Cincinnati Bankruptcy Attorney

Archive for the ‘Financial Aid’ Category

Financial consultants are professionals who work counseling clients in the use and management of their money, investment options and asset relocation.

Depending on the situation, this can be something as simple as helping them create a budget, or as involved as giving them tools to help them get out of debt, understand tax liabilities or contribute to their retirement pension.

Identification

Financial consultants are trained in a variety of fields. While there is no specific degree required to become one, most financial consultants do have a background in finances, business administration or investment and banking techniques.

Those offering brokerage services do need to be licensed by the FINRA (Financial Industry Regulatory Authority), which requires a series of tests from their members, such as the Registered Investment Advisor Law exam.

Significance

Most people go to a financial consultant because they are experiencing problems with cash flow or debts. Financial consultants, as a result, are experts in helping clients deal with expenses and with balancing income or learning to manage their debts.

Because many clients do not have a sizable disposable income at the time they visit a financial consultant, the first step is often to try and organize liabilities so clients can work out a payment plan to cover their debts before they can start investing for the future.

Features

For those whose present financial situation is rather stable, investments and planning for the future come next in the list of financial priorities. In this case, the role of a financial consultant is to establish what type of financial issues should be addressed first.

For example, families with small children often need to work on establishing a college account, while older people need to worry about estate planning and life insurance. Most financial consultants will recommend some type of investment or savings account, no matter the present financial situation of the client. Read the rest of this entry »

Financial problems are normal, day-to-day issues with long-term ramifications. Debt and other major issues are severe enough that experiencing difficult finances is an overarching, central issue for many individuals and families. Many common financial problems overlap to a great extent. The most severe remedy in these situations is personal bankruptcy, but even this presents both short- and long-term problems.

Debt

Debt is likely the most common financial problem among Americans. This is unlikely to change. It includes credit card debt, college loans and bank loans. Debt depletes savings and therefore forces interest rates upward. Debt is closely connected to overspending and escape from it requires great discipline and budgeting.

Foreclosure

Foreclosure is a severe and continuing problem in American personal finance. This destroys credit, depresses house prices and eliminates faith in the economy. Further, the loss of a home is without doubt a major psychological blow.

College

For many, a college education is considered a “ticket” out of poverty and debt. However, it can be a ticket for more debt and stress, especially if one is considering a private college. Repaying college loans can be a major difficulty, and putting money aside for college is yet another major expense.

Medical

The high costs of medical care and insurance are well known. There seems to be no end in sight to the climbing of these costs and the chunk of the paycheck that goes to pay for insurance. Even worse, a major medical emergency can bankrupt a family and plunge it into debt for a very long time. This seems to be a permanent feature of the American financial landscape. Read the rest of this entry »

Financial problems are an unfortunate reality many people face at some point in their lives. College students, mid-career workers and even retirees can encounter similar economic issues. An understanding of the most common causes of financial troubles can help you avoid or reduce stress during difficult times.

Personal Planning

Poor budgeting is one of the most common causes of financial problems. If a person is spending more than he is earning, he is setting himself up for money trouble. Many people start using credit cards and loans to offset their high expenses.

As interest piles up, these debts become larger and more difficult to pay off. Setting a household budget is essential for avoiding these financial problems.

Plan monthly expenses around loans, mortgages and other bills before spending cash on entertainment and luxuries.

Unemployment and Loss of Income

A complete loss of incoming cash can destroy even the most balanced budget. While it may not be possible to prevent job loss, some financial forethought can mitigate the damage. Depositing money into a savings account each month is essential for weathering a period of unemployment. Financial advisers recommend setting aside enough money to cover your living expenses for about three months.

Expensive Emergencies

Even the greatest financial planners aren’t always prepared for costly emergencies. Sudden medical, educational and home expenses can eat away at savings accounts and monthly budgets.

People often turn to additional loans in order to pay for emergencies but then fail to account for the loan payments in future budgeting. Remember that each new expense requires careful balancing with previous costs.

Financial Advice

When financial problems occur, some people look for answers and advice in the wrong places. Friends and family members may have the best intentions but are not always qualified to give financial help.

For example, failing to get the correct tax advice could result in heavy fines from the Internal Revenue Service. Insurance, tax and investment experts may be expensive, but the best ones stand behind their advice. Be sure a financial adviser understands your situation and has solid references before you put down any cash. Read the rest of this entry »

Financial aid can help you attend a more expensive school, rather than settling for the best you can afford. There are many types of financial aid available for those willing to fill out the necessary forms.

1. Apply between January 1 and June 30. Check with the individual schools where you are applying; some have deadlines as early as January.

2. Fill out the Free Application for Federal Student Aid (FAFSA) form, which you can obtain from the Office of Post-Secondary Education. It includes a Student Aid Report, which helps determine your expected family contribution.

3. Use a No. 2 pencil or black ink to complete the application.

4. Be prepared to give general information such as your name, address, social security number, citizenship status, marital status and type of degree you earned in high school.

5. Be prepared to give financial information such as total family income, number of people in the household and number of people in college. Round numbers to the nearest whole dollar amount.

6. List six schools you are interested in attending. You can change them if you find that the schools don’t provide the financial support you need.

7. Sign and date the application form.

8. Photocopy every sheet of the application for your records.

9. Wait for the results of your application, including the amount of financial aid you can expect to receive. It will be sent to you and to the schools you have applied to.

Paying for an Education

College is not cheap. Regardless of what school you wish to attend or the amount of tuition it costs, paying for school often involves student loans or some type of financial aid for most people. But many people can get into college without paying a dime.

Financial aid can come in many different forms. Don’t let money be the only obstacle that keeps you from getting into school. An education may cost money, but it doesn’t have to be yours.

Financial aid as a Loan

Usually financial aid in the form of loans starts with your school. Go to the registrar office and fill out the forms. Those forms ask about your personal income and the incomes of your parents or sponsors if you are dependent upon them.

Once those forms are complete and submitted to the school, the school sends the information up to the government’s Department of Education and, in most cases, they approve a student loan. The loan is disbursed straight to your school and you make a fairly flexible plan to pay it back at a low interest rate.

Grants

Grants are another way to get financial aid for college. Grants are just as they imply in the name–a grant. You don’t have to pay it back. Even the government gets into the business of grants. Depending on your financial status and personal situations, you might qualify for a Pell Grant that can be applied to the cost of your college tuition.

Depending on what you study, you could also qualify for another government grant. That process often involves writing a grant proposal to the government explaining exactly what your study plan is and approximately how much money you would need to complete it.

Scholarships as Financial aid

A scholarship is the most popular way to get financial aid because it essentially is free money to attend school. There are thousands of scholarships available for students; they just usually come with specific requirements or stipulations.

For example, one school offers scholarships for people that are left-handed. Other scholarships can be targeted to a specific population, like military veterans or descendants of Civil War soldiers. It requires time on your part to search available scholarships to find the right scholarship for you. Read the rest of this entry »

One common misconception is that young people who marry are no longer eligible for financial aid. In fact, some couples may benefit from getting married because their combined incomes will be lower than their parents’.

To qualify for financial aid as a married person, you must provide different information than you would if you were single.

Basics of Financial Aid

Before understanding how marriage will affect your eligibility for financial aid, you should understand the types of aid and sources of aid that are available. Generally, the question involves federal government aid.

The federal government provides several grant programs, including the Pell Grant, the TEACH grant and the ACG grant. These funds do not have to be paid back.

Through the government, you can also receive Stafford loans and work study funds. Of all these options, only the Stafford loan can be obtained regardless of your income level.

Determining EFC

Decisions about your qualifications for federal financial aid are based on your EFC (Estimated Family Contribution). Basically, when you complete the Free Application for Federal Student Aid, the income information you provide will determine how much your family should be able to pay toward your college education.

If you are a dependent student, your parents’ income must be provided and used to determine your EFC. If you are an independent student, you do not have to include your parents’ finances. In most cases, the EFC is going to be lower without your parents’ incomes. Unfortunately, being recognized as an independent student is not that easy.

Dependent Vs. Independent

Just because you are away from home, you are not automatically considered independent by the government’s standards for financial aid. Most college students do not live with their parents while in school but still receive financial support from those families.

To be classified as truly independent, you must meet specific criteria such as having your own dependent, being at least 24 years old or being married. If you are legally married, you only have to claim the finances of you and your spouse. From this perspective, being married will often help you lower your EFC and receive more financial aid. Read the rest of this entry »

Any student can apply for financial aid, whether married or single, and financial aid formulas do not discriminate between married and single people when distributing awards. The main factor marriage changes is the people considered to be part of the student’s household. The household size, income and assets all affect whether the student qualifies for need-based financial aid.

Basics of Qualification

Whether an individual qualifies for financial aid depends not on his marital status but on his responses to questions on the Free Application for Federal Student Aid. The FAFSA formula determines how much the student’s family can afford to spend on college each year, which is the expected family contribution.

The federal government awards some types of financial aid based on the EFC. The government and individual schools also look at the difference between the EFC and the cost of attending the school and award aid to meet that gap, which is the student’s financial need. In general, the more need a student has, the more aid he will receive.

Family on FAFSA

The people who are expected to contribute to the EFC are those in the student’s household. Most undergraduates file the FAFSA as dependent students who have to report their parents’ income and assets.

However, getting married is one of the ways for a student to change his status and file as an independent student. Rather than reporting his parents’ income and assets, the student will report the spouse’s income and assets. If the spouse does not earn much money, this can be an easy way to significantly decrease the EFC and get more financial aid.

Reporting Spouse Income

Even if you and your spouse plan to keep your finances separate or have a prenuptial agreement to that end, you must report your spouse’s income and assets on the FAFSA if you are married on the day you file.

The federal government’s financial aid formulas do not allow you to exclude this information from the calculations. If you and your spouse did not file taxes together last year, you must report the information from your separate tax returns.

Timing

The FAFSA asks for your marital status on the day you file your application. You can file your application anytime after Jan. 1 of the year in which the school year begins, and most schools and states recommend filing as early as possible, ideally well before the tax return deadline of April 15.

Therefore, even if you will be married during the school year, you might fill out the FAFSA yourself or with your parents. If you are a dependent student and your parents make more money than your spouse will, getting married before you file the FAFSA that year can help you qualify for more financial aid because you can report your spouse’s income in place of your parents’.

After you apply for financial aid, take the time to choose the right program.

1. Apply for dependent student aid if you’re going to college straight from high school. Dependent student aid is determined by parents’ financial background.

2. Opt for independent student aid if you’re married, born before January 1, 1975, are a veteran, are in a professional or graduate program, or have legal dependents.

3. Apply for a Federal Supplemental Educational Opportunity Grant (FSEOG) if you have a low expected family contribution rate.

4. Consider the Federal Work Study Program (FWS) to use part-time work to help pay for tuition and gain experience before leaving school.

5. Look into student loans to receive low-interest rates and a variety of repayment options.

6. Opt for private loans to avoid filling out federal forms or to cover expenses that federal loans don’t cover.

7. Remember that parent loans can supplement student loan packages.