August 28, 2024 • 44 mins
Unlock the secrets to navigating the FAFSA process with ease as we explore the recent changes with financial aid expert Deborah Paul. Have you ever wondered how the shift from Expected Family Contribution (EFC) to the Student Aid Index (SAI) could impact your eligibility for aid? Join us on Money Matters as Deborah breaks down these updates, including the simplified FAFSA form and the integration of the IRS data retrieval system, designed to streamline your application experience and potentially increase need-based aid.
Discover how to maximize your financial aid opportunities with practical tips for finding local scholarships, which often present better odds than national awards. Deborah and I shed light on the nuances of student loan application periods, especially how different schools like LSU handle summer sessions. We also discuss the importance of understanding the timing of financial aid awards and the valuable resources available to students and parents navigating the FAFSA process.
Get empowered with essential knowledge on student loans, from disbursements and refunds to managing repayment options and exploring loan forgiveness. Deborah shares crucial advice on responsible borrowing, understanding loan obligations, and staying financially literate. Whether you're curious about deferment, forbearance, or public service loan forgiveness, this episode offers a comprehensive guide to help you optimize your financial aid and loan management, supporting your academic journey every step of the way.
Have an idea for a show or a question for Kim? Send us a text message
Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want – brought to you by Neighbors Federal Credit Union.
The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. This Podcast should not be considered professional advice.
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Episode Transcript
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Speaker 1 (00:02):
Welcome to Money Matters, the podcast that
focuses on how to use the moneyyou have, make the money you
need and save the money you want.
Now here is your host, ms Kim.
Speaker 2 (00:12):
Chapman, welcome to another edition of Money Matters
.
I'm your host, kim Chapman.
Do you have a kid in collegegetting ready to head to college
?
Do you need to know what'sgoing on with FAFSA?
What about student loans?
What about student loanforgiveness?
Well, we're going to tackle allof that information today,
joining me as returning guest,ms Deborah Paul, and she's going
(00:36):
to be able to fill in all thosegaps, answer those questions.
I have two kids in college.
I'm confused.
If you're confused, hopefullyby the end of this episode we'll
be enlightened and we'll knowwhat to do going forward.
Welcome, deborah, welcome back.
Thanks, kim, glad to be here.
I'm glad to have you right now.
It's time for kids to go backto school.
(00:56):
There have been so many changesin the news that it's kind of
hard to keep up with.
Like you know what's going onwith FAFSA, what's going on with
student loan forgiveness, andso I know that you are going to
be the right person that cangive us some good, concrete
information and if you're havingfog brain about this situation,
hopefully you know you'll beable to give us those answers.
So let's just catch up.
(01:17):
What's been going on.
Speaker 1 (01:19):
There's a lot going on and hopefully I can provide
those answers that students andparents who are anxiously
awaiting the start of the fallsemester can get.
It's been a busy FAFSA season.
Fafsa season usually opens onOctober 1st of every year for
the next award year, but theymade major, major changes to the
FAFSA for the 24-25 academicyear so it didn't roll out
(01:42):
October 1st of 2023 as expected.
So there were delays, majordelays, and by law it had to
roll out by December 31st.
So I think on December 30ththey rolled it out Ready or not.
Ready or not.
It was out there and studentsand parents in early January
started completing the FAFSA.
Then they noticed there weresome issues with the processing
(02:03):
of the financial aid information.
So that caused some delays andcolleges really didn't start
getting that information untillate February, early March,
which affects decisions of somestudents, because students want
to know early in the springwhere they're going to go, what
financial aid package College Aversus College B is offering
them and so forth.
So that did cause some anxietyand anxiousness among students
(02:26):
and parents of what do I do,where do I go, how much will I
get, and that sort of thing.
So now they've done all of that.
There were some changes.
One of the major changes isthat the FAFSA was too long.
We heard that repeatedly.
It takes me all day to completeit.
So the FAFSA was shortenedthrough the simplification
(02:51):
efforts on that.
And one thing that reallyhelped now is the IRS data
retrieval system.
It was an option before but nowonce a student enters their
information and the parents'information in SSN, it
automatically goes through theIRS database and pulls that
information from the tax return.
So you don't have to get yourtax return and look on line 15
for the AGI or line 60 fordisinformation of that
(03:12):
information.
So that's been helpful.
And it also one major changewas we all knew about EFC, which
is an acronym for expectedfamily contribution.
Well, there's no longer EFC.
It changed to SAI, which isStudent Aid Index.
With the formulas and all thechanges that have made, more
students are supposed to qualifyfor need-based federal aid.
(03:34):
So you fill out the FAFSA.
It determines your eligibilityfor several programs, mainly the
Pell Grant and the student loanprograms.
Speaker 2 (03:44):
Well, let me back up just a second.
So I filled out a number ofFAFSAs in my day and you
mentioned the time in terms ofthe change.
I wish I knew I could havecomplained.
I would have put that in myself.
I just sucked it up and did it.
I remember when you log in, itwill tell you you need at least
30 minutes and I imagine thatcan be tweaked just according to
(04:07):
how tech savvy you are and howreadily you have that
information.
So if it was, on average, 30minutes before, can you give us
an idea in terms of what shouldwe expect now?
Is it 15 minutes, is it 10minutes, is it five minutes and
I know it's going to vary fromperson to person, but on average
, are they even putting that onthe screen that it should be 15
(04:28):
minutes now?
Speaker 1 (04:28):
I'm really not sure what you know and it depends on
your preparedness If you haveall of your information, just in
case you have your taxdocuments.
Parents and students make a lotof mistakes with the birthday
Is it October 1st or October 2nd, the year the child was born,
and all of those things cancause delays.
So I always advise students andparents when you're getting
(04:50):
ready to complete the FAFSA, doa cursory look of what they're
asking for.
If you're not sure, have yourchild's social security number,
have the birth certificate orthe birth date to make those
things sure they're written down.
And a lot of times the parentsare filling out the form for the
students, all right.
So when it says birthday, theymay mistakenly put in their
birthday for the student, whichcauses errors.
(05:17):
One of the things that we seewith the FAFSA is the name.
Students are also filling outcompleting the ACT form to take
the ACT exam.
So when you're looking atapplying for federal and state
aid because we use theapplication from the FAFSA for
TOPS Tail Opportunity Programfor Students so when a student
fills out the FAFSA, we needthem to use their correct given
(05:38):
name on their birth certificate.
Now, just this week I washelping in the office and we
were trying to match thestudent's file for TOPS and
found out her name on the FAFSAis Lillian, okay, but then on
the ACT she goes by Lily andthen she was something else on
the student transcript systemfor her high school diploma.
(05:58):
So the computer is reallyreally smart, but they can't
match Lily to Lil to LillianOkay, that's three different
names.
So we advise them to use thesame name on all of the
documents that they'recompleting, because it can cause
a delay in processing.
But once they have all thedocuments in, the form is
simplified.
They've taken out some thingsthat they found were unnecessary
(06:21):
.
So I just think if they haveeverything, it shouldn't take an
inordinate amount of time toget it done, but just plan and
also always say pack yourpatience when you're dealing
with forms and that sort ofthing.
Speaker 2 (06:31):
Absolutely.
Was there any key reason thatthey decided to revamp it?
I would imagine it would bemore than just consumers
complaining that it's taking 30minutes of their day every year
for the next four years.
Was there any particular reason?
Speaker 1 (06:47):
Well, they felt some information was no longer needed
to determine eligibility forstudents and by simplifying it
and changing from EFC to SAI,more students would qualify for
the Pell Grant.
So those were some of the majorchanges behind making the FAFSA
shorter and able for morestudents to get need-based aid
to attend post-secondary school,whether it's at the vocational,
(07:09):
technical level, two-year,four-year, that sort of thing.
So one thing is the maximumPell Grant has increased for the
24-25 award year.
A student who has a zero or anegative SAI can get $7,395.
So that's a pretty hefty amount, particularly if you have a
student who's going, to say, atwo-year campus and they're
(07:32):
staying at home.
That will cover the majority oftheir costs with the Pell Grant
.
So more students should qualify.
They've taken out questions onassets and that sort of thing,
so it makes the form moreuser-friendly and able for more
students to get Pell Grant.
Speaker 2 (07:47):
Turnaround time.
Previously I remember I'd fillit out maybe on a Monday and
generally within maybe twobusiness days.
I'd say it was a pretty quickturnaround in terms of them
saying it's been completed, andI know that I'd have to contact
the actual university to getwhat my student would be
required to pay or would beresponsible for.
(08:08):
What has that turnaround timebeen like since the changes have
been incorporated?
Speaker 1 (08:13):
Well, a couple of months ago was longer, but now
they're back on that rotationbecause what happens when the
student completes the FAFSA, asyou said, the student and parent
get back their notification andthen the notification is also
sent to the college.
So then the college willprocess that.
So they're back to normal onthat particular schedule.
And so you know the FAFSA whenyou think about it.
(08:34):
Students all across the countryare completing this form and
Louisiana had a big change thisyear where, starting with 24, 25
high school graduates, it's nolonger a high school graduation
requirement for public schoolstudents.
So we were up to 70-somethingpercent of all high school
graduates completing the FAFSA.
We were always first or secondin the nation battling with
(08:57):
Tennessee on FAFSA completion,so our numbers are probably
going to go down.
There were various reasons thatthe state passed that law, but
that's what we have to deal withnow.
Some students who were takingthe ACT maybe weren't planning
to go to college, maybe theywere going to the military or
just not deciding onpost-secondary at that time.
So there are some opponentsthat said it brought down
(09:19):
Louisiana's ACT average.
So we'll have to probably get acouple of years of data to see
where that actually is.
But for this year the resultsat the end of July we were, I
think, in third or fourth place,with 60-something percent of
high school seniors completingthe FAFSA.
So hopefully the efforts that wehad in the past will continue
to inspire those students,because students may have an
(09:40):
idea of what they're going to dooh, I'm not going to college.
And then last minute decisionoh, I'm going to do.
Oh, I'm not going to college.
And then last minute decisionoh, I'm going to college.
So at least if you have theFAFSA completed, that's one of
the first steps you need, andparticularly if you're going to
a community college, theirenrollment period's a little bit
more lenient and they takestudents closer to registration
as opposed to maybe some of yourelite or private colleges or
four-year universities that haveenrollment caps.
Speaker 2 (10:06):
And I know you said that October was ideally that
target date and, like this yearor should I say in 2024, 2023,
they ran into some issues.
And what can we expect thisyear?
Is it going to be ready forOctober?
And then, even if it is ready,what is like the ultimate
deadline that students want tomake sure they have that
completed by for the upcomingschool year?
Speaker 1 (10:28):
Well, for those who will be starting their senior
year this fall, october 1st isstill proposed and I think the
Department of Education isreally extending its efforts to
get it ready for October 1stbecause there was a lot of
backlash.
It was, you know, congress gotinvolved.
Even the president of theUnited States got involved,
assuring parents and studentsthat we're going to work these
issues out and get it ready.
So they're really looking atOctober 1st for it to be ready.
(10:50):
Always, students and parentsshould look at what schools
they're applying for and ifthey're applying for state aid
In Louisiana, we want you tohave it filled out by July 1st,
which is after your high schoolgraduation, to ensure that we
can process your tops if you'relooking to get that award for
school.
But some colleges have earlierdeadlines, like February of
(11:11):
March.
If you're senior year,particularly colleges that have
limited institutional aid, theywant you to have that
application in Once you applyfor admissions.
I always say go ahead and applyfor financial aid, but apply for
admissions first, because insome cases the college will not
process your financial aid.
If you haven't applied, you cansend your financial aid
(11:32):
information to a college butwhen they look at your record,
oh, he hasn't or she hasn'tapplied for admissions.
Here they're processingsomething that may not
materialize, so it's always goodapply for admissions and then
apply for financial aid so thatyou can get an award
notification from that schooleven though you haven't totally
decided to go there.
(11:53):
In some campuses like, forinstance, my youngest child went
out of state and this has beena couple of years ago, but he
had to have an admissionsdeposit in with his scholarship
offer, like March of his senioryear.
So it just depends on theschool and check and see what
their timeline is for that, tosee where you should be as far
(12:13):
as applying for filling out theFAFSA and applying for even
scholarships.
Some scholarship deadlines maybe as early as December 1st of
your senior year.
Speaker 2 (12:22):
As early as December 1st of your senior year.
Now you mentioned that there'sbeen some changes in terms of
what students may be awarded interms of grants, that that
number has increased for mostfamilies.
Has there been any change interms of the amount for the
federal student loans, forexample, I believe freshmen can
get up to a max of $5,500, andthen, when they have enough
(12:43):
hours to be a sophomore, $6,500,so forth and so on.
Have those numbers changed atall?
Speaker 1 (12:49):
Not for the upcoming year Now.
Years ago it used to be $2,625for freshmen and then that went
up to $3,500 plus theunsubsidized loans.
So those numbers have not goneup.
You know, we always tellstudents look at all need-based
sources.
You know, a lot of timesstudents will look at
scholarships and apply for a lotof national awards and if
(13:10):
you're competing with 50,000students when you're looking at
I would just say maybe like anational retailer award, and if
you read the fine print it'llsay we expect 50,000
applications, that we're goingto give out six awards, your
chances aren't that great.
Six out of 50,000.
But then look locally.
You know maybe where yourparents were, your parents'
(13:32):
employer, some of you know wehave a big petrochemical
industry in Louisiana.
We have, you know, hospitalsand we have a lot of private
sector jobs that offerscholarships to children or
grandchildren of employees thereand even nonprofit
organizations.
So look locally because, forinstance, my sorority sponsors a
local scholarship and this isfor students.
(13:54):
Just I'll just use East BatonRouge Parish.
So we give out six $1,000awards which can help with a lot
going to college, and so wenormally don't get over 30
applicants.
So now six out of 30.
Odds are pretty good, Odds arepretty good.
You're writing an essay, doinga short interview, boom $1,000.
So look at sororities,fraternities, the other
(14:18):
nonprofit organizations thatprovide those scholarship aids,
and start local and then workyour way up and I think you can
look at maximize your resource,maximize your efforts and get a
lot of little ones which mayequate to helping out with, you
know, furnishing your dorm orgetting books or a new laptop, a
printer and those things thatare needed for college.
Speaker 2 (14:37):
The name of this session should be Changes or
Confusion, because I definitelyhave a question.
I was literally listening toorientation for my child,
because she's transferring toLSU, and something I heard kind
of threw me because I was likehave I been looking at it wrong
or did they change it?
And what I'm referring to iswhen you apply for a student
loan, typically it's for your.
(14:58):
I always thought it was for thefall, the spring and then the
summer that comes after thespring.
But what I heard, or at leastwhat I thought I heard, is that
actually you're applying for thesummer, the fall and then the
spring.
Can you clarify that for mespecifically?
Right?
Speaker 1 (15:15):
Well, that can be quite confusing.
So you have an academic year,so academic year begins usually
July 1st through June 30th.
Some schools put summer as aheader.
So in the case of LSU, which isprobably one of the few
post-secondary schools inLouisiana that put summer at the
beginning of the academic year,and most schools use summer as
(15:36):
a trailer.
So it depends on the school.
Speaker 2 (15:38):
It depends on the school.
Speaker 1 (15:39):
So for instance, lsu, if you're eligible for $3,500
and you indicate that I'm goingto summer school, they will
divide that $3,500 betweensummer, fall and spring.
If you're going to saySoutheastern or Southern
University and summer is atrailer there, and you don't
indicate you're going to saySoutheastern or Southern
University and summer is atrailer there and you don't
indicate you're going to summerschool, you will divide that
(16:00):
$3,500 between fall and spring.
So it just depends Summer canbe a header or a trailer, but in
most schools summer is atrailer.
But, LSU is different, okay.
Speaker 2 (16:11):
So that really threw me, because when my son was
going to school and I alwaysdealt with his, it was always
the trail, it was always fall,spring and summer and like.
I said I just learned this inorientation for her this week
and they did summer as theheader and I was like did this
change with FAFSA?
Speaker 1 (16:30):
Have I been confused, so I'm glad that you clarified
that I worked in the LSU studentaid office in the late 90s and
we used to start processing FASfor early February because some
students wanted to go to summerschool.
So we had to get them ready andthen their loan amount.
So it's a little bit different,because if you know you're not
going to summer school, thenthat's cool, but if you go to
(16:53):
summer school you're going toget a smaller loan for each
semester summer, fall and springbecause you're already dividing
it by three, Whereas moststudents who just do fall and
spring, their amounts are morefor those two semesters and then
if they decide later to go tosummer school, then they're
having to find more funds on howto finance that.
So it's different.
(17:13):
Yeah, it's tricky, it is it canbe tricky.
Speaker 2 (17:16):
Okay, so any other changes that we can look forward
to in terms of now that we'reright on the brink of the fall
semester starting?
Can schools and students expectto have their awards delayed
because of the changes?
Speaker 1 (17:31):
I think the schools are pretty much caught up.
I work at the TOPS office, soLSU fee bills went out and
they're due soon and we've beenworking with them.
So I think things are gettingback to normal.
And then the federal governmentprovided grants for
organizations to help studentscomplete the FAFSA.
For instance, with our agencywe have gone all across the
(17:52):
state.
Across the state Some collegeshave had Zoom calls or open
extended hours in the afternoonsto help evenings, to help
students and parents make surethat their financial aid
application is in and it's donecorrectly, if they have
corrections and that sort ofthing.
So we've done an all-out effortto do that.
And then, for instance, we haveour website, mylawsfordlagov,
(18:13):
where students can do a virtualoffice hour.
So if they're still havingquestions they can schedule that
and we will have arepresentative work with them
one-on-one for that particularamount of time needed to make
sure everything is done.
So I think we're gearing up fora pretty good fall.
Speaker 2 (18:28):
And something else I've learned for you because
from you definitely myright-hand person when it comes
to all things student loans oncethe student loan is received or
dispersed by the school, I'velearned that it can vary from
institution to institution interms of if a student is going
to receive an actual refundafter they've taken care of
their tuition room and boards orany other expenses or
(18:50):
obligations.
How can a student find out,based on their university, when
they can expect that particularrefund?
Because obviously we found out,or I found out, lsu's obviously
is a lot quicker than theuniversity that my son attended,
because it would be months andmonths after the school, after
the semester, started.
Speaker 1 (19:10):
It's the school and LSU is different in that also,
At LSU, if you're receiving arefund once your tuition and
visas have been met, the refundgoes to the student prior to the
first day of class.
So those students get theirmoney early.
Some schools that may beconcerned that students would
get that money and not stayenrolled will wait until the
(19:34):
semester has started.
So it just depends.
Schools have a default rate sothat could factor in as to when
they decide to disperse thosefunds.
Lsu has, you know, they giveout more loans than Pell Grants
because of the population of thestudent, well, the diversity of
the student body and the income, the income and assets of the
(19:54):
students who attend there.
So LSU has a low default rateand they have been successful in
getting students to repay theirstudent loans and they do an
excellent job at entrance andexit counseling.
So those students pay backtheir loans.
So they have a lot of studentsfrom LSU live off campus.
So by giving them their moneyat the beginning of the semester
, some of them will take it andpay their, say they're living
(20:16):
off campus, pay their rent forthe rest of the semester, as
opposed to not having to waitand borrow money from somewhere
else to make ends meet or theycan have their books and that
sort of thing done.
Other schools who are concernedthat students might get that
money and not complete thesemester or term sometimes wait
until classes have started andthey wait until after the 14th
(20:36):
class day, which is usually twoor three weeks into the semester
, before they disperse thosefunds.
So it varies from school toschool and they can check all
that out during orientation.
They'll give them thatinformation and so forth.
But each student who receives afederal direct student loan is
required to do entrancecounseling and it tells them
about the responsibilities ofthe student borrower.
(20:58):
And a lot of times studentsjust you know, yeah, check yes
and say I agree, I understand,and they really don't.
And the same thing when astudent gets a TOPS award, I
always say students and parentsspend a lot of time from eighth
grade, because sometimes youreighth grade classes can count
as high school classes.
They spend a lot of timegetting tops I'm getting tops,
I'm getting tops and monitoringthe ACT scores and the GPA in
(21:22):
the courses and then, once theyget the rights and
responsibilities, they're likeI'm done, they have tops.
And then after the firstsemester when the student had
too much fun during footballseason and their GPA is a 1.9,
and then we tell them you'resuspended from TOPS.
What do you mean?
Well, if you had read therights and responsibilities, it
says if you go below a 2.0,you'll be on suspension until
(21:43):
you get your GPA back up.
But they didn't read that partbecause they put all their eggs
into getting TOPS and then, oncethey got it, they just thought
okay, I'll always have it forfour years of school.
And that's not necessarily thetruth.
So read the fine print,particularly when you're looking
at what the responsibilitiesare, the requirements to keep it
.
Same thing with student loans.
You can receive a student loanand if you don't meet the
(22:05):
satisfactory academic progress,the SAP requirements, you could
lose your student loan becauseyou have to earn 66% of the
hours that you enroll in.
So if you enroll in 12 hoursand you pass in three, you're
going to end up in trouble.
Speaker 2 (22:20):
And while I would like to think that if some
parents and college students arelistening to this, they're
going to do an about phase andgo back and read those
disclosures, but we know thatthat's probably not going to
happen.
So are there any two or threetop things that are important
for every student and parent toknow that has chosen, has
elected, not to really read thefine print that you think it's
(22:43):
important for every parent andstudent to be aware of?
Speaker 1 (22:47):
Stay in contact.
You know for students, visityour academic advisor.
Get to know who that is.
If you're having trouble in aclass, don't wait until finals
to say I don't understand thistrigonometry or calculus course.
There's free tutoring oncollege campus.
That could be a stigma.
Oh, you're going to tutoring.
You're not high school anymore,but a lot of schools are going
(23:08):
to peer tutoring, which you knowyou're talking to someone on
your age level.
That can really help youunderstand and break it down.
Use common terminology.
The counseling center is yourfriend.
Go to the counseling center,see what resources, because a
lot of students suffer becausethey don't have that transition
from high school to college.
You know, in high school if astudent's overslept, the parent
(23:30):
was like you know, helen orJohnny, wake up, you're going to
be late for school.
Well, when you're on collegecampus you have to set your
alarm clock and if you hitsnooze too many times you might
miss that class.
Or if you live off campus andyou miss your ride, your car's
(23:50):
not working or your battery'sdead or you miss the bus, you
might miss class.
So the time, the management andthen the balance, because when
you think, in high school you'rein class from seven to three.
If you're in college and you'reonly enrolled in 12 hours, that
means you're only going toclass 12 hours a week in a 40
hour work week.
So that means a lot of freetime.
Are you sleeping too much?
Are you staying at the reccenter because they have a
(24:13):
really nice lazy pool there, orare you exploring all of the
options in the food court?
So you have to really balance.
When are you going to study?
You're only in class 12 hours aweek, but you have to plan for
when are you going to study.
If you're in a dormitory and youhave a roommate and you've
always had your own room, howare you working that out with
your roommate?
Do you have a roommate contract, like on the Big Bang Theory
(24:35):
Roommate contract?
So all of those things matter.
Are you eating right?
So the transition from highschool to college is real and
some students aren't preparedfor that.
And then if they're going fromsmall high school to LSU, for
instance, that's a small fish ina big pond.
Are you okay with that?
So, looking at all of that, ordo you miss your cat or your dog
(24:57):
that you love home?
Do you miss your parents?
So all of those things cancause students to not have the
best success.
So go to the counseling centerand even across campus they have
workshops.
You know how to study smarter,not longer, how to transition
from being away from home, andthose kinds of things which all
help with academic success.
So use the tools and theresources that are available on
(25:18):
the college campus.
Ask questions, don't wait tillit's too late.
Students appeal their topsbecause they've gone through
some traumatic experiences which, if they had used the resources
on campus, maybe some of thosecould have been alleviated.
So I just you know, use theresources on campus, ask
questions and read the fineprint.
I promise some of the top threethings I would say.
Speaker 2 (25:39):
OK, and just to kind of round up before we switch
gears from FAFSA is there, ifI'm going to school in the fall?
Is there an absolute deadline,or when is it just too late for
me to complete a FAFSA?
Speaker 1 (26:01):
a FAFSA.
Well, the FAFSA for the 24-25academic year, it's good, from
October 1 of 23 until the end ofthe academic year, which is
June of 25.
So if you start college thisfall and you have not completed
a FAFSA and you're paying onyour own, which is fine, you can
fill out a FAFSA anytime duringthe academic year.
So say, you decide November 1st, I'm going to apply for
financial aid for this year,you've paid your tuition and
then, oh, you have a zero SAI.
(26:22):
You qualify for a full PellGrant, so you're going to get
the full Pell Grant amount forthe fall at that period.
Oh, wow, so you can do itduring the academic year.
Now, if you're applying for aloan, in most cases loans have
to be dispersed no later than 60days after the end of the
academic year.
So if you apply for a loan inApril of your freshman year,
(26:45):
you're still within that 60 daysbefore the academic year ends
to apply to receive the proceedsfrom that.
Speaker 2 (26:51):
And if I get a student loan and it's for
$10,000, but my tuition is only$8,000.
So ideally that's going to cometo me as a $2,000 refund, do I
have to take that extra $2,000?
What can I do with it if Idon't want to have $10,000 worth
of debt, if I only need to have$8,000?
Speaker 1 (27:11):
Borrow only what you need, borrow responsibly, and
that's a big thing.
Borrow only what you need,borrow responsibly, and that's a
big thing.
And you know, 18-year-olds nowthey're, I think, adding
financial literacy to some ofthe high school curriculums.
Yes, you have to jumpstart right, and that's very needed because
students don't have an idea ofwhat things cost.
You know, when you're in highschool mom, dad, auntie, cousin,
(27:31):
big sister, godmother I need Xamount of dollars.
So here you go and you knowstudents spend an extraordinary
amount of money on things likeprom dresses and tennis shoes
and phones and hairstyles andall of that, and they don't
really know the value of that.
Now, when they start working,they're like oh my God.
Speaker 2 (27:51):
And spending their own money.
Speaker 1 (27:53):
Yeah, they're like what is FICA and you know who's
that.
And I'm giving all my money.
Speaker 2 (27:56):
We're not paying taxes, yeah.
Speaker 1 (27:58):
So I think financial literacy is very important, but
borrow responsibly, because thatfollows you.
So if you borrow the max andyou really don't need it once
you graduate and interestcounseling touches on that and
at the end, exit counselingdefinitely makes it real you
don't want to be saddled with anextraordinary amount of debt if
(28:21):
you don't have to, because whenyou're starting out as a young
college graduate, you may wantto get a new car or a car.
They do credit checks if youwant to rent an apartment, if
you have to buy a house, to buya house.
And so I always say, when youlook at borrowing, for each
$10,000 that you borrow, youcould expect to pay about a
(28:44):
hundred dollars a month when yougo into repayment.
So if you borrow $5,000, I'msorry, $50,000, you're looking
at about $500 a month inrepayment.
It's just a regular repaymentoption.
So borrow wise that you don'tthink about it when you're 18,
19, 20 years old, but when youget to be 23 and 24 and your
student loan debt is more thanyour car.
Speaker 2 (29:04):
Note that's a problem and that's a good way to
transition into talking aboutwhen should students especially
if you're new to college andgetting student loans when
should they expect to have tostart paying back that money,
that student loan money?
Speaker 1 (29:18):
With the federal direct student loan program,
repayment starts six monthsafter you graduate or are no
longer enrolled at least halftime.
So if you go to college for twoyears and you say this is not
for me, and after May you'rejust like, okay, I'm not going
back to school in August,november will roll around
because that's your six months,and then you have to start
(29:40):
repaying, unless you go intodeferment or forbearance, which
we can talk about a little bitlater.
So it's real and there areoptions for students who can't
pay, you know, likeconsolidation and other things,
but you start paying back sixmonths after you graduate or are
no longer enrolled.
At least have time.
Speaker 2 (29:58):
So if I take a six-month break, or maybe even a
year break, and then I go backto school, re-enroll, maybe I
finish my bachelor's, andthere's six months comes by, I'm
working, and then I decide,maybe a year later I want to go
back and get my master's or getanother degree, can I then go
back to not having to pay?
How does that work?
Speaker 1 (30:19):
Right.
So if a student re-enrolls, atleast have time, they can put
those loans in a defermentstatus.
So deferment means that you'renot making any payments because
you're back in school at leasthave time.
There are other reasons fordeferment Unemployment or
serious illness or injury andthose if you go into the
military those kinds of things.
You can put your loan indeferment, but it doesn't excuse
(30:41):
you from having to repay it.
It just means that you're onpause and you're not paying
during that period of time.
But it's real.
Speaker 2 (30:48):
All right, and so we talked a little bit about
deferment.
Let's talk about forbearance,or what's the difference between
a deferment and forbearance?
Speaker 1 (30:54):
OK, so deferment and forbearance, okay so a deferment
means that you're on anauthorized pause from paying
your loan.
Maybe you had an injury thatstopped you from working for six
months or for a year, or youwent back to school.
So you're not making anypayments and you're not being
charged interest and so forth.
Forbearance means you justcan't afford to make the
(31:16):
payments that you're required tomake.
So usually in forbearancestudents will pay the interest
on the loan and not pay theactual payment, which will
reduce their payment for aspecified period of time.
Maybe you had to switch from ahigher-paying job to something
lower-paying because of theeconomy or your job title and
that sort of thing.
So forbearance means thatyou're only paying a small part,
(31:37):
which will just continue to.
You know your principal isstill there.
So there are options to helpstudents.
But students need to just notignore those and say I'm just
not paying anything and thenwhen that happens, then you run
into default.
Speaker 2 (31:54):
So we've covered, you know, FAFSA, those students
that are on their journey intocollege, hopefully getting
scholarships and Pell Grants andmaybe even student loans.
We've covered those that havethose student loans that are in
school now.
But I think there is a wholehost of listeners or population
that want to know about studentloan forgiveness.
(32:15):
A couple of years ago, thatcarrot was dangled in front of
many of us saying, hey, there'san opportunity that maybe we can
just wipe away $10,000 or$20,000 of your debt.
And of course, you know,through politics and government
stepping in, that didn't happen,and so a lot of us are sitting
here waiting to see is it evergoing to happen?
(32:36):
Where are we now with studentloan forgiveness?
What has happened since thatinitial proposal was rejected by
Congress?
Speaker 1 (32:43):
Well, there's something going on where they'll
be ruling soon to see if whatPresident Biden has done with
relief.
So we'll talk about publicservice forgiveness first.
So that's still available toborrowers who worked, say, at a
nonprofit organization city,state or federal government
positions, nonprofits, thosesort of things so that still
(33:06):
works.
If you paid on your loan for 10years, you can get public
student, public service, studentloan forgiveness.
So I know several people,friends and family members.
I have a niece who's now anassistant principal and she was
like she called and she was likeAngie.
I got this in the mail.
I don't even know if this istrue, but she had paid for 10
(33:26):
years and she's still old.
I think 50,000 plus and allthat was forgiven and I said you
just got a raise.
So, yeah, so.
So student loan public serviceservices available, but there
are a lot of options they'relooking at for regular
forgiveness for students whojust can't pay.
You know, for whatever reasons.
They're looking at takingaction on that.
(33:47):
Since 2005, which is almost 20years, and you still owe over a
certain amount, that's the groupthey're looking at helping for
those who had student loans orparent loans over that period of
time.
It's still to be decided, sothey're still trying to finalize
the student debt relief package.
(34:08):
So the jury is still out to seewhat will happen in this
administration regarding that.
Speaker 2 (34:13):
You mentioned nonprofit.
Obviously, if you work for anonprofit and you've been paid
on it for 10 years, then you'remost likely eligible, and I'm
not sure if this is a questionthat you can answer.
But let's say, for example, youmay not necessarily work, your
employer's not on that list,because there is a list of
employers that you can check andsay hey, is my company listed
(34:36):
here?
Perhaps your company is notlisted on there, but the work
you do might be considerednon-profit work.
Is there an option to appeal?
Speaker 1 (34:47):
I'm not sure, because I think they look at the 501c3
status of the organization.
So maybe they're operating as anonprofit but they haven't
received all of the federalapprovals to get their 501c3.
So you're working as anonprofit employee but your
company, or your organizationrather, has not received all of
(35:08):
the approvals that are necessary, then that wouldn't count.
What I tell students who aredoing public service forgiveness
is get your employmentverification every year.
So even if you're in the samejob because you may work, say,
for City of Baton Rouge forthree years and then you switch
to state, government and federalDon't wait until you've worked
(35:28):
for the federal government.
And now you have to go back sixyears to the city and say I
need verification that I workedhere from 2012 to 2015.
And say I need verificationthat I worked here from 2012 to
2015.
At the end of every year, youranniversary at that organization
that company or the agency askthem for that.
(35:48):
There's a public serviceforgiveness form you can go
online and download.
Get that form, get it signed bythe HR.
So you're building your folder.
So at the end of 10 years youmay have three years here, four
there and four somewhere else.
So that gives end of 10 years.
You may have three years here,four there and four somewhere
else.
So that gives you your 10 yearsto apply, because you will need
verification for each year ofemployment that you're seeking
the forgiveness for.
So with the death relief, likeI said, they're aiming to help
(36:10):
certain borrowers, those whohave borrowed, who still owe
more than $20,000 after payingon their loans for 20 years.
That's the main group thatthey're looking at those who had
consolidation loans that rightnow what they owe is greater
than what they've borrowed.
Those are the students that theBiden-Harris administration is
trying to assist.
Speaker 2 (36:31):
And will they reach out to those borrowers?
Or should we still be payingattention to the news?
How often maybe should we checkfor updates?
And then where would we findthat information?
To make sure that you know, ofcourse there's Google, but you
know, if you go on Google you'llfind so many different answers.
Where what's the best place toget up to date, accurate
information?
Speaker 1 (36:52):
OK, the federal government has a really good
website called studentaidedgovI'm sorry, studentaidgov, it's
T-U-D-E-N-T-A-I-Dgov and therethey can find lots of all the
information regarding studentloan relief.
Deadline of August 30th ifstudents want to opt out.
(37:18):
But who would opt out if youowe that much money, right?
So if you want to be includedin the potential debt relief,
you don't have to do anythingonly if you want to opt out.
So if you don't want to be partof it, then you need to contact
your student loan servicer byAugust 30th of this year and let
them know.
Otherwise you'll be included inthe debt relief anything that
passes from the administrationCongress right.
(37:39):
So they're emailing allborrowers to tell them about the
potential student loan debtrelief.
Whether or not you receive anemail, you can still follow the
opt-out instructions, but if youwant to be included, then you
don't have to do anything atthis point.
So they're looking at borrowerswho borrow from the direct
student loan program and thosewho have a balance that's
greater than what theyoriginally started with, and
that those who've been paying ontheir loans prior to July 1st
(38:01):
of 2005.
So that's basically 19 years.
Speaker 2 (38:05):
Are there?
So in the mail I get tons ofinformation about consolidating
student loans.
I guess my question is is thereany action that a student loan
borrower could take that wouldautomatically disqualify them
from having student loanforgiveness, for example?
If I do consolidate that, doesthat impact how long I've been
(38:28):
paying on the loans?
Does it start all over againfrom day one with this new
lender?
Speaker 1 (38:33):
Consolidation.
You know it helps students whohave borrowed like over $50,000.
So it extends the repaymentperiod from like 10 to 25 years,
because a basic student loanrepayment schedule is for 10
years.
Whether you borrow $10,000 or$50,000, you're on a 10-year
repayment schedule is for 10years.
Whether you borrow $10,000 or$50,000, you're on a 10-year
repayment schedule.
So if you consolidate, that canextend it up to 25 years.
(38:55):
So those years still count.
It's just giving you a longeramount of time.
So if you have a longer amountof time your note is probably
going to decrease.
It's like buying a house.
If you say you want to buy yourhouse and pay for it in 10
years, then your note's like ohmy God.
But if you say I want to do 25or 30 years, then that reduces
what your monthly note would be.
So that's the major benefit forconsolidation loans giving the
(39:17):
student more time to pay theirloan.
But those years still count.
Speaker 2 (39:21):
And back to student loan forgiveness.
If you have a parent that hastheir own student loans and then
they're also a cosigner fortheir children, their child or
their children's student loans,can that parent apply for
themselves and then the studentsas well, or is it each
individual, whoever the primaryborrower is?
Speaker 1 (39:39):
Okay, for parent loans that is in the parent's
name and the parent may havereceived a cosigner, so they're
responsible for the parent loan.
With the federal direct studentloan students don't have a
cosigner.
But if a student borrowed froma private loan source, that's a
different case.
So if they borrowed from aprivate loan source and there
(40:00):
are some lenders who borrowprivate loans, particularly for
students who go to high costinstitutions, and the direct
loans they've exceeded orthey've maxed out on those
limits, then yes, they would gothrough a private loan and a
private loan would have probablyrequired a cosigner and then
that would be different.
But the private loans are notconsidered under the student
(40:20):
loan debt relief.
Ok, so private loans are not.
Yeah, the debt relief is forthe federal direct student loans
and the federal direct parentloans, not for private loans.
All right?
Speaker 2 (40:32):
Well, and as we get ready to wrap up this session,
are there any other changes thatwe should be looking for, at
least in the next six months, interms of FAFSA, student loan
forgiveness, anything that youknow that may be coming down the
pike, that we need to reallykind of be paying attention to
in the next six months?
I would say the debt reliefpackage that's being proposed.
Speaker 1 (40:54):
Check the studentaidgov site for updates
regarding that.
Stay in contact with yourservicer if you're paying back
your student loan.
Don't skip payments, thinking,oh, I'm waiting on debt relief
because debt relief may not come.
Hopefully it does, which wouldreally improve the financial
livelihood of millions ofstudents across the country.
(41:14):
But don't wait on that.
Continue making payments.
If you're having trouble, looksee if you qualify for a
deferment or forbearance or youcan do the income contingent
repayment plan based on yourincome, where you would pay
lower because you're making alower salary.
So just stay tuned for that.
The FAFSA for 25-26 should comeout October 1st.
(41:36):
Just stay tuned on that withthe studentaidgov.
I go to studentaidgov all thetime and if that's something I
know and I don't look at some ofthose sites that want to charge
you for something or let mehelp you get out of your student
loan debt.
Students should be very wary ofthat students and parents
because most of the timesthey're charging you a fee for
something that you can do onyour own.
(41:56):
Contact your lender, email yourlender, seek relief and other
options available through thefederal government.
Speaker 2 (42:03):
Well, it seems like this is a topic that will never
get old, and we'll probably haveyou back in another six months
just to see what changes,especially with FAFSA, if they
have everything together, ifthere are any new quirks or
hangups that parents andstudents need to be aware of.
I think there are millions ofpeople that are sitting on the
edge of their seat waiting tosee if we will ever have student
(42:24):
loan forgiveness and yes, I saywe and so thank you so much for
coming back, returning andbeing the expert that you are
giving us all this goodinformation.
I know that I will have youback.
As a matter of fact, I'll justget you your own little parking
spot.
So, until as long as there'sstudent loan debt out there,
we're going to need you to comeand keep us up to date.
So thank you again for joiningme.
(42:44):
Thank you, Kim.
I appreciate it Anytime.
I appreciate it.
Anytime.
I want to leave you with someessential tips to help you
navigate the financial aidprocess and manage your student
loans more effectively.
First, start early.
Begin the FAFSA applicationprocess as soon as possible.
(43:04):
Early submission can increaseyour chances of receiving more
financial aid, and the sooneryou have your information, the
better off you will be when itcomes to planning.
Gather your documentation.
Have all necessary documentsready before you start the FAFSA
.
Although they've shortened theprocess, you'll be a lot
smoother throughout the processif you are prepared.
(43:26):
Double-check your information.
Ensure all your informationentered on the FAFSA is accurate
.
Remember, as Ms DeBoermentioned, if you use multiple
names Lily, lillian and Lil thatcan slow down the process of
getting your information and itmay even inhibit you from being
able to get your award simplybecause there's a hang-up over
(43:48):
who's the correct person.
And, of course, to learn more,check out neighborsfcuorg
forward slash financialeducation to learn more on how
to use the money you have, makethe money you need and save the
money you want.
Welcome to Money Matters, the podcast that
focuses on how to use the moneyyou have, make the money you
need and save the money you want.
Now here is your host, ms Kim.
Speaker 2 (00:12):
Chapman, welcome to another edition of Money Matters
.
I'm your host, kim Chapman.
Do you have a kid in collegegetting ready to head to college
?
Do you need to know what'sgoing on with FAFSA?
What about student loans?
What about student loanforgiveness?
Well, we're going to tackle allof that information today,
joining me as returning guest,ms Deborah Paul, and she's going
(00:36):
to be able to fill in all thosegaps, answer those questions.
I have two kids in college.
I'm confused.
If you're confused, hopefullyby the end of this episode we'll
be enlightened and we'll knowwhat to do going forward.
Welcome, deborah, welcome back.
Thanks, kim, glad to be here.
I'm glad to have you right now.
It's time for kids to go backto school.
(00:56):
There have been so many changesin the news that it's kind of
hard to keep up with.
Like you know what's going onwith FAFSA, what's going on with
student loan forgiveness, andso I know that you are going to
be the right person that cangive us some good, concrete
information and if you're havingfog brain about this situation,
hopefully you know you'll beable to give us those answers.
So let's just catch up.
(01:17):
What's been going on.
Speaker 1 (01:19):
There's a lot going on and hopefully I can provide
those answers that students andparents who are anxiously
awaiting the start of the fallsemester can get.
It's been a busy FAFSA season.
Fafsa season usually opens onOctober 1st of every year for
the next award year, but theymade major, major changes to the
FAFSA for the 24-25 academicyear so it didn't roll out
(01:42):
October 1st of 2023 as expected.
So there were delays, majordelays, and by law it had to
roll out by December 31st.
So I think on December 30ththey rolled it out Ready or not.
Ready or not.
It was out there and studentsand parents in early January
started completing the FAFSA.
Then they noticed there weresome issues with the processing
(02:03):
of the financial aid information.
So that caused some delays andcolleges really didn't start
getting that information untillate February, early March,
which affects decisions of somestudents, because students want
to know early in the springwhere they're going to go, what
financial aid package College Aversus College B is offering
them and so forth.
So that did cause some anxietyand anxiousness among students
(02:26):
and parents of what do I do,where do I go, how much will I
get, and that sort of thing.
So now they've done all of that.
There were some changes.
One of the major changes isthat the FAFSA was too long.
We heard that repeatedly.
It takes me all day to completeit.
So the FAFSA was shortenedthrough the simplification
(02:51):
efforts on that.
And one thing that reallyhelped now is the IRS data
retrieval system.
It was an option before but nowonce a student enters their
information and the parents'information in SSN, it
automatically goes through theIRS database and pulls that
information from the tax return.
So you don't have to get yourtax return and look on line 15
for the AGI or line 60 fordisinformation of that
(03:12):
information.
So that's been helpful.
And it also one major changewas we all knew about EFC, which
is an acronym for expectedfamily contribution.
Well, there's no longer EFC.
It changed to SAI, which isStudent Aid Index.
With the formulas and all thechanges that have made, more
students are supposed to qualifyfor need-based federal aid.
(03:34):
So you fill out the FAFSA.
It determines your eligibilityfor several programs, mainly the
Pell Grant and the student loanprograms.
Speaker 2 (03:44):
Well, let me back up just a second.
So I filled out a number ofFAFSAs in my day and you
mentioned the time in terms ofthe change.
I wish I knew I could havecomplained.
I would have put that in myself.
I just sucked it up and did it.
I remember when you log in, itwill tell you you need at least
30 minutes and I imagine thatcan be tweaked just according to
(04:07):
how tech savvy you are and howreadily you have that
information.
So if it was, on average, 30minutes before, can you give us
an idea in terms of what shouldwe expect now?
Is it 15 minutes, is it 10minutes, is it five minutes and
I know it's going to vary fromperson to person, but on average
, are they even putting that onthe screen that it should be 15
(04:28):
minutes now?
Speaker 1 (04:28):
I'm really not sure what you know and it depends on
your preparedness If you haveall of your information, just in
case you have your taxdocuments.
Parents and students make a lotof mistakes with the birthday
Is it October 1st or October 2nd, the year the child was born,
and all of those things cancause delays.
So I always advise students andparents when you're getting
(04:50):
ready to complete the FAFSA, doa cursory look of what they're
asking for.
If you're not sure, have yourchild's social security number,
have the birth certificate orthe birth date to make those
things sure they're written down.
And a lot of times the parentsare filling out the form for the
students, all right.
So when it says birthday, theymay mistakenly put in their
birthday for the student, whichcauses errors.
(05:17):
One of the things that we seewith the FAFSA is the name.
Students are also filling outcompleting the ACT form to take
the ACT exam.
So when you're looking atapplying for federal and state
aid because we use theapplication from the FAFSA for
TOPS Tail Opportunity Programfor Students so when a student
fills out the FAFSA, we needthem to use their correct given
(05:38):
name on their birth certificate.
Now, just this week I washelping in the office and we
were trying to match thestudent's file for TOPS and
found out her name on the FAFSAis Lillian, okay, but then on
the ACT she goes by Lily andthen she was something else on
the student transcript systemfor her high school diploma.
(05:58):
So the computer is reallyreally smart, but they can't
match Lily to Lil to LillianOkay, that's three different
names.
So we advise them to use thesame name on all of the
documents that they'recompleting, because it can cause
a delay in processing.
But once they have all thedocuments in, the form is
simplified.
They've taken out some thingsthat they found were unnecessary
(06:21):
.
So I just think if they haveeverything, it shouldn't take an
inordinate amount of time toget it done, but just plan and
also always say pack yourpatience when you're dealing
with forms and that sort ofthing.
Speaker 2 (06:31):
Absolutely.
Was there any key reason thatthey decided to revamp it?
I would imagine it would bemore than just consumers
complaining that it's taking 30minutes of their day every year
for the next four years.
Was there any particular reason?
Speaker 1 (06:47):
Well, they felt some information was no longer needed
to determine eligibility forstudents and by simplifying it
and changing from EFC to SAI,more students would qualify for
the Pell Grant.
So those were some of the majorchanges behind making the FAFSA
shorter and able for morestudents to get need-based aid
to attend post-secondary school,whether it's at the vocational,
(07:09):
technical level, two-year,four-year, that sort of thing.
So one thing is the maximumPell Grant has increased for the
24-25 award year.
A student who has a zero or anegative SAI can get $7,395.
So that's a pretty hefty amount, particularly if you have a
student who's going, to say, atwo-year campus and they're
(07:32):
staying at home.
That will cover the majority oftheir costs with the Pell Grant
.
So more students should qualify.
They've taken out questions onassets and that sort of thing,
so it makes the form moreuser-friendly and able for more
students to get Pell Grant.
Speaker 2 (07:47):
Turnaround time.
Previously I remember I'd fillit out maybe on a Monday and
generally within maybe twobusiness days.
I'd say it was a pretty quickturnaround in terms of them
saying it's been completed, andI know that I'd have to contact
the actual university to getwhat my student would be
required to pay or would beresponsible for.
(08:08):
What has that turnaround timebeen like since the changes have
been incorporated?
Speaker 1 (08:13):
Well, a couple of months ago was longer, but now
they're back on that rotationbecause what happens when the
student completes the FAFSA, asyou said, the student and parent
get back their notification andthen the notification is also
sent to the college.
So then the college willprocess that.
So they're back to normal onthat particular schedule.
And so you know the FAFSA whenyou think about it.
(08:34):
Students all across the countryare completing this form and
Louisiana had a big change thisyear where, starting with 24, 25
high school graduates, it's nolonger a high school graduation
requirement for public schoolstudents.
So we were up to 70-somethingpercent of all high school
graduates completing the FAFSA.
We were always first or secondin the nation battling with
(08:57):
Tennessee on FAFSA completion,so our numbers are probably
going to go down.
There were various reasons thatthe state passed that law, but
that's what we have to deal withnow.
Some students who were takingthe ACT maybe weren't planning
to go to college, maybe theywere going to the military or
just not deciding onpost-secondary at that time.
So there are some opponentsthat said it brought down
(09:19):
Louisiana's ACT average.
So we'll have to probably get acouple of years of data to see
where that actually is.
But for this year the resultsat the end of July we were, I
think, in third or fourth place,with 60-something percent of
high school seniors completingthe FAFSA.
So hopefully the efforts that wehad in the past will continue
to inspire those students,because students may have an
(09:40):
idea of what they're going to dooh, I'm not going to college.
And then last minute decisionoh, I'm going to do.
Oh, I'm not going to college.
And then last minute decisionoh, I'm going to college.
So at least if you have theFAFSA completed, that's one of
the first steps you need, andparticularly if you're going to
a community college, theirenrollment period's a little bit
more lenient and they takestudents closer to registration
as opposed to maybe some of yourelite or private colleges or
four-year universities that haveenrollment caps.
Speaker 2 (10:06):
And I know you said that October was ideally that
target date and, like this yearor should I say in 2024, 2023,
they ran into some issues.
And what can we expect thisyear?
Is it going to be ready forOctober?
And then, even if it is ready,what is like the ultimate
deadline that students want tomake sure they have that
completed by for the upcomingschool year?
Speaker 1 (10:28):
Well, for those who will be starting their senior
year this fall, october 1st isstill proposed and I think the
Department of Education isreally extending its efforts to
get it ready for October 1stbecause there was a lot of
backlash.
It was, you know, congress gotinvolved.
Even the president of theUnited States got involved,
assuring parents and studentsthat we're going to work these
issues out and get it ready.
So they're really looking atOctober 1st for it to be ready.
(10:50):
Always, students and parentsshould look at what schools
they're applying for and ifthey're applying for state aid
In Louisiana, we want you tohave it filled out by July 1st,
which is after your high schoolgraduation, to ensure that we
can process your tops if you'relooking to get that award for
school.
But some colleges have earlierdeadlines, like February of
(11:11):
March.
If you're senior year,particularly colleges that have
limited institutional aid, theywant you to have that
application in Once you applyfor admissions.
I always say go ahead and applyfor financial aid, but apply for
admissions first, because insome cases the college will not
process your financial aid.
If you haven't applied, you cansend your financial aid
(11:32):
information to a college butwhen they look at your record,
oh, he hasn't or she hasn'tapplied for admissions.
Here they're processingsomething that may not
materialize, so it's always goodapply for admissions and then
apply for financial aid so thatyou can get an award
notification from that schooleven though you haven't totally
decided to go there.
(11:53):
In some campuses like, forinstance, my youngest child went
out of state and this has beena couple of years ago, but he
had to have an admissionsdeposit in with his scholarship
offer, like March of his senioryear.
So it just depends on theschool and check and see what
their timeline is for that, tosee where you should be as far
(12:13):
as applying for filling out theFAFSA and applying for even
scholarships.
Some scholarship deadlines maybe as early as December 1st of
your senior year.
Speaker 2 (12:22):
As early as December 1st of your senior year.
Now you mentioned that there'sbeen some changes in terms of
what students may be awarded interms of grants, that that
number has increased for mostfamilies.
Has there been any change interms of the amount for the
federal student loans, forexample, I believe freshmen can
get up to a max of $5,500, andthen, when they have enough
(12:43):
hours to be a sophomore, $6,500,so forth and so on.
Have those numbers changed atall?
Speaker 1 (12:49):
Not for the upcoming year Now.
Years ago it used to be $2,625for freshmen and then that went
up to $3,500 plus theunsubsidized loans.
So those numbers have not goneup.
You know, we always tellstudents look at all need-based
sources.
You know, a lot of timesstudents will look at
scholarships and apply for a lotof national awards and if
(13:10):
you're competing with 50,000students when you're looking at
I would just say maybe like anational retailer award, and if
you read the fine print it'llsay we expect 50,000
applications, that we're goingto give out six awards, your
chances aren't that great.
Six out of 50,000.
But then look locally.
You know maybe where yourparents were, your parents'
(13:32):
employer, some of you know wehave a big petrochemical
industry in Louisiana.
We have, you know, hospitalsand we have a lot of private
sector jobs that offerscholarships to children or
grandchildren of employees thereand even nonprofit
organizations.
So look locally because, forinstance, my sorority sponsors a
local scholarship and this isfor students.
(13:54):
Just I'll just use East BatonRouge Parish.
So we give out six $1,000awards which can help with a lot
going to college, and so wenormally don't get over 30
applicants.
So now six out of 30.
Odds are pretty good, Odds arepretty good.
You're writing an essay, doinga short interview, boom $1,000.
So look at sororities,fraternities, the other
(14:18):
nonprofit organizations thatprovide those scholarship aids,
and start local and then workyour way up and I think you can
look at maximize your resource,maximize your efforts and get a
lot of little ones which mayequate to helping out with, you
know, furnishing your dorm orgetting books or a new laptop, a
printer and those things thatare needed for college.
Speaker 2 (14:37):
The name of this session should be Changes or
Confusion, because I definitelyhave a question.
I was literally listening toorientation for my child,
because she's transferring toLSU, and something I heard kind
of threw me because I was likehave I been looking at it wrong
or did they change it?
And what I'm referring to iswhen you apply for a student
loan, typically it's for your.
(14:58):
I always thought it was for thefall, the spring and then the
summer that comes after thespring.
But what I heard, or at leastwhat I thought I heard, is that
actually you're applying for thesummer, the fall and then the
spring.
Can you clarify that for mespecifically?
Right?
Speaker 1 (15:15):
Well, that can be quite confusing.
So you have an academic year,so academic year begins usually
July 1st through June 30th.
Some schools put summer as aheader.
So in the case of LSU, which isprobably one of the few
post-secondary schools inLouisiana that put summer at the
beginning of the academic year,and most schools use summer as
(15:36):
a trailer.
So it depends on the school.
Speaker 2 (15:38):
It depends on the school.
Speaker 1 (15:39):
So for instance, lsu, if you're eligible for $3,500
and you indicate that I'm goingto summer school, they will
divide that $3,500 betweensummer, fall and spring.
If you're going to saySoutheastern or Southern
University and summer is atrailer there, and you don't
indicate you're going to saySoutheastern or Southern
University and summer is atrailer there and you don't
indicate you're going to summerschool, you will divide that
(16:00):
$3,500 between fall and spring.
So it just depends Summer canbe a header or a trailer, but in
most schools summer is atrailer.
But, LSU is different, okay.
Speaker 2 (16:11):
So that really threw me, because when my son was
going to school and I alwaysdealt with his, it was always
the trail, it was always fall,spring and summer and like.
I said I just learned this inorientation for her this week
and they did summer as theheader and I was like did this
change with FAFSA?
Speaker 1 (16:30):
Have I been confused, so I'm glad that you clarified
that I worked in the LSU studentaid office in the late 90s and
we used to start processing FASfor early February because some
students wanted to go to summerschool.
So we had to get them ready andthen their loan amount.
So it's a little bit different,because if you know you're not
going to summer school, thenthat's cool, but if you go to
(16:53):
summer school you're going toget a smaller loan for each
semester summer, fall and springbecause you're already dividing
it by three, Whereas moststudents who just do fall and
spring, their amounts are morefor those two semesters and then
if they decide later to go tosummer school, then they're
having to find more funds on howto finance that.
So it's different.
(17:13):
Yeah, it's tricky, it is it canbe tricky.
Speaker 2 (17:16):
Okay, so any other changes that we can look forward
to in terms of now that we'reright on the brink of the fall
semester starting?
Can schools and students expectto have their awards delayed
because of the changes?
Speaker 1 (17:31):
I think the schools are pretty much caught up.
I work at the TOPS office, soLSU fee bills went out and
they're due soon and we've beenworking with them.
So I think things are gettingback to normal.
And then the federal governmentprovided grants for
organizations to help studentscomplete the FAFSA.
For instance, with our agencywe have gone all across the
(17:52):
state.
Across the state Some collegeshave had Zoom calls or open
extended hours in the afternoonsto help evenings, to help
students and parents make surethat their financial aid
application is in and it's donecorrectly, if they have
corrections and that sort ofthing.
So we've done an all-out effortto do that.
And then, for instance, we haveour website, mylawsfordlagov,
(18:13):
where students can do a virtualoffice hour.
So if they're still havingquestions they can schedule that
and we will have arepresentative work with them
one-on-one for that particularamount of time needed to make
sure everything is done.
So I think we're gearing up fora pretty good fall.
Speaker 2 (18:28):
And something else I've learned for you because
from you definitely myright-hand person when it comes
to all things student loans oncethe student loan is received or
dispersed by the school, I'velearned that it can vary from
institution to institution interms of if a student is going
to receive an actual refundafter they've taken care of
their tuition room and boards orany other expenses or
(18:50):
obligations.
How can a student find out,based on their university, when
they can expect that particularrefund?
Because obviously we found out,or I found out, lsu's obviously
is a lot quicker than theuniversity that my son attended,
because it would be months andmonths after the school, after
the semester, started.
Speaker 1 (19:10):
It's the school and LSU is different in that also,
At LSU, if you're receiving arefund once your tuition and
visas have been met, the refundgoes to the student prior to the
first day of class.
So those students get theirmoney early.
Some schools that may beconcerned that students would
get that money and not stayenrolled will wait until the
(19:34):
semester has started.
So it just depends.
Schools have a default rate sothat could factor in as to when
they decide to disperse thosefunds.
Lsu has, you know, they giveout more loans than Pell Grants
because of the population of thestudent, well, the diversity of
the student body and the income, the income and assets of the
(19:54):
students who attend there.
So LSU has a low default rateand they have been successful in
getting students to repay theirstudent loans and they do an
excellent job at entrance andexit counseling.
So those students pay backtheir loans.
So they have a lot of studentsfrom LSU live off campus.
So by giving them their moneyat the beginning of the semester
, some of them will take it andpay their, say they're living
(20:16):
off campus, pay their rent forthe rest of the semester, as
opposed to not having to waitand borrow money from somewhere
else to make ends meet or theycan have their books and that
sort of thing done.
Other schools who are concernedthat students might get that
money and not complete thesemester or term sometimes wait
until classes have started andthey wait until after the 14th
(20:36):
class day, which is usually twoor three weeks into the semester
, before they disperse thosefunds.
So it varies from school toschool and they can check all
that out during orientation.
They'll give them thatinformation and so forth.
But each student who receives afederal direct student loan is
required to do entrancecounseling and it tells them
about the responsibilities ofthe student borrower.
(20:58):
And a lot of times studentsjust you know, yeah, check yes
and say I agree, I understand,and they really don't.
And the same thing when astudent gets a TOPS award, I
always say students and parentsspend a lot of time from eighth
grade, because sometimes youreighth grade classes can count
as high school classes.
They spend a lot of timegetting tops I'm getting tops,
I'm getting tops and monitoringthe ACT scores and the GPA in
(21:22):
the courses and then, once theyget the rights and
responsibilities, they're likeI'm done, they have tops.
And then after the firstsemester when the student had
too much fun during footballseason and their GPA is a 1.9,
and then we tell them you'resuspended from TOPS.
What do you mean?
Well, if you had read therights and responsibilities, it
says if you go below a 2.0,you'll be on suspension until
(21:43):
you get your GPA back up.
But they didn't read that partbecause they put all their eggs
into getting TOPS and then, oncethey got it, they just thought
okay, I'll always have it forfour years of school.
And that's not necessarily thetruth.
So read the fine print,particularly when you're looking
at what the responsibilitiesare, the requirements to keep it
.
Same thing with student loans.
You can receive a student loanand if you don't meet the
(22:05):
satisfactory academic progress,the SAP requirements, you could
lose your student loan becauseyou have to earn 66% of the
hours that you enroll in.
So if you enroll in 12 hoursand you pass in three, you're
going to end up in trouble.
Speaker 2 (22:20):
And while I would like to think that if some
parents and college students arelistening to this, they're
going to do an about phase andgo back and read those
disclosures, but we know thatthat's probably not going to
happen.
So are there any two or threetop things that are important
for every student and parent toknow that has chosen, has
elected, not to really read thefine print that you think it's
(22:43):
important for every parent andstudent to be aware of?
Speaker 1 (22:47):
Stay in contact.
You know for students, visityour academic advisor.
Get to know who that is.
If you're having trouble in aclass, don't wait until finals
to say I don't understand thistrigonometry or calculus course.
There's free tutoring oncollege campus.
That could be a stigma.
Oh, you're going to tutoring.
You're not high school anymore,but a lot of schools are going
(23:08):
to peer tutoring, which you knowyou're talking to someone on
your age level.
That can really help youunderstand and break it down.
Use common terminology.
The counseling center is yourfriend.
Go to the counseling center,see what resources, because a
lot of students suffer becausethey don't have that transition
from high school to college.
You know, in high school if astudent's overslept, the parent
(23:30):
was like you know, helen orJohnny, wake up, you're going to
be late for school.
Well, when you're on collegecampus you have to set your
alarm clock and if you hitsnooze too many times you might
miss that class.
Or if you live off campus andyou miss your ride, your car's
(23:50):
not working or your battery'sdead or you miss the bus, you
might miss class.
So the time, the management andthen the balance, because when
you think, in high school you'rein class from seven to three.
If you're in college and you'reonly enrolled in 12 hours, that
means you're only going toclass 12 hours a week in a 40
hour work week.
So that means a lot of freetime.
Are you sleeping too much?
Are you staying at the reccenter because they have a
(24:13):
really nice lazy pool there, orare you exploring all of the
options in the food court?
So you have to really balance.
When are you going to study?
You're only in class 12 hours aweek, but you have to plan for
when are you going to study.
If you're in a dormitory and youhave a roommate and you've
always had your own room, howare you working that out with
your roommate?
Do you have a roommate contract, like on the Big Bang Theory
(24:35):
Roommate contract?
So all of those things matter.
Are you eating right?
So the transition from highschool to college is real and
some students aren't preparedfor that.
And then if they're going fromsmall high school to LSU, for
instance, that's a small fish ina big pond.
Are you okay with that?
So, looking at all of that, ordo you miss your cat or your dog
(24:57):
that you love home?
Do you miss your parents?
So all of those things cancause students to not have the
best success.
So go to the counseling centerand even across campus they have
workshops.
You know how to study smarter,not longer, how to transition
from being away from home, andthose kinds of things which all
help with academic success.
So use the tools and theresources that are available on
(25:18):
the college campus.
Ask questions, don't wait tillit's too late.
Students appeal their topsbecause they've gone through
some traumatic experiences which, if they had used the resources
on campus, maybe some of thosecould have been alleviated.
So I just you know, use theresources on campus, ask
questions and read the fineprint.
I promise some of the top threethings I would say.
Speaker 2 (25:39):
OK, and just to kind of round up before we switch
gears from FAFSA is there, ifI'm going to school in the fall?
Is there an absolute deadline,or when is it just too late for
me to complete a FAFSA?
Speaker 1 (26:01):
a FAFSA.
Well, the FAFSA for the 24-25academic year, it's good, from
October 1 of 23 until the end ofthe academic year, which is
June of 25.
So if you start college thisfall and you have not completed
a FAFSA and you're paying onyour own, which is fine, you can
fill out a FAFSA anytime duringthe academic year.
So say, you decide November 1st, I'm going to apply for
financial aid for this year,you've paid your tuition and
then, oh, you have a zero SAI.
(26:22):
You qualify for a full PellGrant, so you're going to get
the full Pell Grant amount forthe fall at that period.
Oh, wow, so you can do itduring the academic year.
Now, if you're applying for aloan, in most cases loans have
to be dispersed no later than 60days after the end of the
academic year.
So if you apply for a loan inApril of your freshman year,
(26:45):
you're still within that 60 daysbefore the academic year ends
to apply to receive the proceedsfrom that.
Speaker 2 (26:51):
And if I get a student loan and it's for
$10,000, but my tuition is only$8,000.
So ideally that's going to cometo me as a $2,000 refund, do I
have to take that extra $2,000?
What can I do with it if Idon't want to have $10,000 worth
of debt, if I only need to have$8,000?
Speaker 1 (27:11):
Borrow only what you need, borrow responsibly, and
that's a big thing.
Borrow only what you need,borrow responsibly, and that's a
big thing.
And you know, 18-year-olds nowthey're, I think, adding
financial literacy to some ofthe high school curriculums.
Yes, you have to jumpstart right, and that's very needed because
students don't have an idea ofwhat things cost.
You know, when you're in highschool mom, dad, auntie, cousin,
(27:31):
big sister, godmother I need Xamount of dollars.
So here you go and you knowstudents spend an extraordinary
amount of money on things likeprom dresses and tennis shoes
and phones and hairstyles andall of that, and they don't
really know the value of that.
Now, when they start working,they're like oh my God.
Speaker 2 (27:51):
And spending their own money.
Speaker 1 (27:53):
Yeah, they're like what is FICA and you know who's
that.
And I'm giving all my money.
Speaker 2 (27:56):
We're not paying taxes, yeah.
Speaker 1 (27:58):
So I think financial literacy is very important, but
borrow responsibly, because thatfollows you.
So if you borrow the max andyou really don't need it once
you graduate and interestcounseling touches on that and
at the end, exit counselingdefinitely makes it real you
don't want to be saddled with anextraordinary amount of debt if
(28:21):
you don't have to, because whenyou're starting out as a young
college graduate, you may wantto get a new car or a car.
They do credit checks if youwant to rent an apartment, if
you have to buy a house, to buya house.
And so I always say, when youlook at borrowing, for each
$10,000 that you borrow, youcould expect to pay about a
(28:44):
hundred dollars a month when yougo into repayment.
So if you borrow $5,000, I'msorry, $50,000, you're looking
at about $500 a month inrepayment.
It's just a regular repaymentoption.
So borrow wise that you don'tthink about it when you're 18,
19, 20 years old, but when youget to be 23 and 24 and your
student loan debt is more thanyour car.
Speaker 2 (29:04):
Note that's a problem and that's a good way to
transition into talking aboutwhen should students especially
if you're new to college andgetting student loans when
should they expect to have tostart paying back that money,
that student loan money?
Speaker 1 (29:18):
With the federal direct student loan program,
repayment starts six monthsafter you graduate or are no
longer enrolled at least halftime.
So if you go to college for twoyears and you say this is not
for me, and after May you'rejust like, okay, I'm not going
back to school in August,november will roll around
because that's your six months,and then you have to start
(29:40):
repaying, unless you go intodeferment or forbearance, which
we can talk about a little bitlater.
So it's real and there areoptions for students who can't
pay, you know, likeconsolidation and other things,
but you start paying back sixmonths after you graduate or are
no longer enrolled.
At least have time.
Speaker 2 (29:58):
So if I take a six-month break, or maybe even a
year break, and then I go backto school, re-enroll, maybe I
finish my bachelor's, andthere's six months comes by, I'm
working, and then I decide,maybe a year later I want to go
back and get my master's or getanother degree, can I then go
back to not having to pay?
How does that work?
Speaker 1 (30:19):
Right.
So if a student re-enrolls, atleast have time, they can put
those loans in a defermentstatus.
So deferment means that you'renot making any payments because
you're back in school at leasthave time.
There are other reasons fordeferment Unemployment or
serious illness or injury andthose if you go into the
military those kinds of things.
You can put your loan indeferment, but it doesn't excuse
(30:41):
you from having to repay it.
It just means that you're onpause and you're not paying
during that period of time.
But it's real.
Speaker 2 (30:48):
All right, and so we talked a little bit about
deferment.
Let's talk about forbearance,or what's the difference between
a deferment and forbearance?
Speaker 1 (30:54):
OK, so deferment and forbearance, okay so a deferment
means that you're on anauthorized pause from paying
your loan.
Maybe you had an injury thatstopped you from working for six
months or for a year, or youwent back to school.
So you're not making anypayments and you're not being
charged interest and so forth.
Forbearance means you justcan't afford to make the
(31:16):
payments that you're required tomake.
So usually in forbearancestudents will pay the interest
on the loan and not pay theactual payment, which will
reduce their payment for aspecified period of time.
Maybe you had to switch from ahigher-paying job to something
lower-paying because of theeconomy or your job title and
that sort of thing.
So forbearance means thatyou're only paying a small part,
(31:37):
which will just continue to.
You know your principal isstill there.
So there are options to helpstudents.
But students need to just notignore those and say I'm just
not paying anything and thenwhen that happens, then you run
into default.
Speaker 2 (31:54):
So we've covered, you know, FAFSA, those students
that are on their journey intocollege, hopefully getting
scholarships and Pell Grants andmaybe even student loans.
We've covered those that havethose student loans that are in
school now.
But I think there is a wholehost of listeners or population
that want to know about studentloan forgiveness.
(32:15):
A couple of years ago, thatcarrot was dangled in front of
many of us saying, hey, there'san opportunity that maybe we can
just wipe away $10,000 or$20,000 of your debt.
And of course, you know,through politics and government
stepping in, that didn't happen,and so a lot of us are sitting
here waiting to see is it evergoing to happen?
(32:36):
Where are we now with studentloan forgiveness?
What has happened since thatinitial proposal was rejected by
Congress?
Speaker 1 (32:43):
Well, there's something going on where they'll
be ruling soon to see if whatPresident Biden has done with
relief.
So we'll talk about publicservice forgiveness first.
So that's still available toborrowers who worked, say, at a
nonprofit organization city,state or federal government
positions, nonprofits, thosesort of things so that still
(33:06):
works.
If you paid on your loan for 10years, you can get public
student, public service, studentloan forgiveness.
So I know several people,friends and family members.
I have a niece who's now anassistant principal and she was
like she called and she was likeAngie.
I got this in the mail.
I don't even know if this istrue, but she had paid for 10
(33:26):
years and she's still old.
I think 50,000 plus and allthat was forgiven and I said you
just got a raise.
So, yeah, so.
So student loan public serviceservices available, but there
are a lot of options they'relooking at for regular
forgiveness for students whojust can't pay.
You know, for whatever reasons.
They're looking at takingaction on that.
(33:47):
Since 2005, which is almost 20years, and you still owe over a
certain amount, that's the groupthey're looking at helping for
those who had student loans orparent loans over that period of
time.
It's still to be decided, sothey're still trying to finalize
the student debt relief package.
(34:08):
So the jury is still out to seewhat will happen in this
administration regarding that.
Speaker 2 (34:13):
You mentioned nonprofit.
Obviously, if you work for anonprofit and you've been paid
on it for 10 years, then you'remost likely eligible, and I'm
not sure if this is a questionthat you can answer.
But let's say, for example, youmay not necessarily work, your
employer's not on that list,because there is a list of
employers that you can check andsay hey, is my company listed
(34:36):
here?
Perhaps your company is notlisted on there, but the work
you do might be considerednon-profit work.
Is there an option to appeal?
Speaker 1 (34:47):
I'm not sure, because I think they look at the 501c3
status of the organization.
So maybe they're operating as anonprofit but they haven't
received all of the federalapprovals to get their 501c3.
So you're working as anonprofit employee but your
company, or your organizationrather, has not received all of
(35:08):
the approvals that are necessary, then that wouldn't count.
What I tell students who aredoing public service forgiveness
is get your employmentverification every year.
So even if you're in the samejob because you may work, say,
for City of Baton Rouge forthree years and then you switch
to state, government and federalDon't wait until you've worked
(35:28):
for the federal government.
And now you have to go back sixyears to the city and say I
need verification that I workedhere from 2012 to 2015.
And say I need verificationthat I worked here from 2012 to
2015.
At the end of every year, youranniversary at that organization
that company or the agency askthem for that.
(35:48):
There's a public serviceforgiveness form you can go
online and download.
Get that form, get it signed bythe HR.
So you're building your folder.
So at the end of 10 years youmay have three years here, four
there and four somewhere else.
So that gives end of 10 years.
You may have three years here,four there and four somewhere
else.
So that gives you your 10 yearsto apply, because you will need
verification for each year ofemployment that you're seeking
the forgiveness for.
So with the death relief, likeI said, they're aiming to help
(36:10):
certain borrowers, those whohave borrowed, who still owe
more than $20,000 after payingon their loans for 20 years.
That's the main group thatthey're looking at those who had
consolidation loans that rightnow what they owe is greater
than what they've borrowed.
Those are the students that theBiden-Harris administration is
trying to assist.
Speaker 2 (36:31):
And will they reach out to those borrowers?
Or should we still be payingattention to the news?
How often maybe should we checkfor updates?
And then where would we findthat information?
To make sure that you know, ofcourse there's Google, but you
know, if you go on Google you'llfind so many different answers.
Where what's the best place toget up to date, accurate
information?
Speaker 1 (36:52):
OK, the federal government has a really good
website called studentaidedgovI'm sorry, studentaidgov, it's
T-U-D-E-N-T-A-I-Dgov and therethey can find lots of all the
information regarding studentloan relief.
Deadline of August 30th ifstudents want to opt out.
(37:18):
But who would opt out if youowe that much money, right?
So if you want to be includedin the potential debt relief,
you don't have to do anythingonly if you want to opt out.
So if you don't want to be partof it, then you need to contact
your student loan servicer byAugust 30th of this year and let
them know.
Otherwise you'll be included inthe debt relief anything that
passes from the administrationCongress right.
(37:39):
So they're emailing allborrowers to tell them about the
potential student loan debtrelief.
Whether or not you receive anemail, you can still follow the
opt-out instructions, but if youwant to be included, then you
don't have to do anything atthis point.
So they're looking at borrowerswho borrow from the direct
student loan program and thosewho have a balance that's
greater than what theyoriginally started with, and
that those who've been paying ontheir loans prior to July 1st
(38:01):
of 2005.
So that's basically 19 years.
Speaker 2 (38:05):
Are there?
So in the mail I get tons ofinformation about consolidating
student loans.
I guess my question is is thereany action that a student loan
borrower could take that wouldautomatically disqualify them
from having student loanforgiveness, for example?
If I do consolidate that, doesthat impact how long I've been
(38:28):
paying on the loans?
Does it start all over againfrom day one with this new
lender?
Speaker 1 (38:33):
Consolidation.
You know it helps students whohave borrowed like over $50,000.
So it extends the repaymentperiod from like 10 to 25 years,
because a basic student loanrepayment schedule is for 10
years.
Whether you borrow $10,000 or$50,000, you're on a 10-year
repayment schedule is for 10years.
Whether you borrow $10,000 or$50,000, you're on a 10-year
repayment schedule.
So if you consolidate, that canextend it up to 25 years.
(38:55):
So those years still count.
It's just giving you a longeramount of time.
So if you have a longer amountof time your note is probably
going to decrease.
It's like buying a house.
If you say you want to buy yourhouse and pay for it in 10
years, then your note's like ohmy God.
But if you say I want to do 25or 30 years, then that reduces
what your monthly note would be.
So that's the major benefit forconsolidation loans giving the
(39:17):
student more time to pay theirloan.
But those years still count.
Speaker 2 (39:21):
And back to student loan forgiveness.
If you have a parent that hastheir own student loans and then
they're also a cosigner fortheir children, their child or
their children's student loans,can that parent apply for
themselves and then the studentsas well, or is it each
individual, whoever the primaryborrower is?
Speaker 1 (39:39):
Okay, for parent loans that is in the parent's
name and the parent may havereceived a cosigner, so they're
responsible for the parent loan.
With the federal direct studentloan students don't have a
cosigner.
But if a student borrowed froma private loan source, that's a
different case.
So if they borrowed from aprivate loan source and there
(40:00):
are some lenders who borrowprivate loans, particularly for
students who go to high costinstitutions, and the direct
loans they've exceeded orthey've maxed out on those
limits, then yes, they would gothrough a private loan and a
private loan would have probablyrequired a cosigner and then
that would be different.
But the private loans are notconsidered under the student
(40:20):
loan debt relief.
Ok, so private loans are not.
Yeah, the debt relief is forthe federal direct student loans
and the federal direct parentloans, not for private loans.
All right?
Speaker 2 (40:32):
Well, and as we get ready to wrap up this session,
are there any other changes thatwe should be looking for, at
least in the next six months, interms of FAFSA, student loan
forgiveness, anything that youknow that may be coming down the
pike, that we need to reallykind of be paying attention to
in the next six months?
I would say the debt reliefpackage that's being proposed.
Speaker 1 (40:54):
Check the studentaidgov site for updates
regarding that.
Stay in contact with yourservicer if you're paying back
your student loan.
Don't skip payments, thinking,oh, I'm waiting on debt relief
because debt relief may not come.
Hopefully it does, which wouldreally improve the financial
livelihood of millions ofstudents across the country.
(41:14):
But don't wait on that.
Continue making payments.
If you're having trouble, looksee if you qualify for a
deferment or forbearance or youcan do the income contingent
repayment plan based on yourincome, where you would pay
lower because you're making alower salary.
So just stay tuned for that.
The FAFSA for 25-26 should comeout October 1st.
(41:36):
Just stay tuned on that withthe studentaidgov.
I go to studentaidgov all thetime and if that's something I
know and I don't look at some ofthose sites that want to charge
you for something or let mehelp you get out of your student
loan debt.
Students should be very wary ofthat students and parents
because most of the timesthey're charging you a fee for
something that you can do onyour own.
(41:56):
Contact your lender, email yourlender, seek relief and other
options available through thefederal government.
Speaker 2 (42:03):
Well, it seems like this is a topic that will never
get old, and we'll probably haveyou back in another six months
just to see what changes,especially with FAFSA, if they
have everything together, ifthere are any new quirks or
hangups that parents andstudents need to be aware of.
I think there are millions ofpeople that are sitting on the
edge of their seat waiting tosee if we will ever have student
(42:24):
loan forgiveness and yes, I saywe and so thank you so much for
coming back, returning andbeing the expert that you are
giving us all this goodinformation.
I know that I will have youback.
As a matter of fact, I'll justget you your own little parking
spot.
So, until as long as there'sstudent loan debt out there,
we're going to need you to comeand keep us up to date.
So thank you again for joiningme.
(42:44):
Thank you, Kim.
I appreciate it Anytime.
I appreciate it.
Anytime.
I want to leave you with someessential tips to help you
navigate the financial aidprocess and manage your student
loans more effectively.
First, start early.
Begin the FAFSA applicationprocess as soon as possible.
(43:04):
Early submission can increaseyour chances of receiving more
financial aid, and the sooneryou have your information, the
better off you will be when itcomes to planning.
Gather your documentation.
Have all necessary documentsready before you start the FAFSA
.
Although they've shortened theprocess, you'll be a lot
smoother throughout the processif you are prepared.
(43:26):
Double-check your information.
Ensure all your informationentered on the FAFSA is accurate
.
Remember, as Ms DeBoermentioned, if you use multiple
names Lily, lillian and Lil thatcan slow down the process of
getting your information and itmay even inhibit you from being
able to get your award simplybecause there's a hang-up over
(43:48):
who's the correct person.
And, of course, to learn more,check out neighborsfcuorg
forward slash financialeducation to learn more on how
to use the money you have, makethe money you need and save the
money you want.
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