As a continuing college student entering sophomore, junior, senior or super-senior year you are a bit more savvy about the college funding process, especially as it is intertwined with your ability to clear registration and graduate. Well at least you are supposed to be, and are certainly more knowledgeable than your average incoming freshman.
But before going on cruise control to graduation, there could be some serious financial issues that can undermine the quest for degree completion. It turns out that the greatest barrier to graduation is a financial one for many students. Let’s take a look at some common stumbling blocks and potential solutions.
Renewing the FAFSA on time every year: For many students and their families, a lot of focus is put on the initial FAFSA filing. All of the anticipation building up to admission to a first choice school fuels the motivation for getting that FAFSA filed early. However, FAFSA is not a one-and-done process. The FAFSA is renewed every year and remains subject to filing deadlines to retain maximum funding eligibility depending on what funding was made available. If you are only concerned with keeping a Pell grant, filing the FAFSA late is probably not a big deal. However, when it comes to grants from the school or from the state, there could be a deadline for continuing students that would prohibit late FAFSA filers from retaining their funding. As a continuing student, make sure to diligently file the FAFSA on time every year to meet your school and state deadlines.
Any major changes in income?: If your family has had a major change in income, financial aid eligibility can be radically changed. Many families have had unemployment hit home, causing a decrease in income. Financial aid may be increased if household income drops below a certain level. However, if one parent loses a job, while the other parent maintains income, it may still keep a student from increasing financial aid eligibility. Total household income must be accounted for, so even if one parent goes jobless, it does not guarantee financial aid eligibility.
Also, a student may start college and qualify for financial aid based on household income, but if the parents find new work, financial aid eligibility may decrease. This is why it is very important to follow up with the FAFSA filing process early every year to anticipate any changes in financial aid eligibility.
Are you making Satisfactory Academic Progress (SAP)?: Making satisfactory academic progress is a requirement to keep basic financial aid eligibility like the federal Pell grant and Stafford loans. Generally this means the student must maintain at least a 2.0 GPA and complete a minimum number of credits based on their full time or part time admissions status. There may be variations on what is considered satisfactory academic progress so it is best confirm with your school on requirements directly. For example, an SAP requirement for federal funding may be different than a requirement for a state based grant. Here is an example of an SAP chart from City University of New York (CUNY) to give you an idea.
If the student falls below their minimum GPA requirement or credits completed, they may be determined to not be making satisfactory academic progress and therefore no longer eligible to receive financial aid funding. There is an appeal process available for students to potentially become eligible for financial aid again. The student must submit an appeal to the school’s financial aid office to document their academic struggles and challenges, and supply a plan of action to bring their GPA or credits completed back to acceptable range. If the appeal is approved, the student is again eligible for financial aid. If the appeal is denied the student will not be eligible for any financial aid, often leading to a transfer to another institution.
Know your scholarship renewal requirements and live by them: So you may have been able to earn a scholarship as an incoming freshman, but are you able to retain it through graduation? In order to keep a scholarship year after year, a student may need to retain a minimum GPA and credits completed. If the student falls below the requirement, they may be deemed ineligible and suddenly college becomes much more expensive. Find out what the minimum GPA requirement is and stick to it. This may require additional study and follow up with an academic support center to maintain. Also, will your scholarship extend into super senior status? This would be a scholarship that would extend beyond the normal four years it can take to complete a degree. Many colleges specifically limit a scholarship offering to eight semesters, making a super senior in their ninth or tenth semester no longer eligible for funding. This would drastically increase the cost of college, making a fifth year prohibitively expensive. Good college planning considers timely graduation to prevent excessive and unnecessary costs.
How about your federal Stafford loan eligibility?: Did you know that Stafford loan eligibility differs considering your grade level? As a student progresses from Freshman year to Senior year, their eligibility can increase. Confirm you are receiving the correct Stafford loan amount each year by checking your total credits completed and matching up to your loan eligibility. Sometimes schools make a mistake in awarding Stafford loan funding because of a miscalculation in credits completed, leading to an under-award. Use this chart to confirm your eligibility based on grade level, and compare it to your new award letter. Note the interest rates available on Stafford loans as well.
Stafford loans also have a lifetime aggregate limit. This is when a student reaches the maximum lifetime eligibility for this funding source, and it is cut off. Use The National Student Loan Database (NSLDS) to check up on your aggregate limit.
Here at First Financial, we provide a cuScholar Private Student Loan for undergraduate students and cuGrad Private Student Loan Consolidation for college graduates. If you are interested in one of our loans, you can refer back to one of our previous blog posts for additional information about our student loans. If you have any questions, you can contact us at 866.750.0100 or feel free to stop into any one of our branches.
Private student loans should be used as supplemental funding after exhausting all other sources of financial aid, including grants, scholarships, and federal student loans. Federal loans offer more attractive terms when compared to most other borrowing options, including private student loans. For more information on federal loans, visit FAFSA’s website.
The cuGrad Private Student Loan Consolidation is available to borrowers who are carrying private student loan debt. Federal student loans cannot be consolidated with the cuGrad Private Student Loan Consolidation. If you are seeking a federal student loan consolidation, you can learn more details about the process here:http://www.loanconsolidation.ed.gov/
Article Source: Ken O’Connor and custudentloans.org
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