Ah, deadlines. The sworn enemy of students across the nation. When you’re busy with classes, extracurricular activities, and a social life in whatever time you’ve got left, it’s easy to lose track and let due dates start whooshing by. All of a sudden, your 10-page term paper is due in an hour, and you’re only on page 5 (with the help of 26-point type and triple line spacing). We get it.
If you need financial aid to help you pay for college, you must complete the Free Application for Federal Student Aid (FAFSA®) form. The 2020–21 FAFSA form will be available on Oct. 1, 2019. You should fill it out as soon as possible on or after Oct. 1 at the official government site, fafsa.gov.
A recent post, covers the concern of “summer melt,” where up to one-third of the students who graduate high school with plans to go to college never make it to a college campus. The post discussed how educators can help keep someone on track—but there’s also plenty that a student can do to make sure their college plans don’t get derailed during a summer break.
If you attended Heald College, you may qualify for federal student loan forgiveness.
The U.S. Department of Education is committed to forgiving the federal student loans of eligible former Heald College students. If you qualify for forgiveness, you will not be required to pay back your qualifying Heald federal student loans and you may be refunded any amount that you already paid. You may be eligible if you attended Heald when it closed, or if you were misled or defrauded by Heald.
See if one of the following situations applies to you.
Situation 1: You were attending Heald College when it closed on April 27, 2015, or you withdrew on or after June 20, 2014.
You may be eligible for a type of federal student loan forgiveness called closed school discharge if you were attending Heald College when it closed on April 27, 2015, or if you withdrew on or after June 20, 2014.
This is the fastest way to receive loan forgiveness, but there are certain requirements you must meet.
Situation 2: Heald College misrepresented job placement rates for your program.
The U.S. Department of Education determined that Heald College published misleading job placement rates for many of its programs between 2010 and 2014. If you enrolled in one of these programs on or after the date listed, you can apply for loan forgiveness through an expedited process.
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.
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).
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.
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.
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?
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:
If you borrowed before July of 2010, you may need to consolidate your loans in order to qualify for certain student loan repayment benefits, such as Public Service Loan Forgiveness and some income-driven repayment plans.
Why does it matter which type(s) of loans I have?
If you’re interested in the best student loan repayment benefits, you’ll want to have Direct Loans. If you borrowed any federal student loans before July 2010, there’s a good chance that some or all of your federal student loans are not Direct Loans. But that doesn’t mean you can’t qualify for the best repayment benefits—you can. All you’ll need to do is consolidate. If you consolidate, as a student borrower, here are some of the repayment benefits you could access:
Direct Loans are those that are made to you, though your school, directly by the Department of Education. Since July 2010, almost all federal student loans are made under this program—in full, called the William D. Ford Federal Direct Loan Program.
Though the Direct Loan Program existed long before 2010, there was another bigger federal student loan program that most students relied on to finance their education: the Federal Family Education Loan (FFEL) Program.
Under the FFEL Program, loans were made by banks and ultimately guaranteed by the taxpayer in case you didn’t make your payments. In 2010, this program ended.
Loans from both of these programs are FEDERAL student loans. The main way the programs differ is in who made you the loan in the first place. Most of the benefits in the Direct Loan Program are available in the FFEL Program. However, FFEL Program loans are not eligible for Public Service Loan Forgiveness or the best income-driven repayment plans. This is where loan consolidation can help. It will effectively convert your FFEL Program loans into Direct Loans.
How do I find out which type(s) of federal student loans I have?
Log in using your FSA ID (You can’t use your Federal Student Aid PIN anymore!)
Scroll to the loan summary section. Go through each of the loans that are listed. Use the list below to see if you need to consolidate any of your loans to qualify for the best repayment options.
What should I consider before consolidating?
First, evaluate whether you want any of the benefits that are available only in the Direct Loan Program. Consolidating your loans can increase the amount of interest that accrues on your loans, so if you’re not interested in these programs, you may not want to consolidate. Also, understand that, by consolidating your loans, you will start your forgiveness clock over. For example, if you were already on an income-driven repayment plan and consolidate your loans, then you will lose the any credit you had already earned toward forgiveness.
Lastly, understand that some of the loans that we called out for consolidation are those from another federal student loan program called the Federal Perkins Loan Program. Those loans have their own cancellation benefits that are based on your job. If you consolidate these types of loans, you will lose access to those cancellation benefits. Learn more about Perkins Loan cancellation here.
Now I know what type(s) of loans I have. What can I do?
I have some loans that I need to consolidate, and some that I don’t. Okay, you’re a little trickier to advise. You’ll definitely have some loans that you’ll want to consolidate, but the real question is, should you consolidate all of your loans? Only consolidate what you need to? You can do either. It will be easier to keep track of your loans if you only have one, but as you can see in the above section, sometimes you’re better off not consolidating if you don’t have to. After you’ve figured this out, you can consolidate your loans and apply for the best income-driven repayment plans. After you’re set up on the plan you want and if you want to apply for Public Service Loan Forgiveness Program, get your employment certified for Public Service Loan Forgiveness.
If you’re confused, need help, or have questions, you can contact the Loan Consolidation Information Call Center at 1-800-557-7392 to get free advice.
Ian Foss is a Program Specialist and Nicole Callahan is a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid.
It might seem difficult to choose an income-driven repayment plan when so many of the basic features of the plans look the same. After reading this post, you’ll be armed with the knowledge you need to choose the best repayment plan for your situation.
Here are the basics:
Let’s start by looking at the basics. All of these plans set your payments based on a percentage of your income, and all of these plans forgive any remaining balance on your loans after a period of time. There are some obvious differences between the plans, sure, but the chart is so general that you don’t have enough information in the chart to make a smart choice.
If you’re interested in an income-driven plan, you probably want to pay as little as possible over the shortest period of time and have accepted that more interest may accrue on your loans as a result. Additionally, you should understand that you have to keep in touch with your loan servicer about your income each year in order to stay on these plans. So, Pay As You Earn would seem to be a natural choice. But there are very specific requirements you must meet to qualify for Pay As You Earn plan. The details matter.
If your loans aren’t Direct Loans, that doesn’t mean you can’t qualify for the best income-driven repayment plans—almost everyone can. You just need to consolidate first. If you don’t consolidate, the only income-driven repayment plan you might qualify for is the income-based repayment plan, and, as you saw, it wouldn’t give you the lowest payment.
After you have figured out whether you needed to consolidate, and done so, you’re ready to choose a plan.
Let the Department of Education choose the best plan for you
Don’t do difficult work that you don’t have to do. The details matter for these plans. And there are a lot of details. Instead of sorting all of this out yourself, make us, or, more accurately, your loan servicer, do the difficult work. Just go to StudentLoans.gov and start an “Income-Driven Repayment Plan Request”. (That’s the online income-driven repayment application.)
When you get to the “Repayment Plan Selection” section of the application (toward the end), you should not choose an income-driven repayment plan by name. Instead, choose this option:
If you do, your loan servicer will evaluate whether you are eligible for all of the income-driven repayment plans and put you on the best plan for you.
If you want to choose a plan on your own, you probably want to choose the Revised Pay As You Earn Repayment Plan.
For most borrowers, the Revised Pay You Earn Plan is the best choice because:
all Direct Loan student borrowers are eligible for the plan,
there are no date restrictions,
there are no income restrictions,
it offers the lowest payment of all the income-driven repayment plans,
it offers the shortest repayment period for many, and
it offers a generous interest benefit to keep your interest balance from growing
However, there are some borrowers who can’t or shouldn’t choose the Revised Pay As You Earn Plan.
Answer the questions below to see if you’re one of those borrowers.
Are you married? How do you file your taxes?
If you are married, you can choose to file a joint or separate income tax return. How you choose to file your taxes can have a large impact on income-driven repayment. There are two factors at play here—whether your spouse’s income will be used to calculate your payment and whether your spouse’s loan debt will be used to adjust your payment downward.
There are two things you need to consider
If you file jointly, for all plans, your income + your spouse’s income = income used to calculate payment.
If you file separately, then how your spouse’s income is treated depends on the plan:
For the Income-Contingent, Income-Based, and Pay As You Earn plans, only your income = income used to calculate payment.
For the Revised Pay As You Earn Plan, however, your income + your spouse’s income = income used to calculate payment.
Second, loan debt.
If it seems like using a joint income is going to disadvantage you, this isn’t the end of the story. If your spouse also has federal student loans, then we will figure out what percentage of the total debt is yours and multiply the payment based on a joint income by that percentage. This acknowledges that there are multiple federal student loan debts being repaid with the joint income. If your spouse has no federal student loan debt, however, then 100% of the debt is yours, and so there’s no adjustment to your payment.
What does this all mean? Though the Revised Pay As You Earn Plan is better for most, if you are married, file a separate return from your spouse, and your spouse doesn’t have federal student loan debt, then you will definitely be able to get a better deal under the Pay As You Earn Plan (if you are eligible for it), and, depending on your spouse’s income, you might even get a better deal under the Income-Based or Income-Contingent Repayment Plan. But, to get this better deal, you have to file separately from your spouse, and that might cost you more in taxes.
Did you borrow a federal student loan for graduate school?
Let’s talk about borrowing for graduate school. If you did, then the Revised Pay As You Earn Plan might not be for you.
Under the Revised Pay As You Earn Plan, the forgiveness clock runs for 20 years if you only borrowed for undergraduate study, and for 25 years if you borrowed even one loan for graduate study.
By contrast, the Pay As You Earn Plan has a 20-year forgiveness clock for all borrowers, undergraduate and graduate alike. So, if you qualify for Pay As You Earn and are a graduate borrower, it’s probably a better option for you. If you don’t qualify for Pay As You Earn, however, the Revised Pay As You Earn Plan is still better for you than the Income-Based or Income-Contingent Repayment Plans.
How recently did you start borrowing?
The Pay As You Earn Plan has many, but not all of the benefits as Revised Pay As You Earn, and, for some borrowers, it’s a better option. However, it’s also the plan that is available to the fewest number of borrowers. Specifically, to qualify for Pay As You Earn, you need to be a “new borrower” on or after October 1, 2007 who received a loan on or after October 1, 2011. That excludes a lot of people who have loans today.
Are you are a parent borrower?
Parent borrowers who want to repay their Parent PLUS Loans under an income-driven repayment plan can’t use the Revised Pay As You Earn Plan or any other income-driven repayment plan except for the Income-Contingent Repayment Plan.
The Income-Contingent Repayment Plan is the only plan that a borrower with this loan type can opt for. However, eligibility is not automatic. To become eligible, parent borrowers must consolidate their outstanding Parent PLUS Loans into a Direct Consolidation Loan. If you’re a parent borrower, you can do that by visiting StudentLoans.gov.
Let’s sum up.
The Revised Pay As You Earn is the best plan for most borrowers. However, if it’s not good for you for one of the reasons I mentioned above, then you should consider Pay As You Earn. If that doesn’t work for you, consider the Income-Based Repayment Plan. Finally, consider the Income-Contingent Repayment Plan.
Ian Foss has worked at the Department of Education since 2010. He just saved 33% on his student loan payments by switching from the Income-Based Repayment Plan to the Revised Pay As You Earn Repayment Plan.
Ah, deadlines. The sworn enemy of students across the nation. When you’re busy with classes, extracurricular activities, and a social life in whatever time you’ve got left, it’s easy to lose track and let due dates start whooshing by. All of a sudden, your U.S. history paper is due at midnight, and you still don’t know Madison from a minuteman. We get it.
Nevertheless, we’re here to point out a few critical deadlines that you really shouldn’t miss: those to do with the Free Application for Federal Student Aid (FAFSA®). By submitting your FAFSA late, you might be forfeiting big money that can help you pay for college. Luckily for you, you’ve got just three types of deadlines to stay on top of. Now if only your Founding Father flashcards were that simple.
Here are those three deadlines:
The College Deadline
The first type of deadline comes from colleges themselves, and—spoiler alert—it’s typically pretty early. These deadlines vary from school to school, but they usually come well before the academic year starts, many in the neighborhood of early spring. If you’re applying to multiple colleges, be sure to look up each school’s FAFSA deadline and apply by the earliest one.
Many of these FAFSA due dates are priority deadlines. This means that you need to get your FAFSA in by that date to be considered for the most money. Many colleges have this date clearly marked on their financial aid pages. If you can’t find it, a call to the college’s financial aid office never goes amiss.
The State Deadline
The second deadline is determined by your home state. This deadline varies by state and can be as early as February 15 of a given year’s FAFSA application cycle (What’s good, Connecticut?). Some states have suggested deadlines to make sure you get priority consideration for college money, and some just want you to get the FAFSA in as soon as you can. States often award aid until they run out of money—first come, first served—so apply early.
This last deadline comes from us, the Department of Education, aka the FAFSA folks. This one is pretty low-pressure. Our only time constraint is that each year’s FAFSA becomes unavailable on June 30 at the end of the academic year it applies to.
That means that the 2016–17 FAFSA (which became available Jan. 1, 2016) will disappear from fafsa.gov on June 30, 2017, because that’s the end of the 2016–17 school year. That’s right; you can technically go through your entire year at college before accessing the FAFSA. However, a few federal student aid programs have limited funds, so be sure to apply as soon as you can. Also, as we said, earlier deadlines from states and colleges make waiting a bad idea.
Why so many deadlines?
All these entities award their financial aid money differently and at different times. What they all have in common, though, is that they use the FAFSA to assess eligibility for their aid programs. So when a college wants to get its aid squared away before the academic year starts, it needs your FAFSA to make that happen. If you want in on that college money, you need to help the college out by getting your information in by its deadline. Same goes for state aid programs. Additionally, many outside scholarship programs need to see your FAFSA before they consider your eligibility for their money. If you’re applying for scholarships, you need to stay on top of those deadlines, too.
What happens if I miss the deadlines?
Don’t miss the deadlines. Plan to get your FAFSA in by the earliest of all the deadlines for your best crack at college money. By missing deadlines, you take yourself out of the running for money you might otherwise get. Some states and colleges continue awarding aid to FAFSA latecomers, but your chances get much slimmer, and the payout is often less if you do get aid. It’s better just not to miss the deadlines.
If you miss the end-of-June federal deadline, you’re no longer eligible to submit that year’s FAFSA. Did we mention not to miss the deadlines?
Across the board, the motto really is “the sooner the better.” So put off the procrastinating until tomorrow. Apply by the earliest deadline. Get your FAFSA done today!
Drew Goins is a senior journalism major at the University of North Carolina. He’s also an intern with the U.S. Department of Education’s Federal Student Aid office. Likes: politics, language, good puns. Dislikes: mainly kale.
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:
Does my child need to provide my information on the FAFSA?
Your child’s dependency status determines whose information must be reported on the FAFSA. Even if your child lives on his own, files his own taxes, and 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, 1993, then he or she is most likely considered a dependent student and will need to include your information on the Free Application for Federal Student Aid (FAFSA®).
Why does my child need to provide my information on the FAFSA?
Our dependency guidelines are determined by Congress and are different from those of the IRS. If your child is considered a dependent student, it doesn’t mean you, the parent(s), are required to pay anything toward your child’s education; this is just a way of looking at everyone in a consistent manner.
Which parent’s information should I include when completing the FAFSA?
When completing your child’s FAFSA, your household size should include 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?
You do not need to wait until you file your federal tax return. Deadlines in some states are before the tax filing deadline so you’ll want to ensure your child fills out his or her FAFSA as soon as possible to maximize financial aid. If you haven’t filed 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 7, 2016.
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!
What else do I need to know before I begin?
You and your child will each need to get an FSA ID, which is made up of a username and password. It is used to confirm your identity when accessing your financial aid information and to electronically sign the FAFSA. You can save time by getting your FSA IDs prior to starting the FAFSA.
Certain information and documents are necessary to complete the FAFSA and it’s good to have them handy before you begin. Here’s a checklist to help you get ready.
Susan Thares is the Digital Engagement Lead at the Department of Education’s Office of Federal Student Aid.
Each year, more than 18 million people submit a FAFSA, and the U.S. Department of Education provides more than $120 billion dollars in federal student aid. To protect the integrity of this important financial system and the private data of all of the students, parents and borrowers within it, it’s essential that only the FSA ID owner create and use their account.
Although the FAFSA is considered your application, one of your parents will have to provide some information on the FAFSA and sign it, if you are considered a dependent student. Any parent, who wants to electronically sign the FAFSA, will need his or her own FSA ID.
To avoid problems with your financial aid down the road, you (and your parent, if that applies) should create your own FSA ID. Don’t let anyone—not your teacher, your financial aid counselor, your mom or dad, your best friend, or your second and third cousins—create your FSA ID for you. And you should not create one for your parent or anyone else.
For starters, it’s against the rules. The FSA ID has the same legal status as a written signature, so you should treat it like such. You’re not supposed to let someone else sign your name on a tax form or a job application. Well, the same goes for your FAFSA.
Also, one of the primary reasons people have issues with their FSA ID and need to call our contact center for help is because someone else created their FSA ID. If you don’t make your own FSA ID you are less likely to know or remember your username and password. And if you get locked out or need a reminder of your username or password, you are less likely to know the answers to your challenge questions or have access to the e-mail address associated with your account.
Don’t miss an important deadline because someone else created your FSA ID, and you can’t reset your password!
In addition to signing the FAFSA, you can use your FSA ID to do things like
import your tax information into your FAFSA from the Internal Revenue Service,
view and print an online copy of your Student Aid Report (SAR), and
sign your master promissory note.
Creating an FSA ID is simple and only takes a few minutes. To save time when you and your parent are filling out the FAFSA, create your own FSA IDbefore you begin the application. For more information, visit StudentAid.gov/fsaid.