Turning the calendar page to January (seriously does anyone even have a paper wall calendar anymore?)  is the perfect time to think about getting your credit report.  (Huh?)  Because you are entitled to a free credit report once a year and why not use January 1 as your own annual reminder. 

Thinking that you don’t really need to worry about your credit score until after you graduate? Think again... that federal Grad Plus loan that you may have opted to borrow is reviewed for credit eligibility each year.  So that means that a small credit slip (late bill etc. ) in your 1L year  could make you ineligible for the Grad Plus for your 2L  year.   Are you considering taking out a Bar Loan to help support your living expenses while studying for the bar?  Bar loans are only offered by private lenders and all are credit based -not just for their overall approval but also in determining what your interest rate will actually be.  (i.e. good credit = low interest rate and bad credit = high rate).  Want to take advantage of the new  refinancing options on your student loans that so many lenders are new offering- those interest rates are credit based as well.  Even potential employers will review and factor your credit into the hiring decision.

Here is how this works… there are three nationwide consumer credit reporting companies- Equifax, Experian and TransUnion.  You can get a  free annual report from each one of the credit reporting companies  once every 12 months.    So there are two possible strategies...

  1. Order the report from all three companies at the same time so that you can determine whether any of our files have errors across all three agencies.
  2. Request the reports separately for each credit reporting agency at various intervals so that you can monitor your credit files more often throughout the year.

No matter if you want the report from Equifax or TransUnion or Experion- you order it from one place- www.annualcreditreport.com.  That URL is the only one that will provide the report for free. (You may have seen ads for other sites with names that make you think the credit report is free but it is not). 

What will your find on the credit report? Basically the report  contains information about your credit accounts including how much credit you have vs. how much credit is available to you vs. how much credit you are  actually using. There will also be information on your bill repayment history and whether a debt or bill collection is in place against you.

What won’t you find on the report?   Well surprisingly  you won’t find  an actual “credit score” You will need to purchase a credit score directly from the credit reporting companies. But since that score is based on all the information from the credit report it is still incredibly valuable to review the report and make sure there are no inaccuracies or errors which can hurt the calculation of the  credit score.

What do you do if you find something wrong on the report?  Fix it asap so that it doesn’t harm your credit in the long term.   To correct an error reach out directly to the credit reporting  company and fill out one of their dispute forms.  Know that the agency must investigate and respond to you within 30 days. 

Does asking for the report itself “ding” your  credit? No, self-inquiries do not affect your score, as long as you order your credit report directly from the credit reporting agencies, or through an organization authorized to provide credit reports to consumers (like annualcreditreport.com)!

So start the New Year right – begin by  getting  a copy of your credit report  at www.annualcreditreport.com.   You may need that good credit in the not so distant future!

 Contact Info for the consumer credit reporting companies:

  • Equifax: 1-800-685-1111 or www.equifax.com
  • Experian: 1-888-397-3742 or www.experian.com
  • TransUnion: 1-800-916-8800 or www.transunion.com

 

T'was 11 months before repayment
And all through YLS
All the 3Ls were worrying about their loan mess
All the borrowing had been done
All the MPNs signed
And the reality of debt was beginning to shine
When what to their wondering eyes should appear
But a counseling session with financial aid.. to make their loans clear
On Standard,  on  IBR, or on Graduated too
We will discuss what repayment plan makes most sense for you
Would consolidation or refinancing help in your plight?
And  does the future of  Public Service Loan Forgiveness look at all bright?
With calculators and spreadsheets that will give you hope
We’ll finish off by projecting your COAP
And I hear the 3L exclaim as they  leave YLS
"I have a loan repayment plan now and feel a lot less stressed".

That rhyme (in the spirit of the holidays) was meant to reinforce that the Financial Aid Office is always willing to do individual loan counseling sessions to review your entire loan portfolio, repayment timeframe, servicer contact, repayment plan options and COAP eligibility.   Why are these sessions so important (and why do we keep promoting them)? It's simple ... despite the fact that we offer group  workshops on loan repayment and COAP... there is no "one size fits all" advice for loan repayment because:

  1. Everyone's loan debt (how much and why type of loans at what interest rate)  is different,
  2. Everyone's career trajectory and income  is different
  3. And as such (because of 1 and 2) ...  everyone's COAP eligibility is different.

 That's why an individual session is so valuable... beause we can develop a long term financial plan which meets your own circumstances and life. And if you have significant others in your life (boyfriends/girl friends, fiancees, spouse, parents ... whoever) who you want in on this loan repayment conversation, you are welcome to bring them to the session.

So, 3Ls... if you haven't scheduled a session yet.. the proverbial loan repayment clock is ticking.  Contact the financial aid office to get on our schedule for the Spring term when these sessions are in peak demand. 

 

It seems like I am forever preaching the gospel of eating on the cheap at YLS .   By now I am sure everyone knows that “food” is the one discretionary item in your budget that you can control (because you can’t really change how much you are going to pay each month for rent and utilities.) You probably also have heard me  quote a very wise  YLS student who once shared the prophecy- “ buying meals out is one of the most efficient ways to deplete your budget” .

Well there is a great new resource making its way through the graduate school world – “Good and Cheap: Eat Well On $4/Day” by Leanne Brown.  Leanne actually wrote “Good and Cheap” as part of her master’s in food studies at New York University.  The original premise of her study was focused on the critical question “how well can a person eat on the $4.00 per day given by SNAP (the  U.S. Supplemental Nutritional Assistance Program – aka Food Stamps)? .

Leanne proved that based on maximizing every ingredient and using economical cooking methods there are numerous nutritious and affordable options.  Her upcoming book (self-published as a result of a  successful  Kick Starter campaign where for every book funded a copy would be donated to a non-profit organization)  not only includes a wealth of her nutritious budget conscious recipes but also includes tips on shopping, creating a basic pantry, and mastering some essential  staples (i.e. pizza dough, flour tortillas, even croutons!). Now the book won’t officially “drop” until June 2015 but in advance of that you can visit Leanne’s website where she encourages downloading a PDF version so you can start cooking meals that are healthy for your body and budget.

So this is my one (and most likely only) chance to join the myriad of “fashion bloggers” out there.  Definitely a bucket list item I can now cross off.   
So what’s the connection between my real life world of financial aid and the far more interesting world of fashion… budgeting of course (my favorite topic of conversation).

Our 2013-2014 Cost Of Living Survey indicated that on average, YLS students spent $642 on professional clothing last academic year (a significant jump of 18% over what was spent the prior year). That’s a big bite out of the already stretched student budget.

But the reality is that you can indeed “dress for success… for less” as our October 20th Financial Literacy Lunch Workshop proved. Fashion editor Shanelle Rein Olowokere (In Style, Entertainment Weekly, People Style Watch, PEOPLE.com and currently senior fashion editor at Goodhousekeeping.com) brought her fashion sense and sensibility to YLS.  

Shanelle recognized that YLS students face two distinct challenges- dressing for the nonprofit/public service work environment and dressing for the far more conservative and formal law firm setting.  With clothing generously provided by THE LOFT, Shanelle used real YLS models to demonstrate two looks for both the  conservative (think firm or clerkship) to casual (nonprofits or new media) work places.   Our special thanks to our two models Chelsea Lane-Miller’ 17  and Irina Anta’ 15 for agreeing to walk our makeshift runway (well, okay just the amphitheater stairs in Room 127) .   In the photo on the left, Shanelle (right) highlights some of the features on Irina's "casual work environment" LOFT look , while Chelsea (middle) waits to show a LOFT suit appropriate for "firm wear".  And Shanelle didn’t forget the men- she included in her presentations visuals for optimum casual and conservative looks for them as well. 

So here are some of the key takeaways that Shanelle shared-

1) The absolute need to find the right fit- whether that means ignoring the sizing label, making friends with your local tailor or just knowing  your body enough to realize what looks right on you!

 2) Have a shopping strategy- know how much you can spend (i.e. the all-important budget), know what you need (make a list!), research on line first (saves lots of  time browsing through stores) and shop smart (see something you like… wait for it to go on sale!)

3) Work those accessories- want to express your individual style while wearing a relatively conservative wardrobe? Let your accessories (tie, scarf etc.) do the talking for you.  But don’t forget that you want quality in those accessories so that they fit well and will last … whether in good (aka comfortable) shoes or leather handbags .

Beyond her basic presentation, Shanelle fielded a lively Q&A session with students that touched on every fashion aspect imaginable from appropriate winter outerwear (answer- classic trench coat and wool coat), whether you can wear black shoes with navy pants (answer- absolutely),  if black flat shoes are appropriate (answer- depending on the work environment and if the shoe was constructed well  i.e. no ballet shoes), how to work with a tailor (answer- start  with alterations to some of your less expensive clothing to see if you like their work before giving them any of your higher quality suits or dresses) to whether you can use a nice leather tote bag in lieu of a purse (answer- yes!) . 

Above all Shanelle emphasized how important clothes are to not just looking professional but feeling good about yourself in the workplace, which ultimately help your performance. And she gave tips galore on inexpensive brands, sale strategies (shopstyle.com!)  and continually proved that you can indeed dress well on a budget (provided you make a budget!). 

And so ends this post from the self-proclaimed “Financial Aid Fashionista”!

Remember the basic premise of the vintage game show “Let’s Make A Deal” - you win a prize but then are asked if you want to keep what you have or trade it for another unknown prize that may or may not be better than what you originally had.  That’s basically the scenario you are faced with when considering refinancing or consolidating your student loans.

Right now you know how much you borrowed on each loan, you know the interest rate on that loan and if you use the handy Department of Education Loan Estimator you can project (depending on what repayment plan you choose) what that means in terms of a monthly payment, as well as total interest and principal paid over the life of the loan. But what happens when you are facing the decision of refinancing or consolidating your student loans?

First a little background... historically the only vehicle to refinance or consolidate has been the federal Direct Consolidation Loan under which all your federal loans are basically bundled (not unlike a cable/internet/wireless phone package) to create one “mega” loan with a new interest rate based on the weighted average interest rate (from all your individual loans) rounded up to the nearest 1/8th of 1%.   Since it is a weighted average rate in some cases (if your overall loan portfolio is made up of loans at high interest rates – like the Grad Plus) you may actually end up paying more over the life of the loan then if you kept the loans individual.   You also lose the ability to triage your loans and pay down the highest interest loans first if they are now combined. But for some people the idea of managing multiple loans (1 or 2 for every year of Law School) makes a consolidation seem like a manageable benefit.  In addition because it’s still a federal loan you still get the advantage of multiple repayment plan options, the ability to switch plans, can still participate in Public Service Loan Forgiveness, and have generous options for medical and economic forbearance.

But evolving on the student loan landscape over the last couple of years have been lending agencies that will refinance your federal student loans. Some of these agencies are traditional “bank” lenders and others are new ventures created just for the refinancing opportunities. Many of these new companies operate somewhat on a crowd sourcing model where company investors and borrowers are connected with one another for mutual benefit.  Many offer borrowers the chance to build their own community for their personal and professional advancement through social and networking events.   It’s a new and very different way of looking at student loan repayment and very well may be the wave of the future.

In refinancing the borrower upfront likely makes two critical decisions: 1) which loan term (i.e. 3 of years to repay the loans) and 2) the choice between a variable and fixed rate.  These two decisions are actually interconnected in that the combination of choices drives the ultimate loan payoff amount.  A fixed rate (more than likely higher than a variable) partnered with a long repayment term (say 15 years) is always going to yield a more expensive loan repayment than the variable rate at a short repayment (say 5 years).  But what if you have a fixed rate on a short repayment vs. a variable rate on a long repayment- that combination may be much harder to analyze.  Also with private refinancing your interest rate (whether fixed or variable) is going to be based on your credit (good credit = low rate and not so good credit = higher rate). So depending on what your interest rate turns out to be also drives which combination of the choices will be most advantageous to you.

 Weighing the overall value of the fixed vs variable rate is also challenging.   The fixed rate will be higher but will be stable throughout the life of loan making long term projections of repayment far more accurate. The variable rate may provide a financial gain over the life of the loan but given that the rate will change makes projections far more “guestimates”

The only way to really assess what to do with your loan among the choices of: 1) keep as is, 2) consolidate or 3) refinance is to try to do a side by side comparison of the following factors: your monthly payments, years in repayment, your total cumulative payments and your total interest paid over the life of the loan. Talk to present loan servicer, talk to the Department of Education’s Loan Consolidation Information Center and your potential  private refinancing lender and make sure you understand fully the terms of each decision.

Finally… let’s talk about the elephant in the loan repayment room… COAP.  Beginning in the January 2015 COAP cycle, federal loans refinanced through private lenders (that meet our definition of a “private refinanced student loan”) will be allowed into COAP. And while that sounds like a great development (i.e. if you get a significantly lower interest rate in refinancing you will pay  less in your loan repayment) remember that that also means that we recalculate your COAP eligible loan balance at that new lower interest rate for a new (presumably lower) annual payout.  .  That lower annual payout minus your participant contribution based on income will equal a decreased annual COAP award. More significantly it may mean that you will reach the “income out” threshold (that point where the annual payout equals your assessed participant contribution) at a lower income level.

Lots of options, variables need to be analyzed and evaluating in this refinance/consolidate or not decision.  Welcome to Let’s Make A Deal. 

Want more information on federal consolidation and/or private refinancing of your student loans. See our FAQ on this topic, review the COAP Policy and Procedure Manual  and join us for a webinar “ Frequently Asked Questions –Federal Loan Consolidation and Refinancing (and COAP!” ) on Friday, October 17th from 12:00-1:00 PM EDT (registration info) .

Ouch! Has it really been 6 months since I last wrote a blog post.  Well just because I was inactive doesn’t mean that the great student loan debate didn’t rage on.  Congress and the administration seemed to be in a particular frenzy these past few months in trying to come up with solutions  to the “student loan crisis”.  Much of the fury has been the result of the pending  reauthorization of the Higher Education Affordability Act (up for renewal in 2014) and some of the proposal may really just be  “marker bills”  with more of an intention to “promote” the idea than to actually see any immediate action taken on it.  So although nothing has been approved or adopted (yet) and some have already died… here is a sampling of some of the scenarios that are at least making the rounds on the Hill which could (significantly) impact your loan repayment future:

  •  ExCEL Act (Earnings Contingent Education Loans Act) originally proposed by Rep. Petri (R-WI) in the 112th and 113th Congress (and  co-sponsored by Rep. Polis (D-CO)) – this bill creates a single student loan program (no more Unsub vs Grad Plus vs. Perkins) that is repaid on an income contingent basis (15% of income above 150% poverty) and would use employer withholdings to make payments.  In addition interest would stop accruing on the loan when the total amount of interest accrued (paid and unpaid) equals 50% of the loan’s balance when it entered repayment.
  • Dynamic Student Loan Repayment Act introduced by Senator Rubio (R-FL) and Senator Warner (D-VA)  would replace current loans, subsidies, deferments, forbearances, and repayment options with a single loan called the Income Dependent Education Assistance (IDEA) Loan, and would be repaid through income-based repayment and employer withholding.
  • Financial Aid Simplication and Transparency (FAST ) Act-  proposed by Senator  Alexander (R-TN) and Senator Bennet (D-CO) – streamlines student loan repayments into two options- 10 year repayment or income-based repayment  (eliminating the present Graduate Repayment and Extended (25 year) repayment options ).   Also established a one loan (for undergrad and graduates) program.
  • Investing In Student Success Act – introduced by Rep. Petri (R-WI) and Sen Rubio (R-FL) establishes a regulatory framework for income share agreements. (What do income share agreements have to do with student loans you ask?  It applies to those cases when individuals/organizations provide students with funds for their education in exchange for the student agreeing to make payments linked to their income after graduation) .

The other hot Beltway  topic continues to be the future of Public Service Loan Forgiveness (PSLF).  The President’s 2015 Budget Proposal called for capping the (currently uncapped) total amount of loan forgiveness under PSLF to $57,500.  (Why $57,500? Because that’s the current aggregrate,  undergraduate loan limit. ). The proposal would also limit qualifying payments for PSLF to only income drive repayment plans .  More significantly it would calculate married borrower payments for income drive repayment (and therefore PSLF eligbility) on combined household Adjusted Gross Income.   This would close a gap in the current regulation which allows a borrower if married to complete their taxes as “married filing separately” using only their AGI to calculate the income drive loan repayment amount.  (A huge benefit if the borrower is working for relatively low income  (i.e. public service) while the spouse may be making a significantly higher income).  The Republicans countered with the GOP Tax Reform Act of 2014 under which the loan debt forgiven in year ten of Public Service Loan Forgiveness would now become a “taxable event”- i.e. you would need to declare the monetrary“value” of the amount forgiven  as income on your tax return (and be taxed on income that technically you never received but had “in theory”).   Keep in mind as well that we have yet to see the first group of borrowers step forward for their actual forgiveness (that won’t happen until 2017.

Want another example of how really far the politicizing of student loan debt has gone… Check out this recent ad from the College Republican National Committee parodying one of my favorite  television shows- “Shark Tank”  (Posted here only as example of  the level to which this issue is now political fodder  not for any political affiliation or endorsement )   But it does get you thinking   .. with seemingly every one in Washington throwing out ideas on how to solve the student loan crisis... maybe it is time to turn to the “Sharks” to get this done.

You applied for aid and have viewed your aid award letter on the Yale Student Information System (sis) and now… (pause, silence, crickets etc.) 

The letter you received is termed a “preliminary” award meaning there are a couple of things you need to do to turn the preliminary award into a final award:

1) Send the required 2013 tax documentation.   We will actually compare your 2013 1040 tax return to the information you provided on Need Access upon which the preliminary award was made.  If there is a substantial difference between the two an aid award adjustment (either increase or decrease ) may be made.   Remember you need to file tax documentation for anyone whose data you reported on Need Access (including spouse or parent(s) if you are under age 29 by 12/31/14).  Weren’t required to file a 2013 tax return?  Then you need to complete a “Non Filer” Statement on the Forms section of our website.   Big requests … please only send the  first two pages of the 1040 return . Our office printers and fax machines have died slow and painful deaths printing out tax returns that include multiple pages of Schedules. Save some trees, save our office machines… only send the first two pages.  If we need any of those additional forms  for further clarification.. .we will let you know at the appropriate time.   Final step on the tax returns … by federal aid regulations they must be signed  preferably on page 2 of the 1040 where it says “ Sign Here”  (you would be surprised how many people miss that).   Electronic or scanned signatures are totally acceptable. And if you e-filed your returns just sign anywhere on the copy you are sending us. 

2) Send the Notification and Confirmation Form.   The most important part of the 3 page form is Section A where we as are asking you to accept or decline your aid offer. This is also the part where you can indicate how much or how little of the loan funds offered you are actually accepting as well.  A couple of notes on that topic:

  • If you have decided to borrow additional loan funds to cover the calculated parent contribution you would simply add that additional borrowing to your Grad Plus loan . You can never increase the Direct loan above the $20,500 federal limit.  International students should just increase their Yale Graduate and Professional International loan  for any parent contribution borrowing.
  • Think about how much you truly need to borrow- do you really need the full amount of loan funds offered?  Can you budget for less than the $17,000 living allowance to decrease borrowing?  Even a few dollars less in borrowing can save you considerable money in ultimate loan repayment.  Also know that if you do decline any portion of your loans now… at any point during the academic year you can re-accept those funds .
  • The Notification and Confirmation form is flexible… you can change this form at any time between now and the beginning of the academic year.  Not just in terms of accepting and declining funds .. but you can also change loan types as well.  When the interest rates on federal student loans for academic year 2014-2015 come out (on or around June 1) and if you feel based on those loan rates that you want to look at private student loan options ..  you can do that and submit a revised Notification and Confirmation form.    The reason why we ask for this form now (or by the May 3rd 2014 deadline) is  because:
    • We have to know how much aid you are accepting so that those funds appear as “ anticipated aid” and will against  the direct Yale charges of tuition and fees on your soon to be issued (July 1) Fall term bill. 
    • Equally important…  receipt of the Notification and Confirmation Form is our indicator that your file is ready for a final review. Submitting the taxes alone will not trigger that process . 


Is there more to the financial aid process? Oh yes.    Between now and the end of the summer, financial aid requirements including loan master promissory notes , online entrance counseling, asset verification forms, refund requests  will all come into play. All to insure that when you do arrive on campus the bill is paid and you have funds in hand to support your living expenses. But that’s info for another blog at another time.  For now just focus on finalizing the aid award.  

For more information on the aid award process with links to the tax return and Notification and Confirmation Form requirements visit our website.

Yale  Law School’s COAP (Career Options Assistance Program) lends itself to a lot of questions at this time of the year when new admits are most likely comparing loan repayment assistance program (LRAPs) among schools.   And since these LRAPs really function as a significant post enrollment scholarship for you they should be factored into any financial aid evaluation.    But sometimes the complexities and details of these programs can lead to  misinformation or misconceptions, so we wanted  to "debunk” some of the common COAP myths:

Myth 1:  Below the $50,000 income threshold COAP pays for my loans but above that I do not receive COAP support …
FALSE… it’s true that at an income level of $50,000 or below (for anyone admitted post 9/1/11)  COAP will fully support your loan payments. But above $50,000 we use a tiered contribution schedule at which you are expected to put in a portion of your loan payment but where, depending on your debt, YLS is still providing significant support.   COAP is not an “all or nothing” support program.

Myth 2:  There is one income at which all COAP participants “income out” of the program...
FALSE … The income  where your assessed participant contribution (Myth 1)  is equal to or greater than the calculated annual payment  (or at which point you income out) is dependent on your own loan debt, as well as any income exclusions specific to your own circumstances.  There is no one income threshold that applies to all participants.

Myth 3:  The 15/5 amortization schedule in calculating payments  is not as generous as a straight 10 year repayment schedule
FALSE… The 15/5 works like this … for COAP years 1-5 your annual payment is calculated on a 15 year repayment schedule but then at COAP years 6-10 we recalculate your loan debt on a much more accelerated  (i.e. increased)  5 year repayment schedule .  The advantage of changing the amortization schedule in the middle of the program is that you can earn more income in the back five years of COAP and still have COAP eligibility.  If that annual payment never changes (i.e.  a straight  10 year repayment for all years of the program) but  your income increases and your contribution goes up eventually you in will reach  a point where you income out (see Myth 2).  But if that annual payment changes to a higher number (as it does when we switch to a 5 year repayment schedule in Year 6) you have a higher ceiling for income growth and your contribution  while still maintaining  eligibility for support from us. 

Myth 4 : if I leave COAP  or don’t begin COAP as soon as I graduate I can never be eligible again...
FALSE… You have 10 years of eligibility in COAP at any time (provided you still have loan debt).  So you can be in the program for a couple of years, leave  and return to it whenever there is a point in your life where you need COAP assistance to make the loan payments.  And you don’t need to start COAP immediately after graduation to start your eligibility. As long as you enter the program at some point within 10 years of graduating you will still have your flexible 10 years of program eligibility available to you.

Myth 5: COAP support is dependent on being in a public interest career….
FALSE…  what makes COAP truly unique is that the program does not dictate what type of employment you must have to stay eligible.  COAP is solely based on income no matter what career path you may choose. Granted many COAP participants are in public service or governmental work but we also have had participants ranging from concert pianists to record label producers to novelists.   Your loan repayment assistance program should never restrict you from pursuing  your dreams or taking  a new direction in life.

Myth 6: COAP is the most generous, flexible and supportive loan repayment assistance program available... 
    Okay... based on everything above this myth is actually the TRUTH.

Want more information on COAP?  Visit the COAP website  or attend the COAP Workshop at Admitted Student Weekend. Interesting in having the Financial Aid Office work up a projection of what COAP support may look like for you based on your anticipated loan debt and career path… reach out to us  at financialaid.law@yale.edu

Yes I was a skeptic when I heard several months ago that the Department Of Education’s Office of Federal Student Aid was coming out with a new federal student loan repayment calculator to assist borrowers in estimating their repayment.  Previous iterations of their calculators had been cumbersome (you had to individually enter all your loans by type and then by interest rate), manual (you had to subtotal all your estimated loan payments by each of the various federal repayment plans) and duplicative (separate calculators for Income Based repayment and Pay as You Earn projections).

But my immediate reaction to the new calculator (now called the “Repayment Estimator”) was simply that it was truly a “beautiful thing” (seriously I think I started to tear up a little also) .  Because this time Federal Student Aid go it right. The Repayment Estimator is a huge tool in helping not just to educate borrowers on loan repayment but also in assisting them with making the right choices for them.  And here is why it is indeed “so beautiful” :

1) It’s personalized… you log into the Estimator using your personal information and most importantly your FSA (or FAFSA) pin and when you do your loan balances automatically are pulled from the National Student Loan Database system right into the calculator.  And it pulls the balances with the in school  interest that has accrued to date   so you are really getting the most accurate representation of your loan portfolio. No more manually entering each of your loans – POOF .. they are there like magic.

2) It literally tells you everything you ever wanted (or maybe didn’t want) to know about your loans- want your total debt, your weighted average interest rate, who your servicer is, what repayment plans each loan is eligible for… its all there for you!

3) It allows you to consider all your repayment option at once- Standard 10 year, Extended 25 year, Graduated Repayment, Income Based Repayment and Pay As You Earn are all projected automatically and visible simultaneously so that you can easily compare the cost of each option against one another.  The Estimator even projects little “extras”  like the payment increases (“step ups)  that will happen as part of the Graduate Repayment Option and the loan balance that would be forgiven after 20 years of payment under Pay As You Earn or 25 years under Income Based Repayment.

4) There is a lovely parting gift… at the end of the Estimator you have the option to email the calculators results to yourself.   This summary will include a detailed spreadsheet of the repayment plan results you saw on the calculator but also has some great comparative  graphs documenting  projected total amount paid and total interest paid over each plan.  

Bottom line… the Repayment Estimator takes the ever complex world of federal student loan repayment and actually makes it (dare I say it?) understandable and clear.  It’s a powerful resource for anyone in the quest to become a savvy and empowered loan borrower.  Check out the new Student Loan Repayment Estimator today.

At this time of the year, we all look back at the past year, what happened, what did not happen, what we will change in the upcoming year and everyone thinks about going on a diet!  But what is truly important?

Good question, huh?  What is important to one may not be so important to another, right?  But what if that “important” was bothering you and you are unable or afraid to talk about it or bring it to someone’s attention? 

Some problems or issues can be as small as a grain of sand but depending on the problem or issue that is bothering you, it can feel like the size of Mount Rushmore.  Am I right?  And what if the issue/problem/stress is just too much to handle?  What do you do?  There is always a huge relief to talk things out, get feedback/advice/suggestions.  When you talk out loud and actually hear what you are talking about, it may help.  You may find you feel better and possibly at the same time, find that it can be worked out.

January starts off a new year…let’s try and find things that make us happy, ease the stress, talk things out and to those who can help, etc.  Let’s start off the new year on an upbeat note which can only bring positive vibes for the upcoming year!

Spring term 2014, the financial literacy sessions resume (four in total).  Two significant sessions that should not be missed are about Yale Law’s Loan Repayment Assistance Program – COAP…Session I – Coping through COAP, Monday, March 24th (giving you the basics on the process) and Session II – COAP in Action, Wednesday, March 26th (giving you a more detailed narrative on how it works for you and your household).  For those of you who are 3Ls…be sure NOT to miss either one!  As always, great food will be served!

Spring is also the time 1Ls and 2Ls are getting ready to finish out the term and looking forward to summer.  Possibly thinking of using summer funding (SPIF) for the public interest, non-profit positions…2Ls may repeat SPIF or may want to venture into a firm position and 3Ls are getting excited because spring term 2014 is all that is left before graduation!  Believe it?  Three years here at Yale Law are coming to an end.  The next chapter of your lives will soon begin.

For 3Ls, it would be in your best interest to make an appointment to meet with the Director of the Financial Aid Office, Jill Stone, who will review your loan debt, the repayment process, repayment plans (which is best for you), know what to expect after graduation, COAP, etc., which can all be tricky especially if you are new to the repayment process.  Jill has posted a new blog for our 3Ls in regard to all that I just mentioned.  Please review; make an appointment and be sure to bring all of your questions!

The Financial Aid Office is always here to help.  Please call or visit us at anytime…our door is always open.  We are located straight across the courtyard, up the stairs, pass the childcare center…once through the door…you will find us straight ahead!  Visitors are welcome at all times! 

Happy New Year…we are looking forward to seeing you soon!

Kellie signing out…

 

Happy New Year- time to make that all important decision of which calendar you will use for the upcoming year.  

Personally I will be going with a 2014 “Yoga Cats” calendar which despite the fact that I know the photos of the cats in yoga poses are not actually real (aka digitally created) it never ceases to make me laugh each month when I turn the page.  (Sad but true). 


But for you 3Ls we have a very special 2014 calendar for you. No you can’t find it at Barnes and Noble and you can’t order it on Amazon because it’s the …   “YLS Class of 2014 Loan Repayment Countdown Calendar”.

No glossy photos on this calendar- no pictures of cute puppies, no joke a day items… just basic month to month instructions to insure that when loan repayment actually hits you will be ready.  Loan repayment can be an overwhelming process and our calendar is designed to help you understand the nuances of loan repayment and also can make the most effective choices for your financial future.  The calendar is based on simple loan repayment in that it assumes that most loans have a six month post enrollment grace period and as such will most likely go into repayment November to December 2014. Your personal loan portfolio may have some slight differences that would alter that repayment schedule.

So begin in January and follow the steps and you should find yourself in a very good place on that “special day” when your loans do come due.  No need for the “yoga cats” to guide you along the way….


  Class of 2014 Loan Repayment Countdown Calendar

 

You remember sequestration don’t you?  That hot topic that everyone was talking about at the start of the year and now is very rarely mentioned.   Well just because we’ve forgotten about it doesn’t mean it has forgotten you.  And to make sure that it stays on our radar, it’s just given all of you a reminder… yet another increase in your loan origination fees.

Let’s back up a little with a few basics on origination fees in general.  What are they? How do I pay them?  Why do I pay them?  Origination fees on student loans were initially imposed by Congress in the mid 1980’s as a “temporary solution” to budget issues and to reduce the cost of running the federal student loan program. 

So fast forward thirty years and the temporary fees are still in place. According to the Department of Education Federal Student Aid website  “the loan fee is an expense of borrowing one of these loans”.   The fee, based on a percentage of the amount of each loan, is directly deducted from your actual loan disbursement.   You may have noticed that the amount of loan funds initially awarded by the financial aid office differs from the amount that show up on your SIS account- that difference (the gross to the net) accounts for the origination fee that automatically comes out of the disbursement.   But…. In terms of repayment, you are responsible for the full (“gross”) amount of the loan including the fee that never actually disburses to you.

This is why the issue of origination fees increasing might become a concern for you. Because as these fees increase, you will have less net funds to actually apply toward your costs while enrolled and higher debt afterwards.

So back to sequestration, resulting from the Budget Control Act of 2011, the automatic budget cuts under the “sequester” impacted federal student aid programs in a variety of ways one of which was an increase in the loan origination fees. Most students saw the first increase in these fees at the beginning of this academic year when the Direct Unsubsidized loan fees jumped from 1.0% to 1.051% and (more significantly) the Grad Plus jumped from 4.0% to 4.204 %.  But those increases were only year one of the Sequester,  applied during the middle of federal fiscal year 2013. Now they are quickly being followed by year 2 which further increases the fees from 1.051% to 1.072% on the Direct Unsubsidized loan and from 4.204% to 4.288% on the Grad Plus. 

The new increase in fees will impact any “new” loans disbursed after December 1, 2013.
So if you have an academic year loan awarded last summer for which a fall disbursement has already been made and a spring disbursement is pending – your fees will not change between the two disbursements- it’s still considered one pre-existing loan. BUT if you initially declined all your loans and are now deciding to accept them for Spring - those new loans would be subject to the increased fees.  In addition, if you choose to increase an existing loan – that increase (because it’s recorded as a separate loan on your loan portfolio) would be subject to the new fees.

What is the increase actually costing you?  For a $25,000 Grad Plus loan the total origination fee based on the new 4.288% means that $857.60 would come right out of your loan disbursement immediately.  But you are still obligated to pay back that $857.60 as part of your total loan debt … which based on a 10 year repayment schedule at the current Grad Plus interest of 6.41% equates to a repayment of $1164.38 on those fees alone.  Put yourself on the 25 year repayment plans and now those same fees cost you $1,723 over the life of your loan.   Again,  all for monies that you never have your disposal but for which you then pay back with interest.

So what happens next…   when will the next hike in the origination fees happen given the fact that Sequestration is a 10 year process? Ah… for that question my trusty Magic 8 Ball shows a reply of “Cannot predict now”. 

 

 Any 3L who has already come in for a loan counseling session has probably heard my (overused)  analogy of “ getting on the COAP train and riding it to the end of the station”, meaning determining  a way to maximize your COAP benefits for a full ten years of eligibility.   Well, there’s another train that you may also wish to ride either exclusive of or in tandem with COAP…. Public Service Loan Forgiveness.

Public Service Loan Forgiveness was initially established by Congress with the College Cost Reduction and Access Act of 2007.  And despite the fact that its been around for 6 years, as a recent article in the New York Times reported,  the program has been underused.  The Consumer Financial Protection Bureau has even developed an “Employer’s Guide to Assisting Employees With Student Loan Repayment”  to encourage public service employers  to start actively  promote PSLF among their workforces. 

So why aren’t more people taking advantage of this  “free” loan forgiveness?   Two factors come to mind:
 
First, while the program was launched in 2007,   the Department of Education had no system in place to actually track public service employment until 2012 (yes five years into the program!).  But now that a system has been established  with an annual ‘Employment Certification for Public Service Loan Forgiveness Form”  and a loan servicer  (Fed Loans) appointed as the sole servicer for borrowers in this program, these issues should be addressed going forward.

Second, as the article in the Times references, is the complexity of who gets PSLF for what loans under what conditions.   Basically PSLF works this way…  IF the borrower makes 120 separate, one time monthly payments IN certain loan repayment plans WHILE maintaining working in a public service organization(s) during that 120 month period THEN the borrower may have the remaining balances on the Direct Loans forgiven.   For more information on what the IF, IN, WHILE AND THEN really means – see the federal PSLF website for the program’s specific eligibility requirements.

Because what I wanted to focus on in this post are the two questions I get asked most frequently by students considering PSLF :

Question 1: If I have COAP,  why would I need Public Service Loan Forgiveness?  

The general answer in most cases would be, if you have full COAP eligibility for all ten years of COAP (again the COAP train analogy), then most likely you would not even need to consider Public Service Loan Forgiveness as an option. But given changes in your own income, the addition of a spouse income, accumulated assets or even the amount of your total debt burden, there may be situations where based on the COAP formula you “income out” of COAP (i.e. your assessed COAP contribution surpasses the calculated COAP repayment amount based on either the 15 year repayment in COAP years 1-5 or the 5 year repayment in COAP years 6-10).   In that situation if you  were not eligible for COAP  but still were employed in public service  (and committed to it for the balance of the 120 loan payments) then PSLF might be a viable alternative for  you. The issue would be that you would have to have a sense of that happening right from the outset of your loan repayment to insure you got on one of the eligible PSLF repayment plans from the get go and started banking those 120 payments as soon as possible. This is where one of our loan repayment counseling sessions can really assist you because part of that process is actually estimating your COAP eligibility (based on projected income and loan debt) for the full 10 years of COAP so that you can see how long you might receive support and if you should be making accommodations for PSLF as an option.

Question 2: How likely is it the Public Service Loan Forgiveness will be around when I actually need it? 

We have no indications that PSLF is going anywhere yet this question continues to haunt us Financial Aid folks.  Why? Do the math.. the program started in 2007 which means the first “graduating class” (i.e. the first group of borrowers to complete the 120 payments) won’t happen until 2017. That’s the magic moment when all these people (who up until last year when they required people in PSLF to identify themselves we had no idea  existed) will step forward and ask the government to forgive the balance of their loans and write off their debt.  Why is that significant?  Because unlike other federal loan forgiveness programs where the forgiven debt is a taxable occurence  (i.e. must be declared as income by  the borrower in the tax year in which it is forgiven) in Public Service Loan Forgiveness the forgiven debt is not taxable .  So while you could argue that the actual forgiveness of PSLF loans doesn’t have a direct cost to the government (these are all federal loans so the debt is “written off”) it could have a significant tax loss which may make it a target for review.   On the optimistic future side for PSLF it should be noted that PSLF is not subject to appropriations or the budgetary process so literally it would take an act of Congress for it to go away.   And if that were to happen (switch to pessimistic side) one would also hope that individuals currently clocking time in the program would be grandfathered to completion.   The reality is that I don’t have a crystal ball capable of predicting the long term future of PSLF let alone any other federal aid program. 

Want to learn more about if Public Service Loan Forgiveness is right for you or how it can work with COAP?  Come to our COAP In Action workshop this spring where we dedicate a portion of the session to the specifics of PSLF. Want an individual loan counseling session to chart out your COAP eligibility?  Contact the Financial Aid Office at financialaid.law@yale.edu.

  “I thank you for introducing me to the law, to my many friends, to my husband and I thank you for opening my eyes to the world around me in a way that I had never experienced.”  Those words spoken by Secretary Hillary Rodham Clinton’73 while accepting the Award of Merit this month were nothing short of profound and spoke volumes about the YLS experience.  Being grateful, expressing appreciation and, yes, simply giving thanks are such a central part of the fabric of the YLS community.

That’s why every year at this time we notify students that the need based institutional scholarship they received was supported through one of the endowed funds established by a YLS donor.  And as such, we ask you to acknowledge the support you have received with a simple thank you letter or note (whatever you wish to call it) to that donor.

And each year we have the students who can write amazing opinions, memos and SAWs for class develop a severe case of writer’s block at the thought of composing a thank you note.  “What do I say to this donor who I have never met”  is a common refrain.  Actually it’s very easy … because what the donor wants to know above all else is …. you!  Our donors take great pleasure in seeing that their funds are actually supporting “real” YLS students.  So talk about what you know best… yourself. Tell them why you came to YLS, what courses you have found the most rewarding or challenging, talk about clinic work, SPIF or summer employment experiences, tell them what you hope to do with your life going forward.  Make them realize that their generosity supported a living, breathing law student with goals and aspirations.  And, yes, somewhere along the way in telling your personal story, you should also utter the words “thank you” for their support of your scholarship.

Remember that what you and our donors have in common is that Yale Law School connection that Secretary Clinton articulated so well.  Many of our endowed funds are established by alumni themselves or by the family members or professional colleagues of an alum as a memorial or honorarium.  It is in essence a “pay it forward” movement that celebrates not only the donor’s or honorees’ Yale Law School experience but insures that the same experience is then passed forward to another generation of students through their scholarship support.  (And with the hope that someday you too will reflect back on your YLS experience and find a way to “pay it forward” yourself).

Think of the whole process as Thanksgiving coming a little bit early… minus the turkey and stuffing… but with the same sentiment of gratitude and appreciation for what you have received. 

A reminder for those of you with scholarships from our endowed funds…. What’s more fun than writing a thank you letter alone? A thank you letter writing party! This annual event which will be held November 4th,6th  and 7th from 6:30-8:00 p.m. at Ashmun.    Get inspiration and encouragement from your peers to write your thank you and share in some dinner, drinks and dessert. 

 The recent Bipartisan Student Loan Certainty Act of 2013 sped its way through Congress and the President’s desk on its way to significantly changing the federal student loan landscape. Let’s take a looks at it and see what are the upsides and what are the downsides….

First I need to say up front  that anytime I see the words “bipartisan” anything I have to believe it’s a good thing.  So let’s  acknowledge that this really was a good faith effort on the part of Congress to address the student loan crisis.  How effective their solution will be in providing real term debt relief may be difficult to assess in the immediate.

The major change of this act was to move  the present federal loan system from one where Congress established interest rates to a system where interest rates  are linked to the financial markets.  Every academic year a new interest rate would be established for both Direct Unsubsidized Loans  and Graduate Plus Loans. The rate would be based on the high yield of the 10 year Treasury Note (T-bills) prior to June 1 plus additional add-ons of 3.6% for the Direct Unsubsidized Loan and 4.6%  for the Grad Plus Loan.  So for academic year 13-14 we are looking at a 5.41% interest rate on the Direct Unsubsidized Loan (previously 6.8%) and a 6.41% interest rate on the Grad Plus loan (previously  7.9%). 

The most common question asked of any loan regarding interest is … is this a fixed or variable rate? And the great answer regarding these new student loan  is that it’s termed a “fixed-variable” rate.  (Seriously that’s a better oxymoron than “jumbo shrimp”).  What it means is that while the interest rates will change and be re-established every academic year depending on the T-bill and market, once that interest rate is established it will be locked in for the life of the loan through both your in-school enrollment and your full repayment.  What that translates to is that you could end up  finishing YLS with six different loans (a Direct Unsubsidized and Grad Plus per year for three years) all with different interest rates.  That could make loan repayment just  a little challenging but also may afford you a good opportunity to pay off your loans strategically using a “debt stacking” model (i.e. pay off the highest interest rate loans first). 

It may also make accepting your aid award each year difficult, as you would not have confirmation of what your loan interest rates would be for the forthcoming academic year until after June 1 annually.  It would put you on a very tight timeframe to decide if you would then take the loans at that rate or perhaps look at private loan alternatives  and get it all sorted out by the time the August 1 bills are due. 

Probably the biggest unknown out there is how high can the interest rates rise and ,depending again on the health of the market,  how fast would it get there.  As a safeguard, Congress did build “maximum” rates into the “fixed-variable” plan… for Direct Unsubsidized it’s a 9.5% rate and for the Grad PLUS it’s 10.5%.    The reality is that if the economy improves these rates could increase quickly (some experts are even predicting that as earlier as 2015 we could already exceed the existing 6.8% on the Direct Unsubsidized loan.).  Though the Congressional Budget Office predicts we would not reach the maximum interest rates within the next ten years.  We all want fast economic recovery but we may be developing a culture of current students who need it to happen at a slightly slower pace until they graduate.

So why did Congress take this approach in addressing the student loan crisis?  According to the bill’s proponents the measure was a “victory” for taxpayer who won’t be forced to subsidize student loan rates arbitrarily set by politicians.  In addition the bill is estimated to reduce the deficit by $715 million over the next decade.  Graduate and Professional students, the often ignored in the student loan debate,  probably also want to applaud the fact that the bill actually addresses their loans. 

Critics of the bill (including many student and consumer groups) are worried that the maximum caps are still far too high and should have been set lower to protect future borrowers – i.e. are we offering an immediate interest rate reduction to today’s current  college student but on the backs of our current middle schoolers.  

And the other question behind all this is… is how permanent is this solution?  Would this all change (again) when Congress takes its rewrite of the Higher Education Act this Fall?  Stay tuned.

Part of my ritual for another school year is a blog entry targeted to our new 1Ls basically focused on “living on the cheap” in New Haven.   I could certainly give you my own ideas (like if you shop at IKEA check out their “As Is”… department first where not only can you save money but your furniture will already be put together for you – okay that’s equally a budget tip and equally “I am just lazy” tip).  But this year I decided to change it up a little and go to the actual source… real YLS students who have learned (in some cases the hard way) how to save, sacrifice and manage on a student budget.   I put out a call in early summer to our rising 2ls and 3Ls asking them to share with our incoming students their money management strategies and was amazed at their resourceful responses:

Most of the students agreed that the most challenging part of the student budget centered on housing/rent, transportation, food and books.  That being said here are their creative solutions (with a disclaimer that the Financial Aid Office is not endorsing any strategies or vendors … we are simply stating that this is what students do…):

HOUSING/RENT
 “Pay your rent for the entire semester ahead of time so that you don’t have to think about it. It really reduces the stress surrounding finances to have the biggest expense taken care of.”

“The hardest part of budgeting is paying your January rent, since the second semester doesn't start until after winter break, you don't get the second round of loans until late January. At the start of the semester, set aside all the cash you'll need for rent into a savings account (or wherever) and then budget with the rest. A lot of us 1L year didn't do this and had to scramble in January to make ends meet. “

“If you do not have a roommate, split utilities like internet with neighbors.”

“You can make small adjustments to your food budget, but let's not ignore the elephant in the room: Don't live in expensive downtown high-rise apartment buildings just because it's easy or because everyone else seems to be doing it. You'll have plenty of time to live in your own private mediocre high-rise apartment once you're practicing law. Instead, find a room in a cute house in East Rock, Wooster Square, the Mansfield Street area, etc. You'll save $400-600/month. If you do that, you'll never have to worry about your food budget. Don't be afraid to explore New Haven's "outer" neighborhoods!”

“My advice is simple (for single people): live in East Rock with roommates. Rent is my biggest expense by far - by keeping my rent low, I've found living on the budget is really a piece of cake. “

TRANSPORTATION/TRAVEL:
“Get on a bike and go buy groceries.  Homemade meals are the golden path to saving a ton of money.  It can be hard to get around in New Haven, so a bike can be a great option to get exercise, bask in the sun, and buy the stuff you need.  “

“Being in a long-distance relationship can really strain your budget, but planning ahead can help. If your significant other is an Amtrak ride away, buy a Student Advantage card to get discounted train travel. And book those tickets well in advance, even if you aren't sure that you can actually travel on that day. Fares are much lower two months out and it's easy to cancel or modify reservations - there's no fee and you can use the credit towards a later trip.”
“Book your Amtrak or Mega Bus tickets in advance. Prices go way up closer to the date you're traveling.”

“The key to saving money for me has been signing up for frequent flyer miles and credit cards that give me rewards so I can spend less on transportation to the west coast.”
 
“Sending my car back home was the best financial decision I could have made. With parking and upkeep expenses I was barely getting by, but without a car I'm able to live within my means. I just get my heavy groceries delivered through Peapod and buy fresh items from the co-op.”

SHOPPING:
“Shop at Savers!!!!  Savers has furniture, home supplies & appliances and pretty awesome clothes.  There are some real treasures there. “

“Connect with current or, ideally, recently graduated students to see if they can get some furniture.  Alternatively, Craigslist is a great resource.”

“Carpool with a few other students every 3-4 weeks to Costco or Trader Joes in Milford and stock up on essentials.”

“If you shop online, use Ebates.com--you get cash back for most major retailers. It adds up!”

FOOD/MEALS
“Make food that freezes well and divide it into individual portions (and freeze it) so that you don't have to resort to takeout when life gets hectic. “

“It's surprising how much money you can waste on small expenses like study snacks during the day. To save money, stock your locker with snacks you've bought in bulk.”

“Attend events at YLS. Great way to get tasty free food and learn something new.”

“Make your own lunch or buy food from food carts… cook for yourself as much as you can.  The dining hall has a microwave, plates, utensils, napkins, basic condiments.  There's even a fridge on the other side of the building.  You can really cut costs by bringing your own lunch to school or attending almost-daily free lunch events.”

“I try to pack lunch at least three times a week. And I almost always cook dinner for myself. Buying meals out is one of the most efficient ways to deplete your funds. Plus cooking will impress potential dating partners. “

“I try to buy liquor at the big store next to Trader Joe's.  I get someone with a Costco card to take me shopping there.  Don't eat out! Save it for special occasions. Pack a lunch from home or go to an event with free lunch.”

BOOKS:
“Don't buy books until you've had a couple weeks in your classes.  There may be some classes for which it's more sensible to use the copy the library has on reserve.  This is particularly for professors who give a lot of reading outside of the textbook.  If students are anything like me and can't help highlighting, underlining, and taking notes in the text while reading, scanning and printing the pages you need really works.  At the most, you'll spend $60-$70 on printing per class over the entire semester.  That probably amounts to a third of what you'd pay for buying the book.”

“If you HAVE to buy the book, make sure to check the Initiative's book fair at the beginning of the semester, in addition to the ongoing Google doc that YLS students maintain to sell books (2012-13 version available here).”

“You might be tempted to pay more for your books and for shipping so that you can have them for the first day of class. But don't do it, shop around and find less expensive options. “

“Books are a major expense and there are a lot of other ways to get the readings (friends, copies from the library). My year, someone from our small group got the books from the library and scanned all the readings for the first week and sent them to the group. That way, if the less expensive book didn't ship for a week or two, we were still all covered.”

“You can also rent books from the book store for a lot less than buying them (though you can't write/highlight in them). So keep that option in mind.”

BUDGETING IN GENERAL
“Do your best to estimate your utility bills and other bills related to living so that you can get a better idea of how much spending money you'll have once ALL of your bills are paid for the semester. Divide the excess into weeks --this is the MAX that you can spend each week. Putting the money into a separate account will reduce confusion about how much money is available to go out with friends, shop, etc. “

“I think it's helpful to make an actual budget in Excel at the beginning of every semester. Then at the end of each semester go back and see how well you stuck to your plan and revise for the next semester as necessary.”

“I set up a monthly budget in August and update it periodically to keep track of my expenses. I usually overestimate (within reason) all budget line items so I have a cushion at the end of the semester.

“I also use mint.com, a budgeting app. It lets you set monthly budgets and makes it super easy to keep track of spending.”


My thanks to all the 2Ls and 3Ls who contributed their suggestions and their first hand experiences living on a “fixed income”.   Keep in mind that the Financial Aid Office has budgeting tools available to help you. In addition we will be kicking off our Financial Literacy Lunch Workshop series this year with a workshop on budgeting and credit on September 25 which includes one of those “valuable” free lunch opportunities.

 Okay, I couldn’t resist adding one more to the myriad of over used Top Ten Lists out there (David Letterman what have you wrought in our society!!).   But this is a pretty important one to at least take a look at because it’s all about what you need to do to insure your financial aid actually materializes to pay your tuition bill and actually is accessible for you to pay your own bills.  So… (drumroll....)

#10 – You will not receive a bill - it’s true..…not in the sense of a bill mailed or emailed to you directly.  What you will get is an email that a July 1 billing (due August 1) for charges for the Fall 2014 term is available for you to review on the Student Information System (SIS). 

#9 – You may not need to actually pay the bill – if you have accepted enough financial aid between loans and scholarship funds to fully cover the Fall term (i.e. that’s 50% of your total aid for the year) your financial aid will appear on the July 1 billing statement as anticipated aid.  Provided you have enough accepted financial aid to cover the bill, you will not need to make any payments on the due date of August 1.  However, the only way that your financial aid appears on your bill is if you have completed the financial aid process by submitting all required tax returns and the Notification and Confirmation form.

#8 – You may need to actually pay the bill – if you have declined financial aid, intend to pay on your own or have not accepted enough financial aid to cover the Fall term bill you will owe a balance that must be paid by August 1, 2013.

#7 – There are consequences (bad things) if you do not pay the bill in full by the deadline… including late fees added to your account and holds (including a registration hold if the bill is not paid by the time you get to YLS which will prohibit you from registering with your class and getting your course schedule).

#6 – Your loans are not really loans yet…there are steps that need to happen in the summer to actually “set up” your loans.  You will get an email from Student Financial Services mid-summer (usually mid to late July) instructing you to complete loan paperwork electronically on the SIS system including a promissory note, truth-in-lending statements (TILAs), Title IV authorizations and an entrance counseling session (which are not counseling sessions at all but an online information survey).   Documents will differ depending on what type of loan(s) you have and you  will also need to complete separate promissory notes for each loan (including both the federal Direct Unsubsidized and Graduate Plus loans).  

#5 – The Asset Verification Form is the final piece of the financial aid puzzle - this form must be completed within the window of after July 1, 2013 and by August 1, 2013 (no earlier and no later) allowing us to substantiate the estimate you made on Need Access for your total assets (and upon which we based the asset contribution in your aid award).  Depending on the balances reported on this Verification form aid awards will be adjusted (both increases and decreases).  Find this form in your Admissions Binder or on our website.   Failure to submit by the deadline will put a hold on all financial aid funds.

#4 – Financial aid (loans and scholarship) disburse three days prior to the start of the term - with no exception.  That’s in keeping with federal regulations and there is no getting around that.  What that means is there is no “early” disbursal of aid for any financial reasons or hardships.  So you will have to come prepared to pay for critical things you need (shelter, food, etc.) with your own funds from the time you move to New Haven through orientation.

#3 – Refunds on Financial Aid need to be requested in order to disburse.   Refunds are the technical term for financial aid funds you have accepted for the sake of your own living expenses. Refunds are generated when all the Yale direct charges are paid and there are still excess funds on your account. However, in order to gain access to these funds you must “request a refund” on the SIS system. And you need to do this each semester or anytime you want a refund (i.e. those funds are not going to come to you automatically just because they are yours).  And the earliest you are going to receive a refund is the first day of term. But again because there is no set or guaranteed date for the refund (albeit per federal regulations schools have 18 days from start of the term to issue and Yale does an extraordinary job of getting refunds to students in a timely manner)  make the necessary allowances in your cash flow to survive.

#2 – There are things you can do to expedite the refund.  First, sign up for automatic deposit so that the refund is deposited directly into your own bank account and you are not waiting for a paper check to be issued.  Instructions on this process can be found on the Student Financial Services website .   Second, request the refund a couple of days before the first day of term so that as soon as the excess funds are generated the refund process will already be in process. 

#1 – Reach out to the Financial Aid Office for questions and help.  As as you have just read a lot of fairly complex things need to happen on a certain timeframe, in a certain order over the next few months to ensure that you actually have funds in hand come the first days of classes.   Don’t let a missed step leave you without the money you need.  (Try as some have you can’t survive by living off the free candy that the Financial Aid Office always has available in our candy dish).  So call us, email us or come visit us anytime if something in the process needs to be clarified.

 I know that this is the time of the year when our new admits are scrambling to find housing and put deposits down before someone else snatches up a good apartment.   Lots of pressure to insure that you have a place to actually “land” when you get here in August. 

And not wanting to add any additional pressure onto those tough, timely choices but…. thought it would be worth just throwing out a few numbers which show why we advocate that students give serious cost consideration to finding roommates.   Yes, I know that the thought of sharing space with someone you barely know at this stage of your life probably just makes you groan.    Are they going to “mistakenly” eat your peanut butter… probably yes?  Are they going to play some unbearable (you fill in the genre) music night and day … most likely.  And are they going to have a whole warren of dust bunnies living under their bad?  Absolutely.    They will invariably do things to annoy you and impede your independence.

But what they will also do is save you considerable money in your student budget.  Here’s why we know that… as some of you may have read on the blog post "The Means to Live Within Your Means"  we do an annual costs of living survey among current students to assess if the number we use for “living expenses” in the student budget is  accurate (which it is).  What that survey also shows us is the overall cost differential between living alone, living with one roommate and living with two or more roommates. 

Monthly Cost Comparative

Using  the example of the cost differential of single to one roommate..  that’s  $203 per month or $1,827 per academic year or $5,481 over a 3 year JD degree.   So let’s say that you chose to live alone and let’s suppose that you then have to borrow ( in a Grad Plus loan)  the additional funds of the cost differential in loans in order to make up for that extra expense of living alone.   That $5,481 extra  you borrowed over your 3 year enrollment translates to $7,946 on a 10 year loan  repayment and $12,582 on a 25 year loan repayment.   (And that is not factoring in the interest that is building on the borrowed amount while you are enrolled). So you just spent at a minimum $7,946 to live without a roommate.   Is it worth it? 

You are going to hear two things ad nauseum from me during your enrollment. First, you have a limited amount of money to live on in your student budget. Basically you are on a fixed income (and you didn’t even have to wait till social security).  You can live adequately on our student budget provided you make some fiscally sound life choices.     Second, any opportunities that you have to mimimize your borrowing saves you considerable funds in the future. Sacrifice a little now for long term financial gain.  And choosing whether to live alone or with a roommate is one of the first choices you make that will impact both budgeting and borrowing.

Note this blog was updated from its original April 2013 publication.

This is the season when our office gets a lot of requests to match aid awards from other Law Schools.  But as a need-based institution we can only review or change an aid award if there is a change in financial circumstances which affects need.   The existence of an alternative scholarship does not affect need or allow the leveraging of additional YLS funds.

What we will do when you reach out to us with this request is two things. First, we will do a re-review of your Need Access and FAFSA applications to ensure that we have understood your financial situation correctly.  We recognize the fact that the data on those forms often does not tell the full story of an applicant (or their parents) and as such it’s helpful to dig a little deeper into what has been reported. Sometime the student has miscalculated what assets they will have available as of September 1st  (which is the key number we use in calculating the asset contribution – not the data that reflects the assets you had at the time you completed the application). Or sometimes we will note that the student or parent had a one-time influx of income which is not representative of what their annual income truly is. Again, adjustments to the aid award can be made if we determine that the financial need data should be revised.

Second, we will talk with you about how to look at our aid award in the context of other awards you may have received.  We are big believers in the “look before you buy” philosophy. Often we share the following points in how to effectively compare aid awards:

--- As previously stated, it’s not possible to do a direct (my apples to apples analogy) comparison of “merit” based awards vs. need based awards because they simply are not done on the same principles.

--- With merit-based awards that support tuition only, you want to be conscious, therefore, of how you will then fund your living expenses (and what realistically are those living expenses).  If you are borrowing loans to support your personal expenses and living in a high cost city this could be substantial loan debt.  Which then leads to the question:  is this loan debt borrowed for living costs covered under the institution’s LRAP (Loan Repayment Assistance Program)?  Which in turn leads to the larger question of comparing that LRAP to other  LRAPs available.   

--- LRAPS in general have to factor into any aid award comparison as a “back end” scholarship.  It’s not just about what you are getting in the initial aid award to fund those three (short) years of law school,  it’s also about what support you will receive to assist in the long term repayment of the debt.

--- How was the aid award made?   At YLS we make it a point to show on the aid award letter  the entire progressive calculation: Budget minus Contribution (Student, Parent, Spouse) = Need.  Need is first met by unit loan and then by Institutional Scholarship.  You can see exactly how we are arriving at bottom line numbers.  It’s all very transparent and equitably applied to all students.  If you are going to do a direct comparison of aid awards you will need to understand exactly how each element of the award was calculated by each institution. 

--- The cost of living differential is critical.  Many people focus on the tuition and fees in looking at their student budgets. But let’s talk about the importance of the cost of living allotment.  The reality is that the cost of living allotment is the only part of the student budget which you can control (you can’t change tuition, fees or health costs or anything else that will be billed from the school) but you can live on less (and more ) that what is budgeted for living.    So it’s important to understand how exactly each school calculates the cost of living and if it’s a realistic number.  In the case of YLS we conduct a Cost of Living survey annually with all our JD students to assess how much they are actually paying for rent, utilities, internet, phone, food etc.  Last year the average monthly cost for all living expenses was $1,718 which at a nine month academic year was an average of $15,461.   And we presently budget $17,000 in our 14-15 academic year student budget so we provide a buffer for other expenses.  Bottom line -- we are pretty confident that the cost of living allotment is accurate and is going to allow you to make out okay here in New Haven.  

--- Another related issue is evaluating if increased scholarship support is only supporting a higher cost of living. For example, say you received $3,000 more in scholarship support from another institution than YLS but in looking at their Cost of Living allotment in their budget (assuming their budget includes that breakdown)  you see that it costs $3,000 more to live there than the YLS New Haven allotment.  You really haven’t gained anything in that extra $3,000 because it’s just going to pay for a cost of living differential.

We recognize that deciphering multiple aid awards (all usually looking different, calculated different etc.) is a challenge.  We are always willing to talk about how YLS calculates our award.  

 

 

Inspiration for the blog comes in many forms. Take my change meeting with 2L Christina Coutu this past week who happened to see me with a container of my favorite Greek yogurt.   Bonding over our mutual love of yogurt, Christina shared how in a purely cost savings measure she had taken to actually making her own yogurt. (Seriously you can make it?  I thought it only came from the dairy case at Stop and Shop?).  Christina said that when faced with the realization of how much she was spending buying those little individual yogurts she realized she could save some significant funds doing it herself.  And she didn’t stop there.. .she also shared how she makes her own fast, affordable and healthy steel cut oats breakfast (in lieu of high cost cereals) and how she prepackages healthy snacks from home for munchies cravings while at YLS.  Better than anything from Rachel Ray or Martha Stewart, here Christina shares her self-proclaimed “money saving tips and tricks in the kitchen” proving that budgeting can be done while here at YLS:

1. Make your own GREEK Yogurt.

What you’ll need:
* Crockpot
* Thermometer
* Milk (any fat content will work—higher fat = richer/smoother)
* Starter (1/2 cup per ½ gallon of milk of yogurt with live cultures)

Directions:

  1. Heat the milk in a saucepan on the stove or in a microwaveable safe container (in the microwave) until the milk reaches 180 to 200? F.
  2.  Let the milk cool until it reaches 110-115? F.
  3. Once cool pour the milk into the crockpot.
  4. Remove one cup of the milk and whisk in the starter. Stir this mixture into the crockpot.
  5. Place thermometer inside the crockpot (you can simply crack the lid slightly). Cover the lid with a towel to keep the heat in.
  6. Check the yogurt after a few hours to see that the temperature hasn’t fallen below ~105-110? F. If it has simply turn on the crockpot (warm or low setting) until the thermometer reads 110-115.
  7. Leave the yogurt to sit for a total of ~8 hours, longer will yield tangier yogurt.

Notes:
* Once the yogurt has sat for ~8 hours you should have a layer of whey on the top. I like to pour this into a container and use it for banana bread (higher protein content than plain old water). This also makes the yogurt thicker.
* For extra thick yogurt strain it in a colander lined with cheesecloth, heavy duty paper towels, or coffee filters.

2. Make overnight steel cut oats for a fast, affordable, and healthy breakfast

What you’ll need:
* Add-ins of your choosing (suggestions to follow)
* Crock pot or regular pot
* 1-1/2 cups milk (any variety will do)
* 1-1/2 cups water
* 1 cup uncooked steel-cut oats
* 1/2 teaspoon cinnamon
* 1/4 teaspoon salt
* Optional garnishes:

Directions:

  1. Coat inside of slow cooker with cooking spray.
  2. Add all ingredients to slow cooker.
  3. Stir, cover, and cook on low for approx. 7 hours (slow cooker times can vary).
  4. Spoon oatmeal into Tupperware containers (1 cup portions are perfect) and store in the refrigerator for an easy grab and go breakfast.

*I like to pour ¼ cup milk on top, pop them in the microwave, and add additional toppings for a warm breakfast.

Mix-In Ideas
* Chopped apples, walnuts, and apple pie spice.
* Chopped bananas, cocoa powder, and slivered almonds.
* Flaxseeds, canned pumpkin, and pumpkin pie spice.
* Maple syrup and brown sugar.

3. Portion your own snacks into individual bags.

* Sounds easy enough but we’ve all spent way too much money on snacks because hunger strikes during a class break.
* Buy some Ziploc baggies and large sizes of foods you love—portion all of them at once and you’ll never have to worry about spending money frivolously on snacks.

A Few Great Snack Ideas:
1. Dry Cereal: Instead of paying $2 per serving for an individual cup of cereal in the dining hall do your own. A $4 box of cereal with 12 servings is just 33 cents a serving—saving you $1.67 every time you bring your own.
2. Nuts: Any variety will do but I love the flavored varieties.
3. Chips/Crackers: Just divide them up and pack some hummus for dipping.
4. Raw veggies and dip or hummus: Slice, portion, and bag them up. Grab a bag with a few tbsp. of hummus or dip if you prefer not to eat them plain. (mini Tupperware is great for this).
5. Raw fruit: bananas, apples, and oranges are great for packing.
6. Hardboiled eggs: boil a whole dozen at once.

There are great buys [Note: Christina cites Amazon] for stocking up on DIY snack essentials including:  Food Storage Containers (less than $25 and great for your dips, oatmeal, and homemade yogurt), Thermometer (less than $5 and a must-have for yogurt) and the Crockpot (less than $25).

Any other YLS students have their own resourceful tips and tricks for living within the student budget? And yes .. I am talking to you... 3Ls... who have had three years of learning how to make a budget work for you.   If so share them in the blog comments below or email them to our office (financialaid.law@yale.edu) as the topic of their own future blog posting... 

I am writing to make you all aware of what is out there.  I was reading a whole bunch of financial aid information which I receive daily through my email and an article sparked my attention.  It was about so-called debt management companies claiming that they can help graduates “manage” their student loan debt.  The sad reality of this is that people really do fall for these sorts of things.  I guess maybe because it is easier, faster, etc.  Why do I need to invest my time and energy into this…they (debt management co.) can handle it and that is why they contacted me, to “help” me.  And what is the old saying, “if it sounds too good to be true, it probably is.”  So I am writing again (my last blog was Scholarships and the Bewares) about the newest bewares about debt management companies claiming that they can help you manage your loan debt.

Now, would you ever just give your social security number to a stranger?  Why not?  I am hoping the very first thought that popped into your head was, “NO!”  What if you were ever contacted by a debt management company that wanted your personal information (a big red flag should start waving in front of you right about now), and asked you for your federal PIN (personal identification number)?  How about that one?  Oh goodness…again, I am hoping your first thought was “NO!”  NEVER release your federal PIN number to anyone – your PIN holds valuable information of your personal records – and always keep your PIN in a safe place!  Think about it, this PIN is used to log onto the federal government’s website, and when you are logged in, what sort of data comes across the screen?  Yep, ALL of your personal information, right? 

So another beware is that the debt management companies claim that they can help students manage their student loan debt for a small FEE (the fee is set based on the loan debt).  OH boy…a fee????  Okay, hope you are paying attention so far because what did I mention in the paragraphs above?  I mentioned a red flag, the answer no, any of those ring a bell?  I am sure hoping so because no one should pay a fee for something that can be handled by oneself.

The laugh is on them though, there is no reason to hire a debt management company for your loans, you know why?  It is definitely something that you can handle yourself and I am going to help you get started and get through it!

I know what you are thinking…loans, plans, repayment, what call do I make first…where to begin?  Well, a great website to review - www.studentaid.ed.gov helps you with calculating, managing, picking a repayment plan that best fits you, etc.  Also available on the site are calculators to help figure out the monthly payment calculations based on the plan you chose.

Another helping tool is NSLDS – National Student Loan Data System – http://www.nslds.ed.gov/nslds_SA/ is another great place to grab all of YOUR loan information needed regarding your student loan debt.  Remember, when you borrowed your financial aid, you most likely borrowed from the Department of Education (federal government) but the federal government wants nothing to do with the loan business, so what they do is “hand off” your loans to a servicer to maintain.  The Servicer is your maintainer, helper, guide, problem solver, etc.  The servicer that is appointed to your account will be there for the duration of your loan repayment and is there to help with any and all questions you may have now and in the future.  And like I mentioned earlier, this is all done for FREE!  Yep, FREE!

But now for the best part…the Financial Aid Office is hosting a workshop on Monday, March 11th - LOAN REPAYMENT STRATEGIES:  PICK YOUR PLAN (right here at the Law School).  If you have not signed up to attend this particular workshop, you are missing out on some pretty cool information regarding loan repayment, asking the right questions regarding your own situation, when does it all start, how much are the monthly payments, etc…all that good stuff (including pizza and dessert too!)  It is a great way to obtain all the knowledge possible because what if someday you were contacted by one of these scammers, you will be ready to cut them off at the pass and not fall for their gimmicks.  Ha!  

My best advice is to NEVER, NEVER, NEVER accept any entity’s help that charges a fee, asks for personal information, asks for anything that you are not comfortable with, or is there to “help” with your student loan debt management…only go to those you trust….like the YLS Financial Aid Office! 

We are always here to help at any time, during and after YLS!  Come by; ask question after question.  We are here for you!
Office – (203) 432-1688
Email – financialaid.law@yale.edu
Street Address – 127 Wall Street, Rm M13

Come by…anytime!
“Happy Graduates, Happy Alumni”

Kellie signing out…

Any of you who have ever been in my office may have noticed that I have two watercolor prints on my walls both of which are beach scenes.  Why?  It keeps me focused everyday on "the" goal…the little beach house in South (or North) Carolina that someday in retirement will be mine.  It’s a tangible motivation and my continual reminder that I need to stick to a financial plan to get to that goal (because I won’t be transported down to Myrtle Beach by magic).

And to that point if you think post graduate money management involves only your loan repayment...it doesn't.  Certainly loan repayment is paramount to your immediate finances but it also needs to be coordinated and put in context with other more futuristic financial decisions.  Because as you enter the “working world” you are going to be bombarded with a gazillion (yes that many!)  financial choices particularly when you are faced with electing your employee benefits for health insurance, retirement, and life insurance, to name a few.  And most likely you will be under pressure to make those choices and complete new employee paperwork asap so that you can begin your actual job.  But the reality is that those short term decisions you are making now have significant long term consequences.  So while you might be saying “retirement…but I just started this job”…the fact is that financial planning for the future needs to be on your radar now. (Need proof? A simple test is to use any of the 401K and 403B retirement calculators on the American Institute of CPA’s 360% of Financial Literacy site to compare what happens if you begin saving at age 25 vs. 35 vs. 45 etc.). 

So it’s in your best interest to learn as much as you can about financial planning so that when you are faced with these choices, you can make the best ones.  Financial planner John Caserta is a longtime friend Yale Law School who has presented workshops and has offered one-on-one counseling to YLS students to help them get their financial house in order post graduation. Check out John's article on "Why some people may never find financial freedom" for some key do's and don'ts of beginning the financial planning process as a young professional.

As an extra bonus…John Caserta will be visiting YLS on April 11th and April 17th (12:00-5:00 p.m.) to offer complimentary individual counseling sessions to our students. These are meant as basic introductions to planning and students at all levels of “financial expertise” are encouraged to attend. You can sign up for your session with John by emailing financialaid.law@yale.edu – space is limited. Take advantage of this opportunity because when it comes to financial planning...the future really does start now.

In December, the Federal Reserve Bank reported that student loan debt had increased to $956 billion, more than auto loan debt or credit card debt.  For many, it was the culminating benchmark in the ongoing student loan crisis which sees (as reported by FinAid) the total student loan debt increasing at an overwhelming rate of $2,853.88 per second. 

The conundrum for need based institutions like Yale Law School is that student loans also serve as a key element of access for many students.  Loans are an essential part of our students’ total financial aid support packages which ultimately allow them the means to attend YLS. 

What we must do then to respond to this debt vs. need loan paradox is to make certain that our students are what we term “savvy financial aid consumers”.   It is our obligation to support our students while enrolled and after graduation in making the best financial choices about their borrowing and repayment.

To that end, we have extended the outreach of the Financial Aid Office to include an essential financial literacy initiative.  As part of the program, our popular Financial Literacy Lunch Series provides interactive workshops on a variety of financial management topics presented by experts in the field.  Programs targeted to our 1L and 2L students focus on effective budgeting, strategies to minimize loan borrowing and the benefits of maintaining good credit.  Workshops for our 3Ls assist with their transition from YLS with sessions focused on choosing the right federal loan repayment plan specific to their needs, effective participation in our own loan repayment program, COAP, and an overview of “real world” finances (retirement, insurance, investment options).   And our workshops refute the old financial adage that there is “no such thing as a free lunch” by including pizza (and dessert) for all in attendance.   (YLS students know that you never turn down a free food opportunity!).  You can find our full slate of current spring 2013 term workshops on our Financial Aid Calendar.

Another key component of our financial literacy efforts is the delivery of one-on-one counseling to our students.   Because of Yale Law School’s small enrollment size, we have the ability to work with students on a very individualized basis to develop both short term (living on a budget while in school) and long term (multi year loan repayment) plans.  In particular, we offer our 3L students a comprehensive “exit” counseling session where  their entire loan ”portfolio” is reviewed,  their projected loan payments under the  various federal  repayment plans are compared, and their estimated COAP support is graphed over a 10 year eligibility period.   3Ls can also take advantage of a complimentary consultation with a financial planner to discuss their broader fiscal strategies beyond their loan repayment. 

Our financial literacy support also extends beyond our currently enrolled students.  Our office naturally keeps in close contact with graduated YLS students through the 10 year eligibility of the COAP program, but all alumni are welcome to reach out to our office any time.  Perhaps a life circumstance has changed which allows a faster repayment of your loans?  Or you would like to know the best way to restructure your loan repayment given new found family commitment?  Or you just need assistance negotiating the ever evolving federal repayment programs (like the new federal Pay As You Earn program which just began in December).   We encourage alums, no matter how many years out from YLS, to use our office for support and advice on any issues related to their law loans.  

 Ultimately, the Financial Aid Office’s commitment to comprehensive financial literacy allows our YLS students (and alums) to not only manage their student loan debt effectively, but also build long range financial plans which support their goals and aspirations.

I could give a million and one euphemistic quotes on saving money.  My personal favorite: “if saving money is wrong, I don’t want to be right” from that wise sage William Shatner (presumably as the Priceline Negotiator and not Captain Kirk). 

The bottom line is that as a YLS student we expect you to live within a budget and,as such, assume that you will need to modify spending and make financial sacrifices along the way.  The same budget or Cost of Attendance must be applied to all students within the same degree program. Why do we do this?  Because the Department of Education Title IV federal regulations which allow us to disburse federal loans dictate that we must do this…  “students must be awarded on the basis of a Cost of Attendance comprised of allowable costs assessed all students carrying the same academic workload”.
 
What the regulations do allow is that every school can develop their own budgets based on estimate “allowable” costs specific to their institution and their student populations.  In the case of YLS we do something that not every school does... each year we survey our current students on their primary “living” costs to ensure that what we are allotting for this expense is (again as defined by the federal regulations)   “reasonable”. 

This year 44% of our current enrollment  (including both JD and Graduate students)  responded to the "Cost of Living" survey (up from 38% last year).  That’s a very good response rate and as such probably gives us a pretty accurate sampling.  Aside from the obvious data on “rent” or housing we individually poll on a variety of other expense types including utilities, phone, cable/internet, food and local transportation.  We average those individual expenses by type and then add them together to determine a typical inclusive “monthly” expense which we can then project  for the nine month academic year to determine an average “cost of living" . The result for 2012-2013 is:

 

 

 The survey also yields other interesting facts on how YLS students live which we factor into our decision on the cost of living allotment:

  • The majority of our students (35.6%) make the decision to live alone and, as such,  are most likely incurring higher monthly costs  (Although we did see a slight  increase (18% to 22%) in the number of students living with two or more roommates from last year to this year’s survey).



  • Most students are paying rents in either the $600-$800 range (31%) or $800-$1000 range (25%) Though we did see an increase (from last year) in the number of students at the extreme low end $400-$600 of the rent scale.  Again in the survey rent was defined as the portion of the monthly payment that you personally are responsible for.
  • Surprising (to me at least) …our 1L students have the lowest total living costs per academic year ($14,031) while our 3Ls have the highest ($16,074).  I would welcome feedback on the blog from 3Ls as to why that occurs. 


The survey also monitors some additional expenses including books/class supplies where the average of $849 per year is within the $1,000 allotment already included in the student budget as a separate allowance.  Average childcare costs in the survey were $10,377 per year and YLS presently allows an additional $17,500 in childcare costs to be covered by non COAP eligible loans.

Finally, the survey asks an open ended question regarding “what other ongoing expenses do you have not captured elsewhere on the survey”?  There is always a great diversity in the answers to this question – my personal favorites this year being the response of “Gym, Tan, Laundry” (did you seriously think you could slip a Jersey Shore reference in there and I would not get it?) . 

Of these “ongoing expenses” the most common response was Travel- particularly as cited for the holidays and to visit significant others.  YLS specifically budgets an equitable travel allowance into all student budgets based on home state (as reported on the Need Access application or FAFSA.)   The allotment is based on making two roundtrips- getting to YLS in the Fall,  going home for the holiday break in December, returning to YLS in January and going home at the end of the academic year in May.  Any other travel beyond that schedule is a personal budget choice. However always be aware that if emergency travel or if a personal crisis arises which necessitates travel, we can exercise professional judgment based on a justifiable expense to increase the travel allotment.  As much of a romantic as I am, visiting a love sick significant other does not constitute “emergency” travel.

I also want to address a survey comment that YLS cost of living is less than other Yale Graduate and Professional Schools. The reality is that we have one of the highest cost of living allowances because on top of the basic living expense we build travel and books/supplies as separate budget items. Most of the other G&P schools are incorporating those costs in their general  living allowance.

So… the reality is that the current $17,000 allowance well surpasses the average costs of $15,003 per academic year as documented in survey and provides a buffer of almost $2,000 to support those other “ongoing expenses”- however you may prioritize them.  As such, we feel the $17,000 living allotment, in addition to the travel allowance by state and with the book/supplies allowance of $1,000,  meets the federal guidelines as “reasonable” expenses for the 2013-2014 student budget.

Does it meet your own personal needs? Maybe not.  Does it allow you to maintain a standard of living to which you are accustomed?  Maybe not.  But it’s still an equitable allowance to live “like a student” for the short time that you are here in New Haven.   Will you need to make some sacrifices or make priorities? Probably.  Is it going to be a challenge to live on what is essentially “fixed income”?  Most likely yes.  It is going to be a difficult to receive an influx of funds at the start of a term (no more weekly paychecks) that then has to stretch for several months?  Of course. Ultimately will you need to carefully budget your funds?  Absolutely yes.

And that’s also where the Financial Aid Office comes in... to support you as you face the potential challenge of living within that allowance and to assist you in that budgeting process.    Our office has many budgeting tools and web resources that we can share with you.  We can also sit down with you through one on one counseling to actually develop a personal budget based on your own financial aid, your expected refund and your monthly expenses.  We also offer workshops throughout the year which provide basic budgeting how tos, manageable spending tips and credit dos and don’ts .  

Because despite the preconceived notion that the budget in some way “hinders” you, the reality is that the budget parameters actually "help" you minimize your overall loan borrowing and , ultimately,  ensures that 25-30 years from now you are still not  paying off the lifestyle “choices” you made in law school .

 

With our Class of 2016 beginning to take shape, I thought it was appropriate to reach out and extend a welcome on behalf of the YLS Financial Aid Office.   You’ll find our office tucked in the York St./Grove St. corner of the Law School in M13.  In order to get here, you’ll have to pass through one of the Law School’s  carved stone archways.  But this one has a very vivid depiction of a man with a head in the guillotine and the executioner above (with a big smile on his face no less).  Will that be symbolic of your financial aid experiences at YLS?  Is there a little foreshadowing going on?

Let me give you all assurances that it will not be.  Here is my solemn promise of no beheadings.  I do, however, reserve the right to fill the moat outside my office with small alligators.  (Yes, there is an actual moat outside our office windows). 

Because for us, financial aid at YLS is a very personal process.  Our small class size allows us to not only carefully review all the application forms and documents you submit , but also reach out to you directly if we see something that perhaps was done in error or doesn’t make sense.  We also recognize that applications and forms may not truly capture unique personal circumstances and as such, encourage you to contact our staff and share those situations that may impact your aid award.  And because managing financial aid may be a whole new world for you, don’t ever hesitate to ask the most basic questions related to the application process or the aid award itself.  

Our office believes we have an obligation to ensure that our students are “saavy financial aid consumers” - we want you to understand the financial decisions you are making while in Law School, know the options and choices you have, and also leave here with a plan for how those financial decisions you made will then impact your life going forward.  That’s why we counsel students not only as they enter YLS but all through their enrollment (and beyond because of our loan repayment assistance program COAP).

All Financial Aid Offices have their own "culture" and ours is to have an open door policy – literally the door in M13 is always open.  You don’t have to make an appointment (although it helps), you can drop by and you won’t have to go through a “gatekeeper” to reach either myself or our Assistant Director, if we are available, we will welcome you in and try to help in any way that we can. 

Because the real secret is this…I have the open door policy for a very selfish reason.   The best part of my day is actually when I get the chance to sit down with a student and chat.   Far better than preparing aid estimates on Excel charts or running statistical analysis.  It’s those counseling sessions where I get to know our wonderful (and they are) students on a different level than just a paper financial aid application or a tax return.   And FYI- we always have a full candy bowl in the Financial Aid Office as another temptation to drop by…just to say hello and grab a handful of chocolate.  (Trust me, you may need that sugar rush some days here).

So by way of further introduction, (yes we are indeed real people and not robots processing aid applications)  … here are the folks you will come to know in YLS Financial Aid… …Roselyn, our Senior Administrative Assistant, is our office historian having been at YLS for 14 years (she has truly seen it all!) and, more importantly, is the undisputed “Queen of COAP”– our loan repayment assistance program.     Kellie, our Assistant Director, came to YLS after spending 18 years at Yale Student Financial Services (so she is a great resource for dealing with that office on billing and loan issues) and now, in addition to making aid awards, also coordinates our Summer Public Interest Fellowship program.  Fun fact about Kellie…she is an avid gardener and baker- two indispensable skill sets for the workplace!   And myself, Jill, the Director, a relative newbie to YLS having joined the staff in 2011- returning to financial aid after a few years away in the student services field  because I actually (gasp!) missed financial aid.   Want to strike up a conversation with me (aside from talking about financial aid)-  bring up college basketball (I live for March Madness!),  cats (my husband fears I am well on my way to being the “crazy cat lady” of the neighborhood) or yoga (Om!) .
 
So now that you know us, it’s time for us to get to know you.  We look forward to the opportunity to email, talk and meet as you begin and move through the financial aid process.

Just a reminder that we have a new website “ How to Apply for Financial Aid- New Admits” which will hopefully walk you through the aid award process.   And this is the time when you should be submitting your FAFSA and Need Access application if you wish to receive a provisional financial aid award letter.

As we approach the holiday season, I wanted to throw a very blunt reminder out there that holiday shopping and gift giving were never a part of your student budget. 

There is no denying that those Black Friday sales after Thanksgiving or even cyber Monday sales are incredibly tempting.  But the reality is that if you are living off your financial aid refund, you are on a “fixed income” (you didn’t even have to wait for social security to achieve that status).   You have a set amount of money meant to last you from September 5, 2012 all the way to January 23, 2013 (the earliest date that your spring funds can disburse to your student account).   To make it even more challenging…the Fall term is about 23 days longer that the Spring term so you have to stretch those Fall funds even further than you will have to in the Spring. 

And what is the biggest challenge you are going to face in making those funds last…most likely January rent.  I received many, many  emails last year (particularly during the week between Christmas and New Years) from students who had little or no funds for their January rent payments and turned to our office for help.  The reality is that our office is limited by federal financial aid regulations under which we cannot disburse your spring funds any earlier than three business days before the start of the term and in doing so, the earliest you can receive a refund on the SIS system is the first day of term.

So if you do find yourself in this January rent situation during that final week in December (or foresee even now that this may happen to you), my advice first and foremost will always be to talk to your landlord as soon as possible and explain the situation.  Let him know you are fully supported by financial aid, that the next disbursement will be transferred to your own personal account most likely on the first day of the spring term (give them an actual date) and how much you are expecting  to receive (if you have difficulty estimating that please ask our office to help).  If the landlord requires additional documentation, the Financial Aid office can always write a letter confirming what you have told him about the amount of your spring disbursement and when it should be in your account and for your disposal.  Contact our office as early as possible before your rent is actually due to get this letter (keeping in mind that Yale as a whole and our office is closed the week between Christmas and New Years).  In the majority of cases, we have found that with the right information and assurances of payments, the landlords seem willing to work with you.  Chances are if your landlord has rented to students before he may already be aware of this challenging cash flow issue that all students face. 

But rent may only be part of the battle if you return to campus after break with little funds available.  (There is always that small issue of actually needing money  to eat as well- unless you have strategically hoarded enough holiday gingerbread men to get you through mid January).  That’s why it’s critical to budget right now- not come the end of December when you may be in crisis mode.  And despite rumors to the contrary “budgeting” doesn’t have to be a complicated spreadsheet involved process.  Just take a few minutes to review what funds you have left in your personal account(s) at this very moment in time, then project what funds you will need (through January 23rd!!) to pay both primary living expenses (i.e. those fixed costs you must pay like rent, utilities, phone, etc.) and secondary expenses (i.e. those expenses you can control to a degree…like food, transportation, etc.).   Any excess funds you have not allocated to pay the primary and secondary expenses are available to you to make whatever holiday cheer you choose. 

And if you don’t have a lot to spare – don’t despair… just be a little more “creative” in your gift giving approach this year.  Remember those “ coupon books” you probably made for your parents in grammar school (i.e. “This coupon good for 1 take out the trash”,  “This coupon good for 1 wash the dishes” ) can easily be updated (i.e. “This coupon good for 1 hour of future  legal services”).   Use your talents to make gifts yourself or support some of our great local crafters (did you know that YLS even has its own craft fair on November 30th?). 

I fully acknowledge that celebrating the holidays with limited funds will be a challenge, but if you need a reminder, just watch any of those classic holiday specials that will begin running shortly on a continual TV loop … Charlie Brown, Scrooge or (personal bias) The Grinch, to get the morale of each and every story…that it’s not the gift but the thought that counts (and will help your budget).  

Trust me, your family and friends will completely understand that today you are living like a student and making some tough  financial sacrifices so that tomorrow  (or in the not too distant future) , you can  graduate from Yale Law School and that will probably be the best gift (holiday or otherwise) that you could ever give them.

Hot off the press from the Department of Education is a new addition to your loan repayment plan options.  And pleasantly this plan has a much more descriptive and understandable name that the other plans (i.e. Standard, Extended, Graduate Extended etc.) – it is quite simply “Pay As You Earn”.

“Pay As You Earn” is a new income based payment plan akin to the existing Income Based Repayment (IBR) or Income Contingent Repayment (ICR) plans.  “Pay As You Earn” is generally considered the most “generous” of the repayment programs and was announced by President Obama last October acting as one of the cornerstones of his student loan relief efforts. Final regulations on the program were issued by the U.S. Department of Education last week and the specifics of the plan are already up on the DOE student loan website.

“Pay As You Earn” is really an accelerated version of the existing Income Based Repayment program. Whereas IBR was based on making loan payments equivalent to 15% of your discretionary income (as calculated by the DOE) Pay as You Earn drops that payment to 10% of your discretionary income.  Also whereas IBR forgave any existing loan balances after 25 years of consistent payments, Pay As You Earn will forgive significantly earlier at the 20 year mark.

The key to Pay As You Earn is not just determining if you can meet the “partial financial hardship” qualification (based on loan debt to income) but also have specific eligibility based on your loan portfolio.  To qualify you must have taken out your first federal loan after September 30, 2007 and you must have also received a loan after September 30, 2011.  As such, if you are a current YLS student with just law debt you more than likely meet that standard. 

But just like Income Based Repayment there a couple of things to be wary of with Pay As You Earn.  First if you r payments based on income are calculated so low,  you may not be keeping up with the interest building on your loan and may have negative amortization.  Second, the forgiven amount at the 20 year mark can be a taxable occurrence in the calendar year when the forgiveness occurs (increasing your tax liability significantly).  Finally, if you have any FFEL loans (federal student loans provided through private lenders) those cannot be repaid using Pay As You Earn (although they will be counted in your total loan debt to determine the financial eligibility hardship).  If you are not sure if you have FFEL loans- check your loan history at the National Student Loan Database.

And Pay As You Earn is already stirring up some controversy among critics who feel  it is primarily benefitting those graduate and professional students with high loan debt (with some specific references to  Law students) more so than undergraduates.

Very high hopes have been placed on Pay As You Earn to revolutionize student loans repayment and significantly impact the student debt crisis.  Referencing the Pay As You Earn initiative, former President Clinton himself stated that “this will change the future for young America".

Right now the DOE readily admits that its biggest challenge is simply getting the word out there that this new repayment option exists for both current and new borrowers amongst  the myriad of other loan repayment programs they offer.

For more information - view the DOE Pay As You Earn information sheet or use the Pay As You Earn calculator to estimate eligibility and loan repayment.  If you have questions on your eligibility, use of the calculator or how this program may work for your personal law debt, stop by the Financial Aid Office for one on one loan counseling.

How often do we read or hear about something and think, "Come on, that is too good to be true!"  Well...

All scholarships are a form of gift aid, money that does not need to be repaid (a wonderful thing) and it reduces debt (another wonderful thing)!!!!

To find scholarships to help pay for school, personal expenses, etc., can be difficult because where does one start and how would one know what is legitimate and what is not?

ALWAYS keep your eye out for scams:

If it is too good to be true - probably a scam

If you are asked to come to a free seminar/information session - probably a scam

Scholarships are FREE to apply for, so if there is a cost - probably a scam

If it states, "cannot get this information anywhere else" - probably a scam

The scholarship establishment states that they can do all the work for you - probably a scam

When a scholarship is awarded, notification is always sent by mail, you will NOT be notified by telephone

Be aware of 900 area codes

Walk away from pressured sales

Be suspicious of endorsements

When awarded the scholarship, always keep a copy of the letter!

Here are a few legitimate scholarship websites to review:

www.fastweb.com

www.scholarships.com

www.collegeboard.com

www.gatesfoundation.org

Ask around...get ideas and suggestions on where to look for scholarships through other foundations, friends, family or public libraries in surrounding towns.

Good luck on your quest!  Remember, the Financial Aid Office is always open...come by and visit anytime!

Kellie signing out...

 

 

A very interesting (and timely as you will see below) article on the AP this morning which I wanted to share … “Should you pay off your student loans quickly?”… detailing the story of one recent Grad School graduate who felt that alleviating himself of his student loan debt burden was the key to his personal and professional freedom.   His strategy for how he did this is a good replicable model for any new “loan repayer” to follow.

The article (as indicated by its title) also debates if paying off the student loan debt when compared to other pending debt (credit cards, car loans) is the best strategy.  Basically it  encourages students to develop a “debt stacking” model where debt sources are triaged for repayment based on the amount of total debt and the interest rate.

Want to know more about the value of “debt stacking”?  It just so happens that Lori Moore, Financial Literacy Director for the Access Group will be here at YLS for two workshops in October both of which will incorporate the debt stacking strategy.  On October 15th Lori will present “Loan Repayment... Pick Your Plan “- a workshop targeted to 3Ls for whom loan repayment is imminent and on October 18th Lori will be back to talk about “Borrowing and Budgeting Wisely”- a workshop geared to 1Ls and 2Ls addressing what proactive steps they should be taking as students to put their financial house in order now.  Both workshops are from 12:10-1:00 p.m. in Room 127 and, in the spirit of strategies to save money, include a FREE lunch.   Check the YLS calendar for more info.

In April, I made the big leap and ditched my dinosaur of a home PC for an IPad (such are the dangers of working a block away from the allure of the Apple Store).    But for all of us there comes a time when no matter how trusty the old computer has been or what fond memories you may have of it … it’s just time to let it go quietly into the night. 

So this is reminder that if you are at that point you can avail yourself  of the YLS Technology Loan to make that new purchase.   The loan is made on a reimbursement basis meaning that you will need to make and fund the purchase yourself (not just “ordered” but actually purchased).  After doing so bring the receipts to the Financial Aid Office and complete a budget revision form. 

Reimbursement is made by adding an additional loan to your financial aid award package. In most cases this will be an additional Graduate PLUS loan or Yale Graduate and Professional Loan (for international students).   If you already have a Grad Plus or Yale G&P loan in place adding the extra loan requires no additional loan paperwork or promissory notes.  There is one tricky thing in terms of cash flow… because student loans must disburse 50% for Fall term and 50% for Spring if you purchase a computer in the summer or at any time in the Fall term you won’t have the full reimbursement until the beginning of the spring term when the second installment of the loan comes in.  Some students have waited to purchase until the very end of the Fall term or even into the Spring term itself so that the full reimbursement comes in all at once.

The reimbursement amount is based on your year at YLS.  1Ls are reimbursed at $3,000, 2Ls at $2,000 and 3Ls at $1,000.  As such,  if you are planning on taking advantage of this buying the computer in the 1L year will allow the maximum reimbursement.   Any computer purchases made in the summer are reimbursable but only at the next academic year level (because the loans will not be put into place until that academic year).   So if you are a rising 3L and purchase a computer in July- you will be set up with a $1,000 technology loan for the 2012-2013 academic year. 

What constitutes “technology” for the sake of this loan?  Well we are making the loan on the basis that the technology purchased is essential and necessary to your studies at YLS.  That being said we maintain a fairly liberal definition of what we will allow under this reimbursement.  In addition to a core computer we would allow accessories and or ancillary devices (printer, scanner etc.) up to the reimbursement level if all purchased at the same time.  If you feel a tablet or IPad serves your needs better than a PC or Macbook that’s fine as well.   But keep in mind it is a one time only reimbursement so whatever you purchase you will need to live with for the balance of your YLS life.  


So the reference to the generic "mac and cheese" may not make sense but has a personal connotation for me when it became the staple of my post undergrad life style (at the ridiculously low price of 5 for $1.00 at the  local A&P supermarket).  Was it nutritious -no.  Was it delicious- no.  Did it help me make ends meet - absolutely yes!  It was just one of the creative strategies and sacrifices one needs to make to insure that you can pay the rent have heat and keep the lights on.  

Several  YLS students last year talked to me about the need for information, resources and even training on the concept of maintaining a budget while in Law School.  (Though I understand the new euphemism for “budget” is “spending plan” because it provides the more positive connotation that you actually get to “spend” something).  Either way, I think budgeting is something that many of our students struggle with particularly in their 1L year.   In early Fall we will be announcing a workshop series focused on this topic which I would highly encourage all students to attend.   (Plus we always provide lunch with our financial aid workshops and a free lunch is one of the best budget deals you can get!) .

But in the meantime I wanted to remind everyone of a few key budgeting challenges you will face and should make accommodations for:

First, as mentioned in my last blog - you are not going to receive any excess financial aid (your refund) until, at the earliest, the first day of the term.  There are no exceptions to this federal regulation.  That means that you need to come to New Haven (or return to New Haven for our 2Ls and 3Ls) with funds in hand to secure housing, buy furnishings and eat until the refunds come in.  That’s also the reason why you want to insure that you have completed every step of the financial aid process (including loan entrance counseling and promissory notes) so that there is no possible reason for the refund to be delayed.

Second, as you may have noticed, our Fall term (September 5th - January 17th) is about a month longer than the Spring term (January 22nd - May 17th).  The way that financial aid works by federal regulation is that  your funds are disbursed 50% for each term.  So if you have the same amount of aid per term and the same amount of charges per term – your refund will be the same each term.   But that Fall term refund for living is now going to have to stretch an extra month (including an extra month’s rent).  Beware - we had many students last year who sent me panicked emails over the Christmas break (after  possibly holiday shopping and spending) because they had run out of  Fall term refund monies and had no way to pay their rent due January 1st.  Start from the minute you get that refund in September and hold onto 5 months worth of rent (and utilities) to get you to mid January when your spring term funds will then come in.

Third,  live within your means.  It may be very exciting to move to New Haven and for many students set up their first real apartment, etc.  But this is not the time in your life to be worried about how good that apartment looks, what amenities it has and “boy, wouldn’t a home theater system fit perfectly in that corner of the room”.  Trust me…you will be spending very little time in that apartment and the majority of your life in your true new permanent address of 127 Wall Street. 

Fourth, economize in little ways… do simple things that will save you money:

  •  Avoid the temptations of eating out - probably the most difficult thing to do in New Haven which is renowned for a diversity of restaurants and culinary delights.  But did you know that New Haven is also famous for a variety of great gourmet food trucks clustered all throughout the city (closest “cluster” spot to YLS is the Ingalls Rink on Prospect Street) that provide a much a less expensive albeit “al fresco” dining experience.  (Trust me, don’t knock it ‘till you’ve sampled from the “Cheese Truck”).  Better yet, shop for food - for many years downtown New Haven did not have any supermarkets and now have two (Stop & Shop on Whalley and Elm City Market - a co-op on Chapel).   Frequent the supermarkets so we can insure they can continue to serve city residents.   And scout out “free food” opportunities - look for YLS events and university wide events that have the key words of “open to the public” and “reception”.
  • Buy used furniture – again you are going to be spending so little time in your apartment that what you need is function over style.   There are many consignment stores throughout the greater New Haven area and lots of weekend tag sales in neighborhoods to browse.  I will put a plug in here for Universal Hotel Liquidators - a local business that has gained national attention for its creative “green” enterprise and its commitment to recycle gently use hotel furnishings.   And if you find yourself drawn to New Haven’s flagship IKEA store on Long Wharf - there is no shame in looking at their “As Is” department where you get the added benefit of less expensive items that are already put together (saving you hours using the obligatory IKEA  three inch Allen wrench to assemble your purchase).
  • Ask for a Discount - - New Haven is a “college town” and as such, the majority of stores and merchants offer student discounts from the Apple Store to Criterion Cinemas.  It never hurts to waive that ID card and ask if they offer a discount.  You can use that same ID card to  get your entertainment fix by accessing  the incredible variety of free  lectures, theatre presentations, concerts and film screening that is open to the Yale community and publicized  via daily in the Yale Daily News online or available in its print version (copies always available at the York Street entrance of YLS ).

The point of all this is saving money at this juncture of your life  will ultimately benefit you down the road. I am not advocating that you have to  live like an absolutre spendthrift, because we all need the occassional indulgence and personal reward.   But overall  If you can economize now, minimize your loan borrowing, minimize your consumer debt and yes make some sacrifices for three relatively short years of Law School, it will put you in a much better financial position when you leave YLS for the rest of your life.  

More resources and information on budgeting to come as we move into the academic year.  In the meantime - develop an appetite for generic mac and cheese.

So I like to think we are in the home stretch of the financial aid process,  applications have been processed, award letters are out and  award acceptances (Notification and Confirmation forms) have come in.   So very close… but the reality is  there are still a couple of important things that need to happen to insure that the Yale bill is paid and that you have money in your pocket to live on. I have been getting a lot of our new admits emailing me with the basic questions below  so I am gearing this blog to them but all the info is valid even for our veteran rising 2Ls and 3Ls.

When will I get a bill?  You won’t… not in the sense of a bill mailed or emailed to you directly.  What you will get is an email that a July 1 billing (due August 1) is available for you to review on the Student Information System (SIS).  You’re going to pick up in this blog that the SIS system (www.yale.edu/SIS)  needs to become your new best friend for the sake of financial aid – bookmark it and keep it close at hand .   That July 1 bill is going to show your charges (tuition, fees and health) and is also going to show all your accepted financial aid totaled as an “anticipated financial aid credit”.   As long as the anticipated aid covers the charges you need not worry about the July 1 bill.  If there is a gap that you intended to pay on your own you must make arrangement to pay it (instructions will be on the SIS system how to make direct payments) prior to August 1.  If there is a gap and you discover the need to borrow more loan funds that July 1 bill gives you the time to contact our office and do that prior to that August 1 payment date.

What happens if there is still a balance due on my bill as of the August 1 due date?   On that date if there is any balance due a number of “bad” things will happen.  First a $125 a month late fee will be assessed increasing what you owe even more. Secondly you will be put on financial hold which will prohibit you from registering with the rest of your class and receiving your course schedule.  (In the cast of current students note that a financial hold will prevent you from getting transcripts needed for FIP!)  Note,  at any time before the start of classes if the balance is cleared then the financial hold is removed but the late fee is still payable.

How can I insure my loans will disburse on schedule?   There is a critical step yet to  complete to insure that your loans are ready to go and mark your calendars now to be on the lookout for this in mid July.  After July 1 our office will certify the loans you’ve accepted with either the Department of Education (for federal loans) or Yale’s Student loan office (for our own Graduate and Professional International Loan or Perkins loans).  When the certification is complete and the loan established you will then get an email from Student Financial Services that it is time to complete the loan paperwork which will include a  promissory note and other supplementary documents such as  truth in lending statements (TILAs) and entrance counseling session (which are not counseling sessions at all but an online information survey that you participate in and sign off on).   Documents will differ depending on what type of loan you have- some will be on the www.studentloans.gov  website (Direct Unsubsidized and Grad Plus loans)  some will be available right from SIS (Yale GPI Loan and Perkins).  Also note that you will need to complete separate promissory notes for each loan (including both the federal Direct Unsubsidized and Graduate Plus loans).  Please wait for the email with instructions before going out to any website and doing the prom note on your own as its critical that it link with the completed certification loan (otherwise it hangs out there and goes no where)

When will my financial aid disburse?  By federal regulations the earliest aid (both loans and institutional scholarships) can disburse is three business days prior to the first day of the term (for us the first day of the term is September 5, 2012).   There are no exceptions to this rule ever.   So what this means is that you need to come to New Haven with ample funds to get yourself established including rent (and security deposit), furnishings and food (New Haven has a lot of really good, cheap places to eat – talk to a local for tips).

How do I get a refund of my financial aid funds if I borrowed money to live on?   We’ve already established that the aid comes in the three days prior to the start of the term.  Then the direct Yale charges (tuition,fees and health) post against the financial aid and, (if your aid is more than the charges) generates a credit balance which has to be refunded to you directly.  By federal regulation  an institution has 14 days from the first day of the term to provide you the refund and Yale does an exceptional job of getting it to you as quickly as possible even as early as the first day of the term.  But again because there is no set or guaranteed date for the refund make the necessary allowances in your cash flow to survive.  To expedite your actual receipt of the refund there are two important steps.  First, set up automatic deposit on the SIS system so that refunds are deposited directly into your personal checking or savings account.  Second you must actually request the refund on the SIS system (i.e. the credit balance in and of itself will not generate a refund automatically).  That’s a step that get’s missed alot and something you have to do each term and each time you want the refund to generate.   Check out Student Financial Services website for detailed instructions on the automatic deposit and refund request process: http://www.yale.edu/sfas/financial/accounts.html.

That’s an abundance of information to digest so I will stop there.  As you transition in (or back) to YLS don’t hesitate to ask questions (I readily admit that the financial aid process is overwhelming). The best way to reach our office during this summer period is using our main number 203- 432-1688 and our main email financialaid.law@yale.edu given staff vacations and summer hours but there is always someone checking that phone and that email who will respond right back to you.   You’ve all done a great job of negotiating the financial aid process… just make sure you finish out the final steps and you will be in the money!

Next Blog-  Life Beyond Ramen Noodles- budgeting your refund to live well. 

It has been said that financial aid folks have their own language speaking of FAFSAs , EFCs, COAs,  SARs and other strange terminology.  Sometimes we take it for granted that students will just understand this “jibberish”.  But seeing that our first batch of aid award letters for the class of 2015 just went out last week I wanted to insure that nothing was lost in translation.  To that effort,in clarifying elements of the aid award letter, this blog focuses on the COA otherwise known as the Cost of Attendance. 

The Cost of Attendance is just another word for your budget for the year.  It appears first in the aid award letter because it literally drives all other calculations in the all important need based aid formula :  Cost of Attendance minus Contribution= Financial Need.

Federal regulations stipulate that a Cost of Attendance must be all inclusive not just reflecting your direct expenses billed from the school (like tuition, student fees and health insurance ) but the estimated total cost of actually attending the university.  Institutions traditionally estimate those other costs which usually include books, travel and a living allowance (room and board).

So how do we know our estimates are accurate to survive and thrive at YLS ? Because each year we actually survey our current students with a Cost of Living survey asking for what they pay for rent, food, utilities, cable, internet etc.  We conducted that survey this past Fall and the average cost of living inclusive of all those expenses was $14,562- so the estimate we had been using  of $17,000 more than covered the average costs of living in the Elm City (yes,that’s New Haven’s nickname) . 

The one area in that survey which students indicated additional funding was needed were travel costs. So we changed our Cost of Attendance budgeting process for this year, and now add  a travel allotment into every student’s cost of attendance based on average costs of travel from their specific state of residence to New Haven.

Why is looking at the Cost of Attendance so important in analyzing your aid award?  Because the greater the Cost of Attendance, the more aid you should receive in the need based financial aid approach.  But you also need to look at where is that extra expense in the Cost of Attendance that is driving your increased award.  If that extra aid is just awarded to make up for a higher cost of living based on the geographic  location of the institution - what are you really gaining?  Yes,  you will have more aid but you are going to have to spend more to live there.   As suc, it’s not as simple as comparing, XYZ school gave me a $25,000 scholarship and ABC school gave me a $21,000 scholarship.  If XYZ’s Cost of Attendance shows that it costs $4,000 more per year for living and/or room and board in XYZ city– the offers are then virtually equivalent and the difference in the scholarship amount should be taken off the table as a comparative. 

There is also nothing to say that you have to spend up to the estimated living allowance.   If you can find a cheaper rent, split costs with a roommate or develop a steady diet of ramen noodles, you can maximize your financial aid because your award will still be based on the standard cost of living estimate, thereby allowing you to save funds or, more importantly, minimize your loan borrowing.  Follow the old saying:  “ live like a student today to live like a lawyer tomorrow”.   Sound advice!

Beginning in April, the Financial Aid Office will be offering the “Low Debt, High Gain” workshop series designed to give some practical, real world advice for our 3L students as they begin their transition from Yale Law School.  And while each workshop is individual, the most benefit will come if you participate in all three because, as a series,  they have been designed to build on one another.

The workshops will be held on consecutive Mondays beginning April 2 from 12:10:-1:00 p.m. in Room 128.  We start off on April 2nd with Lori Moore, Director of Financial Literacy for the Access Group. Some of you may have loans held by the Access Group and many of you may know them as the people who brought you the Need Access financial aid application each year. Lori will kick off the  series by providing an overview of loan repayment – the various plans you as the borrower can choose from,  understanding who holds your loan and who is “servicing” it, as well as your rights and responsibilities as a borrower.  

Once Lori has brought you up to speed on loan repayment and options, it’s time to see how COAP then coordinates with your repayment plan.  On April 9th,   Associate Dean Asha Rangappa and myself will present “Coping Through COAP” which will answer all the basic questions on how COAP awards are determined, what loans are covered, how and when to make application, as well as deal with the COAP intricacies of spouses, dependents, clerkships and assets. 

Finally, now that Workshop 1 and 2 has sorted out all your loan repayment, it’s time to move onto larger fiscal  issues you will face. That’s where financial planner John Caserta comes in with his workshop on April 16th  entitled “Your Financial Future Starts Now”.  John, a Yale college alum, has been offering this workshop to YLS students for a number of years and it has always been well received.  John uses the analogy of “building your financial castle” to talk about personal spending plans, investment and insurance basics, understanding employee benefit packages and even focuses on the need to start thinking about your retirement (before you have even graduated !!!). 

Even more incentive to attend- since the workshops are at lunchtime there will be food (probably pizza) – as well as some home baked dessert treats courtesy of the Financial Aid staffs’ kitchens.

As I mentioned the workshops are designed for 3Ls getting ready to leave YLS but are absolutely open for any 1L and 2L students who wish to attend.  We also plan to record the sessions and make them available on the Financial Aid website afterward for those whose schedule might not permit participating.

The phrase “limited time offer” is taking on a whole new meaning for some student loan borrowers who are being contacted by the Department of Education’s student loan servicers and offered a “Special Direct Loan Consolidation”.  This opportunity is part of President Obama’ “Pay As You Earn” initiative announced in October focused on increasing college affordability through better management of student loan debt.

The Special Direct Loan Consolidation is indeed being offered for a limited time (January 1-June 30, 2012) and only to a select group of borrowers deemed to have the greatest opportunity to benefit. In order to qualify for the Special Direct Loan Consolidation you must have:

  • at least one student loan held by the Department of Education  (a Direct Loan or a Federal Family Education Loan [FFEL] owned by the Department and serviced by one of the Department’s servicers); and
  • at least one commercially-held FFEL loan (a FFEL loan that is owned by a FFEL lender and serviced either by that lender or by a servicer contracted by that lender).


The requirements were set up this way to offer borrowers with both Direct and commercially held FFEL loans  the ability to better management their debt by ensuring all of their federal loans are serviced by the same entity, resulting in one bill and one payment . 

Beyond the better loan management aspects, the Special Consolidation offers two other significant benefits not available in a traditional Direct Consolidation Loan. First, the terms of each commercially held FFEL loan brought into the Special Consolidation will remain intact  such as the interest rates on the individual FFEL loans and the arranged repayment terms (i.e.10 year, 25 year, IBR). Normally when you consolidate in a traditional Direct Consolidation, all loans involved are factored into one single fixed interest rate based on weighted average of the interest rates of all the eligible loans (rounded up to the nearest one-eight of 1%, not to exceed 8.25%).  More importantly in a traditionally Consolidation Loan, the repayment terms clock starts over again ultimately leading to more interest building on the loan.  So the Special Consolidation does allow you to take advantage if you have good interest rates on your existing commercially held FFEL loans and providing you a shorter time period for repayment of those loans. 

Second, the Special Consolidation Loan is offering a very tangible financial incentive- a .25% interest rate reduction on any of the commercially FFEL loans brought into the Special Consolidation. So on top of being allowed to retain your original interest rates on the individual loans, you also get the extra .25% reduction.  And just like the traditional Consolidation Loan, the Special Consolidation still offers another .25% interest rate reduction if automatic debit is chosen for repayment.

So how do you apply for this “special” Special Consolidation Loan offer?  Well you can’t apply on your own until one of the Department of Education’s loan servicers (FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae) contacts you to let you know that based on your borrowing history you meet the basic eligibility of holding both the DOE Direct loans and the commercially held FFEL loans.  Notification began in late January and is expected to continue for several weeks.

If you are deemed eligible, do not hesitate to reach out to the Financial Aid Office for guidance or assistance in weighing your loan options and whether the Special Consolidation is ultimately going to be a true benefit for you. For more information on the “Special Consolidation Loan” see the Department of Education website.

All of this talk of DOE Direct loans vs. commercially held FFEL loans making your head spin?  One of the best places to get a better understanding of your student loan history is the National Student Loan Database  where you can log in and review each of your loans in depth including loan periods, amount borrowed, disbursed, balances, interest rates and most important who the lender and servicer on each loan is and how to contact them.

This is the time of the year when a variety of firms, companies, and clubs send the Financial Aid Office information about the scholarships they offer.  Some of the scholarships are awarded based on where you reside, the field you are interested in, and/or if you are in good standing or as simple as writing a paper.  These funds can help pay tuition for the fall semester or spring semester or both.

Why not take advantage of all that is available?  Who could pass up "free money", especially if this money can help pay for your law degree and lessen your student debt?  Apply for any of these scholarships now for 2012-2013 financial aid year!

Toward your benefit, at Yale Law, outside scholarships are applied first to reduce loans (up to 50% of your unit loan amount) and second to reduce any institutional funds that were awarded. If you are only borrowing loans to pay for tuition, then the entire amount of the outside scholarship would be applied toward reducing the loans.

Intrigued by a "free money" offer?  Then take a look at some of the recent scholarship opportunities that our office has been made aware of:

The Yale Club of New Haven - www.ycnh.org - the scholarships ($3,000 per year) are available through the generosity of the alumni of the Yale Club of New Haven.  Scholarships are awarded to full time graduate and professional school students in the spring of their first and/or subsequent years and awarded to residents of the greater New Haven county.

New England Employee Benefits Council (NEEBC) - www.neebc.org - is an organization whose primary function is to advance knowledge and education about issues in the employee benefits field.  The intent of this scholarship ($5,000) is to encourage students to consider the employee benefits field for career opportunities.

NPBA Foundation Fitzwater Memorial Scholarship for Second Year Law Students - www.norfolkandportsmouthbar.org - was established in honor of Elizabeth Fitzwater.  The Foundation's mission is to promote the administration to justice, to educate the public about the importance of law in their daily lives and to enhance the image of the legal profession in the community.  This scholarship ($1,000) has been set up for those students who intend to practice in the south Hampton Roads area of Virginia.

Information on these and many more outside scholarship opportunities is available directly from the Financial Aid Office - come by to learn more!

 On January 31, 2012, the Department of Education (DOE) made a long overdue announcement on the Public Service Loan Forgiveness (PSLF) Program which should significantly help borrowers qualify for this loan forgiveness option.

The PSLF Program was initially established by Congress with the passage of the College Cost Reduction and Access Act of 2007 toward the goal of encouraging student loan borrowers to pursue vitally important public service sector positions.  It works this way.. IF the borrower makes 120 separate, one time monthly payments in certain loan repayment plans WHILE maintaining work  in a public service organization(s) during the 120 month period THEN the borrower may have the remaining balances of their Direct Loans forgiven.

Beyond the basic 120 payments while in the public service field, PSLF comes with a couple of other important eligibility criteria.  First, only borrowers with Direct Student Loans qualify.  However, if the borrower had the older Federal Family Education loans (i.e. federal loans issued by commericial lenders) or Perkins loans, the borrower could consolidate those into a Direct Consolidation Loan to take advantage of PSLF.  Second, the borrower must be using either the 10-year Standard Repayment Plan, Income Contingent Repayment (ICR) or Income Based Repayment (IBR) to pay back the loans. The reality is that only ICR or IBR works to the borrower's advantage for PSLF in that the lower monthly loan payments (calculated on the actual ability to pay) leaves the borrower with a significant enough balance at the end of the 10 years to make forgiveness a true benefit.

The big step forward is that 5 years since PSLF's inception, DOE has now developed a system for borrowers to track their public service employment for the required 10 years (120 months) of payments. Up until now, borrowers working toward PSLF completion were tasked with self-documenting their public service  and maintaining records of their employment on their own with a layer of uncertainty as to what DOE would ultimately require as proof at the end of the 10 year period.  All that changed in January, when DOE announced  the availabiltiy of the "Employment Certification For Public Service Loan Forgiveness Form".  This form makes life easier for the borrower in terms of capturing consistent data from each qualifying employer in a standard template. More importantly, borrowers can submit the forms to DOE on an ongoing basis throughout their 10 years of repayment either annually or even as they change employment positions. DOE, in turn, will track and even confirm employment eligibiilty for PSLF based on each form submission.  As such, borrowers will always be assured that they are making progress to have full loan forgiveness. 

The Employment Certification Form is available for download at the PSLF website which also includes information on what type of public service position (a wide range!) qualify as well as other resources on this program.

The big question mark for PSLF is what happens in 2017, the year when the first group of borrowers participating in the program finally qualify for the loan forgivenss? Hopefully the new certification process will prepare both the borrowers and DOE for that moment.

Welcome to the "financial aid" blog.  With all the captivating topics to write about why would I focus my first blog endeavor (ever!) on something as mundane as financial aid?  Because far from being dull, the world of financial aid is filled with twists, turns and surprises.  Don't believe me?  Then let's talk about one of the biggest changes in the aid world for next academic year.

When you look at your financial aid award letter for 2012-2013, you will probably ask yourself the obvious question ... "where did my Subsidized student loan go?".   Historically, Graduate level students have been offered a portion (presently $8,500 max) of their federal aid in the form a Subsidized loan with the benefit of no interest  building on the loan while the student is both enrolled in school and during the six month post enrollment grace period.   

However,  in  President Obama's 2012-2013 budget proposal  (March 2011) he recommended  the elimination of the interest subsidy of the Subsidized Federal Direct Loans for Graduate and Professional students in an effort to utilize those savings to strengthen the undergraduate Pell Grant program.  Congress initially countered with a proposal for the dissolution of the subsidy for all (Undergraduate and Graduate)  students.  Ultimately Section 502 of the Budget Control Act of 2011 (passed by Congress and signed by President Obama in August ) finalized the elimination of the Direct Subsidized loan for Graduate and Professional level students only.

The good news (in the short term) is that you will not lose loan funds.   You were eligible for a maximum of $20,500 in Direct loans in 2011-2012 and you will be eligible for up to $20,500 in 2012-2013 as well.   Only instead of $8,500 of the $20,500 eligible to be subsidized, the full amount is now unsubsidized.  The bad news (in the long term) is that because interest will now be building on that formerly subsidized portion from the time of enrollment and during the grace period, you will ultimately be carrying a higher loan debt.

One other important aspect of Section 502 of the Budget Control Act of 2011 is that students will be losing the "origination fee rebate" which rewards on time payments on Direct  (presently 1%)  and Grad PLUS  loans  (presently 4%). The loss of the origination fee rebate will go into effect for any loan disbursed after July 1, 2012.  The interest rate reduction for borrowers who agree to have payments automatically electronically debited from a bank account remain in effect (remember that when you enter into repayment!) and has  not changed in the new law. 

The reality is that the elimination of the subsidy loan for Graduate students  has been seriously discussed and considered for several years  as a budget savings measure and while it was a surprise for students (and financial aid administrators ) that it was ultimately passed , it was probably inevitable.  Ultimately  the Department of Education projects this measure will save an estimated $22 billion over the next ten years .  Most significantly,  $17 billion of those savings will address critical funding shortfalls for the Pell Grant program which remains the cornerstone federal aid vehicle to provide low income students access to post -secondary education.  

So what are the most important things to remember/do about this change?

1)      Understand  that this change only affects those loans in place for academic year 2012-2013 (or for loans made for periods of enrollment beginning on/after  July 1, 2012).  The subsidized terms and conditions on any previous Direct Subsidized loans you received as an undergraduate or Graduate student to date remain as is and are secure.

2)      If you declined any or the entire Direct Subsidized loan offered to you for this current 2011-2012 year ,  you may wish to rethink about borrowing it.  Even if you do not need the funds immediately for this year, taking this loan now and banking the funds may serve you better than having to borrow the unsubsidized as your only option in a future academic year. If you do wish to reconsider your aid award and accept the previously award Subsidized loan,  just contact our office.

3)      Now more than ever you will want to take full advantage of COAP, particularly since your interest and aggregate loan balance will be higher without the benefits of the subsidy.  Even in your 1L or 2L year , make an appointment to talk with the financial aid office about your loan balances, COAP eligibility and insure you are on track to apply for COAP to coincide with your loan repayment.

4)      Finally, although it has been said many times, many ways, make a concerted effort to borrow only what you absolutely need to support yourself while at YLS.  Sacrificing now in an effort to minimize your loan burden later will ultimately reap benefits for your future.   Again, the Financial Aid Office can assist with helping you develop a viable spending plan to insure that you have enough funds to both live on and live well, while minimizing your loan borrowing.  

So now that the FinAid blog is up and going ,  keep up with it as we report  in upcoming posts other changes  (beneficial changes!) in the works for the 2012-2013 academic year.   Who knew financial aid could be so exciting!