FAFSA

This could be a big year for the Millennial generation. As a group, those born between 1981 and 1997 could finally overcome the number of Baby Boomers and become the most dominant force in the economy and society. Sometimes they get a bad rap for being too into their digital worlds, or staying at home too long with their parents. But they might be smarter than you think with some of the actions they are taking. Here are four surprising facts you might not know about the up-and-coming Millennial generation: • They’re Learning to Save Money: You thought they were crazy for living at home, but they are wisely using that opportunity to put a little money in the bank. According to the Consumer Federation of America’s ninth annual America Saves Week survey, the percentage of Millennials who saved at least 5% of their income increased from 50% to 56%. They are learning to develop savings plans and are sticking to them – not bad for a bunch of “slackers”! • They’re Pretty Good Workers: Millennials don’t seem to mind working; they just want to do it within their own parameters. Many of Fortune’s 100 Best Companies To Work For seem to agree, and are willing to adapt their policies to attract these younger workers. Pew Research also found that millennials value job security, even more than their elder boomers. They just won’t stay at a job they don’t like. • They Like to Be Challenged: Because they have grown up being able to quickly adapt to changing technology, they don’t mind being challenged on the job. They like things that go beyond the routine, enjoy learning new techniques, and want to have some variety. • They May Not be As Far Behind on Their Student Loans as We Think: A great deal has been made of the student loan debt burden the Millennials are carrying. On the surface, it might seem like they are shirking their responsibilities to repay their student loans, but there is actually a very small percentage that is in outright default. Instead they might just be taking advantage of income-based repayment plans, or they could be deferring their payments while they get more education or serve in the military. Some could be working toward loan forgiveness by teaching or working in the public sector. Parents, educators, and employers may have to do a little learning to deal with this new generation of adults. They’re definitely not your grandmother’s idea of by-the-book disciplinarians, but that doesn’t mean their way of doing things is wrong. It’s just different. For all the hand-wringing the older generation likes to do about this generation, perhaps the Millennials aren’t as bad as they are being made out to be. They are certainly going to do things their way but, when it comes right down to it, they are turning out to be a generation of money-saving, hard-working, loan-paying adults. And that’s not such a bad thing after all, is it?

March is the time of year when high school seniors and their parents start receiving financial aid award letters from the various colleges to which the student has applied. In these letters each college will list out a variety of financial aid awards that can help reduce the family’s out-of-pocket costs for college. Once you start lining the letters up and trying to compare them against each other, though, it can get a bit confusing. All financial awards are not created equally, so it is important to understand their differences. Here are some of the variations you can expect to see in financial aid award letters: • Merit-Based vs. Need-Based: There are different types of grants and scholarships your student may be eligible to receive from a school based on academic or other performance. These are merit-based awards. If you feel that your child’s achievements have not been properly recognized through the merit awards, you can ask the financial aid office if you can supply supplemental information. Need-based awards are based on the financial information you provided when completing the FAFSA. If these amounts seem low compared to your income, check your FAFSA again and correct any inaccurate information, or try to submit additional information which might justify an unusual financial situation. • Grants and Scholarships vs. Loans: Grants and scholarships are monies that do not usually have to be repaid, unless the student fails to meet the specified criteria. Some colleges also list student loans as part of the financial aid award package. Be sure you understand how much of the award is in loan form, as this is money that will have to be repaid once the student graduates or leaves college. • Work-Study Program: This technically doesn’t fall into either category as “free” money or money that will have to be repaid, as it is money that will have to be earned. Make sure your student understands that he or she will be required to set aside a certain amount of time from studying or extracurricular activities in order to meet the requirements of the work-study program. • Federal and Private Student Loans: Most college financial aid award packages will include information on federal student loans for which the family is eligible. While amounts and interest rates are standard for all federal student loans, there can be a wide variety of terms available from different private student loan lenders. Information on federal student loans is easily available, but you must draw up a list of criteria and carefully weigh any private student loans before making a final borrowing decision. Financial aid isn’t the only thing which should affect your choice of college, but it does play an important role in the decision-making process. Be sure you understand all of the financial aid opportunities clearly, and then take into account such intangible factors as school fit, course selection, and potential earning power to find the college that’s just right for you.

Attending college can make a huge difference for your child. It can lead to a higher paying job and better quality of life. There is a lot riding on the Student Air Reports which high school seniors and their parents should be receiving now. If you completed the FAFSA in January, this report will summarize that information and provide your Expected Family Contribution, or EFC. Based on this, your child’s potential colleges will put together their financial aid award letters for you, which will finally reveal the amount of scholarships, grants, and loans you can expect, and give you an indication of how much money you will be required to pay out of pocket. But, what if the federal financial aid doesn’t cover all the expenses, and your family just doesn’t have enough money to pay for the rest – is there anything else you can do? Here are a few suggestions: • Contact the Financial Aid Office: If there is a school that particularly appeals to your student, you can contact the financial aid office and ask if there are any other options for receiving more financial aid. The school may have additional funds for low-income students or may be able to point you in the direction of other scholarships. It could also help to let the school know that you will be interested in finding part-time work in addition to the federal work-study program. • Explain Any Unusual Circumstances: Sometimes the FAFSA doesn’t give a real picture of your family’s financial situation. If there are exceptional medical bills, or a sudden drop in income, put together a short letter that documents your specific situation, and ask the college if you can appeal the financial aid award. • Keep Looking for Scholarships: Be on the lookout for all late deadline scholarships. This money does not have to be repaid if your child stays in school and meets any scholarship requirements for grades. Scholarships can make a big difference in your child’s ability to pay for textbooks, lab fees, and other miscellaneous expenses. Parents can also ask their employers if any funds are available to help with college expenses such as computers. • Consider Private Student Loans: While there are some differences between federal and private student loans, this could be the final piece in your financial aid puzzle. Many private lenders, such as Discover Student Loans, offer competitive interest rates and other incentives that can help reach your college education goal. They may also offer other benefits, such as a reduced interest rate for automatic payments, and may even provide an incentive for good grades. The SAR and the financial aid award letter are definitely good indicators of how much financial aid you will receive, but they don’t have to be the last word on the subject. If you feel the amount just isn’t enough, take steps to find additional aid, and you could still be attending college in the fall.

With deadlines rapidly approaching, it’s time for high school seniors and their parents to check off more items on their college financial aid to-do list. Very soon you will be reviewing the financial aid offers you receive from potential colleges and trying to make the best choice for your family and your student. Here are some things you can do in February to make that decision easier: • Take a Moment: First, just breathe and relax. You have come a long way in a short time, and should be very proud of what you have already accomplished. Don’t put more focus on what has yet to be done than on what you have already completed. Spend some “down” time with your child, too. This has been very stressful for him or her as well, and there is still a lot of uncertainty on the road ahead. Let your child know how proud you are, and that you are happy to be participating in this next grand adventure. • Review the FAFSA One Last Time: That is probably the last thing you want to hear after putting all that work into completing the FAFSA in the first place. But take a few moments to review your application one more time. Make sure you have supplied the correct tax information for 2014, check that the name and social security number match official government documents, and review the list of schools that have been selected to receive your information. • Get Financial Aid Savvy: A better understanding of the financial aid process will help you make smarter choices. The FAFSA is only the first step, the application. Based on the information you supplied you will receive a Student Aid Report (SAR), which will list your Expected Family Contribution (EFC). This will give you an idea of the amount of money you will be expected to pay, but it is not the final answer until you receive a letter of acceptance and financial aid award letter from each prospective college. • Start Calculating: Each college should supply you with an estimated Cost of Attendance (COA), which is based on what it costs most students to attend that school. Make sure their figures are accurate for travel expenses from your home, actual living arrangements, and miscellaneous out-of-pocket expenses. The financial aid award letter will inform you of any grants and scholarships the college is offering. Subtract this from the total costs, and also subtract any other scholarships you acquired. The remaining amount is a good indicator of your out-of-pocket costs for each college. • Learn About Loans: Many colleges include student loan estimates in their financial aid package, but you don’t have to just take what is offered. Learn about the differences between federal student loans and private student loans. Start researching what private lenders, such as Discover Student Loans, have to offer. You’re in the home stretch. Use February to give yourself a financial aid education and you’ll make more informed college choices.

According to Pew Research Center tabulations of Census Bureau population figures, the generation known as the “Millennials” is facing a milestone year in 2015. During this year, the population of people roughly born between 1981 and 1997 will officially overtake the “Baby Boomers” as the nation’s largest living generation. Bookended by students entering college and adults facing family and job pressures, the Millennials are taking on life’s challenges with their own unique spin. With the U.S. economy beginning to pull out of its tailspin, here are a few of the money and mental factors that will affect the newest majority generation: • The Student Loan Elephant: It’s the elephant behind every discussion about Millennials and their need for an advanced education to get a better paying job. Much of this education is being funded by a strong reliance on student loans. Not that there is anything wrong with using student loans as part of a college financial aid package, but a huge portion of this generation graduated just as the job market collapsed. Unable to find high-paying jobs they were unable to deal with their student loans. Now that there is over a trillion dollars outstanding, a great deal of attention is being paid to the entire student loan process. Millennials who have already graduated will need to familiarize themselves with income-based repayment plans, while parents of students who are just entering college will have to keep an eye on changing regulations. • The Itch to Switch: Once older Millennials do manage to find a job, they often get bored easily. Contrary to their older colleagues who find a job for life, they often believe that they should only stay with a company for a year or two before moving on to the next opportunity. This constant need to find something new may impact their ability to pay off their student loans or to save money for a home. Instead of moving from one company to another, though, some Millennials are now searching for job diversity within their current organizations. • Communication is Hard: For a connected generation that likes selfies, Facebook, and Twitter, Millennials often find it difficult to communicate in person with their co-workers. PR News says that they should not fall victim to Millennial-shaming, but should instead learn to bolster their statements with facts and learn to communicate better in-person in order to increase collaboration with older co-workers. An attitude adjustment and a willingness to learn can go a long way towards establishing and building workplace relationships. What lessons can the older Millennials impart to their younger cohorts? Perhaps they might recommend taking steps to maximize college financial aid and scholarships, or learning to compare the pros and cons of federal and private student loans. They might say that building people and communication skills in college is just as important as learning about your major. These lessons are important, as they will have an impact on individuals and society as well.

As a high school senior, let’s face it – it’s been a tough few months. You had to figure out the college application process, sweat out completing the FAFSA (Free Application for Federal Student Aid), and even participate in a few hair-raising college interviews. But now all of that is behind you, so it’s time to sit back and have some fun in your last few months at high school, right? Well, not exactly. If you feel a sudden urge to skip homework assignments, drop out of after school activities, and generally just “sit back and have some fun,” you could be suffering from a condition known as senioritis. According to the College Board, though, this could be a disastrous strategy. Read your acceptance letter carefully and you might notice a small disclaimer which states that the college can rescind its offer if your senior grades drop. Colleges can and do request copies of your final grades and can revoke their offers as late as July or August, even as you’re packing to get ready to attend! Even if the college does still decide to let you attend, your senioritis could mean that you start out on academic probation or with less of a financial aid package than you were anticipating. Instead of starting out on an exciting new journey, you may have unknowingly placed unnecessary roadblocks on your path to success. What can you do to avoid these potentially negative situations and ease yourself down the road to college? Here are a few suggestions: • Keep Up With The Class Work: There are only a few more months to go, and you have already demonstrated that you are capable of handling this amount of work. Besides, it will keep your brain in shape for your coming college classes. • Participate Responsibly: There is nothing which says you cannot enjoy all of the activities of your senior year once you have been accepted into college, but try not to take things too far. An “epic” senior prank that ends up in misdemeanor charges will probably not turn out to be so funny after all. • Plan Ahead: Think about what you can do this summer that might give you a head start on your college career. Perhaps there are some courses at a local community college, an internship, or a travel opportunity that will help broaden your horizons. • Be Aware of Money Issues: Spend some time talking to your parents about the results of their FAFSA application, the Student Aid Report, and the financial aid offer from your college. Try to understand the financial impact your college career will have on you and your family. Start thinking now about what you can do to help lessen the financial load. This is the home stretch and you have almost reached your goal of graduating from high school and moving on to college. Don’t let a case of senioritis derail everything you have worked so hard to achieve.

Once you have completed the FAFSA (Free Application for Federal Student Aid), the next step is receiving a Student Aid Report (SAR) from the Department of Education that summarizes the information you provided and lists your Expected Family Contribution (EFC). The EFC is compared against the Cost of Attendance (COA) at each college to determine the amount of financial aid that is required. This is an important document that will be used by various colleges to determine the amount of financial aid your child might be entitled to receive. If the information accurately reflects your current financial position, your student could receive federal, state, and institutional financial aid to help pay for college. It is very important to check this document carefully to make sure there are no mistakes that could affect your financial future. If you provided an email address when completing your FAFSA, you will receive an email notification that your SAR is ready to be accessed, usually within about two weeks. Be sure the email address, FederalStudentAidFAFSA@cpsemail.ed.gov, is included in your contacts so your notification doesn’t go into to your spam folder. Accessing your SAR involves visiting the same site where you completed the FAFSA, logging in using your FSA PIN, and clicking on “View Your Student Aid Report.” If you did not supply an email address, or your information is not complete, you will receive either the SAR or a SAR Acknowledgement by mail. Once you receive your SAR, here are a few steps you need to take: • Look for the Expected Family Contribution (EFC): This number usually appears in the upper right-hand corner of the SAR. If there is no amount listed, your application was incomplete and you will need to take some further action. • Look for your Data Release Number (DRN): This is a four digit number which will appear either in the upper right-hand corner on a paper SAR or in a box with the Application Receipt Date on the electronic version. You will need to supply this number to any colleges if you want them to change certain FAFSA information. • Check the Information Carefully: Make sure the information listed is what you think you entered. It is possible that you made some type of entry mistake that could affect your financial aid outcome. • Review the List of Schools: Check to see that all of your child’s prospective colleges are listed on the SAR, or they will not receive a copy of your financial information. • Make Necessary Changes: If information is missing or incomplete, you may need to make some changes to your FAFSA. You may also be able to change information if your situation has changed after submitting the application. Although there are still many factors that are taken into consideration, such as scholarships, the SAR is generally the first step in determining how much your family will be expected to pay to send your child to college.

It’s time to talk to your teenager about the realities of paying for a college education. Yes, it’s hard enough talking to them about curfews, let alone discussing something which could have an impact on their education and their whole adult financial life. But that job does fall under your list of responsibilities as a parent, so here are a few tips which might make it a little easier for everyone involved: • Fill Out the FAFSA Together: No, it’s not easy sharing the details of your financial situation with a teenager. You have actually tried to keep that information from your child for years, but there is no better time than right now to discuss the financial reality of your family. Let your teenager see how much money you earn, how much there is in savings, and how much you have saved for retirement. Use the FAFSA4Caster to estimate how much financial aid your child will receive, and then discuss what will have to be done to make up any difference. • Learn the Financial Aid Basics: If this is the first time you have sent a child to college, it can be confusing to learn all of the jargon. Sit down with your child and learn about the various grants, loans, scholarships and work-study programs that are available so that you become familiar with the terminology. Two sets of eyes may be better than one in spotting something that might just help make the financial aid difference in paying for college. • Help Your Teenager Learn to Budget: You are not necessarily doing your child any favors by not allowing him or her to learn how to handle money. Start teaching your children how to plan their income and expenses while they are still in high school, so they will have an easier time when it comes to preparing a budget for college. • Discuss Student Loans: Even with all of the federal, state and institutional college financial aid that is available, you may still have to borrow some money for your child’s college education. Make sure you understand the difference between federal and private student loans. If you have to take out a PLUS loan, explain that this will have an impact on your family’s financial situation. Set out any expectations now about who will be responsible for making payments on any student loans. • Hunt Down Those Scholarships: Scholarships are a great way to cover some of the college expenses, but you can’t receive most of them if you don’t apply. Steer your child in the right direction and make sure he or she spends some time each week pursuing this vital component of financial aid. It may be another hair-raising session to try to talk seriously to your teenager about important financial matters, but don’t give up. Be persistent, and remember that you are providing a financial education to someone who will shortly become an adult who needs these very skills.

Do millennials, generally considered to be those born between 1980 and 1999, have different factors which affect how they make decisions about student loans? The ever-increasing amount of student loans, estimated at over $30,000 per 2013 graduate in some states, seems to indicate that this group is comfortable with taking on debt. How much debt they accumulate and whether they will be able to repay it, though, often rely on several factors: • Your State Might Make a Difference: Although a debt amount of $30,000 is substantial, that is not necessarily the norm for all states. Somewhat surprisingly, the highest amount of student loan debt comes from New Hampshire, at a whopping $32,795. In addition, some 76% of the graduates there have at least some student loan debt. Other states now over the $30,000 mark include Rhode Island, Delaware, Pennsylvania, Connecticut, and Minnesota. Close behind are Maine, Michigan, South Carolina, and Iowa, each with average debt over $29,000. These figures are certainly something to keep in mind as high school students and their parents evaluate financial aid offers for the 2015-16 academic year. • Your Major Makes a Difference: When it comes to repaying your student loans, your major makes a big difference. A recent analysis from The Hamilton Project showed that, while student loan repayment often becomes easier for most graduates as their earnings increase, students with some majors tend to struggle with student loan debt. Their comprehensive review of eighty majors reveals the share of earnings needed to cover traditional student loan payments. Although college graduates still earn significantly more than high school graduates, there are certain careers which will generate enough income during the first ten years to easily repay most student loan balances. For example, given a similar amount of borrowing, graduates in drama and theater can project paying 24% of their earnings during the first year, while energy and extraction engineering graduates, can estimate paying only 7% of their earnings. While graduates may benefit from income-based repayment programs, this information may have some impact on choices of major and career paths for incoming freshmen. • You Might Not Have to Repay All of Your Student Loans: Pew Research found that 24% of millennials expect that student loan debt will be forgiven, and they may be right. Students with federal student loans have some options where part of their student loan debt is forgiven based on non-profit or public service or other factors. Income-based repayment plans may also qualify you for forgiveness after 20-25 years, but the amount forgiven may be taxable. In the end, the best payment strategy is one that is developed before you even begin to take out any student loans. Millennials should not wait until graduation to think about the impact their student loan borrowing will have on their lives after college. As the generation that will have the most economic impact in the next twenty to thirty years, it’s smart to start learning about money management now.

The holidays are over, winter is settling in, and college students are getting set to return to campus. Parents of high school seniors are anxiously beginning the process of completing the FAFSA for the very first time. You may not have noticed that the President has returned to Washington after a holiday break and a Republican Congress is also back in session. The balance of power in Congress has shifted, and college students everywhere are wondering what kind of impact this change might have on their college financial aid. Here are a few ways you could be affected: • Compromise Will Still Be Tough: Although the Republicans do hold a majority, it is not veto-proof, so there is still likely to be some political maneuvering between the two parties. If the parties cannot learn to compromise, this could have a big impact on any changes to federal college financial aid. • Sequestration Is Still an Issue: Remember all the fuss about sequestration some time back? Well, those federally mandated budget cuts are still having repercussions and may affect financial aid funding levels. Particularly at risk is the Federal Perkins Loan Program, which may expire in September without further Congressional action. The loss of this program could deeply impact the ability of students with extreme financial hardship to attend college. • Education May Not be a Top Priority: Although students and their parents know how important a college education is, officials in Washington may not have it at the top of their action list for 2015. They may still be feuding about the Affordable Care Act or the Keystone Pipeline, while renewing the Higher Education Act gets pushed farther down the priority list. • Financial Aid May Actually Get Easier: The financial aid process has caused consternation for years, and there is a movement afoot to make it simpler. There is some talk of streamlining the FAFSA, along with simplifying the number of aid programs. Meanwhile the Education Department, which oversees the implementation of federal financial aid programs, also has plans for implementing certain regulations in 2015. Their attention may be focused on a teacher-preparation regulation, student loan repayment, student debit cards, distance education, and the gainful-employment rule. This relates to President Obama’s college ratings plan, which he intended to have finalized by the fall. Of course, just because the Education Department will be working on these rules doesn’t mean they will all pass Congress. There may still be a lot of negotiation on all fronts in the future. Change is unsettling, but that is the benefit of living in a democracy. You have the opportunity to decide what is important to you and inform legislators of your priorities. Make sure you communicate with your representatives in Congress and the Senate, and tell them how important federal college financial aid is to your family and your future. If cuts are made to these programs, we will only have ourselves to blame for not making our opinions heard.