How to Pay for Grad School? Consider Public Service

If you’re already wondering how you will be able to pay for that MBA or JD that you’re pursuing, earlier this year the federal government made an announcement that might be of interest to you. Under the government’s Public Service Loan Forgiveness (PSLF) program, you may qualify for forgiveness of the remaining balance due on your eligible federal student loans after you have made 120 payments on certain loans while employed full time by certain public service employers.

This is terrific news for anyone who has considered an MBA a JD as a path to a public service career, but who has been intimidated by the levels of student loans they would need to take on in order to make their advanced degrees a reality.

As usual, there are all sorts of rules and stipulations. Only loans made under the William D. Ford Direct Loan Program are eligible for loan forgiveness, including:

  • Federal Direct Stafford Loans (Direct Subsidized Loans)
  • Federal Direct Unsubsidized Stafford Loans (Direct Unsubsidized Loans)
  • Federal Direct PLUS Loans (Direct PLUS Loans)- for parents and graduate or professional students
  • Federal Direct Consolidation Loans (Direct Consolidation Loans)

Only payments made on the Direct Consolidation Loan will count toward the required 120 monthly payments. And, you need to have been making your loan payments on time for the past 120 months — deadbeats need not apply. But, the savings can be significant, resulting in more than $100,000 in loans being forgiven, depending on the exact program for which you qualify.

There’s a lot of fine print to read, but this is a terrific option for anyone who’s thought about going into public service. You can learn more at the U.S. Department of Education’s web site.

Thinking about applying to graduate school this year? Give us a call at (800) 925-7737 to speak with an admissions expert today. And, as always, be sure to find us on Facebook and follow us on Twitter!

Six Important Considerations for Grad School Financial Aid

Students owe it to themselves to consider the true cost and the true reward of the educational opportunity before them. It is has been said that borrowing money to pay for school is an “investment” and not debt, but try telling that to the loan services when they send out the monthly bill.

Not only that, but the analysis is rarely about going back to school or not going, but rather about making the best possible choice. It may very well be the case that attending one’s dream school without the aid of scholarships or grants is the best decision, but it might also be true that a secondary opportunity starts to look a lot better when the calculator comes out.

In order to help students make the best possible choice, adhere to the following tips:
  • Understand the true cost of the education. Pay very close attention to not only the current COA, but also the inflation rate at that school. Some universities are seeing tuition go up more rapidly than others, so it makes sense to project the cost for the following year (or years) as well as simply looking at the tuition and cost for the first year.
  • Carefully calculate the ultimate balance on unsubsidized and private loans. $100,000 in loans is a lot of money, but it is really a lot of money when the interest kicks in immediately and keeps accumulating for the life of a 10-year loan period. Students should make sure to work with the financial aid officers to figure out how much they will ultimately shell out by the time they finish making payments. Any differences in “free money” between school A and B will only become more exaggerated over time
  • Be willing to briefly consider the enrollment decision in purely financial terms. It sounds overly rigid to advise this, but considering how romantically and emotionally most students make their decisions, it will help balance things out to take a short period of time to consider this the way an accountant would.
  • Avoid falling victim to the “drop in the bucket” mentality. Most grad students find the sticker price of graduate school so shockingly high that they sort of give up before they even get started. Not only does this lead to less-than-careful review of the award letter, lack of effort in contacting the financial aid officer, and a failure to appeal for reconsideration (all points included above), it can also lead to careless spending. A bigger or nicer apartment, a car payment, and a brand new laptop are all very common expenditures for grad students, and while the extra five or ten thousand dollars doesn’t seem like much next to a $140,000 education, that extra spending will absolutely be paid for by the loans with the worst terms and highest interest rates. Those seemingly small items will ultimately cost the student twice as much down the road.
  • Doggedly search for outside funding. More common among high school students with parents who see their life savings dwindling away, searching for outside scholarships is often something that slips past graduate school applicants. This is a mistake, as there are a variety of unique scholarships, fellowships, and writing competitions available for graduate students of all stripes. Most top grad programs feature a list of such resources on their websites and there are also both free and pay sites that collate these opportunities.
  • Carefully review the financial aid opportunities at every school of interest. This sounds incredibly obvious, but most applicants do not perform a thorough search of each and every scholarship and fellowship offered at the schools to which they are applying. The reason this is so important is that students may actually qualify for something they aren

Types of Financial Aid for Grad Students

Financial Aid Guide
Last week we announced our new Veritas Prep Guide to Financial Aid, a free resource for new admits or anyone else who’s thinking ahead and wondering how they’ll pay for their graduate degree. We spend most of our time working with applicants who are stressed about just getting into school; how to pay for it is considered a “nice problem to have.” Once you are faced with this problem, however, it will likely hit you like a ton of bricks, so it pays to start thinking ahead and familiarize yourself with the financial aid landscape.

The following descriptions will help students understand the various types of financial aid awards:

  • Scholarships

Introducing the Guide to Graduate School Financial Aid!

Financial Aid Guide
Grad school applicants spend countless hours stressing over the admissions processing and wondering about whether or not they’ll get in, but they tend to forget their next-biggest source of anxiety: If they do get in, how will they pay for the whole thing? To take some of the mystery out of the financial aid process, we’ve just released The Veritas Prep Guide to Graduate School Financial Aid.

This isn’t another “Find 1,000 free loans!” service… Rather, it’s Financial Aid 101 for anyone who is about to start writing some really big checks to attend grad school. It covers grants, merit-based fellowships, subsidized federal loans, and private financing options. All of these should be part of your toolkit as you start to plan how to finance your degree.

The following are four key things you should do, starting now, as you consider how to finance your MBA, MB, or JD:
  • Start early, and stay organized. While separate from admissions, the financial aid process is concurrent and equally important. Deadlines should be placed on the calendar and prioritized similar to admissions deadlines, and checklists can be very valuable in keeping everything organized.
  • Doggedly search for outside funding. Searching for outside scholarships is often something that slips past graduate school applicants compared to their undergraduate counterparts. Scholarships, fellowships and writing competitions for graduate students are often listed on school websites, while independent websites also collate these opportunities.
  • Carefully review the financial aid opportunities at every school of interest. While applicants generally apply to multiple schools, most applicants do not perform a thorough search of the scholarships and fellowships offered at each of the schools to which they are applying. This simple step of due diligence may reveal students qualify for a cost-savings they were otherwise unaware of.
  • Emotions aside, consider the bottom line. Be willing to briefly consider the enrollment decision in purely financial terms. It sounds overly rigid, but considering how emotionally most students make their decisions, it will help balance things out to take a short period of time to consider the enrollment decision the way an accountant would.

You can download the full report for free here. If you want more help in getting into business school, law school, or medical school, call us at (800) 925-7737 and speak with a Veritas Prep admissions expert today!

Harvard’s Endowment May Face Losses

In another sign of economic stress, Harvard has announced that its $36.9 billion endowment may face “unprecedented” losses in the coming year.

While a Harvard spokeperson declined to comment specifically on how the anticipated losses would affect university operations, the university has confirmed that it will continue to offer free tuition to students whose families earn less than $60,000 a year, and offer reduced tuition to families with annual incomes of as much as $180,000.

Other Ivy League schools are taking additional steps to mitigate students’ pain: Princeton will make more financial aid funds available to students, and Brown will relax rules barring students with unpaid tuition balances from registering for classes. Given the size of Harvard’s endowment, even if it faces losses this year, we wouldn’t be surprised to see the school take similar steps to protect its students.

If you’re applying to graduate school this year, the bottom line is that top schools don’t want to have to turn away anyone because of fianances, even in this economy. Don’t be afraid to pick up the phone and have a frank conversation with the financial aid office at your target school. Chances are that they want to work with you to help you make it work.

For more information on Harvard, visit the Veritas Prep HBS information page and read about the HBS 2+2 Program.

Law Schools Loans Still Available … Mostly

In the wake of the credit crisis, one question that has been top of mind for many prospective law students is whether the hefty loans relied upon by so many will, in fact, be available when it comes time to cut the check to the old office of the bursar.

The loan packages required to attend an elite law often soar well above $100,000 in total and are typically cobbled together through a variety of government-backed loans (Stafford, Perkins, and PLUS) and private loans. Given the way loans are drying up in other markets and industries, it was a reasonable question to wonder if they would still be there for students.

Finally, word is trickling down from sources like NYU Law School Dean Richard Matasar that the government-based loans will most likely be unaffected by the credit crisis. So most of the financial aid necessary will still be there.

Unfortunately, it doesn’t look like private loans will be as readily available. The National Law Journal worries about students applying for bridge loans to get from graduation to the bar exam, but those expenses are often covered by law firms as a benefit to the 2L summer associates who accept offers of employment in advance.

Of greater concern is what a reduction in loan availability will do to school choice and the inevitable leveraging game that follows when students are forced to make financial considerations the top factor in selecting a program. In the current J.D. market, students often bypass large scholarships in favor of loan-heavy packages in order to attend the top program or best fit available. However, if those discretionary private loans aren’t available, students may not have a choice but to take the bigger scholarship packages. This tends to create an environment where schools get leveraged by other programs willing to spend big, and the result is confusion in the marketplace with regards to where top students will congregate and where top employers need to go to recruit.

All of that said, the major takeaway is that most of the loans will still be there, which should continue to fuel a recession-driven spike in graduate school applications.

Loan Forgiveness Programs: Should Applicants Consider Them?

Obviously, one of the primary factors that govern a graduate school applicant’s enrollment decision is The Almighty Dollar. As in: how much will this cost, what kind of aid can I get, and what sort of earning potential am I looking at once I finish? Analyzing educational cost is a complicated task because students must first identify actual numbers (sticker price – available scholarship and grant money) and then put those numbers in the proper context by understanding loan repayment and properly estimating future salary figures.

See, complicated.

One thing that is further complicating this financial aid stew is the addition of loan forgiveness programs. Popularized by elite law schools, the concept is a relatively simple one: eschew the big paychecks (and long hours) of a big law firm in favor of public interest work and, in exchange, you will get help paying back your enormous graduate student loans. Law schools have discovered that an attractive loan forgiveness program is a terrific marketing tool. This is primarily due to the fact that a huge number of law school applicants (especially those who are qualified to land admission spots in the elite programs) are highly optimistic people who view themselves as truth-seeking, freedom-fighting altruistic beings. In other words, everyone thinks they are going to do public interest work when they first apply to law school.

This poses an interesting question: how much stock should a top-flight candidate put in a school’s loan forgiveness program?

A quick look at any reputable survey (I’m too lazy to find one at present) will tell you that the number of law school graduates who ultimately do public interest work is far, far less than the number of law school applicants who say they will one day do public interest work. There are many factors that play a role in this phenomenon. It is easier for a student at an elite law school to secure a summer associate position at a law firm than with a cutting edge public interest entity. Public interest firms and groups have fewer recruiting resources. The pressure to work in the big legal markets like New York or L.A. force students to search for an accessible path that will also pay the costs of relocating and then living in those cities. There are also simple (and often perverse) economic incentives, career-building considerations, and personal preference factors to consider. But the simple truth is that the number of actual public interest lawyers is so much lower than the number of hypothetical public interest lawyers because – pay attention now – people have no idea what they want to do when they are applying for law school! In fact, it is safe to say that the “actual” number for any subset of the legal profession is substantially lower than the suggested numbers generated by surveys of law school applicants.

It is human nature to change one’s mind, especially after being exposed to hundreds of hours of logical reasoning and critical analysis.

So this takes us back to our initial question, framed in a new way: if students think they might want to do public interest law, but know they probably won