Posts filed under 'paying for college'
The Pay for College Blog just posted an article about how hundreds of students received bad loan checks from their private student loan company, Astrive. This mistake on Astrive’s part has meant lots of students have gone without loan funds to pay for college-AND they’ve had to pay fees for the bounced checks!
This incident got me thinking that since many of you will be taking out loans soon, it would be a good idea to go over the different types you can get. Deborah Fox, founder of the college planning company, Fox College Funding, has provided me with some expert advice on the subject:
Are You Paying Too Much?
Did you know that there is a difference (actually, several differences) between federal student loans and private student loans? Many students don’t get this information, and they end up accidentally skipping out on low-interest options-meaning they end up overpaying at a time when their bank account is still in its adolescent phase. Ouch!
Federal v. Private
Before we even look at the difference between these two types of loans, let’s set the record straight: federal loans (which come from, or are guaranteed by the government) are your best option when it comes to student loans. Private loans - known as “alternative” loans (which come from private lenders or banks that are not guaranteed by the government) should absolutely be your last resort!
Wondering why?
The basic answer shows up in dollars and cents: federal loans generally have lower interest rates than private ones and have a fixed rate rather than variable. This means you will likely pay less for the same loan amount when you pay it back. Nice right? Another reason federal loans are a better option is that they have a lot more built-in protections for you (the borrower) than private loans do. (For example, a check the government sends you is less likely to bounce!)
Borrowing Smart
There are several types of federal student loans-the Subsidized Stafford Loan (you don’t pay or accrue interest while you’re in school), the Unsubsidized Stafford Loan (you do accrue interest in school, but the interest rate is relatively low), and the federal Perkins Loan (reserved for students with the most need and at the most attractive interest rate: 5%) are all intended for students. Your school will let you know which ones you qualify for. It’s best to borrow them in this order (depending on which ones(s) you are able to get access to):
- Perkins Loan
- Subsidized Stafford Loan
- Unsubsidized Stafford Loan
Going Private
If you decide to borrow an alternative loan (one that comes directly from a bank or other lender), be sure you understand the risks and fees associated with it. Check the interest rate and see if it varies, find out if there is a penalty for paying the loan back early, and make certain that you understand all the loan terms. You might want to go over it with a parent or financial advisor to make sure you are getting the best deal.
Questions?
Student loans are pretty darn confusing, so please feel free to ask me questions–I have the luxury of being able to consult an expert! Thanks again to Deborah for sharing her expertise!
photo: Question mark by JoanaCroft
May 27th, 2008
Ah, budgeting-possibly one of the least exciting things about moving off to college-but usually one of the most necessary!
It’s completely normal to feel confused or even frustrated by the idea of having to juggle all the bills that Mom or Dad once handled themselves. The easiest way to tackle them all at once, and make sure you have some change at the end of the month, is to start a budget.
Where to Start
The easiest way to make a budget that works is to save all your receipts, pay stubs, and bills-all of them!-for a month. At the end of the month, tally up your costs and your income. If your income is less than your expenses, you either need to increase your income (by getting a job, for example), decrease your expenses (check out these 50 ways to save $$ in college), or both!
Planning Ahead
Once you’ve seen what you earn and spend, you can set up a “Planned Budget” for next month. Estimate your income and expenses, and write them down. Use this free budget worksheet from Fox College Funding to get started-it’s straightforward and might remind you of some expenses you’d forgotten about!
So, you’ve made your “Planned Budget,” now what?
You guessed it. Save your receipts, bills, and pay stubs… AGAIN. At the end of the month, enter everything into your budget worksheet, and see how close your actual income and spending came to your estimates. Decide how you want to change your budget plan for next month to fit better with your priorities.
Making it Work
So… You’ve planned out your budget-and you really, really tried to stick to it-but somehow you spent a lot more this month than you thought you did. It’s tempting to think the only solution is to make more money (good luck figuring a second job between your first one, friends, studies, and classes) but the best solution? You need to control your spending.
How???
I’m a big fan of the envelope system-you budget out a certain amount of cash per week for things like groceries, clothes, etc. and literally put them in separate envelopes. Then when the cash is gone, you’re DONE spending for that week.
Don’t want to have cash lying around in envelopes? Here are some other ways you might be able to make a version of the envelope system work for you:
- Keep your weekly budget of cash in your wallet, but clip money together in separate paper clips labeled with what that cash is earmarked for.
- Buy gift cards to places you frequent (Starbucks) and use them to set your budget for the week/month. You could also buy prepaid credit cards or a Visa gift card for items like groceries or clothes-just write the use & balance on the back with a permanent marker.
- Give yourself an “allowance” in cash for entertainment or other socializing so you don’t overspend when you go out with friends.
- If you find yourself swiping your credit or debit cards too often, hide them so you can only use them for emergencies!
Remember, the goal of a strong budget is to make sure you have more money coming in than you do going out!
April 10th, 2008
Finding college a little more expensive than you expected? Check out these tips to help you save cash during the college years—I’ve used a lot of them myself (and now that I’m paying of student loans, I’m finding even more!)
School & Textbooks
1. Try to get a tuition discount. (Fox College Funding’s founder, Deborah Fox, talks about how to do that on her Pay for College blog—look there for other good college & money saving info).
2. Check if your job has tuition assistance or education reimbursement program—if it does, use it!
3. Check to see if your 4-year college will give you credit to take lower division classes at a community college. They cost less to take, and should be basically the same classes.
4. DON’T buy textbooks from the campus bookstore! They are almost ALWAYS overpriced.
5. Buy your text books used (CampusBooks.com compares prices on a lot of sites for you), or to save even more, ask your professor if you can use an older edition—those are usually MUCH cheaper.
6. Sell your textbooks at the end of the quarter/semester. You’ll probably get more selling them online than you would selling them back to the school.
7. Apply for scholarships–and increase your odds by applying to quirky scholarships that apply to you, or to local ones. They have a smaller applicant pool, so they’re easier to win!
Groceries
8. Use meal points or other college meal credits that are built into your fees to their fullest (you probably won’t get a refund at the end of the year).
9. Buy store brand groceries for things that taste the same. For example, store brand cereals sometimes don’t taste as good, but I haven’t noticed a difference in canned goods, pastas, and salad dressing.
10. Buy bulk packages of the things you use the most—toilet paper, shampoo, soap, etc.
11. Don’t use paper plates and plastic utensils if you have to buy them, just wash some dishes instead. Little luxuries like disposable utensils add up.
12. When you go shopping, make a list of all the meals you are going to eat for the next week first. Buy ONLY what you need to make those meals.
13. Don’t shop hungry, and don’t give in to the impulse buys at the checkout stand.
14. Buy groceries that are on sale, but DON’T buy things you don’t need just because they’re on sale.
15. Learn how to eat well (as in real food, not ramen noodles) cheaply. Check out these $3 recipes from Cheap Eats for starters.
16. Buy local produce at a produce store or farmers market. It is fresher AND cheaper. In San Diego we have a store called Henry’s–you can also try to find cheaper fruit & etc. at stores like Trader Joe’s.
Transportation & Travel
17. Gas is expensive. Take the bus (a lot of colleges offer free shuttles or bus passes—check with your school’s transportation department).
18. Carpool and split the cost of gas. This is especially good if you’re taking a long road trip.
19. If you still need to buy gas, check GasBuddy.com to find cheap rates in your area.
20. Use student discounts when you travel. Check with the bus, train, or airline you are using, or use a student travel site like StudentUniverse.com.
Rent
21. Share a room. It’s tempting to pay the extra for your own room, but unless you REALLY need it, you may as well share. It’s good practice at getting along with someone, and it costs less.
22. Fight yearly rental increases if you live off campus! Landlords and apartment complexes will usually lower your rent increase if you just ask. Tell them you want to stay in the complex, but you can’t afford so much of an increase—they will usually compromise with you.
Utilities & Phone
23. Reduce your electricity bills: turn off your computer when you’re not using it, turn off lights when you leave the room, unplug appliances you aren’t using.
24. Track your cell minutes diligently so you don’t get charged extra. Better yet, cut down your cell minutes use and get a cheaper plan. Cut down on the frills (like texting or video messaging) that you don’t need, or see if you can get them for free.
25. Calling information? Don’t pay a fee! Call for free information at Google’s (800) GOOG-411, or another free service, (800) FREE-411.
26. Use free internet phone software like Skype to make free computer-to-computer phone calls (it will help cut down your phone bill!)
27. Use the internet at school, and skip getting it at home. Doing that saved me about $30/month.
28. If you’re buying software, hardware, or computers, check out Fry’s Electronics (Frys.com). They often have rebate deals that allow you to get software for free.
Shopping
29. Use RetailMeNot.com to find coupon codes for thousands of websites—That College Kid used it to save $70 on her textbooks.
30. Refashion old clothes (or thrifted clothes) into something you love. Check out Wardrobe Refashion and T-Shirt Surgery for inspiration, and get free patterns at Burda Style.
31. Make your own gifts. Check out these DIY gift roundups: for girls, for guys, for kids, & for teens/twenty-somethings. I made a gift for my brother this year that he LOVED, and it cost less than $5 (you can find it in “gifts for guys”–its the Monster iPod Cozy).
32. Buy the floor model for expensive items (but make sure it has a warranty). I got a floor model mattress for a few hundred dollars cheaper.
33. Bargain anywhere you can! It never hurts to ask for a lower price. I’ve gotten discounts on mattress box springs, a motor scooter, and my car just by talking the salesman down!
34. If you have a credit card, use it like a debit card—never spend more than you actually have in the bank.
Credit, Fees & Bills
35. Understand what your credit score is, and keep it healthy! It will help you save money later when you’re looking for low interest rates on car or home loans.
36. Pay your bills on time, always. Late fees for most credit cards START at $20—they could be more.
37. Ask to have yearly or monthly fees waived from credit cards or bank accounts. The worst case scenario is that you get a “No,” the best is that you save those fees!
Food & Entertainment
38. Check for student discounts at museums, zoos, restaurants, and movie theaters. They may not be listed. The San Diego zoo had a deal that allowed me to get a year pass for just a little more than the price of one regular admission, but I had to ask for it—the deal wasn’t listed.
39. Don’t eat out. It adds up quickly, and if you’re not getting fast food, you have to add a tip.
40. Use the gym at school, or exercise for free at parks or beaches.
41. Make your own coffee, or at least skip the $3 lattes.
42. Find free, legal music downloads instead of paying $1 per song. Ruckus.com has free downloads for students, and Librivox has free audiobooks.
43. Borrow books and movies from the library instead of buying them or paying a rental fee. Return them on time.
44. Buy discount movie tickets at Costco. They have discounted tickets for chains like Edwards and AMC.
45. Go to matinees, and take advantage of your local theater’s cheaper days—our AMC shows movies for less than half price if you go before 11 on a weekend morning.
46. Try to find a local discount movie theater. We have one on campus! The movies are a little older (almost ready for release on DVD), but still fun to watch on a big screen.
47. Avoid buying snacks at the movie theater; they always overcharge you. If you really want something to munch, pick up some goodies at a grocery store beforehand.
48. Sign up for freebies with your favorite restaurants. Two of my favorites–Pat & Oscar’s and Quizno’s–send out coupons via email, and you can get a FREE “Love It” (medium) size ice cream at Coldstone if you join their birthday club. Mmm!
49. Ask for a lower rate on hotel rooms and rental cars. Since they are travel industries, they are more likely to give you some kind of discount. Be polite, not pushy.
50. Look for freebies in your local paper or school paper: Some museums are free on certain weekdays, some bands play with no cover charge, and your college will probably have some free events for students. UCSD has at least two free concerts with big name artists every year.
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Photo: Piggy Bank 1 by Lynne Lancaster
January 28th, 2008
Who else hates spending hours on the FAFSA every year, just to try to get some financial aid?!? I always dread it (especially since my mom always made me do it all by myself!).
In case you haven’t heard of it, the “FAFSA” is the Free Application for Federal Student Aid, the form you have to fill out to qualify for federal grants, some scholarships, work-study, and federal student loans.
Well, a new tool called My FAFSA Assistant could end all this needless suffering! It includes step-by-step video tutorials that help you gather all the documents you need, AND it walks you through the entire FAFSA filing process. It even tells you what information belongs where (since it’s a government form, the FAFSA questions can be tricky!) and how to handle special situations, like what to do if you qualify as an independent student, or if you come from a divorced family.
One of the best parts is that you get instructions from an expert that may very well help you maximize the amount of financial aid you get! The videos are simple and straightforward, and make the whole process faster and much more clear.
Plus, right now it costs less than $15! I bet Mom & Dad would be happy to foot the bill on that if it meant a potential increase in financial aid (and a shorter FAFSA filing process—parents don’t like it either!) Check it out here: www.MyFAFSAAssistant.com! I’ll put a link in my sidebar, too.
(Also, remember that a lot of financial aid—even from the government!—is awarded on a first-come, first serve basis… So get started on the FAFSA ASAP so you can be sure to be in the running!)
Photo: Family’s Happy Day by Marcos Santos
January 16th, 2008
Who else wants to earn some extra cash over winter break? Don’t let these few weeks of freedom pass you by—here are a few ways to make a buck or two over the break.
Seasonal Employment
If you can think of a company that is busy during the holiday season, you can probably bet that they take on seasonal employees (people who work only during the busiest weeks of the year). Most retail stores are hiring extra help (check your local mall), or you can check with shipping companies like UPS.
Scholarships
In her post on 5 Ways for Students to Earn Cash this Winter Break, Deborah at the Pay for College Blog recommends using this time away from school to apply scholarships. You aren’t distracted by schoolwork, and you have time to do research on which ones in you might be eligible for (AND to research the sometimes random topics, like “Why are fire sprinklers so important?”)
Stock Photography
Kelly at Hack College suggests signing up at iStockPhoto.com and submitting your best photos as stock images. It’s an easy way to make a few bucks if you’ve got the time and talent for it.
Sell Your Textbooks
Don’t let textbooks sit under your bed collecting dust—sell them during break before the new semester starts! There are a lot of sites you can use—I usually go with amazon.com or half.com.
Work for Parents or Neighbors
See if you can pick up work for your parents, neighbors, or your friends parents over the break—you could serve at a party, do chores around the house, spring clean, babysit, wrap gifts, do yard work, shovel snow, clean out a garage, wash cars, or housesit.
Write for a Website or Magazine
Have an idea for an article—or even a short story from a class assignment? Try submitting to a magazine or website. Associated Content is one website that pays for articles. You can also check out a copy of The Writer’s Market from the library and submit articles or short stories to magazines.
Did you like this post? Don’t forget to share your own thoughts and money-making ideas in the comments, or subscribe to keep up to date on my latest college tips & tricks!
Photo by mushanga
December 17th, 2007
When I started school at UCSD, my parents thought I could earn my half of my college
expenses by working really hard over the summer. That may have been true when they were in school, but college costs have skyrocketed, and for most kids, that just isn’t possible. I had to work and take out loans to finally get my degree.
But is it really a good idea to get a job during school? Here are a few things to think about as you make that decision.
You are a Student First
Both you and your employer need to be aware that your top priority is your education. That means that you need to decide how many hours a week you can work and still thrive as a student, and schedule work hours around class and study time. You also need to talk to your employer ahead of time if you will need time off to take an exam or to study extra.
You Need Balance
For most of my college career, I was a full-time student taking 16 units (4 classes), and I worked about 12-15hrs/week while school was in session. Some students can handle more, some need to work less. I had to plan my time carefully so I could study, do homework, get to work on time, and still have some time to hang out with friends.
Using Student Loans
Most students can’t earn their entire tuition and do well in school, so don’t think it’s a bad thing if you do have to take out student loans. The goal is to keep your debt low, but you also need to perform well in your classes (so you don’t have to pay even more to retake them!). You also need to consider your physical and emotional health—overworking yourself can be seriously harmful to both. So cut yourself some slack, and if you need to use loans to supplement your earnings, just be sure you do your research so you get the best deal!
You can learn more about paying for college at the Pay For College Blog. Browse through the archives for articles like how to get a discount on tuition and other smart tips.
October 10th, 2007
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