Tagged: financial aid

Rumor Has It.. Debunking COAP Myths For New Admits

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

“It’s A Beautiful Thing”- the New Loan Repayment Estimator

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.

What is truly important…in the New Year?

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?

2014Good 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…

The Gift That Keeps on Giving- Sequestration and Loan Fees

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”.

Get On Board the Public Service Loan Forgiveness Train

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.

Thanksgiving Comes Early to YLS

“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.

“Fixed- Variable” And Other Student Loan Oxymorons

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.

Life Does Not Have To Involve Living Off Ramen- How YLS Students Save Money

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…):

“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. “

“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.”

“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!”

“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.”

“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.”

“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.

Tonight’s Top Ten Category … Things You Need to Know About Using Your Financial Aid …

Note- this post has been updated since its original publication in May 2013
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  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 1st .

#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 1st and by August 1st (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.

The Price of Solitude … the cost of living with or without a roommate

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.

COL Roommate Chart

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.