Paying For Second Semester Could Be Tough For College Students

Paying for second semester could be tough for college students. Overall, it seems most students made it through the first semester, even though loans were harder to find and many loan disbursements were delayed or cancelled.

Students might not be so lucky next semester.

Since August, the credit crisis has grown much worse and so has the economic situation for families across the country. Many families will enter second semester with exhausted savings accounts, extremely limited access to home equity lines of credit and severely depleted retirement accounts – not to mention those parents that have recently lost employment.

Although students shouldn't have problems accessing their federal student loan dollars, some parents who have gone through recent economic problems may not qualify for Parent PLUS Loans (there is credit criteria related to bankruptcy, delinquencies and defaults on other federal student loan debts). Recent mortgage delinquencies or bankruptcy will prevent some parents from accessing parent loans under the current PLUS criteria.

If you were previously using private student loans to fill the gap that free money and federal loans won't cover, expect it to be much more difficult to secure that money next semester. Even parents in good financial standing will find it much more difficult to co-sign for a private student loan now, given that lenders are scarce and credit criteria has grown increasingly strict. Just another reason why it's important to plan for second semester costs early this year. Here is a short list of second semester financing tips:

1. Maximize all of your federal loan options
Make sure you understand federal student loan options and borrowing limits for undergraduates, graduates and parents.
2. Start looking for a lender now
Whether you're taking out federal loans, private loans or both to cover your second semester costs, complete the application process as early as possible this year.
3. Utilize work study money
If you were granted federal work study money, be sure to check with your school for open positions. The jobs are usually on or near campus and they are designed to work around your school schedule. If you don't qualify for federal work study, but still need a small income, consider short-term holiday employment or a flexible part-time job.
4. Talk to your school
Ask your school's financial aid office about all of your financial aid options, including payment plans, scholarships only available through the school, etc. As a reminder, many financial aid offices are closed over the holidays so contact them immediately.

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How to Quickly Get Your Private Loan Money

The fastest way to get your private loan money is to be prepared when you start to apply. Know if you are going to use a co-borrower or not, and then have your paperwork, and your co-borrower's paperwork, all ready. With the CLC® Premier Loan, you can have your co-borrower immediately apply after you, to see if you preapprove instantly!

Info you will need:

1. Your Social Security Number
2. Your temporary, permanent and prior addresses
3. Your driver's license
4. Your income information if you are employed

Info your co-borrower will need:

1. Social Security Number
2. Permanent and prior addresses
3. Housing expenses info
4. Driver's license
5. Proof of income, like bank statements or pay stubs
6. Employer informationv
7. Email address

Remember! You can always call College Loan Corporation if you have any questions about applying or just apply now!

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Top 5 Financial Aid Mistakes

Money may be tight for you and your family this year. And chances are your school's costs have gone up since last year. Many families are really digging deep and making sacrifices to cover college costs. As you're making decisions on how to pay for college, we just want to make sure that you aren't making any mistakes that might hurt your financial future. If any of these sound familiar, there is still time for you to reevaluate your financial aid decisions and work with your financial aid office.

Potential Financial Aid Mistakes

1. You walked by the financial aid office, but didn't check for new scholarship applications

It's true that your chances of winning the world's most popular scholarship essay contest are one in a million. But once you are accepted into a school, the universe becomes smaller and your chances of winning increase. Suddenly you are competing against just freshman, just female engineers or just chess club members. There are all kinds of scholarships, provided by corporations, alumni or special interest groups. Don't believe it? When you find a scholarship at your school with only 3 other applicants, you will!

2. You didn't accept your work study money

Are you kidding? You turned down a good hourly wage, working on or near campus, with work hours scheduled around your classes – in a recession? Most students love their work study job because they generally get to pick from a list of activities like tutoring kids, working in the library or helping out with intramural sports. In this financial environment, even part-time work is difficult to find. Unless you already have a good gig lined up or you are just loaded with cash from rich relatives every month, work study is highly recommended by other students. Even if you weren't awarded work study on your financial aid award letter, ask your financial aid office if there are any types of work study programs available to you.

3. You didn't talk to your financial aid office

If you are having difficulties paying for school, or your family's situation has changed, check with your financial aid office. Your financial aid package for this year is based on the FAFSA you completed last January, which takes into account your families income from the previous tax year. For example, if one of your parent's has become unemployed, you may be eligible for more financial aid. Don't put off going just because there is a long line; everyone else probably just got their paperwork too. If you can wait in line for a $10 movie, you can wait in line for a $10,000 tuition bill.

4. You didn't maximize your federal loans

When you graduate and have a job, you will realize that the Federal Stafford Loan was a great decision. It's cheaper than other options like private loans or credit cards. There are flexible repayment plans and deferment protections in case you can't find a job right away, or run into financial hardship.

One student I know is working two jobs until 1 a.m. in the morning and making poor grades because someone told her that "student loans are bad." Well, so is flunking out of school. It's a personal choice nearly every student must face: "Am I going to incur debt to complete my college education?" Examine your situation with your family and your financial aid officer. If you find that you need to borrow money, the Federal Stafford Loan (or Federal Perkins loan if you qualify) is a great first choice.

5. You took out private loans without maximizing your other financial aid

Private loans are necessary for many students to fill the gap once they have exhausted free money (scholarship, grants) and federal loan limits. Unless you're an independent student, you can only borrow between $5500 and $7500 in Federal Stafford Loans as an undergraduate, depending on your year in school. It's true that private loans don't require a FAFSA and so some students are tempted to just use the private loan to cover the full amount they owe. Don't do it. Take the extra time to complete the FAFSA. Who knows, you may qualify for grants or federal work study money. In addition, you should always maximize federal loans first before taking out private loans because they will cost you less over time. You'll thank us when you are paying them back.

Graduate students, Mistake #5 especially applies to you. You are eligible for increased federal loan limits ($20,500 in Federal Stafford Loans, $40,500 for medical professionals). If the Stafford Loan doesn't cover everything, the Grad PLUS Loan is also an option you may want to check out.

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