Common Mistakes Students Make When Applying for Financial Aid

Figuring out how to finance your education can be overwhelming. Not only do you have to figure out all of the different types of aid available, but you also have to juggle applications and deadlines at the same time. Here at the Higher Education Student Assistance Authority (HESAA) we want to help make the process as smooth as possible for you, so we are going to talk about five common mistakes students make when applying for financial aid.

Mistake # 1 – Not Applying at All

This one may seem obvious, but it’s really easy to count yourself out for financial aid simply because you think you won’t qualify. In reality, you have nothing to lose and everything to gain from applying for all different types of financial aid. While you may not qualify for certain types of funding, you might be the perfect candidate for others. Complete the FAFSA form to get started!

Mistake # 2 – Not Applying Soon Enough

Sometimes we fall into the trap of thinking that as long as we apply by the deadline that we have as good of a chance at getting financial aid, grants, and scholarships as those that applied early. However, this isn’t always the case. Financial aid is often awarded as applicants apply and so there may not be as much money left for those that apply right before the deadline. While you can’t guarantee that you’ll receive funding, you can guarantee that applications are submitted early enough for top consideration.

Mistake # 3 – Not Knowing Your Options

Finding success in paying for school comes from knowing the different types of aid available to you. Students often finance their education through a number of different ways including

• Personal savings
• Family assistance
• Federal aid, scholarships, grants, and loans
• Private grants and scholarships
• Supplemental loans
• Working part-time while attending school

Here at HESAA, we encourage you to take some time to research all of the ways you can finance your education.

Mistake # 4 – Not Asking for Help

There are so many people that can help you apply for financial aid. A parent or caregiver is often your closest and best resource, but you should also consider asking your High School guidance counselors, siblings, teachers or other helpful mentors in your life. You may find that specific mentors are best suited to assist you with certain types of financial aid. For example, your parents will be a great help when filling out the Free Application for Federal Student Aid (FAFSA) and may also help you by co-signing for a supplemental loan. In contrast, your High School guidance counselor is one of the best resources for learning about local and national scholarships and grants. Regardless of those you choose to ask for help, the important thing is that you don’t try to go through the application process alone.

Mistake # 5 – Not Having a Contingency Plan

Even if you’ve done everything in your power to get yourself financially prepared for college by saving money, filling out the FAFSA and applying for grants and scholarships you still won’t have a guarantee that you will receive enough funding to cover the cost of college. In these cases, many students will also apply for a federal student loan and/or supplemental loans like the New Jersey College Loans to make ends meet. While nothing is better than free money, these loans still make attending college a possibility.

Student Financial Aid from New Jersey’s HESAA

Getting ready for school? Wondering what is available for Student Financial Aid in New Jersey? The New Jersey Higher Education Student Assistance Authority (HESAA) helps students like you find the financial aid that they need in order to get a higher education. With their mission of “Providing students and families with financial and informational resources for students to pursue their education beyond high school,” HESAA seeks to provide opportunities for that might not otherwise be available through student loans, scholarships and grants.

As you can see in the infographic above, HESAA provides financial aid through many different channels. If you are looking for programs to help you save for college, you may consider looking into the NJBEST program, which helps families plan and save for college.

A popular program used by about ⅓ of New Jersey’s college undergraduates, the Tuition Aid Grant (TAG) program is a need-based grant that may cover up to the cost of tuition based on financial need, cost of attendance, and available funding.

If you are looking for Scholarships, and were part of the top 15% of your class during Junior or Senior year, the NJ STARS program can help you. Created with New Jersey’s highest achieving students in mind, the NJ STARS award can cover the cost of tuition for up to 5 semesters of continuous full-time enrollment in a degree program.

For help getting started, or just to learn more, visit HESAA.org.

Where to Apply for Student Financial Aid

Financing your education can seem like a daunting task. You already know that you should look into financial aid options, but you aren’t sure about where to start. Here at the Higher Education Student Assistance Authority (HESAA) we are here to help you know where to apply for student financial aid. Follow these easy steps and you’ll be on your way to financing your education:

1. Apply for Federal Aid

Complete the Free Application for Federal Student Aid (FAFSA). Federal Student Aid is the largest provider of student financial aid in the nation. It provides financial assistance in the form of grants, loans and a work-study program. There is no age limit to receiving assistance; you simply need to meet all of the eligibility requirements. The FAFSA application is available online and the earlier you fill it out the better. Be sure to visit their website and familiarize yourself with the current deadlines. They even have an Early Estimator Calculator that can help you get a rough idea of an early estimate of your eligibility for federal student aid. They recommend juniors in high school or even those in middle school to use this calculator. Having an idea of the funding that may be available to you early on will help you create a successful strategy for paying for school.

2. Apply for State-funded Grants and Scholarships

Make sure you are also considered for state assistance. When submitting your FAFSA, check to see if your state offers state funded grants and scholarships. Applying for state funding in New Jersey is easy and convenient. After you’ve submitted your FAFSA online, simply register for an account through the HESAA website and answer the New Jersey grant questions. The New Jersey Tuition and Grant Program (TAG) is one of the most generous need-based financial aid programs in the nation. It offers funding for full and part-time students attending select schools in New Jersey. The TAG program also offers an online NJ TAG Estimator to help you see what types of funding may be offered to you. New Jersey also has merit-based scholarships available through the New Jersey Student Tuition Assistance Reward Scholarship (NJ STAR). These scholarships are eligible to those who rank in the top 15% of their class at the end of their junior or senior year of high school who plan on attending select county colleges in New Jersey. In addition to these two programs, there is information about many more state funded grants and scholarships available through HESAA.

3. Look into Supplemental Student Loans

Consider investing in a student loan. There are times when college savings, scholarships, grants and federal loans just aren’t enough. Federally funded student loans, both subsidized and unsubsidized, tend to be the best and most affordable options. However, you may not qualify for these student loans, or you may not qualify for a loan large enough to cover all of your costs. When this is the case, students and their families can begin looking at private & supplemental loans like New Jersey College Loans to Assist State Students (NJCLASS) available through HESAA. HESAA will help you determine if you are eligible for NJCLASS loans. These supplemental student loans are offered to those New Jersey residents who plan to attend an eligible in-state or out-of-state school and to out-of-state students attending an eligible school in New Jersey.

Knowing the types of financial aid available to you can help you start your financial planning early. Having a plan on how you will pay for school is one of the first steps in setting yourself up for success. Following these easy steps will help you make one of the smartest investments in your future.

How Cosigning a Student Loan Works

Between rising tuition costs and higher prices on everything from housing to books, many — if not most — college students find that student loans are their last hope for acquiring a higher education. Those students who find that borrowing money is necessary, even after College Savings Plans, Grants, and Scholarships, should look into ways to Minimize Their Student Loan Debt.

Additionally, if student loans are necessary, Federal Student Loans should be used as the student’s primary borrowing source. Federally backed loans typically don’t require a cosigner and provide additional benefits like lower interest rates, payment deferral while in school, tax deductible interest, and the possibility of deferral or forbearance during repayment.

Private and Supplemental Student Loans Often Require a Cosigner

There are times, however, when college savings, scholarships, grants, and federal loans just aren’t enough. Under these circumstances, students and their families can begin looking at private & supplemental loans like New Jersey College Loans to Assist State Students (NJCLASS) available through HESAA.

Because most college students either don’t have a good credit score or don’t have an established credit history, many private and supplemental lenders require a cosigner on student loans, but Cosigning a Student Loan Can Be Risky. Understanding how cosigning works is critical in this situation.

Why Is a Cosigner Needed?

Private and supplemental student loans are termed as unsecured consumer loans. That means that they are not backed by the government and they aren’t secured by a tangible asset like a house or a car, making them riskier investments because there is nothing to repossess if the loan defaults. When a student doesn’t have a good credit score or an established credit history, financial institutions will also see them as a risky investment because there isn’t any historic data indicating that this person is likely to pay back the loan. This typically results either in high interest rates, low borrowing limits, or both. It can even result in being turned down for a loan altogether.

However, many lenders will consider extending a loan with better terms if somebody is willing to cosign the loan with the primary borrower. The credit score and history of the cosigner will be taken into account and allow the lender to offer better interest rates, borrowing limits, and loan terms. While most student loan cosigners are the student’s parents, a cosigner doesn’t have to be related to the borrower.

What Does Cosigning Mean?

A cosigner — as the name indicates — signs the loan in tandem with the primary borrower. In essence, they guarantee that they will cover the debt if the primary borrower fails to pay back the borrowed money. Even though they don’t receive any money from the loan, the cosigner takes on equal responsibility for repaying the debt.

It’s important to note that any cosigned loans will show on the cosigner’s credit rating and credit history, and any late payments on those loans can and will affect their ability to borrow money themselves. If the primary borrower fails to make payments or defaults on the loan, the cosigner can be held responsible for repayment of the debt.

Cosigning a Student Loan Is a Big Responsibility

In many ways, cosigning a loan isn’t that different from taking out a loan yourself. Until the loan is paid back, you are financially responsible for its repayment. Before agreeing to cosign a student loan, you should carefully consider how doing so will affect you and your credit. You will need to be sure that you are willing and able to repay the loan if the primary borrower fails to make payments on the loan for any reason.

If you choose to cosign a student loan, you should carefully consider all aspects of the loan including the loan’s interest rate, term, repayment schedule, and penalties. Then, you should make sure that the primary borrower fully understands the risk you are taking on for them and how their action or inaction can and will affect your financial position.

What Are the Risks of Cosigning a Student Loan?

With rising college costs, it is critical that you understand the different types of financial aid available to the families of students who wish to pursue higher education. College Savings Plans, Scholarships and Grants are typically the best sources of money to pay for college, but aren’t always enough. When college costs outstrip available funds and financial aid that does not require repayment, student loans are generally used to make up the difference. If you find that student loans are necessary to fulfilling your student’s higher education goals, you should begin by looking at ways to Minimize Student Loan Debt.

Federal Student Loans

If borrowing money becomes necessary, Federal Student Loans — both subsidized and unsubsidized — should be pursued as the primary loan source. These loans are entered into by the student and do not require a cosigner. Additional benefits of these loans typically include:

• Lower Interest Rates
• Repayment Deferral While the Student Is in School
• Interest Payments Are Tax Deductible in Some Cases
• There Are Options for Deferral or Forbearance During Repayment When Necessary

Private and Supplemental Student Loans

If savings, scholarships, grants, and Federal loans still aren’t enough, you can begin looking at private and supplemental loan options. Private loans are available through many financial institutions and some states offer supplemental loans like the New Jersey College Loans to Assist State Students (NJCLASS) available through the Higher Education Student Assistance Authority (HESAA). It’s important to note, however, that most of these types of loans require the student to have a cosigner.

Cosigning a Student Loan Is Risky

A cosigner’s established credit history often results in higher borrowing limits and lower interest rates, but cosigning isn’t without its risks. To begin with, when a student loan requires a cosigner, both the student and the cosigner are listed as borrowers on the loan, meaning that they are both responsible for the repayment of the loan.

As a cosigner, the risks you take on with a private or supplemental student loan include:

• The loan and its payment record are listed on your credit history.
• You are taking on new debt, which affects your credit score.
• Any late payments on the loan reflect on your credit history and credit score.
• You are liable for repayment of the loan if the student is unable to repay the loan at any time.
• Your responsibility for the loan is equal with that of the student borrower.
• If the loan defaults, the lender can attempt to recoup the balance of the loan from you.
• Financial institutions are not obligated to keep you up to date on the loan’s status.

It’s important to remember that cosigning a student loan is essentially the same as taking out a loan in your own name. Careful evaluation of the loan’s interest rates, terms, penalties, and repayment schedule is a critical action that should be part of the borrowing process.
If you choose to cosign a student loan, you should have a serious discussion with your student regarding the financial obligation that you are both taking on. Make sure that they understand that their actions or inaction can reflect on your financial position as well as their own.

10 Great Ways to Minimize Your Student Debt

College is expensive. But the hard truth is that in many industries and fields you are much more likely to both gain employment and advance if you have a college degree. Nevertheless, you won’t be surprised that the ever-increasing cost of college tuition has created a world where crippling student debt is the reality for many college graduates. For many of these former students — and their families — their debt hangs threateningly over their heads like Damocles’ fabled sword.

Also unsurprisingly, the best way to minimize the painful effects of student debt, is to first strive to minimize student loan amounts in the first place. At HESAA, We have compiled this list of ways to do just that.

1. Take Advanced Placement (AP) Classes

Advanced Placement (AP) courses are designed to allow high school students to receive a range of college credits before graduating from high school. By taking advantage of these courses, you or your student can actually start college with credits already in place. These credits help fill college prerequisite and graduation requirements and allow you to pay for fewer classes at the college tuition level.

2. Consider a Starting at a Community College

Generally speaking, 4-year degrees require a range of general education courses as part of their curriculum. A cost-effective way to work toward your degree is to start at a community college. These schools offer most general requirement courses at a significantly lower rate than full universities. By taking these courses at a community college before transferring to the college or university of your choice, you can save quite a bit of money.

3. Choose an Affordable College

Every student dreams of being able to choose the best school with the best program for their major. In reality, however, that’s not always practical. Choosing a school that has a quality program in your field of study that is also affordable is one of the best and easiest ways to limit the amount of student loans you will need. When researching the cost of a school, don’t forget to include room, board, and other living expenses in the total cost of attending.

4. Choose an In-Demand Major

When you were a child, you probably didn’t think much about how much money you could make when you were asked, “What do you want to be when you grow up?” However, as a prospective student or a current student, majoring in a subject that is in-demand in the job market is crucial to graduating with a degree that can help you get a job that will allow you to support yourself, support your family, and pay back any student loans you incurred while pursuing your degree.

5. Utilize Savings, Scholarships, and Grants

If your family has been able to save for your college education, you’ll find yourself at a good starting point. 529 College Savings plans, like the New Jersey Better Educational Savings Trust (NJBEST), are one of the best ways to save for tuition. These “qualified tuition plans,” as they are legally known, can offer special tax benefits. Earnings in a 529 plan are not subject to federal tax, nor are they subject to state tax in most cases.

In addition to college savings, scholarships and grants can greatly reduce the amount of student debt you incur. One of the best things about both grants and scholarships is that they are essentially “free” money because they do not have to be paid back. Filling out your FAFSA (Free Application for Federal Student Aid) will tell you if you qualify for federal grants like Pell Grants or Federal Supplemental Educational Opportunity Grants (FSEOG). Additionally, FastWEb.com is a great resource for scholarships and grants that you can apply for depending on your high school grades and personal successes. Other places to look for scholarships include:

• Each College or University You Are Interested In,
• Local Foundations, and
• Local Community groups.

6. Limit What You’re Borrowing Money For

There are many aspects of college life that cost you money, including: tuition, books, supplies, housing, food, etc. Nevertheless, whenever possible, you should borrow money for as few expenses as possible. Even if you are able to use grants and scholarships to cover part of your expenses, borrowing for too many expenses can add up quickly.

Let’s look at an example to illustrate this. In our example, two students are attending an art school that costs $30,000 in tuition for a two year degree.

Student A: Has a $30,000 scholarship through the school that covers their tuition. However, they borrow $1,200 per month for books, supplies, and living expenses. Over the two years, they accumulate $28,800 in student debt.

Student B: Has $10,000 in grants and scholarships that goes toward their tuition. They choose to live with family and work a part time job to cover the costs of books, supplies, and food. Over the two years they accumulate $20,000 in student debt.

As you can see, limiting what expenses you borrow money for can make a real difference in how much debt you accumulate.

7. Work While You Study

As shown with Student B in our example above, working a part-time or full-time job while you’re in school can help you cover some of your expenses. The key is to find the balance of how many hours you can work without experiencing a negative effect on your studies. For some, the best balance is to go to school full time and work part time. For others, the solution is to work full time and take a few courses each term. There is no one, right answer, but balancing school and work can really help you limit how much money you have to borrow for your education.

8. Apply For Federal Student Loans First

As their name suggests, Federal Student Loans, are funded by the Federal Government. They offer a variety of benefits over private loans, including:

• Lower Interest Rates
• Deferral of Repayment While in School
• Tax Deductible Interest (in some cases)
• Possible Options of Deferral or Forbearance During Repayment

Because of these benefits, it is a good idea to see if you qualify for any Federal loans before looking at private loan sources for student loans.

You should understand that there are two main types of Federal Student Loans, subsidized loans and unsubsidized loans. On subsidized loans, the Federal Government pays the interest while the loan is in its initial deferral stage. Unsubsidized loans, on the other hand, begin accruing interest as soon as the loan is taken out. It is often beneficial to make “interest only” payments on unsubsidized loans while in school in order to maintain lower principal loan amounts.

9. Carefully Evaluate Private & Supplemental Loans

Not all loans are created equal. If you find yourself in need of private or supplemental loans, make sure that you carefully evaluate all aspects of each loan before signing. Keep in mind that some states offer supplemental loans to help students from their states or who are attending school in their state. For example, New Jersey offers New Jersey College Loans to Assist State Students (NJCLASS) to New Jersey residents who choose to attend qualifying in-state or out-of-state schools as well as to out-of-state students who plan to attend a school in New Jersey.

Here are a few of the details you should look at when choosing a private or supplemental student loan:

• Interest Rates, including if they are fixed-rate or variable-rate loans
• Term of the Loan(s), i.e. how many years you will be repaying the loan(s)
• Presence of Early Payoff Penalties
• When Repayment Begins
• If "Interest Only" Payments Can Be Made Before Repayment Begins

10. In Short, Don’t Borrow Exorbitant Amounts

All of the above tips funnel to this one: accrue as little student debt as possible. If you find that you need to borrow money to make your college dream come true, make sure that you aren’t selling your future to do so. In general, borrowing more than you can reasonably expect to make as your starting salary after graduation is a bad idea. You should know that students who borrow more than twice what they can expect to make as their starting salary will be at high risk of default.

Bonus Tip: Avoid Defaulting On Your Loan(s)

If at all possible, avoid defaulting on your student loans. Defaulting on your loans has different consequences for different types of loans, but the consequences can ruin your credit score for years and result in paying a significantly higher amount once late fees and interest are taken into consideration. While consequences vary widely for defaulting on private loans, some of the consequences for defaulting on Federal Student Loans can include:

• The entire unpaid balance and accrued interest becoming immediately due
• Loss of eligibility for forbearance, deferment, and repayment plans
• Your loans being sent to a collection agency
• Wage garnishment

By limiting the amount of student debt you acquire, you can put yourself in the best situation possible to avoid defaulting on your loans and setting yourself up to repay your loans on time.

New Jersey Financial Aid For Students

Higher education can be very expensive. Between the tuition, fees, books, housing, living expenses, and more, there are lots of elements pulling for your attention. But it’s at times like these that HESSA - The Higher Education Student Assistance Authority - in New Jersey can help you. They make the finding financial aid for college easier by offering financial and informational resources to prospective students like you. Some of these programs and resources are listed below.

New Jersey’s 529 college savings plan

Start saving early with a 529 College Savings plan, created for American families to encourage saving for higher education. These plans are implemented by state agencies, meaning each state is a little different. The NJBEST 529 College Savings Plan allows maximum flexibility and diverse investments to fit the needs of any investor. You can learn more by visiting NJBEST.com

The New Jersey Better Educational Savings Trust (NJBEST)

The NJBEST Scholarship is for students who are part of New Jersey’s 529 College Savings Plan. They must have had an account open for at least 4 years, with their contribution greater than or equal to $1200. The scholarship will be $500 if the student has had their account with New Jersey’s 529 College Savings Program for 4 years, with an extra $250 available for each additional 2 years activity. Learn more on our page featuring information about the NJBEST Scholarship.

The Governor's Urban Scholarship Program

Created by New Jersey Governor Chris Christie in 2012, the Governor’s Urban Scholarship Program is a merit-based scholarship to help those in New Jersey’s Economically challenged communities. There are eligibility requirements including the area you reside in, being a US citizen and resident of New Jersey for at least one year, etc. You can find these requirements and more in our brochure.

New Jersey College Loans to Assist State Students (NJCLASS)

The New Jersey College Loans to Assist State Students (NJCLASS) is New Jersey’s supplemental student loan program for both New Jersey residents attending an eligible in or out of state school, or out-of-state students attending college in New Jersey. The purpose of the loan is to help pay for education expenses your scholarship, grants, and other loans don't cover such as tuition and fees, book and equipment, housing both on or off campus, and study abroad programs.

The New Jersey Tuition Aid Grant (TAG)

The New Jersey Tuition Aid Grant (TAG) is one of the most generous need-based financial aid programs in the nation. Available for both full and part time students, TAG bases your reward amount on Financial need, cost of attendance, and available funding. These awards can be renewed annually as long as the student meets their eligibility requirements. Check out their brochure to learn more.

New Jersey Student Tuition Assistance Reward Scholarship (NJ STARS and NJ STARS II)

The New Jersey Student Tuition Assistance Reward Scholarships are exclusively for New Jersey residents. There are 2 programs available, the NJ STARS cover the cost of tuition at New Jersey’s 19 community Colleges. This scholarship is for students who rank in the top 15% of their high school classes at the end of either their junior or senior year. Students are eligible for 5 semesters of tuition, and if they maintain a 3.25 GPA or higher, will be eligible for the NJ STARS II program. The NJ STARS II Program is for students who completed the NJ STARS program successfully and have transferred to a New Jersey four-year public or private college or university to earn a bachelor’s degree. This award is based on tuition only, except for those who are TAG recipients who may also be approved for assistance with other school fees as well.

The Governor's Industry Vocations Scholarship (NJ-GIVS)

Announced in 2013 by governor Chris Christie, the Governor’s Industry Vocations Scholarship is especially for minorities and women pursuing a certificate or degree program in a construction-related field. These degrees include Architectural engineering Technology, Carpentry, Civil Engineering Technology, Landscape Design/Build, Masonry, Plumbing, Quality Assurance Technology and more. This Scholarship pays up to $2,000/year or the cost of tuition minus any other financial aid the student may have. Click here for a list of available degree programs and eligibility requirements.

In New Jersey, there are resources designed to fit just about every need. You won’t have to put off going to college because of financial worries. HESAA is here to help find the program that is right for you.

Navigating the Jungle of Student Loans: What Loans Are Available?

When it comes to financing your education, you have several options available. While some people may have already taken advantage of New Jersey's 529 College Savings Plan or are expecting a scholarship, they may still need to supplement their money with a student loan. There are many types of student loans and it’s important to understand what your options are before you sign up for anything. Use this quick guide to learn more.

NJCLASS Student Loans

New Jersey College Loans to Assist State Students (NJCLASS) is a loan option that helps students pay for the some of the costs they may not have covered by other loans or grants. For example, some loans may only be for $5,500 per semester, but your tuition could be more than that. Your NJCLASS loan would help you pay for that excess.

The benefit of choosing an NJCLASS loan over a federal student loan is that the payment plans and interest are usually lower. You can also prepay your loan without any penalties, giving you more flexibility in how you pay. These loans are available to residents of New Jersey attending school in or out of state, as well as people attending school in New Jersey.

Federal Subsidized Loans

Another option students have is a direct subsidized loan. These federal loans are backed by the government. In fact, the federal government will pay the interest on your loan while you are in school. These loans are specifically designed for undergraduates and offer fixed interest rates. Unsubsidized federal loans will occur interest as soon as the funds are disbursed to you or the school.

Private Student Loans

Private student loans are very similar to unsubsidized loans, as you usually start incurring interest right away. These loans are issued by a bank or other trusted lender, rather than the government. This gives you even more flexibility in how much you borrow and at what cost. The only downside is that these loans are not issued by need and you often need to have some income in place in order to qualify.

Choosing the Best Student Loan Option

Every student comes from a different financial background and has different educational goals. This can make it difficult to create a perfect, uniform way to fund undergraduate degrees. If you are planning on getting financial aid, contact HESAA to learn how we can best assist you.

Should Student Loans be Forgiven?

The issue of student loan forgiveness has recently been a contentious issue in modern politics, and is a issue we face often at HESAA, New Jersey's Student Loan department, Historically, student loans were issued primarily by private banks, and even then primarily to the children of the reasonably well-off, and so concerns about loan forgiveness and default were minimal, especially when college graduates seemed to be guaranteed high-paying jobs. However, the modern employment market demands bachelor's degrees for most entry-level jobs, and rising tuition costs mean that more people must borrow their way to an education than ever before. This, combined with recent scandals involving for-profit universities, has led many to clamor for more lenient policies regarding loan forgiveness.

Originally, the thinking behind making student loans so hard to forgive was a fear by private banks that new graduates would simply declare bankruptcy as a matter of course. Before the 1980s, most college students had no credit to speak of and there was a general opinion among bankers and regulators that students would not see bankruptcy as much of a penalty, since they would leave college with low income and low savings anyway, and could simply enter the job market with a bad credit rating and build it up over time. As such, banks argued that student loans should only be forgiven in the event of death or total and permanent disability. Basically, if the student was still able to function on some level, they should be forced to repay the loan, since the bank had no security other than the potential employment of the student.

The opinion on this began to change rapidly after the 2008 financial crisis, where an increased focus on lending regulations in general revealed numerous hardship cases where persons had either been deceived about the likelihood they would be employed or were simply unable to pay due to massive job losses in their industry. Additionally, there was increasing concern that the current system forced students to only choose high-paying jobs, as they would need to pay off large loans prompted by ever-increasing tuition prices.

In response, in 2010, Barack Obama signed a bill that would mandate that federal government agencies such as HESAA manage all student loans, and that they would offer new programs to enable graduates to have their loans forgiven. These programs are there to help students who give back, but also come with certain requirements to qualify. You can see a list of programs available for New Jersey students and their eligibility requirements by visiting this link on HESAA.org.

Why You Should Apply for NJCLASS

Introduction

Higher education often requires motivated students to make some difficult financial choices. Whether assistance is needed from parents or from financial aid resources, students are encouraged to explore a variety of college financing options. As a state approved agency that is dedicated to helping high school graduates locate funding, the Higher Education Student Assistance Authority (HESAA) provides information about a variety of unique loan programs, scholarships and grants.

New Jersey Student Loans

Money is available for students who attend higher educational programs in New Jersey. Additionally, residents of New Jersey may apply for loan programs to finance in-state educational expenses or to pay for higher education costs in another state.

Affordable financing solutions offered through the New Jersey College Loans to Assist State Students (NJCLASS) may be used to meet certain educational costs that are needed beyond traditional funding sources. Students may use the money that is received from NJCLASS to pay for tuition, books, campus-based housing or off campus housing, educational fees, computers, equipment and other expenses.

Scholarships and Grants in New Jersey

HESAA offers a large list of resources for New Jersey residents who need financial assistance for higher education expenses. Students may apply for merit-based programs and scholarships to help pay for certain educational costs. Financial aid counselors are available to discuss a variety of ways that a New Jersey resident may be able to cover higher education costs via NJCLASS and HESAA resources.

Consideration

Many students apply for financial assistance through the HESAA and NJCLASS. Certain deadlines are established for each year to apply for financial assistance. Students are encouraged to timely submit the required financial aid documents that are needed to determine whether an application will be approved.

Students who are awarded financial aid through the Higher Education Student Assistance Authority or the New Jersey College Loans to Assist State Students generally receive low-cost loans that are extremely competitive.

On the NJCLASS website, students can review loan information and receive tips about borrowing money for higher education costs. The website also offers options to make student loan payments and to consolidate student loans.

Borrow Wisely: Your Guide to Minimizing Student Debt

Most students rely on loans to finance their college education. While most experts say that this type of debt can be a wise investment in the long run, they stress that students should weigh their personal needs, resources available, and ability to repay when considering how much is too much to borrow. The following tips can help you keep your student loan debt from becoming overwhelming.

Choose a Marketable Major

It pays to select a field of study that is in demand. Literally. It can mean the difference between quickly finding a well-paying job and being unemployed after graduation. That doesn’t mean you have to commit to a major in computer science, technology or engineering, if you have no interest in the subjects, but if you are majoring in a topic such as economics, taking accounting as well can’t hurt. If your field of study is history or government, you should consider also learning a foreign language, or if you are a journalism major, having a health, business or computer minor can bolster your opportunities.

Bypass the Standard Four-Year College Plan

You can save thousands of dollars by starting off at a community college and later transferring to a four-year school. Enrolling in Advanced Placement (AP) courses through the College Level Examination Program can also help high school students reduce future expenses by providing college credits. By graduating from a community college first, you can save up to $1,000 on textbooks, save on housing while living at home, and then move on to a four-year college debt-free.

Don’t Overlook Scholarships and Grants

Research the schools you are interested in to find all of the grants and scholarships you qualify for. Look for offerings from community groups and local foundations as sources of support. In New Jersey, check out the Higher Education Student Assistance Authority (HESAA) for help locating sources of applicable scholarships and grants.

Apply For Federal Student Loans

Most students rely on federal government loans to finance at least a portion of their education, as they do not require collateral or credit checks, and they feature low interest rates. They also offer a variety of extended repayment and deferment options. Federal PLUS loans are available for parents, while Federal Perkins and Federal Direct Loans are available for students.

Consider Private and Supplemental Loans

If you have exhausted all of your resources such as grants, scholarships and federal loans, and still have college expenses that aren’t covered, supplemental loans like New Jersey College Loans to Assist State Students (NJCLASS) can help bridge the gap between the full cost of your education, grants and scholarships you’ve been awarded, and the amount you can borrow from government programs.

Borrow Smart

Calculate the amount of college debt you can reasonably shoulder. There are many online student loan calculators available online to assist you in estimating the amount of college debt you can manage based on your major’s starting salary, your maximum recommended loan debt, and the total cost to repay. A typical guideline is to borrow no more than twice your anticipated beginning salary upon graduation to reduce the risk of default.

How Much Is Too Much? Things to Consider When Getting a NJCLASS Student Loan

One of the hardest parts of getting a student loan is knowing how much to ask for. Asking for too little can leave one destitute, taking on regular employment that puts you at risk of neglecting your future education for your current obligations. But taking too much can likewise be dangerous, since every dollar borrowed today will cost you more than a dollar when the loan comes due. At HESAA, to often we see students borrow too much during their education and live a bit more opulently than their future employment can really support. This results in decreased future earnings and a huge debt that's all the more difficult to pay down.

So how can you, as a student in New Jersey, avoid borrowing too much, without borrowing too little? It's a tough needle to thread, but there are an increasing number of tools that students can use to get the job done right. The first (and oldest) is simply to begin asking around within your own major or specialty. Most departments now understand that student loans are not quiet embarrassments but instead public issues, and are willing to discuss how much other students are borrowing and what expenses can be expected. Schools are much more open about pricing and living expenses, and many will offer suggested borrowing plans for different majors or career paths.

Second, more and more public research has been conducted on student expenses, enabling upcoming students to understand their potential expenses by looking at trends as a whole. Researching what others borrow is key to figuring out how much you should borrow, and enables you to narrow down what sort of range you should apply for. Making sure you borrow something close to what's expected also helps reduce your risk, since it will more closely match you with what you anticipate your industry of choice will enable you to pay back.

Third, it's important to know yourself. Some people can live on store-brand coffee while others will be too miserable to function without daily visits to coffee shops. Look at your own expenses and see what you really spend on yourself - the number may be surprisingly high. Talk to your parents and see what they spent on you in high school, and compare that with your own bills, budgets and spending habits. Accounting for living expenses is one of the most intractable parts of attending college, and borrowing enough to keep yourself comfortable, without overreaching your ability to repay is very important.

In the end, you should borrow an amount that allows you to live comfortably, but that you are comfortable with. If the number looks a little high, it probably is. So don't hesitate to talk to others about what they borrowed, and how they spent it. You may save thousands in the long run.