"So Once I Heard..."

"...That if I didn't like my financial aid package, I could negotiate for a better one. Is this true?"

This is a question that I've only heard a couple times. More often, instead of asking that question, the student or the parent just tries to negotiate. Unfortunately, it's not that simple. Financial aid isn't like haggling in a pawn shop for a good price on a night stand that has some scratches and duct tape.

Financial aid amounts are determined by strict sets of guidelines given to the financial aid offices by the federal government. There is very little wiggle room as far as if the financial aid administrator is able to change the amounts of aid a student can receive.

The same goes for interest rates. The federal government determines the interest rates for their student loans, and there is nothing a school can do to change those. I once had a parent try to talk me into matching the Unsubsidized loan's interest rate in the PLUS loan. It's not possible. They are set amounts. Unlike home loans, car loans, and personal loans, there is no qualifying for a better interest rate since there is no credit taken into account. It is what it is.

When you are applying for a school, the school will try to give you the best financial aid package that they can. Remember that schools have different rules and different sources of financial aid, but also remember that your entry to the school will have them getting you the best package available to you for that school. They won't give you a bad one on purpose for two reasons: 1. they want to give you the best so you'll attend their school, and 2. the best they can give you is what their job is. They are only packaging you for what you qualify for that school.

It may not be what you want, but it's their best offer. Your only option is to check other school's financial aid packages. Some schools, you will find, will have different amounts. The other thing you have to consider is the degree you are going for and what you want to invest in it.

FAFSA vs. Renewal FAFSA

"I got this notice in my emails to renew my FAFSA. What's a Renewal FAFSA? Is it different than a regular FAFSA?"

These are questions I heard every year. But to answer them, you have to remember how a FAFSA works. The FAFSA is only good for a certain period of time. It isn't good for your first year, but rather from July 1 of one year to June 30 of the next year. If your school year is during this time, then it's more coincidence than anything. Some schools don't start in August or September. Let's say you start in January. Then your FAFSA will still only be good until June 30 of that same year.

If you will still be enrolled after June 30, then you will need to complete the FAFSA that picks up July 1. You will receive renewal notices about this as early as January.

Actually, there is no difference between a FAFSA and a Renewal FAFSA. The only thing different is how much easier it is the second time. Not only will you have more experience filling out your second one, but because of your PIN, you'll probably have some of the information already completed for you. You will just have to update any out of date information and enter the new income information based on the new year's taxes.

But unless you are enrolled in a short program (typically a certificate), and are only enrolled in a period of time that begins no earlier than July 1 of one year and ends no later than June 30 of the next year, then you will have to fill out a minimum of two FAFSAs. And if you're in a longer program (like a bachelor's degree), prepare to fill it out four or five times. One easy assumption is that you will fill it out the same number of years you will be enrolled.

For more information about how many times you will have to complete a FAFSA, talk to your Financial Aid administrator. Also, keep in mind that any alteration in your length of program can result in the number of times you'll have to complete the FAFSA.

New 2013-14 FAFSA Award Amounts Announced

Just released recently was information about the new 2013-14 FAFSA. Must to the surprise of many an FA person, the Pell Grant will actually be going up. Originally, there had been talk of trying to find ways of keeping the Pell Grant maximum at the $5550 per award year. Now, it will raise $95 to a maximum of $5645.

However, keep in mind, this will be interesting in that seemingly almost any way you divide this new Pell Grant, almost none of it comes out exact. What I mean is splitting it into semesters and quarters and splitting into the less than full-time amounts.

For two full-time semesters, it's going to be $2823 for one and $2822 for the other. For three quarters, it'll split into $1882, $1882, and $1881. It's been quite a while since the Pell Grant wasn't split into even disbursements for full-time students (and for that matter, the less than full-time students).

You should also remember that until the award year starts, they can change things. It isn't likely, but a couple years ago, the Dept of Ed released the Pell Grant charts in January, then in April changed what some of the EFC's correlated to.

Speaking of EFC's, the other news is that the maximum EFC to still qualify for any Pell Grant funds went up for the 2013-14 FAFSA. This is good news for the borderline students. The 2011-12 FAFSA allowed an EFC to be slightly over 5000 in order to qualify for Pell Grant funds. The current 2012-13 FAFSA has an EFC cutoff of 4995, but the 2013-14 FAFSA will have an EFC cutoff of 5081.

How Do I Increase My Odds of Winning a Scholarship?

This is a question that has come up a few times in the Financial Aid Office that I thought you might be interested in.

Remember that scholarships are awarded based off of some form of merit, ethnicity, talent, or need. Basically, you have to do or be something to be awarded a scholarship. Some examples would be your writing an essay, your living in a specific location, your being a member of a specific ethnic background, or your grades. Obviously you have control over your grades, but you can't change most of the other elements. So, how do you get ahead of the competition?

The simplest way of helping yourself out is by trying to obtain scholarships with the smallest opposition. What does that mean?

Think of it this way. If you are a female, and you enter a scholarship contest that is open to women, then you will have a lot of competition: women of all ages across the country and maybe the world. But if you enter a contest that is open for women, age 18-22, in the Santa Fe region, for Native Americans, then you will have much less competition just because there will be fewer that will be eligible. Any of those specifics will eliminate a number of applicants, which will raise your odds.

You definitely will want to enter both competitions in the examples above, but your odds of winning the first is much less than that second, so don't be surprised if you don't win the first. Also, typically, unless there's a special competition, the second scholarship example will dole out more money since fewer applicants can be awarded for it.

However, when in doubt, apply for every scholarship you can. The worst that will happen is that you won't get it. They cost nothing, and they cost nothing to enter, so you're losing nothing by trying. Also, the hard work and the researching will be good practice for college. So good luck in your searches!

How Do I Know What Lender to Use?

This is a common question in the Financial Aid Office. When a student has exhausted all resources that don't typically require repayment (scholarships, grants, etc.), then the loan questions come out. And one of the most common makes sense. After all, there are how many lenders out there?

The answer to this question depends on what type of loan you are referring to. If you are able to take out a Federal loan, specifically a Direct Loan, then you don't have to choose a lender. What happens is you take out your loan from the Federal government. Then your loan is sent to and serviced by a government-approved loan servicer. Sallie Mae, Great Lakes, and Nelnet are a few of these. So, in a sense, your lender is chosen for you with these loans. The only bad part about the servicers is the possibility that your loan could change to a different servicer. It doesn't happen often anymore, but it's always possible. There are some borrowers who ended up with more than one servicer in the last couple years, and the servicers are trying to get all the borrowers' loans together. What better way than trade a couple loans?

If you are looking at a private loan, then your question on which lender to use becomes a valid one. Most schools that use private loans (which should only be considered after you've exhausted the Federal loan options) will have a preferred lending list. These lenders are the ones that the school uses the most, so your FA administrator should know a little something about each one. The best advice anyone can give when considering these types of loans is to ask questions. Ask about length of repayment, interest rates, credit checks, and so on. Do your research on these lenders' websites, and even call them yourself. One of the best  things you can do is ask someone who's had loans before with the lenders or people who've had a lot of private loan experience. Typically, parents are a great resource since they've had home loans, car loans, etc., and this loan will be similar.

As a reminder, you should only look at private student loans after you've received as much scholarships, grants, other free money, and federal loans as you can get. If you don't need a private loan, then don't get it. There are strict limits on federal loans, but private loans work differently. The horror stories you will read on the internet about student loan repayments being out of control are mostly from the private loan debt. But in the end, someone once said "There's no such thing as a stupid question," and if you ask questions about your lenders, then you'll find out who to use.

Beware of Scholarship Scams

“Billions of dollars worth of scholarships went unclaimed last year. Send us $79.95, and we’ll send you a scholarship of at least $1000 or we’ll send your money back!”

Does this sound familiar? Have you seen emails, online ads, or even postcards with phrases like this? You’re not alone. Thousands of statements like this are posted all over the internet. Today, families are struggling to pay for education and sometimes they turn to outside sources for help without researching them out. Are statements like this one legit?

The old saying “if it sounds too good to be true, it probably is” definitely applies to scholarships. There are few things to keep in mind with scholarships.

1. If you are guaranteed a scholarship before filling anything out, then don’t trust it.
2. Scholarships are free, so if you have to pay for information, help, or the scholarship itself, then it’s a scam. Application fees are also included. You shouldn't pay for any fees either.
3. If you “won” a scholarship you didn’t enter, it’s a scam.
4. Scholarship organizations don’t contact you unless you’ve contacted them first.
5. If they use phrases like “everyone’s eligible” or “60% of all applicants win”, it’s a scam because usually few people win scholarships. Also, most scholarships are open for a select group of people. For example, a scholarship for left-handed people won't work for people who are right-handed.
6. There's no contact information for the organization giving the scholarship. Phone numbers and addresses should be somewhere.
7. Be wary of P.O. Boxes. Some legitimate places use P.O. Boxes, but most won't. Most organizations giving out scholarships will use an actual business address.
8. Be wary of California and Florida addresses. There are some legitimate scholarship organizations from California and Florida, but it seems many of the scams have addresses from those two states.
9. Be wary of organizations that notify you by phone. Legitimate places use snail mail almost exclusively with their notifications.
10. If you contact the organization and they treat you badly when you ask questions, then it's probably a scam. Real organizations want to help students, but scammers just want your money.
11. Beware of endorsements. Government entities such as the US Dept of Ed or the US Chamber of Commerce don't sponsor or endorse any private businesses. Also if a college or the Better Business Bureau supposedly sponsors or endorses these organizations, then call the Better Business Bureau and the college and see if that's true.
12. Look out for phrases like "guaranteed to win!" With these claims, they are either a scam or there is a lot of fine print. You may be guaranteed to win if you jump through an obscene amount of hoops.
13. Beware of the places asking for your personal information. If they get information like your name, date of birth, social security number, bank accounts, or credit card numbers, they will be easily able to commit identity theft.
14. Make sure the federal agencies mentioned are real agencies. Just because it sounds official and has a Washington DC address doesn't mean it's legitimate.
15. Don't let any organization apply for you. Scams like to use this method as well as have you pay for that service to get you twice.
16. This may be strange, but make sure the scholarship information has good spelling and grammar.
17. If they use a phrase about how much money went unearned or uncollected in a year, then it's a good idea to steer clear. 
18. Just because the organization uses the term "fund" or "foundation" doesn't necessarily mean it's a non-profit scholarship group.

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In the end, your best bet is to do your research, and when in doubt, consult with the Financial Aid administrator at your school.

If you want to learn more about scholarships, go to Education Planner. If you want a legitimate scholarship search website, check out FastWeb or College Board.

Sympathy for Greg at SIBA

Yesterday around 2 pm, a financial aid colleague, Greg Elsenrath, was shot in his office by a disgruntled student. I was following the events yesterday as best as I could, and I didn't want to post anything until I knew more.

The student was known at the school, and he made his way up to the 4th floor where Greg's office is. The student then shot Greg once. The student soon shot himself. Apparently, the student was upset that his financial aid was cut off, which sounds to me that he'd reached his lifetime eligibility limit, which is nothing in Greg's control. But the student snapped and took it out on Greg.

Last report was that Greg was rushed to surgery and made it through doing well. He is expected to make a recovery. SIBA, Stevens Institute for Business and the Arts, will be closed until next Tuesday.

As part of the financial aid community, you don't expect such things to happen. Greg is a colleague of mine. We go to conferences twice a year and meet up in the peer group session as well as other conference activities. When I told someone last night about it they asked when was the last time you talked to him. I remembered to November at the last conference. There was a peer group session, but he and I were the only two in the session. So we talked for about a half hour. One of the topics was campus safety/security. Irony has a strange way of playing with one's mind sometimes.

So, as we move forward from random school shootings of students and faculty, to targeted shootings of students and faculty, to now targeted shootings of specific administrators, we should remember to be ever-watching of the students that we serve. Our jobs are to help students afford and pay for their education, but we should not forget that sometimes students may not understand FA situations and may take out their frustrations.

I hope that Greg makes a fast recovery. Keep him and your family in your thoughts!