Vicki Beam: Congratulations to the Class of 2022

Stephanie Shomin, The Record-Eagle, Traverse City, Mich.
·3 min read

Jun. 29—Congratulations to the Class of 2022! What an accomplishment to achieve after the last few years. Many of the recent graduates are taking the time to decompress — but now is the time to plan for the upcoming college year.

The summer break can be a valuable time for your family to work together to create a college funding plan for your college bound students. Most of these plans will include some federal student loans. Take note: federal student loan interest rates will increase for the 2022-2023 school year. The new federal rates will be 4.99 % for undergraduate loans, 6.54 % for graduate loans and 7.54 % for Parent PLUS loans.

The new rates are only applied to those federal loans that are taken out to pay for the 2022-2023 academic year. Any existing education debt will not be changed by the new rates. The new federal rates will not apply to private student loans either. Private student loans rates will still vary from lender to lender. Private loans are a combination of both fixed rates and variable rates.

Your student will need to accept the direct loan at their student portal. In addition, they will need to complete the entrance counseling as well as sign the master promissory note. Both of these can be accessed at studentaid.gov.

While borrowing costs won't deter most families who need to use loans as a form of payment for college, the new higher interest rates can still mean bigger debts. Utilizing loans to finance higher education can be a great tool, but borrowers must be willing to assess whether the investment will pay off when graduation time comes. It's always good practice to figure out whether the debt borrowed can be easily paid off once the student graduates and they start earning. It is suggested that your total student debt should be less than your annual income.

Most recent graduates are also scheduling their orientation to register for classes for the fall semester. For those who took AP courses, the scores won't be released until July 5 — so make sure you discuss the impact on your schedule if you are registering for classes now.

When you do meet with your academic adviser, ask to map out the four years you will be taking classes. Now is a great time to determine if you can get all your graduation prerequisites completed in four years or less.

Most of the colleges have not set their costs for the 2022-2023 school year. Make sure to check your email and student portal for announcements and your bill for the fall semester. The direct costs for college will be on the bill — which include tuition, room and board and any college fees you may incur. Indirect costs like books, supplies, transportation and personal expenses will not be reflected on the bill; however, these costs are still considered for the total cost of college. Your financial aid eligibility includes both direct and indirect costs.

Take the time now to get help from a college funding advisor. Michigan College Planning helps navigate the financial aid process from start to finish, including creating a clear plan. Our services include preparing you NOW to optimize your financial aid eligibility for your student's college years. We are happy to help! Contact us for a complimentary college funding consultation.

Take advantage of Michigan College Planning's College Planning workshop to learn more about the application process and how to become what colleges want. Visit www.michigancollegeplanning.com or https://www.tcaps.net/programs/leap/for locations and dates. The workshops are informative and include steps you can take right now to assure you understand the cost of attendance and how you can afford college. If you are unable to attend a workshop, feel free to call Michigan College Planning with your questions.

Vicki L. Beam is a college planner at Michigan College Planning located in Traverse City. She encourages questions and comments about future columns. Contact Michigan College Planning at (231)947-0203, by email at vicki@michigancollegeplanning.com and at www.michigancollegeplanning.com.