Easy-to-Understand Guide to Financial Aid

IMPORTANT!

Printable Resource: Use this worksheet to help you determine how much to borrow.

Important Resource: US Department of Education: Complete Student Loan Information

Understand that if you do take out student loans, you will have to pay interest, which adds up faster than you think!

Here's an example: If you graduate with around $20,000 (average for most students) and take 10 years to pay it back:

  • Monthly Loan Payment: $230.16
  • Number of Payments: 120
  • Cumulative Payments: $27,619.31
  • Total Interest Paid: $7,619.31
  • Best Tip: Our best tip for reducing student loan debt? ONLY BORROW WHAT'S NECESSARY!

  • Best Tool: Determine what your loan payments will be with this Loan Payment Calculator.

  • Right Now: Keep Track of Your Obligations
    Visit http://www.nslds.ed.gov/nslds_SA/ to find out how much you owe and what your interest rates are. Student loans are a serious obligation.

Financial Aid Definitions

Printable Resource: Use this worksheet to help you determine how much to borrow.

Important Resource: US Department of Education: Complete Student Loan Information

  • Know this Term: Interest
    When you borrow money, you have to pay the borrower a fee for borrowing the money, called interest.

  • Know this Term: Grace Period
    The period of time a lender provides for a borrower before the borrower has to make payments on the debt.

  • Know this Term: Federal Student Loan
    A loan given to a student by the US government.

  • Know this Term: Private Student Loan
    A loan given to a student by a bank or credit union.

  • Know this Term: Deferment
    A period of time during which your loan holder suspends your regular loan payments.

  • BEST OPTION for Financial Aid: Grants
    Do not require repayment. They are awarded to undergraduate students who demonstrate financial need. For example, Federal Pell Grants provide a foundation of financial assistance to which other forms of aid may be added. Undergraduate students who establish eligibility for this program will receive a grant based on their estimated family contribution and the cost of attendance.

  • BEST OPTION for Financial Aid: Scholarships
    UNL offers several FRESHMAN SCHOLARSHIPS based on one of many different factors: high school rank, ACT or SAT scores, state of legal residence, leadership and financial need. UNDERGRADUATE SCHOLARSHIPS can be obtained by completing the online Scholarship Application for Current Undergraduate Students available on MyRed and through Individual Colleges.

  • GOOD OPTION for Financial Aid: Federal Work Study
    Part-time jobs during the academic year and full- or part-time jobs during the summer for students who demonstrate exceptional financial need and who must earn a part of their educational expenses. Jobs may be on- or off-campus with a public or private nonprofit agency including jobs in community service areas. Part-time FWS students work 10-20 hours per week and will receive a paycheck every two weeks for the actual number of hours worked. Need to find a work study job? Check out Husker Hire Link.

  • GOOD OPTION for Financial Aid: Private Scholarships
    UNL students are encouraged to keep applying for scholarships from companies and organizations. FastWeb.com is a great database of scholarships for students.

  • NEXT OPTION for Financial Aid: Federal Loans
    Federal loans are borrowed funds you must repay, along with the interest that accrues. A federal loan allows you and your parents to borrow money to help pay for college through federal government programs.

    Some people also look at private loans made through banks or credit unions. However, private loans often have higher interest rates and loan fees than federal loans, require a credit check, and do not provide as many flexible repayment options and plans.

    Federal student loans offer borrowers many benefits not typically found with private loans, including:
    Low, fixed interest rates, 6-month grace period during which payments are due, income-based repayment options, ways to lower or postpone payments, loan forgiveness programs, and deferment options, especially if you return to school.

  • NEXT OPTION for Financial Aid: Federal Loans - Federal Perkins Loans
    The Federal Perkins Loan program gives priority to students with exceptional need. These funds are awarded on a first-come basis to qualified applicants who have a completed financial aid file. The federal government does not charge interest on Federal Perkins Loans while you are enrolled at least half-time, during the 9 month grace period, or during deferments. The interest rate while in repayment is 5% fixed. Grace period before repayment begins is 9 months after you graduate, leave school, or drop below half-time enrollment.

  • NEXT OPTION for Financial Aid: Federal Loans - Federal Direct Subsidized Stafford Loan
    The federal government does not charge interest on subsidized loans while you are enrolled at least half-time, during the 6 month grace period, or during deferments.

    For Subsidized Stafford Loans first disbursed on or after 7/1/06 the interest rate is 6.8% fixed. There is an exception - for Subsidized Stafford Loans made to undergraduate students only with a first disbursement date on or after 7/1/11 the interest rate is 3.4% fixed. For a comparison chart of all Federal Direct Stafford Loan interest rates, click here.

    Grace period before repayment begins is 6 months.

  • NEXT OPTION for Financial Aid: Federal Loans - Federal Direct Unsubsidized Stafford Loan
    The student is responsible for paying all interest on Unsubsidized Stafford Loans beginning the day the loan is disbursed. For Unsubsidized Stafford Loans first disbursed on or after 7/1/06 the interest rate is 6.8% fixed.

    For Unsubsidized Stafford Loans first disbursed on or after 7/1/06 the interest rate is 6.8% fixed. For a comparison chart of all Federal Direct Stafford Loan interest rates, click here.

    Grace period before repayment begins is 6 months.

  • NEXT OPTION for Financial Aid: Federal Loans - Federal Direct PLUS Loans
    The Federal Direct PLUS Loan Program assists eligible parents in meeting educational expenses. The Federal Direct PLUS Loan allows parents to borrow up to the cost of attendance minus other resources.

    For Direct PLUS Loans first disbursed on or after 7/1/06 the interest rate is 7.9% fixed. For a comparison chart of all Federal Direct Stafford Loan interest rates, click here.

    Repayment begins 60 days after the entire Direct PLUS Loan is disbursed for a school year.

Simple Checklist

Printable Resource: Use this worksheet to help you determine how much to borrow.

Important Resource: US Department of Education: Complete Student Loan Information

  • Complete the FAFSA
    Do this as close to January 1st as possible since some need is first-come, first-serve. The priority deadline is April 1st.
    Do this every year. Remember you WILL need your parents' tax information. You can use the IRS Data Retrieval Tool to make this task much easier!

  • Understand How Much Free Money You Are Getting
    You will get notification of how many grants and scholarships you are getting.

  • Determine How Much More Money You Need
    Current Costs of Attending UNL

  • Talk to Your Parents
    If you need to take out loans, talk to your parents to see if they want to take out parent loans, which are Federal Direct PLUS Loans, or if you want to take out Stafford Loans.

  • Take Out SUBSIDIZED Loans First
    The loans you DO NOT pay interest on.

  • Then Take Out UNSUBSIDIZED Loans
    The loans you DO pay interest on.

  • REMEMBER, ONLY BORROW WHAT YOU NEED! Interest will add up and will be a waste of money if you don't really need the loan!
    One thing you can do that will help hinder you from taking out too much is to determine how much your monthly payments will be and how much interest you pay on your loans by using this easy-to-understand Student Loan Calculator.

How Much to Borrow

Printable Resource: Use this worksheet to help you determine how much to borrow.

Important Resource: US Department of Education: Complete Student Loan Information

ONLY BORROW WHAT'S NECESSARY!
Student loans should only cover necessary costs like tuition, room & board, books, and school supplies. Know what your monthly student loan payments will be. This can help you keep borrowing to a minimum. Use this easy-to-understand Student Loan Calculator.

Good Guideline

  • Plan for no more than 10% of the expected monthly gross income from your first job going for repayment of all loans.
  • 15% would mean you probably will not be able to buy a new car.
  • 20% is the start of the "danger zone" when loan debt is out of control.

Printable Resource: Use this worksheet to help you determine how much to borrow.

Calculator: This Student Loan Advisor provides you with an estimate of the amount of educational debt you can reasonably afford, given the expected starting salary for your major.

Resource: Career Services UNL Salary Survey

  • Keep Track of Your Obligations
    Visit http://www.nslds.ed.gov/nslds_SA/ to find out how much you owe and what your interest rates are. Student loans are a serious obligation.

  • Be Smart with Your Refund Check
    Use your refund to pay off debt or save it to pay for expense throughout the semester. Remember this is actually additional debt, not a true refund.

  • Plan for Repaying Student Loans
    Keep other debts low to help keep money available to pay off your student loans faster.

Quotes from UNL Students: Reducing College Debt

Printable Resource: Use this worksheet to help you determine how much to borrow.

Important Resource: US Department of Education: Complete Student Loan Information

  • Don't Rush, But Try to Get Through School in a Reasonable Amount of Time
    "Start earning a regular salary as soon as you can. Don't waste time living on loans & charging up interest!"

  • Try to Pick Your Major Early in Your UNL Career
    "Switching majors is costly. You can end up taking lots of classes you don't need and we all know how expensive classes are. Visit Career Services. They can help you pick the major that's right for you."

  • Pass Your Classes!
    "This should be obvious, but it's worth reminding people that retaking classes is expensensive and can delay your graduation."

  • Start Your Own Business
    "Find something you're good at and can make you lots of money. One of my friends owns his own DJ business and makes lots of money. The SMMC can help you get started."

  • Live at Home if You Can
    "If you and your parents agree this is a good option, do it! Make sure you sit down and create some ground rules."

  • Become an RA
    "Free room and board baby! It's a good deal."

  • Consider Working for an Apartment Complex
    "I work for my apartment complex. I do maintenance 15 hours per week and get free rent plus a little income."

  • Do Consider Loans for Study Abroad
    "I was hesitant to use loans for a study abroad trip, but it was the best experience. I combined my loans with scholarships, plus I saved up money for 2 years before I went, so I didn't dig myself into a huge debt hole."

  • Don't Take on Additional Debt While in School
    "Stay away from credit cards unless you pay the balance off each month. Spring break might sound like a good reason to use credit, but you'll regret it in the future!"

  • Apply for Scholarships From UNL Every Year
    "It's crazy not to apply. You never know what free money you can get. The general scholarship form can be found on MyRed beginning on November 1. This form is due February 1st for current undergraduate students. Also apply for scholarships through your own college."

  • Don't Forget to Apply for Private Scholarships
    "I love Fastweb.com. I've gotten 2 scholarships through that website and didn't have to go through a lot of work for them."

  • Consider Tuition Reimbursement Programs
    "If you have a job, make sure you ask your employer if they offer education benefits. Some companies will give you money. Also, consider the Army ROTC. They offer scholarships and monthly living allowances. Another great program is Americorps, which offers you the opportunity to work for a public service program and get an educational award."

  • The Easiest Way to Make Money is to Save What You Have
    "Create a spending plan to see in what areas you are overspending. I stopped buying coffee, and by spending just $3 less a day, I saved over $1,000 this year. Mint.com is an automatic budgeting program that has saved my life!"

  • Work Part-Time
    "I think 10-15 hours each week is enough for most students. My job not only helps me earn a little extra cash, but I'm gaining marketable skills that will help you to get a great job after college. Plus, I get to network with people who can help me find a full-time job after college. Try to find jobs that will fit both your interests and your chosen career field."

  • Work Extra Hours Over School Breaks
    "Places like theworkbuzz.com list companies that are hiring seasonal workers. Check it out to see if any of the companies interest you."

  • Live Like a College Student!
    "We're all broke! Make sure you don't try to spend money like you've already made it. I shop at sales, search for free furniture, split rent with a roommate, and cook meals at home. I make saving money a game."

  • Curb Impulse Spending by Creating Financial Goals
    "If you need to save for tuition, determine how much you will need and when you will need it. Divide this amount by the number of months you have left to save. This number will show you just how much money you need to save each month to reach your financial goal."

  • Save Money on Weekends
    "Weekends are when most UNL students waste their money. But going out doesn''t have to be expensive. I recommend taking $20 cash out and not spending more than that. There's no reason to with so many free events happening at UNL all the time!"

  • Avoid Paying Student Loan Interest
    "I make sure all my friends, and myself, max out our subsidized loans before using unsubsidized loans."

  • Lower Student Loan Interest Payments
    "If you have the money, make interest payments on unsubsidized loans while you're still in school. That's what I do so I have less debt when I graduate."

Private Loans

Printable Resource: Use this worksheet to help you determine how much to borrow.

Important Resource: US Department of Education: Complete Student Loan Information

  • FIRST, EXHAUST FEDERAL LOANS OPTIONS BEFORE LOOKING AT PRIVATE LOANS
    Federal loans are borrowed funds you must repay, along with the interest that accrues. A federal loan allows you and your parents to borrow money to help pay for college through federal government programs.

    Some people also look at private loans made through banks or credit unions. However, private loans often have higher interest rates and loan fees than federal loans, require a credit check, and do not provide as many flexible repayment options and plans.

    Federal student loans offer borrowers many benefits not typically found with private loans, including:
    Low, fixed interest rates, 6-month grace period during which payments are due, income-based repayment options, ways to lower or postpone payments, loan forgiveness programs, and deferment options, especially if you return to school.

Before You Take Out a Private Loan:

  • Know they will check your credit score. Make sure there are no mistakes in your credit report by visiting: annualcreditreport.com.

  • Know that if you do not have a long history of using credit, you most likely will need a co-signer.

  • Know that you CAN shop for the best interest rates (REMEMBER, the lower the better!) within a focused period of time and your credit score will not be affected.

Repaying Student Loans

Printable Resource: Use this worksheet to help you determine how much to borrow.

Important Resource: US Department of Education: Complete Student Loan Information

Simple Checklist for Starting Student Loan Repayment

  • Get All Your Student Loan Information
    All your information is available at: http://www.nslds.ed.gov/nslds_SA/

  • Create Your Personalized Budget
    Figure out how much money you have to put towards debt repayment. Try using: mint.com.

  • SMMC's BEST TIP: Plan to Keep Living Like a College Student, Even After Graduation
    Live as frugally as possible and get your loans paid off as fast as you can to reduce wasting money on interest!

  • Carefully Choose a Repayment Plan
    Choose the student loan repayment plan that works the best for you. Simple descriptions are below.

  • Determine if You Qualify for Loan Forgiveness Program
    Make sure you look into Student Loan Forgiveness programs. You might qualify to get your loans dropped!


Student Loans & Credit Scores

Printable Resource: Use this worksheet to help you determine how much to borrow.

Important Resource: US Department of Education: Complete Student Loan Information

  • Will Your Student Loans Affect Your Credit Score?
    Yes, when you start making student loan payments, your credit score should be positively affected. However, if you DO NOT pay your student loans on time, your credit score will decrease.

  • Why Is a Good Credit Score Important?
    Your credit score is an indicator of your use and repayment of borrowed money over time - a numerical value ranging from 300 to 850 - average of 700. If you have a low score, you will pay more for mortgages, loans, and insurance, and may be prevented from getting an apartment, and in some cases, even a job.
    FICO: Understanding Your Credit Score

Tips for Building a Good Credit Score

  • Make Payments on Time
    The easiest way to establish your score.

  • Only Open Accounts You Need
    If you open too many accounts, your credit score will go down. Don't open too many accounts at once.

  • Keep Debt Levels Low
    Keep balances of credit cards under 30% of the total credit limit. Pay down revolving credit card accounts and pay consistently on installment type loans.

  • Monitor Your Credit Report
    Credit scores being with the information from your credit report. Make sure this information is correct by requesting your report from annualcreditreport.com.

  • Fix a Bad Credit Score
    If you had credit problems in the past, the best things to do to fix your score are: stop taking on debt, avoid opening new credit accounts, work to pay your debts down, and PAY YOUR BILLS ON TIME!