Can I Apply For A PLUS Loan If I Was Turned Down Before?

You sure can. If you were turned down for a Parental PLUS Loan in the past couple of years you should really try again. The emergency legislation, that we have discussed before, was passed in 2008 has made PLUS loans more affordable.

The legislation made it so parent could apply for a PLUS Loan, through December 31, 2009, so long as they are not more than 180 days delinquent on a mortgage payment for their primary residence or any medical bills. In the past the time limit was 90 days.

There is a FICO credit score check of sorts, but it is to show that there are no adverse items on your credit report. However, if you have filed bankruptcy in the past five years you are not eligible for a PLUS Loan. Previously you had to be current on all debts not just mortgage payments and medical bills. With economy's current state the legislation was passed to to give PLUS Loan Lenders more leeway in forgiving late debt payments. Another plus, no pun intended, if a parent dies, I guess that's not really a plus but the PLUS loan debt is forgiven. This is a benefit over private loans, as with private loans the debt still needs to be paid.

I Have A Subsidized StaffordLoan For My Tuition, But How Can I Get More Money?

You can apply for a unsubsidized Stafford Loan too. If you have maxed out your subsidized loan you can get another $2,000 a year from an unsubsidized Stafford Loan. Many students unknowingly leave Stafford Loan money on the table because they don't know that it is available to them. Your school's financial aid office should make you aware of the additional loan money that is available. If they haven't, get on it.

I Have Been Approved For A Stafford Loan, But I Need More Money For Tuition. Where Can I Get More Money?

Another great federal student loan program, which we have mentioned before, is the Parent PLUS Loan. With this loan the parent borrowers the money rather than the student. Parents are able to borrow up to full amount of the remaining college costs minus any other student aid and other loans. The nice thing is there is no income limit. For the majority of borrowers the interest rate is fixed at 8.5%. If the school is part of the program that has you borrow directly from the federal government, rather than using a third party lender the rate is 7.9%. One thing to consider is only about 20% of the schools are part of the Federal Direct Loan Program.Something else to consider is that you should only apply for the Parent PLUS Loan after the student has maxed on the Stafford Loans. The Parent PLUS Loan is a great option, but Stafford Loans are better because the interest rate is lower.

How Do I Get A Stafford Loan?

To apply for a Stafford Loan, or any other student financial aid, you have to complete the Free Application for Federal Student Aid, also known as FAFSA. Without completing this application you won't get any sort of financial student aid. It is time consuming to complete. So set aside some time to do so. And pack a lunch because it can take a few hours to complete. Don't let that scare you though. You must do this to get a Stafford Loan, but it is worth it in long run. Just do it. Your school or university's financial aid office should be able to assist you in completing this form.

How Much Can I Borrow For My Tuition With A Stafford Loan?

Emergency legislation was recently passed increasing the amount you can borrow with a Stafford Loan by $2,000 a year. This began in the 2008-2009 school year. For Freshman the loan amount is $5,500; Sophomores $6,500; and juniors and seniors can borrow up to $7,500. If you are not claimed by your parents as a dependant you are eligible for higher loan amounts.

Should I Use My IRA To Pay For My Childs College Tuition?

We have discussed this before about using your 401K to pay pay for your children's education. You don't want to hit up your retirement funds to pay for other expenses. Again, with social security going away, what are going to live in on? I hope your kids appreciate their college education, because you are probably going to have to live with them if you don't have enough retirement savings. You could also be jeopardizing their chances for financial aid because the withdrawal from your IRA can be treated as part of your income. You could be making too much money, where as you might not have before the withdrawal. Do not use your IRA, 401K, or any other retirement funds to pay for your children's college tuition.

One piece of good news if you go against my advice and make the withdrawal anyway, unlike a 401K withdrawal, you will not pay a 10% early withdrawal fee if you are using to pay your child's tuition. However, you will have to pay income tax on the amount you withdraw. If you have a Roth IRA though, the withdrawal amount will not be taxed. Though earnings made through interest may be taxed. Bottom line don't do it.

If I Shouldn't Take 401K Loan Out To Pay For My Children's Education, How About A 401K Loan?

This is a similar question to the one we answered regarding taking out a 401K loan to pay off credit card debt, with a similar answer...Don't do it. You must resist the temptation to take a 401K loan out to pay for other expenses. In the state of the current economy it is very dangerous to borrow money from your 401K. Although the economy is improving, layoffs are still occurring. A layoff can happen at any time and if it does your loan will be treated as a withdrawal. You will have to pay income tax on the entire amount you borrowed and if you are under 59 1/2 you will have to pay a 10% early withdrawal on top of it. If you need money for college, federal student loans are your best bet.

Should I Stop Contributing To My 401K To Start Saving For College For My Children?

We discussed a similar question about stopping contributions to your 401k's to pay off credit card debt. I know you love your children and want the best for them. This is going to sound selfish, but you should not stop contributing to your 401k to fund your children's college education.

If you are looking for additional funds to pay for your children's education then it is obvious that you probably don't have an emergency fund either. Right now in the current state the economy is in, it is imperative to have an emergency fund of least six to eight months of expenses.

Again I know you want your children to be able to live up to their full potential, but jeopardizing your financial security is not the way to do it. Also in this point in time, your 401K has probably taken a beating. When people's investments tank their instincts tell them to run, but this is not the time to run. It is the time to stand and fight. You need to keep your money in your 401k and continue to invest even though it doesn't seem like the right thing to do. I am assuming that you have at least ten years until you retire. The reason I am telling you to keep your money in your 401K is this: When the market is down you are able to buy more shares of what you are investing in, and the more money you will make when the stock market goes back up.

Also, you are going to need as much money as you can get your hands on when you retire. With the threat of social security being gone one day your 401k, IRA's, and cash savings will be all that you will have to rely on. If you don't have retirement savings you may one day be a financial burden to your children. So unless you want to work for the rest of your life or live with your children after retirement don't withdrawal funds from your 401k to pay for your children's education. I am not telling you to leave your children high and dry without an education. There are several federal loan programs to choose from, whether it be the military, employer tuition assistance, or loan forgiveness programs to pay for a college education.

Finding Ways to Pay College Tuition

Saving for college tuition these days pretty much requires parents to start saving for our college futures as soon as we're born. But there programs out there to help pay for college.
A great way to pay for college tuition is to start your chosen career as soon as possible. Many employers offer tuition assistance programs. When starting my career in banking my employer, Bank of America, paid my tuition plus for all of my books.

Generally, you need to choose a major in your career field. Of course this should seem like common sense, but it is what most employers require. They want you to be long term employees if they are shelling out the money to pay for your education. In my case, for example, my finance degree fit in perfectly, but accounting, business, etc. would have worked as well. Getting a medical degree would not work with banking for instance.

Most tuition assistance programs require you to pay the tuition upfront and then you are reimbursed at the end of the semester. But the major requirement for reimbursement is you have to pass each course with a "C" or better to get your tuition paid for.

Usually, each semester will relatively cost the same. So once you make the initial investment yourself you can keep using the same money over and over again once you are reimbursed at the end of the semester.

If you have chosen your career field definitely check with prospective employers to see if they offer tuition assistance programs. Even if you don't want to get a degree you can still take a course here and there and help make yourself a more knowledgeable employee. Remember education is power.

Free College Tuition Money...Finding Ways To Pay For College

With college tuition increasing every year about 5% to 8%, students usually begin their careers with massive debt from student loans. The cost of tuition can be overwhelming for most college bound students, but there are ways to help pay those tuition's.

CNN personal finance editor, Gerri Willis and author of the book, "Home Rich-Increasing the Value of the biggest Investment of Your Life", gives us some ways to ease student loan burden.

1. Let Uncle Sam forgive your student loan

Uncle Sam has some programs that can help with the daunting costs of tuition. A private four year college can run you $25,000 a year and Uncle Sam can help you through loan forgiveness.

You must perform volunteer work, military service or teach or practice medicine in certain types of communities to qualify for these programs.

Volunteering Loan Forgiveness Programs

- AmeriCorps: Serve 12 months and receive up to $7,400 in stipends plus $4,725 toward your loan--that amount is expected to increase.

- Peace Corps: Cancel 15% of your federal Perkins Loan per year.

- Volunteers in Service to America: Provide 1,700 hours of service and receive $4,725.

2. Loan Forgiveness For Teachers.

If you are teacher at an elementary or school in an area that has students from low income families, a portion of your Perkins Loan can be forgiven. For up to five years, you can have a portion of your Perkins Loan forgiven for year you teach. Check with your school districts administration to which schools are eligible.

If you are teacher in a high need school and teach math and science you can also get up to $17,500 forgiven from their Stafford loan.

Visit The American Federation of Teachers at AFT.org for their list of other debt forgiveness programs.

3. Cut Medical or Law School Bills.

Visit the American Bar Association (no this isn't amount drinking), for a list of loan repayment assistance programs. Many law schools forgive the student loans if you serve in public interest or in a non-profit position.

Some options for health care student loan forgiveness programs are:

- National Health Services Corps

- Nursing Education Loan Repayment Program

These organizations offer loan forgiveness to physicians and registered nurses who agree to practice for a set number of years in areas that lack adequate medical care--and that includes remote areas or economically depresses regions.

Visit the American Association of Medical Colleges at aamc.org for a list of state and other loan repayment programs for medical students.

10 Things Credit Card Companies Don't Want You To Know. Part 5 0f 10

April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 5 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.

A few summers ago, Vicki Jacobson's college-student son, Craig used his debit card to pay for a taxi ride in Italy. The driver ran his card three separate times as a credit card and three time as a debit card , not knowing that the previous transaction had gone through. Well, I am sure you can guess what happened - Craig paid for that cab ride six times. It took months to clear up the credit card charges, which finally got resolved, but it was much more difficult to get the debit card transactions cleared up.

Why was there so much trouble with the debit card transactions? Debit cards resemble credit cards in all visible ways, but offer the consumer less protection. Some debit cards offer purchase protection, meaning you can replace a damaged item within 90 days, but many did not.

And although unauthorized transactions, such as the three charges on Craig's credit card should be refunded by the issuer, banks are less motivated to speedily resolve cases involving debit cards then credit cards, why is that? Well, debit cards draw on a checking account, meaning they are essentially checks in plastic form. Credit cards are in constitute a loan, so it's the banks money , giving it more reason to protect it.

10 Things Credit Card Companies Don't Want You To Know. Part 3 0f 10

April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 3 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.

Most parents send their children off to college knowing that they will be bombarded with credit card offers, but what parent's don't know is that credit card companies are taking their marketing one step farther, they are hitting up high school students. College students are considered "good risks" to creditors, because they are just starting out and they have unlimited earning potential and now high school students are being put into that category as well.

Robert D. Manning, author of "Credit Card Nation" and a professor at the Rochester Institute of Technology says that most parents do not realize how early a child's name, address, and other information, can turn up in the databases used by credit card companies to market their products- or that children as young as 16 can get credit cards without parental consent.

Creditors know that if kids get in trouble that their parents will usually pay to bail them out.

So as a parent what can you do to protect your child's financial future? Protect your child's information and assume that all requests, however legitimate, will land in a database somewhere. Gift cards, for instance, may offer protection if lost or stolen, but they do require personal information. Manning and other experts advise teaching teens about credit well before they get their first credit cards and monitor their spending as they learn to use them.

Students Give Bank of America More Than 5,000 Financial Tips

I love fresh ideas about money and a great way to present that is through the youngest consumers just starting out in the financial market...College Students

Recently, in a nationwide campaign, Bank of America asked college students to share practical money management tips and over 5,000 students offered advice for saving more, spending less and managing college debt.


"Now more than ever, it takes planning and saving to stay ahead. Students may not think they are in a position to take to take control of their money. But they are," said Farnoosh Torabi, author of You're So Money! How to Live Rich, Even When You're Not, who worked with the Bank on the campaign. "Opening a financial dialogue with your peers is a great first step."

Torabi appears as part of the campaign in webisodes posted on the Bank of America student life website morrisoncampus.com in which she discusses her top tips on how college students can save money. Students can download while visiting the site the Student Financial Handbook, a handy guide full of additional tips on money management.

PAY YOURSELF FIRST- Is one of the first steps that students recommended in managing their finances is a common refrain among professional financial planners.


"Set up a direct deduction from your paycheck," one Virginia Tech University student said, "Even as little as 5% from everything will add up quickly. If it is automatically deducted, you will never see the money and never have a chance to miss it."

Using a personalized financial spreadsheet to create a budget, embedding reminders on electronic calendars to pay bills on time and keeping track of account balance online also were strong recommendations.


"If you check your balance online nightly, you can automatically update the spreadsheet each day and maintain a current balance by subtracting any outstanding and pending items that have not yet cleared your account," a George Washington University student said. "This way you always know what you have, what you have to pay and what you have left splurge."

Textbooks are a significant recurring expense which also represents an opportunity to save. By buying used books or getting access to free books from the library that have been put on reserve, or Web sites that offer free or sponsored text downloads, students said.


Heading into the financial aid season, several students offered practical tips for tapping into a key source of income for covering tuition bills. Fill out the financial aid forms by February 1 to meet school deadlines and stake your claim to financial aid, and complete as many scholarship applications as you can, a University of Nevada Reno student said.

Although, most students in the Bank of America campaign focused on budgeting and spending wisely, others considered the other side of the financial management equation...managing debt, especially from college loans.



"If you can, you should start pre-paying your loan $50 a month, and by the time you graduate you have less to pay off," an Ohio State University student said.

Torabi, a senior correspondent for thestreet.com, offered her own tips to simplify money management for students in this complex economic time, including:


-Planning is key: Knowing what you want in you life, short and long term, can help you better asses your financial needs.

-Set your goals to save: If you have no money, create a practical revenue stream by tutoring fellow students or babysitting, jobs that create opportunities to save.

_Think free first: Seek out and use free resources, check out DVDs from the library and use your student ID to get discounts and access to museums.

I especially like this campaign because it focuses on college students during their financial opinion forming years. The earlier they start good financial habits the better because timing make a big difference when it comes to financial sense. The earlier you start the better.

We'd love to hear from more college students. Give us your money saving and financial planning tips.

The Neighbor Next Door Just Might Be A Millionaire...Part 7

If you read the books "The Millionaire Next Door" or "The Millionaire Mind" you may be surprised to learn that most millionaire's are just ordinary people.

The majority of millionaires aren't living in gaudy mansions or driving Ferrari's. They have average sized homes and drive Ford F150's. They DON'T regularly drink champagne or eat caviar. They drink beer and eat hot dogs. They DON'T wear designer clothes they wear Levi jeans.

In a 10 part series we will discuss the misconceptions many people have about being a millionaire. Truths that may just burst your wanting to be a millionaire bubble.

In part 7 we learn that most millionaires say they were a B student. According to the book "The Millionaire Mind," The average college grade point average for millionaires is 2.9 and the average SAT score is 1190, hardly Harvard material. According to the American Express/Harrison Group study, 59 percent of millionaires attended a college or university.

Millionaires rank hard work, followed by education, determination and treating others with respect when asked to list the keys to their success. Jim Taylor, vice chairman of the Harrison Group says, they also say what they absorbed in class was less important than learning how to study and stay disciplined. Forty-eight percent of millionaires hold an advanced degree, and elite colleges do open doors to Wall Street and in Silicon Valley. For every PH.D millionaire, there are many more who squeaked by. Robert Kiyosaki says, "we cheated like crazy." The only way he survived college calculus was by sitting by the smart kids.

Your Mom is right when she says good grades were the key to success...just not necessarily a big bank account.