Posts Tagged ‘fafsa’

Student Loan Borrowing Questions

December 13, 2012 Leave a comment


Hey guys,

I was just interviewed for an upcoming article about student loan borrowing advice for college students.  Some of these answers may be of help to you as well.  Please add your own input or question in the comments section.

Which loans should a student accept?

It is important for students to exhaust all of their federal loan options before resorting to private loans.  Perkins loans and Direct Stafford loans typically have much more favorable interest rates and benefits than private alternatives.

What factors should be considered beyond just the interest rate of a student loan?

There are several benefits associated with federal loans which usually do not exist with private loans.  For example, federal Direct Stafford loans have deferment and forbearance options which can postpone your payments and protect your credit in times of hardship.  Payment plan flexibility is another important consideration.  Federal Direct Stafford loans have several different repayment plans which a borrower can switch between, and the federal consolidation program can extend the repayment term up to 30 years if needed.  One last factor to consider is prepayment penalty; federal student loans never have any prepayment penalty.

How should students decide how much they can afford to borrow and be able to pay back after college?

Students should calculate their projected student loan payments using the calculators available on the Department of Education’s website.

When should student loans be turned down?

Ideally, every loan should be turned down unless it is absolutely necessary.  When loans are an absolute necessity, students should always accept the federal loans first.  It is important to note that students do not need to accept the entire federal loan amount that is awarded to them; unused portions of the loan can be returned without any penalty.

Do you have any other financial aid advice for college students?

Students should try to supplement their financial aid by applying to scholarships and work-study programs.

If possible, it is a very good practice for students to make the interest payments on your unsubsidized student loans to keep.

I hope this information helps!




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

November 28, 2012 Leave a comment


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 (  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!


iGrad Financial Literacy