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Federal Loan Costs Just Went Up

June 18, 2018

Except for the 60 or so colleges and universities that have "no loan" policies, most financial aid packages include student loans. Federal loans are call Stafford loans and can either be interest deferred, which means interest doesn't accrue until 6 months after a student graduates, or non-deferred, which means either students pay the interest each year or it is rolled back into principle until graduation.


The interest rate on Stafford loans are updated each July and reflect changes in 10-year Treasury Note interest rates. This year, the interest rates rose from 4.45% to 5.05% on Stafford loans. That's a 13% increase in a single year! According to the New York Times, this is expected to increase monthly payments by around 2.8%. For graduate students eligible for the Stafford loan, the interest rate rose from 6.0% to 6.6%, a 10% increase.


ThSince interest rates are expected to rise over the next few years, it is very important to consider how much you can safely borrow without putting your future on hold after you graduate. I urge all of my students to strongly consider net (actual, after aid) cost when they make their decisions on which school to attend. If Drexel's net cost is $20,000 less than Penn each year, is the prestige of an Ivy League education really worth $80,000? For some, the answer may be "yes," if they believe that Penn can offer educational or employment opportunities not available at Drexel. For most students, the answer is most likely "no." And if parents have to borrow expensive PLUS loans to cover the additional cost, that difference isn't $80,000, it's a whole lot higher.

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Resources for Seniors

March 27, 2020
In many ways, seniors are in the cross-hairs of the COVID-19 pandemic. Their financial situations may have changed as the bottom fell out of the stock market. They aren't able to visit colleges to decide between their top choices. Their AP tests in May have been canceled and not rescheduled and the test format and scope have changed. Because things are changing daily, it's more helpful to provided links to dynamic resources than to publish lists of important changes to school policies at any given moment. 1. Visiting Schools and Deposit Deadlines NACAC, the National Association for College Admissions Counseling, has posted a searchable database that lists whether or not college are open to visitors, are hosting any admission events and whether or not they have changed their deposit deadlines. The database is searchable by college, location or status. Many colleges are developing resources to aid their accepted students. Smaller schools are doing Video conferences with admissions officers, many schools are providing Zoom meetings. Seniors should check with their school's admissions offices to see what resources are available. 2. Test Optional Policy Changes At the moment, a dozen schools that are not usually test optional will go test optional, at least for their 2021 applications. That number is likely to increase during the spring and summer. Fair Test keeps a current list of all test-optional schools and you can use this resource to see the list of schools that will be temporarily test optional. 3. AP Test Requirements If you're still confused about what the College Board is doing about AP tests or when the online tests will be administered, please use this link to AP Central for a detailed explanation of what you'll be required to know for each AP course. At this time, the test dates have not been published, so check the link often. One of testing partners is providing free on-demand AP tutoring in almost every subject. Please contact me if you are interested. If you have any specific questions, please know that College Match Guru is here to help! Give me a call or send me an email and I'll do all I can to help during this troubled time!

AP course exams will be offered online

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The College Board announced today that AP tests will not be given in their usual proctored format this year because of the Corona virus. Instead, students wishing to take the AP test will be offered the opportunity to take the tests at home. For most courses, the test will only include sections that should have already been covered in class. For the Art-related courses, students will need to submit a smaller number of works and investigations. AP tests are important because most colleges and universities will give students credit for AP test scores in the 4 and 5 range. This can allow students to substitute other classes so they can explore areas they may find interesting or to graduate early. AP tests are an indication that students have mastered their course work and most colleges consider AP courses in their admissions decisions. Art works and investigations will be due May 26th; testing dates for other courses have not yet been published. For more information, go to the College Board website https://apcentral.collegeboard.org/about-ap/news-changes/coronavirus-update .
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