HBCU Spotlight – Howard University

Howard University SealHistorically Black Colleges and Universities (HBCUs) have served a vital and transformative role in the history of America. Many of this country’s most prominent civil rights activists, politicians, actors, scientists, scholars, and public figures attended or taught at HBCUs, and for students of all backgrounds who want to connect with and be inspired by this history, HBCUs can provide an excellent education and a sense of pride in the extraordinary accomplishments of the many students who have gone before them.

There is, however, another potential benefit of attending an HBCU. Many of the top HBCUs offer generous merit-based scholarships to students who have met certain GPA and test score requirements. In this series, we have profiled some of the top HBCUs in the country to show you the kinds of opportunities that exist at these historic institutions.

Before becoming a Supreme Court Justice, Thurgood Marshall's most famous case was Brown v. Board of Education.
Before becoming a Supreme Court Justice, Thurgood Marshall’s most famous case as a lawyer was Brown v. Board of Education.

Howard University

Located in Washington D.C., Howard University was founded in 1867 shortly after the end of the Civil War by the First Congregational Society of Washington D.C., and throughout its history this institution has played an important role in the development of the Harlem Renaissance, the Civil Rights movement, and other historic events. Howard has produced many notable alumni, including Nobel Laureate and Pulitzer Prize winning novelist Toni Morrison; activist and author Stokely Carmichael (also known as Kwame Ture); the first president of Nigeria, Nnamdi Azikiwe; lawyer and U.S. Supreme Court Justice Thurgood Marshall; classic American novelist, Zora Neale Hurston; former mayor of New York City, David Dinkins; and former NASA astrophysicist and ousted prime minister of Mali, Cheick Modibo Diarra. There are many scholarships available to Howard’s students, including those listed below. To find out more, visit: http://www.howard.edu/financialaid/grants_scholarships.htm

Scholarship High School GPA SAT (CR+Math)/ ACT Scores OtherRequirements Award Renewal GPA
Presidential 3.75 1500/34 NA Tuition, Fees, Room, Board, $950 Book Voucher, & Laptop 3.3
Laureate NA NA National Achievement Finalist Scholars who designate Howard as their First Choice Tuition, Fees, Room, Board, & $950 Book Voucher 3.3
Founders 3.5 1400/32 NA Tuition, Fees, Room, Board & $500 Book Voucher 3.3
Capstone 3.25 1300/29 NA Tuition, Fees, Room 3.3
Legacy 3.0 1170/26 NA Tuition & Fees 3.0

HBCU Spotlight – Morehouse College

20130801082219!Morehouse_college_sealHistorically Black Colleges and Universities (HBCUs) have served a vital and transformative role in the history of America. Many of this country’s most prominent civil rights activists, politicians, actors, scientists, scholars, and public figures attended or taught at HBCUs, and for students of all backgrounds who want to connect with and be inspired by this history, HBCUs can provide an excellent education and a sense of pride in the extraordinary accomplishments of the many students who have gone before them.

There is, however, another potential benefit of attending an HBCU. Many of the top HBCUs offer generous merit-based scholarships to students who have met certain GPA and test score requirements. In this series, we have profiled some of the top HBCUs in the country to show you the kinds of opportunities that exist at these historic institutions.

morheouseMorehouse College

Morehouse College has one of the most illustrious lists of alumni of any HBCU, or any college for that matter. According to Wikipedia, “Morehouse alumni include notable African-Americans such as: Dr. Martin Luther King, Jr., theologian Howard Thurman, businessman and former Republican presidential candidate Herman Cain, filmmaker Spike Lee, filmmaker Robert G. Christie (a.k.a. Bobby Garcia), actor Samuel L. Jackson, Gang Starr rapper Guru, Olympic gold medalist Edwin Moses, Lloyd McNeill, Jazz flutist, USPS Kwanza Stamp designer, the first recipient of Howard University’s MFA Degree, former Bank of America Chairman Walter E. Massey, the first African-American mayor of Atlanta Maynard Jackson, Major League Baseball first baseman and 1969 World Series MVP Donn Clendenon, former Secretary of Health and Human Services Louis W. Sullivan, and former United States Surgeon General David Satcher.”

Morehouse College is located in Atlanta, Georgia, and its student body is and always has been 100% male. The institution that eventually became Morehouse College was founded in 1867, just two years after the end of the Civil War, by Baptist ministers as a training ground for black ministers and teachers. Over the years it relocated and expanded (in part with financial help from John D. Rockefeller, who was a baptist). Dr. John Hope, who became the college’s first black president in 1906, brought a new vision to Morehouse, giving new emphasis to traditional academic disciplines (in contrast with Booker T. Washington’s stress on practical trades and agriculture at Tuskegee). This institution would go on to produce many of the Civil Rights movement’s most influential leaders, including Martin Luther King Jr. Few other colleges have been such important engines of social change in world history.

Martin Luther King Jr. graduating from Morehouse.

The cost of attending Morehouse College is  estimated at about $40,000 per year for students who live on campus and $27,000 to $28,000 for students who live off campus. As you can see from the chart, there are very few merit-based scholarships awarded to incoming freshmen each year. Like many other institutions of higher learning, Morehouse College prefers to award need-based aid, and according to the Morehouse website, “Over 90% of our students’ education is financed with a combination of scholarships, loans, grants, and work- study,” so don’t despair over the price tag right away – chances are you won’t have to pay the sticker price. Below are listed two scholarship programs available to qualified incoming freshmen at Morehouse.

Scholarship GPA Other Requirements Award
Stamps Leadership Scholarship 3.7 Only awarded to the top 5 applicants each year. Interview and supplementary materials required. Awardees selected annually will receive full-ride scholarships valued at approximately $200,000 each. Students in the program also will have access to an enrichment fund of $10,000 each to support study abroad trips, undergraduate research trips, unpaid internships and academic or co-curricular conferences.
Rugari Scholarship  NA Only available to five students from the African Great Lakers Region, including the Democratic Republic of the Congo (DRC), Rwanda, Burundi and Uganda Full scholarship program to cover the cost of a four year education program

Be a National Merit Scholar! Part IV – What Now?

PSATThe time has finally come. You’ve found out what your PSAT scores are. Did you score well enough to make the cut?

The truth is that PSAT cutoff scores vary from state to state and change from year to year, so you can’t be certain you made the cut until the fall, when the National Merit Scholarship Corporation officially notifies students of their National Merit status.

“What? A whole year! I can’t wait that long!”

Relax, it won’t actually be an entire year, but it will be at least nine or ten months. Most qualifying students will be notified of their status as a National Merit Semifinalist around September of their senior year. Before you give into despondent impatience, although the cutoff scores for each state vary from year to year, they are usually fairly consistent. If you found out what your PSAT score is yesterday, the first thing you should do is compare it to last year’s cutoff score.

“OK. It looks like I would have been a National Merit Semifinalist using last year’s cutoff. What now?”

Now nothing. Congratulations! Again, most states’ cutoff scores tend to be fairly consistent; if you scored above your state’s cut off score for last year, then you can be reasonably assured recognition as a National Merit Semifinalist, or at least a Commended Student. If you have scored well enough to be recognized as a Semifinalist, when you are officially notified next year, your high school guidance counselor will be sent an application for you to fill out. This application will determine whether you advance to Finalist status (you shouldn’t overly concern yourself with this; 15,000 of the 16,000 Semifinalists will go on to become Finalists).

If you just must learn more about how to Be a National Merit Scholar! please refer to these previous posts:

Be a National Merit Scholar! Part I – Qualifications and Overview

Be a National Merit Scholar! Part II – What Does it Take to be a Finalist?

Be a National Merit Scholar! Part III – Scholarship & Opportunities

Have a question? Ask the experts at Test Masters!

College Compass is sponsored by Test Masters, the nation’s leading test preparation company. Every Test Masters prep course comes with a Score Increase Guarantee, find out why here.



Be a National Merit Scholar! Part III – Scholarship & Opportunities

PSATIncentive is the mother of motivation, and the National Merit Scholarship Qualifying Test (NMSQT) is no exception; one of the most obvious reasons students compete so desperately to become National Merit Scholars is the financial reward that accompanies such an achievement. Before we dole out sagacious and prescient advice on how to Be a National Merit Scholar! (like study your vocabulary, for example), we want our students to know exactly what they are competing for.

There are several different types of scholarship associated with being recognized by the National Merit Scholarship Corporation (NMSC).

  1. National Merit Scholarship $2500 Scholarships – These are one-time scholarship payments which every Finalist competes for. These scholarships are awarded on a state representational basis, and family circumstances, college choice, and major or career plans are not taken into consideration.
  2. Corporate-sponsored Merit Scholarship awards – These scholarships can be either one-time or four-year renewable awards. Corporate sponsors may designate scholarships to children of their employees or members, residents of a community in which the company operates, or for National Merit Finalists whose college or career plans the corporation wishes to encourage.
  3. College-sponsored Merit Scholarship awards – These scholarships are renewable for up to four years of undergraduate study; they are awarded by sponsor colleges to Finalists who will be attending that college or university, or to those who have indicated to the National Merit Scholarship Corporation that the sponsor college is their first choice.

All of these award types are prestigious and incredibly difficult to obtain. However, if the reason you prepare so diligently for the National Merit Scholarship Qualifying Test is financial in nature, then some are more desirous than others; specifically, the four year renewable scholarship types are what you should be focused on winning.

After reading these descriptions you may have noticed that each of the above scholarship-types share a distinct characteristic, namely that you must be a Finalist in order to qualify. This may seem a bit overwhelming as there are only about 15,000 Finalists every year, and that of those 15,000 Finalists, only about half will be awarded a scholarship.

Before giving up hope of ever obtaining any of these National Merit Scholarships, you should be aware that there is an additional scholarship type associated with being recognized by the National Merit Scholarship Corporation:

  1. Special Scholarships – These scholarships may be either four-year renewable or one-time awards; they are reserved for non-Finalist National Merit competitors. To be considered, students must meet the entry requirements set forth by the National Merit Scholarship Program as well the sponsor’s criteria. Candidates must submit entry forms to the sponsor organization, after which the NMSC will contact and review high scoring candidates through their respective high schools (usually by notifying your high school principle).

The NMSC releases some information about what a student must do to become a National Merit Scholar. This information has been discussed in previous posts; however, the process is basically as follows:

1. Students have to take the PSAT during their junior year of high school (some exceptions exist for those who are graduating early or cannot, for one reason or another, take the PSAT on the regularly scheduled test date). About 1.5 million students take the PSAT every year.

2. Of the approximately 1.5 million students who take the PSAT each year, the NMSC selects the 50,000 with the highest scores to be selected either as a Commended Student or a National Merit Scholarship Semifinalist.

3. Drawing on these 50,000 students, 34,000 are selected as Commended Students. These 34,000 Commended Students receive Letters of Commendation, but are out of the running to win a National Merit Scholarship. The remaining 16,000 students are deemed National Merit Scholarship Semifinalists, and are notified early in their senior year of high school. Along with your notification, you will receive the requisite application materials to advance in the National Merit competition.

4. Of these Semifinalists, 15,000 go on to become Finalists and vie for National Merit Scholarships.

Although becoming a National Merit Scholarship winner is a huge honor, generally speaking, even becoming a Semifinalist is enough to have a significant impact on a student’s educational opportunities. Lists of Semifinalists are released to the media and colleges, who make concerted efforts to contact these students and offer them special scholarships and programs. This is not only because National Merit Semifinalists represent some of the brightest young minds in the country, but also because colleges stand to benefit in ranking if these students elect to go there.

Because becoming a Semifinalist can mean so much to students, there is a heavy focus on what it takes to make the cut.

This step -the selection of Semifinalists- is where the NMSC becomes reticent to divulge information. Semifinalists are chosen on a per-state basis in order to maintain a fair geographic distribution of National Merit Scholars. According to the NMSC, the cutoffs are selected to allow the top 1/2 of the top 1% of each state’s students to become Semifinalists. This means that there are different Semifinalist score cut-offs per state. For example, in 2008, if you scored above a 216 in the state of Texas, you were a Semifinalist; in California, however, the cut-off was 218. They span a fairly large range: roughly from 205 to 230 each year. The cutoffs are not published by the NMSC, but are generally available online. (UPDATE: THE PSAT CHANGED IN 2015. INFORMATION ABOUT THE NEW SELECTION INDEX SCORE CAN BE FOUND HERE, HERE, AND HERE.)

Because this information is not published by the NMSC it might sometimes be difficult to guess at what score you need. To get an idea of what the Semifinalist cut-off is in your state, you can examine old data and make an educated guess. The cut-off score in any given state does not usually vary by anymore than two or three points in either direction. That said, the best way to hedge against those fluctuations and maximize your chances of becoming a National Merit Semifinalist is to thoroughly prepare for the PSAT. Although most students will prepare for the SAT, they often neglect the PSAT.

If you are interested in becoming a National Merit Finalist or Semifinalist, our recommendation is that you begin preparing no later than between freshman and sophomore year of high school.

This post is part of a series; other posts in this series include:

Be a National Merit Scholar! Part I – Qualifications and Overview

Be a National Merit Scholar! Part II – What Does it Take to be a Finalist?

Be a National Merit Scholar! Part IV – What Now?

If you have any comments or questions, we encourage you to leave them below or Ask Test Masters directly.

Pay for College – Perkins Loans

paying for college
paying for college
The Federal Perkins Loan Program is an excellent option for students and parents trying to figure out how to pay for college.

We have discussed several different types of financial aid commonly available to undergraduate students trying to pay for college: Pell Grants, Stafford Loans, and Direct PLUS loans. Another type of loan available to students with financial need is the Perkins Loan.

Approximately 1,700 postsecondary institutions participate in the Federal Perkins Loan Program. Each institution receives a different amount of funding from the US Department of Education, and each is given a significant amount of flexibility and discretion when awarding that money. Because funding is limited and individual institutions have the authority to decide who merits how much, this means that you may qualify for a Perkins Loan but not receive one, or you may receive less than you qualify for. Factors that will influence how much aid through Perkins you can use to pay for college are the amount of aid you are receiving through other forms of financial assistance and the availability of funds for your specific school.

Perkin loans are very similar to Stafford Loans; the most notable differences between the two are that Perkin Loans have no fees (origination or default), a longer grace period (nine months instead of six months), and disbursement is handled directly by the school.

Perkins Loans share several important characteristics with some of the other loans we have discussed so far. In order to be eligible to receive a Perkins Loan you must fill out and submit your Free Application for Federal Student Aid (FASFA). Aso, Perkins Loans are not automatically renewable, so you must apply for them every year. Having to reapply for Perkins Loans each year means that it is quite possible that you may not receive the same amount from year to year, or even receive anything at all. When coming up with a strategy to pay for college, it is important that you keep many financial aid and payment options in mind.

As mentioned earlier, Perkins Loans are one of the most desirable loan types a student can obtain. One of the most attractive features of a Perkins Loan is its fixed interest rate and extended grace period. Currently, the Perkins Loan is fixed at a 5% interest rate and a nine month grace period. These loans are structured in such a way that students are not charged an interest rate on their debts (keeping in mind that each Perkins Loan is distinct unless you consolidate your debt) until nine months after graduation, drop to part-time student status, or withdraw from school.

How do you receive your Perkins Loan? The loan is given to your college or university, at which time it may be used to pay for any outstanding costs, including tuition, books, fees, etc. If there is any amount left over, you will be given that amount to use towards other educational expenses.

One of the main reasons Perkins Loans are not easy to obtain is the limited amount of funding available for so many needy students. Take a look at the chart below to get an idea of the amount of funding, if you qualify, you might receive to pay for college.

The total limit an undergraduate student can borrow through Perkins Loans is $27,500.

That does it for today’s discussion of Perkins Loans; join us next time as College Compass continues it serial on how to Pay for College. Find additional financial aid information here.

The experts at Test Masters are available year round to address all of your college admission need. Have a question about financial aid or college admissions? Ask the experts at Test Masters!



Paying for College: Part III – Direct PLUS loan

paying for college
paying for college
College tuition doesn’t have to eat a hole through your stomach.

So far we have discussed two different types of financial aid: Pell Grants and Stafford Loans. For students attending local city or state universities these two types of aid might actually cover the bulk of your financial needs. However, students who intend on going to more expensive universities, or who don’t qualify for need-based aid, have probably noticed these options don’t come close to covering all of their expenses. Fortunately, there are many alternatives we have yet to explore in our ongoing conversation about financial aid. In College Compass’ third installment of the “Paying for College” series, we will discuss a loan designed specifically for parents: the Parent Loan for Undergraduate Students, also known as a Direct PLUS loan. The most important thing you need to know about Direct PLUS loans is they let parents borrow the remaining cost of college attendance for their undergraduate children, something we will discuss in much greater detail later on in this post.

PLUS loans have a complicated history. In the past, PLUS loans were given out through the Federal Family Education Loan Program; the FFEL was disbanded in early 2010, although the PLUS program was considered important enough to keep. Today, PLUS loans are dispersed through the Direct Loan Program, thus the name Direct PLUS loans. Unlike other types of loans, most of which have an option allowing parents or cosigners to eventually transfer full responsibility of the loan to the student, PLUS loans cannot be transferred and are, at least legally, solely and entirely the parent’s responsibility.

All the financial aid types we have discussed so far share one feature – in order for a parent to qualify for a Direct PLUS Loan, their child must fill out and submit a Free Application for Federal Student Aid (FAFSA). Universities and colleges require a FASFA from the student before accepting a Direct PLUS loan because schools encourage, to the point of requiring, that students explore all of their financial options before approving a big loan, even if that loan is in the name of the parent and not the student. This is the primary reason I refer to the amount parents can borrow through Direct PLUS loans as the ‘remaining cost’ of attendance, rather than just the ‘cost of attendance.’ The official PLUS policy is that parents can borrow the entire cost of school minus whatever financial aid their child has qualified for. If parents want to they could borrow the entire cost of attendance, but it is in everyone’s best interest to apply for other kinds of financial aid before even considering that option.

As we continue our discussion of Direct PLUS loans, you’ll notice there are many differences between PLUS loans and other educational grants and loans. This is because the Direct PLUS loan is not need based. The PLUS loan may share certain features with other federal financial aid programs, but there are key differences when it comes to rates, charges, and accessibility.

An important difference between this type of loan and other education loans is the Direct PLUS loan requires a credit check. This aspect of the Direct PLUS loan illustrates why it is unique and how its differences separate it in crucial ways from similar loans.

One consequence of PLUS loans requiring a credit check is you can be denied a PLUS loan if you don’t pass a credit check. The two biggest reasons someone would be refused a PLUS loan are bankruptcy or defaulting on any previous education loan within the last five years. Unfortunately, there are not many ways to get around a failed credit check; no other immediate family members, like an uncle, grandparent, or sibling, can take out this loan instead of a parent, or even cosign with a parent. If the parents are divorced it is possible for one, the other, or both parents to take out a PLUS loan; however, the amount taken out by both parents cannot be more than the total or remaining cost of tuition. The best option after being denied a Direct PLUS loan is to pursue a private loan, where there are many more options when it comes to circumventing a failed credit check.

Another result of the PLUS loan not being need based is that the interest rate is much higher than other federal education loans. Like Stafford Loans, the interest rate to a Direct PLUS loan is fixed. However, the current interest rate is 7.9% (compared to the 3.4% rate for a subsidized Stafford loan and the 6.8% rate for an unsubsidized Stafford loans). The interest rate for PLUS loans may also change from year to year, depending on a variety of economic and political factors.

Like every other loan or grant, you have to apply for a PLUS loan every year you intend to use one. This may result in a hodgepodge of financial statements and bills that are hard to keep track of and even harder to pay. There is a way to navigate these treacherous financial waters: debt consolidation. Consolidation is not mandatory, but can sometimes be necessary; especially if you intend to pay for college entirely through financial loans and aid. Consolidation allows individuals to essentially bundle their various debts into a single debt and monthly payment. An important aspect of consolidation is there is no restriction on the number of times you may consolidate; so, if you are taking out loans every year to pay for school, you have the option of consolidating your debt every summer. Consolidation gives financially stressed individuals a degree of control when it comes to planning and structuring their debt, however debt consolidation does have certain negative implications. Consolidation usually leads to a lower monthly payment; a lower payment means it will take longer for you to pay off your debt; the longer it takes to pay off a debt, the more interest will be charged on that debt.

The Direct PLUS loan is also subject to fees. These fees are generally modest and similar to those associated with Stafford Loans; currently, with a 3% origination fee and 1% default fee.

The cost of college doesn’t stop with a diploma; most people pay for school years after graduation. Like most of the important decisions you make in life, success requires planning. The Direct PLUS loan is a great option for parents who want to ensure they can afford the expense of their child’s college education; however, it is important to remember it is not the only option. Like any other loan or financial assistance program, there are benefits and risks that go with it. Any successful plan for financing higher education should include out of pocket payments, grants, loans, and scholarships.

Have a question? Ask the experts at Test Masters!

You can learn more about financial aid here. Remember, the experts at Test Masters are available year round to help address all your college admission needs.

Paying for College: Part II – Stafford Loans

paying for college
paying for college
College tuition doesn’t have to eat a hole through your stomach.

College Compass is happy to present the second installment of our “Paying for College” series: Stafford loans. Last time, we focused our discussion on Pell Grants, a highly sought-after kind of financial aid reserved only for those students who need and deserve it most. Today, our attention will be directed toward a more commonly available type of financial aid, the Stafford Loan. While this loan is also need based, it is generally available to middle class students and families who could still use some help paying for college. Because the process of applying and receiving financial aid can be confusing, we’ll follow the journey of a hypothetical student, Susie Q., as she goes from interested applicant to Stafford loan recipient.

Filling out the FAFSA is the first step toward getting a Stafford Loan.

Stafford Loans are similar to Pell Grants, and just about every other kind of federal student aid, in one very important initial aspect: the first step to applying for a Stafford Loan is completing and submitting a Free Application for Federal Student Aid (FAFSA). Students are required to update their FAFSA and apply for Stafford loans every year of college they want financial aid. This means you’ll take out one loan for your freshman year, one for your sophomore year, etc. until your financial situation improves or you graduate. Students who are claimed as dependents on their parents’ tax returns, like Miss Susie Q., have access to less money than their independent counterparts, because their parents are expected to help them pay for college.

The government is not giving you money, it is letting you borrow money.

Step 2: After submitting her FAFSA online and being accepted as a student, Susie Q. calls her Desired University’s (DU) financial aid office to see if they approve Stafford loans.

Step 3: If DU allows Stafford loans, Susie Q. talks with one of DU’s financial aid officers to determine how much of each kind of Stafford loan she might qualify for. (Susie Q. is a totally reasonable human being and knows that information might not be immediately available, so she ends up calling several times, until her information has been processed.)

Before exploring the differences between these two types of loans, there are a few general requirements any loan applicant considering Stafford Loans should be aware of. In order to qualify for a Stafford loan, the applicant must be enrolled or plan to enroll for at least half-time status (which varies from university to university, but is typically between 6-9 hours), must be accepted for enrollment or attending a university which participates in the Stafford Loan Program (information which should be readily available on the university’s financial aid website), and MOST IMPORTANTLY the applicant cannot be in default on any educational loan payments or owe a refund for any previous educational grants or loans.

Your university’s approval is the most important step in obtaining a Stafford loan.

Step 4: Susie Q. reads Campus Compass’ “Paying for College” blog serial, so she is already prepared and does not need to waste a lot of time learning about the differences between subsidized and unsubsidized Stafford loans.

One type of Stafford loan is subsidized by the federal government. This means the government is willing to cover all the interest accrued by this particular loan (remember, you have to apply for these types of loans every year and each loan is distinct from another) until six months after you graduate. Like the Pell Grant, access to this kind of loan is based largely on need; however, unlike a Pell Grant, it is far more accessible to middle class families. Another benefit to subsidized Stafford loans is the interest rate is fixed at 3.4%, which is half the rate of unsubsidized Stafford loans (though both rates are lower than any private loan). The interest rate is so low because the government essentially backs your loan. THIS DOES NOT MEAN THE GOVERNMENT WILL PAY YOUR STUDENT LOAN! Students are responsible for paying back both kinds of Stafford loans; the government will collect, one way or another (probably through garnished wages) if you default on your loans!

I’m not trying to scare you; there are a number of reasons to prefer federal education loans to private student loans: greater accessibility, no credit check, fixed interest rate, grace periods, variety and options, and the list goes on. However, misconceptions concerning student loans can be dangerous, so it’s important to understand what you’re getting yourself into. Loans are NOT the same thing as grants: even with federally subsidized loans, students are taking a risk when they accept loans because eventually they are going to have to pay them back. These risks are different, depending on the type of loan you receive, and we’ll talk about these differences (specifically the different risks associated with these two kinds of Stafford loans) as we continue our discussion.

The second kind of Stafford loan is unsubsidized. The recipient of an unsubsidized Stafford loan is immediately responsible for any interest accrued from the loan; interest accrues as soon as a student’s account is credited. You do have options when it comes to repaying an unsubsidized Stafford loan: you can either begin paying it off immediately, or defer payments until six months after graduation. This second choice is obviously very similar to the repayment plan of subsidized Stafford Loans. However, while deferring payment will allow you to push payment back to a time when you can actually afford to make payments, it won’t stop interest from being charged as soon as you are credited with the loan. Deferment can be viewed as a dangerous convenience because it is essentially a gamble; you are letting your debt increase significantly (at a 6.8% interest rate) over the course of at least four and a half years, and gambling that you will have a good enough job to make payments on that debt after you graduate. You could save yourself thousands of dollars over the long haul if you start making payments immediately; this quickly reduces your debt and lowers the total amount of money you are charged in interest. There is risk associated with this strategy too; once you agree to begin paying back a loan you cannot miss any payments without seriously jeopardizing your financial future. It may not be easy, but one the best ways to pay off an unsubsidized Stafford loan is to work your way through school and perhaps rely on your parent’s help making those first payments.

Step 5: After discussing the particular details of her loan with her bank’s loan officer, and more importantly with her parents, Susie Q. decides the best option for her is to apply for the maximum amount for both a subsidized and unsubsidized Stafford loan.

Monitoring your financial situation can be exhausting, but it’s very important.

One interesting aspect of the Stafford loan program is that subsidized and unsubsidized loans are not mutually exclusive; you can apply for and receive aid from both at the same time. It’s important to keep track of how much money and of what kind of loans you are taking out, and to monitor your debt as it accumulates. This is very important because there is a debt ceiling (see Max Debt Allowed in chart below); once the debt ceiling is reached the government won’t let you borrow any more money through Stafford loans.

Though I have been warning you all about the dangers of ignoring or overlooking your loan interest rate, Stafford loans do have some of the best interest rates available. Aside from being lower than most any other loan you’ll ever get, the best part of Stafford loan interest rates is that they are fixed. A fixed interest rate means that the interest rate for the loan you take out will never change! This does not mean that every Stafford loan you take out will necessarily have the same interest rate; the interest rates vary year to year, but the interest rate on a specific loan will not change. This means that the interest rate for the loan you take out to cover your freshman year may be different than the interest rate you get on the loan for your sophomore year; however, the specific interest rate for your freshman year loan will never go up. A fixed interest rate is great because it lets you figure out exactly how much you will owe and when, months and even years in advance.

Step 6: Susie Q.’s student account is credited with the amount of money she applied for, which is the maximum amount available to her.

Notice that the biggest difference in access to funds is in the unsubsidized Stafford Loans category; the amount of aid a student may have access to is determined entirely by the student’s tax status.

I imagine the biggest question on everyone’s mind concerning Stafford Loans is, “How much aid can I actually get?” The answer depends on your tax status (whether your parents claim you as a dependent), your grade (freshman – senior), as well as your status as a student (full-time student or part-time). It is important to point out the amount of money available through Stafford loans can change over time. Remember, these are federal education loans and so they are subject to the president’s policy and Congressional budgets.

Additionally, students may not receive all the money they apply for. This can happen for several reasons: the bank or lender may charge what is called an origination fee, which is simply a fee for processing the loan; this is a small fee that is usually no more than 1%. There is another, similar kind of fee called a default fee, where the lender charges a small fee to set up a reserve in case the student defaults on his or her debt. Also, it’s important to remember the amount of aid you are eligible for depends on the deliberations of your university; just because you want the maximum amount does not mean you will be able to even apply for it!

Step 7: Though Susie Q. received the maximum amount of Stafford loans available to her, she still does not have enough money to pay for DU. She’s not worried though; she plans on reading the next edition of College Compass’ “Paying for College” series, which will cover even more options on how to pay for school!

This may seem like a lot of information, and it is, but there are many considerations to take into account when paying for college. I encourage you to carefully research your options, contact banks and universities, and really work to understand the different financial strategies available to you. Another great option is to follow our “Paying for College” series on College Compass; next time we’ll be covering Direct PLUS loans, a loan that allows parents to pay for their children’s entire tuition! Until then, keep studying!

Have a question? Ask the experts at Test Masters!

Learn more about financial aid here! Remember, the experts at Test Masters are available year round for all your college admission needs.

Pay for College – Pell Grants

paying for college
paying for college
College tuition doesn’t have to eat a hole through your stomach.

A lagging job market and the increasing cost of a higher education have made it more difficult for undergraduate students to pay for college; for many, financial aid is now a necessary and unfortunate aspect of the college experience. While there is a voluminous amount of information available to interested students and parents, the process of applying for financial aid can still be confusing. This series is intended to help you understand your different financial options; my goal is to help you figure out how to pay for college.

In this first post, we will discuss Pell Grants, which occupy a unique place in the world of financial aid. Almost exclusively specific to undergraduate students seeking their first degree, Pell Grants are highly prized because they are fully subsidized and do not require repayment. To qualify for a Pell Grant students must first complete and submit their Free Application for Federal Student Aid, or FAFSA. Filling out the FAFSA means you will be automatically considered for a Pell Grant; although they are primarily reserved for students who need them the most.

pay for college
Uncle Sam wants YOU to go to college!

There are two specific Pell Grant eligibility requirements. The first is that you must be accepted as undergraduate and seeking your first degree. The only exception to this is for post-baccalaureate students seeking a teaching certificate. The second requirement is fairly simple – you cannot be currently incarcerated.

The primary factor in determining eligibility for Pell Grants is the ability to demonstrate financial need. This is where things get a bit technical, so pay attention…

Financial need is defined as the difference between the aggregate cost of attending college, which includes general expenses like tuition, fees, and books plus living expenses, minus the student’s Expected Family Contribution, or EFC.

A student’s EFC is automatically calculated upon the completion of his or her FAFSA using relevant factors such as the student’s and parents’ income and assets, the size of the student’s household, and the number of family members currently attending post-secondary institutions.

To qualify for a Pell grant in the 2012-13 school year a student’s Expected Family Contribution must not exceed a maximum threshold of $4,995. Just to be clear: the higher a student’s EFC, the less in need that student is in the eyes of the government or a university; the lower a student’s EFC, the more in need that student is in the eyes of these institutions. So, if a student’s EFC exceeds $4,995 that student may still qualify for financial aid, however he or she will not be eligible to receive financial aid through a Pell Grant. It is also important to note that a student’s Expected Family Contribution is not necessarily the amount a family will contribute toward tuition. Rather, EFC is the number used to gauge need by a university’s financial aid office. A student’s Expected Family Contribution might be better understood as a student’s potential family contribution, which financial officers take into consideration when deciding financial aid. The actual cost of college to a student’s family will depend on  the final decisions of the financial office.

The first step to applying for a Pell Grant is completing and submitting the FAFSA. Don’t forget: the earliest you can submit a FAFSA is January 1 and the deadline is June 30.

The most important question to an interested and eligible Pell Grant applicant might now be, “How much aid can I qualify for?” The answer is, of course, it depends. For example, a full-time student with an EFC of zero will be eligible to receive the maximum annual amount, which in 2012-13 will be $5,500, or $2,750 a semester. On the other hand, a student who meets but does not cross the EFC maximum of $4,995 might only qualify for the minimum amount, which in 2012-13 will be $577, or $288.50 a semester. It is important to note that a student’s eligibility to receive a particular amount of funding does not necessarily translate to the amount of funding a student will receive. Universities do not have equal access to Pell Grant funds; some schools receive more funding than others. The real dollar amount a student receives through the Pell Grant is determined by the university’s financial aid office, and is dependent on a number of factors. For example, state schools will have more access to Pell Grants than private universities and schools with larger endowments will not receive as much public funding as schools that lack such financial resources.

Pell Grants are popular among students seeking financial aid because they do not have to be paid back; however, this is not always true. Dropping classes or withdrawing entirely from school may change your status as a student from full-time to part-time, or to not-enrolled. Any action that changes your status as a student also has a significant impact on the financial aid you are eligible to receive. If these actions are done after a certain date or after the account has been credited then the student will be responsible for repayment with interest. Essentially, any money a student receives through Pell Grants is exclusively for school-related expenses and is given with the expectation of good faith on the part of the student. If that faith is violated, then the money that was given to the student becomes a loan, not a grant. Loans, unlike grants, have to be paid back.

Pell Grants
Pell Grants can make those books feel a little less heavy.

Eligible students often wonder how long they will be qualified to receive Pell Grants. Assuming no changes have occurred to alter a student’s financial status, or any other relevant factor, so long as a student satisfies their university’s standard for academic progress they will be eligible to receive financial aid through Pell Grants until they graduate. Academic progress is measured differently at different universities, but it typically involves earning a minimum number of credits per semester.

There are many factors that must be considered throughout the financial aid process, and everybody’s situation is uniquely their own. This article’s aim is to guide students through some of the more specific and confusing requirements of Pell Grants; however, two other useful guides for any financial aid applicant, according to my own research and common sense, are the student’s preferred university’s financial aid office and FAFSA website.

Stay tuned for the next post in Test Master’s financial aid serial, “Paying for College,” where the most common kind of student loans, Stafford Loans, will be covered!

Additional information about Pell Grants can be found at:



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Be a National Merit Scholar! Part II – What Does it Take to be a Finalist?

PSATIf you scored well enough on the PSAT in October, you will be notified of your status (whether you are a Commended Student or Semifinalist), via your high school, in September of the following year. Receiving any kind of commendation from the National Merit Scholarship Corporation (NMSC) is extremely prestigious, but no one likes to run a long race and come in second place. Of the approximately 50,000 students who are recognized for their PSAT scores, only 15,000 will advance to become Finalists. So what makes these students more deserving among a peer group of other exemplary students? What does it take to be a National Merit Finalist?

Students who advance from Semifinalist to Finalist status are awarded a Certificate of Merit to commemorate their distinguished performance. Who gets a Certificate of Merit is ultimately decided by the professional staffers at the National Merit Scholarship Corporation. Though the PSAT is standardized, advancement in the National Merit competition is not. There is no magic GPA, PSAT score, or extracurricular that will guarantee you a promotion to Finalist. Remember, you are competing against the very best and brightest students in the nation. Using a broad spectrum of criteria as a basis for advancement, each potential candidate is individually evaluated (which is one reason it takes so long for students to be notified of their status), and a determination on advancement is made from there.

Though there are no exact specifications as to what it takes to be a National Merit Finalist, the NMSC does publish a list of guidelines and prerequisites students are required to meet in order to qualify for advancement. In order to be a National Merit Finalist, you must:

1) Meet all entry and program requirements.

2) Be enrolled in your last year of high school and planning to enroll full time in college the following fall, or be enrolled in your first year of college if grades 9-12 of high school were completed in three or less years.

3) Complete the National Merit Scholarship Application with all information requested, which includes writing an essay (You will be contacted by NMSC through your high school and provided with the necessary application forms then).

4) Have a record of very high academic performance in all of grades 9-12 and in any college course work taken (the high school must provide a complete record of courses taken and grades earned by the student, as well as information about the school’s curriculum and grading system).

5) Be fully endorsed for Finalist standing and recommended for a National Merit Scholarship by the high school principal.

6) Take the SAT and earn scores that confirm the PSAT/NMSQT performance that resulted in Semifinalist standing.

7) Be prepared to provide any other documentation and information that NMSC requests.

Hopefully these guidelines and requirements did not make you cringe. All the NMSC asks is that you have been and continue to be consistently and demonstrably a candidate of the utmost academic quality.

An item of note:

It is not enough to have done well on the PSAT; in order to advance to Finalist status you must demonstrate that your PSAT score was not an anomaly. This means you must either match, or preferably beat, your state’s National Merit Score Index requirement on the SAT This means practice and additional preparation.

This post is part of a series. Other posts in this series include:

Be a National Merit Scholar! Part I – Qualifications and Overview

Be a National Merit Scholar! Part III – Scholarship & Opportunities

Be a National Merit Scholar! Part IV – What Now?

Have a question? Ask the experts at Test Masters!
Have a question? Ask the experts at Test Masters!

One of the best ways to prepare for the PSAT/NMSQT is to take practice tests. PSAT Exam Packs, available from Test Masters, are packaged PSAT exams and an excellent resource for students who want to Be a National Merit Scholar.

Test Masters offers the most extensive and comprehensive PSAT & SAT preparation courses available; click here to learn more about the Test Masters PSAT & SAT preparation course.



Be a National Merit Scholar! Part I – Qualifications and Overview

PSATEvery year approximately millions of students participate in the National Merit Scholarship Qualifying Test (NMSQT), otherwise known as the Preliminary SAT or PSAT. Of these students, approximately fifty five thousand students will score high enough to be recognized by the National Merit Scholarship Program. Needless to say, qualifying is extremely competitive and a very big deal. Whether you qualify as a Finalist, Semifinalist, or Commended Student, a high enough score on the PSAT will give you access to otherwise inaccessible opportunities. This is especially true in the context of scholarship and financial aid. Practically every high school student is, at one point or another, eligible to become a National Merit Scholar. The eligibility requirements to be a National Merit Scholar are as follows:

  1. A student must take the PSAT/NMSQT in the “specified year” of their high school program (for most, this means you can only qualify when you take the PSAT in 11th grade).
  2. Be a full time high school student and plan to go to college full time no later than fall of the year following graduation from high school.
  3. Be a US Citizen or permanent US Resident with the intention of becoming a US Citizen.

Of the approximately 55,000 students who receive recognition from the National Merit Scholarship Program, only 16,000 will go on to become National Merit Semifinalists. The remaining 34,000 students receive Letters of Commendation. Though no longer eligible to continue in the competition for National Merit Scholarships, some Commended students may qualify to become candidates for Special Scholarships. We will discuss this type of scholarship, along with several others, at length in a future post.

National Merit Scholarship Coporation
The NMSC is an independent not-for-profit corporation responsible for awarding a variety of scholarships.

Of the 16,000 semifinalists, 15,000 will go on to become Finalists. Before getting too excited, it’s important to note that advancing to the position of Finalist does not guarantee you a National Merit Scholarship. We will discuss the qualifications for advancement at length in a future article. In fact, approximately only 8,300 National Merit Finalists will receive Merit Scholarship awards. According to the National Merit Scholarship Corporation a wide variety of information is used to determine who wins a scholarship, including “the Finalist’s academic record, information about the school’s curricula and grading system, two sets of test scores, the high school official’s written recommendation, information about the student’s activities and leadership, and the Finalist’s own essay.”

The advantages of being a National Merit Commended Student, Semifinalist, or Finalist do not end with a National Merit Scholarship; in fact that is only where they begin. Be sure to return soon as we continue our series, Be a National Merit Scholar!

This post is part of a series; other posts in this series include:

Be a National Merit Scholar! Part II – What Does it Take to be a Finalist?

Be a National Merit Scholar! Part III – Scholarship & Opportunities

Be a National Merit Scholar! Part IV – What Now?

Have a question? Ask the experts at Test Masters!
Have a question? Ask the experts at Test Masters!

One of the best ways to prepare for the PSAT/NMSQT is to take practice tests. PSAT Exam Packs, available from Test Masters, are packaged PSAT exams and an excellent resource for students who want to Be a National Merit Scholar.