The U.S. Department of Treasury recently released a report entitled “Opportunities to Improve the Financial Capability and Financial Well-being of Postsecondary Students.” I read this report because I am an intern in the office of Federal Student Aid at the Department of Education, and I am working on various projects related to financial literacy for college students. I actually found this report to be a worthwhile read as a college student embarking on the daunting journey of funding my college education and managing my money while in school.
Despite the heavy financial burden, most of us understand the necessity of a college degree. Report after report make evident that education is one of the most significant factors in upward economic mobility. Still, college students face not only education loans but also consumer debt. There are so many important decisions that college students have to make in support of the ultimate goal to become financially independent. And, as tuition, books, housing and more only rise, the dream of financial independence has only become more difficult, and stressful.
Although I am no expert in financial literacy and financial aid, learning about responsible borrowing, careful budgeting, and repaying loans on time has helped lower my financial stress. The following are some simple tips I’ve learned that can alleviate financial stress and help college students manage their money.
1. Borrow responsibly.
Federal Student Aid offers resources to help students understand the borrowing process.
First, know how to read the financial aid package your school offers you. Be sure you can differentiate among grants, loans, scholarships, and work-study offers. You can do this by talking to the staff at your school’s financial aid office. Next, talk to your parents or those contributing to your education. Review the financial aid offer from your school, and look at your family’s finances, to decide which aid to accept or turn down. This is important in calculating how much you need to borrow in order to afford your education. You do not need to accept the full amount of loan money that’s offered to you; and understanding that concept will leave you with less debt in the future.
2. Budget carefully.
Budgeting is vital to lowering stress. By adopting responsible budgeting habits, you’ll learn planning skills to help manage multiple priorities and prepare for the future. Healthy budgeting practices provide dual opportunities for money-saving and time-management techniques. Budgeting is a great financial foundation and can be a stepping-stone to handling greater financial responsibility, leaving lifelong benefits.
3. Repay on time.
Repayment is the final step of the student loan process and lasts long after you graduate. If you do your research, the repayment process can go a lot more smoothly.
One way to reduce your stress is to understand the different repayment plans. You might find that you meet the criteria for making payments based on your income. Use the Repayment Estimator to help you understand the different repayment plans and decide which one is best for you. Then contact your loan servicer to see how to apply for the plan that best fits your situation.
Another thing to be aware of is that there are certain loan forgiveness options, including one for those who work full-time in public service. Knowing who qualifies and how to apply can ease the stress you feel about your debt as well.
Lastly, know that forbearance and deferment (ways to postpone or reduce your payments) are options if special circumstances arise. Understanding what’s best for your situation and applying in a timely manner is something you need to be aware of and talk to your servicer about.
As the report says, “Postsecondary education is essential to the economic health of our nation and to the economic opportunity of many Americans,” and each of our personal financial decisions contributes to that!
Megan McCusker is a sophomore at Loyola University Maryland studying History and Spanish. She served an intern for U.S. Department of Education’s Office of Federal Student Aid.
The U.S. Department of Education offers a number of affordable repayment options for borrowers who are struggling to pay back their student loans. The important thing to remember about all the options below is that it’s completely free to apply! Also, if you ever have questions or need FREE advice about your student loans, you can always contact your Department of Education loan servicer.
1. Switch Your Repayment Plan
You may be able to lower your monthly student loan payment by switching to a different repayment plan. Use this calculator to compare what your monthly payment amount could be if you switched your plan.
Your monthly payment will be a percentage of your income. Depending on the plan, that may be 10% or 15% of your discretionary income, or something else. What you ultimately pay depends on the plan you choose and when you borrowed, but in all cases, it should be something you can afford.
Your monthly payment amount will be lower than it would be under the 10-Year Standard Repayment Plan if you qualify to make payments based on your income. In fact, it could be as low as $0 per month!
Any remaining balance on your loans is forgiven if your federal student loans are not fully repaid at the end of the repayment period (20 or 25 years).
Income-driven repayment plans are a great option if you need lower monthly payments. However, like all benefits, there are also costs. All of these benefits will ultimately increase the amount of interest you pay over time. The income-driven repayment plans also have tax consequences for any forgiveness received.
If one of the income-driven repayment plans is not a good option for you, we offer other options. Your servicer can help you identify the best plan to fit your needs.
2. Consolidate your Student Loans
Loan consolidation can simplify your payments by combining multiple federal student loans into one loan. Consolidation can also lower your monthly payment.
Can lower your monthly payment by extending your repayment period (spreading your payment out over more years). The repayment term ranges from 10 to 30 years, depending on the amount of your consolidation loan, your other education loan debt, and the repayment plan you select.
Will allow you to qualify for additional repayment options. If you have FFEL or Direct PLUS Loans, consolidating your loans into a Direct Consolidation Loan will allow you to qualify for additional repayment plans, such as the Pay As You Earn or Income-Contingent Repayment Plans, that you wouldn’t have qualified for if you hadn’t consolidated.
Your variable interest rate loans will switch to a fixed interest rate. It’s important to note that consolidation will lock-in interest rates on variable-rate loans, but will not lower them further. This would be a benefit if, like now, interest rates are low.
The benefits listed could provide relief to some borrowers. However, it’s important that you also weigh the costs before consolidating. For example, because you’re restarting and possibly extending your repayment period, you’ll pay more interest over time. Additionally, you may lose borrower benefits, such as interest rate discounts and loan cancellation benefits, offered with the original loans.
Under certain circumstances, you can receive a deferment or forbearance that allows you to temporarily postpone or reduce your federal student loan payments.
Deferment and forbearance may be a good option for you if you are temporarily having a difficult time paying back your student loans. Deferment and forbearance are not good long-term solutions. If you think you’ll have trouble paying back your loans for more than a year or you’re uncertain, you should consider an income-driven repayment plan or consolidation.
You do not need to make student loan payments during a deferment or forbearance.
The federal government may pay the interest on your loan during a period of deferment. This depends on the type of loans you have.
Again, deferment and forbearance are not good long-term solutions for borrowers who are struggling to pay back their student loans. Some reasons why:
With a deferment, interest will continue to be charged on your unsubsidized loans (or on any PLUS loans).
With a forbearance, interest will continue to be charged on all loan types, including subsidized loans.
The interest you accrue during periods of deferment or forbearance may be capitalized (added to your principal balance), and the amount you pay in the future will be higher.
If you can, you should consider making interest payments on your loans during periods of deferment or forbearance
Federal Student Aid PIN, known as PIN to his many friends, died on May 10, 2015, after a long life of public service. Born in Washington, D.C. in 1998, PIN immediately made his presence felt across the country as he helped students complete their FAFSAs electronically on the World Wide Web. For 17 years, PIN reduced the completion time of federal student aid applications by millions of hours. Success with the FAFSA led to an extended career spanning the entire student aid life cycle, ranging from the aforementioned FAFSA and the IRS Data Retrieval Tool, entrance and exit counseling, and signing Master Promissory Notes, all the way to loan history access on the National Student Loan Data System and—more recently—StudentAid.gov. PIN is survived by one child, FSA ID.
On May 10, 2015, we changed the way you log in to Federal Student Aid websites. Students, parents, and borrowers are now required to use an FSA ID, instead of a Federal Student Aid PIN, to log in. If you haven’t logged in to a Federal Student Aid website (such as fafsa.gov or StudentLoans.gov) since May 10, you will need to create an FSA ID before you can log on in the future.
A: An FSA ID is a username and password you use to access your personal information on Federal Student Aid websites and to sign important documents.
Q: What happened to the Federal Student Aid PIN?
A: On May 10, 2015, after 17 years of dedicated service, the PIN was retired to make way for the more modern and secure FSA ID.
Q: If I already submitted my FAFSA this year, do I already have an FSA ID?
A: The FSA ID replaced the PIN on May 10, 2015. If you submitted your FAFSA before that, you used a PIN. In order to do anything with your FAFSA or any other Federal Student Aid websites, you will now need an FSA ID. You can create one at StudentAid.gov/fsaid
Q: Who needs an FSA ID?
A: Students, parents, and borrowers who need to log in or interact with Federal Student Aid websites need an FSA ID.
Q: Can I make an FSA ID for someone else, such as my child or my parent?
A: No. Only the FSA ID owner should create and use the FSA ID. Why? The FSA ID is a legal signature that should be used only by its owner. If you don’t create your own FSA ID, then you may not be able to access the websites you need to get your financial aid!
Q: How do I get an FSA ID?
A: Go to StudentAid.gov/fsaid to create an FSA ID. If you have a PIN, then you can enter your PIN during the FSA ID registration process so that you won’t need to wait for the Social Security Administration to verify your information. But, if you don’t have a PIN or don’t have it handy, you can still create an FSA ID.
Q: Do I have to wait before I use my FSA ID?
A: You can use your FSA ID to sign and submit a new FAFSA right away. For other tasks, if you didn’t link your PIN when you created your account, you’ll need to wait one–three days for us to confirm your identity with the Social Security Administration. You’ll get an e-mail when this process is complete.
Q: What if I forget my FSA ID username or password?
A: Don’t worry. On our log-in pages, you’ll find links that give you the option of retrieving your username or password through your verified e-mail address or by successfully answering your challenge questions.
For answers to other frequently asked questions about the new FSA ID, go here: StudentAid.gov/fsaid.
Earlier today, the U.S. Department of Education announced new steps to protect students from abusive for-profit colleges, as well as a new debt relief process for students at Corinthian Colleges – which operated schools under the names Everest, Heald, and Wyotech.
Information for borrowers is available at the Federal Student Aid (FSA) website, at our new toll-free number for Corinthian students at (855) 279-6207, and from your loan servicer.
Background on what happened at Corinthian
Corinthian Colleges, Inc. has been the target of consumer and taxpayer protection enforcement efforts by the federal government and other authorities. The Department of Education investigated and found that between 2010 and 2014, Heald College misrepresented the job placement rates of many of its programs. Investigations by other entities are ongoing. Over the past year, Corinthian sold off many of its schools, and the remaining campuses closed shortly before Corinthian went bankrupt.
We’re committed to making the debt relief process as simple, streamlined, and fair as possible. That’s why we’re taking several steps to help borrowers, including appointing a “special master” to help us create a straightforward process for debt relief and implement steps to reduce the burden on borrowers.
Options for Debt Relief
Our Department is committed to helping students affected by the closure of these schools, or who believe they were victims of fraud by their school. Today, we announced next steps to support students who attended Corinthian schools. Here are answers to some common questions about debt relief, depending on your situation.
I attended a Corinthian school that closed
On April 27, Corinthian College closed its 30 remaining locations (see the list of those closed schools). Students who attended any of these closed schools any time after June 20, 2014 have two options:
Apply for a closed school loan discharge
Transfer earned credit to another institution to continue his or her education in a comparable program. (Students who select this option may still qualify for defense to repayment of previous loans – more information can be found below.)
A closed school discharge means that 100 percent of the federal student loans you took out to attend the school that closed may be forgiven, including a reimbursement of amounts you already paid back. You can find instructions and a form for seeking closed school debt relief here, or by contacting your loan servicer.
A closed school loan discharge may be an option for you if:
You did not finish your program at a Corinthian school
You did not already transfer your Corinthian credits to another school in a similar program (for instance, if you were taking a criminal justice program and you transferred to another criminal justice program, that would be similar)
You were attending the school when it closed, or withdrew no later than June 20, 2014. A closed school discharge normally only applies to students who withdrew (without completing their program) within 120 days of the school’s closing date, or were attending when the school closed. But for Corinthian students, the Secretary of Education has extended the timeframe to include any Corinthian student who withdrew from one of its closed schools on or after June 20, 2014
Please note that if you choose closed-school debt relief, you can’t transfer your credits to a comparable program at another institution.
Visit studentaid.gov for more information on closed-school loan discharge.
What if I want to transfer my credits?
If you transfer your credits to a similar program at another institution, you cannot request closed-school debt relief. However, if you believe you have a claim against your school under state law, such as fraud, you may still pursue debt relief based on borrower defense to repayment, as described below – even if you transfer your credits to another school
What if I need help?
Visit the contact us page on the FSA website, or use any of the options listed above. Or, for further help, the Department is working with an independent group of organizations and institutions that are setting up a volunteer advising corps to help Corinthian students navigate the different options. Contact them to talk to a volunteer counselor. (Note that as the Department is not managing this initiative, it cannot endorse any advice that a student may receive.)
I believe I was a victim of fraud or another violation of state law at a Corinthian school (whether that school closed or not)
If you were a student at a Corinthian School—Everest, Heald, or Wyotech—and you believe you were a victim of fraud or other violations of state law by the school, you can make a claim for debt relief under a legal rule called “borrower defense to repayment.” This rule applies to all public, private and for-profit schools across the country, and requires students to show that they have a legal claim against their college.
If you were a student at a Corinthian school and you apply, or intend to apply, for borrower defense, you have the option to place your federal loans into forbearance (a special permission to stop payments) while your claim is being resolved, to ensure you do not fall behind on your loan. For students in default, you may request a stop to collection activity. However, interest will continue to accrue during the forbearance or stopped collections period. You may also decide to opt out of forbearance or stopped collections.
Visit studentaid.gov/Corinthian for more information on filing a borrower defense claim and on putting your loans into forbearance
For Certain Heald College Students
The Department has carried out an investigation and determined that Corinthian misrepresented job placement rates for a majority of programs at its Heald College campuses between 2010 and 2014. In an effort to simplify and speed up the process of applying for loan forgiveness, the Department has established that if you relied on those incorrect placement rates, you may be entitled to a discharge of their Federal Direct Student loans you took out to attend those programs through a streamlined process. That process can be done by filling out a straightforward attestation form. In addition, you may request to have your federal loans placed into forbearance or, for defaulted loans, to have collections stopped while your claim is reviewed.
If you are a Corinthian student seeking debt relief of any type and didn’t get your question answered, please visit the FSA website or call our toll-free number, (855) 279-6207, and a staff member will provide the information you need.
College application deadlines are fast approaching and you may be wondering if you can even afford to go to college. What you might not know is that the federal government provides almost $150 billion a year to help students just like you pay for college. Right now, you’re probably thinking of all of the reasons why you won’t qualify for financial aid. Please don’t waste your time worrying- you could be using this time to complete the Free Application for Federal Student Aid (FAFSA®). Here are some common myths about financial aid that you shouldn’t believe.
Myth #1: My family makes too much money for me to qualify for aid.
There is no income cut-off for federal student aid. Your eligibility for financial aid is based on a number of factors and not just your income. Plus, many states and schools use your FAFSA data to determine your eligibility for their aid. If you’re not sure what you will get, the best way to know for sure is to complete the application!
Myth #2: I need to file taxes before completing the Free Application for Federal Student Aid or (FAFSA).
You can use estimated information on your FAFSA so you’ll be able to submit it before you file taxes. In fact, many states and schools have financial aid deadlines well before the tax deadline. So completing your FAFSA earlier is a good idea. You might want to base your estimates on last year’s tax return, and once you file your taxes, you can log back in and update the information. You may even be able to use the IRS Data Retrieval Tool to automatically import your tax information into your FAFSA.
Myth #3: The FAFSA is too hard to fill out.
This is a very common misconception, but the FAFSA has come a long way! It’s easier than ever to complete online. The form uses “skip logic,” so you are only asked the questions that are relevant to you. And if you’ve filed your taxes, you can transfer your tax return data into your FAFSA automatically. As a result of improvements like these, the average time to complete the FAFSA is now less than 21 minutes. If you do get stuck, help is available by Web chat, e-mail and phone.
Myth #4: My grades aren’t good enough for me to get aid.
Eligibility for most federal student aid programs is not linked to your academic performance. However, you will need to maintain grades that your school considers satisfactory in order to continue receiving financial aid.
Myth #5: My ethnicity or age makes me ineligible for aid.
Myth #6: I support myself, so I don’t have to include parent info on the FAFSA. This is not necessarily true. Even if you support yourself and file taxes on your own, you may still be considered a dependent student for federal student aid purposes. You can determine your dependency status by answering these questions. If you are independent, you won’t need to include your parents’ information on your FAFSA. But if you are dependent, you must provide your parents’ information.
Myth #7: I already completed the FAFSA so I don’t need to complete it again. You need to complete the FAFSA every year you plan to attend college or career school. Don’t worry; it will be even easier the second or third time around since a lot of your information will be pre-populated on the application.
Millions of students complete the FAFSA each year and receive financial aid to help pay for college. Don’t let these myths stop you from achieving your goals. Take the first step by completing the FAFSA at fafsa.gov.
Tara Marini is a communication analyst at the Department of Education’s office of Federal Student Aid.
I hear all kinds of reasons: “The FAFSA is too hard,” “It takes to long to complete,” I never qualify anyway, so why does it matter.” It does matter. By not completing the FAFSA, you are missing out on the opportunity to qualify for what could be thousands of dollars to help you pay for college. The FAFSA takes most people 21 minutes to complete, and there is help provided throughout the application. Oh, and contrary to popular belief, there is no income cut-off when it comes to federal student aid.
Not Being Prepared
The online FAFSA has gotten a lot easier over the last few years. We’ve added skip logic, so you only see questions that are applicable to you. There is also an option to import your tax information from the IRS directly into the FAFSA application. But, the key to making the FAFSA simple is being prepared. You’ll save yourself a lot of time by gathering everything you need to complete the FAFSA before you start the application.
Not Reading Carefully
You’re on winter break and probably enjoying a vacation from reading for a couple weeks. I get it. But when it comes to completing the FAFSA, you want to read each question carefully. Too many students see delays in their financial aid for simple mistakes that could have been easily avoided.
Don’t rush through these questions:
Your Number of Family Members (Household size): The FAFSA has a specific definition of how your or your parents’ household size should be determined. Read the instructions carefully. Many students incorrectly report this number.
Amount of Your Income Tax: Income tax is not the same as income. It is the amount of tax that you (and if married, your spouse) paid on your income earned from work. Your income tax amount should not be the same as your adjusted gross income (AGI). Where you find the amount of your income tax depends on which IRS form you filed.
Tip: If you use the IRS Data Retrieval Tool, this number will be pulled for you, directly from your income tax return.
Legal Guardianship: One question on the FAFSA asks: “As determined by a court in your state of legal residence, are you or were you in legal guardianship?” Many students incorrectly answer “yes” here. For this question, the definition of legal guardianship does not include your parents, even if they were appointed by a court to be your guardian. You are also not considered a legal guardian of yourself.
Inputting Incorrect Information
The FAFSA is an official government form. You must enter your information as it appears on official government documents like your birth certificate and social security card. Examples:
Entering the Wrong Name (Yes, I’m serious): You wouldn’t believe how many people have issues with their FAFSA because they entered an incorrect name on the application. It doesn’t matter if you’re Madonna, or Drake, or whatever Snoop Lion is calling himself these days. You must enter your full name as it appears on official government documents. No nicknames.
Entering the Wrong Social Security Number (SSN): When we process FAFSAs, we cross check your social security number with the Social Security Administration. To avoid delays in processing your application, triple check that you have entered the correct SSN. If you meet our basic eligibility criteria, but you or your parents don’t have a SSN, follow these instructions.
Not Reporting Parent Information
Even if you fully support yourself, pay your own bills, file your own taxes, you may still be considered a dependent student for federal student aid purposes, and therefore, you’ll need to provide parent information on your FAFSA. Dependency guidelines for the FAFSA are determined by Congress and are different from those of the IRS. Find out whether or not you need to provide parent information by answering these questions.
Bonus: Who is my parent when I fill out the FAFSA?
Not Using the IRS Data Retrieval Tool
For many, the most difficult part about filling out the FAFSA is entering in the financial information. But now, thanks to a partnership with the IRS, students and parents who are eligible can automatically transfer the necessary tax info into the FAFSA using the IRS Data Retrieval Tool. This year, the tool will launch on February 1, 2015. In most cases, your information will be available from the IRS two weeks after you file. It’s also one of the best ways to prevent errors on your FAFSA and avoid any processing delays.
Tip: If you used income estimates to file your FAFSA early, you can use the IRS Data Retrieval Tool to update your FAFSA two weeks after you file your 2014 taxes.
Not Signing the FAFSA
So many students answer every single question that is asked, but fail to actually sign the FAFSA with their PIN and submit it. This happens for many reasons, maybe they forgot their PIN, or their parent isn’t with them to sign with the parent PIN, so the FAFSA is left incomplete. Don’t let this happen to you. If you don’t have or don’t know your PIN, apply for one. If you would like confirmation that your FAFSA has been submitted, you can check your status immediately after you submit your FAFSA online.
Nicole Callahan is a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid.
If you’re a parent of a college-bound child, the financial aid process can seem a bit overwhelming. Who’s considered the parent? Who do you include in household size? How do assets and tax filing fit into the process? Does this have to be done every year? Here are some common questions that parents have when helping their children prepare for and pay for college or career school:
Why does my child need to provide my information on the FAFSA®?
While the federal government provides nearly $150 billion in financial aid each year, dependency guidelines for the FAFSA are determined by Congress. Even if your child supports himself, he may still be considered a dependent student for federal student aid purposes. If your child was born on or after January 1, 1992, then he or she is most likely considered a dependent student and you’ll need to include your information on the Free Application for Federal Student Aid (FAFSA).
Who’s considered a parent when completing the FAFSA?
If your child needs to report parent information, here are some guidelines to help:
If the child’s legal parents (biological and/or adoptive parents) are married to each other, answer the questions about both of them.
If the child’s legal parents are not married to each other and live together, answer the questions about both of them.
If the child’s parent is widowed or was never married, answer the questions about that parent.
When completing your child’s FAFSA, you should include in the household size: parents, any dependent student(s), and any other child who lives at home and receives more than half of their support from you. Also include any people who are not your children but who live with you and for whom you provide more than half of their support.
Do we need to wait to apply until I file my income taxes?
Deadlines in some states are before the tax filing deadline so you’ll want to ensure your child files his or her FAFSA as soon as possible after January 1st to maximize financial aid. You do not need to wait until you file your federal tax return. If you haven’t done your taxes by the time your child completes the FAFSA, you can estimate amounts based on the previous year if nothing has drastically changed. After you file your taxes, you’ll need to log back in to the FAFSA and correct any estimated information. If you’ve already filed your taxes, you can use the IRS Data Retrieval Tool to automatically pull in your tax information directly from the IRS into the FAFSA. The IRS Data Retrieval Tool will be available February 1, 2015.
Do I need to do this every year?
Yes, you and your child need to complete the FAFSA each year in order for your child to be considered for federal student aid. The good news is that each subsequent year you can use the Renewal Application option so you only have to update information that has changed from the previous year!
Did you hear? The 2015-16 FAFSA became available on January 1, 2015! Fill it out: fafsa.gov
If you will be attending college between July 1, 2015 and June 30, 2016, you should complete the FAFSA. Here are some reasons why:
The FAFSA is free to complete and there is help provided throughout the application. Several websites offer help filing the FAFSA for a fee. These sites are not endorsed by the U.S. Department of Education. We urge you not to pay for assistance that you can get for free at the official government website: fafsa.gov.
It’s easier than ever.
We’ve done a lot over the past few years to simplify the FAFSA. One of the most exciting enhancements has been the launch of the IRS Data Retrieval Tool. The tool allows students and parents to access the required information from their IRS tax return to complete the FAFSA, and transfer the data directly into their FAFSA from the IRS website with just a few clicks. This year, the IRS Data Retrieval Tool will launch on February 1, so be on the lookout for that. Also, for those who have completed the FAFSA in the past, when you go to renew your FAFSA for the upcoming school year, a lot of your information will automatically roll over, saving you lots of time.
It takes less than 21 minutes to complete.
Did you know that, on average, it takes less than 21 minutes to complete the FAFSA? That’s less time than it would take you to watch your favorite TV show! And think of the benefits! Spend 21 minutes completing the application and you could qualify for thousands of dollars in financial aid. Talk about return on investment…
More people qualify than you’d think.
If you don’t fill out the FAFSA, you could be missing out on a lot of financial aid! I’ve heard a number of reasons students think they shouldn’t complete the FAFSA. Here are a few:
“I (or my parents) make too much money, so I won’t qualify for aid.”
“Only students with good grades get financial aid.”
You may need it to apply for state and college financial aid and even private scholarships!
Completing the FAFSA is the first step toward getting financial aid for college, career school, or graduate school. The FAFSA not only gives you access to the $150 billion in grants, loans, and work-study funds that the federal government has available, but many states, schools, and private scholarships require you to submit the FAFSA before they will consider you for any financial aid they offer. That’s why it’s important that every college-bound student complete the FAFSA. You’ll never know what you get unless you apply.
Need to fill out the FAFSA® but don’t know where to start? We’re here to help. You’ve already done the hard part and gathered all of the necessary information, so now it’s time to complete the FAFSA. Let us walk you through it step by step:
Go to fafsa.gov. One thing you don’t need in order to fill out the FAFSA? Money! Remember, the FAFSA is FREE when you use the official .gov site: fafsa.gov.
Choose which FAFSA you’d like to complete. The new FAFSA that becomes available on January 1, 2015, is the 2015–16 FAFSA. You should complete the 2015-16 FAFSA if you will be attending college between July 1, 2015 and June 30, 2016. Remember, the FAFSA is not a one-time thing. You must complete your FAFSA each school year.
Note: The 2014–15 FAFSA is also available if you will be attending college between July 1, 2014 and June 30, 2015, and you haven’t applied for financial aid yet.
Enter your personal information.* This is information like your name, date of birth, etc. If you have completed the FAFSA in the past, a lot of your personal info will be pre-populated to save you time. Make sure you enter your personal information exactly as it appears on official government documents. (That’s right, no nicknames.)
Enter your financial information.* All of it. You should use income records for the tax year prior to the academic yearfor which you are applying. For example, if you are filling out the 2015–16 FAFSA, you will need to use 2014 tax information. If you or your parent(s) haven’t filed your 2014 taxes yet, you can always estimate the amounts using your 2013 tax return; just make sure to update your FAFSA once you file your 2014 taxes. Once you file your taxes, you may be able to automatically import your tax information into the FAFSA using the IRS Data Retrieval Tool. It makes completing the FAFSA super easy!
Choose up to 10 schools to which you wish to apply, and we will send the necessary information over to them so they can calculate the amount of financial aid you are eligible to receive. Make sure you include any school you plan to attend, even if you’re not sure yet. This will prevent your financial aid from being delayed. If you’re applying to more than 10 schools: http://1.usa.gov/1mHPD1F
Sign the document with your PIN.* The PIN serves as your electronic signature, or e-signature. You’ll use it to electronically sign and submit your FAFSA. If you don’t have a PIN, you’ll need to get one. If you’ve completed the FAFSA in the past, you probably already have a PIN. You can use the same PIN you used in the past to renew your FAFSA each school year, so keep it in a safe place. If you have forgotten your PIN, you can retrieve it. If you’re considered a dependent student, at least one of your parents or your legal guardian will need a PIN as well. If you or one of your siblings have completed the FAFSA within the last 18 months, your parent(s) will use the same PIN they used before. If not, your parent(s) may need to apply for a new PIN.
*If you are considered a dependent student, your parent(s) will also need to do this.
If you need financial aid to help you pay for college, it’s important that you complete the Free Application for Federal Student Aid (FAFSA®). The good news? The FAFSA is simpler than ever! Did you know that, on average, it only takes 21minutes complete? That’s less time than it takes to watch an episode of your favorite TV program, so no excuses about not having the time. Record that TV show and watch it later.
The 2015–16 FAFSA becomes available on January 1, 2015, at 12 a.m. Central Time. You can fill it out for FREE on the official government site, fafsa.gov. To speed up the FAFSA process, get prepared early. Here is what you’ll need to fill out the FAFSA:
Your social security number* — If you don’t know it, it can be found on your social security card. If you don’t have access to that, it may be on your birth certificate or permanent resident card. If you don’t have one of those, or don’t know where it is, ask your parent or legal guardian. If you’re a dependent student, you’ll need their help with portions of the FAFSA anyway. If you are not a U.S. citizen, but meet Federal Student Aid’s basic eligibility requirements, you’ll need your Alien Registration Number.
Your driver’s license number — If you don’t have a driver’s license, then don’t worry about this step.
Your tax records* — Use income records for the tax year prior to the academic yearfor which you are applying: so if you are filling out the 2015–16 FAFSA, you will need 2014 tax information. If you haven’t filed your taxes yet, you can always estimate the amounts using your 2013 tax return, just make sure to update your FAFSA once you file your 2014 taxes. Once you file your 2014 taxes, you may be able to automatically import your tax information into the FAFSA using the IRS Data Retrieval Tool.
Records of your untaxed income* — This includes a whole bunch of variables that may or may not apply to you, like child support received, interest income and veterans non-education benefits. Parents can find specific details here. Students can find details here.
Records of all your assets (money)* — This includes savings and checking account balances, as well as investments like stocks and bonds and real estate.
List of the school(s) you are interested in attending — The schools you list on your FAFSA will automatically receive your FAFSA results electronically. They will use your FAFSA information to determine the types and amounts of financial aid you may receive. You can list up to 10 schools on your FAFSA. If you’re applying to more than 10 schools, you can add more later. Be sure to list any school you’re considering, even if you’re not sure yet.
*If you’re a dependent student, you will need this information for your parent(s) as well.
You didn’t pay your federal student loan for several months, and now a collection agency is calling you telling you your loan has defaulted. If you’re like many borrowers in this situation, you are probably freaked out and don’t know what to do.
Don’t worry — you still have options to remedy your situation. You don’t have to run from your debt; you can face it head-on and we can help you.
When you default on a federal student loan, you have three basic options to get your loan back in good standing:
Loan Repayment: You can repay your defaulted loan, but just know that your lender will ask for the full amount. When you default, the entire balance of the loan is due immediately. If you are able, you can pay by check, money order, or credit or debit card. Get more info on where to send your payment. If this isn’t an option for you, keep reading.
Loan Rehabilitation: You can rehabilitate your loan by voluntarily making at least nine payments of an agreed-upon amount over a 10-month period. You can choose your due date, and your payment has to arrive at the Department payment center within 20 days of that due date. You and the Department of Education must work together to agree on a reasonable and affordable payment plan. After you’ve successfully rehabilitated your loan, you may regain eligibility for benefits such as choice of repayment plan, loan forgiveness, deferment, and forbearance. However, it is possible that your monthly payment could increase after you make those initial nine payments due to the additional collection costs that are added to your principal balance.
Loan Consolidation: You may be able to combine all of your federal student loans, including defaulted loans, into a new Direct Consolidation Loan. Usually, you are required to make at least three consecutive, voluntary, and on-time payments on your defaulted loans prior to consolidating. Please note that the principal balance of your new Direct Consolidation Loan may include accrued interest and collection fees. There is also an option to consolidate without making any payments; however, you must agree to one of our income-driven repayment plans as part of this consolidation, and you are required to complete income verification documents. Learn about your options for consolidating.
Now that you understand your options, it’s time to take action. First, contact the agency that is billing you to explain your situation, ask for more information on your options, and let them know that you want to work out a plan to get your loan back on track. In no time, you will be out of default and your loan will be back in good standing.
Tara Marini is a communication analyst at the Department of Education’s office of Federal Student Aid.