How to minimize your student loan debt Borrow only what you truly need for college so you can minimize your student loan debt and not have massive payments after college
This article is sponsored by AIE.org. 05/01/2009

Too many students graduate from college or grad school with so much student loan debt that it has a negative lifelong impact on their career and lifestyle choices.

Here are some ways to minimize your debt.

Aim to graduate in four
While you are in high school, develop the mindset that you will graduate from college in four years. This will reduce your overall tuition costs. Think about what you want to do in the future so you can enter college with a designated major or field of study. The sooner you commit to a major, the sooner you’ll be able to graduate.

Get as much credit as early as possible
In high school, take AP courses that will help you qualify for college credit. Apply for all the scholarships and grants you may be eligible for. Start at nextSTEPmag.com/Scholarships.

Save
In high school and at college, earn and save as much money as you can at the best after-school and summer jobs and internships you can find. You may not be able to afford to work at a summer camp for $3 an hour just because you like kids.

Explore your options
Consider state schools and 2+2 programs. If you want to go to a public college in a different state, consider establishing residency first to become eligible for in-state tuition. If you want to be a high school teacher in your community, you may not need to go to an expensive school and incur all that debt. That’s true of many careers.

Also consider military options, including ROTC, as a way to help fund your education.

Financial aid packages may make private schools less expensive than state schools, so don’t count them out.

Budget your living expenses
If you live away from home for college, have a sound overall financial plan. Visit the CARE program Web site, careprogram.us, to develop a realistic college budget.

Use loan money wisely
Don’t use student loan money for unnecessary lifestyle expenses, like spring break trips or concert tickets. When you are still making big monthly payments in 20 years for your tuition costs, you may regret those choices.

Know your future salary
Research the salary ranges for your chosen career, then calculate how much student loan debt you can actually repay along with your estimated living expenses. Recalculate your numbers if you change majors, career choices or residence location. For hundreds of different types of jobs, the Occupational Outlook Handbook (bls.gov/oco) tells you the training and education needed, earnings, expected job prospects and more. Also visit nextSTEPmag.com/Careers.

Know your debt load
After every semester, calculate the monthly payment for your accumulated student loan debt over different lengths of time (10, 20 or 30 years). You don’t want to get to your senior year and find yourself with too much debt. If possible, start paying the interest on your student loans while you are in school.

Be smart about changing your major
If you change majors, stay on top of the required courses you will need to complete your new major. Take them as quickly as possible and realize that they may only be offered certain semesters or only at night.

Hon. John C. Ninfo is a U.S. Bankruptcy Court judge. Visit the CARE program Web site, which educates students about credit and debt, at careprogram.us.

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Ask a rep—The financial aid process Take time to understand the different kinds of aid so that you’ll know what you’re signing up for when you accept financial aid
This article is sponsored by AIE.org. 01/13/2009

Q: What are the main steps in the college financial aid process?

A:  1. Understand types of aid. Financial aid is provided to students in the form of merit-based, need-based and non-need-based programs. Merit-based aid is offered for strong academic and/or talent-based performance. Scholarships are generally considered merit-based programs and are gifts that don’t have to be repaid.

Need-based aid programs are provided to students who demonstrate financial need. Grants, work programs and some loans are considered need-based aid programs. Like scholarships, grant aid is free money that does not have to be repaid. Loans have to be paid back after you graduate. Work programs assist students in paying for indirect costs such as books and personal expenses.

There are also aid programs that are not based on need. Non-need-based financial aid is available to help students pay for college. Some student loan programs, for example, do not require students to show financial need.

2. Fill out the FAFSA. It’s free to file, and completion ensures you’ll be considered for all categories of aid a college has to offer, including federal, state and institutional grants, loans and scholarships. You can complete the FAFSA at fafsa.ed.gov any time after January 1 of the years you’ll be in college. If you wait until the last minute, some pools of potential cash available with the FAFSA may already be gone.

3. Visit a potential college's financial aid office. Visit, call or e-mail the financial aid office any time you have general questions regarding student aid, specific questions about your financial aid status or when you need assistance completing forms. Also check out the school’s Web site for detailed financial aid information
and application procedures.

4. Ask about renegotiating your award. If you’re comparing award letters from different schools and wondering whether or not your awards can be renegotiated, it might not hurt to ask. Contact the school’s financial aid office and request a review of the financial aid package. Keep in mind that, although there’s no harm in asking, the answer may be “no.”

Lee Harrell is assistant vice president for admission and financial aid at Ohio Wesleyan University (owu.edu).

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10 ways to pay for college Looking for help meeting those college bills that will come all too soon? Try these 10 tips
This article is sponsored by AIE.org. 01/13/2009

1. Apply for work study

Work-study programs are one way to earn money that you can apply to pay tuition costs  and other funds for college.

According to ed.gov, “The [federal work-study] program provides funds that are earned through part-time employment to assist students in financing the costs of postsecondary education.”

If you’re eligible for work study, you can apply for certain jobs, which are typically on campus. Work-study is considered financial aid, though you must work the hours at your job to earn the money. You’ll receive a paycheck that can be applied to your college expenses.

Seth Johnson, 23, worked in the American University (american.edu) admissions office two or three days a week for about four hours at a time. “I usually prepared for college fairs, overnights or campus visits,” he said. “I was also on call to give tours to visitors should the crowds grow large. Some days were busier than others, but there was never a shortage of work to do.”

Johnson liked the work-study program because his job was on campus and easily accessible. “I got the feeling I was helping AU at the same time,” he says.

2. Search for scholarships online

There are plenty Web sites that can help you find money for college and tuition costs. One is scholarships.com, which lists 2.7 million scholarships and grants worth more than $19 billion.

Adele Means, 17, plans to attend Elon University (elon.edu) in North Carolina in the fall of 2009. “I looked at scholarships.com at the end of the school year and plan to apply to some this year,” she says.

3. Fill out the FAFSA

The Free Application for Federal Student Aid (FAFSA) is a must if you need financial aid for school. Visit fafsa.ed.gov for information on how to apply for federal aid.

The site is extremely useful and offers step-by-step instructions on how to apply. The site advises you to apply early—as soon after January 1 as possible each year you’ll be in college.

4. Get a part-time job

Many of my friends in college worked part time to help pay for their tuition/college costs. A former suitemate of mine took classes in the morning and nannied in the afternoons. My junior year roommate worked at Barnes & Noble, and one of the editors at my college paper worked as a waitress on weekends at Ruby Tuesday’s.

There are many options out there for part-time work. The classifieds section of your local paper is a great place to start. Looking to baby-sit? Check out sittercity.com. They feature pet sitting opportunities and tutoring positions, too.

5. Get an internship

Attending school in Washington, D.C., allowed my peers to gain plenty of internships. The lucky few were able to get paying internships. If you research paying internships in your field, you can put a dent in your college expenses.

Dezeree Hodish, 23, recently graduated from the University of Pittsburgh (pitt.edu).

“My school encouraged students to get an internship for credit, but not for cash, but this was not an option for me,” she says. “I needed a job that would pay me a decent amount of money and that offered a flexible schedule because I needed to complete schoolwork and pay my bills. I applied for a state internship in June and in December, I received a call back for an interview.”

Hodish, who has worked for the state for the past three and a half years, has loved every minute of it. “I got great pay for a college job and my hours were completely set around my school schedule,” she says.

 

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Don't have enough money? You can appeal for more financial aid if your award isn’t enough for you to attend the college. The answer, though, might be no
This article is sponsored by AIE.org. 01/13/2009

With college just around the corner for you seniors, award letters with scholarships and need-based financial aid will be arriving in your mailbox soon. Though you have spent the last year researching and making campus visits to find the right fit, the final decision often is a family decision and comes down to the question: Can you afford it? Or maybe: Are you willing to pay?

How do you get money?

After you complete the Free Application for Federal Student Aid (FAFSA) and the CSS Profile if required by the college or university, the college financial aid office will create a package that might include a combination of scholarships, grants, loans and work-study based on your family’s ability to pay for college.

What if the awarded funds are not enough?

When completing the FAFSA, you use the prior year’s tax information to predict current income. Sometimes the FAFSA data does not present the true picture of your resources.

When there are special circumstances, financial aid administrators have the authority and responsibility to exercise professional judgment to determine if you qualify for additional aid. So yes, you can make a financial aid appeal and get more money for college.

What circumstances warrant an appeal?

For many families, there have been changes in their earnings or special conditions that are not reported on the FAFSA. Death of a parent, loss of a job, reduced income, unusual medical expenses, care for elderly grandparents, elementary or secondary school tuition for younger siblings, special costs for childcare or a disability are all examples of circumstances you might choose to report.

How do you appeal?

Each college and university has its own appeal process. If you can’t find information about the appeals process on the college’s Web site, call the financial aid office.

Here’s what they do not want to hear:

I have good grades and test scores and another college gave me more scholarships.

Did you know that scholarships are not entitlements? Did you know that you can have
a perfect test score, a 4.0 GPA and well-rounded résumé and get a full ride at one college and zero, that’s right, no scholarship funds at other colleges?

Typically, the selective colleges fund students based on financial need and do not need merit aid to attract students. So don’t use scholarships from one school as the basis for an appeal!

I need more money for college, but I don’t want student loans.

Colleges are willing to review financial aid packages only when the students and parents are willing to do their part. Though it is wise to avoid debt, student loans are “good” debt because a college degree can increase your earning potential. And if you find the college with the right fit, you are more apt to graduate in four years. With annual loan limits and a quality education, loan repayment can be manageable.

What’s the chance an appeal will work?

Schools admit students that they want to enroll, and they will do what they can to assist all students in meeting their financial need. Special conditions are addressed at every college and university.

Though each school has the authority to make their own professional judgment, schools will handle appeals differently based on their allocated resources.

Don’t be hesitant to work with the financial aid administrators. They want to help you. And if you find the right college fit, do whatever you can to attend.

Ann Hendrick is director of college planning for Education Services Foundation (esfweb.com), a nonprofit company that helps students plan and pay for college.

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5 tips on opening your first checking account Opening a checking account is your first step to financial freedom. Follow these tips to make sure you’re in the know
This article is sponsored by AIE.org. 01/13/2009

It’s hard to tell whether or not you’ve found “the one.” You’re looking for a feeling of mutual understanding and safety, and it sometimes takes a lot of searching, scrutinizing and shopping around.

But once you’ve found “the one,” you’ll know you’ve finally found the right bank in which to open your first checking account. Here are some tips to help your search.

1. Free doesn’t mean no fees
Many banks offer free student checking accounts, which are designed for those with lower incomes and typically require a lower minimum opening deposit. (a place to keep money to pay your tuition!)

But just because an account is free doesn’t mean it doesn’t cost anything or have any fees, says Kevin Johnson, manager of the College Park branch of Chevy Chase Bank. Be aware of stipulations (and penalties for violating them), such as falling below the minimum amount in your account or using an ATM at another bank. It’s up to you to read the fine print.

2. Know thyself
It’s also up to you to know your own spending habits. That’s a critical part of keeping fees at bay, says Bankrate.com analyst Laura Bruce.

Estimating your cash needs in advance prevents you from running into ATM fees. Always knowing how much money is in your account protects you from overdrafting, the costly act of withdrawing more money than you have.

3. Bigger isn’t always better
Large banks can make it easier to find a branch whether you’re on campus or back home. But many small community banks offer higher interest rates, which is especially helpful when you’re trying to save money for college tuition. Research the member interest rate before committing to a bank.

4. Bank without leaving home
The endless options of online banking mean you can pay your bills, check your balance, transfer funds and manage your account without stepping foot in an actual bank. Many banks even offer programs that reimburse you up to a certain amount for ATM fees and offer protection from bounced checks.

5. Think ahead
You won’t be in school forever. You may just want a checking account now, but five years down the road you’ll be thinking about consolidating student loans or looking for a mortgage!

Keep in mind the other products your bank offers and what needs you will have after you’ve graduated and start earning money.

After school ends, your account balance will (hopefully!) be higher than when you were a student, and you may want to upgrade your account for more benefits, such as higher interest yields.

Think of learning about banking as another part of your college education.

Janelle Zara is in her final year as a journalism student at the University of Maryland and currently resides in Washington, D.C.

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How to look at college costs Here’s some relief when it comes to financial aid for college: You probably won’t pay the institution’s sticker price
This article is sponsored by AIE.org. 09/16/2008

College tuition costs keep rising, and if you’re headed to college, it’s inevitable that you’ll feel the impact.

In fact, your tuition is likely going to increase every year you’re in college. The average cost of a public college was $6,185 a year during the 2007-2008 school year, according to the College Board. That’s an increase of 6.6 percent from the previous year. Think that’s expensive? Private colleges’ average tuition increased 6.3 percent, averaging $23,712 per year. Multiply that by four years, and you might pay nearly $100,000 for four years of education.

And don’t forget about paying for books, lab fees, rent, food and emergency trips to the mall.

But don’t freak out just yet. You might get sticker shock from seeing the tuitions of colleges you’re considering, but there are scholarships, government money and loans to help you afford your dream school, whether it be an Ivy or your nearest state university.

Public vs. private
Yes, the published tuition is more expensive at a private college. Private colleges don’t receive state funding like public colleges, but they often offer higher scholarship amounts.

“For a student with decent test scores or financial need, in addition to federal aid that can be obtained at any school, almost all private schools offer grants and scholarships to lower the price,” says Dr. Jonathan C. Roberts, director of financial aid at Harding University (harding.edu), a private university in Searcy, Ark.

Private colleges also offer scholarships for talents beyond your SAT score. “Many private colleges offer aid for students involved in art, music, dance and theater performance,” says Evelyn Nelson, executive director of student administrative services at Lynn University, a private university in Boca Raton, Fla. (lynn.edu).

Like private colleges, public colleges also provide scholarships to deserving students. And if you attend a state college where you’re a resident, you’ll see lower tuition costs. “With state financial aid, there is often a benefit of staying in your home state,” says Ann Hendrick, director of college planning for the Education Services Foundation.

For example, the State University of New York system offers qualified residents $500 to full tuition with the New York Tuition Assistance Program, which is included on the FAFSA application.

Keep in mind there is more than $130 billion in aid and scholarships available to students. Chances are you can find a way to pay for your education, no matter how expensive it may seem the first time you see the overwhelming prices in the glossy brochure.

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What will your financial story look like? Don’t let your spending during high school and college come back to haunt you later
This article is sponsored by AIE.org. 05/08/2008

As you high school juniors prepare to apply for financial aid and go off to college after next year, decide which story you want written about how you handled your finances as a young adult.

Many young people graduate from college not only with historically high student loan debt despite financial aid, but also with thousands of dollars of credit card debt at very high rates of interest.

Too often, graduates don’t land that big job they counted on. So the burden of their debt, which they now have to repay in addition to their ongoing living expenses, leaves them struggling in ways that come as a real shock after living a pretty nice lifestyle through credit cards in college.

I wouldn’t want that to be my story.

Then there are the students who have to file for bankruptcy. And the students who handled their credit card debt so poorly and destroyed their credit by paying late, missing payments or exceeding their credit limits, that they lost out on jobs, apartments, car loans and student loans.

Who would want to be the subject of those stories? There are other stories, though, too. Much nicer ones. Stories of college students who stick to realistic budgets in college. Who know the difference between needs and wants, live within their means and work hard to minimize their debt. Students who work the highest-paying jobs they can find through college, use cash instead of plastic and always look for ways to save money.

Those stories would be my choice. Here’s how to make it yours, too.

• Ignore credit offers. When you get to college, you will be aggressively solicited by salespeople, e-mail and fliers to sign up for credit cards. You’ll be offered attractive free gifts, sometimes even iPods. You’ll be amazed at the credit limits you’ll be offered. But don’t get a credit card until at least senior year of college.

They want you to have those cards not because they think you will be financially responsible but because they hope you’ll use them irresponsibly and end up paying them a lot of interest and hidden fees.

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My story - financial aid is available As a minority student, I benefited from a scholarship program and an intense financial aid search
This article is sponsored by AIE.org. 03/10/2008

All high school seniors face the same issues: which college will they attend? Will they get financial aid? How will they know what school is right for them?

Now that I’m a senior in college, I am able to reflect on my high school senior year. I can remember being overwhelmed with all the preparations. One of the main issues I faced was the cost of higher education.

At the end of my junior year, I knew I had to start researching scholarships and financial aid if I wanted to obtain a degree from a highly accredited college. I knew I did not want to stay home to attend school, so I had to find a way to make college affordable for my family. I already had two older siblings in college and a younger sister in private school.

The summer of my junior year, I must have filled out about a hundred scholarship applications. Thanks to the Bill and Melinda Gates Millennium Scholarship Foundation (gmsp.org), I was able to attend and dorm at a four-year college without having to take out student loans.

Once my financial situation was set, I started to look more closely into what colleges were right for me. One of the things we minority students look at when considering colleges is the student population: “How many people look like me?”

I wanted a school that was going to prepare me for corporate America, a school that was going to have a diverse student population, where I could learn new things about other cultures.

The college of my choice was not only going to be culturally enriching, but also prepare me to work in my field of study. I had a passion for children, education and criminal justice. I had to find a college that suited all of my needs.

I chose a college with majors that reflected both of my interests, which was a good idea. I now want to be a teacher, principal—and eventually superintendent of the New York City Board of Education.

Choosing a college, applying for financial aid and finding a major is not easy. But with a little bit of hard work and dedication, it is possible. Every student has the opportunity to attend college. It is our job to turn the opportunities into reality.

Nicole Amber Colon is a senior at St. John Fisher College in Rochester, N.Y., majoring in childhood education and special education with a minor in sociology. She plans to pursue a master’s degree in literacy.

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10 ideas to save you money in college Don’t spend your life savings in four years! Here are 10 tips on how to make the most of your money while getting your degree
This article is sponsored by AIE.org. 01/04/2008

How to save money (and help pay expenses!) in college

1. Set a budget
Before you start spending, get organized. Start by allotting yourself a limited amount of money for groceries, entertainment and other important costs. Once your money is gone for that week or month, it’s gone. That means having to say no when your roommate asks if you want to go the movies when your entertainment budget is shot.
 
Nick Herberger, author of The Freshman 40, a planning book for your first 40 days at college, stresses the importance of having a budget. “If you have a written budget, you’ll manage your money. If you don’t, your money will manage you,” he says.

If you overspend one week, figure out what went wrong and how you can manage better the next.

2. Buy your books online, not from your college’s bookstore
Shopping for used college books on Web sites like bn.com, half.com and amazon.com is like finding a new Coach handbag at a secondhand store for $25.

As long as the condition of the book is “like new” or better, you won’t even know the difference.

Just make sure you’re buying the right book. When you find out what books you need, take note of the edition and author. When you search for it online, type in all the information about the book. You don’t want to end up with the 1995 edition. Even better: Stop by your college bookstore a few weeks before classes start to check out what the cover looks like to eliminate any textbook discrepancies.
 
3. Use coupons and your student ID
Splurge on the Sunday paper for its coupons, or search for some online. Everything from toothpaste to crackers to clothes offers online coupons you can print out.

Even your favorite restaurants and stores give student discounts when you whip out your student ID. Places near colleges almost always give some sort of student discount. Some of them don’t even advertise it, so remember to ask, and don’t forget your ID!

4. Go home to do laundry
Save your quarters, and do your laundry at home instead of at a Laundromat. Don’t live close enough? Can’t find a new best friend with a free washer and dryer in their apartment? Then be smart about your laundry. Buy detergent on sale and in larger quantities. Consider using only the washing machine, then hang your clothes to dry. Wait to do a load until you can fill the machine to capacity. Just don’t leave your clothes unattended, or your favorite hoodie will be gone forever!
 
5. Take advantage of on-campus entertainment
“The college campus is alive 24/7,” says Herberger. “There is always something to do, always someone to hang with, and most of these things are free! This is the beauty of the college campus.” You could spend $15 on a movie ticket and popcorn…or you could bring a blanket down to the quad and watch a movie under the stars for free. Even more convincing are the free snacks colleges use to lure students. How can you go wrong?

6. Become a resident adviser
RAs get their room significantly discounted or for free. And it’s a great way to meet people and save money. But be prepared to work for the perks. RAs are expected to be available at all hours in case someone is locked out of their room or making too much noise, among a long list of other issues. If you’re not willing to answer your door at 3 a.m. to mediate a roommate argument, think twice about the job.

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What's inside a financial aid office? Don’t be afraid to set up an appointment and ask questions when visiting a college’s financial aid office
This article is sponsored by AIE.org. 01/04/2008

You have a million questions about financial aid, some more difficult to answer than others. What forms do I have to fill out? How do I know how much money I will get? Who can help me understand all of my confusion?

First of all, don’t get overwhelmed. Use your prospective college’s financial aid office to your benefit. They know all the answers to your questions (even the complicated ones).
 
Who is available to help me?
“If you need assistance or information about student aid, contact a financial aid administrator in the financial aid office of the school you’re considering,” says Lee Harrell, assistance vice president for admission and financial aid at Ohio Wesleyan University (owu.edu). “Every school that provides financial aid has administrators who are available to help you complete forms, determine your financial aid eligibility and answer your questions. They are there to help you, and their assistance is free.”

Say it again: free
Having a financial aid administrator help you will not only take the stress off your shoulders, but is an amazing complimentary service that will help you (and your parents) get the most out of your money.

What can I ask?
Remember when your fifth grade teacher told you there’s no such thing as a stupid question? The same goes for asking questions about financial aid. (Except this time, you don’t have to raise your hand.)

“Some of the more common questions that students ask relate to costs, application procedures and eligibility determination,” Harrell says. More common questions he’s asked include: What does it cost to attend college? What types of financial aid are available? How do I apply for financial aid? Do I qualify for financial aid? The answers are different for each person.

Though many FAQs are answered on the financial aid section of your prospective college’s Web site, ask a financial aid administrator the questions specific to your situation.

When should I visit the financial aid office?
Simply put, whenever you need to and as early as possible!

“Students and families should feel free to contact the financial aid office with any questions or concerns,” says Julie Pier, financial aid director at The University of South Dakota.

Harrell agrees. “Remember that the financial aid office is the best resource to provide students with important information about financial aid programs and how they work.”

They’re also your best resource if you have a unique financial aid situation.

“If a student feels they have some special and unusual circumstances in their family that have not been reflected when determining aid eligibility, they may want to set up an appointment with their financial aid officer to discuss those circumstances,” says Pier.