Category Archives: Student Loans

1:15PM

Today two of our peer financial assistants will be talking about student loans in Peter Hardy’s first year seminar class at 1:15PM. This should offer a great opportunity to spread the word about our program among freshmen on campus and hopefully spur a good conversation among them!

What you need to know about refund checks

WHAT IS A STUDENT LOAN REFUND CHECK?
Funding for a student’s account comes from a combination of sources including financial aid (student loans, grants and scholarships) and cash payments made to the University.
When a student has more funding on his/her account than the actual  balance due towards the University (for tuition, fees, etc.) that student will receive a check in the mail which carries the students excess balance.

WHO QUALIFIES?
Anyone is qualified to receive a refund check so long as they have taken out student loans in excess of a semester’s Cost of Attendance or have made cash payments in excess of a semester’s Cost of Attendance (or any combination of funding sources in excess of COA).

HOW DO I KNOW IF I’VE GOT ONE?
You will be alerted by the financial aid office if a refund check is waiting for you; this is typically done towards beginning of each semester, after all loans and scholarships have been disbursed (passed on to the students account).  In order to collect your check, you need to present two forms of ID.  

BEST WAY TO SPEND IT?
In an ideal world, all students that receive refund checks would be able to pay the money right back for next semester’s tuition.  If you do not need the money given to you in the refund, have the financial aid office put the check towards your next payment.  DO NOT view it as extra cash — especially if the refund is from student loans, which is money that you will have to pay back eventually, with interest, anyways.  If you can write the check off, a best practice would be to take the entirety of the refund check and use it to pay off a portion of your student loan balance. Make sure you alert the lender that the money is to be used to pay off outstanding interest and whatever is left over should go towards your principal. If you’re reticent to give the money up immediately, place it in a savings account to be used as emergency income at a later date, so that, if the need arises, you have a small income safety net. If you DO need the money, spend it on essential living expenses or educational costs (books, etc.).

A Note About Refund Checks:
University financial aid systems are subject to systematic error, as uncommon as they may seem. You may receive more on your refund check then you should actually be allotted. If you spend this money before double checking with the Financial Aid Office, you may end up paying back some, or all, of that refund check. Always double check with the FinAid office that the refund amount is correct before you cash the check.

Common problems and resolutions:
Late Paperwork: If you waited until the last minute to file your FAFSA and/or apply for student loans, anticipate that your refund check will not be available until later in the semester. Talk to your financial aid office to find out the turn around time. If they cannot give you a specific date, try to find a range, like sometime during the month of October. If you are really late, the refund may take until November, or possibly until the end of the semester.
Paperwork was submitted, but something was wrong: Maybe you forgot to sign something, or forgot to submit a very important form. You may think everything is complete, but it turns out you missed something. Make sure you review all documents, and follow up with your financial aid office early in the semester to make sure things are in order.
The Moral: If you are hoping for a refund check, submit all required info early, and follow up with the FinAid Office to make sure everything is in order. If you are late this year, patiently work with your financial aid office so that everything is done and you know a refund is on the way.

The BIG Question

How Much Should I Borrow?

What is the appropriate amount of debt to take on for my education? In our economic climate, this is a question that gets asked considerably more often than it did before the Great Recession. It used to be that students would take out gobs and gobs of money with the full confidence that with our economy growing they would land a job that pays well and the loans would be a non-issue. Not so anymore. Financial planning is essential and student loan debt should be a calculated peice of those plans. To answer the question of how much to borrow, consider several factors:

What is my major? How much can i expect to earn in my first year of work after graduation?

The rule of thumb is based on your major; depending on what you are in school for you should be able to figure out the answer to the second question of what you can safely estimate your first year’s salary will be out of college. Based on that figure, you can form an answer to the question of how much to borrow. Generally speaking, Liberal Arts majors should try to avoid borrowing more than $27,000- $35,000 and Math/Science types or Computer Programmers can plan to borrow near double that. Mark Kantrowitz, who runs FinAid.org (a great resource for student loan and indebtedness information) says that if you’re borrowing more than $10,000 a year you need to cut down on loans or, if that’s not possible, transfer to a cheaper institution.