Student Financial Aid Resources and the Internet - A few caveats about internet use can reduce your risk of falling victim to identity theft or scholarship fraud. What every student should know.

There are a plethora of internet sites touting their financial aid prowess. As in all things related to internet usage, seeking financial aid information and advice via the internet required a critical eye. One enormous red flag is a request for payment for filing your FAFSA for you, or for providing you with scholarship information. Neither process should have a fee attached to it; so caveat emptor. The best places to search for reliable and up to date information are from sites that offer the service free of charge, or directly from the government agency or scholarship donor involved.

Each state has a higher education agency that can give you important information about state aid in the state you live. Americorps is an underused federal program that can help students pay for current education related expenses or to repay educational loans. Go to www.americorps.org for the details. The U.S. Armed Forces offers financial aid for its service members and their families in some instances. Some programs are recruitment incentives, others are earned benefits. Contacting the U.S. Department of Defense's www.todaysmilitary.com will take you to detailed information on college help. It is common to require a copy of your previous years' income taxes for financial aid purposes. Also, you or your aren't may be interested in accessing information on the Hope Tax Credit, Lifetime Learning Credit or the Student Loan Interest Deduction. A visit to www.irs.gov can give you access to information to these programs and to information on how to secure a copy of your tax return from previous years.

As a student seeking funds for college, you are likely to do a scholarship search online. While many scholarship databases are excellent resources, some are, simply put, a scam. So many precious dollars have been lost to scams that the FTC (Federal Trade Commission) has issues the following warnings signs to look for to scholarship seekers:

1. Does the scholarship promise a “guarantee or your money back”?
2. Does it boast that you can't “get this information anywhere else”?
3. Are you asked for your bank or credit card information “to hold this scholarship for you”?
4. Are you being told you're a “winner” or a “finalist” in a contest you did not enter?

Any of the above is a serious warning sign. You should file a report with the FTC if you feel you have been a victim of a fraud or scam. You can also verify the validity of a claim on the internet with the FTC at www.ftc.gov/scholarshipscams/.

Because the financial aid application process involves divulging private personal and financial information, it is the perfect breeding ground for identity theft. Wide-eyed students and parents, anxious to complete the lengthy and often frustrating application process might become blasé about handing over information that should remain secure. While providing such information, such as social security numbers and birthdates are required on the FAFSA and other legitimate applications, you need to remain vigilant about to whom you disclose your private data. You can help prevent identity theft by adopting some “safe computing” habits.

1. Remember to completely log off of any internet session especially when using a public access computer.
2. Keep your Student Aid Report and any financial aid documents away from view, preferably locked up or in a secure email account.
3. Never give anyone your PIN, or allow your PIN to be accessed.
4. Promptly destroy and dispose of any credit card offers you receive in your email or your postal mail box.
5. Never give personal information to anyone over the phone or via the internet unless you have initiated the contact and you have verified their authenticity

By keeping your information secure you are participating in an important part of the security net that the Department of Education has in place to protect your private information. Your participation helps them keep you safe from fraud and identity theft.

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It's a rare college student who does not have to assume student loans. If student loan debt is in your future, now is the time to educate yourself on your rights and responsibilities.

New changes to the student loan program make it necessary for student loan borrowers to educate themselves on their rights and responsibilities. New student loan borrowers are required by the Department of Education to complete a rights and responsibilities tutorial aptly named Entrance Counseling. This counseling used to be done en masse on campuses to incoming students but is now easily accessed via the internet and can be accomplished at the borrower’s convenience from and computer with internet capability. Since this tutorial is required of all borrowers we’ll concentrate our attention in this post to the latest changes that affect your eligibility.

What remains constant since congress last acted on the student loan program is the mode of application, repayment options and cancellation, forgiveness and discharge policies. However, the HERA or Higher Education Reconciliation act of 2006 ushered in substantial changes to the student loan program. Those changes include the interest rate on the student and parent loan programs, the maximum annual loan amount a student can borrow, and the addition of a Graduate PLUS loan program.

Interest rates on Direct and FFEL student loans are now set at a fixed 6.8% rate whereas before the rate was variable up to 8.25% and based on the 91 day T-Bill. This fixed rate does protect students from the possibility of the rate increasing to 8.25% but also eliminates the possibility of borrowing or consolidating at a lower interest rate as had been done by countless student loan borrowers in the past few years. While the days of rock bottom interest rates are passed until Congress sees fit to act again on this issue, the bottom line is the interest rate currently is lower than most commercial loans and the loans themselves carry many protections and rights to the borrower. All in all, most counselors still sleep well at night recommending these loans over commercial market rate loans to students.

Some students can now borrow more subsidized loan funds than they previously could. Dependent freshman can now borrow a maximum of $3,500 in an academic year. Dependent sophomores can borrow $4,500. Remaining unchanged, dependent juniors and seniors can borrow $5,500. Some Independent students unsubsidized annual limits have increased as well. Independent freshman and sophomores can borrow and additional $4,000 in unsubsidized loan. Juniors and seniors limits remain unchanged at $5,000 in additional unsubsidized loan. Post baccalaureate students can now borrow up to 12,500 in an academic year if they are independent per the FAFSA application. Graduate students, all of whom are considered independent, can now access a total of 20,500 in a combination of subsidized and/or unsubsidized loans depending on their calculated need.

The newest student loan program is the Graduate PLUS Loan. This loan is perhaps the most confusing loan program to explain. For those of us in the “industry” we know the term PLUS to mean Parent Loan for Undergraduate Student, hence the acronym PLUS. When the Department of Education named their new program the graduate PLUS, many inside out outside the field believed initially that this loan was to be taken out by a parent of a graduate student for their child’s graduate education. This is not the case. The Graduate PLUS, in actuality, is a loan taken out by the student that bears the same terms and conditions as the undergraduate PLUS taken out by a parent. So, the terms are the same between the two PLUS programs but the borrower is different. To be clear, graduate students can now borrow beyond their guaranteed amount of 20,500 in a Graduate PLUS loan. However, the Graduate PLUS is not guaranteed. The student borrower must pass a credit check in order to be eligible.

This post is a brief outline of the changes to the major student loan programs. Please visit http://www.studentaid.ed.gov for detailed information straight from the source.

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