student loans

How Do You Get Paid to Go to College?

February 24, 2021 By Kathryn Vercillo Leave a Comment

College education is expensive. Everyone talks about the burden of debt that it brings along with it, often wondering if the cost is worth it. However, a college education can be truly invaluable on so many levels. Moreover, there are many different ways to hack the system. You can even get paid to go to college.

It’s Worth It to Try to Get Paid to Go To College

It’s relatively easy for many young people to get student loans. In fact, older people returning to college also often have easy access to large loans for higher education. Despite the availability of loans, it’s worth it to take the extra time to try to get paid to go to college. After all, college costs tens of thousands of dollars. Why would you burden yourself with that amount of debt when you could potentially get paid to go to college instead?

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Fill Out Your FAFSA

The first step planning out the financial side of your college education is filling out your FAFSA. Through this application, you provide the federal government with information about your financial status. They reply with information about the loans, work-study opportunities, and grants that are available to you based on financial need. Look first at the grants and work-study opportunities. Loans should be your final resort.

Apply for Grants and Scholarships

FAFSA tells you about the need-based federal aid that you’re qualified to receive. Therefore, it’s the first step if you want to get paid to go to college. The grants are “free money” that you can use to pay for college. Work-study allows you to earn money on campus to pay for college. In both cases, you reduce your college expenses by earning money.

However, these are only a handful of the grants and scholarships available to you. Take the time to seek out and apply for as many grants and scholarships as possible. In addition to need-based financial assistance, you can apply for grants and scholarships based on varying criteria including grades, family status, gender and other demographic factors, age, area of study, sports and community involvements, and essay-based applications. The more grants and scholarships that you apply for, the more money you might be able to make to go to college.

In addition to grants and scholarships, ask your college about tuition waivers. In many cases, colleges actually reduce or waive tuition fees. Each school is different but some of the qualifications for tuition waiver include financial need, cultural diversity needs of the school, status as a foster child or adopted child, disability, nontraditional student status (such as over age 60) and more.

Get Paid to Go To School Through Work or Military Service

You don’t have to go to college right out of high school. In fact, waiting until later can often open up opportunities to get paid to go to college.

Military Members Get Paid to Go to School

One of the most common routes historically has been to sign up for military service. The GI Bill helps pay military members to go to college. There are also other military tuition benefits, including some for family members.

Members of any branch of the military can get paid to go to school. However, each branch has its own rules and regulations around the terms of service. For example, according to Military.com, most branches offer assistance to both active duty and reserves members; however, the Marines only offer help to active duty members.

In addition to the GI bill and other military tuition assistance, military members as well as their family members have access to a variety of different grants and scholarships particular to their unique circumstances.

Corporate Jobs Pay You to Go to School

But the military isn’t the only career path that will send you to school. Sometimes you can get a corporate job that pays for you to go to college. For example, you might start out as an admin at a large company. After a certain period of employment, they pay you to get a degree in an area study that corresponds to the company’s job opportunities. Typically, you commit to a certain amount of work with them. Then you get paid to go to college to qualify to do that work.

There are some companies that will pay tuition for nearly all employees up to a certain amount per year. For example, according to eStudentLoan by Unigo, UPS employees are eligible to receive over $5000 per year in tuition reimbursement starting on their first day as a part-time or full-time employee. They list three dozen companies that offer corporate tuition assistance including Wells Fargo, Starbucks, Home Depot, Verizon, McDonalds, Chipotle, CVS, and JetBlue. If you’re looking to start a job now that will allow you to get paid to go to college, then check out this list.

Student Loan Forgiveness Programs

If you do end up taking out student loans, then consider studying in a field that offers student loan forgiveness. Teachers qualify for student loan forgiveness. You might also consider social work or another opportunity to qualify for public service loan forgiveness. In either case, you do have to pay your tuition up front using loan money. Then you have to make your student loan payments (with varied options depending on your salary.)

However, over time, if you provide enough service in one of the qualifying post-graduation job positions, then some or all of your student loans will be forgiven without penalty. This provides a long-term way to get paid to go to college if you don’t qualify for up-front payment opportunities.

In addition to federal student loan forgiveness programs, you can find funding to forgive loans from other career-specific organizations. For example, The Balance recommends checking out Nurse Corps Loan Repayment Program and National Institute of Mental Health Loan Repayment Program if you work in either of those fields after graduation.

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5 Lessons I Learned From Paying Off Student Loan Debt

January 20, 2021 By Rachel Slifka Leave a Comment

Do you have student loan debt? If so, you are not alone. According to ValuePenguin, the average debt among student loan borrowers in the United States is over $32,000. Ouch.

When I graduated college, I was near that average with $30,000 in student loan debt. And then, I got married and joined my finances with my husband. Combined, we had over $70,000 of student loan debt. We paid this off in 5 years as recent college grads. And while I can look back and rather have not spent over $70,000 in paying off debt, I’m eternally grateful for our student loans. Here are the biggest lessons I learned from paying off student loan debt.

1) My Financial Situation Doesn’t Define Me

Student loan debt is just a number. I learned my financial situation doesn’t define me.

I can have debt and still say yes to things. I can say no to other things. Debt isn’t good or bad….it just is. Money is important, but it certainly isn’t everything. Now that I’m debt-free, my life isn’t drastically different.

When I was in debt, I spent a lot of time making it mean something about me. I thought it meant that I was irresponsible, and that I didn’t deserve to spend money. I beat myself up over even buying something off the dollar menu at a fast-food restaurant.

Looking back, I wish I cut myself some more slack. We had a solid plan to pay off our student loan debt early. I wish I trusted in my plan a little more, and allowed myself to live a little. After all, isn’t that what life is all about?

2) My Student Loan Debt Was Not a Mistake

Again, student loan debt isn’t good or bad. It just is. It certainly wasn’t a mistake.

I spent a lot of time regretting my student loan debt. How could I have let myself borrow so much? Why didn’t I work more throughout college, or go to a community college first in order to avoid taking out so much in loans?

As I did more mind work, I realized my student loan debt certainly wasn’t a mistake. It provided me with so many opportunities. Without it, I wouldn’t have launched my career, met my now-husband, or be the person I am today. My student loan debt launched my personal finance journey, and has given me so many opportunities. Sure, it was not the easiest lesson to learn, but I’m so grateful I did!

3) Making More Money is Fun than Being Cheap

When I first graduated, I had a bare-bones budget. It was all I could do to scrape together enough to pay the minimum required payment to my student loan debt each month!

Frugality works, but it requires a lot of work and can only get you so far. I found myself living with roommates, couponing, eating rice and beans, and even going on a shopping ban for three years!

Then, I started freelance writing and earning extra money on the side. At first, I started writing simply because it gave me a creative outlet after my day-job. Although at first, I was only earning a few hundred extra bucks a month, it was enough to pay my minimum student loan payment. I could then free up a little bit of my budget. I allowed myself to spend a little on my day-to-day spending to be less frugal, but then I put the rest towards my debt, making nearly double the minimum payment at first.

Once I started freelancing, the opportunities really began to take off in both my day job and side gig. I job-hopped and worked hard in order to quadruple my income at work. I also started charging more for my freelancing services, and found more clients. During busy months, I started bringing in an extra $5,000 in freelancing cash!

Most of this went to our student loan debt. While extreme frugality maybe could have worked, it was so much more fun to spend my time growing my freelance business than it was clipping coupons. Plus, now that my debt is paid off, I still get to enjoy the extra income and put it towards our savings goals!

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4) I Love Being In-Tune With My Money

When paying off my student loan debt, I checked in with my money daily. And guess what? I still do this.

I actually love checking my bank and investment accounts. It’s so fun. No matter what financial goal I’m working on, I love being in-tune with my money.

Learning to love my money has been a game changer. And when my mindset shifted, I started thinking of my debt repayment journey as a game. It was so liberating to see just how far I would get in meeting my debt repayment goals!

5) I’m Grateful for My Debt

After graduation, I resented my debt. I was so mad at everything. How could I let myself get into debt? Why did my parents let me take out so many loans? Why does public schooling still cost so much? Why don’t we get more financial support?

Once I stopped blaming other people for my debt and owned it, it was like a weight was lifted off my shoulders. I was able to push aside all of the negative thoughts I had about debt and about myself, and truly learned to love the journey.

While I wasn’t grateful for my debt at first, I learned to love it, even when I was still paying off my loans. And looking back, I see how many opportunities my debt provided me. It allowed me to take leaps into higher paying roles at work. It motivated me to start my freelance writing business. It gave me the means to attend University. It takes a lot of work to become truly appreciative of debt, but once you start the journey, your life will change for the better.

Reasons Not to Co-Sign on Your Grandchildren’s Student Loans

July 31, 2020 By Kathryn Vercillo Leave a Comment

You want to be a good grandparent. Therefore, you might have thought about whether or not you should co-sign grandchildren’s student loans. Or perhaps they’ve already asked you to co-sign, and you’re trying to make a decision about it. While it’s certainly a nice idea, it might not be the best thing for either of you. Here are ten reasons not to co-sign grandchildren’s student loans.

1. It Encourages Private Loans

Federal student loans don’t typically require a co-signer. Notably, these are usually the best available student loans. Therefore, your grandchild should be trying to get those federal loans first. More often than not, those loans will cover college costs. If you quickly agree to co-sign grandchildren’s student loans, then you’re encouraging them to get private loans, which they might not need at all.

2. It Discourages Hard Work

In addition to federal student loans, there are a lot of other ways for your grandchildren to fund college. Options include:

Applying for grants and scholarships.
Working part-time including on-campus jobs to supplement loans.
Working full-time for a year or two to save up for college.
Choosing a less expensive college or hacking their education.

When you readily agree to sign their loans, you take the hard work out of it for them. You don’t give them the opportunity to figure out different options. This can be a disservice to them down the line when they have to think their way creatively out of other financial challenges, but haven’t had the practice in doing so.

3. It Affects Grandparents’ Credit

When you co-sign a loan, you guarantee that the borrower will repay that loan. That shows up on your own credit report. It impacts your ability to borrow money. Therefore, you want to think very carefully before you co-sign your grandchildren’s student loans.

After all, your grandchildren are still young adults. They likely aren’t that responsible with their money yet. It wouldn’t be unheard of for them to make late payments or to skip payments altogether. You’ve worked your whole life to establish your credit history. Do you want them to ruin it for you now?

Remember, also, that even if they make all of the payments on time, the loan may still impact your credit score. It adds to your total overall debt.

4. You Can’t Afford It

Of course, you want to help your grandchildren go to college. However, can you truly afford to help them? If you can afford to help them outright, then it’s better to gift or loan the money to them directly. If you can’t afford to do that, then you probably also can’t afford to co-sign grandchildren’s student loans. After all, that’s the same thing as taking out that loan for yourself. Can you afford that at this late stage in your life? Are you truly comfortable with that? Would you do it to go back to school yourself?

5. It Can Circumvent the Parent-Child Relationship

If your child needs someone to co-sign their student loans for them, then they might first look to their parents (your children or children-in-law). If their parents said no, there could be a good reason. If you turn around and say, “well I’ll do it” then you might be circumventing the parents’ efforts. Depending on your family situation, dynamics, and configuration, this could be an important reason not to co-sign grandchildren’s student loans.

6. Parents Have Better Loan Options than Grandparents

If the grandchildren’s parents are involved in their lives and willing to help, it’s better for them to explore loan options before you do. That’s because there are some terrific loans set up for the parents of college students. PLUS loans are the obvious example. These options aren’t typically available to grandparents. If your family is going to support the younger generation through college, a grandparent as co-signer is really a last resort.

7. Your Grandchild Is Only One Family Member

Everyone is facing tough financial times right now. That means any one of your family members might need financial help. If you put all of your eggs in one basket by co-signing on a grandchild’s student loans, then you might not be able to assist other family members as needed. Your other grandchildren, your children, your siblings, and your own parents, if they’re still alive, may all need financial help. Where do you want to put your money?

8. It Puts Your Health at Risk

Dallas News reports on statistics from the Consumer Financial Protection Bureau that show that co-signing on a grandchild’s student loans often puts the grandparent into a precarious financial position. They are more likely than others in the same age group to skip medicine and doctor’s visits. And yet, if debt causes stress, they made need those doctor visits more than ever before. If you aren’t in a financial position to lend money directly to your grandchildren then chances are that you shouldn’t co-sign grandchildren’s student loans either.

9. It Will Likely Affect Your Retirement

Investopedia reports that older people with student loan debt often end up working later instead of retiring when they originally planned. Moreover, about one-third of baby boomers report that they’ve either delayed accruing retirement income or taken out retirement income early due to those loans. It’s important to think about your own financial future first. Your grandchild has many years left to figure theirs out. But do you?

10. It May Change Your Relationship

When you think about co-signing for the loan, you imagine your grandchild’s gratitude. You are happy to help them out. But it’s important to recognize that this might not be the reality. Your grandchild might drop out of college. They might default on the loan. They might not be as grateful to you as you would think. All of this can have a drastic negative impact on the relationship that you have with your grandchild.

And what if you have more than one grandchild? Are you going to co-sign for all of them? If not, how does that impact your relationship with each grandchild? These are questions to take lightly. Your familial relationships are important. There are other ways for your grandchildren to fund college. There aren’t other grandchildren for you to have relationships with.

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Do You Have to Pay Back Unsubsidized Loans?

June 10, 2020 By Kathryn Vercillo Leave a Comment

There are a lot of questions going around right now about student loans. The political landscape is filled with ideas about how to address outstanding student loan debt. In the midst of all of the potential changes, you might wonder if you have to repay your own loans. In particular, you might wonder about any differences that exist between subsidized and unsubsidized loans.

Subsidized vs. Unsubsidized Loans for Students

First of all, you’ll need to know the difference between subsidized and unsubsidized loans.

Similarities of Subsidized and Unsubsidized Loans

These are both types of student loans.
Both of these loans are issued by the federal government.
You must be enrolled in higher education with at least part-time credits in order to receive one of these loans.
You are allowed six months grace period after school ends before you have to begin repaying either loan.
Both types of loans have several repayment options.

Differences between Subsidized and Unsubsidized Loans

Here are the important differences between the two types of student federal loans:

You must meet an income requirement of financial need in order to qualify for a subsidized loan.
Subsidized loans are for undergraduate education only. Unsubsidized loans are for both undergraduate and graduate school programs.
Typically you are able to access more money with unsubsidized loans.

But here is the really big difference: you do not pay the interest on subsidized loans. The US Department of Education covers that interest for you. In contrast, you do pay interest on unsubsidized loans. Therefore, you have to repay more than the cost of the original loan for an unsubsidized loan.

If you have the option, get a subsidized loan. You can also get both. For example, I got as much money as possible from subsidized loans for my undergraduate education. Then I supplemented that with additional funds from unsubsidized loans, for which I have to pay the interest. When I went to graduate school, I got additional unsubsidized loans.

You Have to Repay All Student Loans … But You Have Options

There are many potential changes taking place in the political landscape when it comes to student loans. For example, one of the COVID stimulus payment plans recommended a stipulation that $10000 of student loans be wiped out across the board for all borrowers. Note: that did not pass! But it is one of many ideas floating around the political landscape in regards to student loans.

That said, you do currently need to repay student loans. You have to repay both subsidized and unsubsidized student loans. With unsubsidized loans, you also have to pay interest on the loan.

Remember, a loan is money that you borrow. It might seem like “free money” at the time. Young students especially feel this way. However, it’s borrowed money. You accepted it with the stipulation that you would repay that loan. If you have unsubsidized loans, you further agreed to pay interest on the loan.

Options for Repayment, Deferment, or Forbearance

That said, student loans are some of the easiest loans to work with when you don’t have enough money to make your full payment. You can contact the lender and figure out the best option given your current financial state.

Repayment Plans

Here are a few common options available to people with unsubsidized loans:

Standard repayment plan in which you pay a specific amount every month for a set amount of time (typically ten years)
Graduated repayment plan in which you pay less per month at the start and gradually increase over that ten year period
Extended repayment plan in which either the standard or graduated repayment plan is extended over the course of 25 years
Income-based repayment plans, of which there are several, allowing you to pay based on what you earn

Options When You Can’t Make Payments

Many people find themselves unable to make their student loan payments for one reason or another. That is particularly true during times of financial stress, such as the COVID-19 pandemic. You might have the option to apply for deferment or forbearance. There are different types of each but essentially both are methods of delaying your payment for a period time.

Note that with unsubsidized loans you are still responsible for the interest that accrues during the period of non-payment. If you are able to pay the interest as it accrues, rather that postponing those payments, it is in your best financial interest to do so.

You Do Not Have to Pay Unsubsidized Loans During the COVID-19 Pandemic

Here’s something important to learn about: There are special payment rules in place during the coronavirus pandemic. This is part of the CARES Act.

First of all, all student loan repayments are automatically canceled through 9/30/20. Therefore, you do not have to pay back unsubsidized loans (or any student loans) during this time. You don’t have to do anything to qualify this; it is automatic for everyone.

That said, you can still choose to make your payments if you want to. If you can, then you should. You’ll repay your debt more quickly.

0% Interest During COVID-19 on Some Loans

Do be aware that certain student loans are set at 0% interest during this COVID-19 “special rules” period. Therefore, although you usually accrue interest on unsubsidized loans, it’s possible that you will not during this time.

Generally speaking, you will not accrue interest on your loans during this time if the loans are serviced directly by the Education Department. This may include Direct Loans, FFEL, and Perkins Loans – both defaulted and non-defaulted loans. It also includes some defaulted HEAL loans.

That said, it is very important to check with your lender to make sure that you clearly understand whether or not your loans accrue interest during this period. Remember that if you have loans that aren’t covered under these temporary 0% rules, you might be able to qualify for an Education Department student debt consolidation loan through which the rules would then apply.

Again, if you can afford to pay your loans, do so. If you ave unsubsidized loans that qualify for zero interest during this period, then any payment you make will go directly to pay down the principal on your balance.

What If I Just Learned I Didn’t Need to Make Payments During COVID-19?

CARES went into effect in March. The 0% interest and no-payment period extends through September. It’s already June. What if you didn’t realize this and have been making payments? First, check to see that you’ve really made them. If you had them set to auto-debit, chances are that the automated withdrawal was canceled without you doing anything.

That said, if you did make payments since CARES went into effect, and you weren’t required to, you can actually get that money back! If you are in a dire financial situation and really need that money, contact your loan servicer to request the refund.

In summary, unsubsidized loans do need to be repaid eventually. However, during COVID-19, you might not have to make payments. You might not even accrue interest. Even after the CARES Act ends and you ave to make payments again, you have options. These include lower payments, deferment, and forbearance options. Check with your student loan provider to review all of your options.

Here Are the Upcoming Changes for Student Loan Borrowers

May 25, 2020 By Amanda Blankenship Leave a Comment

There has been a lot of talk surrounding the United States student loan debt over the past few years. Given the additional financial struggles that came along with COVID-19, many lawmakers are looking for a way to help student loan borrowers manage their debt. Here is what that may look like in the months to come.

What Changes Are Coming?

Since the coronavirus outbreak, it has become increasingly clear that there is something fundamentally wrong with the way the U.S. finances higher education for students. Not to mention, 2020 college graduates are entering one of the worst job markets in recent history. The pandemic gave lawmakers a basis for introducing relief programs to the Senate floor.

They have already passed temporary assistance that will waive all interest on student loans until at least October 2020. However, many politicians think more is needed. House Democrats have proposed the zero-interest period should extend through October 2021.

Additionally, the new HEROES Act would give up to $10,000 in loan forgiveness to private borrowers who are struggling financially. Democratic presidential candidate Joe Biden has even gone as far as to say he would forgive student loan debt for any borrowers who attended public college.

The country’s leaders will be meeting to discuss possible changes for student loan borrowers in the coming months. For now, it is hard to say what will happen.

Student Loan Borrowers, Keep This In Mind

No matter what happens with student debt in America, student loan borrowers need to maintain payments up until a decision is made. Putting off payments until a decision is made in Washington regarding a relief program can seriously hurt your finances.

Don’t forget, there are also a number of payment arrangements you can make as well as forbearance options if you are having trouble paying. Call your loan provider to discuss your options if you need help.

Should You Use Student Loans to Pay Off Credit Card Debt?

May 14, 2020 By Tamila McDonald Leave a Comment

In some cases, when a person takes out a student loan, they get more cash than they need to cover their tuition, housing, and other college costs. When this happens, figuring out what to do with the excess can be challenging. At times, the simplest choice is to send it back to the student loan company. But, if you have credit card debt, is that the best move? If you are wondering whether you should use school loans to pay off credit card debt, here’s what you need to know.

Student Loan Interest Rates Are Lower

Typically, the rate you’ll get on a student loan is far lower than what you’ll have on a typical credit card. For the period between July 1, 2019, and July 1, 2020, the interest rate on direct subsidized loans and direct unsubsidized loans from the federal government is 4.53 percent. Compare that to an average credit card interest rate of 15.09 percent, and it is easy to see why using a student loan to pay off a credit card would be an attractive idea.

With the lower interest rate, you’d pay less over time by paying off your credit card with your student loan. That’s an important consideration.

Streamline Your Monthly Payments

By rolling your credit card into your student loan, you’d streamline your monthly payments. You’d have one set amount to pay each month, making your budget easier to manage thanks to the increased predictability.

If stability is a goal, then using your student loan to pay off a higher interest credit card could give you that. The two debts become a single line item, making it easier to track.

Empty Credit Card Temptation

When you pay off a credit card, you have the ability to charge that amount all over again. If you don’t intend to close your credit card account, then that temptation may be hard to resist. As a result, you may begin ringing up a new credit card balance quickly, creating even more debt.

If you aren’t sure you could refrain from using the credit card after its paid off and don’t intend to close the account, you might not want to pay it off with your student loan. If you do, you could be getting yourself into deeper financial trouble, which isn’t ideal.

Issues During Bankruptcy

While few people plan to file for bankruptcy in the future, it certainly happens. If you get in a bad financial situation and have to file, credit card debts are often dischargeable. You could rid yourself of that burden during the bankruptcy process.

In contrast, federal student loans can’t be discharged during bankruptcy. They stick with you regardless of the financial hardship. If you pay off your credit cards with your student loan, you are effectively moving a dischargeable debt into one that isn’t. That’s a risk that exists, so it’s important to take it into consideration.

It Might Be Against the Rules

When you have money from a student loan, there can be rules about how you use it. Federal student loans are limited to educational expenses at your school. Usually, this includes tuition, room and board, certain transportation costs, and specific tools, supplies, and equipment.

Technically, if you use your federal student loan to pay off a credit card, you could be misusing those funds. You’d be violating your lending agreement, and that could come with ramifications.

Now, it could be hard for your lender to prove that’s what occurred, which is why some people decide to use the money inappropriately. But that doesn’t mean it’s impossible.

Additionally, it’s crucial to note that private student loans may have different rules. With those, each lender can decide what is and isn’t permitted, so you might legally be in the clear to take the funds to pay off other debts. If you’re considering it, review your agreement to find out whether it’s allowed.

Have you considered using student loans to pay off credit card debt? If so, did you go through with it? Why or why not? Share your thoughts in the comments below.

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