411 on Financial Aid - The Director's Blog

Parent PLUS, Grad PLUS, and Private Loans

Education loans may be one of the options that your family considers for managing unmet costs. As with any other type of financial aid, borrowers need to do their homework in order to make an informed decision.  It’s important to always remember that taking on debt for any reason should be done deliberately and only for the amounts needed.  Please know that our office is committed to helping families understand their options in this area.

At DU, there are two loan options available when eligibility for Direct Stafford Loans is exhausted.  The PLUS loan program is a federal student loan available to graduate students or the parent of a dependent undergraduate student.  Private education loans are offered by private financial institutions and are available to both students and parents.  PLUS loans and private educations loans are both credit-based loans, so there may be instances where a co-signer is required to borrow the funds.  Below, we have tried to provide resources to help you evaluate which loan option may be right for you. 

Federal student loans have fixed interest rates and origination fees that are regulated each year by Congress. They also carry other federal benefits, such as an Income-Based Repayment option and Public Service Loan Forgiveness.

Alternative student loans often offer a variable interest rate, based off of indexes such as LIBOR or Prime that fluctuate with the market. Because these indices are at historic lows, students and families with very strong credit histories may find that an alternative loan offer appears to be more attractive than their federal loan offer. Borrowers need to keep in mind, however, that there is a lot more to consider than just the interest rate.

If you would like to compare the Federal PLUS loan against a private loan offer, filling in the following questions may help you make an accurate comparison of each loan program.  Remember that you will want to apply for these loans at least 6-8 weeks prior to the start of the academic term and no earlier than May 1^st for the upcoming Fall Semester/Quarter.

	Federal PLUS Loan	Your Private Lender
Who can be the borrower?	A graduate student or the parent of a dependent undergraduate
Co-signer Required?	Only in the event of adverse credit history for the primary borrower
Credit Requirements	No adverse credit history
Interest Rate	7.9%
Can the rate change and if so, how often?	No, fixed interest rate
Origination Fee	4% deducted at time of disbursement
When do payments begin?	Immediately, upon graduation, or 6 months after graduation ( borrower has the option)
Repayment Options	Standard 10 Year Extended 20-30 Year Graduated Income-Based
Yearly or Aggregate Borrowing Limit	None
Loan Deferment Options	In-School Deferment
Forbearance Options	Economic Hardship Forbearance
Loan Forgiveness Options	Public Service Loan Forgiveness Total and Permanent Disability Discharge Death Discharge
Borrower benefits offered: -          Interest rate reduction for on-time payments, electronic funds transfer, or graduation -          Release of cosigner after making a certain number of on-time payments -          Other benefits	Borrowers who enroll in direct debit can receive .25% interest rate reduction.   Graduate PLUS loans can be consolidated with a student’s other federal loans.

 

 

Denver Spring College Fair

Today I had the pleasure to present financial aid information to 300 attendees of the 2012 RMACAC Denver Spring College Fair. Over 2000 attendees were expected to attend the College Fair held in the Gates Fieldhouse on the DU campus.  As a member of Colorado Association of Financial Aid Administrators, I was asked to share the my knowledge on Financial Aid & the College Admission Process.    It was great to see so many families looking to learn about paying for college.  For those families who attended the breakout session and for those that reguarally read this blog, I have two different links to the information presented this afternoon.  

One option is to view the presentation in your web browser: Denver Spring Fair - Fin Aid 101

The other option is to download the presentation to you computer:  Denver Spring Fair - Fin Aid 101

Feel free to share comments or questions and I'll respond as needed.  Thanks again to everyone who attended the two sessions.

- Chris George

 

Managing Unmet Costs

By now, most new undergraduate and graduate students have received their financial aid award letter email.  After taking the time to review the financial aid that has been offered, you may still wonder about how to pay for the additional costs not covered by the initial financial aid package.   We recognize that many students and their families face challenges in financing a DU education and it’s our goal to help you craft a manageable, customized plan that combines a range of resources -- out-of-pocket contribution, scholarships, student employment and loans -- to cover the remaining unmet cost of enrollment.  First, we encourage you to review and complete a budget worksheet: 

• Undergraduate Students
• Law Students
• Graduate Students

Once you have completed a budget worksheet, you can explore the following financing options to help cover your unmet costs:

• Tuition payment plans. The Bursar's Office offers flexible payment plan options to spread the cost of tuition and fees over monthly payments. Both yearly plans and one-term plans are available. The enrollment fee is $50 per plan. Learn more about payment options through the Bursar's Office.
• Part-time employment. Consider earning money through student employment. Whether part of the formal Work-Study program or not, part-time jobs can help lessen the financial burden for you and your family. The Office of Student Employment can help you find both on- and off-campus job opportunities.
• Private scholarships. Organizations of all types and sizes sponsor scholarships. Throughout the year, various organizations provide our office with information regarding their private scholarship and grant opportunities. Explore available scholarships and sign up for our monthly newsletter to stay up-to-date with the most current information about private scholarships for DU students.
• Federal Direct PLUS loan (only available as a Parent Loan for dependent Undergraduate Students). PLUS loans are not included in the initial award letter; however, parents of dependent, undergraduate students who are enrolled at least half-time may apply for it. Parents may borrow up to the student's total cost of attendance, minus all other financial aid. Learn more about PLUS loans or apply online at www.StudentLoans.gov.
• Federal Direct Grad PLUS loan (only available to Graduate Students). Grad PLUS loans are not included in the initial award letter; however, graduate students who are enrolled at least half-time may apply for it. You may borrow up to your total cost of attendance, minus all other financial aid. Learn more about Grad PLUS loans or apply online at www.StudentLoans.gov.
• Private education loan. After exhausting all other opportunities, including federal loans, you may consider a private education loan as a source of funding. The terms and interest rates of private loan programs vary, and you may obtain a better interest rate by applying with a credit worthy co-signer. Learn more about private education loans before applying with a lender.

In my next blog, I will discuss the benefits and differences between the Federal and Private/Alternative Loan Options.

Chris George, Director of Financial Aid

 

Financial Aid Terminology - Part 2

In the past two weeks, the Office of Financial Aid has sent over 4,500 financial aid award letters to newly admitted undergraduate and graduate students.  As students and families take the time to review the information in this award letters, I think it is helpful to have a quick reference about the awards that comprise the total offer of financial aid.   Below you will find definitions for the most common terms found in a financial aid award letter. Next week, I’ll start a series of blogs on loans and paying for the additional costs that are not covered by the aid found in the award letter.

Merit-Based Award: Admission and departmental scholarships awarded to students with competitive GPAs and scores on standardized tests. 

Residence Hall Grant: This grant is awarded to incoming students who receive a merit-based award from the Office of Undergraduate Admission.

DU Educational Grant (DUEG): Need-based grant awarded to student.  The amount is based on the results of the CSS PROFILE and DU’s awarding policy.

Federal Pell Grant: Need-based grant awarded to students with high financial need.  The amount is based on the results of FAFSA EFC calculation.

SEOG (Federal Supplemental Educational Opportunity Grant): Grant is administered by DU with funds from the federal government.  It is available to students with exceptional financial need, as based on the result of the FAFSA EFC calculation.

CSG (Colorado Student Grant): Grant awarded to undergraduate students who are Colorado residents with high financial need, as calculated by FAFSA.  

COF (Colorado Opportunity Fund) Grant: At DU, this is a need-based grant available to students who are eligible for the federal Pell grant.  The recipient of a COF Grant must also be a graduate of a Colorado high school OR be a student that has successfully completed a non-public home-based educational program in Colorado.  COF will not appear in your financial aid award offer; however, if you are a recipient of this award, it can be applied toward your direct costs.

Work-Study (Federal and State): Need-based award that offers part-time employment on and off campus.  Although many students qualify for Work-Study, a Work-Study award is not offered to all eligible students because funding is limited. It is a highly competitive financial aid award and is awarded first to students who meet the priority application deadlines until funds are exhausted. The University also assists students in finding non-Work-Study employment, both on and off campus.

Federal Student Loans (also called the Stafford Loan Program): Subsidized and unsubsidized Direct Loans are available to students enrolled at least half-time in a degree-granting program.  Direct loan borrowers receive a 6-month grace period before repayment begins after they graduate or stop attending school at least half-time. The standard repayment period is 10 years, but can be as long as 25 years.

Subsidized Loans: Awarded to students with demonstrated financial need. No interest will accrue on the loan as long as the student is enrolled at least half-time in a degree-granting program, and during the sixth month grace period. 

Unsubsidized Loans: Non-need based loan that begins accruing interest immediately upon disbursement and continues to do so during the grace period and through repayment.

Federal Perkins Loan: A federal, campus-based, fixed-rate, low-interest loan for students enrolled at least half-time.  Although many students qualify for a Perkins Loan, a Perkins Loan is not offered to all eligible students because funding is limited. It is a highly competitive financial aid award and is awarded first to eligible students who meet the priority application deadlines.   Students with demonstrated financial need who meet the Office of Financial Aid application deadlines are considered for a $3,000 loan. The 5% interest rate does not accrue while the student is enrolled half-time, during a nine-month grace period and during periods of eligible deferment. 

As always, if our office can assist you in any way, please feel free to contact us.

Chris George, Director of Financial Aid

Help is available

For the past two weeks, the Office of Financial Aid has put a tremendous amount of effort into processing financial aid applications and preparing financial aid award letters for new students. This week we will be sending emails to thousands of students who have applied and been admitted to the University of Denver at both the graduate and undergraduate level, notifying them of their financial aid award.   

We know that over the course of the next 6 weeks, students and families will make one of the biggest and most important decisions in their lives. Please know that the Office of Financial Aid is committed to assisting students and families with their decision and transition to the University.  Also know that we provide a tremendous amount of information and resources on our website (www.du.edu/finaid) and are happy to respond to your email and phone inquiries.  If needed, you can schedule in-person or phone appointments to answer some of the more difficult questions.   Applying for financial aid can be a tedious and difficult process at times, so please feel free to reach out to us with questions. 

Chris George, Director of Financial Aid

 

Financial Aid Award letters

March is the time for admission decisions and, subsequently, financial aid award letters.  The Office of Financial Aid knows that undergraduate admission letters went out late last week because our phone call volume has tripled the first three days this week!  The phone calls we receive are falling into three categories:

1. I missed the priority financial aid application deadline, is there anything I can do?
2. When will I receive my financial aid award letter?
3. What else do I need to complete to ensure I receive a financial aid award letter?

If you have missed our priority deadlines, don’t despair; just act.  Complete the FAFSA or CSS PROFILE now.  You can still use estimated information to complete both applications if your 2011 taxes are not complete – though you will need completed taxes very soon if you would like an award letter prior to the deposit decision deadlines.

Our first run of financial aid award letters will be emailed to students next week. This email will have instructions on how to access your financial aid award letter, a 15- to 17-page guide on Financial Aid, a budget worksheet to help you estimate costs, and a document on the next steps you need to take regarding your financial aid award.  If you don’t receive a financial aid award letter next week, there can be several reasons for this.  You haven’t been admitted to the University of Denver, you didn’t meet all of the priority deadlines, or you still have outstanding items that DU needs to receive to complete your applications for financial aid.  We continue to package students on a weekly basis, so if you have been admitted and have all of the financial aid requirements completed, an award letter will be on its way very soon. 

To check to see what items are still needed to complete your financial aid application, you may access this information on webCentral at http://webcentral.du.edu (please allow 2-3 business days for webCentral to reflect documents received). Once logged in, go to the Admitted Students (new undergraduates), Incoming Grad Student (new graduates) or Student (continuing students) tab and review your “Financial Aid Requirements” on the right side of the page (be sure the Aid Year is set to 2012-13). Documents we have received will have a green check mark. The Verification Process requirement will remain unsatisfied, and have a red flag, until your file has been reviewed by a staff member.   Know that our office communicates these requirements to students on a weekly basis.  We do not continue to remind students after 5 communications, but the information will still be available on webCentral.

As always, if you have any questions, feel free to contact us.

Chris George, Director of Financial Aid

 

Financial Aid "Top Tips"

Over the past few weeks, several different people have asked me for my “top tips” regarding financial aid. I thought I would share my list of tips for students and families.

1) Research, be aware of, and meet financial aid deadlines. Many sources of financial aid are limited and are first distributed to students who meet the financial aid deadlines established by the school.

2) You may estimate your 2011 tax information on both the FAFSA and/or CSS PROFILE in order to meet deadlines at the University of Denver. It’s great if you will have your 2011 taxes completed by the application deadline, but if you can’t, you are allowed to estimate this information. 

3) Use IRS data retrieval in the FAFSA application process. This should help eliminate additional information requests from the Office of Financial Aid. In the past, about 1 in 3 financial aid applicants to the University of Denver needed to provide additional information required by the federal government.

4) Make sure you understand the types/sources of financial aid that are listed (packaged) in the financial aid award letter. Grants and scholarships typically do not have to be repaid, Work-Study awards allow you to earn money through on-campus employment, and loans will need to be repaid.  If you have questions about an award in the financial aid letter, contact the school to ensure you understand what has been offered.

5) Understand that college (undergraduate/graduate) is a multi-year investment that results in a lifetime of returns. Project your out-of-pocket commitment as well as any debt that will need to be repaid. For loans, make sure you understand the monthly payment you will have upon graduation.  FinAid.org has a useful loan calculator you can use, found here.

6) Last, if you have questions, contact the Office of Financial Aid. We want to help provide you with the resources and information to make a DU education a reality. Know that we receive high volumes of calls, emails, and faxes around our financial aid deadlines, so if you can plan ahead, it’s that much easier for us to provide exceptional quality service.

Chris George
Director of Financial Aid

 

Graduate Financial Aid

For graduate students, the University of Denver requires only one financial aid application - the FAFSA.  The Free Application for Federal Student Aid is available at www.fafsa.ed.gov.  The FAFSA determines eligibility for federal Work-Study funds and federal loan programs.  Our priority deadline for new students to complete the application was February 15^{th; f}or continuing students, the priority deadline is March 15^th. Completing your financial aid application by these deadlines increases your chances of receiving a Work-Study award and/or Perkins Loan.  However, because of limited federal funding, only a small percentage (4-8%) of eligible students receive a Work-Study award or Perkins Loan as part of their financial aid package.  For those students that do not receive a Work-Study award or Perkins Loan and would like to be considered for one, we do maintain a waitlist in the Office of Financial Aid. If funding is available, we review our waitlist in late September and early October and offer new Work-Study and Perkins Loan awards at that time.  For students that miss the priority deadlines, please still take the time to complete your FAFSA application as this will allow you to be eligible for unsubsidized federal loans.

Graduate scholarship options

At the University of Denver, graduate scholarships, assistantships and fellowships are awarded by the academic unit or department.  We are working to compile a list of departmental contacts to better serve students looking for other ways to finance their graduate education at DU. In the meantime, the best contact for scholarship options is the admission office for your graduate program.

Federal loan programs for graduate students

For the 2012-13 academic year, the Stafford Direct Loan program has changed.  In the past, graduate students were eligible for up to $8,000 in subsidized loans and $12,500 in unsubsidized loans.  Recent federal legislation has eliminated subsidized loans for graduate students as of June 30, 2012.  Moving forward, graduate students will be eligible for $20,500 in unsubsidized loans and may be eligible for additional funds through the graduate PLUS program. Please visit our graduate loan website for more information on loan programs.

Graduate financial aid letter timelines

Looking ahead, new students that meet our priority application deadline and are admitted to the University of Denver can expect to receive a financial aid award letter e-mail during the last two weeks of March.  Continuing students who meet the priority application deadline can expect to receive their financial aid award letter email in the middle of May. Please note that, after our initial packaging of new and continuing students, we continue to send out new financial aid packages on a weekly basis. 

On occasion, graduate students may need to provide documentation to confirm their eligibility for federal student aid.  If this information is required, the Office of Financial Aid will send an email request detailing the information you need to provide to our office. Without this information, we cannot process your financial aid application and your award letter email may be delayed.  If at any time you have any questions, please feel free to contact our office about your financial aid package or speak with the admission office in your graduate academic unit.

Chris George, Director of Financial Aid

Applying for Financial Aid - Part 3

As I wrap up the three blogs on the New Year financial aid checklist, the last and perhaps most important item to tackle is college cost.  If you haven't already begun the family affordability conversation, now would be a great time to begin the discussion on what the family can afford.  Having the conversation now, instead of late March/early April will be helpful when you begin to receive the financial aid awards letters in the spring.   One way to help understand the cost of DU is to check out our Net Price Calculator.  We have designed the calculator to estimate the amount of merit and need-based aid you will receive.  When the financial aid award letter arrives via email, you will already have an idea about what DU will cost for next year and ultimately will be in a better position to make a decision on the best social, academic, and financial fit for you.

 

Applying for Financial Aid - Part 2

Continuing on with the New Year financial aid checklist theme, now is the time to look for additional sources of grant and scholarship funds outside of the University. A few weeks ago, I participated in the 9News CollegeLine9 call in program on financial aid and scholarships. The bulk of the questions focused on completing financial aid applications and how to find additional scholarship resources. So for those of you reading this post, there are many sources for finding private scholarships.  You can check with civic groups/organizations, religious organizations, corporations, your high school counselor, College in Colorado and the DU Private Scholarship website. Note that the College in Colorado site offers both a video on the strategies to win scholarships and a scholarship worksheet.

I understand it can be a daunting process, but there is help available.