Student Debt Refinancing and Consolidation Blog and Resources

The numbers of Americans with master’s degrees and doctoral degrees have doubled since 2000, according to the U.S. Census Bureau. With more and more American adults attaining higher education, you might be wondering: should I go back to school for another degree?  Maybe you feel like your career progress has stalled. Maybe you're looking to change fields. Maybe you want to increase your salary. Key Takeaway: Think carefully about these questions Would an advanced degree further my career goals? How would an advanced degree affect my pay? How would I pay for an advanced degree? What kind of degree program would I attend? Would an advanced degree further my career goals? A degree won’t have the same effect on every person or every career.  You’ll need a professional degree to become a doctor or a lawyer, and becoming a college professor will probably require a PhD. But for other careers, getting a graduate or postgraduate degree may not be necessary or even helpful. For example, if you're a newspaper reporter looking to advance your career, a master’s degree in journalism may not be helpful to you. But a master's in political science could help you specialize as a political reporter. Part of your decision-making process should also include how much work experience you have. If you graduated with a bachelor's degree less than a year ago, a master's in business administration probably isn't for you — yet. Those degrees are typically meant for students with at least three years of work experience. If you're not sure where returning to school fits into your long-term goals, try talking to someone with a career similar to the one you want. “Request informational interviews at companies you think you’d like to work for," suggests Frankie of Frank Money Talk. "Ask them about your plans to see if they can provide a reality check. They could save you years and tens of thousands of dollars.” How would an advanced degree affect my pay? Earning a bachelor’s degree increases a person’s lifetime earnings by about $1 million, compared to high school graduates, according to a report from the Georgetown University Center on Education and the Workforce. The report also found that earning a master's degree adds another $400,000 to a person's lifetime earnings, compared to someone who earned only a bachelor's degree. And earning a doctoral or professional degree increases lifetime earnings even more. But just like career goals, getting an advanced degree won't affect everyone's pay the same way.  For example, a study by Poets & Quants found that students who earned MBAs concentrated in finance economics and business and marketing doubled their salaries. On the other hand, graphic designers who earn graduate degrees only increase their salaries from about $42,000 to $52,000, according to data from CareerBliss. Before you pursue further higher education, think about how much an additional degree would increase your pay versus the cost of the degree.  “Use government sites such as the Bureau of Labor Statistics to evaluate whether you are entering a growing career field,” Frankie says. “Use employment sites to estimate what income can be expected based on experience." How would I pay for an advanced degree? The cost of a graduate degree varies depending on the college you attend and your course of study, but the average is $30,000 to $40,000 per year, according to Peterson's, a leading educational services company. Make sure when you’re calculating your potential costs, you’re not thinking only about tuition. “There are supplemental costs such as books, parking and commuting,” Frankie says. “There are time commitments away from family. There are late nights and potentially unbalanced work/school/life balance.” Also don’t forget about any current student loan debt from your undergraduate degree you may be paying off. If that’s an issue for you, consider refinancing or consolidating your existing loans with one of the top student debt companies before getting another degree. Once you have a good idea of what your costs are going to be, think about where you’re going to get the funds to pay for those expenses. Keep in mind that if you’re going to quit work or reduce your work hours, that will eat into your available income.  “Don’t forget about grants and other financial aid specific to re-entry students,” Frankie adds. “Also speak with your employer about tuition assistance or reimbursement.” What kind of degree program would I attend? You don't just have to decide on your field of study. Depending on what school you want to attend, there are usually lots of options for types of programs. One option is the traditional full-time student experience. If you're currently working full-time, this will require you to leave work or cut back your hours for at least the duration of the graduate program. If a full-time program isn't an option, some schools offer executive programs meant to accommodate students who are working simultaneously. Another option is earning your degree through online courses, which offer the most flexibility. 

A year of college in the United States costs an average of $23,091, according to the National Center for Education Statistics. American students today often pay for higher education through some combination of scholarships, part-time employment, and other financial assistance — including federal student aid. Key Takeaway: Read the fine print for details Aid can be used for tuition, fees, room and board, books, supplies, and transportation. FAFSA forms are due on June 30. More information can be found on studentaid.gov. What is federal student aid? Federal student aid is financial help from the government available to students enrolled at an eligible college or career school. What can you use federal student aid for? Aid from the federal government goes toward tuition, fees, room and board, books, supplies, and transportation. How do you qualify for federal student aid? Students must complete the FAFSA form to apply for federal aid. You can find the FAFSA on the studentaid.gov website. Some of the financial aid eligibility requirements include demonstrating financial need, being a U.S. citizen or eligible noncitizen, and being enrolled or accepted for enrollment in an eligible degree or certificate program. What happened to studentloans.gov? In December 2019, the U.S. Department of Education combined resources from several locations into studentaid.gov. Studentaid.gov contains the FAFSA, student loan consolidation, entrance counseling, exit counseling, a Master Promissory Note, PLUS loan applications, and income-driven repayment plan applications. What information do you need to apply for federal student aid? Students will need their Social Security number; driver’s license number (if they have one); federal tax returns; records of untaxed income; and information on their cash, savings and checking account balances, investments, and other assets. Dependent students will also need their parents’ Social Security numbers; tax returns; records of their untaxed income; and information on their cash, savings and checking account balances, investments, and other assets. Students that aren’t U.S. citizens will also need their Alien Registration number. When is the FAFSA deadline? Online FAFSA forms are due by 11:59 p.m. Central Time on June 30, 2020 for the 2019–2020 school year and June 30, 2021 for the 2020–2021 school year. Also keep in mind that each college and state may have its own deadline. What federal student aid programs are available? Federal financial aid can take the form of grants, loans, or work-study programs. How does federal student aid work? After a student fills out the FAFSA, they receive their aid offer and accept the offers they want to use. If the student decides to take out loans, their college’s financial aid office will put their financial aid toward the amount the student owes the school. Then, the school sends the student what's left over for other costs. Borrowers don't have to begin repaying their student loans until they drop below half-time attendance or six months after leaving college. Students who participate in a work-study program will receive payments directly from their college once per month. What are the types of federal loans you can receive? The Department of Education offers direct subsidized loans, direct unsubsidized loans, and direct PLUS loans. What is a direct subsidized loan? Direct subsidized loans are for eligible undergraduate students who demonstrate financial need, such as low-income students. Students who qualify pay no interest as long as they're in school at least half-time and for the first six months after they leave school, or during a period of deferment. Eligible students can receive up to $5,500 annually at an interest rate of 4.53 percent for subsidized loans disbursed between July 1, 2019 and July 1, 2020. What is a direct unsubsidized loan? Direct unsubsidized loans are not based on financial need and can go to eligible undergraduate, graduate, and professional students. Unlike with direct subsidized loans, students who qualify for unsubsidized loans pay interest during all periods. Unsubsidized loans can provide up to $20,500 annually at an interest rate of 4.53 percent for a loan disbursed between July 1, 2019 and July 1, 2020. What is a direct PLUS loan? Direct PLUS loans are available to graduate students, professional students, and parents of dependent undergraduate students to pay for education costs that aren't covered by other financial aid. Like direct unsubsidized loans, eligibility does not depend on financial need, but borrowers will need to submit to a credit check, and those with poor credit will need to meet additional requirements. The interest rate for direct PLUS loans is 7.08 percent for loans disbursed between July 1, 2019 and July 1, 2020, and borrowers can receive up to the maximum cost of attendance, minus any other financial aid the student receives. What is a direct consolidation loan? Direct consolidations loans are a way for students to combine all their eligible federal student loans into a single loan. This allows the borrower to make a single monthly payment, simplifying their debt. What's a Master Promissory Note? A Master Promissory Note is a legal document that contains the terms and conditions of your loan from the Department of Education. When you sign the document, you promise to repay your loan.  What is a work-study program? Work-study programs are one time of financial aid the Department of Education offers based on financial need. They are available to undergraduate, graduate, and professional students. Students who receive a work-study award work part-time while enrolled in school. Jobs may be on on- or off-campus and typically focus on civic education and the student's chosen field, when possible. What are the benefits of using federal student aid? Interest rates on federal student loans tend to be lower than those on private student loans. Direct subsidized and direct unsubsidized loans don't require a credit check. If you qualify for a direct subsidized loan, the Department of Education pays the interest on the loan until you drop below half-time or have been out of college for six months, or during a period of deferment. Federal student aid can also be used to supplement other scholarships or grants you might have that don’t quite cover the cost of your educational expenses. How do you contact federal student aid customer support? Studentaid.gov has a contact center with answers to frequently asked questions. You can contact the Federal Student Aid Information Center at 800-433-3243, studentaid@ed.gov, or via live chat The center is open Monday through Friday 8 a.m. to 11 p.m. Eastern Time and Saturday through Sunday 11 a.m. through 5 p.m. Eastern Time.

For the month of May, Best Company Finance (@BestCoFinance) has been posting tips and tricks on avoiding, leveraging, and managing student debt on our Twitter account, including advice for the FAFSA, scholarships, private loans, and loan payoff. In case you missed it, here are some expert highlights and hints you can use to pay for college. Plan ahead—way ahead It’s never too early to start thinking about college, and our experts agree. With college costs so high, prospective students have to be creative and unconventional.To cut costs, consider concurrent enrollment in high school: “Find out if you can take college classes while still in high school. Many high schools have established partnerships with local colleges to allow students to take college-level courses. These are generally offered at no charge, or at a discounted rate, as part of the high school curriculum.”Freedom Debt Relief Get a clear picture of what degree you’re aiming for: “The ‘average’ for public college is four and a half years to graduate. Because more than 50 percent of college freshmen change majors, it’s also important to talk about career selection before college begins.”Patti Black, Bridgeworth, LLC If you’re still young or know someone who is, suggest searching for and planning for scholarships ahead of the game: “There are many scholarships open to elementary and secondary school students, not just high school seniors. Plus, half the scholarships have deadlines in the fall, so if you wait to search for scholarships and to apply, you'll miss half the deadlines.”Mark Kantrowitz, SavingForCollege.com “If you are fortunate to have the foresight, think about getting involved in student clubs, sports, extracurricular activities, and community service as early as possible.” Sylvia Wu, Keeping Up with the Changs“The strategy with scholarships that's worked best for my students is casting a wide net . . . the most lucrative scholarships are usually the most competitive. Receiving a few scholarships, each for $1,000, is the same as one for $5,000. But it's much easier to qualify for the five scholarships that are less competitive.”Dennis Shirshikov, FitSmallBusiness.com Hunt for the best deals, and try before you buy: “The best way to minimize the need to spend excessive amounts of assets or debt on college is proper college selection.”Jim Anderson, Making College Worth It Apply for the FAFSA and the CSS All prospective students should file for the FAFSA — even if they doubt they’ll be offered funding: “Make sure you complete your FAFSA because there might be scholarships or grants available which do not consider financial circumstance as a qualifying criterion. As a result, if you don’t file your FAFSA because you don’t think you’ll qualify, you might miss out on money.”Riley Adams, YoungandtheInvested.com“Even if you don't qualify for need-based financial aid, the FAFSA is the key to getting federal student loans.”Robert Farrington, TheCollegeInvestor.com Know what files the FAFSA will pull to qualify you for eligibility; it pulls financial records from one year prior to the October 1 opening date. For example, for the 2020–2021 FAFSA, filers who apply October 1, 2019, and on, will report their income for 2018: “Families really need to understand how FAFSA works before sophomore year of high school. Reason: so families don't mess up their chance at getting the most grant money because they unknowingly increased their income or assets for the FAFSA calculation.”Jim Anderson, Making College Worth It Don’t forget the CSS Profile: “Some schools and states require you to fill out the CSS Profile as well as the FAFSA. Don't leave money on the table and make sure to fill out both.“Lindsey Conger, Moonprep.com Crowdfund your education . . . sort of Many family members, friends, and institutions can help you reduce college costs: “Look into tuition reimbursement programs offered by local employers. For instance, a high school student who is interested in a career in broadcast journalism may be able to take an entry-level position at a local station, which will help pay for college courses. Go local. Room and board costs can be significant. Living at home, even if for a couple of years, and attending a local school, can save big. Or, consider living off campus to share rent and utility costs with roommates. Check into family discounts. If you have a relative who works at a college . . . it’s possible you might qualify for a family discount. Consider the service. While not for everyone, military service is an option for some teens. If they are willing to give several years of service to one of the military branches, college classes will be covered.”Freedom Debt Relief“There are scholarships everywhere, based on everything from your gender, ethnicity, religion, professional associations, and much more. Your parents' employer might even have a scholarship program available to you. So do your homework and leave no stone unturned.”David Bakke, MoneyCrashers.com Plan your payback Be smart about what loans you take out. Federal loans have fixed rates, more deferment options, and consolidation plans: “When it comes to loans, they should be a last resort. And if you need to borrow, always borrow federal loans before looking at private student loans.”Robert Farrington, TheCollegeInvestor.com Ask for help so you don’t end up paying more than you need to: “When you graduate college, meet with a Financial Adviser to review your student loan repayment plan. They will advise you if it is best to consolidate your loans, [look into] refinance options, or if you qualify for a loan forgiveness program based on your career path.”Jacqueline Devereux, SproutCents Take advantage of any bonus income to wipe out debt: “Throw all windfalls into your loans. Got a raise? Birthday money from Grandma? Extra cash from a side gig? Put it towards your loans.”Holly Peterson, Elite Retirement Strategies Consider your post-college education plans: “If you intend to collect more debt in graduate school, it is crucial you choose a lower cost school in undergrad. If you go on to become a doctor or lawyer, you may be eligible for special mortgage loans that take [into] consideration your extensive educational debt and high current/future earnings.”Chelsea Mariah Stellmach, KaiZenith Admissions Continually reassess your payment plan: “Consider loan consolidation — carefully. Consolidation can lock in a low fixed rate, extend the repayment period significantly and lower the payment — sometimes cutting it in half. While it can help if you’re truly cash-strapped, remember it’s important to pay off the debt as quickly as possible. If for any reason you cannot pay your student loan bill, immediately contact your lender. A lender would rather work with you to figure out some alternative payment plan than risk a defaulted loan. . . Damage from defaulting can prevent borrowers from buying a home or car or getting a job, apartment, or insurance for years to come.”Freedom Debt Relief  College can be a gateway to opportunity, but only if you keep your finances in check. Think outside the box and search for more expert advice to keep yourself financially healthy while preparing for your future.