Top 5 Questions About Subsidized and Unsubsidized Loans

So you filed your FAFSA and got accepted to a college. Congrats! Your school will send you an award letter that lists different types and amounts of financial aid you’re eligible for. These types of aid could include grants, scholarships, work-study funds, or student loans. You might see two types of federal student loans in your letter: Direct Unsubsidized Loan and Direct Subsidized Loan. Some people refer to these loans as Stafford Loans or Direct Stafford Loans or just subsidized and unsubsidized loans. It’s important you know the basics about these two types of loans before you sign to accept either of them.

1. How are they similar?

Both are federal student loans offered by the U.S. Department of Education. To be eligible to receive either of them, you must be enrolled at least half-time at your school. Both loans offer a six-month grace period before you’re required to begin repaying them.

2. How are they different?

The major differences are interest and how much you can borrow. For subsidized loans, you won’t be charged interest while you’re enrolled in school and during your grace period (about six months). For unsubsidized loans, interest starts accruing (accumulating) from the date of your first loan disbursement. For both types of loans, the amount you can borrow is determined by your school, and they use several pieces of information to calculate your aid.

Quick Overview of Direct Subsidized Loans and Direct Unsubsidized Loans
Subsidized and Unsubsidized Loan Table
Quick Tip: “Unsubsidized” starts with a “U” – think of it like “You” pay the interest on your unsubsidized loan.

3. Which loan should I accept?

If you need to accept loans to help cover the cost of college or career school, remember to borrow only what you need. You should accept the subsidized loan first because it has more benefits. If you have to accept an unsubsidized loan, remember that you’re responsible for all the interest that accrues on that loan.

4. What if I don’t need the entire loan amount?

You don’t have to accept all the student loans offered to you! It’s OK to accept a lower amount than what you see in your award letter, just talk to the financial aid office at your school. If you need more money later in the year, your school can give you more loan money.

5. What should I do if I have unsubsidized loans?

Consider making interest payments right away if you can—it will save you money in the long run. This is because when you graduate or leave college, interest accrued during your time in school gets added to your principal loan amount. So, unless you paid your interest while in school, when you’re ready to repay your unsubsidized loan, interest will accrue on a new, higher principal loan amount.

Do you have more questions on Direct Subsidized Loans and Direct Unsubsidized Loans? Go to the FAQs on our website.

This article originally appeared on

Learn the Secret to Expanding Your Student Loan Repayment Benefits

If you borrowed before July of 2010, you may need to consolidate your loans in order to qualify for certain student loan repayment benefits, such as Public Service Loan Forgiveness and some income-driven repayment plans.

Why does it matter which type(s) of loans I have?

If you’re interested in the best student loan repayment benefits, you’ll want to have Direct Loans. If you borrowed any federal student loans before July 2010, there’s a good chance that some or all of your federal student loans are not Direct Loans. But that doesn’t mean you can’t qualify for the best repayment benefits—you can. All you’ll need to do is consolidate. If you consolidate, as a student borrower, here are some of the repayment benefits you could access:

What are Direct Loans?

Direct Loans are those that are made to you, though your school, directly by the Department of Education. Since July 2010, almost all federal student loans are made under this program—in full, called the William D. Ford Federal Direct Loan Program.

Though the Direct Loan Program existed long before 2010, there was another bigger federal student loan program that most students relied on to finance their education: the Federal Family Education Loan (FFEL) Program.

Under the FFEL Program, loans were made by banks and ultimately guaranteed by the taxpayer in case you didn’t make your payments. In 2010, this program ended.

Loans from both of these programs are FEDERAL student loans.  The main way the programs differ is in who made you the loan in the first place. Most of the benefits in the Direct Loan Program are available in the FFEL Program. However, FFEL Program loans are not eligible for Public Service Loan Forgiveness or the best income-driven repayment plans. This is where loan consolidation can help. It will effectively convert your FFEL Program loans into Direct Loans.

How do I find out which type(s) of federal student loans I have?

  1. Go to
  2. Log in using your FSA ID (You can’t use your Federal Student Aid PIN anymore!)
  3. Scroll to the loan summary section. Go through each of the loans that are listed. Use the list below to see if you need to consolidate any of your loans to qualify for the best repayment options.


Which loans to consolidate

What should I consider before consolidating?

First, evaluate whether you want any of the benefits that are available only in the Direct Loan Program. Consolidating your loans can increase the amount of interest that accrues on your loans, so if you’re not interested in these programs, you may not want to consolidate. Also, understand that, by consolidating your loans, you will start your forgiveness clock over. For example, if you were already on an income-driven repayment plan and consolidate your loans, then you will lose the any credit you had already earned toward forgiveness.

Lastly, understand that some of the loans that we called out for consolidation are those from another federal student loan program called the Federal Perkins Loan Program. Those loans have their own cancellation benefits that are based on your job. If you consolidate these types of loans, you will lose access to those cancellation benefits. Learn more about Perkins Loan cancellation here.

Now I know what type(s) of loans I have. What can I do?

  • I have some loans that I need to consolidate, and some that I don’t. Okay, you’re a little trickier to advise. You’ll definitely have some loans that you’ll want to consolidate, but the real question is, should you consolidate all of your loans? Only consolidate what you need to? You can do either. It will be easier to keep track of your loans if you only have one, but as you can see in the above section, sometimes you’re better off not consolidating if you don’t have to. After you’ve figured this out, you can consolidate your loans and apply for the best income-driven repayment plans. After you’re set up on the plan you want and if you want to apply for Public Service Loan Forgiveness Program, get your employment certified for Public Service Loan Forgiveness.


If you’re confused, need help, or have questions, you can contact the Loan Consolidation Information Call Center at 1-800-557-7392 to get free advice.

Ian Foss is a Program Specialist and Nicole Callahan is a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid.

This article originally appeared on and can be found here.

How to Save Money Without Disrupting Your Lifestyle

What if you could save an additional $1,500 each year? After 30 years you would have $119,000, assuming the money was invested and you got a 6% return. That $1,500 each year — just $125 a month — can add up to quite a bit of money.

Of course, to save more money each month you likely need to cut your spending. But if you are like most people, you probably don’t want to drastically change your lifestyle. Fortunately, there are smart and simple steps you can take to trim spending without a major overhaul.

Use the 72-hour rule for purchases

How many purchases have you made on Amazon or at the store that you later regretted? Limit your impulse purchases using what personal financial author Carl Richards has called the 72-hour rule. Instead of buying an item you want immediately, wait 72 hours to see whether you still want it. You’ll be surprised at how much less you end up deciding to buy. I find this works all the time with my kids. They think they can’t live without a certain toy, and then after 72 hours they forget it even existed.

Analyze big purchases

Major purchases may have the biggest impact on your spending and ability to save. I’m often amazed that the same person who will drive across town to save money on gas will buy a new expensive car without analyzing the implications. The same goes for housing costs or big-ticket vacations. Here are some tips on how to analyze and save on each of these purchases:

  • Car: The Internet has been a huge help for consumers in finding car deals. With online sales you often can negotiate through email, and sites like TrueCar provide transparency about what other car buyers have paid. But when buying a new car, it’s important to consider the ongoing costs and not just the upfront purchase price. For instance, many people prefer luxury cars, but premium gas and maintenance typically will cost more for these cars. Finally, a simple rule is that the longer you keep the car, the cheaper the cost.
  • House: Housing tends to be the biggest expense for most people. As a financial planner, I’m a fan of homeownership if you plan to live in your home for more than five years. However, the larger and more expensive the home you purchase, the more it limits your ability to spend within the rest of your budget. One family I work with, a couple with one child, decided to downsize because they just didn’t need the space. This was a good move financially because it gives them greater flexibility to save more, spend in other areas or retire sooner.
  • Vacation: Research locations and potential deals on sites like If you can, be flexible when selecting travel dates to maximize savings. Also, compare multiple locations to determine the best fit for you and your family — and where you can get the most bang for your buck.

Rethink ongoing phone and cable plans

Most people look only at their monthly payments and often are shocked by how much they spend annually on cell phone and cable bills. When shopping for a phone plan, try to compare plans based on the minutes, texts and data you need. Another option is to consider no-contract cell phones. The monthly cost is much lower, but you do have to buy the cell phone upfront.

With cable, the average monthly bill is $100, or $1,200 a year. “Cutting the cord” has become more popular recently as many people decide they don’t need the 100+ channels on cable. If you can do with a limited number of channels, then a streaming device and a good HDTV antenna for local channels may be all you need — and it can save you a lot of money.

Review your insurance policies

Many people are paying too much for property and casualty insurance. Every few years you should shop around your auto insurance and home insurance policies to confirm you are getting a good price. You also can see how your auto and home insurance providers rank based on consumer satisfaction by checking out the yearly report from market research firm J.D. Power.

Additionally, one way to lower premiums for home or auto policies is to raise your deductible if you have cash in the bank and you rarely make any claims. Larger deductibles typically range from $1,000 to $2,500, depending on the type of insurance you have. However, note that this does create risks if you don’t have money available or in an emergency fund if a large claim does occur.

Pick high-quality products that last

Sometimes it makes sense to spend a little more money for items you will use for a long time. A good example is men’s shoes. A high-quality pair of shoes will last almost forever and, though more expensive in the short term, will be a lot cheaper over the long run than repeatedly buying the cheapest pair. Think about the items in your life that you will use for a very long time and are worth the extra expense upfront.

Stick to a budget

First, automate your savings. It’s hard to spend what you don’t see, so automatically transferring money out of your checking account will help you keep spending down. Determine how much you should be contributing to or withdrawing from your accounts, and set up automatic monthly transfers. I like to call this forced scarcity, in that you can spend only what is in your bank account.

If this is not working and you start running up debt, try using online budgeting tools to help you create and monitor your budget. It may be more time-consuming, but you’ll know where every dollar is being spent. And if you are still having issues, consider working with a fee-only financial planner to help you develop and stick to a budget so you can reach your goals.

Hire a professional

Sometimes spending money can save you money. This can be true for home repairs, taxes, college planning and many other areas. For instance, I see many people miss important deductions or credits they could have claimed when they complete their own tax returns instead of working with a professional. And for me, it makes sense to pay someone to help when it comes to house repairs. I can try to fix the problem, but I only make it worse.

So how do you decide whether to hire a professional or go it alone? If the risk of mistake is greater than the cost to hire someone, it is worth the investment. Of course, if you don’t have the time or knowledge to take care of the task at hand, it makes sense to get help, too. If you’re not sure where to look, ask for referrals from friends or co-workers, or check Angie’s List for service providers and the National Association of Personal Financial Advisors for fee-only financial planners.

Spend wisely

Ultimately, the goal is not to disrupt your lifestyle dramatically, but to make sure you spend your money wisely and efficiently. In short, it’s important to think about what you are spending your money on and what you really get out of it.

Perhaps even more important than drastically cutting your spending is thinking about the non-monetary value of your money. In a longitudinal study following 268 men for over 70 years, researchers for the Grant Study found that good relationships are key to leading a long and happy life — not how much money you have, the newest tech gadget or a certain high-profile job, but the people in your life.

Instead of spending money on more stuff, why not spend it on personal experiences with your friends and family?


Mike Eklund is a financial planner at Financial Symmetry in Raleigh, North Carolina. 

This article originally appeared on NerdWallet.

How to Live on the Cheap While Paying Off Your Student Loans

College students have a lot on their plate — who could blame you for not paying attention to that mounting student loan balance? But once you graduate, your new monthly student loan bill will be hard to ignore. After all, missing a payment isn’t like turning in a term paper late; debt collectors aren’t nearly as forgiving as your Chemistry 201 professor.

A few tips can help keep your budget on track and your student loan servicer happy. First, know that you can lower your monthly federal student loan bill by switching repayment plans if you need to. After that, tighten up your spending so you don’t fall behind on your loan payments. Here are five ways to free up cash when that student loan bill comes due.

Pick the right student loan repayment plan

Start by making sure you can afford your student loan bills. You’ll build the rest of your budget around them, along with other big expenses such as rent and transportation.

If you can manage it, repay your federal loans on the standard 10-year repayment plan. You’ll pay less interest and get rid of your loans sooner. And it’s a good idea to throw extra money at your bill when you can to speed up the process.

If you’re really strapped for cash, switch to an income-driven student loan repayment plan. The government offers four options that make your payments a percentage of your income, so you’ll pay less when you earn less. The newest plan is known as REPAYE, and it gives all federal loan borrowers the ability to pay, at most, 10% of their discretionary income each month. That means you’ll have more money to pay for the other stuff you need.

Private lenders aren’t as flexible. Some have programs that will let you pause your payments for a time. If you’re struggling to pay your bills, call your lender and ask about ways to postpone or lower your payments.

Prioritize your spending

Next, think about where you can cut costs elsewhere in your life so you can keep your loan bills current. Focus on saving money in ways that make sense for your lifestyle. That way you won’t feel deprived of everything you enjoy, and you can cut out expenses that you truly don’t need.

For instance, someone who likes to travel might live with several roommates or outside the city center so she can save money on housing. Or a grad who likes to eat organic meals might skip buying a new car so he has more flexibility in his grocery budget, says Brian McCann, a financial advisor and founder of Bootstrap Capital in San Jose, California.

“I know people that have relatively constrained finances, but they shop at Whole Foods every week because that’s important to them,” he says.

Choose ridesharing over owning a car

Rent and transportation are often grads’ two largest expenses, so those are good places to lower your costs if you can.

“I encourage people to try and get the big things right and not overstretch,” McCann says.

Car payments can be especially costly. Consider forgoing a car and signing up for Zipcar, car2go or another car sharing service if it’s available in your city. These companies let you rent a car hourly, which can help when public transportation won’t get you where you need to go. Plus, you won’t rack up extra expenses for car insurance or parking.

“Members really just pay for the time that they use,” says Dacyl Armendariz, car2go’s external communications manager.

If you need a car where you live and don’t have access to these options, look into buying a used car instead of a new one.

Trim recurring monthly costs

Now it’s on to smaller expenses — and some you might not even know you’re paying for.

It’s easy to sign up for a service that automatically charges you every month, such as the gym, ClassPass, Spotify or Netflix. Cancel them if you’re not using them at least a few times a week. A service such as Truebill will track your monthly subscriptions and show you which ones you’re not using so you can cancel.

Instead of paying for services like these, find free ways to do the things you love: Quitting the gym, for instance, doesn’t mean you have to stop exercising. Join a free fitness group such as the November Project, which meets to exercise in the morning in cities across the country. You’ll avoid the monthly fee and the long wait to use the elliptical.

Take advantage of free events in your city

If going out is a big expense for you, get creative.

Sign up for newsletters or bookmark local blogs that keep track of free and cheap movies, plays, concerts and readings around town. Take advantage of inexpensive ticket deals for 20-somethings at cultural institutions; the New York City Ballet, for instance, offers $29 tickets for same-day performances if you’re 29 or under. Make your own free fun by starting a book club or hosting themed potlucks.

You can always add to your income by picking up extra part-time work. No matter how you do it, it’s possible to pay down your loans, keep up with your other bills, and maybe even have some money left over. A grad can dream.


Brianna McGurran is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @briannamcscribe

This article originally appeared on NerdWallet.

6 Wallet-Stretching Tips for Renters

Rent has long been the biggest expenditure in many people’s budgets — about 30% of a renter’s income has traditionally gone to the landlord. And today that percentage is on the rise.

But as a smart renter will tell you, you don’t need to break the bank to have a roof over your head. Here are six ways to keep money in your pocket if you rent.

1. Get a roommate

Finding one or two roommates is a foolproof way to save on rent and utilities. You might also be able to split other expenses, such as groceries, Internet and cable. That means you may be able to afford a larger and nicer apartment in a better location than if you lived alone. Websites like and Craigslist may help you find a compatible roommate.

2. Find a great location

Location is one of the most important factors in many apartment searches. Choosing a place that’s close to your office or school, as well as a grocery store, will save you time and gas money. The Walk Score app shows you grocery stores, schools, restaurants and coffee shops near any apartment you’re considering.

3. Have your finances in order

Like any other business owner, landlords want to protect their investments — and get paid on time. Having a credit score of 700 or higher and other evidence that you’re financially stable reassures potential landlords that you’ll be a good tenant. This gives you more choice in apartments, and it may allow you to negotiate a lower down payment or rent.

4. Negotiate with your landlord

It helps to know the prices of other rentals in the area when negotiating your rent. If similar apartments nearby are priced more competitively than yours, use this as leverage. Or you can ask your landlord for a discount in exchange for painting and performing minor repairs.

If you plan to live in the same place for a long time, you can also ask your landlord for an extended lease agreement at a lower rent. Most landlords would be happy to have consistent rental income, even if it’s slightly less than they intended to charge. And if you have some money saved up, offer to prepay three months’ rent in exchange for a 5% to 10% discount.

Make sure that any discounts you discuss with your landlord are laid out in writing — and that effective communication can help you a lot when negotiating.

5. Take advantage of technology

Apps and websites — such as PadMapper, Zumper, Naked Apartments, Rad Pad and Zillow — can help you find affordable rentals and avoid real estate agent fees.

Once you have a place, websites such as and Craigslist let you move in and furnish it on a budget. For instance, when my firm switched offices, we found our movers through Craigslist.

6. Consider renters insurance

Your landlord is responsible for insuring your rental against damage from fire and other disasters, but not your personal property. For that, you need to buy a renters insurance policy. Renters insurance adds an expense to your budget, but it’s reasonably priced, and it can protect you from having to replace all your belongings — which would be a much bigger financial setback than your monthly premium.

Finding a great place to live for a reasonable price can be difficult in some locations, especially big cities like New York and Los Angeles. Fortunately, there are many ways you can save on your rent. And bringing down your housing costs frees you up to put cash toward bigger financial goals, such as saving for a down payment on a home or investing for retirement.


Winnie Sun is the founding partner of Sun Group Wealth Partners in Irvine, Calif.

This article originally appeared on NerdWallet.

8 Student Loan Tips for the Class of 2016

Nothing says, “Welcome to adulthood” quite like getting your first student loan bill in the mail. If student loans are your reality, here are some tips that may help you (from someone who is going through this too).

1. Don’t ignore your student loans!

I think everyone can agree that student loans are no fun to pay back, but ignoring them can have serious consequences (and it won’t make them go away.) If you’re worried about your student loans or don’t think you can afford your payments, contact us for help. No matter what your financial situation is, we can help you find an affordable repayment option. For many, that could mean payments as low as $0 per month.

2. Set a budget.

Life after graduation gets real, real fast. To make a plan to tackle your student loans, you need to understand what money you have coming in, and what expenses you have going out. If you haven’t already, it’s important that you create a budget. This will help determine your repayment strategy. Here are some budgeting tips to help you get started.

3. Choose an affordable payment amount.

There is no one-size-fits-all approach to paying back student loans. The key question you need to answer is: Do you want to get rid of your loans quickly or do you want to pay the lowest amount possible per month?

With our Standard Repayment Plan, the plan you’ll enter if you don’t take any action, you’ll have your loans paid off in 10 years. If you can’t afford that amount or if you need or want lower payments because you haven’t found a job, aren’t making much money, or want to free up room in your budget for other expenses and goals, you should apply for an income-driven repayment plan. Your monthly payments will likely be lower than they would on the standard plan—in fact they could be as low as $0 per month—but you’ll likely be paying more and for a longer period of time. If you choose an income-driven plan, you must provide documentation of your income to your loan servicer each year (even if your income hasn’t changed) so that your payment can be recalculated. To compare the different repayment options based on your loan debt, family size, and income, use our repayment calculator.

repayment estimator output


4. Research forgiveness options.

There are legitimate ways to have your loans forgiven, but there are often very specific requirements you must meet in order to qualify. Research forgiveness programs ASAP, as it may affect your repayment strategy. For example, if you’re interested in Public Service Loan Forgiveness, you’ll want to make sure you have the right type of loans from the get-go (which may mean you have to consolidate), and you’ll want to make sure to get on an income-driven repayment plan.

5. Sign up for automatic payments.

If you don’t like thinking about your student loans, this is a great solution! Ok, ok, so you’ll still have to think about your loans and make sure you have the money in your account to cover your monthly payments, but you won’t have to worry about missing payments, writing checks, or logging into websites every month to pay your loans manually. Sign up for automatic debit through your loan servicer and your payments will be automatically taken from your bank account each month. As an added bonus, you get a 0.25% interest rate deduction when you enroll!

6. Make extra payments whenever you can (and specify how you want those payments applied).

Pay early. Pay often. Pay extra. If you want to ensure that your loan is paid off faster, tell your servicer two things. First, tell them that the extra you pay is not intended to be put toward future payments. Second, tell them to apply the additional payments to your loan with the highest interest rate. By doing this, you can reduce the amount of interest you pay and reduce the total cost of your loan over time.

7. Don’t postpone payments unless you really need to.

One of the flexible repayment options we offer is the ability to temporarily stop (postpone) your student loan payments. This is called a deferment or forbearance. While they can be helpful solutions if you’re experiencing a temporary hardship, these are not good long-term solutions. Why? Because in most cases, interest will continue to accrue (accumulate) on your loan while you’re not making payments and may be capitalized (cause interest to accrue on interest). When you resume repayment (which you will have to do eventually) your loan balance will probably be even higher than it was before. If you’re having financial trouble, why set yourself back even further by doing this? There are often better solutions available. Before choosing deferment or forbearance, ask about enrolling in an income-driven repayment plan. Under those plans, if you make little or nothing, you pay little or nothing. Additionally, with the income-driven repayment plans, you’re working toward loan forgiveness while making a lower payment. Before postponing your payments, consider your other options.

8. Take advantage of the FREE federal student loan assistance the government provides.  

Each federal student loan borrower is assigned to a loan servicer (some borrowers may have more than one servicer, depending on the types of loans you have). Your loan servicer is a company that collects your student loan payments and provides customer service on behalf of the U.S. Department of Education. This is a FREE service. There are many companies out there who offer to help you with your student loans for a fee. Do not trust these companies. Remember: You never have to pay for help with your student loans. If you need advice, assistance, or help applying for one of our repayment programs, contact your loan servicer. They can help you for free. Just remember to keep your contact information up to date so they can reach you when they need to.

Student loans can seem overwhelming at first, but by taking this advice and setting up a repayment strategy that works for you, you’ll master your student loans in no time!


Nicole Callahan is a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid.

8 Student Loan Tips for the Class of 2016” was originally published on

When and How to Appeal a Financial Aid Award

Your latest financial aid award letter arrives, and you tear it open, eager to find out how much money you’re getting — but you’re met with disappointment.

Maybe the offer’s less generous than the ones you’ve received from other colleges. Maybe it has way too many loans and not enough grants and scholarships. Maybe it prevents you from attending that particular school. But what if that school is your first choice, or your FAFSA no longer tells your whole financial story? Then the appeals process comes into play.

That’s right: You can ask for more “gift aid” — that’s money that doesn’t have to be paid back, unlike student loans.

The process varies from school to school, and there’s no guarantee that your appeal will be approved, but there are steps you can take to improve your chances.

Here’s what you should know about appealing your financial aid award:

When to appeal your financial aid award

The appeals process isn’t for everyone. “Saying, ‘We didn’t save enough money, can you please give us more’ just isn’t a compelling enough reason,” notes Zena Taylor, founder of College Select, a service that helps students find and apply to schools.

Here are the main reasons to appeal your award:

Your financial circumstances have changed. If your family has experienced a life event that impacts its finances and isn’t reflected on your FAFSA, you’re probably a good candidate for an appeal. These changes can include a birth or death, unemployment, disability, divorce, lowered income, moving, selling a house, or having another child enter college.

Most colleges will help you find additional need-based aid — but you have to back up your claims. Supplying supporting documents, such as medical bills, helps.

Your top school offered less aid than another. Some schools will work with you to match or beat another school’s offer if it means locking in your acceptance — especially if you’re an exceptional candidate.

“At many schools, it’s a buyer’s market,” explains Lynn O’Shaughnessy, author of “The College Solution,” a book aimed at helping students find the right school at the right price. “You’re going to be more likely to succeed [in getting more financial aid] if you’re looking at a private school than at a public school. They’re more eager to fill their spots.”

Stephanie Goldberg-Mauro, founder of consulting company College Planning 101, suggests researching the SAT and ACT score ranges of the college’s previous freshman class using the National Center for Education Statistics’ College Navigator tool. If your scores are in the 75th percentile or higher, you may be able to leverage them to secure more merit-based aid.

You can also use the College Board’s search tool to learn about the average financial aid package awarded by each school you’re considering. This will help you decide if appealing is the right move.

How to appeal your financial aid award

Email — don’t call — the school’s financial aid office to find out its appeals guidelines.

“Have you tried calling a college lately?” Goldberg-Mauro asks. “You can’t get through. You can call and call and call; they are so slammed with requests — but they’re going to check their email.”

The response you receive should tell you whom to contact, how to get in touch with him or her, and any special requirements you must meet.

Once you have this information, figure out exactly how much you want, why you want it, and how to put it in writing. The more specific you are, the more likely it is that the school will approve your appeal.

Another useful tip: Speak their language.

“I wouldn’t use the word ‘negotiate’; they don’t like that. And don’t just appeal to a school emotionally. They’re not going to relate to that,” O’Shaughnessy says.

Instead, Taylor suggests saying, “You’re my first choice,” or asking if there’s anything the school can do to enable you to attend.

If you document your situation, ask for a specific sum, show that you’re willing to work for the extra aid and sprinkle in a bit of flattery, you’ll have a good shot at approval. But it’s important to go in with realistic expectations, Goldberg-Mauro says. She advises students to expect nothing, but hope for the best.

“We might get another $500, or we’ve had one offer go from $8,000 into a $30,000 award. So there’s a huge range,” she says.

If your financial aid award appeal is rejected

If your appeal isn’t successful, you might still be able to close the gap. For example, you can ask to have the cost of attendance adjusted for your circumstances, covering your commuting costs, for example, or the costs of required items, such as a laptop or textbooks. This might qualify you for more aid. If that doesn’t work, it might be time to consider a less expensive alternative.

“Don’t go to a school that costs too much money,” O’Shaughnessy says. “Do not go into huge debt because you think this degree is going to be magical.”

Devon Delfino is a staff writer at NerdWallet, a personal finance website. Twitter: @devondelfino.

This article originally appeared on NerdWallet.

Spring Clean Your Finances

Warmer temperatures make it a good time to thaw out and soak up some much-needed vitamin D. Why not use the subsequent energy boost to tidy up your personal finances? Performing some financial spring cleaning can help you avoid making a mess of your fiscal affairs down the road. Here’s where to get started.

Revamp your budget

Living within your means is an integral part of a healthy financial lifestyle. But we’re all human, and those new kicks you spotted at the mall or that popular restaurant down the street can make it difficult to stay faithful to your budget.

“Everything in your financial life flows from your ability to effectively manage and allocate your income,” says Carrie Houchins-Witt, a financial advisor in Coralville, Iowa.

She recommends that you review last year’s spending transgressions. Then recalibrate your budget for this year.  That may mean zeroing in on and consequently reducing purchases in a given spending category, such as going out to eat.

Tweak your investments

As important as it is to track current spending habits, make sure also to review the investment allocations in your retirement account and other long-term savings. This spring, adjust the mix if what you hold no longer gels with your overarching financial goals.

“We are all so busy and — especially for the index-fund investor who relies on the simplicity of this kind of strategy — it’s easy to forget that we need to perform periodic maintenance to ensure our investment allocations have not grown out of whack over the last year,” Houchins-Witt says.

Financial advisor Mathew Dahlberg recommends rebalancing your portfolio.

“Regularly rebalancing a portfolio can add a few percentage points to long-term returns,” says Dahlberg, of Kansas City, Missouri. He recommends using rebalancing tools offered by major online brokerages or just crunching the numbers yourself.

Ramp up retirement contributions

Boost your retirement savings this spring by setting up a monthly transfer from your checking account into a retirement fund. Contributing to a traditional individual retirement arrangement, or IRA, before the tax filing deadline may reduce your previous year’s taxable income. But consider making regular contributions throughout the year — it can take some of the guesswork out of investing the money.

Such dollar-cost averaging — or contributing in smaller, regular amounts to minimize risk — “forces you to buy at all price points and, therefore, takes the guesswork out of trying to find the right time” to get in the market, says Johanna Fox Turner, a financial advisor in Mayfield, Kentucky. “This also gives your money more time to grow than the lump-sum deposit on April 15.”

Adjust your withholding

Receiving a big tax refund isn’t necessarily a good thing. The average federal refund of about $3,000 could, if eliminated, put $250 a month in a taxpayer’s savings account. If you received or are expecting a large check from the government in coming weeks, it may pay off to adjust your withholding on your W-4 form before next year’s tax season.

“While you might love getting a huge tax refund, you should consider the potential income you are losing by giving Uncle Sam that interest-free loan,” Houchins-Witt says. “If you decrease your withholding to the amount necessary to pay your tax bill, you won’t get a huge refund next year, but you’ll have immediate access to money that could be put toward your 401(k) or college savings accounts.”

Houchins-Witt recommends working with a tax preparer to help determine how to revise your withholding so you don’t have too little taken out of your paycheck for the rest of this year.

Still, many people appreciate the forced savings element of a bigger tax refund. If you’re one of them, have a plan for the refund money that gives you the greatest benefit in the long run. It’s not found money — it’s part of your paycheck and should be treated as such.

The takeaway

Be it tweaking your budget or adjusting your withholding amount, there are plenty of ways to get organized this spring. No matter how minor a certain tuneup item may seem – like cutting back on movies or brewing your own coffee – you’ll be doing yourself a favor by putting the savings toward your future.


This article has been updated; it was originally published April 13, 2015. 

Tony Armstrong is a staff writer covering personal finance for NerdWallet. Follow him on Twitter @tonystrongarm and on Google+.

This article originally appeared on NerdWallet.

The Education Department’s New Student Loan Servicing Plan: What It Means for You

Can you name your student loan servicer? If the federal government’s new proposal goes according to plan, you won’t have to.

The U.S. Department of Education announced Monday, April 4, 2016, that it wants to streamline the way grads pay off their federal student loans. The department plans to create an online student loan portal where all borrowers would make payments, sign up for repayment plans and find answers to student loan questions.

As it stands now, borrowers must work with their student loan servicers for those purposes. Servicers are private companies contracted by the government to collect payments from federal student loan borrowers and keep loans in good standing.

But working with servicers is a common source of confusion for borrowers, says Betsy Mayotte, director of regulatory compliance at American Student Assistance, a nonprofit that provides student loan education. “Borrowers saying it’s complicated to keep track of their loans has been a running theme for many years,” she says.

Borrowers’ experiences can also vary from company to company, according to student loan advocates and as detailed in a September 2015 Consumer Financial Protection Bureau student loan servicing report. In a blog post announcing the initiative, U.S. Undersecretary of Education Ted Mitchell said one goal of the new platform would be to remove the need for grads to know which servicer they’ve been assigned.

“It really shouldn’t matter who your servicer is,” says Jennifer Wang, director of the Washington, D.C., office of the Institute for College Access and Success. “Borrowers should have consistent, accurate information regardless of whether they have one servicer or another servicer.”

So what would the Department of Education’s plan mean for you? Here are the basics:

  • If you wanted to make an online student loan payment, you would do it on the new government-run portal, not your servicer’s website. Your servicer would work behind the scenes to collect and process your loan payments and requests for a different repayment plan.
  • Communication about student loans would come from the Department of Education, not servicers. That means the department would send you emails or letters about your loans, not FedLoan Servicing, Great Lakes, Navient or other servicers.
  • You would have access to “high-quality, one-on-one customer service” on the new federal loan management portal, according to Mitchell’s blog post.
  • You would experience a decrease in sudden transfers of your loans to a different servicer, which can be confusing and result in missed payments and changes to repayment benefits, according to the CFPB report.
  • You would have a new and potentially more convenient way to make complaints about your servicer to the Department of Education. Currently, borrowers’ best option to submit a student loan complaint is through the CFPB. More than 5,000 grads have done so regarding their private student loans, according to a NerdWallet analysis.

There’s no date set for the portal to go live; the government is accepting proposals through May 9, 2016, from contractors interested in helping create it. In the meantime, you can look up which federal student loans you have and who your loan servicer is on the National Student Loan Data System.

Whatever the new portal will look like, advocates say it’s a step in the right direction.

“Anything we can do to make things less complicated for borrowers is a great thing,” Mayotte says.

Brianna McGurran is a staff writer at NerdWallet. Email: Twitter: @briannamcscribe. NerdWallet writer Teddy Nykiel contributed reporting to this post.

Measuring and Understanding Your Financial Well-Being

Financial well-being: the phrase can conjure up a number of different interpretations, depending on who you’re asking. For some, it can mean having an emergency fund. Others may think it’s finally paying off those student loans (woo-hoo!) Still, others may simply believe that financial well-being is attained by making a lot of money. But that’s not totally correct. While making money certainly is a factor in financial wellness, it’s certainly not the only one. After all, having a large paycheck is great but it won’t seem like much if you’ve comparable levels of debt and expenses. Despite the common belief that more money brings more security, the definition of financial well-being shows that there’s more to it than just your income:

Financial well-being: a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life.

                                -Consumer Financial Protection Bureau (CFPB)              

As the CFPB indicates, financial well-being is not at all about how much you earn. Rather, it’s about making smart decisions with the money you have to allow you to experience peace of mind. True, earning bigger bucks can give you the opportunity to more comfortably cover your financial obligations, but all of that can be undone by giving in to lifestyle creep and failing to plan.  That’s why the CFPB has created a tool to help you measure how financially fit you are and a starting point upon which to build your path to financial well-being.

The CFPB Financial Well-Being Tool

The CFPB Financial Well-Being Scale was created to help quantify something that hasn’t been very easy to measure up to this point: your financial wellness! It’s based on a series of five to ten questions, depending on the version you decide to complete. The questions were carefully selected through a series of cognitive interviews, factor analyses, and three rounds of psychometric testing to ensure that you can clearly interpret them in order to construct an accurate score. In other words, it’s a scientific look at the not-so-scientific way we spend money!

Why is this important?                     

If you’ve seen any financial literacy survey or research lately, you know that Americans are failing miserably when it comes to managing money. Millennials, especially, are being targeted as a generation that doesn’t understand credit, can’t repay their student loans, and will need to work well into their golden years due to a lack of saving and retirement planning. But that doesn’t have to be the case. Learning about and investing in your financial well-being can turn these trends around and ensure that you don’t become part of these statistics. And the Financial Well-Being Scale is a good place to start.

That being said, this tool doesn’t “grade” you; there’s no gold star for finding yourself high or low on the scale. Most people will find themselves in the middle. However, you might challenge yourself to an annual competition to monitor your progress on a monthly, quarterly, or annual level. You can use your findings to help yourself cut back, maintain, or add some splurge funds to your next budget.

Can my score change?

Absolutely. Although it’s probably ineffective to take the test every time you put money into your savings account, taking the test every few months may be beneficial as it can help you determine whether or not you’re making the right financial decisions for your lifestyle. Your score is based on things that change – income, spending, savings – so it will fluctuate as your financial behaviors do.

How do I take the assessment?

The assessment is online and ready for you to complete when you’re ready. The best part? It’s everyone’s favorite price – free. The assessment can be downloaded in three easy clicks starting here.

How do I find my results?

Each response has a set value between zero and four, and the sum of those response values is located on a table where you will follow the number to your corresponding identification and you’ll see your score.

In the end, your score means more than just the number you find on a piece of paper. It gives insight into what you’re doing well and where your challenges are when it comes to money. It provides an objective lens through which you can view your ability to pay the bills, both today and in the future, and whether or not you can splurge on a Friday night on the town. And when you know all that before you even receive your next paycheck, then you know you have achieved financial wellness.

Take your assessment today and start becoming your own financial hero.