Before, During, and After College: Watch Out For Student Aid Scams!

Halloween! The traditional date for trick or treating. But you should beware every day that tricksters out there want to rip you off before, during, and after college.

Students get $253 billion a year in financial aid, and scammers go where the money is, so rest assured they’re after your aid and other money.

Here’s a common scam. The promise to “find’ sources from which you can apply for aid in return for fees of hundreds or thousands of dollars. What’s delivered is information on federal, state, or private aid programs.

You can get this information for free from your high school counselor or reputable scholarship search engines like Big Future and Fastweb.

Another example — the U.S. Education Department (ED) reports phishing emails are targeting student accounts that use single factor authentications of student identity. Scammers then redirect deposits from student bank accounts into their bank accounts. This includes deposits of student aid remaining after tuition and fee payments — i.e. your spending money for the academic term.

Schools notify students upon sending aid to their bank accounts. If such deposits aren’t in your account within 3-4 working days, contact your school and, if need be, notify ED.

Those struggling to repay college debts are also fraud targets. Last year, the Federal Trade Commission (FTC) and 11 state attorneys general found scammers that used false promises of debt relief to steal more than $95 million in illegal fees from federal borrowers.

This year, New York sued several so-called debt relief companies that allegedly talked borrowers into making student loan payments to them for $1,000 in fees. And Betsy Mayotte of TISLA tells of a crooked company pretending to do federal student loan debt relief. It tells borrowers that repayment plans tying monthly payments to income are ending, then charges them fees to keep using such plans.

You can always repay your lender — including ED for Federal Direct Loans — at no charge. And income-sensitive repayment plans aren’t ending. It costs nothing to get or keep them. Just call your federal student loan servicer.

It’s not always easy to recognize student aid/loan scammers, so here are some warning signs. They:

  • Request up-front fees. No legitimate student aid or loan provider charges up front for its services.
  • Seek personal information. Some scammers hope to steal your identity to open fake credit cards in your name.
  • Make promises that sound too good to be true, because they are too good to be true!

If you’ve been scammed, file a consumer complaint with the FTC. It may be able to get your money back, or at least warn others of what to watch for.

Suspicious of some offer related to your student aid and loans? Contact College Affordability Solutions for a free consultation.

After College: If You’re Older and Paying on College Loans, You’re Not Alone. And You Have Options!

The nation’s $1.5 trillion in outstanding student loan debt is increasingly affecting older Americans, and not for the better.

The Consumer Finance Protection Bureau (CFPB) recently found that the numbers of people aged 60 and over owing on college loans quadrupled in a decade. Their average educational debt rose from $12,100 to $23,500 during that period.

A $23,500 debt generates monthly payments that can reach $490. This significantly reduces what aging Americans have to spend on basic necessities, including healthcare. It also cuts into what they can save for retirement.

These problems are compounded by the automobile, credit card, mortgage, and other debts many older borrowers are repaying. Bankruptcy courts, however, hardly ever discharge student loan debts.

Fifty and 60 year olds amass these debts by helping children and grandchildren pay for school or by cosigning — pledging to repay if their students don’t — private loans. Only 27% borrow for themselves.

Not surprisingly, many older borrowers struggle to repay educational loans. The CFPB found that 12% were behind on such payments, negatively affecting their credit scores.

Among federal student loan borrowers aged 65 and over, 37% were in default. The government has the legal right to garnish (confiscate) their social security benefits to repay their defaults. Social security is the only regular source of retirement income for 69% of Americans aged 65 and over, so this is particularly alarming.

Delinquent and defaulted borrowers are also subject to aggressive, hostile, even threatening collection calls and letters. As one expert put it, “A student loan can be a debt that’s kind of like a ball and chain that you . . . drag to the grave.”

How to avoid these problems? If you’re a precollege parent, implement a College Finance Plan. This’ll help your children cut the cost of a quality postsecondary education by, for example, completing college level classes in high school, getting grants, and winning scholarships. It’ll also help you maximize savings and financial resources other than debt to pay that price.

If you and your student must borrow for college, use the Federal Direct Loan Program’s (FDLP’s) student and/or parent PLUS loans. If either of you ever considers private student loans, research and compare them (see here and here) beforehand.

Carefully select your loan repayment plan. Different plans require different monthly payment amounts. In the FDLP, some also lead to loan forgiveness. You can also reduce monthly payments temporarily through forbearance or permanently through consolidation, which is generally better for federal loans than refinancing them.

Finally, FDLP loans offer three pathways for getting out of default. Explore them here.

Owing on college loans late in life need not be a crisis. Check your options. Then pursue what works best for you!

Contact College Affordability Solutions if you’re looking for strategies to better manage your college loan debts. There is no charge for consulting with it on this or other issues related to paying for postsecondary education.

During and After College: Despite What You May Have Heard, Public Service Loan Forgiveness is Still Available!

IMG_5373Hey current and future public servants! Are you hoping the Public Service Loan Forgiveness (PSLF) program will cancel part of your student debt? But do you keep hearing scary things about the program? Well, the PSLF news is both bad and good.

Bad News: Republicans want to kill PSLF. The president’s last two proposed budgets would have eliminated it. So would a Republican bill the House Education and Workforce Committee passed on a party line vote early this year.

Good News: Congress ignored all these proposals. Even if it accepts them in the future, PSLF’s end will probably apply only to those not borrowing qualifying loans (see below) before the following July 1st. If you borrow such loans before that date they’ll likely remain PSLF-eligible.

Keep tabs on PSLF with the U.S. Education Department’s easy to read and very informative PSLF web page.

Bad News: Most who’ve applied for PSLF so far have been disqualified. One problem seems to be that FedLoans, the company administering PSLF for the government, misled many borrowers about PSLF-qualifying repayment plans (again, see below).

Good News: Congress put up $700 million to fund the Temporary Expanded Public Loan Forgiveness program under which PSLF goes on a first-come/first-served basis to borrowers whose PSLF applications were rejected solely because they used the wrong repayment plans.

Bad News: PSLF’s low forgiveness rate is also due to borrower mistakes.

Good News: You can avoid such mistakes. Remember, you must meet four criteria for 120 months to get PSLF. These need not be consecutive months, but they count only if you have:

  1. Qualifying Loans: Only Federal Direct Loan Program (FDLP) loans qualify for IMG_5374PSLF. The National Student Loan Data System will show you other federal college loans you may have. Replacing them with an FDLP Consolidation Loan makes them PSLF-eligible.
  2. Qualifying Employment: Only months in which you work full-time in public service positions count and you must submit PSLF employment certification forms on which your employers confirm the months you had such jobs. It’s best to submit these forms to FedLoans by certified mail every year or when your qualifying employment with a government agency or nonprofit ends, whichever’s first, and to keep copies and your certified mail receipts.
  3. Qualifying Repayment Plan: As indicated above, a month counts only if you’re making payment under the standard repayment plan or one of the four income-driven repayment plans.
  4. Qualifying Payment: A month counts only if you pay the full required amount on-time.

IMG_5375Don’t qualify for PSLF? Don’t give up! The (Almost) Complete Guide to Student Loan Forgiveness from The Institute of Student Loan Advisors is a wonderful resource for information on over 200 other student loan forgiveness programs in the United States. Use it!

Contact College Affordability Solutions for a free consultation about your postsecondary debt if you want to take advantage of its 40 years of experience in the field of college borrowing.

During College: Using Campus Services to Boost Academic Performance Pays Off

Performing well academically makes postsecondary learning more affordable. Completing your classes with good grades does this by helping you:

  • Improve your chances of winning scholarships and paid on-campus IMG_5329assistantships or internships
  • Avoid flunking out or dropping classes to avoid flunking out, both of which require you to pay tuition and fees at least twice to finish the same credit hours; an
  • Maintain Satisfactory Academic Progress (SAP) toward your degree. The government and other providers set SAP standards for the aid programs they fund, so SAP rules may differ from award to award. But whatever they are, you must comply with them to remain eligible for the financial aid you’re currently receiving.

So take advantage of available academic support services even if you’re not at risk of dropping below SAP or flunking out. Given the financial benefits of a good academic record, it just makes sense to use these services as much help as possible as early as possible.

IMG_5332Where to go? That depends on the issue. Of course, if you have trouble understanding or applying anything that comes up in class, see that class’s teacher or teaching assistant right away.

Your institution probably has numerous other services to help resolve situations that make for academic problems. They’re typically free and always confidential. Examples include centers and offices for:

  • Academic Advising: Consult these professionals about classes and course schedules. They can also guide you to other campus resources;
  • Campus Safety or Police: Contact them whenever your security may be in jeopardy;
  • Career and Job Placement: This is for help exploring changes of major and IMG_5335related employment pathways;
  • Counseling: Go here for help with anxiety, grief and loss, stress, and other emotional or mental wellness issues;
  • Disabled Students: This office will help you arrange accommodations and services to overcome functional limitations;
  • Emergency Services: These provide support to help overcome crises, emergencies, food shortages, or homelessness;
  • Learning or Student Success: Go here for tutoring and for coaching, study groups, and workshops to help improve your academic skills — note-taking, public speaking, studying, test-taking, etc.;
  • Legal Services: This’ll help you understand your rights under civil, consumer, criminal, tenant, and traffic laws;
  • Multicultural Students: You can find programs and events to help you understand students from other cultures, deal with prejudice, etc.;
  • Student Health: Get treatment here for physical illnesses or injuries; and
  • Student Housing: Your resident assistant can help you navigate roommate and other living environment issues. He can also guide you to other services.

In summary, there are many forms of academic assistance on campus. Use them early and often to do your best in every class and keep college as affordable as possible!

Contact College Affordability Solutions for a free-consultation if you want strategies to implement before, during and after college to make it more affordable.

Before College: Check Out Free Tuition Programs When Considering Colleges

One of the best ways to make college more affordable is to reduce tuition and fees.
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The latest available data show that, in 2017-18, the average tuition and fees charged to full-time undergraduates were:

  • $3,570 at community colleges;
  • $9,970 at in-state, public, 4-year colleges;
  • $25,620 at out-of-state, public, 4-year colleges; and
  • $34,740 at private, 4-year colleges.

But elected officials, candidates for public office and many colleges are pushing a new trend in American higher education — free tuition. Check for this as you consider applying to various postsecondary schools.

Some free tuition programs have been well-covered by the media. For example, New York’s Excelsior Grant, which offers in-state undergraduates tuition-free attendance at any school in the State University of New York and City University of New York systems. Another well-publicized state initiative is Tennessee’s Tuition Promise and Reconnect Programs. They cover full tuition at all of that state’s community colleges and technical institutes.

Rice University has an institutional plan that recently gained national attention. Rice’s tuition exceeds $40,000 a year, so it’s long offered generous scholarships. But beginning next academic year, it’s enlarging its Rice Investment Program to cover full tuition for students from even upper middle-class households.

Likewise, The University of Texas at Austin* has expanded funding for its Texas Advance Commitment to fully cover tuition for low-income undergraduates and partially cover it for the upper middle-class.

IMG_5228Across the country, other colleges are offering free tuition programs at least somewhat similar to those offered by Rice and in Austin. Be sure to look for such programs at any school you’re considering.

Most of these programs won’t actually eliminate tuition. Instead, they guarantee grants and scholarships (gift aid) sufficient to cover 100% of the tuition, and sometimes required fees, billed to students. These are usually “last dollar” awards — that is, they fill gaps remaining after federal and private gift aid is subtracted from tuition bills.

Certain other characteristics are common to these programs. Some, but not all, require students to:

  • Work while attending classes, fulfill post-graduate service requirements, or sign income-share agreements under which they pledge part of their post-graduate earnings to their institutions;
  • Have family incomes below certain thresholds, or have financial need, so the FAFSA is typically required;
  • Be residents of the states in which their colleges are located;
  • Be U.S. citizens or permanent residents;
  • Enroll full-time; and/or
  • Attend summer school or other specified academic terms.

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To find a map of the United States through which you can link to information on dozens of free tuition programs, go to the College Promise website. College Promise is an initiative of Civic Nation, to which this website is attributable.

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A word of warning . . . don’t let free tuition be the only thing you consider about colleges. It’s also essential to achieve student-institutional fit because, ultimately, the most important thing is to succeed in college!

* Note: The author is an alumnus and prior employee of The University of Texas at Austin, but College Affordability Solutions does not necessarily endorse or recommend it or any other institution cited in this article.

Contact College Affordability Solutions if you’re looking for strategies to help keep postsecondary learning affordable.

Before, During, After College: Vote as if Your Student Aid and Loan Repayment Depend on It . . . They Do!

Do you think your family will one day need financial aid for college? Are you or your student now relying on state or federal aid? Are you struggling to pay off your college debt?

If any of these circumstances apply to you, you have until November 6 to take IMG_5103personal actions to make government programs work for you. How? Vote! You’re not registered to vote? Get registered right away!

There are 6,070 state legislative seats, 435 U.S. House seats, 36 governorships, and 33 U.S. Senate seats up for election on November 6, and you can vote for and against candidates at least in part based on what they’ll do about college affordability.

Make sure you educate yourself about candidate records and positions on grants, loans, scholarships, and work-study. To do this:

  • Review their campaign websites for statements about college affordability and student aid;
  • Write and ask what they plan to do about college costs and student aid; andIMG_5105
  • Confront them at campaign events with direct, specific questions — and don’t let them off the hook until they give real answers.

For example, did you know that, over the last decade:

  • Congress increased funding to provide up to $1,160 (37%) more in Federal Pell Grants. But the average cost of one year at a public college or university increased $7,924 (146%), so the nation’s largest college grant program now covers $6,314 less of those costs.
  • State legislatures allocated only 33% more for grants and scholarships even though there’s been a 12% increase in college students who are paying almost 150% more to attend college.

Did you know the U.S. House Committee on Education and the Workforce recently passed HR 4508 on a party-line vote. If this bill becomes law it would:

  • Eliminate Federal Direct Subsidized Loans, the least expensive form of college IMG_5106debt, which, even if interest rates don’t climb, will raise the typical undergraduate’s cost of borrowing by at least $2,710 (8%).
  • Kill Public Service Loan Forgiveness, leaving tens of thousands of first responders, teachers and others who provide low-paying but essential community services without a way get some of their college debt cancelled in exchange for 10 years of full-time government or nonprofit employment.
  • End the Federal Supplemental Opportunity Grant program that currently provides $840 million a year to our neediest college students.

And did you also know that more candidates than ever are pledging to work for free college tuition if they get elected or reelected?

So there’s no shortage of financial aid issues on which you need to pin down the candidates, then use what you learn in voting decisions. Get busy. November 6 is just 35 days away!

Use College Affordability Solutions’ Topical Index or contact College Affordability Solutions to learn about strategies that’ll help you control your postsecondary education costs before, during, and after college.