September 20, 2017



The Search For Scholarships: For Adopted Children, It Can Be Tough

student loans for adopted childrenIt’s not often that a foster or adoptive parent worries about paying for college when they first agree to take a child in, but hopefully they will one day realize it’s time to search around for scholarships; for adopted children, it can be tougher than normal to get traditional funding. A foster parent of an adopted child can occasionally count on money from the state for a variety of different purposes — dependent on their financial situation, of course — but few states have programs to help out with scholarships for college students that were adopted.

Unless you’re lucky enough to live in Florida, New Jersey, Maine, Texas, or Virginia and get one of the limited number of state scholarships for adopted children, you’re going to have to look to private groups to provide the same — or seek alternative forms of college financing. Student loans are a common enough choice, but if you happen to have bad credit, student loans can be even harder to obtain than scholarships. (Note: that list isn’t necessarily comprehensive, you should always call your state’s particular department that deals with adoption and foster care and ask them about any relevant college financing programs they might have.

Mercifully, there are plenty of private organizations that organize scholarships for adopted children. You can contact the National Foster Parent Association, the Orphan Foundation of America, and a few other major national organizations, but the truth is that it’s often easier to get college financing from smaller institutions, either state or local groups, or even financial institutions with the right kind of political bent.

One way to find these more obscure scholarships for adoptees is to know a few key terms to search for online. ‘Legacy scholarships for adopted children’ is a good one to start with, and more can be found with a bit of poking around online. Of course, finding the scholarship isn’t enough — you still have to meet any other qualifications, print off the form, fill it out, and return it to the institution that handles the scholarship.

Generally speaking, adoptee’s scholarships are limited by the state, as most charitable organizations are statewide. Frustratingly, some of these organizations will only apply their scholarships to an adoptee currently living in their state, regardless of where they go to college — and others are exactly the opposite, providing college financing for adoptees attending school in their state even if they have a residence elsewhere. Finding the right set of scholarships for your adopted child requires patience and persistence more than anything else.

There are options beyond just scholarships for adopted children, as well. Various waiver programs, Federal loans and grants, work study programs, and even institution-specific options (particularly at private schools) can be used in any combination to get your child into and through the higher education system. If you keep an open mind and you’re willing to try at a variety of educational institutions, you’ll eventually find a way to succeed.



Student Loans Without Cosigner Video Part 2 Now Live!

Student Loans Without Cosigner VideoThe second installment to helping students obtain a loan without a cosigner is now live! Presented in this video are tips on how to obtain a student loan without a cosigner, plus other important information such as eligibility criteria, and a direct comparison between Government issued student loans vs. Private student loans!

Please take the time to check out the video below. Enjoy!



How NOT To Pay For College

pay for college without loansWe spend a lot of time thinking about how to pay our way through college but it is just as important sometimes to stop for a moment and think about how not to pay for college.

There are all sorts of things which you should avoid when it comes to getting together the money you need for college and here we are going to look at four in particular – two which affect you directly as a student and two which may affect some mature students but which are primarily aimed at parents.

1. Excessive student loans.

Most students will need to take at least one loan (and frequently several loans) to get them through college and, since a good college education is likely to land you a higher paying job so that you can repay these loans, this is normally fine. Loans should however be kept to an absolute minimum and only be taken out to meet essential expenditure. In the case of federal loans you cannot of course borrow more than you need as this is one requirement of granting you a loan. However, when it comes to private loans, it is very easy to borrow a bit more than you need to cope with ‘unexpected’ expenditure. This little bit extra on each loan over several years can quickly add up however and run you into serious financial trouble.

2. Credit cards.

Today it is the easiest thing in the world to get a credit card (or indeed several credit cards) and no matter how good our intentions at the outset we always seem to end up maxing them all out and running into problems making even the minimum monthly payments required. Credit card do have a valuable role to play in our lives but while you are attending college you are probably better to simply stick with a debit card and leave the credit cards until you are out of college and have a well paying job.

3. IRA Withdrawals.

Parents are sometimes tempted to make withdrawals from their IRA accounts to help pay college fees but this is very rarely a good idea. Despite the fact that you are permitted to make withdrawals and will not have to pay a withdrawal penalty (normally 10%) if a withdrawal is made to meet higher education expenses, you will have to pay tax on any withdrawal at your highest tax rate. More importantly however you IRA is designed to allow you to build up a retirement fund in a tax efficient manner and even a modest withdrawal in the relatively early life of your IRA can reduce your retirement fund considerably. For example, a withdrawal of $10,000 today could easily result in a drop of $70,000 to $80,000 in the size of your retirement fund in twenty years time.

4. Borrowing From Your 401k.

If you have a 401k which allows you to borrow against it then this is also a tempting way for parents to borrow money to help their children through college. However, although in some ways this is a better alternative than taking money from an IRA, it nevertheless has the same effect on future earnings within the account and should be avoided if at all possible. Perhaps the one exception here is when you need to borrow money on a very short term basis and will be able to pay it back into your 401k reasonably quickly.

Naturally these are just a few of the ways that you should avoid when it comes to funding a college education and you can probably think of many your yourself. The secret is not to saddle yourself with debt which you are going to have difficulty repaying or to take money from any existing investment vehicle where you will suffer tax penalties and/or a significant loss in future earnings.



How To Consolidate Alternative Student Loans

Consolidate student loansMost students will need to take out a series of loans to fund their way through college and in no time at all it is easy to find that you are making several loan repayments on different days every month and, although the amount of money you are paying on each loan may not be high, the total sum each month for all of your loans can be crippling. Indeed, it is quite possible that this sum will eventually be more than you can afford.

In many cases the problem does not actually arise until you have left college because a substantial proportion of your college funding comes from federal loans which do not need to be repaid while you are still in school. However, these loans are often insufficient to meet your financial needs and so many students turn to private alternative student loans on which repayment is normally required to start as soon as the loans are drawn down.

The procedures to be followed for consolidating government student loans and private alternative student loans are quite different and, in the case of alternative loans, it is very much a simple case of rolling all of your individual loans into one single loan. In other words you take out one single consolidation loan and use the money from this loan to pay off your other loans. This then leaves you with just one single payment to make each month.

Having said consolidation is simple there are a few things that you need to look out for. For example, if you are paying off a loan which has not been in issue for too long then you may find that there are redemption penalties on the loan and that it is actually more expensive to pay it off than to keep it running. You will also need to look carefully at the interest rate on your consolidation loan and compare it to the interest rates that you are paying on your individual loans. It is often possible to reduce your interest rate with a consolidation loan but this is not always the case and you could end up paying more than you are already paying in interest.

The commonest reason for consolidating alternative loans is to reduce your monthly payments and the usual way in which this is achieved is by extending the period of the loan. In other words, for example, you take a series of 10 year loans and combine them into a single 20 year loan. This allows you to reduce your monthly payments but it also means that you are now going to be saddled with this new loan for very much longer and end up paying back a lot more money in the long run.

Alternative loan consolidation can often be very useful, if not indeed necessary, and is also often quite easy to arrange. You should however go into it with your eyes open and make sure that you know just what you are committing yourself to.



How To Apply For Government Student Loans

Government student loan applicationAlthough federal loans will not always meet your financial needs for funding a college education and it may be necessary for you to take out alternative private loans as you go along, you should nevertheless start by funding your education as far as is possible through federal loans such as the Stafford loan scheme. But how do you go about applying for government student loans?

Application is made to the US Department of Education using a simple application form known as a FAFSA (Free Application For Federal Student Aid) application which can either be completed online through www.fafsa.ed.gov or as a paper application which you can obtain from your college and mail in. This form is used for all types of federal student financial aid including loans, grants and work-study and in many cases colleges will also use information from your FAFSA application to help determine whether you may be eligible for non-federal aid.

The form itself is not too difficult to complete but you will find that it contains a lot of financial questions which some students find confusing. Unfortunately this information is necessary to determine your family’s EFC (Expected Family Contribution) and thus whether or not you yourself are eligible for government financial aid and, if so, how much. Colleges will also often use this information to determine whether or not you are eligible for additional college or state aid.

Once your eligibility for government financial aid has been determined any aid will normally be paid to your college who will deduct the necessary monies to meet such things as tuition fees and room and board (if this is provided by the college) and will then pay the balance to you to meet your other educational expenses.

Student aid can be more than a little confusing, especially if you are just at the start of your college education and applying for the first time. So, if you are looking for information the best place to start is your own college’s financial aid office. You will find that your college’s financial aid administrator will have a wealth of information available not just about government financial aid, but also about aid which is available from the college itself, within your state and from a variety of other sources.

Where can I apply for federal student loans and grants? The bottom line is start with your college’s financial aid office!



Summary Of Federal Student Loans And Grants Available

The table below provides a quick overview of the student loans and grants which are available to college students today.

Federal Aid Program Type of Aid Program Summary Annual Award
Federal Pell Grant Grant:
Does not have to be repaid.
Available to undergraduates on the basis of financial need. $400 – $4,731
Federal Supplemental Educational Opportunity Grant (FSEOG) Grant:
Does not have to be repaid.
Available to undergraduates with exceptional financial need with priority given to Federal Pell Grant recipients. Funds depend on the availability of the program in schools. $100 – $4,000
Academic Competitiveness Grant (ACG) Grant:
Does not have to be repaid.
Available to undergraduates receiving Pell Grants who are US citizens enrolled full-time in their first or second academic year of study. First year students must have completed a rigorous secondary school program of study not previously been enrolled in an undergraduate program.

Second year students must have completed a rigorous secondary school program of study and have at least a 3.0 cumulative GPA at the completion of their first year of postsecondary study.

First year students:
Up to $750 Second year students:
Up to $1,300
National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) Grant:
Does not have to be repaid.
Available to undergraduates receiving Pell Grants who are US citizens enrolled full-time in their third or fourth academic year of an eligible degree program majoring in physical, life, or computer sciences, engineering, technology, mathematics or a critical-need foreign language and who have at least a 3.0 cumulative GPA. Up to $4,000 for each of the third and fourth academic years
Federal Work-Study (FWS) Money is earned while attending school:
Does not have to be repaid
Availabe to undergraduate and graduate students. Jobs can be on campus or off campus and students are paid at least federal minimum wage. No annual minimum or maximum award amounts
Federal Perkins Loan Loan:
Has to be repaid
Available to both undergraduate and graduate students with interest charged at 5% Payment is owed to the school making the loan. $4,000 maximum for undergraduate students $6,000 maximum for graduate and professional degree students

No minimum award amount

Subsidized Direct or FFEL Stafford Loan Loan:
Has to be repaid
Available to students who are in financial need and following at least a half-time program. US Department of Education pays interest while the student is in school and during grace and deferment periods. $3,500 to $8,500 depending on grade level
Unsubsidized Direct or FFEL Stafford Loan Loan:
Has to be repaid
Available to students who are in at least a half-time program. The student is responsible for interest payments throughout the life of the loan. $3,500 to $20,500 (less any subsidized amounts received for the same period), depending on grade level and dependency status
Direct or FFEL PLUS Loan Loan:
Has to be repaid
Available to parents of dependent undergraduate students who are enrolled at least half-time. The PLUS Loan Program is now also available to graduate and professional degree students.

PLUS Loans are unsubsidized and the student is responsible for interest payments throughout the life of the loan.

There is no minimum award amount. Maximum amount is the cost of attendance minus any other financial aid which the student receives.


How Student PLUS Loans Help To Close The College Funding Gap

Student Plus LoansWith the rising cost of education over the past few years students who have been depending on traditional Stafford loans have regularly found that they do not cover most of their expenses. The PLUS program (Parent Loans for Undergraduate Students) was thus introduced and is intended to help in closing the gap between the sum provided by college loans and the actual cost of education.

Despite the fact that the interest rate is greater than that for other types of loan the cap on borrowing is considerably more flexible and PLUS loans are not need-based.

In the case of the FFEL program (Federal Family Education Loan) in which funds are provided by private lenders the interest rate is currently 8.5% and loans provided through the US Department of Education under the Direct loan program are currently charged at 7.9%.

The difference of just 0.6% may appear insignificant but can be very significant when viewed over the lifetime of an average loan.

The PLUS loans program is designed to provide loans for parents to pay for their kids school and under the PLUS loans program parents can borrow up to the full cost of a child’s education less the amount of any financial aid that the child is receiving. Dept of Education parent loans are not cheap they can often make a considerable difference when choosing which college to attend or whether or not to attend at all.

However, since PLUS loans are not based upon need, they do require a credit check for approval. Usually it is of course the parent’s rather than the student’s credit that is considered since the parent is signing the promissory note and will be responsible for repayment of the loan.

In those rare cases where the parent’s credit history disqualifies him or her from a PLUS loan a co-signer can come into play and a relative or other party can guarantee the loan repayment and take on the legal responsibility as a co-borrower. With recent problems in the area of sub-prime borrowing however such cases are more common than they once were. That means that the need for a co-signer is becoming more likely in borderline cases.

Aside from interest rate changes another fairly recent change to the program is the fact that it has been extended to permit professional and graduate students to qualify for PLUS loans. The same interest rates and eligibility criteria apply and they have to be enrolled at a suitable institution and on an eligible program.

Unlike many college loan programs, repayment of PLUS loans begins immediately and the first payment is typically required within 30 to 60 days after the loan funds are disbursed. Interest begins accumulating from the time the first payment is drawn down and both principal and interest needs to be paid in regular monthly installments during the time that the student is in college. Payments must be made to the specific lender in the case of FFEL loans and to a US Department of Education servicing center for Direct loans.

Make sure that you calculate all the costs associated with obtaining a PLUS loan very carefully and look on it very much as a loan of last resort. Even something like a home equity loan Could turn out to be less expensive because the interest is tax-deductible.



An Introduction To Stafford Student Loans

Stafford Student Loan SavingsIn 1965 the US Congress established the Federal Family Education Loan Program to provide financial aid to students. One part of this loans program is Stafford student loans which were originally intended only to help students in real financial need but which today comprise in excess of 90% of all Federal Government education loans.

Over the years Stafford college loans have evolved with changing conditions and now there are two forms of the loan – subsidized and unsubsidized.

For subsidized loans the Federal Government accepts responsibility for paying any interest that accrues on a loan from the date of issue until the date on which the student has to start repaying the loan. Generally a student does not have to make repayments as long as he stays enrolled in a program of study that is considered to be a ‘half-time’ or greater program and for a period of six months following the end of his course. A student can however begin making payments sooner if he wants to do so.

Since interest is being subsidized, loans are generally only granted in cases of need and officials will examine both a student’s and the family’s income when deciding whether or not the student qualifies for a subsidized Stafford college loan. Students have to fill out a Free Application for Federal Student Aid application form that includes details of income and each student is then assigned a number known as the Expected Family Contribution (EFC) calculated from the declared income.

Around two-thirds of all subsidized Stafford loans are granted to students with parents having an Adjusted Gross Income of less than $50,000 a year. A further one-quarter of subsidized loans are granted to families in the $50-100,000 a year bracket. After this the definition of ‘need’ becomes a bit blurred and slightly under one-tenth of loans are given to students with a combined family income of in excess of $100,000.

For students who do not qualify for a subsidized loan the majority will qualify for an unsubsidized Stafford loan. The major difference here is that the student must meet all loan interest payments, although once again payment will not generally start until six months after the end of the student’s program of study.

The workings of an unsubsidized Stafford loan means that a loan can be relatively costly as interest accumulates over the period of study and so the capital sum for eventual repayment will also increase. Let’s consider a very simplified example.

Let’s say that a student borrows $5,000 at the start of his first year at an interest rate of 6.8%. At the end of the year the interest due is $340 which will be added to the loan capital. During the following year the student will then accrue interest on the new capital sum of $5,340 at 6.8% which will amount to about $363 raising the total borrowed after two years to $5,703. Naturally this example is not completely accurate as interest is calculated and added monthly but it does nevertheless show the principles underlying this type of loan.

Dependent upon the sum of money that is borrowed every year and the time before repayment starts we can see that students can pay a quite high price for the benefit of delaying the repayment of a Stafford loan.

Despite the apparently high cost it has to be remembered that many of the alternative methods of meeting the cost of a college education are considerably more costly and that a lot of students would not be able to afford to attend college without Stafford college loan money.

Learn more about The Federal Family Education Loan Program and Stafford Loans



Grants And Scholarships For Older Students

Grants for older studentsWhen you consider the range of educational opportunities available today which were simply unheard of twenty or thirty years ago it is perhaps no surprise to find that a growing number of older people are now applying for places at our universities.

There are of course many different reasons for an older person deciding to go to university but the two most commonly seen reasons are to prepare themselves for a change in career and to do something for themselves once their children have grown up and left home.

The biggest problem however for many older students is finding the money to pay for university. A full time campus based course is not cheap and for mature students the cost of the course is only half of the equation and they will also need to give up work to attend university and so also lose the regular salary that they and their family have become accustomed to.

The good news is that there is financial aid available specifically for older students and for which you are not in competition with the vast majority of people seeking grants and scholarships each year, but only with those over the age of 25 or, in some limited circumstances, over the age of 30.

Because it is the aim of the government to increase the number of mature students in order to bring education to the masses, national, state and college funding is now far more widely available than it used to be as local governments and colleges have taken up the federal government education initiative.

The principle behind funding for older students is simply that money should be made available to students in cases where a student’s family would not be able to survive with the loss of the students wage while he attends university. As in most cases it becomes increasingly difficult to manage without a salary as we get older, this means that the vast majority of older applicants meet this criterion.

Local governments and individual schools offer grants which vary widely from small grants to provide supplemental income to large grants which will fully fund tuition fees. The good news here though is that you can generally apply for grants from more than one source and, in the case of low income families, there are also special grants available.

When it comes to scholarships these are also available specifically for mature students and this gives you a wider field of opportunity as there is also nothing to stop mature students from applying for scholarships which are open to younger students as well.

Finally, you should note that funding is not only available to mature students who are looking to follow a bachelor or associate degree, but is also on offer to older individuals who are looking to return to university to follow a masters or PhD program.

So, if you are considering attending university later in later, or thinking about returning to university as a mature student, do not be put off by the thought that you simply cannot afford to so. Take the time to look at the many sources of funding available for mature students today.



Credit Union College Scholarships

credit union college scholarshipsWhether you are waiting to go up to college or are already in college you will almost certainly need money for college and your starting point should always be to look for free money in the form of grants and scholarships. Here, one often overlooked area is that of credit union college scholarships. But just what is a credit union?

Credit unions were established in the United States during the early years of the twentieth century and today have some 86 million members. In simple terms a credit union is a financial organization or institution which is owned and controlled by its members and provides a range of financial services to its members, including the provision of credit at reasonable rates of interest.

Outwardly credit unions look a lot like banks in that you can open a checking or savings account with a credit union, have a credit union credit card and borrow money from a credit union for a variety of different purposes. However, behind the scenes the differences between credit unions and banks are substantial. For example, a bank is a business owned by its shareholders and managed by a paid board of directors whereas a credit union is owned by its members and run by a voluntary board drawn from those members. Perhaps most importantly credit unions are not-for-profit cooperative organizations which enjoy tax-exempt status. In other words, any money within the union is there for the benefit of the members and is exempt from federal and state income taxes, but not from employment of property taxes.

Okay, so what has all this got to do with college scholarships?

The vast majority of credit unions, like other organizations, are always keen to attract new members and one way in which they do this is to run annual competitions for the award of college scholarships. These competitions vary widely and might come in the form of an essay or video competition which is generally open to any member who is currently attending college or enrolled to start college in the year in which the competition is being run.

The important point to note about the competition is that it is only open to members and so, before you can submit an entry for consideration, you will need to join the union. This however is generally very easy and in many cases amounts to nothing more than opening a savings account, often with a balance of as little as $5.

What sort of award can you get and how easy is it to win?

Awards will vary widely between different credit unions and from year to year and they are unlikely to meet all of your expenses, but they can certainly help. One attraction however of credit union college scholarships is that competition is not always that high, especially for scholarships from the smaller unions, and so it is well worth having a try.