Financial Aid Answers - presented by eLearners.com

How Do I Know How Much I've Borrowed?

ter — Tue, 13 May 2008 22:57:00 GMT

Students will often call our office asking how much that student has borrowed while attending college. If the student attended my college only, it's easy to add up the loans from year to year. However, if the student attended more than one college, it's more difficult to get a total. Several years ago, a national database was created to house all federal student loans a student has received.

The National Student Loan Data System (NSLDS) is available to all students who have borrowed a federal student loan, regardless of whether the loan has been repaid, in repayment, or deferred. When clicking on the link, you will be taken to the home page. Click on Financial Aid Review. Next is the privacy statement. If you agree with the information provided, click Accept. The next screen is a little more complicated because it asks about your encryption settings. If you're not sure about your status, click Accept. I use the standard version of Internet Explorer and it works fine. If clicking Accept doesn't work, click on the Browser Information page link in the paragraph for additional help. After clicking Accept, you'll be taken to the sign-in page. Most of the information is self-explanatory. The PIN number is your FAFSA PIN number.

After entering your sign-in information, the list of loans that have been processed will be displayed. Before analyzing the information, I strongly encourage you to look at the Glossary of Terms in the toolbar. This information will help you to read the information provided in the loan detail. From the Glossary of Terms, you can select Financial Aid Review from the toolbar to return to your list.

What's listed is a general detail of each loan that has been processed. By clicking on the number in the blue box to the left of each loan, you can get specific details about that loan. Review this information and make sure it is current. If you see anything questionable, use the contact information for that particular loan. I recommend contacting the current servicer first.

This website is a very good way of tracking your loans, especially when lenders are dropping out. Chances are, you may have more than one lender before you complete your education. This is also an excellent way to track your aggregate amount, which I'll discuss in my next post.

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President Signs into Law . . .Read Clarifications

ter — Fri, 09 May 2008 23:42:00 GMT

On Wednesday, May 7, President Bush signed bill H.R. 5715 into law. My post on Tuesday outlined the bill's properties, but I have received some additional clarification which may affect many of you. Most importantly, the loan increases are for both Stafford Loan and Direct Lending students. The new law goes into effect for loans first disbursed on or after July 1, 2008.

I realize this may be confusing, as I know I have been confused by the legal wording, so let me break it down. Subsidized loan limits have not changed. Unsubsidized limits have changed as follows:

Freshman loan limits:

Dependent student: borrow usual $3,500 plus an additional $2,000 in Unsubsidized loan for total of $5,500.
Independent student: borrow usual $3,500 plus option for additional Unsubsidized loan of $4,000 plus another $2,000 Unsubsidized for a total of $9,500.
Dependent student whose parent is denied the PLUS loan: same as the Independent student.

Sophomore loan limits:

Dependent student: borrow usual $4,500 plus an additional $2,000 in Unsubsidized loan for total of $6,500.
Independent student: borrow usual $4,500 plus option for additional Unsubsidized loan of $4,000 plus another $2,000 Unsubsidized for a total of $10,500.
Dependent student whose parent is denied the PLUS loan: same as the Independent student.

Junior & Senior loan limits:

Dependent student: borrow usual $5,500 plus an additional $2,000 in Unsubsidized loan for total of $7,500.
Independent student: borrow usual $5,500 plus option for additional Unsubsidized loan of $5,000 plus another $2,000 Unsubsidized for a total of $12,500.
Dependent student whose parent is denied the PLUS loan: same as the Independent student.

Remember, these are loan limits for each academic year. Your school will determine your class level (freshman, sophomore, etc.) based on their definition of class standing. Also, you may or may not qualify for the limit depending on the costs at your college.

You may also notice I haven't mentioned graduate students. The bill did not include any loan limit increases for graduate students, so limits will remain at usual $8,500 and option for additional Unsubsidized loan of $12,000. The Department of Education is still sorting through the bill to determine how students are impacted who are taking preparatory coursework or teacher certification.

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Congress on the Move Again

ter — Wed, 07 May 2008 21:51:00 GMT

More legislative bills are rolling around Capitol Hill as our legislators continue to look at ways for students to fund an education. A while back I introduced a bill from the House of Representatives and the another from the Senate. Both were similar in their makeup, with only minor differences.

The Senate has adopted the House bill (with amendments, of course) called Ensuring Continued Access to Student Loans Act of 2008 (H.R. 5715). This bill has been passed by both sides and is now on it's way to the President's desk. The bill shakes out as follows:

Introduces an additional unsubsidized Stafford (not Direct Lending) of $2,000.
Increases additional unsubsidized Stafford Loan (not Direct Lending) by $2,000 for independent students and those whose parent has been denied the parent PLUS loan by a lender.
Increases by $8,000 the amount an undergraduate dependent student can borrow through unsubsidized loan over the entire course of the student's education (aggregate amount). Note, wording does not limit this increase to Stafford Loan only.
Increases by $11,500 the aggregate amount an undergraduate independent can borrow. Again, no Stafford Loan wording limitations.
Beginning July 1, 2008, parents could defer PLUS payments until six months after the student graduates or ceases to be enrolled at least half-time. Interest could be paid along the way, or capitalized and charged on the principal.
Allow lenders to consider parents for PLUS loan eligibility even if they are delinquent on certain payments such as medical or mortgage. Most delinquency cannot exceed 180 days.
The Lender-of-Last-Resort (LLR) and Department of Education as a secondary market would be approved. Schools would be able to provide a stable lender option to students if they choose to participate in LLR, and students who cannot find a lender to buy old loans can use the Department of Education.
Lastly, some changes would be to the Academic Competitiveness Grant and the SMART grant, which I'll discuss later.

What will you get out of all this? A bigger loan payment after graduation. What do you not see in this list? An increase in Pell Grant as anticipated in the bill's early stages.

One reason behind cutting loan subsidies to lenders was to funnel that money into the Pell Grant program. Doesn't look like that's going to happen with this bill, however.

This is an "in-a-nutshell" type of listing. I'm sure I'll have more to report when, and if, the bill is signed by the President.

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I'm Sooooo Mad

ter — Sat, 03 May 2008 00:30:00 GMT

Today has not been a good day for me. In fact, this last month hasn't been good. My supervisor retired the end of January, and I was offered a very meager pay increase to take on half of his duties (plus my own). Another senior administrator in my office accepted the other half. Somehow, I think I got the wrong half! And I'm now wondering if it was even worth it. Lately, I spend most of my time in meetings, which isn't all bad since I can make decisions that will benefit our office, but it means I'm getting behind in my duties of processing financial aid applications for students.

Finally, I had 2 hours of often interrupted time this afternoon to review financial aid applications for student at my school. This included 2007-08 (the end our of term is next week), summer, and 2008-09 applications. I'm already feeling the stress of doing 1 1/2 jobs, and it only got worse when I looked at FAFSA results for a few students for 2008-09.

I reviewed a FAFSA application that was selected for verification, meaning I had to collect the family's tax returns and the Dependent Verification Form. To make a long story short, the family didn't qualify for the maximum Pell Grant to begin with, and when I had to add in the tax breaks the family received which totalled about $2500, the family fared even worse for financial aid. This family consists of three in the household and one in college. It's single parent household, with the mother making $24,000 and the student not working. I double checked the calculation because I couldn't believe a family with that income wouldn't qualify for full Pell Grant. I immediately went to a close co-worker, closed her door, and proceeded to verbalize (with explatives) my feelings about how this is so wrong. All she could do was agree with me. I was so upset that I had goosebumps all over me. Puhleeeze! This is what I consider a low-income family---and it's worse for middle-income families! But, my hands are tied, and I will have to explain to this family how the student can take private alternative loans to attend our college.

The next FAFSA application I reviewed wasn't any better. Still a single parent family, the parent made more money ($40,000), but had two in college. The Pell Grant was even worse than the situation above. Figure this- income is $40,00 but the parent is trying to put 2 children through college, so spliltting the annual income is really $20,000 per child. And the financial aid package is worse. Helloooo! It makes me wonder why I stay in this profession.

As a result of my job today, I've started documenting situations where families are getting the shaft because of income or tax breaks. I've also started working on documenting national averages for living expenses, so I can contact my federal legislators with hard-core data to wage my own war against the injustices in funding an education. I used to believe that families should help in their child's education. Of all people, I should be able to save for my child's education, right? WRONG!

We, being adult students or parents of students, have so many other things that are sucking up our savings, that it's impossible to save for education. For me, it's been heating bills, electricity, gas, and general living expenses.

To top it off, my counterpart stopped by my office after hours, and I proceeded to tell her my frustration. I explained that I had plenty of fire for my post tonight. She added fuel to the fire by adding that our legislators will not be increasing Pell Grants, as I outlined in legislative updates the last couple of posts. They're reasonging is because they are increasing the Unsubsidized loan limits. Goosebumps and anger again! I have at least eight messages in my email regarding legislation that I haven't had time to read. Granted, I will be reading those emails ASAP.

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Senate Side of Legislation

ter — Mon, 28 Apr 2008 22:50:00 GMT

I apologize for the inconsistencies in my posts. It's been crazy at work with students trying to pay their bills to register, students applying for summer aid, and 2008-09 application processing. I have job security!

A while back I wrote about Senator Edward Kennedy's proposal for increasing financial aid opportunities. It's now official--he and others have created Senate Bill 2815, similar to that of the House's version HR 2815. The summary of the bill was a little more confusing, so I had to perform some research prior to this post. Here is the proposal in a nutshell:

Unsubsidized federal student loans for dependent students would be increased by $1,000 (up to $4500 1st year, $5500 for 2nd year, and $6500 for 3rd and 4th years). The wording includes both Direct Loans and Stafford Loans. This doesn't address Subsidized loans, and there are students who qualify for just subsidized or a combination of unsubsidized and subsidized, so I don't know how this loan increase would come into play for those situations.
The aggregate for the increase above would increase from $23,000 to $29,500 for the time a student is an undergraduate.
For independent students or dependent students whose parents are denied the parent PLUS loan, annual unsubsidized loan limits would increase by $2,000. Remember, an independent student or student with a parent PLUS denial can ask for an additional unsubisidized loan amount, so limits would increase to $9,500 lst year (including Subsidized), $10,500 2nd year, and $12,500 for 3rd and 4th years.
The total aggregate limit for the new loan limits would be $57,000 (up from $46,000).
Allow parents to defer principal of federal PLUS loan.
Provide $750 Pell Grant increase to low-income families who have a negative Expected Family Contribution (EFC) in the Federal Formula, or qualify for the Automatic Zero EFC.
The Secretary will allow schools to request a Lender of Last Resort. This allows schools to offer a particular lender, funded by the government, for students who have difficulty securing a valid lender. Note: this only applies to Stafford Loans, not Direct Lending.
The Department of Education will have authority to buy student loans from lenders who are no longer in the student loan business. This will help students to consolidate their Stafford Loans (not Direct Lending). There would not be any adverse charges passed on to the student.

If you read my last post, you'll notice that this is similar to the House proposal. Currently, S. 2815 has been referred tot he Committee on Health, Education, Labor, and Pensions. The intent of both bills to reduce dependency on private alternative loans. I'm don't think that will be the case with only $1,000 or $2,000 loan increases.

Now is the time to contact your federal legislators. I can't stress enough that you, as a voter, have the most power.

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