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College Students and Recent Grads

Tuition Reciprocity Programs to Make College Affordable

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Candace Ramirez has student loan debt, but it’s thousands of dollars below the national average. That’s because she took advantage of a tuition reciprocity program offered by Western Kentucky University, in which she paid in-state tuition even though she was an out-of-state student from a nearby county in Tennessee. To give you an idea of the savings this creates, the tuition and fees at WKU for the 2015-16 year were $4,741 for in-state residents—and $12,066 for non-residents. “It was a big financial help,” says Ramirez, 24, who now lives in Seattle. “Those tuition programs are a lifesaver.”

The difference in cost between attending an in-state school and an out-of-state school can be staggering. The most recently published average tuition and fees for a public four-year in-state school were $9,410, according to the College Board. For a public four-year out-of-state student, average tuition and fees were $23,893. That’s a difference of more than $57,000 over four years, especially considering that rates generally rise each year.

But if you live in a state without many good in-state options for you, or without schools that offer the degree you’re interested in pursuing, what else are you going to do? As it turns out, in many states you can take advantage of reciprocity agreements with other regions or states that enable you to pay in-state rates—or reduced out-of-state rates—to attend an out-of-state school. You may be able to qualify for this rate for all four years of school, saving you a substantial amount of money.

Here are some of the arrangements that exist, depending on where you live:

The program: Western Undergraduate Exchange (WUE)

What it is: Residents of member states of the Western Interstate Commission for Higher Education (WICHE) can apply to receive a reduced tuition rate no higher than 150% of resident tuition at participating out-of-state college programs.

What savings might look like: An out-of-state resident attending the University of Arizona, for instance, would pay $28,416, versus $9,952 for resident tuition. The WUE rate would be $14,928 (150% of the resident rate), saving that student $13,488 per year.

Participating states: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, and the Commonwealth of the Northern Mariana Islands.

The program: Midwest Student Exchange Program (MSEP)

What it is: States that participate in the MSEP agree to a multi-state tuition reciprocity arrangement in which they charge out-of-state students no more than 150% of the in-state resident tuition rate for certain programs. As part of the MSEP, private institutions will reduce rates by 10%.

What savings might look like: The program estimates that students will generally see savings of $500 to $5,000 per year, depending on the institution.

Participating states: Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota and Wisconsin. You must be a legal resident of one of those nine states and enrolled at a participating MSEP school as a non-resident student.

The program: Academic Common Market

What it is: This is a program run by the Southern Regional Education Board (SREB) in which students can get an out-of-state degree at in-state rates at various colleges and universities. Applicants can search the database by state and type of program to see if an agreement exists.

What savings might look like: For instance, a resident of Maryland may be able to pay in-state rates to get a Bachelor’s in biomedical engineering at West Virginia University. At WVU, tuition and fees for a West Virginia resident are $3,816, compared to $10,716 for a non-resident.

Participating states: Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia. Each school has an ACM program coordinator who can help students get more information.

The program: New England Regional Student Program (RSP)

What it is: The New England Board of Higher Education runs this program that offers a discount on out-of-state tuition to New England students who aren’t able to study their desired major at a public college or university in their home state.

What savings might look like: Full-time students saw annual tuition savings of $7,515, on average, according to the program, but you could save more, depending on the school you attend. At the University of Connecticut and University of Maine, out-of-state students could shave more than $13,000 per year off of their bills.

Participating states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

Some states or schools also have their own individual arrangements with neighboring states, such as the University of Minnesota, which offers lower tuition rates to out-of-state residents of North Dakota, South Dakota, Wisconsin and the province of Manitoba, Canada. Call your school’s financial aid office and ask about reciprocity agreements.

Keep in mind: The number of these awards may be limited by institution each academic year, so apply early for consideration.

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This Tool Is The Best Way To See Federal Student Loan Repayment Options

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Student loan borrowers now have a new place to get information on loan payment plans. In April, the Department of Education launched a website to help borrowers access their best repayment options: StudentLoans.gov/Repay.

The website prompts you with a series of five yes or no questions in order to help develop an action plan.

  1. Do you have federal loans?
  2. Did you take out your loans before 2011?
  3. Do you work for the government or a non-profit?
  4. Have you ever missed a student loan payment because you couldn’t afford it?
  5. Do you want to lower your student loan monthly payment?

Based on the answers, the site pops up a quick action plan for consolidating loans or signing up for income-driven repayment—or both. It overviews the materials you’ll need as well as give you links to know where to sign up.

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“We’re working to make it simple and easy to connect borrowers with the right repayment option for them,” Secretary of Education John King said. “And we’ll continue to streamline our website at StudentLoans.gov to help borrowers better understand their options.”

This streamlining of the student loan repayment process is especially important considering a Department of Treasury report last year that found that 7 out of 10 people in default on their student loans were eligible for income-driven repayment—but hadn’t signed up.

“What’s clear, based on our analysis, is that there are student borrowers out there today who could benefit from income-based repayment and haven’t yet taken advantage,” said King in a press call on the subject. “We want to make sure that they get the information they need.”

Income-driven repayment plans cap monthly payments at a percentage of your income, such as the Pay As You Earn plan, which limits payments to no more than 10 percent of your discretionary income. Almost 5 million student loan borrowers are enrolled in some kind of income-driven repayment plan, and the Department of Education aims to get 2 million more student borrowers signed up within the next year.

Signing up for these plans really isn’t complicated, but it has led to a market of third-party student loan debt relief services. There is no need to have someone else sign you up for a government income-driven repayment or forgiveness program, but unfortunately, you may not know this before someone calls to solicit you to sign up. These third-party servicers charge a fee; a fee you won’t have to pay if you do it yourself.

“The goal is to get all of the folks who would benefit from income-based repayment into one of the plans that makes sense for them,” King said. “Clearly, for some folks, the standard repayment plan and finishing paying off their loans in 10 years may be superior because they’ll end up paying less interest over the time of repayment. So it’s really individual-specific.”

The website is part of a joint push by the Education Department, Treasury Department and the Consumer Financial Protection Bureau to improve loan servicing and improve customer service for borrowers.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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CFPB Payback Playbook Might Reduce Student Loan Stress

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The amount of student loan debt in the United States is crushing in size, second only to mortgages. More than 41 million Americans owe more than $1.2 trillion collectively, according to the Consumer Financial Protection Bureau.

And those millions of borrowers have a big complaint: Student loan servicers aren’t providing basic information necessary to help borrowers repay their loans. “Many federal and private loan borrowers report experiencing serious problems accessing affordable repayment options or other repayment alternatives to avoid default,” said a September report from the CFPB. In fact, the report found that one out of four borrowers struggled to repay loans or was already in default.

Enter the Payback Playbook—the CFPB’s new proposal to help address this problem. As proposed, the Payback Playbook would be information that a loan servicer would provide, and it would clearly outline a borrower’s alternative repayment options on a loan. The info might be found online when the borrower logs into her student loan account, or in her monthly bill.

You can see an example at consumerfinance.gov/payback-playbook, and the CFPB is soliciting feedback on the Playbook until June 12, 2016. You can provide your feedback here.

“We’re asking the industry and consumers to weigh in on where they think it would be most helpful, and what information they need most,” says Moira Vahey, a spokesperson for the CFPB.

For instance, when would borrowers find it best to see personalized information on repayment options—during repayment or during a grace period? And what specific information would they like to see? “We also have a different prototype if you’re about to default,” Vahey says. “Those are all things we’re taking into consideration.”

One Department of Treasury report last year found that 70% of people in default on their student loans were eligible for income-driven repayment. “Once you’re in default on a loan, it can ruin your credit and future credit opportunities,” Vahey says. The fact that so many of the people in default could have opted for a more affordable repayment option—and didn’t—was one of the things that led the CFPB to take a closer look at the issue.

“The Payback Playbook would help ensure that people have the information they need to make decisions on what repayment plans are best for them,” Vahey says.

Once the CFPB has gotten feedback from borrowers and industry professionals, they plan to work with the Department of Education to finalize the Payback Playbook, and the Department of Education has committed to incorporating this into their work.

Says Vahey: “The aim is to get this Payback Playbook onto the over 40 million student loan borrowers’ bills in the next year.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Refinancing rates from 3.50% APR. Checking your rates won’t affect your credit score.