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What are some common financial aid scams which students should be wary of?

November 28, 2012 Leave a comment

Financial_aid_scams

Hey guys … I just answered this question for a reporter working on a financial aid piece and thought I would share. Feel free to add your own answers below.

What are some common financial aid scams which students should be wary of?

One most common financial aid scam is companies that charge money for services that are typically free.  The FAFSA is a common target for this.  Many websites charge students money to submit their FAFSA, even though it is a free federal application (FAFSA actually stands for FREE Application for Federal Student Aid).  Even if these websites are assisting students in completing their application, this assistance can typically be found for free online as well.  More importantly, a FAFSA submitted by one of these websites is much more likely to be flagged for verification, compared to a FAFSA completed electronically on the Government’s website (FAFSA.ed.gov).  Verification means much more work for the student, as they will need to compile tax returns and other documentation, and it could also mean a delay in receiving the financial aid.

I hope this helps!

Kris

iGrad Financial Literacy

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150K in debt. Can I quit med school?

November 18, 2012 Leave a comment

Check_thumbs_up

Hey guys … I just answered this question on a forum thread at The Student Doctor Network

I’m 38, about to start 2nd year, and realize this is not the path for me. Oops. I have a BA in Psychology. Is there any way to get out with this much debt? -GotstaGo

Hey GotstaGo. Sorry to hear about that debt total, that’s painful. Fortunately, the Department of Education has repayment plan that should be beneficial to you. The IBR plan (or Income Based Repayment plan) is a plan setup by the Department of Education to keep payments manageable in situations like yours. For most eligible borrowers your loan payment should be less than 10% of your income. Also, any balance left over after 25 years of qualifying payments will be forgiven by the Government.

A word of warning though, the balance that’s forgiven will likely be taxed as income so it’s a good idea to pocket some savings along the way. Hope this hopes and good luck!

Kris

iGrad.com

* Note: This response was transcribed and posted by my virtual assistant.