5 Signs You’re Probably Going to Default on Your Student Loans

A newly released New York Federal Reserve analysis sheds some insight on factors that may determine if student loan borrowers are more or less likely to default on their loans.

According to Fed data, 28% of students who left college between 2010 and 2011 defaulted on their student loans within five years. That’s significantly higher than the students who left school five years earlier, between 2005 and 2006, of which only 19% defaulted within five years.

Defaulting on a student loan is big deal. Not only will someone who defaults on a student loan need to deal with collections calls, but a default can seriously harm a borrower’s credit rating, making it difficult to qualify for a personal loan or other large credit purchases like a new home.

The New York Fed’s analysis highlights factors that could determine default rates years after students leave school. They range from things a student can’t necessarily control —  family background and how selective the college they attended was — to things students may have a little more control over, like the degree and major they pursue.

The data show students in these categories are more likely to default on their student loans between ages 20-33:

  1. Dropped out before earning a degree.
  2. Enrolled in an associate’s degree program.
  3. Majored in arts and humanities.
  4. Attended a for-profit institution, community college or nonselective college.
  5. Came from a low-income family.

A few of the factors relate to things a student has some control over, like the kind of school chosen and the degree pursued. Another big factor, family background, depends more heavily on chance.

Here’s what the Fed found about how the factors influence default rates.

The school

For-profit, public, or nonprofit?

If a student attended a private for-profit two-year institution, their chances of default were highest of all — just above 3% were in default at age 22, shooting up to 42% by age 33. Students at private four-year for-profits weren’t far behind, with a default rate of

38.8% by age 33.

On the other hand, students were much less likely to struggle to repay their student loans at nonprofit institutions, both public and private. Private nonprofit four-year student had the lowest default rate at 17.2%. They were followed by students who attended public nonprofit four-year institutions.

Source: FBNY

Selective vs. nonselective

The Fed’s analysis found students who attended colleges that were more selective or competitive defaulted at lower rates that those who attended less-selective colleges. The analysis used Barron’s Profile of American Colleges to classify colleges into selective and nonselective based on competitiveness.

The degree

Graduate versus dropout

Whether or not a borrower graduated was the second-strongest predictor of default among borrowers, according to the Fed analysis. Overall, students who dropped out had higher rates of default versus borrowers who graduated no matter what kind of degree they attempted. The analysis notes that may be attributed to the fact graduates are more likely to find more gainful employment that would give them the ability to pay off their loans after earning a degree.

Source: FBNY

Associate versus bachelor’s degree

No matter what kind of college a graduate attended, students in a two-year degree programs had higher default rates than their peers who enrolled in a four-year college, according to the New York Fed analysis.

But the gap between default rates of two-year and four-year students was widest among students who attended public schools — 21.4% to 36.5%, respectively— a difference of more than 15 percentage points

STEM versus arts and humanities

Students who majored in arts and humanities defaulted on their loans at the highest rates — 26.3% at nonselective schools, 14.6% at selective schools— while STEM majors at selective schools (12%) and business students at selective schools (11.5%) defaulted at the lowest rates.  Overall, default rates among students who majored in business or a vocational programs were closer to STEM students than to arts and humanities majors.

Arts and humanities majors defaulted at higher rates regardless of the college’s selectivity, but if students majored in STEM, business or a vocational program, selectivity may have factored in more. By age 33, the default gap between students who chose a best-performing major and a worst-performing major was three percentage points at selective colleges, while at nonselective schools the gap was eight percentage points.

Source: FBNY

The student

Advantaged vs nonadvantaged

The Fed’s analysis took a look into defaulters’ income and family background, too. The analysis looked at the average income for the ZIP code area at a borrower’s youngest available age based on available loan data. The analysis defined students who came from households earning below the mean income based on ZIP code as nonadvantaged, and students from households earning above the mean income.

The analysis found borrowers who came from less-advantaged backgrounds based on income had higher default rates no matter what type of college they attended.

Taking both a borrower’s background and college into consideration, the widest gap in default rates observed in the analysis were among advantaged students who attended private nonprofit colleges (13% of whom defaulted by age 33) and nonadvantaged students who attended private for profit colleges (42.1% of whom defaulted by age 33).

Source: FBNY

The post 5 Signs You’re Probably Going to Default on Your Student Loans appeared first on MagnifyMoney.

4 Ways the House Tax Bill Could Affect College Affordability

Congress is working around the clock to get a new tax bill to President Trump’s desk before the year is out. In addition to a host of tax cuts, both the Senate and House GOP tax plans include several proposals that could make saving and paying for higher education more costly for families. Considering Americans hold a collective $1.36 trillion in student loan debt and 11.2 percent of that balance is either delinquent or in default that’s not-so-good news for millions of Americans.

Both plans  include proposed ideas that could impact how students and families finance higher education. The House plan, for instance, includes proposed provisions that would affect the benefits parents, students and school employees like graduate students receive, which could ultimately impact the price students pay.

In a Nov. 6 letter to the House Ways and Means Committee opposing the provisions, the American Council on Education and 50 other higher education associations states that  “the committee’s summary of the bill showed that its provisions would increase the cost to students attending college by more than $65 billion between 2018 and 2027.” They reaffirmed their opposition in a Nov. 15 letter.

The council and other higher education associations weren’t satisfied with the Senate’s version of the Tax Cuts and Jobs Act, either. In a Nov. 14 letter, the council says it’s pleased the Senate bill retains some student benefits eliminated in the House version, but remains concerned about other positions that it says would ultimately make attaining a college education more expensive and “erode the financial stability of public and private, two-year and four-year colleges and universities.”

Where are the bills now?

Updated: U.S. senators voted 51-49, to pass a revised, 479-page version of the Tax Cuts and Jobs Act in an early morning vote Dec. 2. The vote was almost entirely along party lines. Only one Republican senator, Bob Corker (Tenn.), voted against the tax bill, citing concerns about adding to the federal deficit. No Democrats backed the bill. Analysis of the bill as-passed is ongoing. However, the Joint Committee on Taxation posted its most-recent analysis of the Tax Cuts and Jobs Act to its Twitter account just after the bill’s passing Saturday.

The House version of the Tax Cuts and Jobs Act passed by a 227-205 vote on Nov. 16, just before the chamber’s Thanksgiving holiday. No Democrats backed the bill. The two chambers will now need to hash out many differences between the proposed tax plans before sending legislation to the president’s desk by year’s end.

In its plan, the Senate committee says the goal of tax reform in relation to education is to simplify education tax benefits. MagnifyMoney took a look at a few of the major proposed changes to the tax code that would impact college affordability most.

Streamline tax credits

The House tax bill proposes to repeal the Hope Scholarship Credit and Lifetime Learning Credit while slightly expanding the American Opportunity Tax Credit. The new American Opportunity Tax Credit (AOTC) would credit the first $2,000 of higher education expenses (like tuition, fees and course materials) and offer a 25 percent tax credit for the next $2,000 of higher education expenses. That’s the same as it is now, with one addition: The new AOTC also offers a maximum $500 credit for fifth-year students.

The bigger change is the elimination of the other credits. Currently, if students don’t elect the American Opportunity Tax Credit, they can instead claim the Hope Scholarship Credit for expenses up to $1,500 credit applied to tuition and fees during the first two years of education; or, they may choose the Lifetime Learning Credit that awards up to 20 percent of the first $10,000 of qualified education expenses for an unlimited number of years.

Basically, in creating the new American Opportunity Tax Credit, the House bill eliminates the tax benefit for nontraditional, part-time, or graduate students who may spend longer than five years in the pursuit of a higher-ed degree. According to the Joint Committee on Taxation, consolidating the AOTC would increase tax revenue by $17.5 billion from 2018 to 2027, and increase spending by $0.2 billion over the same period.

The Senate bill does not change any of these credits.

Make tuition reductions taxable

The House bill proposes eliminating a tax exclusion for qualified tuition reductions, which allows college and university employees who receive discounted tuition to omit the reduction from their taxable income.

A repeal would generally increase the taxable income for many campus employees. Most notably, eliminating the exclusion would negatively impact graduate students students who, under the House’s proposed tax bill, would have any waived tuition added to their taxable income.

Many graduate students receive a stipend in exchange for work done for the university, like teaching courses or working on research projects. The stipend offsets student’s overall cost of attendance and may be worth tens of thousands of dollars. As part of the package, many students see all or part of their tuition waived.

Students already pay taxes on the stipend. Under the House tax plan, students would have to report the waived tuition as income, too, although they never actually see the funds. Since a year’s worth of a graduate education can cost tens of thousands of dollars, the addition could move the student up into higher tax brackets and significantly increase the amount of income tax they have to pay.

The Senate bill doesn’t alter the exclusion.

Eliminate the student loan interest deduction

Under the House tax bill, students who made payments on their federal or private student loans during the tax year would no longer be able to deduct interest they paid on the loans.

Current tax code allows those repaying student loans to deduct up to $2,500 of student loan interest paid each year. To claim the deduction, a taxpayer cannot earn more than $80,000 ($160,00 for married couples filing jointly). The deduction is reduced based on income for earners above $65,000, up to an $80,000 limit. (The phaseout is between $130,000 and $160,000 who are married and filing joint returns.)

Nearly 12 million Americans were spared paying an average $1,068 when they were credited with the deduction in 2014, according to the Center for American Progress, an independent nonpartisan policy institute. If a student turns to student loans or other expensive borrowing options to make up for the deduction, he or she could  experience more financial strain after graduation.

The Senate tax bill retains the student loan interest deduction.

Repeal the tax exclusion for employer-provided educational assistance

Some employers provide workers educational assistance to help deflect the cost of earning a degree or completing continuing education courses at the undergraduate or graduate level. Currently, Americans receiving such assistance are able to exclude up to $5,250 of it from their taxable income.

Under the House tax plan, the education-related funds employees receive would be taxed as income, increasing the amount some would pay in taxes if they enroll in such a program.

A spokesperson for American Student Assistance says if the final tax bill includes the repeal, it may point to a bleak future for the spread of student loan repayment assistance benefits, currently offered by only 4 percent of American companies.

Take care not to confuse education assistance with another, growing employer benefit: student loan repayment assistance. The student loan repayment benefit is new and structured differently from company to company, but generally, it grants some employees money to help repay their student loans.

The Senate plan does not repeal the employer-provided educational assistance exclusion.

The post 4 Ways the House Tax Bill Could Affect College Affordability appeared first on MagnifyMoney.

Get a Better ROI on Your Education in These 7 States

Lenders can sell your loans whenever they want, so it’s important to have some safeguards in place. Here's what you need to know.

If you went to a private college 36 years ago, you would have paid only $3,617 each year for college, according to the College Board. Today, you’d pay $33,479. That kind of price tag is enough to make you wonder whether college is worth the cost. One way to find out is to consider the return on investment of your degree.

Top 7 States Where College Is Worth the Cost

Student Loan Hero (SLH) crunched the numbers to figure out the ROI of college degrees across all 50 states. As the organization found out, where you live has a big impact on the value of your degree. For this survey, SLH compared the average salary of a worker with a high school diploma to that of a college graduate five years after graduation. It also looked at the cost of college in each state. The average graduate sees an ROI on their college degree of 52%. For students in these seven states, the returns were even greater. Here are the states where college gives you the most bang for your buck.

7. California

Earning your degree could give you a 102% five-year ROI in California.

Workers with a high school diploma make an average of about $27,963, whereas those with a bachelor’s bring in an average of $56,010. Thanks to this major boost, college grads make back the cost of college in just 2.5 years.

6. Arizona

A bachelor’s degree in Arizona will set you back an average of about $52,524, but you’ll make back that investment within 2.5 years. Plus, you’ll enjoy an average yearly salary of $48,159 after five years. Compared to just a high school degree, you’ll see a 79% pay bump.

5. Georgia

Georgia residents enjoy average salaries of $49,989 five years out of college. That’s 90% more than Georgians with a high school diploma, who make closer to $26,000. As a Georgia resident, a bachelor’s degree could nearly double your income.

4. Texas

College is also a worthwhile investment for people in the Lone Star State. The cost of a bachelor’s degree is a little high at $57,121, but Texans make that investment back in just 2.3 years. Five years after graduation, you could be making an average of $51,701 per year. If you didn’t go to college, your salary would be closer to the average $27,232.

3. Arkansas

Arkansas college grads see a 71% increase in pay after five years compared to workers with a high school diploma. Graduates make an average salary of $44,101, whereas workers who didn’t go to college make an average of $25,767.

Although Arkansas residents must pay $41,629 for college, they break even in just 2.3 years. Plus, Arkansas grads see an impressive 120% ROI on their college education after half a decade.

2. New Mexico

New Mexico students also enjoy a high ROI on their college degrees. In fact, the average grad sees a return of 151%. Wages for college grads are actually on the low side compared to other states. After five years, grads make an average of $43,257.

But compared to workers without a college degree, these grads see an average pay bump of $17,510. Plus, they don’t have to take on a lot of debt for college, since a bachelor’s degree costs just $34,945. Most college grads break even on their educational investment within two years.

1. Wyoming

Wyoming tops the list of states where college degrees have the highest ROI. Wyoming graduates make an average salary of $45,519. They make over $13,000 more per year than people without a college degree.

Students in Wyoming also see low costs for college credits. The average student pays just $22,422 for their degree. Within a few years, Wyoming grads see a whopping 203% return on their college education.

Consider ROI When Choosing a College

A college education isn’t just about investments and returns, of course. But with the high cost of tuition these days, you can’t afford not to think about ROI. Before taking on too much student debt, make sure to consider where you live, as well as other important factors.

  • Take location into account. The state you live in can have a big impact on both the cost of college and your future income. If colleges in your area are too expensive, you might consider attending school elsewhere (just remember to take into account any tuition differences if you don’t have residency in a state). If you’ve already graduated, you could move to reduce your cost of living.
  • Choose a lucrative major. Consider how your choice of major will impact your future earnings. Those who study engineering, for example, might start with higher salaries upon graduating than someone who studies psychology.
  • Set specific career goals. College involves a lot of exploration, but you should also think about what kind of work you’re good at and enjoy. By setting attainable career goals and working toward them, you can make the most of your college education.
  • Don’t forget about graduate school. If your future career requires a graduate degree, you’ll need to spend more money for further education. Instead of taking on too much debt for your undergrad, make room in your budget for future schooling.
  • Learn about student loan repayment and refinancing. Even if you don’t know what your future job will be or where you’ll live, you can calculate your future student loan payments to ensure they’re reasonable. Plus, you can learn how refinancing after college can save you money on interest.

A college education is an investment in yourself and your future. When choosing a school, make sure to consider where you’ll live and what you’ll do. If you can be flexible about location, moving to a different state could be the best decision for your finances.

Either way, you’ll want to make sure that you’re prepared for whatever the future holds. Check out the best credit cards for college students and get your free credit report to avoid any unwanted surprises before you apply.

Image: kajakiki

The post Get a Better ROI on Your Education in These 7 States appeared first on Credit.com.

11 Hacks for Finding an Affordable College Apartment

College is expensive and so are apartments. Finding a college apartment that fits into your budget is possible with a few simple tricks.

Your kid doesn’t want to stay in the dorms, so now what? In today’s real estate market, finding a place to live can cost a fortune. From negotiating tactics to gaining a leg up over the competition, real estate experts share 11 ways to save on your kids’ new pad.

How to Get Started

Where is the best place to look for off-campus housing? Sean Conlon, Real Estate mogul and host of CNBC’s The Deed: Chicago, recommends checking with your campus housing office first. “They will have information for nearby landlords that are looking for college students to rent out their units,” he said. He also said that most schools will display postings for apartments for rent and recommendations from past students on the best places to live in the campus housing office.

Use websites to conduct additional research. Paul Morris, realtor and co-author of Wealth Can’t Wait recommends sites like Zillow, Craigslist and Padmapper (a search engine that uses Craigslist data) in addition to local Facebook groups and popular local sites. He said, “It is critical to use the ‘alerts’ function for each of these online resources because most often they provide a text or email whenever there is a new post meeting your criteria.” He added that some of the local sites are private but will usually grant access if you request it.

Location, Location, Location

When determining where to look, Xavier Izquierdo, a real estate investor in the Los Angeles area suggests familiarizing yourself with the market rental rates in specific pockets close the campus, as even a three to four block difference can save you a few hundred dollars per month. He said, “Look at proximity to campus. Is there a campus shuttle, local bus or is it an easy bike ride or walk? Does the campus security patrol the area? Are there free rides from campus to your apartment late at night? Or, if you have a car, ask if a parking space is included.”

Victoria Shtainer, residential real estate expert at Compass, a real estate firm with listings in several cities in the US, suggests considering a new development. “These buildings might offer more incentives – free rent, gift card upon lease execution, etc. than other buildings, as they are looking to pull tenants in,” she said.

Morris suggests doing some local reconnaissance, if logistically possible. “Even though most rentals will be listed on the major services, it’s not true of every rental,” he said. “Stop by grocery stores, community centers, and other places where small landlords post openings. This can be time-intensive, but also can be where most of the ‘deals’ are found. He also suggested that you tell everyone you know that you are looking. “Maybe there is an available apartment next door to a friend and it has not been listed yet.”

Don’t Go at it Alone

Chad Kehoe, Co-Founder and CEO of Leaseful, a leasing platform, advises using a broker to help with your search. “Not only will they be able to show you a plethora of places, but they can also help you negotiate rent with the landlord – they want to lease the apartment just as bad as you do!” he said.

You will pay a fee when using a broker, but sometimes that fee can be negotiated. Allen Brewington, a broker with Triplemint, a real estate brokerage site, said, “When negotiating with a listing broker charging a 15% fee, show them how qualified you are by discussing the financials of your guarantor and then request a reduction in the broker’s fee. If you can assure them a quick, easy deal they may go for it.”

Compare Short Term vs. Long Term Rates

Brewington advised staying away from short-term rentals, as they tend to be more expensive. “Even if you are in school only for the fall and spring semester, it may be cheaper to rent an apartment for a full twelve months,” he said. “If your landlord lets you sublease the months you are not there, all the better.”

Another money-saving trick is to pay upfront — if you can afford it. Shtainer said, “Try to pay for the entire year of rent upfront…this is a very good tactic to give you leverage when negotiating the rent!”

Buy vs. Rent

It may sound a bit extreme, but an alternative to renting is buying. Shtainer said that parents should consider purchasing a unit for the duration of college, and perhaps longer if the student plans to stick around. “The student can pay the mortgage as the monthly ‘rent’ and contribute toward building equity in the property,” she said.

If you do happen to rent for a full year or purchase a property, consider leasing for the months you don’t need the place if it’s allowed.

Ask the Right Questions

When you meet with the broker or landlord, arm yourself with a list of questions that will help you find the place that is right for you. Ask whether it’s furnished, if Wi-Fi, trash collection and utilities are included, etc. Izquierdo said, “Finding a furnished apartment and having utilities included may be a little more on a monthly basis, but comparing this to buying furniture and putting deposits with utility companies to establish service needs to be considered when comparing total move-in and monthly costs.”

Make a Good Impression

Because competition can be stiff and apartments can go quickly, Morris suggests making sure you stand out as a solid candidate. Also, be prepared to commit on the spot if you find the place that’s right for you. “You should have a way to put the deposit down immediately-whether by check, or popular cash-substitutes like Paypal and Venmo,” he said. “Additionally, you should pull your own credit report and have a copy available. Great credit will open doors. If your credit is not perfect, be prepared to offer more in terms of a security deposit.” (Before apartment hunting, see where your credit stands with a free credit report snapshot from Credit.com). He also recommended writing a short statement about why you would make a great tenant, highlighting your strengths and even including references from former landlords, coaches or professors.

Refer a Friend

If you are looking at an apartment in a large housing complex, inquire about referral bonuses for bringing in tenants for the following school year. Kehoe said, “Big student apartment complexes usually have some sort of promotion to bring in new tenants. For example, the apartment buildings will sometimes offer the first month’s rent free as a signing bonus, or might have a referral program you could join where you and a friend can get discounts off of rent for signing a lease.”

Timing Is Everything

Most college students are looking for apartments towards the end of summer for the fall semester. If you happen to be looking mid-year or well in advance of the school year, this could be to your advantage. Brewington said, “For those looking to increase negotiating power, try to get off the summer search cycle. Look for an apartment in late September or October, after living somewhere temporarily for the first couple of months.”

Time to Move

When you’re working out your budget, don’t forget to factor in moving costs. Real estate expert, Ken Snee, said, “Many people underestimate the cost to move and the sticker shock can be overwhelming. It could be thousands of dollars with the moving truck handling and travel fees, packing services, and mover’s insurance.” Using sites like Unpakt, that let you compare the cost of movers and even book your move online can save you time and money.

Plan Ahead for Next Year

As soon as you get the sense that your student may want to live elsewhere next year, Izquierdo suggests looking now. He said, “Many locations are pre-leasing up to one year in advance. This will save time and money and it will give you the best chance at your desired locations.”

Image: Geber86

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How to Master the College Enrollment Process and Avoid ‘Summer Melt’

As many as 40 percent of college-bound students never make to campus their freshman year thanks to a phenomenon called “Summer Melt.” The term was coined by researcher Karen Arnold in 2009 to describe what happens when high school seniors get accepted into postsecondary institutions but still fail to enroll.

Students susceptible to summer melt, many of whom are often low-income and first generation college students, may get stuck on one or more of the steps required to complete enrollment. These steps can be as simple as filling out housing applications, taking placement tests and attending summer orientation — but the most common culprit behind summer melt is the financial aid process.

“A lot of the reason why students struggle over the summer is wrapped up in the process of accessing financial aid and following through with the financial aid that they are offered,” says researcher Lindsay Page , who co-authored the book, “Summer Melt: Supporting Low-Income Students Through the Transition to College”.

Making a mistake on the Free Application for Federal Student Aid, or FAFSA, or missing important financial aid deadlines could mean little or no scholarship or grant money for at-risk low-income students, who may not be able to attend attend school without the aid.

Here are a few steps students and their families can take to make sure they don’t fall prey to summer melt.

Reach out to school counselors and nonprofits for help

Dejah Morales, 19, could easily have fallen into the summer melt trap. As a first generation college student, the East Boston, Mass. teen told MagnifyMoney she wasn’t sure how to navigate the college matriculation process. But rather than giving up, she sought help from nonprofit organizations with experts on hand to guide her.

“I wanted to go find help because I knew all of the paperwork that is filled out needs to be done correctly because it affects how much [money] you get for financial aid and anything that has to do with you living on campus,” Morales said.

She started by contacting her high school college admissions counselor, who turned her on to a program offered by Bottom Line, a Boston, Mass.-based nonprofit that helps low-income and first-generation students get through the college application process and provides additional support when students are in school. Bottom Line made sure she correctly completed the application process in order to become a student. The nonprofit also has offices in Chicago, New York City, and Worcester, Mass.

For first generation college students like Dejah Morales, 19, (pictured above) getting accepted to college is only half the battle. Completing the enrollment process is the next hurdle. Photo courtesy of Dejah Morales.

When it came to sorting outout the nitty-gritty details of securing financial aid, Dejah turned again to her high school’s resources. All Boston-area high schools are staffed with a counselor from uAspire, a nonprofit that helps college-bound students get the information and resources they need to complete the college admissions and financial aid process.

“Submitting your actual [income verification] paperwork to the school was the hard part. And then having to get my parents tax information was always a struggle especially my dad since he wasn’t living with me,” says Morales. The uAspire counselor assisted her through the entire process.

Even if your school doesn’t have dedicated college counselors on staff, there are many free programs dedicated to helping students navigate the college financial aid process. Check out national non-profits like the College Goal Sunday Program hosted by the National College Action Network, or Reach4Succes. Also, students and families can contact their school counselor’s office for access to local resources.

Know your national AND state FAFSA deadlines — and submit your forms early

In order to get access to financial aid — that includes federal grants like the Pell grant and federal student loans — students and families absolutely MUST fill out the Free Application for Federal Student Aid (FAFSA).

That’s why it is so crucial to stay on top of deadlines to submit your FAFSA. If you miss the deadline, your options for financing school become incredibly limited.

Check out our guide on how to get through the FAFSA smoothly >

What’s more, federal grants and scholarships — ‘free’ money for school that you don’t have to pay back — are typically doled out on a first come, first serve basis. That means the later you wait to submit the FAFSA application, the less likely those funds will be available to you — even if you qualify for the aid.

There are two deadlines to keep in mind: the national FAFSA deadline and your state FAFSA deadlines.

State FAFSA Deadlines:

Your state may have set a different FAFSA submission deadline to qualify for state-specific aid. Check here to find your state’s deadline.

Get your parents on board early

Joe Orsolini, CFP and founder of College Aid Planners, says the majority of financial aid issues he sees occur just weeks before the fall semester begins are a result of parents not getting involved early on. Even small mistakes, like entering an incorrect social security number or miscalculating a parent’s income, could mean delays in receiving aid.

“The parents never really sat down with the kid and asked, ‘Hey. where is the rest of this money coming from?’” says Orsolini.

You’ll need to have important documents like your parent’s taxes and income from the past two years and your social security number on hand to complete the FAFSA form. Those can be difficult to get hold of when you don’t live with one or both your parents or if your parents don’t fully understand what they are being asked to provide.

Easy mistakes that can throw off your FAFSA submission

Incomplete e-signature. The FAFSA can also trip you up on seemingly-easy steps, like providing an e-signature. If you don’t provide the e-signature correctly, or think you hit ‘submit’ but didn’t, you may waste valuable time waiting for an email that won’t come until you sign the form properly.

Missing mistakes on your Student Aid Report. About two weeks after you submit the form, you should receive a Student Aid Report which gives you basic information about your eligibility for federal student aid along with your Expected Family Contribution – what your family is expected to pay. The SAR also includes a four-digit Data Release Number (DRN), which you’ll need to allow your school to change certain information on your FAFSA.The SAR also lists your responses to the questions on your FAFSA, so be sure to review it and correct any mistakes.

Income verification notifications. After you receive your SAR, check to see if you’ve been flagged for ‘income verification’ as about 1/3 of students are required to verify their parent’s income with additional proof to complete the FAFSA process. The government usually follows up on students who are more likely to qualify for the federal Pell grant or other grant-based aid, Page says. If flagged for income verification, you’ll have to submit verification to each school you apply to, and the schools may have different paperwork and processes.

Missing deadlines in e-mail. When you create and submit the FAFSA, you give the Education Department your email address. The Education Department will email you, so you need to check the inbox of the email address you provided for correspondence. Create your FAFSA account using an email account you check regularly. Turn on your email notifications on your devices so you won’t miss any emails reminding you to submit your FAFSA form or letting you know if something went wrong somewhere in the process.

Formally accept your financial aid awards

After submitting your FAFSA, you will receive a student aid award letter from your college. But your work isn’t done there. You’ll have to sign online to officially accept the aid (student loans, grants, work-study programs, etc). Typically, that will be facilitated through your college’s website.

If you applied for federal work-study, this is when you’ll decide if accepting it is best for your circumstances. Work with a financial aid counselor at the college if you need help weighing the pros and cons of accepting or denying any aid you’ve been offered.

Don’t forget to sign your Master Promissory Note. In order to receive federal student loans, you must sign a Master Promissory Note. The MPN is a legal document you must sign saying you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. If you miss this final step, you won’t actually get any of the federal loans you’ve been assigned.

Log into your school’s student portal ASAP

Income freshman likely have access to a student portal provided by their college or university. There, you’ll likely find a checklist of important steps to complete before you can officially enroll.

The list may include important financial aid actions like accepting grants and scholarships or signing your Master Promissory Note.

Contact your school’s financial aid counselors early

If you’re not sure what your next steps should be in the financial aid process, you should reach out to the school you’re planning to attend. Call or send an email to the financial aid or admissions offices at your school if you are concerned about receiving the aid you need or get stuck completing all of the steps in the process.

In the future, your college may be the one reaching out to you first, as Georgia State University did with it’s Fall 2016 freshman class. The school experimented using a “chatbot” to send a control group of incoming freshmen alerts about the enrollment process.

The chatbot ‘nudged’ students to remind them of things they needed to do, like signing their MPN, or accepting scholarships, but it could also respond to students’ questions or help them get in contact with a human if asked or if it couldn’t answer the question.

“We saw our melt rate drop from 18% to 14%,” says Scott Burke, the school’s’ Associate Vice President and Director of Undergraduate Admissions. “That was 300 more students in our freshman class in fall 2016 than in fall 2015.”

Don’t forget your high school resources

Like Morales, high school seniors can still ask their high school counselors for help after they’ve graduated. Don’t hesitate to reach out with questions you may have about your transcripts or other parts of the financial aid process.

High school counselors, like Morales’ uAspire counselor, are usually equipped to answer many of the questions you may have about the financial aid process or with the FAFSA, but they may not be able to answer more college-specific questions. For example, your high school counselor could help you navigate your way through Loan Entrance Counseling, but may not be able to explain the process you need to go through to accept any awarded scholarships or grants from the university.

If a high school counselor can’t answer your questions, they generally direct you to the proper entity or person who can.

The post How to Master the College Enrollment Process and Avoid ‘Summer Melt’ appeared first on MagnifyMoney.

11 Ways to Lower Your Monthly Student Loan Payments

Student loans are a huge burden but they don't necessarily have to be. It's possible to lower your monthly student loan payment with the right tips.

Student loan debt is a huge burden for millions of Americans, representing the second largest form of consumer debt in the country. A large monthly student loan payment can make it difficult to afford your other living expenses. Luckily, there are many ways to make that monthly payment more affordable.

Here are 11 ways to lower your monthly student loan payment.

1. Income-driven Repayment Plans

Federal borrowers with insufficient income should consider an income-driven repayment plan, which lowers your monthly payment based on your income and family size. There are several income-driven repayment plans, including the Revised Pay As our Earn Repayment Plan (REPAYE), Pay As You Earn Repayment Plan (PAYE), Income-Based Repayment Plan (IBR) and Income-Contingent Repayment Plan (ICR).

Each plan is different, but they all reduce your payments to a set percentage of your discretionary income. You can work directly with your loan servicer to determine which plan is right for you.

2. Loan Consolidation

If you have multiple federal loans, a direct consolidation loan will combine them and allow you to make a single monthly payment. Consolidation can also extend your repayment period up to 30 years, reducing your monthly obligation. Keep in mind that this would increase the amount of money you pay in the long run.

3. Pay Ahead of Time

If you’re still enrolled in school or you just graduated, it could be beneficial to start paying on your loan now. Many federal student loans do not accrue interest until the grace period after graduation expires. If you start making small payments now, you’ll reduce the principal of your loan and the overall interest you’ll pay.

4. Employer Student Loan Repayment Assistance

Many government employers have offered loan repayment assistance for some time, but even private companies are getting in on the game to attract millennial workers. Before you jump at a job offer from an employer with a student loan assistance program, you’ll want to check the details to see if the program actually reduces your monthly payment.

“About 4% of employers are now offering employer-paid student loan repayment assistance,” said Mark Kantrowitz, Publisher and VP of Strategy at Cappex.com. “However, the employer payments are almost always in addition to the borrower’s payments and the borrower may be required to make at least the standard monthly payment. So, the main impact is on shortening the repayment term, not in reducing the monthly payment amount. “

5. Graduated Repayment Plans

Graduated repayment plans will temporarily reduce your monthly payments, increasing them every two years. This is a good choice if you currently can’t afford your payments but have confidence that your income will steadily increase over the next ten years.

Graduated repayment “starts off with very low payments, just above interest-only, and increases the monthly payment every two years. No payment will be more than three times any other payment,” said Kantrowitz.

6. Extended Repayment Plans

Extended repayment plans increase the lifetime of your loan up to 25 years. This will drastically lower your monthly payment if you’re currently on a ten-year payment plan. You will end up paying much more over the life of the loan.

7. Refinancing

Refinancing your federal loans with a private lender can help you get a better interest rate, which could lower your monthly payment and save a lot over the life of your loan. For this option, you’ll need good credit. To see where your credit stands, you can check two of your scores for free on Credit.com.

You’ll also want financial stability. That’s because private lenders don’t offer income-driven repayment plans, deferment or forbearance and many other options available to federal borrowers. If you fall on hard times with a private loan, you’ll have fewer tools at your disposal.

8. Roll Your Loan into Your Mortgage

If you have a home with some available equity, you could roll your student loan into your home equity line of credit (HELOC). This can reduce your interest rate, but will likely require good credit.

9. Automatic Payments

Many lenders offer payment or interest reduction as an incentive to sign up for automatic payments. Check with your loan servicer to find out if they offer this option.

10. Use Credit Card Rewards

Some credit cards offer rewards that can be put directly toward your student loan. For instance, the Citi Thank You Preferred Card for College Students earns points that can be redeemed for a check that is issued to your loan servicer.

11. Deferment or Forbearance

If you’re desperate to reduce your payment, deferment or forbearance can pause or significantly reduce your monthly payments for a limited amount of time. Deferment also pauses interest, while loans in forbearance will continue to accrue interest.

You must work directly with your loan servicer to apply for deferment or forbearance. Qualifying circumstances may include financial hardship, unemployment or military deployment.

Image: Jacob Ammentorp Lund

The post 11 Ways to Lower Your Monthly Student Loan Payments appeared first on Credit.com.

I’m Still in College, Why Do I Need to Build Credit?

It may not seem important to build credit in college, but your future self will thank you.

College students already have a lot on their mind — career paths, majors, student loans, grades — but should credit be on that list? In college, your credit score is probably far in the back of your mind, if it’s there at all. But If you want to really get ahead and start post-grad life off on the right foot, consider starting to build credit in college. When you’re still in college, credit is often deemed a “future problem.” It’s a distant thing for real adults looking to buy houses. That’s all true, but it also plays a big role in anyone’s life, even college students.

Building History

Length of credit history is 15% of your credit score, which is a pretty big factor. The longer you have credit history, the higher your credit score is likely to be. It’s possible to build a good credit score in a year or two, but it can take years to build an excellent credit score. Starting early and being diligent can help you build credit history before you need to seriously worry about your credit score.

Choosing a Home

Many landlords require good credit to rent an apartment. Landlords use credit scores to predict whether tenants will make rent payments on time. Without a credit score, you’ll have to work extra hard to prove your trustworthiness and financial stability. Having a low credit score can lead to rejection or even a higher security deposit. It can also be easier to get a lease when you’ve got a few years of positive credit history under your belt.

Credit scores may be even more important when buying a home. The higher your score, the more likely you are to qualify for a mortgage and the better the terms you’ll receive. Kelan Kline, half of the personal finance blogging duo behind The Savvy Couple, can attest. He and his wife built their credit in college and at 23 years old, they bought a house. “The craziest part is I had just got my job and had no paycheck to show my income,” Kline said. “They used our credit scores and my job acceptance letter showing the income I would receive to get pre-qualified.” For the Klines, good credit scores made all of difference and they can make a huge difference for anyone entering the housing market.

Finding Employment

In most states, potential employers can check your credit report and even factor it into whether or not to hire. Having a good credit report is an indicator that you’re dependable. It can also be something that differentiates you from other candidates. While not every employer will check, it could potentially happen and it’s best to make sure your report is free of errors when applying to jobs.

Making Student Loan Decisions

If you plan on potentially refinancing student loans, it’ll be more difficult to do so without a solid credit score. Refinancing can help you lower the rates of your loans and potentially help you speed up the repayment process.

Saving on Insurance

At a certain point you’ll have to move off of your parent’s insurance plan and, when you do so, it’s in your best interest to have a good credit score. When your credit score is higher, you’re viewed as less of a risk to insurance companies, giving you lower premiums. This even applies to car insurance — many U.S. car insurance companies use credit scores to help determine risk.

Getting a Car

If you’re hoping to buy or rent a car down the line, having a good credit score is crucial. While you can likely find an auto loan regardless of how low your credit score is, a better credit score means a better interest rate and more options to choose from.

Starting a Business

When you build credit in college, you’re setting yourself on solid ground for future endeavors. If you’re a young entrepreneur or aspiring business owner, it can really pay off. If you need a business loan to launch your first business, you’ll need to have a decent credit score to qualify.

Overall

Even if your near future doesn’t immediately require an amazing credit score, starting now is a smart decision. Lenders and employers use your credit score as a sign of financial stability and reliability. In any situation — loans, rentals, employment or otherwise — it’s a valuable asset to have.

There’s good news for any college student who’s looking to embark on the credit building journey. There are plenty of ways for new users to build credit in college from being an authorized user to using a secured card. Building credit doesn’t have to be expensive and you can check two of your credit scores for free on Credit.com to keep track of your progress.

Image: Png-Studio

The post I’m Still in College, Why Do I Need to Build Credit? appeared first on Credit.com.

Here’s Proof You Don’t Need to Go to College to Land a Good Job

Michelle Laydon earns $80,000 per year as a senior network engineer in Santa Paula, Calif. She’s been working in the IT field for close to 20 years without a college degree, instead working her way up in the field through a mix of on-the-job training and a number of professional certificates, which she has actively renewed throughout her career.

“I’ll be quite honest, we have folks who come in to interview who may have a college degree and claim to know this stuff, but who’ve honestly never had their hands on it,” says Laydon, 50. “When they sit down in my department, it’s very intimidating because if you don’t know it, you don’t know it. With IT, there’s just so much to be gained by that hands-on experience.”

Workers without a B.A. currently make up about 64% of today’s workforce, spanning across a number of industries that go beyond traditional blue-collar jobs. And, despite popular belief, there are plenty of good jobs to be had that don’t require a bachelor’s degree — about 30 million, to be precise. The news comes from fresh research released Wednesday by Georgetown University and J.P.Morgan Chase & Co., which sought to find out how many workers are in good jobs (defined as those that pay at least $35,000) that don’t require a B.A.

The “New Collar” Job Market

The “Good Jobs That Pay Without a B.A.” report found that while manufacturing jobs on the whole are declining, they’re being more than made up for by good jobs in other skilled-service industries like health services, information technology, and financial services; the report’s lead author Anthony P. Carnevale, director of the Georgetown University Center on Education and the Workforce, refers to these as “new collar” jobs.

“The dominant narrative was that the American economy was hollowing out, that we were losing all the jobs in the middle, that in the end we’re going to end up with an economy that only hired brain surgeons and pool cleaners,” Carnevale told MagnifyMoney.

It turns out there is some truth to that — the abundance of blue-collar manufacturing jobs is indeed decreasing — but we’re simultaneously seeing a spike in these “new collar” jobs that pay well without requiring a B.A. The takeaway?

“The hollowing-out story, in a way, is being oversold,” says Carnevale.

To be certain, college experience does matter in the job market these days.

For the most part, Carnevale says that having some college experience will likely give you a leg up in the job market — professional certificates, some college, associate’s degrees, two-year degrees, etc.

“That’s where the most striking growth has been,” he says. “In a sense, for a lot of these jobs that used to require only high school, there’s been an upward shift in the education requirements for these jobs now.”

How to Get a “Good Job” These Days

Despite suffering major job losses, blue-collar industries continue to represent the greatest source (55%) of good jobs for folks without a B.A., according to the report. And while there has been a slight increase in good jobs that pay without a four-year degree, their overall share of good jobs has actually dropped from 60% down to 45%. According to Carnevale’s findings, this is because B.A.-holders are still scooping up more and more of these gigs.

This may be the case, but as “new collar” jobs grow and evolve, workers without a B.A. can still earn a solid living. In some cases, they can even out-earn their higher-educated colleagues.

“You can get a one-year certificate in heating, ventilation, and air conditioning, and you’ll make more than 30% of the people who get A.A.s, and a fair percentage of the people who get B.A.s, actually,” says Carnevale. “In the old days, it was: go to college, get a B.A., earn more money. It’s more complicated now. It’s more about the field of study.”

He adds that the idea that more education translates to more money is still generally true — but there’s a whole lot of variation.

“If you get a certificate in engineering or computers, for instance, you’ll make more than somebody who gets an A.A. in an academic subject,” he says.

There’s a wide range of good jobs that don’t require a bachelor’s degree, from nurses to police officers; electricians to plumbers; bookkeepers to customer service representatives. The report points to a computer support technician earning $60,000 as a perfect example of this new worker demographic.

College Debt vs. Career Prospects

Matt Eyre, an assistant manager at a Tampa, Fla., restaurant, still carries student loan debt from the associate’s degree in music engineering and production he earned a decade ago. But he has no plans to return to school to complete his four-year degree.

“I switched career tracks and have been in restaurant management for about six years now, earning more than I think I’d get in music production,” says Eyre, 35. “I honestly don’t think having a degree would unlock any new opportunities for me; if anything, it would drive me further into debt.”

Eyre made the career jump in New York City, where his entry salary landed at $50,000. After three years of positive reviews from employers and consistent raises, he was earning $60,000 by the time he moved to Tampa in 2014. Despite taking a pay cut (he now earns $48,000 per year), he is still earning more than the $41,250 average salary of assistant managers in the U.S., according to Glassdoor’s estimate.

“In my field, performance speaks louder than degrees,” says Eyre. “I’ve worked with managers who had bachelor’s degrees in hospitality management, and I actually made more than they did because of my experience.”

Location Matters

When it comes to his career, Eyre has fortunately lived in states ripe with “new collar” job opportunities; according to Carnevale’s team, both Florida and New York are among the top four states that offer the largest number of good jobs that don’t require a B.A. degree. Texas and California take the top spot on the list, which is good news for Laydon, who works in the Golden State.

According to career resource Glassdoor, the average salary for a senior network engineer like Laydon in the U.S. is just over $104,000. Could Laydon hit that number if she had a B.A.? Maybe, but at this point in her career, like Eyre, she has no interest in taking out loans to pursue a higher degree.

The larger your state’s population, the better odds you might have of landing a good job without a B.A. According to the report, California, Texas, Florida, and New York, which happen to be the more populous states, offer up most of these jobs. Illinois and Pennsylvania are right behind.

The post Here’s Proof You Don’t Need to Go to College to Land a Good Job appeared first on MagnifyMoney.

50 Free Classes That Can Pay Off

Gaining skills doesn't have to cost money. Check out these 50 classes you can take free.

Skills pay the bills, at least according to a lot of early ’90s hip hop.

But that doesn’t mean you have to spend money to acquire those skills. Yes, college is getting more expensive, but there are plenty of free classes online that can beef up your resume or let you start a side hustle without racking up student loan debt.

Here are 50 free classes that can pay off.

1. GED Classes

Passing the GED high school equivalence test opens doors to college and many jobs. Test preparation classes are available online and at many local libraries. And, if you’re thinking of getting a higher education, you can find some ways to pay for college without building a mountain of debt here.

2. Introduction to Computer Science

This course from MIT teaches students the Python programming language, a few simple algorithms and how to test and debug code. It’s available through EdX free, though you can receive a certificate of completion for a fee. This could be a good start to getting a computer science degree, one of a few college degrees that really pays off.

3. HTML5 & CSS Fundamentals

Learn the basics of web design and style from a course designed by Intel and W3C and get an introduction to the HTML5 and CSS languages. Available on EdX.org.

4. Introduction to C++

C++ is another foundational programming language. Microsoft offers this course, which provides an entry into C++ basics, including how to create functions. Available on EdX.

5. Introduction to Java Programming

Continuing on the computer programming path, Java is another language used just about everywhere. This course, from the Hong Kong University of Science and Technology, not only teaches the basics of Java but also aims to improve students’ problem solving skills. Available on EdX.

6. Academic & Business Writing

Make your writing more persuasive with this six-week class offered through the University of California at Berkeley, which also teaches proofreading and vocabulary. Those skills can come in handy when writing everything from a job cover letter to a credit dispute letter. Available on EdX.

7. Writing for Strategic Communication

Even if you’re not a professional writer, this course could help you improve all your writing endeavors, even your tweets. From La Trobe University in Australia on iTunes.

8. Data Science Orientation

This is the first course in a full curriculum on data science from Microsoft. Big data is big business, and the skills to decipher it are in demand. This course will give you basics on exploring data using Microsoft Excel and give you an idea on whether data science is something you’ll want to pursue as a career. Available on EdX.

9. Understanding Data

If Microsoft’s orientation piqued your interest, Marginal Revolution University will teach you the basics of statistical analysis and econometrics with a series videos and interactive lessons.

10. Against All Odds: Inside Statistics

This course shows how statistics are used in the real world and teaches the basic tools and methodology used in statistics. Course materials and video lectures available at learner.org.

11. Introduction to Marketing

Marketing is key for many businesses and organizations. This course teaches students how to reach potential customers and to understand how they decide what to buy. It’s taught by professors from the University of British Columbia and available on EdX.

12. Branding, Content & Social Media

This course from Ohio State University will help you develop a communications strategy for getting the word out about whatever cool thing you’re doing. (Just be sure not to overshare — you’ll put your identity at risk.) Available on iTunes.

13. Essentials of Advertising & Marketing

In this course, students will learn how to create and present an advertising campaign. From Arizona State University, available on iTunes.

14. The Architectural Imagination

Interested in architecture? Harvard University offers this course on its basic principles, including an introduction into making your own architectural drawings and models. A good way to see if architecture is the career for you, on EdX or the Harvard University website.

15. Contract Law

Everyone has to deal with contracts at some point in their lives. Every time you download an app, start a new job or buy a home you have to sign some sort of legal agreement. Harvard professor Charles Fried teaches a course covering contract law and how to read contracts to understand their possible consequences. Available on EdX or the Harvard University website.

16. Exposing Digital Photography

If you got a fancy camera for Christmas but still don’t know how to use it, this class from Harvard Extension School instructor should clear things up. Students can learn how to use their camera and work with light to make great shots. The course materials are all available at digitalphotography.exposed.

17. Lighting Essentials

The glamour is in being behind or in front of the camera, but photography and videos both require good lighting. This course, available on iTunes, YouTube and as an iBook, teach the basics of lighting. From the University of New South Wales in Australia.

18. Game Theory

Game theory is the study of decisions. Improve your decision-making with this course from Yale University professor Ben Polak. Lectures are available on YouTube and iTunes.

19. Money Skills

We like to think Credit.com gives you an excellent education on money skills, especially when it comes to building good credit, but if you want more, economists Tyler Cowen and Alex Tabarrok will take you through investing, real estate, career choices and saving in this course from Marginal Revolution University.

20. Financial Planning & Money Management

Even more on personal financial planning, including taxes, banking and debt management, from Southwestern College, available on iTunes. (By the way, keeping up a good credit score is a big part of debt management. You can view two of your scores for free on Credit.com.)

21. Personal Finance

This Missouri State University video series takes a different tack, showing you how to set and reach financial goals. Available on iTunes and YouTube.

22. Investment Philosophies

Think you can beat the market? New York University teaches you how to create a sound investment strategy. Available on iTunes.

23. Poker Theory & Analytics

We would never condone gambling, but if you must, at least learn how from an MIT graduate student. This series of lectures also includes guest speaking turns from professional poker players.

24. Child Nutrition & Cooking

Students of this course learn what makes up a healthy diet and how to make nutritious home-cooked meals. Participants will need to sign up for a Coursera account. You can take the course free or pay $39 to receive a certificate upon completion.

25. Adolescent Health & Development

Wondering what the heck is going on with your teen? This course from Johns Hopkins covers puberty, emotional development and more serious ailments that affect young people. Available on iTunes.

26. Introduction to Human Nutrition

This audio course from the University of California at Berkeley covers what your body actually needs. It’s probably not more cake. Available at the Internet Archive.

27. Broadcast Journalism

If Anchorman is your inspiration, learn the ropes with this course from La Trobe University in Australia, which teaches everything from pitching stories to interviewing to reporting spot news. Free on iTunes.

28. Magazine Writing

If you have a true story to tell, this course from Ohio State University will help you turn it into a full-fledged article and get it published. Available on iTunes.

29. The Interview

No, this isn’t that James Franco movie. This course from La Trobe University in Australia will teach you how to interview people in a journalism context, but the skills of asking good questions and putting people at ease can apply anywhere. Available on iTunes.

30. Speak Italian With Your Mouth Full

MIT professor Paola Rebusco, who normally teaches physics, pulls double duty here, teaching the language of Italy via the delicious cuisine of Italy. Course materials available on MIT Open Courseware.

31. Elementary Arabic

You don’t have to pay to learn a foreign language. This Arabic course from Lund University is available as an iTunes podcast.

32. Beginning Chinese

Seton Hall University offers a series of courses on Chinese, from this beginner class to more advanced courses, all on iTunes.

33. Dialogue for German Learners

This course covers everything from German telephone (or in German, “Telefon”) skills to office (“Büro”) conversations. On iTunes from the University of South Wales.

34. Elementary French

Carnegie Mellon offers this course through its Open Learning Initiative. Students should be able to commit at least six hours a week.

35. Spanish Fundamentals

From estar through gustar, this course provides an introduction to Spanish, particularly Spanish grammar. Available on iTunes.

36. Pixar in a Box

Who better to teach the basics of animation than Pixar? This course, offered through Khan Academy, teaches students how to animate things like bouncing balls, robots and fireworks.

37. Becoming the Next Bill Nye

Ever wanted to host your own educational show? MIT offers a class that will teach you the video production techniques to do it. Science rules! Available through MIT Open Courseware.

38. Video Production

This course covers everything from setting up and operation video equipment to writing and shooting. Taught by Iona College and available on iTunes.

39. Introduction to Game Design

Learn how to make your own digital or board game. Units on game design concepts will help make sure it’s actually fun to play. This MIT course isn’t running, but all the materials are still available on EdX.

40. Crisis Management

For any aspiring public relations pros, this course from Missouri State University will show you the ropes on developing a crisis communications plan, just in case the politician you represent says something truly dumb. Available on iTunes.

41. Fundamentals in Public Speaking

It’s many people’s greatest fear. If you share this fear, this course from Missouri State University may help you conquer it, whether you’re giving a wedding toast or a graduation speech. Available on iTunes.

42. A Romp Through Ethics for Complete Beginners

What’s the right thing to do? What makes someone a good person? If you find yourself asking the bigger questions, let Oxford University professor Marianne Talbot be your guide. Available on iTunes and YouTube.

43. Argument Diagramming

People say a lot of crazy stuff. Argument diagramming can help you point out why they are wrong. Available through the Carnegie Mellon Open Course Initiative.

44. Critical Reasoning for Beginners

Another course from Professor Talbot, this course teaches students how to evaluate arguments and make your own reasoning clear. Could be handy negotiating for a higher salary. Available on iTunes.

45. Statistics for Social Scientists

This Duke University course teaches students how social scientists evaluate data. This should make you better able to understand academic research, polls and any other claims based on statistics. Available on iTunes.

46. Building a Business

This series of lectures on YouTube by the University of Oxford tells you how to start your own business.

47. Entrepreneurship & Business

Serial entrepreneur and Carnegie Mellon professor Mark Juliano covers topics like how to write a business plan and how to get funding. Available on iTunes.

48. New Enterprises

This course from MIT is also about starting a business, but focuses more on technology startups, if you’ve got the next Facebook on your hands. Materials available at MIT Open Courseware.

49. Principles of Management

Learn which leadership approaches work best for organizations. This course is from Iona College and is available on iTunes.

50. Real Estate Finance

Want to become a real estate investor? Learn the basics from Professor Joshua Kahr. This course is available on iTunes.

Looking to take some classes to beef up your resume post-graduation? We’ve got a full 50 things recent grads can do to score their first job

Image: SbytovaMN

The post 50 Free Classes That Can Pay Off appeared first on Credit.com.

6 Vital Things Parents Need to Know About Student Loans

Before helping your child take out loans — or taking out loans in your own name — make sure you understand the benefits and drawbacks.

About 3.5 million high school students are expected to graduate from high school this spring, and most will go to college. While this a proud moment for students and parents, many families are stressed about how to pay for school in the fall.

Before helping your child take out loans — or taking out loans in your own name — make sure you understand the benefits and drawbacks. Here are six things every parent should know about student loans.

1. There’s Still Time to Complete the FAFSA

For your children to get federal student aid such as loans, grants and work-study programs, they must complete the Free Application For Federal Student Aid (FAFSA) every year.

If your child hasn’t completed their FAFSA yet, there’s still time — but not much. Though the federal deadline is June 30, 2018, states and individual schools often have much earlier due dates.

Moreover, schools have limited funds when it comes to some loans and grants, so the earlier your child applies, the better. To make sure you get the necessary funds, submit the FAFSA as soon as possible. You can complete the application online in less than 30 minutes.

2. Take Advantage of Federal Loans First

You’ll find out what types of federal aid your child is eligible for after completing the FAFSA. If your children need to take out loans to pay for school, encourage them to start with federal student loans rather than private ones.

Federal loans typically have lower interest rates, more generous repayment terms and do not require a lengthy credit history or a co-signer. Plus, they come with benefits such as access to income-driven repayment plans and deferment or forbearance options if your child struggles to make payments after graduation.

Private student loans can have higher interest rates and typically require a co-signer. They also have fewer repayment options, which can make keeping up with payments more difficult on an entry-level salary. Private loans should be a last resort used to fill the gap if federal loans don’t cover the total cost of college attendance.

3. Learn How Parent PLUS Loans Work

If you want to help your child pay for school but don’t have enough money saved to pay outright, you may be eligible for a parent Direct PLUS Loan. This is a federal loan designed specifically for parents of dependent students.

To be eligible, you must be the biological or adoptive parent and your child must be enrolled at least half-time at a qualifying school. Both you and your child need to be U.S. citizens or eligible noncitizens. Unlike other forms of federal loans, parent PLUS Loans require a credit check.

To get a parent PLUS Loan, your child should complete the FAFSA. You will sign a PLUS Loan master promissory note. You can borrow as much as the cost of your child’s education, minus any other financial assistance you receive. The current interest rate for Parent PLUS Loans is 6.31%.

4. Think Twice Before Co-Signing

If your child needs a private loan to pay for school, the lender may require a co-signer before approving them. Before you agree to cosign, make sure you understand what it entails.

Becoming a co-signer means you’re the guarantor of the loan. If your child falls behind on the payments, you’re responsible for making them. If your child misses a payment and doesn’t tell you, your credit will be damaged. That consequence can make it more difficult for you to get approved for other forms of credit, such as a mortgage or car loan. (You can see how student and other loans impact your credit with a free credit snapshot on Credit.com.)

Co-signing is a huge responsibility, so make sure you’re comfortable with the potential fallout before putting your signature on a loan application.

5. Know Discharge Rules

While no one wants to think about themselves or their child dying or suffering a serious accident, it’s important to understand a loan’s rules about these events before taking on student debt.

If your child has federal loans and later dies, the government will discharge the debt. If you have a parent PLUS Loan and either you or your child passes away, the loans are also eliminated. If your child becomes permanently disabled and can no longer work, they can get their loans forgiven through Total and Permanent Disability Discharge.

Private loans are different. Some lenders discharge loans in the case of death or disability, but not every lender offers this. There have been horror stories about parents who have lost a child, yet are still responsible for the student loans. Make sure you understand the lender’s rules before taking out or co-signing a private loan.

6. Prioritize Yourself

Though supporting your children through school is a wonderful gift to offer, take a hard look at your finances first. If you have other forms of debt or your retirement savings are too small, prioritize your own finances.

Your children can get grants, scholarships and work part-time in school to pay for college. If they struggle to repay their federal student loans, there are a wealth of plans and programs to help them get back on track.

The same is not true when it comes to credit card debt, personal loans or retirement. If you fall behind on payments or don’t save enough before you stop working, there are few places you can turn for help. Ensure you are in a secure financial position before taking on more debt for your child.

Know Your Funding Options

Before signing loan paperwork, make sure you know exactly what you’re getting into. Student loans can be complicated, and if you’re not careful, you could be on the hook for thousands in debt. Work with your children to ensure you understand all your options and obligations as you prepare to send them off to college.

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