Trump 2017 Budget is Bad news for low-income college students?

Federal financial support for low-income undergraduate students — in the form of Pell Grants — stays alive as other grants are killed in President Donald Trump’s budget proposal for 2018.

The budget proposal, released Thursday, keeps the Pell Grant program, but reduces funds for it by $3.9 billion.

The program has been around since 1972, and the Trump administration says slashing its funding “safeguards” its survival for the next decade.

While pretty much everyone has college loans, grants are a huge factor for undergraduate college students in the United States. The Pell Grant program is the largest federal grant program, according to the National Center for Education Statistics.

The program sends up to $5,920 to students in families that earn less than $40,000 a year, prioritized for families earning closer to $20,000 or less. A key difference between a Pell grant and a loan is that students don’t have to pay back the grants.

Pell grants are the largest expense in the U.S. Department of Education. The government spent $28.2 billion on Pell grants in the 2015-2016 academic year. The peak in expenditure was $39.1 billion for the 2010-2011 academic year, according to the College Board, citing the U.S. Education Department.

But the need is there. For example, 88% of the student body at New Mexico State University and 80% of the population at Texas A&M received Pell grants in the 2014-15 academic year, per The Economist.

The #TrumpBudget also proposes totally eliminating the Federal Supplemental Educational Opportunity Grant (FSEOG) program.

FSEOGs supply $100-$4,000 a year for students with financial need, according to the U.S. Department of Education. This federal educational grant is different from others because it is campus-based and sent directly to the financial aid office, not to the student. Availability is based on the individual need and also on the school’s funds.

The Trump administration argues FSEOGs are “a less well targeted way to deliver need-based aid than the Pell Grant program.” They note that killing this program will “save $732 million.”

These Pell and FSEOG grant funding changes are part of an overall $9 billion U.S. Education Department cut.

Will this budget — including these budget cuts to student grants — go into effect? That comes down down to Congress, which has the ability to approving or reject the budget.

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10 Companies That Will Help You Pay for College Fee's

One of the best ways to pay for college is to get someone else to foot the bill. And as luck would have it, there are quite a few companies that offer tuition assistance or tuition reimbursement as an employee benefit–even if you’re only there a few hours a week. Why would they offer such a lucrative perk to someone working part time? It’s really quite simple. Many employers understand that this type of incentive may actually tempt you to work for and stay longer with the company. I know I would feel a sense of obligation if someone gave me $12,000 for college. Wouldn’t you? If you have to work to help pay your college expenses, consider looking into one of these companies that will actually pick up part of the tab.

1. UPS

Part-time employees of UPS are eligible to receive up to $5,250 in tuition assistance per year, up to a lifetime maximum of $25,000. Eligibility begins on the date of hire. Also, most full-time UPS employees started at the company as part-time or non-manager employees, including managers and executives!

2. Publix

According to the company’s website, employees may be reimbursed for not only traditional degree programs, but also some individual courses and online programs. Any associate with at least six months of continuous service, who works an average of 10 hours per week is eligible. Associates enrolled in a four-year college or university, may be reimbursed up to $3,200 annually, with a lifetime limit of $12,800. Associates enrolled in undergraduate courses at a two-year community college, technical program or individual course program may be reimbursed up to $1,700 annually, with a lifetime limit of $3,400.

3. Wells Fargo

Wells Fargo offers several scholarships to children of employees, ranging from $1,000 to $3,000 each. In addition, they offer their employees up to $5,000 in tuition reimbursement annually, for eligible tuition expenses.

4. Baxter

Regular employees may receive up to $5,250 per year for undergraduate courses at accredited colleges and universities. Upon management approval, employees may also receive tuition reimbursement for graduate-level coursework, as well.

5. Comcast

Comcast’s Education Assistance Program will reimburse approved tuition, books, and other educational fees up to$5,750 per calendar year.

6. Starbucks

As part of the Starbucks U Program, part-time and regular employees have the opportunity to take advantage of special student discounts (on books, tuition and more) and scholarships offered at select schools, as well as receiving up to $1,000 per year in tuition reimbursement. Eligible employees must have at least one year of continuous service before their classes begin.

7. Verizon

Verizon offers one of the better tuition reimbursement packages, providing its employees with up to $8,000 a yearin education benefits. In 2012, more than 23,000 employees took advantage of the program.

8. Bank of America

Associates, who have been employed for six months and work a minimum of 20 hours a week, are eligible to receive tuition repayment through Bank of America. Under the program, 100 percent of tuition-related expenses (up to $5,250 per calendar year) will be reimbursed for both undergraduate and graduate programs.

9. Oracle

Regular, full-time employees may receive up to $5,250 per calendar year in tuition reimbursement for courses related to their current or future responsibilities at Oracle. Management approval is required. Download PDF with full details.

10. Fidelity

Full-time employees with at least six months of service may apply for tuition reimbursement for up to 90% of of certain costs, up to $10,000 per year (!). Eligibility is subject to manager approval and the coursework must be at an accredited college or university and be work-related.

Of course, getting these benefits is not as simple as submitting your college tuition bill. Some companies will only reimburse your fees after you have completed the courses with a minimum grade (usually a ‘C’ or better) or can show that your college degree is related to your position within the company. Even those that do reimburse upfront may place conditions on your benefits, such as a requirement to stay with the company for at least two years after completing your degree. To ensure you get every dime available to you, contact your company’s HR department and ask about your educational benefits.  You may have to jump through a few hoops, but every little bit helps.

Variable vs Fixed Rate Student Loans

Understanding the basic concept of variable vs. fixed rate student loans if fairly simple.  A variable interest rate will change periodically over the term of the loan whereas a fixed rate will not.  The questions many borrowers face is, “which is better?”  Answering that question is more difficult than you might think–at first.  Let’s break down both, so you can make an informed decision about which type to choose for your student loans.

Federal Student Loans: Fixed Rate

To get started, let’s review five key things to understand about federal student loans.

1. All federal student loans have fixed interest rates.
2. The interest rate is set (fixed) prior to July 1st of each academic year and applies to loans made between July 1st and June 30th.
3. If you attend college for four years, for example, you may borrow four times during each of those academic periods.  Your rate on each of those four loans will vary, but will not change over the repayment term.
4. If you attend college for four years and you borrow during each academic period, you could wind up with four loans with different fixed rates. But for each of those loans, their interest rates won’t change over the course of repayment.
5. When you enter repayment, you can decide whether or not consolidating those loans in to a single loan with a single fixed rate makes sense.  Your fixed rate on a federal consolidation loan is the weighted average of the rate on the loans to be combined.  Don’t be scared off by the term “weighted average.”  It just means that the rate on your higher balance loans will count more toward determining the average.

To learn more about federal student loans, and the current fixed rates, see: Federal Student Loans.

Private Student Loans: Variable or Fixed Rate

Now that we have federal loans out of the way, let’s review the five things to know about variable and fixed rate private student loans.

1. Most private student loan lenders today are offering both variable and fixed rate loans.  The LoanFinder (our tool that helps you compare student loans) only includes variable interest rate programs.  We do this because it’s a bit less confusing for borrowers when they are first evaluating their options.
2. A private student loan with a fixed rate will always have a higher interest rate than a variable rate loan from the same lender.  Since student loans are repaid over a relatively long period of time, lenders set rates such that if they do increase in the future, they aren’t losing out on the margin they could earn had the loan been variable.
3. There’s no way to know if interest rates for a variable rate loan will increase. With some research about historical trends and an understanding of the financial markets or, better yet with the help of a financial expert, you can weigh the relative odds that a variable rate loan will increase. But remember: no one can predict the future.
4. When looking at how rates have changed in the past to guess how they might behave in the future, its important to consider your repayment term of a private student loan, it may be 5, 10 or even 15 years in length. How interest rates fluctuate over 5-15 years may be very different.
5. To repeat ourselves: no one can predict the future. A good rule of thumb to remember is that when interest rates have been historically low, they have nowhere to go but up.

Deciding between a fixed rate and variable rate student loan will depend on your particular situation and comfort with risk. To simplify what choosing between the two means: When you choose a variable rate, you are betting that interests rates won’t rise substantially during the repayment term.  If you choose a fixed rate, you are betting that rates will increase.

How To Choose

The bad news is that we can’t choose for you. When it comes to federal student loans, you have no choice; your rate will be fixed. For private student loans, it really comes down to a matter of personal preference and your willingness to accept risk. A variable rate may be lower in the short term, but increase over your repayment period. It could exceed the fixed rate option you were presented when you borrowed the loan at any time–now or along the course of repayment. A fixed rate loan eliminates the guess work, but could cost you a lot more in interest than a variable rate loan whose rate does not increase substantially over the course of repayment. The best advise we can offer is to compare your options and make a choice that feels right for your particular situation. If you need more help deciding, we always encourage borrowers to seek the help of a financial planner or other qualified professional.

Bad Credit Loans

Bad Credit Loans: If you have made some mistakes in the past as far as your credit is concerned, brace yourself for the facts about bad credit loans. You should first try to assess just how bad your credit is before you hit the panic button though. Very often, bad credit items that appear on your credit report can be challenged and sometimes removed. In addition, mistakes on your credit report can have an adverse effect on your credit score, shunting you into the category of a high credit risk. Items that are good news for you but do not show up on your credit report (or on one or the other of the credit reporting bureaus’ file on your credit history), can cost you some valuable points. Last, but not least, taking bad advice from well-intentioned relatives or friends can lower your credit score, making you a candidate for bad credit loans.

Bad news first

Let’s look at these possibilities for improving your credit rating one at a time. But first, let’s get the hard core issues out of the way. If you have had bad credit issues in the past and know you have made some wrong choices that may have landed you in bankruptcy or wage garnishment, it will be almost impossible to fix your situation in the short term. Medical emergencies have unavoidable consequences as well but none of these means you will not be able to find a lender of last resort.

If you are reading this you are probably at the point where you have decided to turn around your spiraling credit history, but know for sure that this will take time and will cost you money. Bad credit lenders will equate you with high risk and assign a high interest rate to whatever type of loan you are seeking in order to offset some of the risk that you may not pay back their loan on time.

Bad credit car loan

Let’s say you are in the market for a car. You will be required to make a hefty down payment on a bad credit car loan. I have heard of down payment requirements as high as $3,000 but that is not the only problem you face. Your interest rate on a bad credit car loan may range from 19% on the low end to as high as 29% on the top end. A high-mileage used car could end up costing you $400.00 or more per month in monthly payments. To minimize the damage from these high rates, I would suggest you start by calling several lenders. They usually both sell and finance the product on the spot. If you can find one whose maximum interest rate is in the low twenties you may be able to save a substantial amount of interest payments. You must make sure though, that they report your payment history to the credit bureaus as this will help to improve your credit score provided you pay on time.

Bad credit personal loan

Bad credit personal loans are issued by a variety of sources. Here again their emphasis will be on charging you a high interest rate to cover the risk of your defaulting on the loan. Payday loans are an example of bad credit personal loans that carry enormously high rates of interest as they are calculated over a short time span and are designed to get you to the next paycheck.

Other types of personal loans include equity-backed loans. Let’s say you have a home or some other asset that is almost or fully paid off. Local and regional banks or home equity specialists will lend you money using your asset as collateral. Although a loan of that nature will be safer for the lending institution, your past credit history will force you into a bracket paying somewhere around 21%, despite the use of your collateral.

Bad credit mortgage loan

This is the big ticket item that will cost you dearly over the life of the loan. Consumers with credit scores above 650 may find themselves paying say, six percent on their mortgage loan, depending on the prevailing interest rates at the time of their purchase. If you have bad credit, you should be prepared to pay two and a half to three percentage points more and sometimes into double figures on your mortgage rate. Depending on the prevailing economic circumstances you may find it very difficult to get a mortgage at any rate. You can expect that any lender looking at your loan application will expect you to have a substantial down payment in hand, ranging from 10% to 20% of the value of the home you are trying to purchase.

Not only should you expect to face a high interest rate, but also, your lender will require you to purchase private mortgage insurance to cover the risk of your defaulting on a payment. If your down payment is higher than 20% of the cost of the home you are buying, you may be able to negotiate away paying PMI, even on a bad credit mortgage loan.

As with a bad credit car loan, your history of on-time payments will begin to raise your credit score over time. Given a record of good payments, you may be able to refinance at a more reasonable interest rate. But before you sign for your bad credit mortgage loan in the first place, be sure to check the penalties for getting out of the loan early. Pre-payment penalties may be enormous and most people are so excited to get a bad credit mortgage loan, they neglect to consider what may change three years down the line.

Cleaning up bad credit items

Let’s say your situation is so bad that you can’t find a lender willing to risk lending you money. Where do you go from here? You could wait a few years until bad credit items on your credit report fall off, usually in seven years for most items. Or you could begin the process of cleaning up your credit report as even a difference of a few points on your credit report score could make the difference between getting a loan or a refusal. If there are items on your credit report that are incorrect or should have been removed because of their age, write the credit bureaus and request their removal. They are required by federal law to make those corrections.

Mistakes on your credit report can be caused by human error. An account with a bad history could appear on your report because a clerk typed someone’s social security number one digit off. Rest assured, it happens. You could end up being saddled with someone else’s court record but you wouldn’t know until you inspect a copy of your credit report.

Include the good news

If you have paid off a delinquent account in the past but it does not show on your credit report, you will want to present proof of payment to the credit bureaus and have their records corrected. That can mean a few points on your credit report score.

You may find that a car note you have paid off was never reported to the credit bureau and though your payments were all on time, you are not receiving the benefits of that piece of good credit history. Contact the lender and ask them if they will report your credit file to the bureaus.

A word of caution

Well-intentioned friends and family often “hear” that you should do this, or that, to raise your credit report score and improve your chances of getting a bad credit loan. The most popular advice is that you should close your credit card accounts. This may sound reasonable but may affect you adversely. Make sure that if you take that route, you do not close the accounts with the longest history. It may be safer to close newer accounts but you should know that part of your credit report score is calculated by looking at the ratio of outstanding debt to total available credit. Close some accounts, lower your available credit and your score could go down.

What make college affordable?

When it comes to paying for school, you're not alone. Grants, work-study, and low-interest loans help make college affordable.

Financial aid is available from a variety of sources for college, career school, graduate school, and professional school.

Financial aid is money to help pay for college or career school. Aid can come from

• the U.S. federal government,
• the state where you live,
• the college you attend, or
• a nonprofit or private organization.

Besides financial aid, you also should think about what you can do to lower your costs when you go to college

Aid and Other Resources From the Federal Government

The federal government offers a number of financial aid programs. Besides aid from the U.S. Department of Education (discussed below), you also might get

• aid for serving in the military or for being the spouse or child of a veteran,
• tax benefits for education,
• an Education Award for community service with AmeriCorps,
• Educational and Training Vouchers for current and former foster care youth, and/or
• scholarships and loan repayment through the Department of Health and Human Services’ Indian Health Service, National Institutes of Health, and National Health Service Corps.

The U.S. Department of Education awards about $150 billion a year in grants, work-study funds, and low-interest loans to more than 15 million students. Federal student aid covers such expenses as tuition and fees, room and board, books and supplies, and transportation. Aid also can help pay for other related expenses, such as a computer and dependent care. Thousands of schools across the country participate in the federal student aid programs; ask the schools you’re interested in whether they do!

Federal student aid includes:

• Grants—financial aid that doesn’t have to be repaid (unless, for example, you withdraw from school and owe a refund)
• Loans— borrowed money for college or career school; you must repay your loans, with interest
• Work-Study—a work program through which you earn money to help you pay for school

Use FAFSA4caster to get an estimate of how much aid you might receive from the U.S. Department of Education.

Apply for federal student aid using the Free Application for Federal Student Aid (FAFSA^®). And remember, the first F in “FAFSA” stands for “free”—you shouldn’t pay to fill out the FAFSA! 

Aid From Your State Government

Even if you're not eligible for federal aid, you might be eligible for financial aid from your state. Contact your state grant agency for more information.

Aid From Your College or Career School

Many colleges offer financial aid from their own funds. Find out what might be available to you:

• Visit your school’s financial aid page on its website, or ask someone in the financial aid office.
• Ask at the department that offers your course of study; they might have a scholarship for students in your major.
• Fill out any applications the school requires for its own aid, and meet the deadlines.

Aid From a Nonprofit or Private Organization

Many organizations offer scholarships or grants to help students pay for college. This free money can make a real difference in how affordable your education is..

What's free money for college or career school!

Find and apply for as many scholarships as you can.

Start researching early, and meet deadlines, and you may be on your way to scholarship success.

Scholarships are gifts. They don't need to be repaid. There are thousands of them, offered by schools, employers, individuals, private companies, nonprofits, communities, religious groups, and professional and social organizations.

What kinds of scholarships are available?

Some scholarships for college are merit-based. You earn them by meeting or exceeding certain standards set by the scholarship-giver. Merit scholarships might be awarded based on academic achievement or on a combination of academics and a special talent, trait, or interest. Other scholarships are based on financial need.

Many scholarships are geared toward particular groups of people; for instance, there are scholarships for women or high school seniors. And some are available because of where you or your parent work, or because you come from a certain background.

A scholarship might cover the entire cost of your tuition, or it might be a one-time award of a few hundred dollars. Either way, it’s worth applying for, because it’ll help reduce the cost of your education. 

How do I find scholarships?

You can learn about scholarships in several ways, including contacting the financial aid office at the school you plan to attend and checking information in a public library or online. But be careful. Make sure scholarship information and offers you receive are legitimate; and remember that you don't have to pay to find scholarships or other financial aid. 

Try these free sources of information about scholarships:

• the financial aid office at a college or career school
• a high school or TRIO counselor
• the U.S. Department of Labor’s FREE scholarship search tool
• federal agencies
• your state grant agency
• your library’s reference section
• foundations, religious or community organizations, local businesses, or civic groups
• organizations (including professional associations) related to your field of interest
• ethnicity-based organizations
• your employer or your parents’ employers

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When do I apply for scholarships?

That depends on each scholarship’s deadline. Some deadlines are as early as a year before college starts, so if you’re in high school now, you should be researching and applying for scholarships during the summer between your junior and senior years. But if you’ve missed that window, don’t give up! Look at scholarship information to see which ones you can still apply for now.

How do I apply for scholarships?

Each scholarship has its own requirements. The scholarship’s website should give you an idea of who qualifies for the scholarship and how to apply. Make sure you read the application carefully, fill it out completely, and meet the application deadline.  

How do I get my scholarship money?

That depends on the scholarship. The money might go directly to your college, where it will be applied to any tuition, fees, or other amounts you owe, and then any leftover funds given to you. Or it might be sent directly to you in a check. The scholarship provider should tell you what to expect when it informs you that you’ve been awarded the scholarship. If not, make sure to ask.

How does a scholarship affect my other student aid?

A scholarship will affect your other student aid because all your student aid added together can’t be more than your cost of attendance at your college or career school. So, you’ll need to let your school know if you’ve been awarded a scholarship so that the financial aid office can subtract that amount from your cost of attendance (and from certain other aid, such as loans, that you might have been offered). Then, any amount left can be covered by other financial aid for which you’re eligible. Questions? Ask your financial aid office.

Learn about the eligibility criteria for the federal student aid programs.

Different types of aid (private scholarships, state grants, etc.) have different rules, called eligibility criteria, to determine who gets the aid. Here are the eligibility criteria for the federal student aid programs.

Basic Eligibility Criteria

Our general eligibility requirements include that you have financial need, are a U.S. citizen oreligible noncitizen, be enrolled in an eligible degree or certificate program at your college or career school, and more. Make sure you’re familiar with our basic eligibility criteria, and ask a collegefinancial aid office if you have any questions about whether you qualify.

Most students are eligible to receive financial aid from the federal government to help pay for college or career school. Your age, race, or field of study won’t affect your eligibility for federal student aid. While your income is taken into consideration, it does not automatically prevent you from getting federal student aid.

To receive federal student aid, you’ll need to…

Qualify to obtain a college or career school education, either by having a high school diploma orGeneral Educational Development (GED) certificate, or by completing a high school education in ahomeschool setting approved under state law

AND

Be enrolled or accepted for enrollment as a regular student in an eligible degree or certificate program

AND

Be registered with Selective Service, if you are a male (you must register between the ages of 18 and 25)

AND

Have a valid Social Security number unless you are from the Republic of the Marshall Islands, Federated States of Micronesia, or the Republic of Palau

AND

Sign certifying statements on the Free Application for Federal Student Aid (FAFSA) stating that

- you are not in default on a federal student loan and do not owe a refund on a federal grant and

- you will use federal student aid only for educational purposes

AND

Maintain satisfactory academic progress in college or career school 

In addition you must…

Be a U.S. CITIZEN or U.S. NATIONAL

You are a U.S. citizen if you were born in the United States or certain U.S. territories, if you were born abroad to parents who are U.S. citizens, or if you have obtained citizenship status through naturalization. If you were born in American Samoa or Swains Island, then you are a U.S. national.

OR

Have a GREEN CARD

You are eligible if you have a Form I-551, I-151, or I-551C, also known as a green card, showing you are a U.S. permanent resident

OR

Have an ARRIVAL-DEPARTURE RECORD

Your Arrival-Departure Record (I-94) from U.S. Citizenship and Immigration Services must show one of the following:

-Refugee

-Asylum Granted

-Cuban-Haitian Entrant (Status Pending)

-Conditional Entrant (valid only if issued before April 1, 1980)

-Parolee

OR

Have BATTERED IMMIGRANT STATUS

You are designated as a “battered immigrant-qualified alien” if you are a

victim of abuse by your citizen or permanent resident spouse, or you are the child of a person designated as such under the Violence Against Women Act.

OR

Have a T-VISA

You are eligible if you have a T-visa or a parent with a T-1 visa.

Start filling out the FAFSA at www.fafsa.gov.

The U.S. Department of Education’s office of Federal Student Aid provides more than $150 billion every year in grants, loans, and work-study funds to students attending college or career school. Visit StudentAid.gov today to learn how to pay for your higher education.

There is no age limit when it comes to receiving federal student aid.

Students With a Parent Who Was Killed in Iraq or Afghanistan

If your parent died as a result of military service in Iraq or Afghanistan after the events of 9/11, you might be eligible for additional Federal Pell Grant funding or for an Iraq and Afghanistan Service Grant.

Non-U.S. Citizens

Generally, if you have a “green card” (in other words, if you are a permanent resident alien), you will be considered an “eligible noncitizen” and will be able to get federal student aid if you meet the other basic eligibility criteria. Full details of which immigration statuses make you an eligible noncitizen are at our Non-U.S. Citizen page.

Students With Criminal Convictions

If you are incarcerated, have a conviction for a drug offense, or are subject to an involuntary civil commitment after completing a period of incarceration for a sexual offense, your eligibility for federal student aid may be limited.

Students With Intellectual Disabilities

Students with intellectual disabilities may receive funding from the Pell Grant, Federal Supplemental Educational Opportunity Grant, and Federal Work-Study programs in certain circumstances.

Staying Eligible

Once you’re in college or career school, make sure you stay eligible for federal student aid by paying attention to a few things, including keeping on track toward graduation. And remember to fill out your Free Application for Federal Student Aid (FAFSA^®) every year.

Regaining Eligibility

You might lose federal student aid eligibility in a number of ways. Some of the most common are that you

• are in default on a federal student loan,
• don’t maintain satisfactory academic progress in college or career school, or
• are convicted of a drug offense.