Budgeting: A Brief Guide

Budgeting: A Brief Guide

So you have adult money now! Do you know how to take care of it and make sure it is used appropriately? If you don’t keep reading! Below you will find steps and tips on how to budget your money, a skill that is crucial for survival and success. Once you master budgeting, you’ll get a clear sense of your financial limitations as well as your freedoms! 

Get a sense of your cash flow

How often do you get money? Knowing how often you have access to money ensures that you actually have money to spend. As a student, get a clear sense of how much money you get from a financial aid refund every semester/quarter. If you have a job, get a clear sense of how much you get paid, along with how often you get paid. Once you know your cash flow, you can figure out how much money you have to spend in a semester/quarter, a month, a week, etc! 

Identify your costs

What do you have to spend your money on? Make a list of everything you pay every month. Begin by listing the costs that are necessary for your survival and success as a student. Costs to prioritize include– but are not limited to–  housing, food, transportation, and textbooks. Costs that are secondary are not necessarily needed; this includes services like Netflix or Spotify. Make sure your costs are not greater than your cash flow! If your costs are bigger than your cash flow, try to find costs that you can reduce or cut out entirely. 

Save some money

Are you prepared for an unexpected cost? After you identify your costs, create some wiggle room for unexpected costs. Perhaps your computer charging cable is broken and you need to buy another one ASAP, will you have the money ready? Of course, as students, we are limited with how much we can save, but it is wise to leave as much of our money untouched as possible.

Enjoy your freedoms

What fun things do you want to spend your money on? After you’ve paid everything you have to and put some money on the side for savings, do something fun! Go out for boba or buy a video game! Make sure that you have a clear idea of how much you have to spend for a certain time period. For example, if you have an extra $200 dollars a month, you can only use $50 a week. Do not exceed your spending limit, otherwise, you will be biting into your costs and savings which are necessary for your survival.

All of this can be confusing, but bless the internet age for all its applications! Below are some free apps you can download to help you budget.

Options to Cover the College Bill

Options to Cover the College Bill

Financial aid offers from the colleges you have been accepted to oftentimes don’t cover the entire direct cost of college. This means that after financial aid has been applied, there is usually a balance leftover that the student must pay, which is billed by the college. The total amount due for the year is typically split into two or three bills, based on whether the college goes by the semester system, quarter system, or credit hours. The student will receive the fall bill via mail or via the student’s college portal in June or July. Bill due dates will vary by college, but typically must be paid before classes for the new term start.

There are several options for paying the college bill, and it all depends on what works for you and your family. When planning to pay the college bill, students and families should consider these options first:

  • Family/student savings from savings accounts, and/or college savings plans (such as 529 college savings accounts, if applicable)
  • Earnings from summer or part-time jobs may help cover part of the college bill or cover indirect expenses like transportation, books, or dorm room supplies.
  • Outside scholarships can be used at any college or university. Search for scholarships online and pay close attention to deadlines. 
  • Tuition Payment Plans may make the bill more manageable by enabling you to pay the estimated bill over the course of the school year instead of having to pay it all at once and with no interest accrual. You can look at your college’s website for payment plans available and see if there is one that fits your family’s budget.

These are the best options to pay the college bill because they do not need to be repaid in the future. However, student loans are also another option. If you are considering taking out student loans to cover the college bill, it is advisable to maximize your eligibility for Federal Direct Student Loans or campus-based loans first before looking at private student loans. There are several reasons why federal student loans and campus-based loans may be more beneficial than those you may find on the private market:

  • Favorable interest rates and terms
  • Eligibility doesn’t depend on credit history
  • More flexibility during repayment
  • May be eligible for loan forgiveness if you work in a certain field

In addition to Federal Direct Loans offered to you, the student, there is also a federal loan option for parent(s) who would like to help their children cover the college bill. The Parent Loan for Undergraduate Students (PLUS) allows parents to borrow up to the cost of attendance (after existing financial aid has been taken into account) every year of college, with no long-term cumulative limit. In addition, they may postpone monthly payments on the loan until after their child graduates (although interest will continue to accrue on the loan balance regardless). Also important to note, if your parent(s) apply for the PLUS but are denied, you become eligible for an additional $4,000 in Federal Direct Unsubsidized Loans for the school year. If you find yourself in this situation you should contact your financial aid office for the next steps in having the extra loan amount credited to your account.

After the FAFSA/Dream Act: Next Steps

After the FAFSA/Dream Act: Next Steps

Check Your Student Aid Report (SAR)

After you submit your FAFSA or Dream Act there are some additional steps that you should be aware of. For students who complete the FAFSA, there is something called a Student Aid Report (SAR) which is a summary of all information reported on the FAFSA. This summary is usually available to view a few days after you submit the FAFSA. It provides important information about potential issues with your FAFSA such as a mismatch between what you reported on the FAFSA and what the Social Security Administration has on file for your name and social security number. Any issues such as these need to be addressed as soon as possible- otherwise, it could create a delay in receiving your financial aid.  

For students who complete the Dream Act, there is a very similar document called the Cal Student Aid Report (Cal SAR) which is a summary of all information reported on the Dream Act, available a few days after you submit your application. The Cal SAR also provides important information about potential issues with your Dream Act application. You should address any such issues as soon as possible to avoid delays in the financial aid process.

The SAR and Cal SAR also will include your official Expected Family Contribution (EFC). The EFC  is determined by the information entered into the FAFSA or Dream Act such as family income, household size, and number in college. The EFC is an important index number that is used by colleges to determine what type of and how much financial aid you can receive based upon your need. The higher the EFC, the lower the need, and the lower the EFC, the higher the need. The EFC is not the exact amount you will have to pay for college, but instead, it can be thought of as the minimum amount you and your family will need to pay. Colleges will receive your EFC and use it to determine the student’s eligibility for financial aid.

Important links and resources:

  • A helpful video about how to retrieve and download a Student Aid Report can be found here. 

 

You Might Be Selected for Verification

Another step that you should be aware of is something called verification. Verification is a process in which the federal government and colleges can request copies of specific documents to confirm the accuracy of the information reported on financial aid forms. Some students are randomly selected for verification while others are selected due to conflicting information that the colleges are seeing on the financial aid forms. 

Examples of documents required for verification can include any of the following if applicable:

  • Official tax transcripts or tax returns
  • Proof of citizenship/residency
  • Documentation of legal guardianship

This process must be completed in a timely manner! If you receive a verification request from a college you need to respond as quickly as you can so you do not miss out on potential financial aid that is first-come, first-served. Note that these verification requests may come through email, the school portal, and/or the regular postal mail.

Institutional Documentation Service – CSS Profile Submissions Only

For students required to complete the CSS Profile, there is a follow-up step that is similar to verification which is called Institutional Documentation Service (IDOC). If required, this process will also require you to submit additional documentation. 

Important Links and Resources:

  • Watch a helpful video that shows how to request a tax transcript via IRS.GOV to be mailed home here.
  • To find out you are required to complete IDOC, check out this website.
  • Created by the College Board, this is a series of slides and videos that reviews the IDOC process that can be found here

Create a WebGrants 4 Students Account

California students also need to be aware of the steps to take to secure their Cal Grant, Middle-Class Scholarship (MCS), or Chafee Grant, if awarded. For general information about these financial aid programs, see our post “All About Cal Grants and Other CA Financial Aid”. After you submit your FAFSA or Dream Act, you will need to create a WebGrants 4 Students (WG4S) account. This is the online portal that allows you to track the status of your state financial aid, complete required To-Do items and manage their award, and review your state financial aid history and remaining eligibility.

It is crucial that students complete your required steps by the appropriate deadlines, such as:

  • Confirm your intended school of attendance or make a school change
  • Certify your high school graduation date, for current high school seniors
  • Complete the Transfer Entitlement Certification, for community college transfer students
  • Complete the Cal Grant C Supplement, if being considered for Cal Grant C

Keep in mind that the timelines for you to complete these steps may vary depending on if you are a first-time applicant or renewing your award, as well as what type of award you are being considered for. You should keep track of their deadlines to ensure that you do not miss out on any state financial aid you may be eligible for. Once you have completed all of the requirements on your WG4S account, your intended college will be able to confirm their eligibility and move forward with issuing payment of their award. 

Important Links and Resources:

  • Watch a help video created by the California Student Aid Commission about how to create your WebGrants 4 Students account here

Check out a detailed description of how to complete certain steps on WG4S here.

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Verifying Your Income for the CA Dream Act Application

Verifying Your Income for the CA Dream Act Application

After submitting the CA Dream Act Application, you may be asked to verify the information you provided about your income. Don’t worry, you did not do anything wrong if you are selected; a percentage of all applicants are required to verify income as general practice. If you happen to be selected, follow the steps below!

  1. Know if you have you have to verify your income

Not all CA Dream Act applicants are required to verify their income. You will know if you must verify your income via email or schools’ online portals. If you do not receive any notification about verifying income, then you do not need to take additional steps at the moment.

2. Know if you are Dependent or Independent Student

You are Dependent if you are all of the following:

  • under 24 years old or born after 1/1/98,
  • not legally married (single),
  • have no children or other dependents, 
  • and are pursuing an undergraduate degree.

If you are Dependent then you MUST provide information on BOTH your income and your parents’ income. Even if you do not live with your parents or receive their financial support, you must provide their information. Some exceptions on this may apply depending on school. 

You are Independent if you are at least one of the following:

  • over 24 years old or born before 1/1/98,
  • legally married, 
  • have children or other dependents for whom you provide 50% of their support, 
  • a veteran or active duty, 
  • an orphan or ward of the court, 
  • at risk of homelessness,
  • have a special circumstance, 
  • or pursuing a graduate degree.

If you are Independent, then you will only provide income information about yourself.

3. Know if you and/or your parents are Tax Filers

If you and/or your parents file taxes, be prepared to obtain the 2019 tax return transcript (note: this is different from the tax account transcript). You may request the tax return transcript from the Internal Revenue Service (IRS) for free online or through the phone. The person requesting the transcript must be the one who signed the taxes; someone else is not allowed.

If you and/or your parents do not file taxes, prepare the following information/documents:

  • all 2019 household income earned,
  • financial assistance or benefits (if received),
  • a copy of W-2 form(s). 

Be aware that if you or your parents earned over the IRS income filing limits, you may be required to file taxes in order to receive a financial aid award.

If you and/or your parents do not file taxes because of cash payment and do not have a W-2 form, you must explain the circumstances in the school verification worksheet. You may be required to include proof of non-filing from the IRS.

4. Fill our the Income Verification Worksheet

After you have determined where you stand with dependent/independent status and tax filing status, you will fill out the Income Verification Worksheet. A standard worksheet asks about/for the following:

  • Household Size: The rules of the CA Dream Application define households as you (the student); the biological or adoptive parents; siblings under the age of 24 in most cases; and/or other dependents for whom the parents are financially responsible (such as an elderly or disabled person). Additional family members or individuals that live within the home, but do not meet these requirements should not be included in the household.
  • Marital Status: Indicate whether the parent or you are single, married, separated or divorced, or widowed. Parents who are living together, but are not married should choose that option.
  • Tax Filing Status: Indicate whether you and/or parent or spouse is a tax filer or a non-tax filer.
  • Financial Aid Received: List the amount of grants or scholarships you received during 2020 and the school(s) attended.
  • Child Support Paid: List the amount of any child support paid in 2020, including the child’s name, the name of the person who paid child support, and the name of the person to whom it was paid.
  • SNAP Benefits Received: Indicate whether you and/or your parents received SNAP  benefits in 2020 or 2021. Documentation from the agency that issued SNAP benefits may be required upon request.
  • Certification and Signature: By signing the verification worksheet, you and/or your parent certify that all the information is true. Signing also authorizes the Financial Aid Office to update the student’s California Dream Application per CSAC guidelines and the information provided.
  • Additional Documentation: An individual college or university has the right to ask for additional documentation regarding household size or income earned if it is necessary to gain an adequate understanding of how household expenses were met for 2020.
  • Multiple Schools: If you listed more than one school on the CA Dream Application, you will be required to complete income verification at each school individually.

It is natural to feel overwhelmed by this process! Remember that this is standard procedure for a certain percentage of students who apply for the Dream Act. Do not be discouraged. We, and many others, are here to support you through the process!

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Academic Probation and Financial Aid

Academic Probation and Financial Aid

What is Academic Probation?

Academic Probation is a term used to describe when a student’s overall, or campus GPA, falls below a 2.0. All students are subject to this rule.

What happens if I am on Academic Probation?

While on academic probation, there are a few things the school will require you to do. 

What is the difference between Probation and Disqualification?

Academic Disqualification occurs when a student does not meet their class level GPA. When a student is academically disqualified, they may not be able to enroll in classes and are discontinued from attending the institution.

Academic Level Earned Units GPA
Freshman 0-29 Below 1.5
Sophomore 30-59 Below 1.70
Junior 60-89 Below 1.85
Senior 90+ Below 1.95

Can I still get financial aid on academic probation?

Yes, you can still get financial aid if you are on academic probation. Each school has specific rules and procedures to help you stay on track. 

How can I make sure I don’t lose aid?

To avoid potentially losing aid, you must have a status of Satisfactory Academic Progress (SAP) (check with your specific school on how to meet SAP). Failure to meet SAP may result in being ineligible for aid.

Tips on improving academic performance and staying out of probation

  1. Meet with your advisors and professors for advisement
  2. Take advantage of academic resources on campus, like your school’s Learning Center
  3. Being a proactive student
  4. Following a structured schedule for studying and me-time

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Tuition and Fees Explained

Tuition and Fees Explained

Navigating your financial aid award letter can be confusing because of all the unknown terms and definitions. It is important to understand your total attendance cost so that you determine what you may need to pay out of pocket. 

Tuition and Fees are part of the expenses on your financial aid award letter. Tuition refers to the cost of attendance and fees are other expenses like room and board, meal plans, and books! 

To learn more about tuition and fees, download this guide Tuition and Fees Explained. Guide provided by DecidED 

 

 

What You Need to Know About Verification

What You Need to Know About Verification

Being selected for verification regarding your financial aid doesn’t mean you did something wrong.

Sometimes students are selected for something called “verification.” It is very common for students to be selected for verification. If you are selected, you need to submit additional documents or information to the financial aid office at the college that confirms what you wrote on your FAFSA.

Completing this process will ensure you receive all the potential financial aid you are eligible for and that you get your financial aid on time.

To learn more about the verification process, download this guide What You Need to Know About Verification. Guide provided by DecidED 

 

 

Work Study

Work Study

Work-study is one of the financial aid options that are available to you if you qualify for it. There are usually on-campus work-study programs or off-campus work-study programs. You must connect with your school to see what options are available for you. 

There are several benefits of a work-study job including flexibility with hours, little or no commute since most opportunities are on campus, and easy access to campus resources. 

To learn more about work-study programs, download this guide Work +Work-Study. Guide provided by DecidED 

 

 

 

DecidED: College Affordability Tool for Students

DecidED: College Affordability Tool for Students

One of the most memorable events in a student’s life is receiving their college acceptance letter in their portal, or mailbox. In those letters, you receive your well-deserved congratulations, your welcome package, and your financial aid package. This letter now determines where you will be going for the next four years of your life. 

One of the biggest deciding factors for college students is the financial aid award letter that comes in that envelope. A financial aid letter determines how much grant money the college/university is willing to offer you, how much you will pay out of pocket, and how much you will possibly have to take out in loans. When applying to more than one school, this information can get lost, misinterpreted, and confusing. 

DecidED makes this process a bit easier for students! With this tool, you can create your own account, add schools, and start comparing fit factors and any financial aid packages you’ve received. In addition, you can also get how-to guides from everything on loans to budgeting for indirect college expenses. 

All you have to do is head over to DecidED to create and use your DecidED account.

Watch their demo Introducing DecidED: Moneythink’s college affordability tool for students and congrats on getting accepted! 

If you are an academic advisor and want to help your students choose a high-quality, affordable college head over to their advisor page for resources!