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Caroline

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If you're a high school senior, Decision Day is almost here. You're getting to the point where you should be receiving your award letters  from colleges.

If you haven't already decided on a school, these award letters are probably a big part of what you've been waiting for. For many students, school choice comes down to the financial aid package.

So what can you expect? Your award letter typically will list the Cost of Attendance (COA), the federal aid you're eligible for (grants, work-study, and student loans), and your Expected Family Contribution (EFC).

Review your award letters carefully, considering these important points  to be sure you understand the aid that's being granted and what your final costs will be.

The link above lists some key questions to ask, such as:

• Does the Cost of Attendance include all projected costs?
• How do non-institutional scholarships affect you award amount?
• Does the aid package likely cover the same expenses every year?

When it comes to award letters, they're not all written in the same format, so here's a cool tool  to help you compare apples to apples. Don't be afraid to contact the school to get all your questions answered.

Are you waiting for an award letter before deciding on a school?

Barbara

Caroline has already gone over some details of the FAFSA for beginners, but what about those of you who filed a FAFSA (Free Application For Federal Student Aid)  last year?

You need to complete a FAFSA every year you're in school, even if your financial situation hasn't changed. Don't worry — renewing your FAFSA takes much less time than the initial application.

The Department of Education will send you a Renewal Application or a reminder of your PIN (Personal Identification Number) to apply online, and you may also get a reminder from your school. However, you don't have to wait for either notification to apply. If you need a reminder of your PIN, just head to the PIN Website. 

And while it's best to file your taxes early to have the correct information, you don't have to wait. Use December pay stubs to estimate income for the year. You'll have the opportunity to correct your application if needed. Plus, applying earlier ensures you meet your deadlines  (some aid is first come, first served).

If your situation has changed — like a dramatic shift in your income, a divorce, or a parent's job loss — you may want to talk with your financial aid office about how it could affect your financial aid award. They'll be able to walk you through what may be different this year.

Once you've applied for federal aid, keep on applying. Seek free money like scholarships and grants.  Even though you may receive enough financial aid to cover your costs, you don't have to accept everything you are offered. Some aid, like unsubsidized Federal Stafford Loans, will need to be repaid with interest — so the more funding you find that doesn't have to be repaid, the better!

Caroline

You're probably starting school soon, if you haven't already. So let us know how your funding came together for fall semester.

How are you paying for school?  Scholarships, loans, grants, Work-Study?  All of the above?

Did you hit any bumps on the road in figuring out your financing? Got any questions?

Let us know how it went!

Staci

Student LoanDown readers, recently we received this question (typos and all — we publish 'em as is) on one of my older posts from kat s., a concerned grandmother:

I would like to ask you a queston. My grandson was attendin college. One semester he could not go because he had gotten mononucleosis. He was so sick from that. He was going to school through having a studeent loan. He also went on the Pell Grant. He has his own apartment and his only means of support is what he makes at Applee's. Whgich he makes pretty good money. He wants so badly to go back to college and finish ge4tting his degree, but even though the student loan place where he got his loan has so far said nothing since he had to skip the one semester, he feels thagt if he applies again that they will turn him down and make him try to pay back his loan at one time. He wants to go on the Pell Grant instgead of taking the ute of increasing the student loan. Is there a way that this can be done while having the outstanding loan balance from the student loan or will they make him pay back everything right away before he can go back.

Well kat, you and your grandson certainly are not alone in your concerns about student loan repayment. I hope my answers will calm your fears and help get your grandson back to school, where he belongs!

First of all, if your grandson is not currently attending school but has not heard from his lender yet, it's possible that he is in his grace period. On Federal Stafford Loans (the most common type of student loan, and the one I'm assuming he has) students have a six-month grace period between the time they graduate, leave school, or drop below half-time enrollment and the time that they have to begin making payments.

Once your grandson does have to start making payments, he won't have to pay back the full student loan amount all at once. Generally student loans are repaid over time — not in an immediate lump sum.

However, if your grandson doesn't know what's happening with his loans right now, ultimately it's HIS responsibility to find out. The worst thing he could do is bury his head in the sand  and pretend like those obligations don't exist. Please encourage him to contact his student loan lender, let them know that he is not attending school right now, and work out a repayment plan. Ignoring the issue could damage his credit and/or impact his eligibility for future student loans — big risks, in my opinion.

When your grandson is ready to go back to school, he also should contact his lender. The lender will put his loans into an "in-school" status, and then he will not be required to make payments as long as he is enrolled at least half-time.

In terms of the Pell Grant , I certainly can see why your grandson would prefer to use that to fund his education — it's a grant, which doesn't need to be repaid! However, please keep in mind that Pell Grants are based on financial need and are awarded to low-income students. If he qualified for a Pell Grant when he initially started school but now is making more money at his job, it's possible that he won't be able to qualify for it again. Your grandson's best bet would be to talk with the financial aid office at his school and see what kind of funding he's eligible for when he's ready to return.

Sure, student loan repayment can be scary, but when you have some information on your side, it doesn't have to be.

Now, what other questions can we answer?

Barbara

We've talked before about what to do once you've completed the FAFSA. Have your received your award packages (the next step) from your colleges yet?

If so, I bet many of your schools gave you a chance for some "free money" — that is, money you don't have to repay after you leave school, like grants and scholarships. Or you may have found the chance to earn some funds for school through the Federal Work-Study program .

Out of curiosity, I checked the possibilities  at my alma mater . Lots of options for many different interests! Have you thought about what type of work you may be interested in?

While I myself did not have a work-study position while in college, several of my friends (a lot of English majors) had jobs at USD's Writing Center . They were able to find a work-study position that was applicable to their major. (Our own Ms. Schiller scored a similar job during her collegiate years.)

For those of you who’ve already completed work-study jobs, where did you work?

Staci

In recent weeks, several colleges have followed Harvard University's lead  in reducing tuition costs for families below certain income levels. Student loans are being replaced with increased grants — most of these funded by the schools' endowments . Just yesterday, Yale University announced a similar initiative .

Sure, this is good news about college tuition and affordability — for some. But not all schools have such well-funded endowments or are in a position to make these kinds of sweeping financial aid changes. And as such, the majority of students are still struggling to afford their rising tuition.

So, tell me what you think: Are changes like the ones Harvard and Yale are making a step in the right direction for making education more affordable, even if they're just for a select group of students and families?

Barbara

For a number of my friends, formal education didn't stop at our undergraduate commencement. Many are now taking graduate level classes towards a master's degree. Some are taking classes on top of a full-time job, some are working part-time and some aren't working at all.

I'm always interested to see which of those options grad students choose. What are you, your friends or your family doing?

Each option has its perks and pitfalls. There's not a singular best option for all graduate students – it depends on the individual situation. The choice can be based on a number of variables, like what kind of program the student is in, the need for a steady income, or how much money the student wants to borrow. Caroline addressed the financing piece in an earlier post back in May.

Here are a couple things to consider:

Tuition assistance: For those students who choose to work full-time, many employers offer a tuition reimbursement program  so employees can continue their education part-time while they are working.

Grants and assistantships: Sometimes instead of working part-time outside of school, graduate students can get financial assistance through assistantships  in their own department. Usually students must be attending full-time to qualify for a GA position.

Attending school part time : Even if your employer doesn't offer tuition assistance, having the income and benefits from a job may give you the ability to take a class here and there, working slowly toward an advanced degree.

Working part time: Working part time while attending school full-time may mean borrowing less money through student loans, which could save you money in the long run.

Workload: For many programs, there really isn't an option to work. With heavy loads of homework, some graduate students just need to focus on their studies.

Are there any graduate students or former graduate students out there with advice for those facing the work conundrum?

Barbara

A while back I told a reader that I’d faced my own Stafford Loan conundrum in college. If you’ve been reading the Student LoanDown for a while, you know I didn’t take on any student loan debt to attend college, thanks to a full-ride scholarship.

But after a summer internship in Fargo, N.D., I thought about accepting a Federal Stafford Loan. Living on my own for a summer — making a small but adequate salary — I incurred some credit card debt to covering some necessities like groceries and other living expenses.

Because of my credit card’s high interest rate (about 17%), I wanted to throw all of the money I was going to make working that upcoming semester toward my debt. But that’d have me cutting it close on living expenses, since that’s what the money usually covered.

So when my college’s financial aid award letter arrived a little more than halfway through the summer, I took a second look at the funds I was offered. Alongside my two scholarships was an Unsubsidized Federal Stafford Loan — for somewhere around $2,000.

Even though I had scholarships coming my way, my dad had me fill out the FAFSA (Free Application for Federal Student Aid) every year just in case my situation changed. And with all the benefits of federal loans, it was a smart plan.

But when I looked at that loan on my award letter, I didn’t know if I should take it. In my mind, because I had my tuition covered and a little left over to live on, it seemed wrong to take the money.

I opted not to take the loan. Instead, I faced a financially tight year, and ended up with more debt after having to use my credit card in a pinch — well, several pinches. Definitely not the smartest decision, considering the Stafford Loan rate would have been 4.70% while I was in school and during a six-month grace period after graduating!

For those of you wondering what you can use Federal Stafford Loan money to pay for, here are the details from the Promissory Note. You can use a Federal Stafford Loan to pay for:

• Tuition
• Room
• Board
• Institutional fees
• Books
• Supplies
• Equipment
• Dependent child care
• Transportation
• Commuting expenses
• Rental or purchase of a personal computer
• Origination fee and federal default fee
• Other documented, authorized costs

So, bottom line: if the school awards it to you based on cost of attendance, expected family contribution, other financial aid, etc., and you use it for an authorized expense, you’re good to go.

Wish I’d looked into this two years ago! :)

Staci

This week I'm in our nation's capital—Washington, D.C.—attending the National Association of Financial Aid Administrators  conference.

It's unbearably hot and humid. The weather is triggering memories of the two Julys I lived here—when I'd walk the four blocks to my Capitol office in shorts and a T-shirt and change into hosiery and a suit after I arrived, drenched in sweat; when there was a brownout in my northeastern D.C. neighborhood and I sweltered through a sleepless, 100-degree night without air conditioning; when my friends and I would drive to Rehoboth Beach  in the middle of a weekend afternoon just to get some relief from the heat.

When I was much, much younger.

On Sunday afternoon I attended a seminar on the legislative and regulatory changes happening in the student loan industry. Here at the conference, it's a topic as hot as it is outside.

I've mentioned before that lately there's been a lot of media attention given to inappropriate relationships between some financial aid directors and some student loan lenders. But the operative word is some. The majority of those who work in financial aid aren't in it for money or glory. In their profession, there isn't much of either to be had. Rather, financial aid counselors, directors and administrators are doing this work for one reason: to help students and families pay for college educations. And it's complicated, stressful work.

So I'd ask this: Instead of believing all the negative stuff you see in the media about financial aid professionals, give 'em the benefit of the doubt. When you enter their offices, don't automatically be skeptical about their motives or intentions. Remember that they have knowledge to share, experience upon which to draw, and compassion beyond compare.

If they didn't, they wouldn't do what they do. And they certainly wouldn't be sweating it out here at the conference, trying to learn new information about how to help families navigate the choppy waters of financial aid. They really are good nuts, here to help. Let them.

Caroline

Since July 4th is tomorrow, let's talk about another kind of "Independence Day"—the financial type.

I've always liked feeling financially independent. I had a paper route  as a kid and relished having my own money for movies, candy and Ms. Pac-Man . I worked as a grocery checker  in high school, spending my cash on clothes and other extras I wanted for myself.

In college, I was able to pay my own way through school with a combination of grants , scholarships, student loans, work-study  and regular jobs. And after college, I was soon on my own and paying all my own bills from cable to car insurance.

But I distinctly remember the day I felt truly financially independent. I was 29 years old and had just purchased my first car without consulting my parents in any way, shape or form. Finding that little Mazda  all on my own and securing the financing was a little scary, but it felt great. I'd crossed that final bridge to true financial independence. Light the sparklers!

Got any stories to share about your own Financial Independence Day?