Part 6 (2/2)
The following page contains a sample chart of what you can expect to pay for your MBA, and, if you're participating in an eram, whether the expense is usually considered reies certainly rack up!
What About the Books?As you raduate career, books are an essential-and expensive-part of a student's diet Unfortunately, most companies do not pick up the bookstore tab as part of a reie]
As noted above, enerally covered in a conificantly, though, so be sure to consider theree
Setting BoundariesIn many cases, the limit for tuition reimbursement reflects the former federal tax lahich the first 5,250 in company tuition reimburseh colleges and universities are still trying to have it reinstated
Read the Fine Print If you are fortunate enough to be eanization that implements a tuition reiate the terms
Is the tuition reimbursement limited to areas of study approved by your company? Is the tuition reimbursement limited to areas of study approved by your company? When restrictions on area of study exist, the primary criterion for approval is usually the direct applicability of the program to the requirements of your job When restrictions on area of study exist, the primary criterion for approval is usually the direct applicability of the program to the requirements of your jobHave you been eh? Have you been eh? Tuition reiram may only be available to you after several years' service with your company These requirements are usually spelled out in your eree program may only be available to you after several years' service with your company These requirements are usually spelled out in your employee handbookAre 100 percent of tuition expenses covered? Are 100 percent of tuition expenses covered? Sorade (for example, 100 percent reimbursement for an ”A,” 80 percent for a ”B,” 70 percent for a ”C,” etc) Remember that companies often only reirades are official You may have completed your first term and started your second-and had to pay for it-before you receive any reirade (for example, 100 percent reimbursement for an ”A,” 80 percent for a ”B,” 70 percent for a ”C,” etc) Remember that companies often only reirades are official You may have completed your first term and started your second-and had to pay for it-before you receive any reimbursementIs there a limit as to the amount you will be reimbursed? Is there a limit as to the amount you will be reimbursed? Some employers may allocate a capped amount of tuition reimbursement offered or set atwo courses per term you do not exceed your annual maximum Some employers may allocate a capped amount of tuition reimbursement offered or set atwo courses per term you do not exceed your annualinto MBA programs, I requested perram at Fordham University Part of my job responsibilities in the bank where I was eal contracts for financial products Although I saw the relevance of the MBA/JD program to my course of work, ree” ”When I was looking into MBA programs, I requested perram at Fordham University Part of my job responsibilities in the bank where I was eal contracts for financial products Although I saw the relevance of the MBA/JD program to my course of work, ree”- MBA, Fordham University If, however, your company does not have a tuition reiet your MBA, there are a few financial aid options you can consider, such as financial aid, loans, scholarshi+ps, and your own savings We will cover these alternatives in greater detail in the next chapter
CHAPTER 13
Financial Aid, Scholarshi+ps,
and Loans Financial aid can be broken down into two general categories: funds that are lent to the student and require repayrants and scholarshi+ps This chapter will give you an overview of the general application require the documentation, that's usually necessary Even if you are not sure that you qualify for financial aid, it can't hurt to apply
Forms Financial aid application procedures can vary froet the adhly Usually, general financial aid infor the financial aid deadline(s) These deadlines drive the rest of the process for you
Key Materials The Free Application for Federal Student Aid (FAFSA) form is always required to request any federal financial aid This form is used for need analysis, the calculation that determines your financial need The detailed financial inforh a federal forure
As its nae and allows you to send your financial infor to more than six schools, you need to list your top six choices If you subsequently want to add a school to this list, you'll have to drop one from your list Make your life easier-try to limit your financial aid application to just your six top choices
Other required forms may include (but are not limited to):A separate school financial aid application Private need analysis fore Scholarshi+p Service or the NeedAccess disk Your prior year's IRS 1040 form Financial aid transcripts from every postsecondary school that you attended (this requirement has been replaced at many schools by the National Student Loan Database System (NSLDS); check with your school to see if it participates) Once you've submitted all the required for else happens regarding your financial aid Youthis ti center for the govern on the information you provided on your FAFSA They rub your nuy that is revaed yearly) Their calculations result in a Student Aid Report (SAR) You'll get a copy of it in the mail Your SAR contains both the financial information that you provided on your FAFSA plus the results of the federal need analysis calculation The schools that you listed on the FAFSA will receive the data electronically, but they n an additional form to activate the financial aid process (especially if the school does not have its own financial aid application)
Remember to keep track of your financial aid applications in the sa track of your admissions application material If you need money to attend school, this process is just as i ade Once the financial aid office has all the forms and data that they need, they'll wait for the ad this waiting period, it's a good idea to check with the schools toonce the admissions decision has been made
When the financial aid office finds out that you've been admitted, they'll review your application and offer you an award package This financial aid package can include funds you are required to pay back, such as: Federal Perkins Loans, Federal Stafford or Federal Direct Loans, and suggested private loans, as well as ”free funds” such as scholarshi+ps and grants
Before You DecideGet the answers to these questions about your financial aid package: What is your contribution expected to be? How much money will you be expected to borrow? What kinds of loans are offered, and do they have attractive rates?
FUNDS YOU ARE REQUIRED TO PAY BACK
As a student, you ible for federal or state student loans or private loans Some student loans are need-based and some are not So, as mentioned previously, you should apply even if you do not think you qualify
It can take up to 8 to 12 weeks fro is essential Also, since the rules and regulations for borrowing through each of these prograood news is that educational loans typically have more favorable terms than consumer loans, particularly unsecured loans, and they're usually easier to obtain However, you can't assuet a student loan whatever your financial circuibility requirerams have some type of credit criteria that you ra limits
The trick is to make sure that you don't borrow so raduate With planning, you can avoid that proble A poor credit history could be a large sturee While the US federal loan prograraduate students don't really check your credit history, rams do If your credit record is weak, your previous actionsB-school a financial impossibility
Federal Loans In order to qualify for federal student loans (Federal Stafford or Federal Direct loans), you cannot be in default of any previous federal loans If you are, you can't take out another federal student loan until you make six consecutive payments on the loan you're in default on, or completely pay it off If you're only delinquent rather than in default on your loan payments, you ain
Private Loans and Credit Reports Private loan prograuidelines than the federal governram checks your credit history, it requests a credit report from one of the three major credit bureaus in the United States
Your credit history shows a record of all your prior debts and your history of repaye, and any other consuht have Your repayment history on any previous student loans will be listed, too Private loan programs look for a record of on-tiations If your track record as a borrower is not up to its standards, a lender will deny your loan application
Key Credit Terrams require that you have no adverse credit and that you be at least credit-ready, if not credit-worthy Credit-ready simply means that your credit record is clean, that there are no indications of credit problems You can be credit-ready even if you have no credit history at all, because you have nothing adverse in your credit record Soner if you have no previous credit history Credit-worthy means that you have both a clean credit history and that you currently have the e is an example of a loan that requires you to be credit-worthy
Check Your Credit ReportCredit reports can be incorrect! Obtain a copy of your credit report well before you apply for any loans and ensure that there are no errors We've all heard horror stories about so ood one A word of caution: If you (or soe broker or bank) request a credit check too frequently, this can jeopardize your credit rating How? Ityou money-they may want to knohy your credit has been checked so frequently
Federal Loan Prograraduate business school students are generally considered the core loan programs, since they carry certain attractive features defined by law These features include a low interest rate, low fees, and defined deferrarararaibility criteria, interest rates, fees, grace period, deferment and cancelation provisions, and other terms are all basically the same There are, however, minor differences in the application process and certain repayment options
The key differences lies in who provides the loan funds The Federal Stafford Student Loan is part of the Federal Fah which loans are s and loan association, a credit union, or an insurance coency sponsored by the US federal government Under the Williaraovernment is the lender
Many schools participate in the Stafford prograram The school you attend will determine which of these two loans you can apply for
In order to be eligible for these prograible noncitizen of the United States Be enrolled at least half ti, and be ree (as defined by the school) Not be in default of any previous loans without being in an approved repay your last Federal Stafford Loan (for exarad student) Never have been convicted under federal or state law of sale or possession of drugs (This neas implemented on July 1, 2000; however, a conviction prior to 7/1/00 could still affect your eligibility) Show financial need based on the information provided on your FAFSA in order to qualify for the interest subsidyFederal Stafford Student Loans The Federal Stafford Student Loan Program provides two types of loans: subsidized and unsubsidized The subsidized loans are a better deal, but you have to overnment's financial need criteria For either type of loan, you raduate or drop below half-ti on when you first borrowed, there's a grace period of six or nine months before you'll have to start repayrarae The concept of a federal loan prograinated in 1965 as the Federally Insured Student Loan Progrararams-to make loan funds available for students to attend post-secondary school-but the amounts available, interest rates, and deferment provisions have been modified
Federal Subsidized Stafford Loans are available to all students who meet the financial need criteria A federally mandated needs analysis, based on information provided on the FAFSA, deteribility Students who don't qualify for the subsidized loan or need to borrow beyond the limit can take out an Unsubsidized Federal Stafford Loan
Borrowing Limits Graduate students may borrow up to their demonstrated need with a maximuraraduate Federal Stafford Loans) of 65,500 The Federal Unsubsidized Stafford Loan Prograible student to borrow up to 18,500 per year, minus any Federal Subsidized Stafford Loan approved The total cu the Federal Subsidized Stafford Loans)
Interest Rate As the prograovernment subsidizes the interest on the Federal Subsidized Stafford Loan You're not required to pay interest on these loans until after you leave school If you have a Federal Unsubsidized Stafford Loan, you're responsible for the interest while you're in school, but most lenders will allow you to capitalize the interest, and not pay it until you leave school Capitalization means that the interest accrues while you're still in school and is added to the principal at a predetermined time (often at the point of repayment) Applications and information about current interest rates and repay institutions
Fees There's a loan origination fee that is equal to 3 percent of the loan If you borrow 5,000, for exaination fee will be 150 The fee, required by law, is sent to the US federal government to offset a portion of the federal interest subsidy In addition, the guarantee agency e you an insurance fee of up to 1 percent of the loan Both of these fees would be deducted from the loan proceeds when the check is issued All lenders are required to deduct the federal governination fee, but they're allowed to reduce or eliuarantee fee Some lenders reduce this fee as an incentive for borrowers Shop around for the best deal
Sources of Federal Stafford Student Loans Federal Stafford Student Loans are s and loan associations, credit unions, pension funds, and insurance companies
Application Procedures To apply for a Federal Stafford Student Loan, you should complete the FAFSA and mail it to the federal processor, and fill out a Common Loan Application and submit it to the school you plan to attend The B-school will certify your application and either mail it to the bank or electronically send them the certification information The bank will electronically forward that inforency ill approve or deny the loan and send that info back to the bank The bank will either cut a check made payable to you and the school, or will transmit the funds to the school via Electronic Funds Transfer (EFT) Once the funds are available at the B-school, the funds are credited against any unpaid balance you have and the difference is refunded to you This whole process can take up to three
Repayment The amount of your monthly payment will depend on the total amount you borrowed, the number of months in the repayment schedule, and whether or not you elected to pay interest on the unsubsidized portion of the loan while in school The maxienerally in equal monthly installments You'll have a shorter repayment term if you borrow a small amount, since there's a minimum monthly installment of 50
If you don't o into default and the entire balance of the loan becooes into default, your lender ain until the entire debt is satisfied