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Two Things to Consider Before Going Back To School

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Going back to school is the first step for some to accomplish a life-long dream for many men and women who did not have an opportunity to go to college earlier in life. No matter what’s taken you off the path to education, one thing that can keep you back, forever, is going in too much debt or earning a degree that is essentially useless. Not every college on TV or in your city has the right credentials to set you up for life long success. Before you head back to school this fall, be sure to ask the right questions and do your research! I’ve identified two common areas where people make the BIGGEST mistakes when enrolling back in school.

  1. Accreditation : If your school is accredited, that means that the school you attend has a program that is respected everywhere and meets certain educational standards. If you need to move or want to transfer schools, your new school will accept the courses taken at your previous school and allow you to continue without repeating courses as long as your school is accredited correctly.

There are two types of accreditation! Many of the schools advertised on TV are nationally accredited. Many of your local schools are regionally accredited. Some regionally accredited schools DO NOT ACCEPT credits from nationally accredited schools. This means you can take courses at one school and those courses WILL NOT COUNT if you try to transfer to another school. You’ve essentially wasted money and time.

Ask about your school’s accreditation before you sign anything or enroll. If your school is not accredited at all, your courses will not be considered legitimate and it will keep you back from jobs and other steps in your education.

2. Financial Aid: Paying for school happens in a few ways – scholarships, loans, and paying out of pocket.

Scholarships are funds that you do not have to pay back. This is free money, or, rather, money you’re rewarded based on your credentials, to use for school expenses. Most scholarships are paid directly to your school and will not come to you as an individual check.

However, be aware that nothing is ever really for free. More than likely, you’ll need to maintain a minimum GPA or participation in an athletic or other academic program as per your scholarship agreement. Once you’ve failed to uphold to these standards your scholarship is kaput!

Paying out of Pocket is spending your own money to pay for courses. You will be billed every semester for your courses. If you fail to pay for those courses, you will be ‘dropped’ from the courses and even if you continue to attend the class, the grades or credits will not count on your transcript. This is a great option if you have the money put away but can be dangerous if you run into some financial trouble. Unless this is your last option, it is important to hold on to “your own money” in case a financial burden arise.

Student loans get you in A LOT of trouble if you do not understand the long term implications. Getting your education is an investment and most of us will have to take out some form of loan to get through the process. Remember you will have to pay back this money and, typically, with interest.

Unsubsidized Stafford Loans: These federal loans are not based on need. You can request the maximum amount of loan for a semester to help you cover additional costs such as textbooks. Interest will continue to add up while you are enrolled in school. The amount you owe by the time you finish school will have interest included.

Subsidized Stafford Loans: These federal loans are based on financial need. The interest does not add accumulate while you are in school. Often times they are deferred, meaning, added interest will not take into effect until you’ve graduated college and, hopefully, have found a job bringing in steady income.

Perkins Loans: Like the subsidized Stafford loans, the Perkins loans are federal and based on financial need. The loans have a low federal interest rate.

For the three loans listed above, if you drop below half-time enrollment for 6-9 months, you will need to begin making payments even if you are still enrolled in some classes. Your payment amount will be higher than the total amount of funds you were originally rewarded because interest is added on some loans while you are enrolled, and continues to be added even when you have completed your education.

Private Loans: Banks and other resources can provide private loans for students. Keep in mind that these loans often have higher interest rates and can require you to pay the loans back sooner than the 6-9 month period you get with federal loans.

If and when you are awarded financial aid, it’s important to note that you may receive a refund check. A refund check means that the amount of your financial aid has covered your educational expenses and any remaining funds are for your personal use. In theory, those funds should be used towards your educational expenses such as transportation, books, and other fees.

How to use that money is up to you. BUT you must pay that money back some day and some of it is gaining interest. If you can survive without the refund check money, experts recommend paying that money back to the lender to help keep your post-graduation loan payments lower.

Resources: http://www.finaid.org/loans/

It’s always a great thing to seek higher education, but never a great idea to waste valuable time and money because you aren’t well educated on how the business of education works. It’s much more than just signing up for classes and getting started. Make sure you understand what type of school you are attending and the long-term financial implications of your choice.

Remember, decisions you make today will affect your future.

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