When A Scholarship Doesn’t Cover the Rest

by Tom O'Hare | Jun 18, 2021 | Financial Aid, Paying for College | 0 comments

The evaluations, comparisons, campus tours, and conversations are over. Hundreds of family’s and students have made their choice. We’re off to college.

Oh, what a minute…. Have got everything done? One being the tuition bill… and it’s on its way!

Parents of Sophomore and Juniors – read our article on Pre-Qualifying for College Costs

College tuition bills are on their way!

When scholarships and financial aid don’t cover every, students and families need to have a Plan B

Plan B

Continue to investigate and apply for scholarship programs; deadlines continue right through the summer and restart in the Fall. If you missed one or didn’t get selected, reapplying in the second, third, and fourth year of school.
If there is any doubt or questions regarding the information reported when completing the FAFSA, parents should contact the Financial Aid Office.
Family’s whose financial status profile has changed since the FAFSA (or CSS Profile) filing to the present needs need to inform their college or university. Reductions in earnings, loss of income, unexpected medical bills, and caregiving responsibilities may qualify for an appeal under the extenuating circumstance guidelines.
Consult with the Student Account – Bursars’ Office regarding the use of a 10 Month Payment Plan. Plans generally require an initial administrative fee payment – consider it an interest-free short-term payment program.
Then there are the loan programs!

Federal Direct Student Loan a loan that 99.9% of all financial aid awards include. The loan that has quietly been remained by some parents is the FAFSA loan. A low-interest, non-credit-based loan for undergraduate and graduate/professional students. Loan limits are staggered, starting at $5,500 for year one students and progressively higher in upper-class years. Projected fixed interest rates effective July 1, 2021, for the academic year 2021-2022 will be:

Direct Subsidized and Unsubsidized Undergraduate Loans – 3.73%
Direct Unsubsidized Graduate and Professional Loans – 5.28%
These loans also carry a yet to be announced Origination Fee (2020-2021 fee was 1.05%)

Federal Direct Federal PLUS Loan is the second education loan offered by the US Department of Education and US Treasury. Federal Direct PLUS Loan is available to creditworthy parents of undergraduate students. The loan can cover all or a portion of the remaining cost of education, and projected fixed interest rates for the upcoming academic year will be 6.28% (origination fee yet to be announced). Note this loan is subject to repayment and does not carry all of the benefits that the Federal Direct loan offers.

Private Educational Loans, commonly known as alternative student loans, are available to eligible students with many similarities to a standard consumer loan. A credit-based consumer loan where the student serves as the primary borrower along with a creditworthy co-signer. Loans rates are variable, and fixed interest rates starting as low as 1.22% (variable), 3.0% (fixed), and can range as high as 12% depending on the lender. Rates are set based on the creditworthy status of the student and co-signer and whether repayment begins immediately or payment is deferred while the student is in school. Before utilizing any loan, a family should exhaust all other resources and be highly concern with debt tolerance and excessive borrowing.

Spoiler #1 – a student with little or no credit will require a credit-worthy co-signer. No co-signer, no private loan!
Grandparents can contribute to 529 Plans but should not co-sign private loans

Find more program details and download the Education Loan Program Chart

Spoiler #2 – No matter how dreamy the college or university is; no matter how many tears – never touch Retirement Savings!

PLUS: Food for Thought

- Protect your first-year student and family from unforeseen liability and losses by putting in place important legal and medical documents.
- Agree to a routine of communicating and monitor warning signs. Loneliness and issues associated with being a first-year student are not just study habits and academics. Talk, don’t hover, listen, don’t’ preach, call, don’t just text, and find a time when both are not rushing to get something done.

Learn more information, before, during, and after college at Pivotal College Years

Have Questions – Calm the Waters – Consult an Independent College Counselor

An experienced college counselor (who can fault me for banging my own horn) can help families develop and manage a customized college plan. Each plan should address a student’s individual needs, expectations, and abilities, plus a family’s capability to finance the educational costs. A college counselor can considerably cut the stress by laying out clear timelines, unbiased guidance, and accountability for managing the overall experience. Using a holistic lens, a good counselor will connect all aspects of the college experience, finding, selecting, and financing the right college to career choice.

See more blog post from Tom O'Hare and Get College Going at https://getcollegegoing.com/trending-now/