnings, and many summer positions pays above that average.

If your student doesn’t have a summer job, here are five steps for effectively seeking one. You can help with all of them.

  • Define Himself and His Best Fits: Start with a self-analysis. What can he bring an employer in terms of knowledge, skills, and volunteer or work experience? Then identify the characteristics of jobs in which he’s interested — type of work, location, hours, pay scale, etc. He may not get everything he wants, but this’ll help him get as close as he can.
  • Make Himself Presentable: Now’s the time for him to write his resume and IMG_0968cover letter, leaving them on his word processor for easy updating and tweaking if needed. And since most summer employers audit applicants’ social media, have him review his and delete anything that might be inappropriate.
  • Search . . . and Search More: You and your student should network by sharing his resume with adults you know. Ask about their employers — lines of business, work environments, whether they use students in summer? If a workplace sounds promising, request contact names and ask the adult to be a reference. And until he lands a position, your student should continue searching for job opportunities on internet job boards, search engines, and websites; in newspaper ads, etc.
  • Get Out There: Urge your student to apply online or send send his cover letter and resume to employers of interest before spring break if possible, then visit IMG_0969those employers in-person over spring break. Remind him to dress conservatively and review of notes on each employer for each visit. Whenever the opportunity arises, he should complete applications and participate in interviews. Help him prepare for interviews by developing answers to common questions and formulating his own inquiries.
  • Keep After It: Advise him to follow up on opportunities he likes with notes of thanks and, later, with calls expressing continued interest in those positions.

Whatever your student’s summer employment needs, the keys are to start early, be thorough, and remain persistent!

College Affordability Solutions offers practical advice on strategies for keeping college affordable. Call (512) 366-5354 or email collegeafford@gmail.com for no-cost consultations.

Special Bulletin: Congress Considering Cuts to Student Aid Programs

On Monday the White House released its budget proposal for Fiscal Year 2019, which begins this coming October. The prospective budget is similar to HR 4508, the “Promoting Real Opportunity, Success, and Prosperity through Education Reform” IMG_0890(PROSPER) Act. This is a bill designed to revamp federal higher education programs. It will soon to be debated in the House.

If your student is now or likely will be a federal financial aid recipient, contact your  U.S. Representatives and Senators to let them know your thoughts on the proposed budget and HB 4508. Why? If Congress passes either as written, several federal student aid programs would be reduced or eliminated.

Subsidized Federal Direct Loans: Currently, no interest is charged on these loans until six months after their undergraduate borrowers leave college. But they would end for those first borrowing on or after July 1, 2019. Even at current interest rates, which are expected to rise, this would increase the cost of borrowing the $27,000 maximum allowed over 4 academic years by at least $2,800.

Income-Driven Repayment: Four repayment options would be replaced by one repayment plan requiring ex-students to pay 12.5%, instead of the current 10%, of their discretionary income toward their federal college debts. The repayment period would last 15 years instead of 20 to 30 years for undergraduates, and 30 years for graduate students. Discretionary income is the amount a borrower’s income exceeds 150% of poverty-level.

Public Service Loan Forgiveness (PSLF): Any student first borrowing a federal loan on/after July 1, 2019 would be ineligible for PSLF.

Federal College Work-Study (FCWS): The budget would reduce FCWS funding by 49.5%. FCWS currently helps over 630 thousand students earn more than $1 billion a IMG_0891year to pay college costs. Graduate students would become ineligible for FCWS.

Federal Pell Grants: College costs keep rising, but the budget proposes to limit Pell Grants to the same amount as in FY 2019 as this year.

Pell Grant eligibility would be extended to students in short-term programs providing certificates, licenses, or other credentials for “in-demand fields”. For-profit vocational schools usually offer such programs, but their certificate earners average 1.5% higher unemployment rates, 11% lower earnings, and $5,000 more in student debt than students earning similar certificates at community colleges.

Federal Supplemental Education Opportunity Grants (FSEOGs): The FSEOG program, which provides extra grant dollars to approximately one million of the nation’s neediest Pell Grant recipients, would be eliminated.

Contact College Affordability Solutions at (512) 366-5354 or collegeafford@gmail.com for a no-cost consultation you have questions about how to pay for college.

Before College: Financial and Other Pros and Cons of AP and Duel Credit Courses

High school students will be registering for 2018-19 later this semester. If your student‘s bound for a 4-year college degree, urge him to consider enrolling in advanced placement (AP) and duel credit courses. Here are some of their pros and cons.

Financial Pros and Cons

These courses are an opportunity to pay little or nothing to earn college-level credits that may then substitute for courses your student would be required to take — and pay for — at his college or university. This can reduce what he must pay for tuition, fees, and books while in college.

IMG_0681And imagine the savings if your student graduates from college a semester or two early. Transferring AP and duel credit courses may reduce the time during which college-related room, board, and transportation costs are necessary.

But not every postsecondary institution accepts AP and duel credit courses from all students. Some won’t transfer AP credits if AP test scores, even passing AP test scores, are too low by their standards. Out-of-state colleges may reject such credits because they cannot evaluate course quality at your student’s high school. Check this out when applying to colleges.

Academic Pros and Cons

AP and duel credit participation isn’t just accompanied by financial pros and cons. There are also academic implications.

These courses tend to attract the brightest, most dedicated, and hardest working IMG_0682students in a high school. So if your student finds regular classes dull, AP and duel credit courses will doubtlessly be more stimulating.

Such stimulation is usually accompanied by a faster pace, more demanding assignments, and considerably more homework. If these are turn-offs to your student, AP and dual credit courses may not be for him.

Many high schools recognize the additional effort AP and duel credit courses require with different grades. For example, on a 4.0 grading scale, an AP or duel credit “A” may be worth 5.0 points, a “B” may be worth 4.0 points, etc. So AP and duel credit can boost GPA and class rank.

Of course, AP and duel credit courses may also work against your student. They could be so rigorous that classmates taking regular classes might amass more grade points than he does.

Your student, and maybe you, should discuss AP and duel credit options with a guidance counselor. Sure, there are downsides; but the upsides are too beneficial to ignore!

College Affordability Solutions can be reached at (512) 366-5354 or collegeafford@gmail.com for no-cost consultation on strategies for making higher education more affordable before, during, and after college.