Cuckoo for Loans

Topic: Breaking down loans.

In the book Debt-Free U, the author, Zac Bissonnette breaks down going to college without having to take a loan.  He has some great ideas like taking all the pre-requisite classes at a community college and applying for work-study.  However, there are some difficult (for me) options -- Like working 30 hours a week.

Confession:  I was never the top student in my class and I need to spend hours reading, taking notes, making outlines, occasionally making note cards, reading again, getting high-lighter happy... Well, you get the drift.  Although, I would like to work 30 hours a week and attend TCM school (which involves learning a whole new and esoteric way of thinking about the human body) FT seems not unrealistic just difficult.  

However, I want to take the least amount of loan as possible.  I have talked to many grad students who have taken the maximum amount of loans as possible without considering the idea of living below their means.  This scares the crap out of me particularly since the salary straight out of school is pretty low.  I want to make sure I balance my life (scroll to the bottom of this post) but I also know I will have to cut down on many luxuries (So long, cappuccinos and mani/pedis!)

Gradloans.com does a fantastic job breaking down loans and definitely worth looking.

Currently, I am looking into the following loans:

• Stafford Loans (Subsidized and Unsubsidized)
• Work-Study
• GradPlus Loan

Subsidized Stafford Loan is the one I'm very interested in:

PROS

• Awarded based on financial need 
• Interest is charged AFTER school 
• Fixed rate - as of 2011-- 6.8%

CONS

• Out of the maximum $20,500/year -- No more than $8,500 can be taken out as Subsidized 

I will also probably take out the Unsubsidized Stafford:

PROS

• Not awarded based on financial need (ANYONE is eligible)
• More cash than Subsidized 
• Fixed rate - As of 2011 -- 6.8% 

CONS

• Interest begins right when you receive the loan until it is fully repaid

I will definitely be applying for Work-Study:

PROS

• Money  
• Opportunity to become familiar with the school and its system
• Opportunity to meet the professors, staff and students
• Opportunity to understand the various systems whether it's working at the herb clinic, admission office or library

CONS

• Hours 
• Hours are flexible 
• Pay 
• The pay varies depending on each school

I've met a few students who have chosen to also take out the GradPlus Loan which personally, I think is a mistake.  The way I'm viewing the GradPlus Loan is as EMERGENCY CASH.  It is a credit-based loan and only takes a couple of days to get the money -- Therefore, if there is any emergency (dentist, hospital, etc.) then the loan can be applied and received immediately.  There are some benefits:

• Fixed interest rate - as of 2011 -- 7.9%
• Deferred payment option while in school
• Interest is tax deductible for most grad students

There are also Private Loans which personally I am not interested in.

I also have a semi-hefty savings account which I plan on depleting my throughout the 3-4 years of grad school.  In addition to just the tuition, books, etc. I also have to consider the following:

• Moving expense
• Am considering renting a small U-haul rather than buying everything new -- Though, I have to make an IKEA stop to weigh out the price option

• Rent and Utilities
• Took 1 major trip to Portland scoping out the different hoods
• Checking Craigslist religiously to get an idea of rent & apartment complexes

• Food
• I tend to cook most of the time but I also want to explore 

• Fun Stuff While in School
• This is MAJOR considering grad school is going to be intense.  I think it's crucial to have some money set aside to go to a museum, watch a movie, just chill out.

• VACAY!
• Mr. Zac Bissonnette would probably be against this last spending option but I def plan on taking a vacation holiday at least once a year -- Preferably somewhere with blinding sun.  As TCM students, it's all about balance and we need to remember to incorporate that into our own lives. 

CALCULATORS  Helpful financial calculators here to get an estimate on how much loan you'll need, how much to save, how much to spend, etc. 

FAF$A

Topic: Breaking down the FAFSA application process.

 

WHAT: Free Application for Federal Student Aid.  FAFSA is a free application intended to determine the financial eligibility (how much $$$... In loans) each student may be entitled to receive based on a series of questions (income, assets, not including 401K or retirement.  Savings various depending on the amount in the account), dependency, etc.)  These numbers are crunched into what is called the Expected Family Contribution (EFC) which ultimately determines how much you qualify.  Grad students are entitled to apply for the 4 loans: 

1) Perkins Loans

2) Stafford Loans

    2a) Subsidized

       2b) Unsubsidized

3) Federal Work-Study Program  

4) GradPlus Loan

Each application is good for 18-months. Student Aid Report (SAR) is a summary of the FAFSA and forwarded to the student.  Be sure to look it over and check for any mistakes. 

WHO: Current and prospective college and graduate students.  Applicants who have already completed FAFSA in previous years may submit a renewal.  No need to re-do the application process. 

WHERE:   www.fafsa.ed.gov

WHEN:  ASAP.  Applications begin acceptance at the beginning of the year (January 1) for the upcoming academic period.  The amount of loan you qualify for is based on... 

FIRST COME, FIRST SERVED!

HOW:  Applying through the online application is easy peasy -- Like Turbo Tax easy.  You will, however, need your tax information so although acceptance begins on January 1 -- You might have to wait until you get your W2s. 

 Once you submit, the information is forwarded to the intended schools you listed.  (*These do not have the be the schools you are 100% sure applying to -- but the ones you're seriously interested in.  You don't even need to be apply to these schools in the end but it's def worth listing all the schools you're interested in, particularly if money is a major deciding factor.)  

The schools then will contact you with an estimate of how much you qualify... For that particular school.  Yeah, it varies. 

WHY:  Even if you don't plan on taking any loans, it doesn't do you any harm to apply for FAFSA since it's FREE!   

There is NO commitment... It just an estimate.  

It's like checking out the merchandise before plopping down the AMEX.  In the case anything should happen, you will have a solid back-up Plan B.  If you don't apply, then find out you may have to take out a loan -- You're screwed because there may not be enough money.

 What I Did...

1) Visited the financial adviser at the schools.

2) Major search - online, books, magazines, etc.

3) Asked the current students (during my visit) how much they received - Particularly out-of-state students.  This gave me a great idea of how much I may qualify for and which loans students are taking.

   

4) Applied for FAFSA immediately after I was done with my taxes which was late-January or early February.  By the first week of February my FAFSA was completed.

5) Emailed to schools just to make sure they received my FAFSA application.

Now... I wait.  

The REAL decisions begin AFTER FAFSA:  

When you decide which loans you want (if any) & how much you want to take out.