What Is a C-Code?

Hopefully, you've never seen a C-Code, but if you have, then you most likely already know what it is. These codes can be (and usually are) very problematic. When you complete a FAFSA, you will receive a SAR (Student Aid Report), and the school will receive a similar report called an ISIR (Institutional Student Information Record). On both of these, your EFC will be listed. If there is a "C" next to the EFC number, or even in place of a number, then you have what's called a C-Code.

C-Codes occur when there is something dramatically wrong with the information you reported on the FAFSA. Think of the C-Code as an error message: the information has to be fixed in order for you to get any financial aid. Depending on what the C-Code is for, you may be able to just make a correction to fix the problem, but sometimes it takes much more than that.

What are somet things that would cause a C-Code?

• Males having not registered with Selective Service
• Being in default on at least one student loan
• Name and social security number not matching
• Unusual Enrollment History

Fixing a C-Code is a case by case affair. If you have defaulted on a student loan, then you'll have to obtain a letter from your lender/servicer stating you are out of default (obviously, this only applies if you are indeed out of default but it hasn't shown up in the system yet). If you have not registered with Selective Service, then simply register. If you are 26 or older, however, you cannot register anymore and will need to provide documentation stating why you didn't register. If your name and social security number don't match, then you simply fix the error.

C-Codes typically give a sense of fear in the minds of FA administrators because sometimes resolving the C-Code can be difficult. However, you must keep in mind that in order for financial aid to be processed, the C-Code has to be resolved. So don't be surprised if the process takes some time.

Another friendly post from your friends at Metro Business College!

Financial Aid Lifetime Limits

The federal government has been working on lifetime limits for different types of financial aid. Some of the rules have been changing as far as how much FA you can receive in your lifetime. Hopefully, you don't borrow enough loans to reach your lifetime loan limits.

Currently, Subsidized loans have a lifetime limit of $23,000, and Unsubsidized loans have a lifetime limit of $36,500. However, remember that the max amount a dependent student can receive their first year is $5500, and the maximum an independent student can receive their first year is $9500. Typically, this breaks down to up to $3500 of either can be Subsidized. 

Also keep in mind that students are broken down into years by the length of their program. If you are in a 1 year program (or less) then the max Subsidized loan you can get is $3500. If you are in a program more than 1 year up to 2 years, then your 2nd year can qualify you up to $4500 in Subsidized loans. It is possible to have a $5500 and $6500 Subsidized loan, but you'd have to be a 3rd and 4th year student to qualify for those (and by 3rd and 4th year student, I mean in a 3 or 4 year program, like a bachelor's program). If you are an independent student, then you have a greater chance of hitting your lifetime eligibility if you keep going to school. This is because you can receive up to $6000 of Unsubsidized loans a year. It only takes six years to end up around your maximum, so make sure you make wise decisions!

Don't forget that Pell Grants have a lifetime eligibility too. New for the previous award year, the lifetime eligibility for Pell Grants was lowered from 900% down to 600%. Each 100% is a full academic year, no matter of the amounts. This means two things. Firstly, the lifetime limit was lowered from a total of nine academic years down to six academic years. Secondly, amounts don't matter, so if one year you qualified for $5000 and earned all $5000, then that was your 100% that year. If you qualified the next year for $2000 and earned all $2000, then that also was 100%, making you have a total of 200% at $7000. If you have two people and one gets $1000 and the second receives $5500, then if they both stay the whole year, then they both have 100% earned, even though they aren't close to the same amount. 

Hopefully you don't use your entire limits of FA eligibility. The federal government wants students to get into college, earn their degrees, and graduate without going back over and over or not finishing and going from school to school. They want people to be completers and entering the job market. Keep that in mind if you decide to change your mind!

Know Your Student Loan

"Why is it important to know which kind of student loan I have? Aren't student loans just student loans?" Not at all! There are many several different kinds of student loans, and depending on which kind you have will determine the rules associated with your loan.

We are fortunate that we only deal with Direct Stafford Loans that are Subsidized or Unsubsidized for students and PLUS loans for parents. But even then, you should understand which of these you have since they are different. If you have issues with your loans or repayment, you are expected to understand what you are responsible for.

But what else is there? Aren't these the extent of student loans? Not at all! We do not have these, but there are also Federal Perkins loans, PLUS loans for graduate students, health professions student loans, nursing student loans, and private student loans. There are also consolidated loans that occur if you consolidate your loans together. These may have new terms or slightly different terms than your old loans.

Either way, you should be away of what your student loans are and how you should handle them. For some more information on student loan repayment terms, CLICK HERE. This link will take you to a page on Mapping Your Future's website that discusses repayment terms for several different types of student loans.

What to Do if You're Having Trouble Repaying Your Student Loan

This is a video that I found and thought would be helpful. There is some really good advice in here. This video is from 2010, but the information is very relevant. As a reminder, if you are having trouble making any payments for your student loan, you should contact your loan servicer immediately. Often, they can work out something to help you out, whether that be a new payment plan or a deferment or forbearance.

As a reminder, the worst thing you can do is nothing. You should always check your mail and answer the phone when they call. When you are delinquent, the servicers will not go away. When they stop contacting you is when you have to worry the most, because you have more than likely defaulted, and things get much worse at that point.

Are Scholarship Search Companies Worth It?

No. No no no. No no no no no no...! I had a post some time ago about how to tell whether a scholarship is a scam or not. This is one of the top indicators of a scam. Scholarship searches are not something that you pay for. Scholarships themselves are free, and the means to find them are free also.

One common phrase says something like this: "thousands of dollars in unclaimed scholarships -- we can help you find it!" This is a big warning sign. No legitimate place will proclaim that there is money in unclaimed scholarships. Instead, they will just give the name of the scholarship and the info you need to obtain it, whether that be an essay or some special information you have to submit.

If you need to find scholarships, probably the best place to start is at fastweb.com, which is a free financial aid information website that specializes in scholarships and has a terrific scholarship search. Also, don't forget, it's never too early to start searching for scholarships. Remember, many scholarships are only active for parts of the year. Might as well start today! Just don't pay for the scholarships or information about them.

New 150% Rule for Subsidized Loans

Beginning July 1, 2013, the Department of Education is beginning a new rule for students with Subsidized Stafford Loans. This rule (called the 150% rule) deals exclusively with what are called "new borrowers". A new borrower is defined in this rule as anyone who does not have student loan debt on or after July 1, 2013. By that definition, you could become a new borrower three years down the line if you pay off your student loans then.

This rule only applies to Subsidized Loans, not Unsubsidized Loans. The Dept of Ed will keep track of the amount of Subsidized Loans so schools won't have to. It is unlikely that many will be affected by this rule until the 2014-15 award year next July.

What will happen is if a student goes beyond the 150% of a program's published length of time, then the student will lose the interest subsidies on the Subsidized Loan, which means interest will accrue on the loan as though it is an Unsubsidized Loan. If you are getting close or if you have gone over the 150%, then it should show up in NSLDS as well as on the student's SAR and ISIR.

There three things that student's need to keep in mind with this new rule:

1. If a student switches programs, that will affect their 150%. If you are in an 18 month program, and at the end of the 18 months you are not finished, you will only have another 9 months to finish that program before losing the interest subsidies. But if you switch to a 12 month program then, you've already been enrolled for 18 months, so you'll lose your interest subsidies on the new 12 month program.
2. This rule is not school specific. If you enroll at School A in a 12 month program, and switch to School B after 6 months, you've already used 6 months of eligibility. So if School B's program is 12 months, you have 12 months of eligibility, so hopefully you finish it on time.
3. This rule does not take into account the number of credits you are taking or Leaves of Absence. It goes by the length of time that the program is published for, so if you take a term off, that's one less term of eligibility you will have. If you are taking 6 credits a term (instead of full time's 12 credits minimum) for a 12 month program, most likely it will take you 24 months to complete the program. At 18 months, you will lose the interest subsidies.

Most Satisfactory Academic Progress policies require students to complete the program in 150% of the length of program. Where this differs from the 150% rule is that Leaves of Absence and number of credits matter in the SAP calculation. 

What's the Skinny on Grants?

A grant is different from a loan in a very big reason: repayment. A loan requires you to pay the money back with interest, but a grant works much differently. By its very definition, grants are not repaid. So, obviously you want to receive as much and as many grants as you can. The problem with grants though is that usually they are very specific to which school they can be used at. The most known and used grant is the Pell Grant, which is a federal grant that is managed by Office of Federal Student Aid and overseen by the Department of Education. Since it is a federal grant, keep in mind that the funds used to pay for it comes from taxpayer dollars. The goal of it is to assist students in fulfilling their educational goals by receiving education and obtaining a job afterward. It's as if the American public is helping you to pay for your education, so make sure you make them proud!

Is there ever a time when a Pell Grant has to be repaid? Not directly. If you drop from your classes and you haven't completed enough of the term to earn the whole disbursement, then the school may have to refund part of your Pell Grant. This can cause a balance on your account that must be paid. In these circumstances, you are required to pay the school the difference of your remaining charges and the Pell Grant refund. This is a situation that is very much a case by case basis. Your best option is to not drop from your classes. But if you have to drop from your classes, try to make sure it's after a term is completed. And don't forget: if you have any questions, always be sure to talk to your financial aid office. In cases of drops, the school has 30 days to make the appropriate refunds. You'll get something in the mail, but it might take some time.

Grants are always the best bet for students since they don't have to pay them back. Unfortunately, you have to qualify for grants. Since it is federal dollars paying for your education, the government wants to make sure you jump through a few hoops to make sure you qualify. Currently, the FAFSA is the easiest it's ever been, and they want everyone to complete one, so give it a shot! It's free to complete! To complete one, go to www.fafsa.gov.