Everything You Need to Know About Financial Aid Resources for Teachers

financialaid

We know that preparing to become a teacher can be expensive. Sometimes it’s tough to pay all of the bills on time, including student loans. But there are resources and programs out there that teachers can take advantage of and we’ve gathered them all here in one place just for you.

Under certain circumstances, you can get your federal student loans forgiven or even canceled.

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5 Must DOs Before Repaying Your Student Loans

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Almost time to start paying back your student loans?  Contrary to popular belief, your student loan payments don’t have to stop you from living your life. You just have to weigh your options and find a strategy that works within your budget. Here are some steps to get you started.

1. Compare monthly payment amounts

The amount you pay each month toward your student loans will depend on the repayment plan you choose. If you take no action, you will be automatically enrolled in the 10-year Standard Repayment Plan. If you don’t think you can afford that amount or you want a lower monthly payment, consider switching to an income-driven repayment plan, where your monthly payment could be as low as $0 per month. Just know that when you make payments based on your income your monthly payment amount may be lower, but you will likely pay more in total over a longer period of time.

Use our repayment calculator to compare the different repayment options.

repayment estimator output

Calculate

TIP: If you’re interested in the Public Service Loan Forgiveness Program, you should apply for an income-driven repayment plan and submit an Employment Certification Form.

2. Decide whether to consolidate

If you borrowed federal student loans before 2011, you may need to consolidate any FFEL loans into the Direct Loan program before you can qualify for the better income-driven repayment plans or Public Service Loan Forgiveness. You may also want to consolidate if you have multiple loans and/or servicers and want a single monthly payment. The application takes about 10 minutes.

Consolidate my Loans

3. Choose an affordable repayment plan

If you decide to consolidate, you will choose a repayment plan from within the consolidation application. If you’d like to choose an income-driven plan, choose the Pay As You Earn Plan. It’s the best plan available, and if you don’t qualify for it, your servicer will put you on the next best income-driven repayment plan.

If you aren’t going to consolidate and you’d like to enroll in one of the income-driven repayment plans, learn how to choose the right income-driven repayment plan and apply here. The application takes about 10 minutes.

Choose recommended option in IDR app

Apply for an income-driven repayment plan

If you’re interested in a plan other than the standard or one of the income-driven plans, contact your servicer to ask how to enroll.

 4. Set up your payments

You will never pay the U.S. Department of Education directly. In most cases, federal student loan borrowers will make payments to one of our loan servicers. Loan servicers work on behalf of the U.S. Department of Education to collect your payments and provide customer service. If you don’t know who your loan servicer is, find out here.

Your loan servicer will contact to let you know when your first payment is due and how to make a payment, so it’s very important that you provide your servicer with updated contact information.

TIP: To simplify the repayment process, consider enrolling in auto debit and your payments will be automatically taken from your bank account each month. As an added bonus, you get a 0.25% interest rate deduction when you enroll. Ask your servicer how to enroll.

5. Know who to contact if you need help with your student loans

Beware of student loan scams.  You never have to pay for help with your student loans. As you’re researching repayment and forgiveness options, make sure you’re getting information from trusted sources, like .gov websites or your servicer’s website. The government and your servicer will never charge application or maintenance fees, so if you’re asked to pay, walk away.

If you have questions or need help, contact your servicer.

TIP: Save your servicer’s contact information in your phone so you can access it when you need to.

Nicole Callahan is a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid.

Image by Getty Images

8 Student Loan Tips for the Class of 2016

8 student loan tips for the Class of 2016

Nothing says, “Welcome to adulthood” quite like getting your first student loan bill in the mail. If student loans are your reality, here are some tips that may help you (from someone who is going through this too).

1. Don’t ignore your student loans!

Affordable payment options

I think everyone can agree that student loans are no fun to pay back, but ignoring them can have serious consequences (and it won’t make them go away.) If you’re worried about your student loans or don’t think you can afford your payments, contact us for help. No matter what your financial situation is, we can help you find an affordable repayment option. For many, that could mean payments as low as $0 per month.

2. Set a budget.

Budgeting tips

Life after graduation gets real, real fast. To make a plan to tackle your student loans, you need to understand what money you have coming in, and what expenses you have going out. If you haven’t already, it’s important that you create a budget. This will help determine your repayment strategy. Here are some budgeting tips to help you get started.

3. Choose an affordable payment amount.

Repayment calculator | Apply for an income-driven repayment plan

There is no one-size-fits-all approach to paying back student loans. The key question you need to answer is: Do you want to get rid of your loans quickly or do you want to pay the lowest amount possible per month?

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9 Myths About the FSA ID

Get an FSA ID

As a graduate student, I‘m no stranger to filing the Free Application for Federal Student Aid (FAFSA®), and when I filed my 2016-17 FAFSA, I was prompted to create an FSA ID—the username and password you need to log in to the FAFSA. I followed the step-by-step instructions, and voila! I easily created my very own FSA ID in no time!

2016-17 FAFSA Login with FSA ID

Login options on fafsa.gov

The FSA ID replaced the Federal Student Aid PIN (check out this blog post explaining why). Students, parents, and borrowers must use an FSA ID to log on to certain Department of Education (ED) websites like fafsa.gov, StudentAid.gov, and StudentLoans.gov. The FSA ID is a more secure way to access and sign important documents without using personally identifiable information (PII).

More than 30 million FSA IDs have been created, and people, like me, have used their FSA ID more than 146 million* times. With any new process, there are some myths floating around about creating and using an FSA ID. Let’s tackle some of those right now…

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4 Steps to Understanding and Comparing Financial Aid Offers

Students sitting on bench.

When I was in my last semester of high school, I checked my family’s mailbox just as much as I checked Snapchat and Instagram combined. It was the season of admissions decisions, and I was getting letters from all the colleges I’d applied to.

But once I’d gotten into several schools, my attention shifted to my e-mail inbox. I was waiting on information that was just as critical: my financial aid offer from each college. I knew that for me, the amount of financial aid I got from a school mattered just as much as the general admissions decision. I’d fallen in love with each of the schools I’d visited, and I knew I’d be happy anywhere. Basically, my choice was going to come down to the money.

Analyzing different aid packages can seem like way too much math for the end of your senior year—at least it did to me—but it’s important stuff. Check out my four steps to make this analysis simpler.


What to do once you get an aid offer

1. Make sure you know what you’re looking at.

The financial aid offer (sometimes called an award letter) typically comes in an e-mail from the college’s financial aid office. The offer includes the types and amounts of financial aid you’re eligible to receive from federal, state, private, and school sources. Be sure you understand what each type of aid is and whether it needs to be paid back. For example, when I got into UNC-Chapel Hill, my aid offer was a mix of scholarships, which I didn’t need to pay back, and private loans, which I did. My offer from Duke (booooo) had mainly the same stuff with some grant money mixed in.

Click to download PDF.

Click to download PDF.

Lucky for you, hundreds of colleges nationwide have signed on to present financial aid offers in a standardized format known as the Shopping Sheet. The Shopping Sheet is a standardized award letter template that makes it easy to compare financial aid offers from different schools. In addition to providing personalized information on financial aid and net costs, the Shopping Sheet also provides general information on the college, like graduation rate and loan default rate.

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No, You Won’t Be Arrested For Falling Behind On Your Student Loans

Student-Loan-Repayment-2

Today, more than ever before, a college diploma or job-training credential is one of the best investments you can make in your future. By some estimates, a bachelor’s degree is worth an average of a million dollars over the course of your lifetime.

But college also has never been more expensive, and far too many Americans are struggling to pay off their student loan debt.

Maybe you haven’t quite landed that dream job in your field of study yet. Or you decided to go into public service instead of taking the highest-paying offer. Your reward for investing your time and money in the skills and knowledge needed to secure your future shouldn’t be a sky-high monthly payment.

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A New Vision for Serving Student Loan Borrowers

For Sarah, streamlining student loan repayment for easy access to affordable repayment plans is critical. Sarah teaches second grade in Minnesota, and works to ensure that all her students have hope for their futures and “know that the possibilities are endless for them.” After paying her monthly loan balance, she lives paycheck-to-paycheck. Public service loan forgiveness options are available to help make debt more manageable and affordable, but many teachers like Sarah struggle to learn about whether or not they qualify. The Obama Administration knows that families across the country are working hard to pay off their loans. This Administration wants to ensure that students do not have to choose between a job that serves their communities and paying their debt, and that borrowers like Sarah do not struggle to navigate student loan repayment. That’s why the US Department of Education is taking steps to reinvent customer service for federal student loan borrowers to ensure that every borrower has the right to an affordable repayment plan like Pay As You Earn (PAYE), quality customer service, reliable information, and fair treatment as they repay their loans – objectives the President put forward in his Student Aid Bill of Rights.

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Focusing on Financial Literacy for Students

April is National Financial Capability Month. Decisions about paying for higher education can have lasting impact on individuals and our economy. In keeping with our ongoing efforts to increase financial literacy among college-bound and postsecondary students, the U.S. Department of Education (ED) is working with Treasury’s Financial Literacy and Education Commission (FLEC) to teach students how to save and manage money for their postsecondary education.

The Far-Reaching Impact of Financial Literacy

Financial literacy, which can be defined as an understanding of how to earn, manage, and invest money, has a critical impact on students’ ability to make smart choices about which institute of higher education to attend, what to study, how to pay for college, and how to manage student loan debt after graduation.

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5 Things You Didn’t Know About Your Financial Aid Award

Generally, the first step in applying for financial aid is completing the Free Application for Federal Student Aid (FAFSA). The schools you listed on the FAFSA will take that information and use it to calculate the financial aid you’re eligible for.  Your financial aid awards may vary from school to school based on a number of factors including: your Expected Family Contribution (EFC), the number of credits you will take each term, your cost of attendance (COA) at each school, your eligibility for state and institutional aid at each school, and your year in school. Keep in mind that many schools have a priority deadline, so the sooner you apply each year, the better. Here are 5 things that will help you better understand how financial aid is awarded:

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Scholarship Basics and Tips

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We all know college is super expensive; not only do you have to pay tuition, but there’s also room and board (for those of you staying on campus), a meal plan (yay for cafeteria food…), and textbooks (buying hundred-dollar books for one chapter). It’s a lot. Luckily for us, there’s help: scholarships! Of course there’s no guarantee that you’ll actually be awarded any money, and sometimes it can seem like a whole lot of work for a whole lot of nothing. But that’s why I’m here! I’ve gone through the process recently (and am doing it again), and I’m at your service with suggestions and tips.

A lot of these tips come from StudentAid.gov/scholarships, so check out that page for a more comprehensive, detailed guide to scholarships.


 Types of Scholarships

There are scholarships for almost everything—all you have to do is look. Applying for scholarships doesn’t have to be tedious—find scholarships for things you’re passionate about. Some scholarships are really cool. There are scholarships for animal rescue, volunteering with the elderly, etc.; you can find them through specific organizations, too.

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How to Update Your FAFSA After Filing Taxes

It's time to update your FAFSA

Did you submit your 2016–17 FAFSA® before you (and your parents, if you’re a dependent student) filed your 2015 taxes? If so, it’s time to return to your application to update the information you estimated with the actual numbers from your 2015 tax return.

The easiest way to update your tax information is by using the IRS Data Retrieval Tool (IRS DRT). It allows you to transfer your tax information directly into your FAFSA! Check to see if your tax return is available and if you’re eligible to use the tool. You usually have to wait a few weeks after filing your taxes before you can use the IRS DRT, but this tool can save you lots of time.

To update your FAFSA:

Step 1

Go to fafsa.gov and click Login.

Step 2

Students: Log in to the FAFSA using your FSA ID.
Parents:  Your child must initiate the FAFSA correction process by logging in first, continuing to Step #3, and creating a Save Key*. If you need to make corrections to your child’s FAFSA, get the Save Key from your child. Once you do, you can log in by entering the student’s information. The FAFSA will ask you to enter the “Save Key” if you wish to continue.
FAFSA login screen

*A Save Key is a temporary password meant to be shared between you and your child. It lets you and your child pass the FAFSA back and forth and allows you to save the FAFSA and return to it later. This is especially helpful if you and your child are completing the FAFSA, but are not in the same place.

Step 3

Click Make FAFSA Corrections.

Make FAFSA Corrections

Step 4

Navigate to the “Financial Information” section.

Step 5

Change your answer from “Will file” to Already completed.

2016-17 - Taxes Completed

Click to enlarge.

If you’re eligible to use the IRS DRT, you’ll see a Link to IRS button. If you’re not eligible to use the IRS DRT, you can manually enter the data from your completed tax return.

Step 6

Click Link to IRS and log in with the IRS to retrieve your tax information.

  • Enter the requested information exactly as it appears on your tax return.
IRS DRT Screenshot with 2015 tax info

Click to enlarge

 

  • Review your information to see what tax data will be transferred into your FAFSA.
  • Check Transfer My Tax Information into the FAFSA, and click Transfer Now to return to the FAFSA.
IRS DRT Screenshot with 2015 tax info

Click to enlarge

 

Step 7

Review the data that was transferred to your FAFSA, and click Next.

Step 8

Sign and submit your updated FAFSA using your FSA ID.

Once you’ve made updates at fafsa.gov, your changes will be processed in about three days. You’ll receive a revised Student Aid Report (SAR) showing the changes made to your application. Each school you listed on your FAFSA can access the revised information one day after it’s processed.

Remember, some state and school financial aid is awarded on a first-come, first-served basis. So, log in today to update your FAFSA!

April Jordan is a senior communications specialist at Federal Student Aid

4 Things You Should Consider When Choosing A College

4 things to consider when choosing a college

A college or career school education = more money, more job options, and more freedom. Yet, with more than 7,000 colleges and universities nationwide, deciding which college is right for you can be difficult. Maybe you want to find a school with the best nursing program, or study abroad options, or the best college basketball team; every person values different things. However, it’s also important to remember that college is one of the biggest financial investments you will make in yourself. Just as important as academics and extracurricular activities are the financial factors: how much a college costs, whether students are likely to graduate on time, and, if alumni are able to find good jobs and pay off their loans. That is why the U.S. Department of Education developed the College Scorecard. It provides clear information to answer all of your questions regarding college costs, graduation, debt, and post-college earnings.

As you’re comparing colleges, use the College Scorecard to compare these four things:


1. Net Cost

For starters, you should consider how much you’ll actually be paying on an annual basis. That’s not necessarily the sticker price, but it’s the sticker price minus all of the scholarships and grants that you will receive when enrolling in an institution. This is called the net price, and it’s important because it’s the average amount students actually pay out of pocket. The College Scorecard can show you the average net price of each school compared to the national average. It can also give you a net price estimate for each school broken down by family income. Here’s an example:

College Scorecard - sample net cost of a college.

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