Credit Cards 101

Credit Cards 101

You see it all the time on movies and TV! People go shopping and pull out their nice sparkly credit card to pay for the charge, but what exactly is it? Credit cards are actually a staple in adult finances. Read below for more on what credit cards are and why they matter!

Q: What is a credit card?

During a transaction, a credit card will work the same as a debit card. Both cards have a 16-digit number, a security code, and an expiration date; however, the mechanics behind them are different. 

While debit cards withdraw your own funds from the bank, credit cards draw from a loan. This “loan” is called your credit line. Banks will approve you for a certain loan amount and this loan is the maximum the bank is giving you to spend. If your credit line is $500, then you can only use $500. If your credit line is $1000, then you can only use $1000. 

Because the money is not yours, you have to pay the money back month-to-month. Most banks have a listed minimum payment amount. For example, you may have used $300 of your $1000 credit line, and you’re required to make at least a $35 payment each month. The minimum payments vary from bank to bank. 

Notably, credit cards charge you an interest rate. Because the bank is allowing you to use their money, they will charge you interest to make more money back. If your interest rate is 10%, then if you use $100, you have to pay the bank back $110 ($100 + $10 for interest). 

There are different types of credit cards. Some are specifically meant for college students! As you grow older, you will have options to cards that are specific to travel, rewards shopping, and more.

Q: Why should I get a credit card?

Importantly, credit cards can help build and increase your credit score! A credit card is a perfect way to show lenders that you are a reliable consumer through on-time payments and credit usage. 

If you pay your credit card bill every month on time, your credit score will go up! If you pay more than the minimum payment each month, your credit score will also go up!

Additionally, using only a portion of your credit limit is extremely beneficial! Financial experts recommend using only 30% of your credit limit. This indicates to other lenders that although you have access to more money, you do not need to use it all. So if you have a $1000 credit limit, it is recommended that you only use a constant $300. If you use more than 30%, your credit score may decrease, but if you manage to keep it at 30% or lower, your credit score will go up!

Q: Who can get a credit card?

There are a few requirements for a credit card. You must:

  • Be at least 18 years old. At this age, you must have a reliable source of income (your financial aid counts);
  • Have a social security number. If you are a DACA recipient, you can use the SSN assigned to you to apply;

Applications will then ask for other basic information such as your residence, birthdate, and more. Note that some banks may require that you have a co-signer. A co-signer is someone who becomes responsible for your debt if you cannot pay it back. If you miss your credit card payments, then the co-signer begins to be charged and becomes liable for the debt. 

After submitting an application, you will know if you got approved or not within a few business days. Some cards let you know if you got approved instantly!

Q: How do I get a credit card?

The first step is choosing a credit card to apply to. Because we are not financial experts, we cannot recommend specific cards; however, there is plenty of information available online. Some cards are specifically designed for college students. While your credit limit may be lower, it will have more advantages for college students such as easy approval or no yearly charges. 

Google, “best credit cards for college students,” and choose according to what you think is best! Remember that this is a huge financial decision and can impact you negatively if you get rejected. First, make sure that you can prove you have access to financial aid. A work-study or part-time job will always be a plus! If you have not worked for a few months anywhere, you should wait until you have a longer history of income. Credit cards are a safer option for people who have been working for at least a year or two.

Follow the links below for more resources on credit cards! Please remember that we at the Let’s Go team are not financial experts. More individualized advice is required by experts. 

 

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.

Scholarships for Undocumented Students | Due: April – May

Scholarships for Undocumented Students | Due: April – May

Check out these 5 scholarships to apply to! Deadlines are coming up soon, be sure to read the guidelines clearly. You got this! 

Great Minds in STEM Scholarships

Due: April 30, 2021 

Award: $500 – $10,000 

Academic Level: Undergraduate Student, Graduate Student 

Region: National 

Field of Study: STEM 

Eligibility: 

  • Hispanic origin and/or have significantly participated in and promoted organizations and activities in the Hispanic community
  • Enroll in an accredited 2-yr or 4-yr undergraduate college or graduate program for the upcoming fall semester 
  • Must demonstrate merit through academic achievements, leadership, and campus/community activities
  • GPA requirement: 3.0 

Link: http://www.greatmindsinstem.org/scholarships/ 

$1,000 First-Generation Scholarship

Due: May 

Award: $1,000 

Academic Level: High School Senior, Community College Student, Continuation School Student, Nontraditional GED

Region: California (Fresno, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus or Tulare County)

Field of Study: Any

Eligibility:

  • Incoming undergraduate student for the upcoming academic year
  • Must be a first-generation student 

Link: www.centralvalleyscholars.org/scholarships  

B. Davis Scholarship

Due: May 21, 2021

Award: $1,000 

Academic Level: High School Junior or Senior, Undergraduate Student 

Region: National 

Field of Study: Any 

Eligibility: 

  • Open to high school juniors and seniors and college students 

Link: http://studentawardsearch.com/scholarships.htm 

Humane Education Network: A Voice for Animals Contest 

Due: May 

Award: $600 

Academic Level: Under the age of 19

Region: National 

Field of Study: Any 

Eligibility: 

  • Open to all otherwise eligible students worldwide regardless of nationality, citizenship, or country of residence

Link: www.hennet.org/contest.php 

IvyPanda Essay Writing Contest Scholarship

Due: May 31st, 2021 

Award: $1,000

Academic Level: High School, Undergraduate Student

Region: National 

Field of Study: Any 

Eligibility:  

  • The scholarship is open to high school, college, and university students from any country. 
  • Applicant must submit an essay on one of three given topics related to COVID-19.

Link: https://www.ivypanda.com/scholarship-writing 

Filing Taxes as a College Student FAQs

Filing Taxes as a College Student FAQs

Adulting is scary! Suddenly, money is everywhere and confusing. Part of that confusion can definitely stem from filing taxes. Taxes, however, can be tackled, no matter how mysterious. Here are some FAQs about filing taxes as a college student.

***Please note that Let’s Go to College CA can not offer professional tax advice. This post serves as a collection of answers found online. Consult a tax professional for specific questions regarding your unique situation***

Q: Do college students need to file taxes?

A: ANYONE who is single (not legally married) AND earned more than $12,400 in 2020 is required to file taxes. Earned income includes salaries, wages, tips, professional fees, and taxable scholarships and fellowship grants. 

Additionally, you are required to file taxes if your unearned income was more than $1,100. Unearned income includes taxable interest, ordinary dividends, capital gain distributions, unemployment compensation, taxable social security benefits, pensions, annuities, and distributions of unearned income from a trust.   

Source: Internal Revenue Service (IRS) 

Q: Can my parents still claim me as a dependent?

A: Yes! Your parents can claim you as a dependent until you are 24 years old AS LONG AS they provide more than HALF of your living support AND you are a full-time college student. If your parents provide less than half of your support and/or if you are not a full-time student, you should file your taxes independently from them.

Source: Internal Revenue Service (IRS) 

Q: Can I file my own taxes as a dependent?

A: Yes! Even if you are a dependent, you may still file taxes if you had earned income in 2020. If you had a job where you were taxed, you may be entitled to a refund. All you have to do is note in your tax return that you will be claimed as a dependent with your parents. A tax preparer or tax preparing website will assist you with this. 

Source: Internal Revenue Service (IRS) 

Q: What is the American Opportunity Tax Credit?

A: If you/your parents make less than $80,000 a year, you may be entitled up to a $2,500 credit from the government. The credit is meant to help you pay for qualified education expenses. The main factors of eligibility are being enrolled at least half-time during the beginning of 2020, not having finished the first 4-years of higher education, and having no felony or drug conviction.

If the credit brings down the overall tax you owe to zero, you can have 40 percent of any remaining amount of credit (up to $1,000) refunded to you.

Source: Internal Revenue Service (IRS)

Q: What information do I need to file taxes?

A: The main things you will need to file your taxes are your social security number, your mailing address, a W-2 form(s) (provided by your employers), a 1098-T (provided by your school), and a 1098-E (provided by your school loan servicer). 

Source: Internal Revenue Service (IRS) 

Q: Can I file taxes if I am undocumented?

A: Yes! If you are undocumented, you are required to file taxes if you made more than $12,400 in 2020. 

Source: The Balance

Q: What if I don’t have a social security number?

A: If you do not have a social security number, but still are required to file taxes, you can use an Individual Taxpayer Identification Number (ITIN). The ITIN does not allow you to work legally in the U.S., but can be used when reporting taxes. To get an ITIN, you can apply for one through the IRS. 

Source: Internal Revenue Service and The Balance

Q: What if I don’t have a mailing address?

A: You can choose to use a P.O box for tax filing purposes. If you are experiencing homelessness, however, you can ask a shelter or service center if you may use their address on your records and they may allow it.

Source: Get It Back 

Q: Can I claim a device such as a laptop or a tablet as a qualifying educational expense?

A: Yes! If you bought a device in 2020 because it was required for school, then it qualifies as an education expense. However, if you are claiming the Lifetime Learning Credit, you may not deduct equipment purchased from the education institution. 

Source: Turbo Tax

 

Applying for Scholarships

Applying for Scholarships

Scholarships are free money that you do not have to pay back. Scholarships are awarded based on grades, community service, major, class level, where you live, and more. The money that you are awarded can be used to pay for college tuition and other expenses. 

Investing in yourself 

Most scholarships have similar prompts, so you have the advantage of reworking the same essay for each application you submit. If a scholarship is worth $1,000 and you spend 10 hours writing an essay and submitting your scholarship application, it results in $100 per hour invested! Use the Scholarship Essay Worksheet to improve your essays and ability to receive multiple awards.

Getting started

Use Immigrant Rising’s Scholarship Lists and additional scholarship databases to identify scholarships you are eligible to apply. Use the Scholarship Search Chart to list the ones you are eligible for, including deadlines, and create an action plan. Remember the more scholarships you apply for, the greater your chances to be awarded. 

Immigrants Rising Scholarship Lists 

Undergraduate List

Graduate List 

Additional Scholarship Databases 

Dreamers Roadmap

Geneseo Migrant center

http://migrant.net/scholarships/

MALDEF

My Undocumented Life

https://mydocumentedlife.org/category/undergrad-scholarships/

Scholarships A-Z

Silicon Valley Community Foundation 

The College Expo

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All About CA DREAM Loans

All About CA DREAM Loans

Background

The creation of the California Dream Loan was first introduced by then-Senator Lara back in 2014. Then in 2018, Assemblymember Ian Calderon introduced AB1895 and it was signed by the California governor. AB1895 provided repayment programs based on someone’s income for the loan. The latest piece of legislation signed by Governor Newson was SB354 by Senator Maria Elena Durazo which expanded the Dream Loan program to graduate students. 

How to apply and know you if are eligible

Students are eligible if they are enrolled at a CSU or a UC where the loan is currently being provided and they are enrolled as an AB540 student. Students may also be eligible if they file the California act application with the financial aid office and show that they are in financial need. Students need to keep in mind that the loan is provided on a main campus basis so they have to make sure to talk to their campus because it is not administered by anyone else.

Important details about California Dream Loans 

  • The interest rate that you agree upon in your contract can not change, it is a fixed interest rate and the interest rates are the same as federal student loans.
  • Just like federal student loans, you have a six-month grace period before you have to pay it back.
  • There is an income-based payment program that schools have come up with. This is based on what you are making as someone who has entered their career and are you eligible to repay this program.

 To learn more about CA Dream Loans click the video below! 

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All About Cal Grants and Other CA Financial Aid

All About Cal Grants and Other CA Financial Aid

Paying for college can be challenging, but as a Californian student, you have several state-based financial aid programs available to help ease the burden. Remember that you will either need to submit the FAFSA or the California Dream Act application by March 2 in order to be considered for most types of financial aid. See our post, “Financial Aid 101”, to learn more about the process of applying for financial aid. Read on to find out more information about the Cal Grant, Middle Class Scholarship, Chafee Grant, and other financial aid opportunities in California. 

Cal Grant

Perhaps the most well-known financial aid program in California is the Cal Grant. The Cal Grant is a state-sponsored grant program available to eligible California students who attend participating colleges, universities, and technical schools in California. Some key facts about the Cal Grant program are:

  • The Cal Grant is gift aid and you do not need to pay it back
  • You need to meet certain financial, academic, and general requirements in order to be eligible for one of the Cal Grant awards
  • There are several types of Cal Grant awards, based on factors like when you are applying for financial aid, what type of college or institution you attend, and your income level. The following provides brief descriptions of the types of Cal Grant awards:
    • Cal Grant A or B High School Entitlement: For eligible current high school seniors and recent high school graduates
    • Cal Grant A or B Transfer Entitlement: For eligible students who plan to transfer directly from a California Community College to a participating four-year college or university
    • Competitive Cal Grant A or B: For eligible students who are not applying as a high school senior, within one year of high school graduation, or upon transfer from a California Community College to a four-year college or university
    • Cal Grant C: For eligible students who are pursuing an occupational or technical program
  • You do not need to figure out which Cal Grant you may qualify for on your own – you are automatically considered for the correct award based on the information you provide when applying.
  • The award amounts for the Cal Grant program depend on which award you have received and the type of institution you attend

Your FAFSA or California Dream Act application serves as your application for the Cal Grant program. Once you have submitted the appropriate financial aid application, you will need to create a WebGrants 4 Students account to access the next steps and secure your Cal Grant, if awarded. For more information about Webgrants, see our post, “After the FAFSA/Dream Act: Next Steps”.

Keep in mind that students who are current or former foster youth, and students who have dependents, may be eligible for additional funds or increased Cal Grant eligibility. 

Important Links and Resources:

  • Read detailed information about the different types of Cal Grant awards and their eligibility requirements here
  • Check out the various Cal Grant award amounts by institution type and award type here
  • Check out the 2021-2022 Cal Grant Program Income Ceiling chart here
  • Create your Webgrants 4 Students account here
  • Learn more about the Cal Grant B Foster Youth Award here
  • Learn more about Cal Grant awards for students with dependents here

Middle Class Scholarship

If you are not eligible for the Cal Grant program but still meet certain financial and general requirements, you may be eligible for something called the Middle Class Scholarship (MCS). Unlike the Cal Grant, the Middle Class Scholarship is only available to eligible students at public, four-year universities in California. Some key facts about the MCS are:

  • In order to be eligible, your family may have an annual income of up to $184,000 and hold up to $184,000 in assets
  • The Middle Class Scholarship is gift aid and does not need to be repaid
  • Award amounts for the MCS are sliding scale and may vary by student and institution. This means that you may receive a MCS at one college you have been accepted to but not another
  • Students who are eligible can receive an award amount between 10% and 40% of the mandatory system-wide tuition and fees at a University of California or California State University campus
    • At a CSU, awards can range between $574 – $2,298
    • At a UC, awards can range between $1,257 – $5,028

Like the Cal Grant, your FAFSA or California Dream Act Application serves as your application for the Middle Class Scholarship. Once you have submitted the appropriate financial aid application, you will need to create a WebGrants 4 Students account to manage your award. You will be notified if you have been awarded a Middle Class Scholarship by August.

Important Links and Resources:

  • Read the top 10 things to know about the Middle Class Scholarship here

Chafee Grant

In addition to the Cal Grant or Middle Class Scholarship, current or former foster youth who meet certain criteria may also be eligible for another financial aid program in California called the Chafee Grant. If you have been in foster care for at least one day between the ages of 16 and 18, as a dependent or ward of the court, you qualify for this award. If eligible, you can receive up to $5,000 per year (that does not need to be repaid) for five years as long as you attend a qualifying institution in or outside of California. 

You will first need to submit a FAFSA or California Dream Act application to be considered for the Chafee grant. If a first-time applicant, you will also need to complete an additional form called the California Chafee Grant application, which you can access through their Webgrants 4 Students account. If the California Department of Social Services is unable to verify your foster status, you will need to complete an additional form to certify your eligibility.

Important Links and Resources:

  • Find detailed information about eligibility, the application process, and more for the Chafee Grant here
  • To learn about your rights as a California foster youth as well as resources available to you, visit the California Office of the Foster Care Ombudsperson here

California College Promise Grant

For California residents who attend a California Community College and meet certain financial and general eligibility requirements, there is another financial aid program available called the California College Promise Grant (CCPG). This grant waives all enrollment fees for eligible students and does not need to be repaid. It is important to keep in mind that the CCPG waives the $46/unit enrollment fee for any number of units you enroll in, but does not cover additional student fees or books and supplies – you will need to cover these costs through the use of other financial aid or out of pocket. 

There are several ways to qualify for the California College Promise Grant, for instance by meeting the income requirements, providing proof of receiving certain federal or state benefits or showing a certain level of financial need. The easiest way for you to determine your eligibility is by completing the FAFSA or the California Dream Act Application, and submitting the California College Promise Grant Application for the specific community college you attend. The financial aid office will follow up to confirm eligibility and potentially request additional documents as proof. 

Important Links and Resources:

  • For a complete list of links to the California Community Colleges that offer online CCPG applications via CCCApply, click here
  • To learn more about the financial aid and opportunities available at the California Community Colleges, check out the website icanaffordcollege.com 

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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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Undocumented Students Budget Worksheet

Undocumented Students Budget Worksheet

You have applied for FAFSA, the CA DREAM ACT, scholarships, so now what comes next? Budgeting! Budgeting your aid is a great way to assure all your needs are met while also giving you the ability to plan around how much money you will receive/ have left. Immigrant Rising has conducted a budgeting worksheet to make it easier for you!

On this worksheet, you lay out your cost of attendance, your scholarship money, your CA grant money, and any other methods of income. By laying out your aid, you are able to see which college is the BEST for you by the aid they give you as well as allowing you to petition for even more aid. To access this worksheet and more resources for undocumented students follow the links below! 

Resources – IMMIGRANTS RISING 

Undocumented Student Budget Worksheet  

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