Student Life

Tips for Making the Most of Your College Experience

You’ve probably heard either your parents, your friends, or one of your family members say that “College is the greatest time in your life,” and they certainly aren’t wrong.  College is awesome in that you are living on your own for the first time, you are more independent, and you are given the opportunity to make a whole group of new friends.  However, with the college experience comes responsibilities.  This is why we’ve come up with a few tips on how to make the most of your college experience.

Join a student group or organization.  Especially if you join an organization that fits your major field, this can be a great way to build your resume.  In an article by  Sam Coren at StudentAdvisor.com, these types of groups offer you opportunities that you might not be able to learn in the classroom, like leadership and managerial experience.  This also shows that you can manage multiple tasks at once, and can demonstrate to a prospective employer that you actually did make the most of your time in college.

However, you won’t just get job experience from joining a student group.  You are also becoming connected with people who share at least one common interest with you.  In this way joining student groups will give you a chance to meet new people, especially if you’re typically a little shy.

Do an internship.  While working at the coffee shop near campus will pay your bills, you may also want to think about taking on an internship.  This is not only a great way to build job experience, but it can also help you decide what you want to do (or not do) for a career.  However, you should be aware that not all internships are paid (check out our previous post on internships here).

Consider studying abroad.  If you have the chance, you may want to consider studying abroad.  This type of experience will not only give you a chance to travel and receive college credit (one less class you have to take!), but it will also expose you to an entirely new culture, new place and a new group of people.

Get to know your professors.  According to Coren, you don’t need to have a problem or a question to visit your professors.  If your professor has office hours, you may want to just stop by to see what they are working on or talk with them about current events.  The relationships you build with your professors cannot only help you in their class, but it can also help you throughout the rest of your college career.  If you build good enough relationships with your professors, you may even be given valuable research opportunities, or these could be the people you turn to for recommendations for a job, graduate school, or internships.

While each of these are great opportunities for you to consider when you go off to college this fall, there are some other things you may want to consider to ensure that you don’t fall behind.

Go to class.  In an article by  Miranda Marquit on Money Crashers, she says the first most important thing students need to do is go to class.  Many students after about the third or fourth week of class start getting sick of getting up for an 8 am class, and so they stop showing up.  This is probably the biggest mistake you can make because 1) you’re paying for it, so it’s a waste of money if you don’t show up half the time; 2) more often that not, your professor is going to factor attendance into your grade, and 3) you’re going to miss a lot of information and assignments you’ll need to make it through the class.

Don’t overschedule yourself.  For some students, one of the biggest problems they run into is just not having enough time to do all of their homework, go to their internship, and go to work.  Some students, in fact, have more than one job at a time.  The key is to not overschedule yourself because if you do, you’ll end up losing out.  Make sure that your schedule doesn’t overload you so much so that you’re overtired all the time, you don’t have time to study for that big exam, or you never have time to do your homework.  You have to remember that you are a student first and foremost, so that means school comes first.

Have fun.  This is especially important; students need to make sure they have fun during college.  This should be one of the greatest times in your life and something you should look back on fondly.  In college you’re given more opportunities than ever, and you should really make the most of them.  While this should include making the most of your academic experiences, it should also include your social and personal experiences.  Don’t let yourself get too bogged down by the stresses associated with college life; make sure to take some time out for yourself to have fun.

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Ask the Expert, College Planning, Finances

ASK THE EXPERT: College Financial Planning, Part 3

For the third installment in our college planning series, we wanted to know what were some of the biggest issues encountered by students when applying for financial aid.  Once again, we spoke with Mark Kantrowitz, publisher of FinAid.org and Fastweb.com and expert on paying for college, to give us his perspective on this issue and how students can maximize their federal student aid.

According to Kantrowitz one of the major problems he identifies is that students often do not fully understand the reality of the loans they receive.  Kantrowitz explains that students will sign their name to a loan so long as it enables them to fulfill their dreams.  Many believe that they will figure out how to pay back the loan when they graduate from college.  However, this is a major problem, explains Kantrowitz, as it is much more difficult to figure out how to pay back the loan after you have incurred that cost, rather than before.   He urges that “If you’re choosing a college and your dream is to study a field that doesn’t pay very well, you need to make sure you borrow less to match your expected income when you graduate.”  While this could mean going to a cheaper school, it could also mean just limiting other costs while attending school.  Kantrowitz suggests buying used textbooks, selling textbooks back to the bookstore, taking fewer trips home, and eating out less.  He advises  “You have to live like a student while you’re in school so that you don’t have to live like a student after you graduate.”

Another major problem Kantrowitz identifies is that student often will not file their Free Application for Federal Student Aid (FAFSA) early enough, and will consequently receive less financial aid.  Instead he urges students not to wait until they have filed their income tax information, but rather file their FAFSA based on projected income information and their previous income tax information.

To maximize financial aid with FAFSA, Kantrowitz urges students to be aware that income is weighted much more heavily than assets, and assets in a child’s name count much more heavily (about 20% are counted against aid eligibility) than those in the parent’s name (5.64% or less is counted against aid eligibility).  He explains that if you currently have a Uniform Gift to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA) account to help save for college, you may want to consider moving the money to a custodial 529 college savings plan account.  Kantrowitz advises that this is the most tax advantageous ways of saving for college, and that this will help students to maximize the financial aid they receive.

By saving, being frugal and being mindful, Kantrowitz explains that students can make the most of their experience, while still being able to afford college.  It is important that students stay informed when it comes to paying for college so that they may make decisions that are right for them.

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Ask the Expert, College Planning, Finances

ASK THE EXPERT: College Financial Planning, Part 2

For the second installment of “Ask the Expert:  College Financial Planning” series, we wanted to know what types of loans are available to students, and what are the distinctions between each of these types.  To find out more, we once again spoke with Mark Kantrowitz, an expert on paying for college, to give us the lowdown on loans.

Kantrowitz explains that there are two major types of student loans:  federal education loans and private student loans.  According to Kantrowitz, the federal loan has greater availability, better repayment plans, and is generally cheaper than a private loan.  He advises that the federal loan should be a student’s first choice when applying.  They will also be much easier to obtain in that they are offered through the Direct Loan program where students obtain federal loans through their college or university.

There are several different types of federal loans that are available to students.  The most common is the Stafford loan, in which there are two versions:  the subsidized and the unsubsidized.  According to Kantrowitz, there are a few main distinctions students should note when applying for subsidized and unsubsidized federal loans.  The first is that the subsidized version is based on financial need, while the unsubsidized version is not.  Even wealthy students can qualify for the unsubsidized Stafford loan.  Second, with the subsidized version, the government will pay the interest on the loan while the student is in school, and with the unsubsidized version, the government will not.  Thirdly, the interest rates for subsidized loans will be half of the rate (3.4%) as the rate for unsubsidized loans (6.8%) until tomorrow, in fact.  While there was a great deal of debate over how the government could afford to keep the rate the same, Senate majority and minority leaders  established an agreement that would enable the rate to remain at 3.4%.   According to Kantrowitz, this agreement will modify pension insurance premiums and drop eligibility for subsidized Stafford loans from students who are taking too long to graduate.

The other major distinction between subsidized Stafford loans and unsubsidized Stafford loans is the limit to which a student can borrow.  For the subsidized Stafford loan, a student may borrow up to $3,500 for their freshman year, $4,500 for their sophomore year, and $5,500 each for their junior and senior year.  Should the student require more aid, they may apply for unsubsidized loans.  However, there are limits as to how much one can borrow, either with a combination of subsidized and unsubsidized, or just from unsubsidized alone.  Overall, the limits are $5,500 for dependent freshmen students, $6,500 for dependent sophomore students, and $7,500 each for dependent junior and senior students.  If the student is filing as an independent, or their parents have been denied a loan, the borrowing rate is increased to $9,500 for their freshman year, $10,500 for their sophomore year, and $12,500 each for their junior and senior years.

The second type of federal loan available to students is the Perkins loan, which is given to students with exceptional financial need.  However, Kantrowitz explains that this is a very small loan program, and most students will not receive this type of loan.  Those students who do receive this type of loan will obtain between $1,000 and $2,000, on average.

The last type of federal loan Kantrowitz identifies is the PLUS loan, which is granted to the parents of undergraduates and to graduate students.  In either case, there is a 7.9% fixed interest rate, and eligibility is dependent on the borrower’s credit history. The PLUS loan also has a limit up to the full cost of education, minus any other aid received.  The Plus loan program is very popular, and only about one-fifth of those who apply will be denied due to bad credit.

While Kantrowitz explains that federal loans should be a student’s first choice, he also explains that a student may take out private loans should they require more funding.  However, Kantrowitz warns against some of the major pitfalls with private loans and denotes the differences between the federal and the private loans that should play into a student’s decision.    The first is that private loans are determined by individual lenders (not by the government), therefore these loans will vary significantly and will often have variable interest rates.  While some are introducing fixed interest rate options, this is something that students should consider when applying for private loans.

The second major consideration is that eligibility for these loans depends on one’s credit history and credit score.  In fact, Kantrowitz explains, more than 90% of these loans require a creditworthy cosigner as many students do not have any credit history or if they do, it is oftentimes very poor.  The higher of the two scores will then determine eligibility and the cost of the loan.  Kantrowitz gives us the example that if the loan has a variable rate, the interest on the loan would be a combination of a variable index plus a fixed margin, which depends on one’s credit score.  This means that the higher one’s credit score is, the less they will have to pay in interest on the loan.

Kantrowitz advises that “Your debt at graduation should be less than your expected annual starting salary.”  He explains that ideally, students should not be borrowing more than $10,000 each year for college.  If total student loan debt is less than annual income, the borrower will be able to repay their loan in 10 years or less.  Kantrowitz explains that “If your debt exceeds your annual income, you’ll struggle to repay the loan, and you’ll have to alter your repayment plan by income-based repayment or extended repayment in order to afford the monthly loan payments.”  This means that students will not only be stretching out their repayment, and therefore the amount of time they are in debt, but they will also be increasing the cost of the loan.  This means that they may still be repaying their own student loans when their children are looking to attend college.

For more information on financial aid and scholarships, visit www.finaid.org and www.fastweb.com.

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Ask the Expert, College Planning, Finances

ASK THE EXPERT: College Financial Planning, Part 1

For our newest blog series, we wanted to look at college planning and financial aid, as the student debt crisis has most certainly been a hot topic in the media recently.  For this series, we wanted to know exactly what students need to understand when it comes to financial aid, college financial planning, loan repayment, and student debt.  It just seems so complicated!

For the first installment in the “Ask the Expert:  College Financial Planning” series, we wanted to know what students should be concerned about when it comes to finances and applying for college.  To find out more, we spoke with Mark Kantrowitz, a noted financial aid and college planning author and publisher of FinAid and FastWeb, two resources for students looking to find out more about financial aid options available to them.

Kantrowitz tells us that students should ideally start looking at financial aid options as early as possible.  Often many students start looking their senior year, however, many of the deadlines have already passed.  Kantrowitz says that students looking to get scholarships should be planning for deadlines as early as junior year (if not earlier), so that they can get their applications in for those scholarships with deadlines in the fall of the their senior year.  He explains students should start considering financial aid as early as possible, as this increases the number of scholarships available to them, including those that they may earn in earlier grades.

According to Kantrowitz, when it comes to examining their options, they should weigh the cost of financial aid.  For students, he says, saving is always the better option.  “Every dollar you save is a dollar less that you’re going to have to borrow and every dollar you borrow, will cost you about $2 by the time you pay back the debt.”  It is simply the more affordable options, because when you save, you earn interest and when you borrow, you will pay interest. He gives us the example that, “If you were to save $200 per month for 10 years at 6.8% interest, you’d accumulate about $34,400.  If instead you were to borrow and pay back over 10 years at 6.8% interest, you’d pay $396/month.”  That would roughly double what one would pay if they were to save money instead.

Kantrowitz explains that students should also be aware of the actual cost of college.  He says that students should utilize a net price for college, which is the difference between the cost of attendance and just grants and scholarships.  “Think of it as a discounted sticker price.”  He explains that using this figure is a better basis for evaluating the cost of college rather than utilizing other cost evaluations.  Especially when it comes to the net price figures that schools will often provide on their websites.  Kantrowitz explains that these numbers will often include financial aid packages and loans, that do not actually lower the cost, but will rather increase the cost.

Kantrowitz also urges students to use caution with net price calculators that universities are now required to provide on their websites.  He explains that since October 2011 schools have mandated to host a calculator, however, he says that they really should only be used to determine a ballpark figure for net price.

According to Kantrowitz, there are a couple of major issues with these calculators.  The first major concern with these calculators is the number of questions the calculator has.  He says that much of the accuracy of these calculators is dependent upon the number of questions that they ask; while the standard calculator provided by the National Center for Education Statistics (NCES) contains approximately 10 questions, other calculators such as the one provided by the College Board, contain more questions.  The more questions a calculator has, the more accurate the calculator will be, he explains.  While these calculators are will mean more work for the user, they will produce much more accurate results.

The second concern Kantrowitz points out is that the age of data will play into the accuracy of the calculator.  He explains that calculators like those provided by NCES contain data that is approximately 2 years old, while those like the one provided by the College Board are current, and are more up-to-date.  In either case, Kantrowitz explains, one should use caution with these calculators and should not exclude any colleges on the sole basis of the figures provided by a net price calculator.

The last major concern Kantrowitz points to relates to the financial aid award letter.  He explains that students should be careful when they receive their financial award letter that they understand the characterization of the different awards and understand which award they were given.  “I’ve had families come to me thinking that they’re getting a free ride from a college, and when I look at the financial aid award letter I see $5,000 in student loans and $20,000 in parent loans.  That’s far from a free ride.”  Students should really do their homework when it comes to the different classifications of financial aid, so they know that when they receive a grant, they know which grant they have received and what this implies.

Overall, Kantrowitz urges students to start considering college financial aid early and often, and to do their homework when it comes to understanding the different options available to them.  He explains that students and their families should always exercise caution when it comes to financial aid and to make financial aid decisions that work best for them.

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