Parents, last week there was a great article  in the New York Times with tips on organizing your finances to make the most of qualifying for need-based financial aid. This information may be especially helpful to those who have younger students and are still early in the planning process.

For those of you who are sending students off to college this year—how's the FAFSA  coming?

Posted by Staci at 09:21 AM |  Permalink |  Comments (0)
Found in Financial education, Parents, Paying, Preparing, Student loans, Wells Fargo Bank

We recently received a good question from someone who's in the midst of his student loan repayment and is wondering about his options. Since many of you might be in a similar situation, I thought I'd post the answer here.

Here's his question:

I received my degree in 1995 and have worked as a chemical dependency counselor since then. My wife is a psychologist and makes a lot more money than I. The comment I have is that I have forty thousand dollars in student loans at 7.75% interest. I try not to think about it much, but it's hard to see that $417 a month go on and o into eternity. My understanding is that the legislature is considering reducing interest rates, but I don't qualify for that. Is there anything I can do with this or am I stuck for the next 20 years?

First, let me point out that he's right about the proposed student loan legislation —it wouldn't make a difference in his situation. If it passes, it will only affect new subsidized Federal Stafford Loans.

Now, without knowing all the facts about his situation and what types of loans he has, I can't advise the best course of action. However, here are a couple of options to consider for anyone who's in the midst of repayment and feeling frustrated:

1. Pay more down each month. I know, I know—this isn't always easy, but paying off your loan faster can save you money in the long run. In the example above, he's already paying a significant amount each month, but if he upped his monthly payment by $35, at the end of the year, he would have made an extra month's payment. The interest savings will add up over the years that you have left to repay your loan. And you'll see the light at the end of the tunnel a little sooner. Worth a try, maybe?
   
   
2. Try to lower your interest rate. If you have not already consolidated your loans, visit with your lender to see if loan consolidation  is a good option for you. It may help you lock in a lower interest rate. Be aware, however, that consolidation could also extend your repayment period. If you do consolidate, you could continue to make the same monthly payments that you're making now to avoid paying more over the life of your loan.
   
   
3. Take full advantage of any lender rewards. Many lenders offer rewards (such as reduced interest rates) for responsible repayment or for making payments automatically from your bank account. Check with your lender to see what they offer. These reductions may seem small, but they can definitely add up over time, and every little bit helps.

For everyone who's in repayment and wondering if they could be doing something more to help the cause, I encourage you to talk with your lender. They know the specifics of your loans and can be of more help.

Have you found a way to make student loan repayment a little easier to take?

Posted by Caroline at 12:09 PM |  Permalink |  Comments (2)
Found in Financial education, Parents, Paying, Post-college, Preparing, Student loans, Wells Fargo Bank

Ladies and gentlemen, grab your hats and blow out your party horns—it's almost my birthday! I turn 23 years old on Sunday.

Birthdays  are classic evaluation points in one's life. You sit back and think: Is this where I thought I'd be at [insert age]? This inevitably leads to comparing oneself with others of a similar age (which I am NOT a big fan of, but seem to do anyway).

Luckily for me, the 23-year-old checklist has several things crossed off—things many others are hoping to cross off, too. Career , yes. Apartment , yes. And then there's the money check—finances in order —which doesn't quite have the big red check by it.

Ahhh yes, it all comes back to money, doesn't it? No, I didn't expect to be completely out of debt and have $10,000 in savings by 23. But as I look back on it, I could have (and probably should have).

Earlier financial planning could have made a big difference. I'll give you an example.

Remember those paid internships I told you about? Well, the first two were completed while living rent-free with my parents (and board-free, too, thanks to my parents' nicely stocked refrigerator). So where, you ask, did the $8,000 I earned go? The answer lies not in my savings account, but in my closet (well, not all of it, but a good chunk).

It's a bit of a Carrie Bradshaw moment. When she's trying to buy her apartment the people at the bank tell her she's "not an attractive candidate for a loan." Later she realizes that at $400 a pop, her 100 pairs of shoes would have given her a $40,000 down payment. OK, it's a moment like that on a very minute scale. And while Carrie is my fashion icon, I prefer to watch her look trendy  while I get by with a wardrobe à la Target®.

I'm starting to see the financial light—as they say, it's better late than never—but it pains me to know what my pocketbook could look like had I made better financial decisions. Here  are some major financial decisions to consider as we become adults.

As you look back at how you've handled your money, which financial decisions would you change?

Posted by Barbara at 09:38 AM |  Permalink |  Comments (0)
Found in Financial education, Paying, Post-college, Preparing, Student loans, Wells Fargo Bank

I came across a story in The Daily Times of Salisbury, Md., by Anne Ryman with Gannett News Service listing things to consider  during a college scholarship search.

You parents and soon-to-be collegians might find the article helpful in your quest for college funding.

Posted by Barbara at 03:38 PM |  Permalink |  Comments (0)
Found in Financial education, Parents, Paying, Preparing, Student loans, Wells Fargo Bank

For four years in the 1990s, as soon as I returned to campus from winter break, I started Interim .

Does your school offer Interim? It's a concentrated academic session for the month of January. (Some colleges call it January term or J-term.) In one month, you take one class—usually for four hours a day, five days a week—and receive full credit.

I loved Interim. Not only was it a welcome break between the fall and spring semesters, it offered an opportunity to study intensely and independently.

My first Interim class was—I'm not kidding—"American Family Folklore ." It fulfilled an English requirement, but not much else. Hey, I was a freshman and in the last group to register. My options were limited.

During Interim of my sophomore year, I tackled a four-credit American Government class. My friends, slightly less ambitious, took aerobics. Turns out I should've joined them: About halfway through (and the night before an exam), Operation Desert Storm  began. Completely transfixed by the happenings on CNN, I called my professor at home and told him that I couldn't take the test. He was kind enough to give me an extension, but he told the whole class about it. I didn't live that down for the rest of my college career!

As a junior, I finally got it right. I traveled to England and Scotland to study literary landmarks with my favorite professor and a small group of fellow English majors. In Stratford-upon-Avon, we saw "Romeo and Juliet"  and "Henry IV, Part 1"  performed by the incomparable Royal Shakespeare Company . We studied the poetry of Sir Walter Scott in Abbotsford and Robert Burns in Edinburgh (doesn't his "Address to a Haggis"  sound so much more appealing when it's read in a Scottish accent?). In the Lake District, we wandered the hallowed grounds of Dove Cottage  (William Wordsworth's home) and hiked to Hill Top Farm  (Beatrix Potter's home). Among all the castles and cathedrals and abbeys, I decided I wanted to be a professor of English literature. Obviously, things changed.

My final Interim was spent in "Light in the Darkness: Courage and Evil in the 20th Century." This was my Capstone class, required for every senior and designed to "encourage students who are concluding their college experience to wrestle with issues of meaning and moral value." Three of my favorite professors—one in English, one in Government, and one in Religion—taught this class, which had a special emphasis on the Nazi Holocaust. We read "Night"  by Elie Wiesel and Albert Camus' "The Plague."  We viewed the films "Cabaret"  and "The Killing Fields."  We took a weekend trip to Minneapolis to talk with Holocaust survivors at a Jewish community center. It was the most intense and emotional month I had at college. Fourteen years later, my school is still offering this course—and with the same three professors.

Are you studying at a college with an Interim period? Is it worth your while—and your money?

Posted by Staci at 10:17 AM |  Permalink |  Comments (0)
Found in Financial education, Preparing, Student loans, Wells Fargo Bank

So, I've already told you how I spent my winter breaks in college searching and applying for internships. To recap why they're a good thing : Internship = better opportunities = better pay/benefits = brighter financial future. Got it? Good.

Now, I want to share my own internship experience. During my freshman year of college I decided I wanted to be departing on the internship train each summer. Thus the search began. Just as I'd done with my college applications, I chose several "safety" newspapers (ones that I was likely to have a chance at), some "medium" papers (ones that would be a little tougher to get), and a couple of "reach" papers (ones that I really didn't stand a chance at, but wanted to apply for anyway).

As a freshman applying for internships, my resume quickly found its way to the bottom of the pile. And pretty soon, I began getting a lot of mail … "Ms. Raus, Thank you for your interest in our newspaper. We had over 100 applications for only five positions, yada, yada, yada , better luck next time." I quickly realized that I must have been in la-la-land when I made my application decisions.

Clearly, I was not getting any of the reach papers , the medium papers  were looking a little grim, and even the safety papers  were in danger. As doing chores around the farm all summer long was not a suitable Plan B, I started to brainstorm other options.

Sometimes, you have to compromise a little to get what you want down the road. For me that compromise was taking an internship at a small-circulation paper a mere 15 minutes from my home. Most of my stories were about small-town festivals and 4-H  fairs, but at least I was writing.

I ended up repeating the process after my sophomore year, and again I ended up at that same paper. But the next summer after my junior year, the compromises paid off. I was able to land an internship at The Forum  in Fargo, N.D.  While I did work Saturdays to cover those same small-town festivals, I also got to cover City Hall for a week and spend two weeks on an in-depth story about families of missing-in-action soldiers.

At the end of my summer up north, I asked one of my supervisors what it was that got me the job. Turns out, writing each summer—no matter if it was about 4-H fairs—helped me get a leg up on my competition.

I guess the moral of the post is this—perseverance. It really does pay off.

What have your internship experiences been like?

Posted by Barbara at 09:39 AM |  Permalink |  Comments (0)
Found in Financial education, Paying, Post-college, Preparing, Student loans, Wells Fargo Bank

After Staci got me waxing nostalgic about the winter breaks I had during college, I thought I should share a break experience that might benefit you.

While I did take a generous portion of my break to sleep, eat Christmas leftovers  and catch up on my guilty pleasures (namely NBC soaps ), a lot of my time was spent thinking about how I'd be spending my next summer.

Specifically, I was looking for internships , researching them, and preparing my applications. And my time was well spent—each summer during my college career I was able to complete a paid internship.

Why? Because pretty much any professor, adviser or employer will tell you that a completed internship bumps your resume up in the pile—or at least keeps it out of the trash. (Sorry to be Debbie Downer , but you should know what you're getting yourself into. It's a competitive job market, and internships distinguish you from the pack.)

There are a lot of different types of internships  out there. For me, it was important to have some cash flow in addition to an intensive educational experience. So the only internships I looked at seriously were paid internships.

As a college newspaper geek, it was pretty much a given that I'd look for internships at a print news publication. When you start your own internship search, know that there may be an internship search or list tailored to your area of interest. Here's what I used to get started: The Detroit Free Press jobs page , The American Society of Newspaper Editors , and The Associated Collegiate Press Internship Guide . Obviously, they're focused on newspaper internships.

Here are a few ideas to jump-start your internship search:

• Visit with your school's career development center about possible opportunities in your field.
  
  
• Check out popular job search engines to see if they offer a filter to sort out internship opportunities versus full-time positions.
  
  
• See if your department has a list of internships in your field.
  
  
• If there's a specific place where you're interested in completing an internship, call them and see if one is offered.

And if you're not quite sold on the internship idea quite yet, think of it this way: Internships lead to experience; experience leads to better job opportunities; better job opportunities can lead to better pay and benefits; better pay and benefits are a good start to a successful financial future (I've got your back on this one).

Have questions or advice about internships? Leave it here.

Posted by Barbara at 09:25 AM |  Permalink |  Comments (0)
Found in Financial education, Paying, Post-college, Preparing, Student loans, Wells Fargo Bank

Most college students change their major at least once during their college career. And you probably know some people who've extended their four-year stay in school to five or maybe six years because they couldn't settle on a major.

There's definitely nothing wrong with switching your major —but if you can do some upfront exploring in your chosen field, you might save yourself some time and the expense of additional semesters in college.

One good way to help ensure you're in the right major is to observe a professional in your field. A few weeks ago, I mentioned that my stepdaughter was planning to job shadow in the field she's considering (occupational therapy). I thought I'd share a little bit about what she learned:

1. 1) The job is interesting. This is BIG. You may be good at a job, and you may make a lot of money at a job—but if you don't find the work interesting, you probably won't be happy for long. I'm glad to report that my stepdaughter liked what she saw.
   
   
2. The salary  range has given her pause. She researched this ahead of time, but her day "on the job" made her think about it more closely. She's not sure the salary potential is enough to satisfy her. Another excellent thing to start thinking about early on (especially if you'll have student loans to repay).
   
   
3. Paperwork and repetition are part of the job. Along with some excitement about her chosen field, she also got a good dose of reality. She saw that it wasn't just about working with patients—there was a lot of paperwork involved as well. And she noticed that they went through the same routine with many patients. I'm glad she got to observe that. It's good to know the potential downsides of any job you're considering.
   
   
4. She wants a closer look. After her job-shadowing day, she thinks she'd enjoy occupational therapy, but her experience prompted us to talk about different options she has within the field. It's made her want to take a closer look—maybe shadow another occupational therapist in a different setting.

All in all, her job-shadowing experience helped my stepdaughter confirm that she was pursuing the right career path. And if it didn't? Well, if you're in the wrong major, it's better to know sooner than later.

Have you switched your major? Is it prolonging your college career?

Posted by Caroline at 09:55 AM |  Permalink |  Comments (0)
Found in Financial education, Parents, Paying, Preparing, Student loans, Wells Fargo Bank

In November, a Student LoanDown reader, Karen, asked this really smart question:

Hi, I am a prospective student looking to return to school to get my degree. My situation is this: I am married with two small children. We rent but would like to soon buy a home. I'm concerned with how taking out student loans would effect my husband's and my chance of buying a house. I need some advice as to whether or not it would be smarter to buy a house first and put off my education, or go ahead and return to school.

Well, I've already owned up to the fact that my response to Karen's inquiry is less than prompt. And I'm not an expert on mortgage qualification, but I went to one who is: Jason Menke, one of my counterparts at Wells Fargo Home Mortgage. I hope Karen will think it was worth the wait. Here's what Jason had to say:

While they may be the most significant debt loads you'll ever take on, most experts agree student loans and mortgages are good debts to take on. Education can significantly improve your lifetime earning potential, and well-maintained homes are likely to appreciate in value over the long term. But as with any financial resource, these are loans that must be properly managed in order for them to work for you instead of against you.

People with student loans buy homes every day, so it's not a debt that necessarily acts as a barrier for people who want to become homeowners. Most of these borrowers, however, are in a position where they've already received their education and are employed full time, which makes your situation a bit different.

For the sake of this discussion, we'll assume you're going back to school with the goal of boosting your income via a marketable degree. (If you're studying ancient Mesopotamian paper making , all bets are off!) We'll also assume that you're currently a stay-at-home mother who wants to go to school full time. While your current household income wouldn't drop based on your decision to go back to school, you may have new expenses—such as childcare and commuting—that will impact your monthly budget. We'll also need to assume your husband's employment outlook for the next several years is fairly stable. Job losses do happen, and if your sole source of income suddenly goes away for six months, will you be in a position to continue to make rent or (presumably larger) house payments?

When applying for a mortgage, a lender looks at a variety of factors when deciding whether to approve you. To keep this simple, we'll assume you've got a good credit score, and you don't have past credit issues. Two other factors your mortgage lender will consider will be your current debt-to-income ratio (what comes in every month compared to what goes out) and your future earning potential. Although we're already assuming your degree will positively impact your future earning potential, determining how your student loans will factor into your debt ratios, all I can say is, "It depends."

Every mortgage lender has different programs and guidelines, and every consumer has a unique financial situation, so every mortgage loan is going to be tailored to that customer. Whether or how your student loans are factored into the equation depend on the lender and the type of loan you apply for (prime or non-prime, conventional or jumbo, fixed-rate or adjustable). =

The real issue for you and your family is: How much debt are you comfortable taking on without the benefit of your second income? In 10 years—when you're making a six-figure salary and have that corner office—a $1,500 monthly mortgage payment may seem a paltry sum, but it can be a fortune those first few years while you're going to school and relying only on your husband's income. So make sure you can afford your mortgage payments now—regardless of whether you decide to go to school or not.

Most real estate and mortgage experts agree that conditions are incredibly favorable for first-time buyers right now. Interest rates are still among the lowest they've been in 30 years, there's a strong supply of homes in many markets, and homes in many "hot" real estate markets aren't appreciating as quickly, keeping prices in check. First-timers are a seller's dream, because they can typically move in more quickly and they don't have to worry about selling the home they're currently in.

If you decide to go down the path of homeownership, do yourself a favor and get pre-approved (not prequalified—there's a difference!) from a reputable mortgage lender first. Your lender can help you determine what you can afford and help you better target homes in your price range. There's nothing worse than falling in love with a home and then finding out you can't afford it. This way, you'll avoid the temptation to overextend yourself financially.

In short, student loans won't necessarily prevent you from buying a home—especially if your educational endeavors will likely lead to increased income. Just make sure you're ready, able, and comfortable taking on all of these financial obligations at once.

Here's one option I'd like to throw out there for your consideration: If you're looking to work in a specific field once you obtain your degree, why not try to get an entry-level job at a company in that industry now? The extra income can help you save for the down payment on your first home, and many companies provide tuition reimbursement benefits for their employees who seek to further their education. It may take you a bit longer, but you'd reduce your need to assume debt for your education, and many companies highly value the expertise of employees who have "worked their way up" and now have a degree.

Sound advice all around, Jason. Thanks for sharing.

For more information, check out these great homebuying tools. Or, feel free to ask questions here.

Posted by Staci at 10:39 AM |  Permalink |  Comments (2)
Found in Financial education, Parents, Paying, Preparing, Student loans, Wells Fargo Bank

Over the past few weeks, we've been spending a lot of time discussing the FAFSA  (the Free Application for Federal Student Aid), which is a great place to begin your financial aid journey.

But don't stop there.

Recently I came across this Washington Post article  describing the experiences of Ben Kaplan, who won more than $90,000 in merit scholarships and graduated from Harvard University debt-free in 1999.

Kaplan is proof that many a merit-based scholarship is there for those willing to seek them out. So complete your FAFSA and apply for scholarships. With a little creativity and a lot of diligence, free money for education could be yours.

How aggressively are you pursuing your scholarship search? Start with some of Wells Fargo's free tools, or share your experiences with us.

Posted by Staci at 10:26 AM |  Permalink |  Comments (0)
Found in Financial education, Paying, Preparing, Student loans, Wells Fargo Bank

You may remember that at the beginning of the semester, my college-sophomore stepdaughter called in a panic about the price of her textbooks . She paid close to $600 for a semester's worth of books.

A couple weeks ago, after she'd finished up with her finals, she called again from the bookstore. This time the conversation was much different. She was perusing the shelves for Christmas presents:

Daughter (mulling over the baseball caps): "OK, there's a white hat, a black hat, and a red hat. But doesn't Dad already have a red one?"

Just kidding! I won't bore you with all the details of our gift selection—I'll cut to the chase:

Me (with trepidation): "So, do you need any money for presents?"

Daughter (happily): "Oh, no! I just sold my books. I've got $160!"

Yes, she got $160 back from $600 worth of books-roughly 25%. Needless to say, I had hoped it would be more. But she seemed to feel pretty flush with that much cash in hand. Well, at least it would get her though winter break, right?

Not so much. Between holiday gift-buying and traveling to visit her friends, she's blown through the $160 pretty quickly. It's tough to make money last that long, unless you have a plan .

How much money did you get back for your textbooks? Did you plan to make it last, or is it already spent?

Posted by Caroline at 09:08 AM |  Permalink |  Comments (0)
Found in Financial education, Parents, Paying, Preparing, Student loans, Wells Fargo Bank

In my last post I talked about the process of getting a Federal Stafford Loan . Elizabeth had a great question about Stafford Loans not being enough to cover the cost of higher education. It's an issue that arises for many student borrowers. So here's the scoop on supplementing your Stafford Loans.

First things first. Stafford Loans might not be the only assistance you are offered in your award letter(what the financial aid office sends outlining all the aid you are eligible to receive). Some students also qualify for Federal Perkins Loans , and you may be eligible for the Federal Work-Study Program  or receive scholarships and grants. So fear not, there might be more aid on the way.

That being said, there are a couple options to consider if you need to supplement the financial aid package that's outlined in your award letter.

If your parents are willing to help out, they can take out their own federal loan to cover the extra amount—the Federal PLUS Loan for parents . Parents are able to borrow up to the cost of your education (the term that's used to talk about your tuition, plus room and board)—minus what you'll already be getting in other aid (your own federal loans, grants and scholarships). Your parents could also consider home equity financing (check out Caroline's post about this topic).

If that's not an option—or if you'd rather be the borrower—you can apply for a private student loan (they're sometimes called alternative loans). These loans vary from lender to lender, but the basics are the same. They're an option for student borrowers that will usually cover up to the cost of your education. Keep in mind that these are not federally guaranteed, so the lender will usually charge a higher interest rate than you have on your Federal Stafford Loans. That rate is generally based on your credit. Lenders may require a cosigner for private loans. A cosigner (also known as a co-borrower) is someone who signs the promissory note and assumes equal liability for your loan.

Check out this comparison chart(PDF) to weigh these options. And as always, we're here to help with any questions.

Posted by Barbara at 09:27 AM |  Permalink |  Comments (0)
Found in Financial education, Parents, Paying, Post-college, Preparing, Student loans, Wells Fargo Bank

Even though New Year's is so NOT my favorite holiday, I do love thinking up New Year's resolutions . To me, there is something fun about the clean slate and the hope that this is the year I banish frozen pizza  as a dinner staple, stop counting "taking out the trash" as exercise, and organize (or throw out!) the foot-high pile of files on my desk (I can dream, can't I?).

Since I have already narrowed down my lofty goals for 2007, I thought I'd come up with a few resolutions for you as well. Even though we're already well into the New Year, try any one of these as a small, easy step toward feeling more in control of your finances:

• Organize and keep your financial aid paperwork. If your current system is to hope your parents are holding on to these documents, make this the year you grab the reins yourself! Get one of those handy expandable file folders, collect all the documents you currently have, and start filing. If you haven't kept all your documents to date, now is the time to start. When you receive new documents, read them carefully, and then file them away. If you have questions about them, contact your lender.
  
  
• Learn about your loans . If you aren't familiar with at least the basics of your student loan, take a few minutes to educate yourself. Check out those loan documents you just filed or your lender's website to learn at least two things: the interest rate and any benefits you can qualify for. Some lenders offer special discounts for responsible repayment of your loans. Find out exactly what they offer and what you have to do to earn the discount.
  
  
• Learn about your credit card. If you have a credit card but aren't sure about your interest rate, fees, or rewards attached to it, make a point to learn. Check out your next bill, and make sure you can decipher it. If any of it is confusing, ask your parents, a savvy friend, or the credit card company itself to explain it to you. Read your paperwork or check out the credit card company's website to see if there are any rewards tied to your card that you can take advantage of.
  
  
• Try out one new money-saving  trick. It's hard to save money when you're in college—you're probably not earning that much. But every little bit adds up, so see if you can try just one thing to help the cause. It can be as small as limiting your eating out to just once a week or maybe something bigger, like making interest payments on your student loan. If you carry a credit card balance, make a goal to pay it off and charge only what you can pay off monthly after that.

If you decide to give any of these resolutions a try, let us know how it's going. Or maybe you've already made some money-related resolutions of your own for 2007. If so, what are they?

Posted by Caroline at 09:48 AM |  Permalink |  Comments (0)
Found in Financial education, Parents, Paying, Preparing, Student loans, Wells Fargo Bank

If you're just starting to look into financial aid, you may be wondering what's so special about federal loans—after all, you have pay them back with interest, right? (Yep, that's right!)

So, what makes a federal loan different from any other loan? Should you even bother with the financial aid paperwork? Well, since it's time to fill out the FAFSA (Free Application for Federal Student Aid) for next school year, now is a good time to discuss it.

We always recommend that students max out their federal student loan options before looking to private student loans. Why? Here are a few of the reasons to look to federal student loans first:

1. Interest is often lower than other loans. Now it's true, you do have to pay back federal loans, and you do have to pay interest. However, the interest rate on federal loans is fixed, and the private loans typically have variable rates. Generally speaking, the government sets interest rates on federal loans lower than what you'll find on private loans.
   
   
2. You may qualify for a subsidy. If you meet the federal financial guidelines, you may qualify for a subsidized Federal Stafford Loan, which means the government pays the interest while you're in school. This can save you a fair amount of money, and it's a benefit you'll only find on federal loans.
   
   
3. You don't need a credit history  or a cosigner. Even if you've never borrowed money, paid a bill or held a job, you can borrow a Federal Stafford Loan on your own. Most private loans require that you have a good credit history and a certain income level, or you'll need a cosigner on the loan with you.
   
   
4. You have a lot of options for repayment . When it comes time to repay federal student loans, there are different payment plans available. If you're having trouble making the standard monthly payments, you can adjust your payment plan to make income-sensitive payments or graduated payments (including an interest-only option). With private loans, you may be able to work out a special payment plan with your lender, but you're not entitled to it.
   
   
5. You're entitled to postpone payment under special circumstances. With a federal loan, you're allowed to temporarily postpone (or "defer") your student loan payments if you meet certain requirements. Again, you can request to postpone payment of private loans as well, but you're not entitled to do so based on your circumstances. It's up to your lender whether they'll allow it.

The idea here is that federal student loans have some built-in protections to help students borrow AND successfully repay their federal loans.

These facts don't cover the whole story on federal loans, but if you're looking at your college-financing options for next year, these are some critical points to consider that make federal loans unique.

Will you be taking out a federal loan to pay for college? Why or why not?

Posted by Caroline at 09:37 AM |  Permalink |  Comments (2)
Found in Financial education, Parents, Paying, Preparing, Student loans, Wells Fargo Bank

Happy New Year!

So, have you made any New Year's resolutions?

How about taking a couple of hours to complete your FAFSA —the Free Application for Federal Student Aid?

If you're headed for college this fall, you should complete the FAFSA as soon after January 1 as possible. There's a lot of money on the table—more than $152 billion in college financial aid was awarded during the last academic year, according to the College Board—and you want to be sure you receive every bit for which you're eligible.

Keep in mind that the FAFSA isn't just the federal application for financial aid—it also may be used to apply for aid from other sources, such as your state or your school. And financial aid can take a variety of forms: scholarships, grants, work-study programs, and student loans.

Why apply now? Because financial aid programs, like college applications, have deadlines for submission. The actual deadlines may vary by school, but here's  a good overview.

Take those deadlines seriously. Remember that episode of "Felicity"  when Felicity decides she is going to pursue her art major even though her doctor father doesn't approve and refuses to pay her $8,000 tuition? She goes to the financial aid office and receives a grant check for $75. The counselor tells her that's all she qualified for because she applied too late.

While an episode of Felicity is hardly real-world experience—and what happened to her may only be relevant for some forms of financial aid, not all—my point is this: It's January 2. Resolve to get started now!

Posted by Staci at 12:11 PM |  Permalink |  Comments (2)
Found in Financial education, Parents, Paying, Preparing, Student loans, Wells Fargo Bank