Categorized | Business

Money Tips for Students March 2015

Star Staff Reports

Money graphicStudents should learn about credit scores

Students should be familiar with credit scores, according to KHEAA.
Your credit score is a three-digit number that has a long-lasting effect on your buying power. When you apply for credit, your credit score will be checked.
The higher your credit score, the better the chances you will be approved.
Although there are several scoring methods, the most widely accepted form comes from the Fair Isaac Corporation, or FICO. Your FICO score ranges from 300 to 850. The exact formula that Fair Isaac uses is proprietary information, but these items make up your credit score:
·  35 percent of your score is based on your payment history. Early payments will have a higher number than on-time payments, which will have a higher score than late payments.
· 30 percent of the score is based on outstanding debt. This outstanding debt is how much you owe on car loans, mortgages, credit cards, etc. The number of credit cards you have and if those cards are near the maximum borrowing limit will hurt your score.
·  15 percent of the score is based on the length of time you have had credit. The longer you have been borrowing money and paying it back in a timely manner, the better your score.
· 10 percent of the score is based on new credit. If you have opened several new accounts, that will have a negative effect on your score. Also, the more inquiries on your credit report in a year, the lower your score.
· 10 percent of the score is based on the types of credit you currently have. It helps to have a mix of loan types. If you have a credit card, an installment loan will even the credit out.
KHEAA is a public, non-profit agency established in 1966 to improve students’ access to college. It provides information about financial aid and financial literacy at no cost to students and parents. KHEAA provides the ThinkAhead Net Price Calculator to universities and colleges.
The calculator, available on a school’s website, lets students and parents determine their out-of-pocket costs for attending that school. KHEAA also helps colleges manage their student loan default rates and verify information submitted on the Free Application for Federal Student Aid (FAFSA).
In addition, KHEAA disburses private Advantage Education Loans on behalf of its sister agency, KHESLC. For more information about Advantage Education Loans, visit www.kheslc.com.

Financial Aid Tip of the Month, March 2015

College students should take FAFSA verification process seriously
The federal government requires colleges to verify the information submitted by many students on the Free Application for Federal Student Aid (FAFSA).
The FAFSA is the form used to apply for most federal and many state student aid programs. It asks detailed questions about the income and resources of students and their parents if the students are considered dependent students. Students are considered dependent if they are undergraduate students under 24 years old, not married, have no dependents of their own, are not veterans or were not orphans or wards of the court until age 19.
The college or, in some cases, an agency working with the college will contact students to let them know if their data is being verified.
Students and parents need to take that process seriously, according to KHEAA. Students chosen for verification cannot receive their financial aid until they have completed the process.
If students have decided not to attend a college that asked them for verification, they should let the college know so it will stop requesting information.
KHEAA is a public, non-profit agency established in 1966 to improve students’ access to college. It provides information about financial aid and financial literacy at no cost to students and parents. KHEAA provides the ThinkAhead Net Price Calculator to universities and colleges.
The calculator, available on a school’s website, lets students and parents determine their out-of-pocket costs for attending that school. KHEAA also helps colleges manage their student loan default rates and verify information submitted on the FAFSA.
In addition, KHEAA disburses private Advantage Education Loans on behalf of its sister agency, KHESLC. For more information about Advantage Education Loans, visit www.kheslc.com.

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