You might be sitting there right now, getting ready to read this particular post and you’re thinking to yourself, why would I need a student loan? You served in the military, you had Tuition Assistance (TA), and after 3 years, was able to take advantage of the GI Bill. But here’s the thing, not everyone takes advantage of TA while they’re in, then they get out, don’t have a degree, and have transferred their GI Bill to their child or spouse. Then one day, you apply for a job, you have all the experience, but you don’t have a degree and without it, you can’t get the particular position you’ve been eyeing.
Don’t worry; we aren’t saying education is the only way to get a job. Plenty of people have well-paying jobs, some even enjoy them, and guess what, they didn’t get a college degree to get it. Of course, if you want to be a Doctor or something like that, you’ll need a degree. But, in many cases, degrees get you promotions, not jobs.
College degree or not, you might find yourself sitting in an entry-level position. But, that doesn’t mean you shouldn’t pursue higher education. Or, maybe you’re not the one seeking a degree because you somehow obtained five degrees while you were still serving and used your GI Bill because you were never planning to get married and have kids anyway-sike! Or maybe you were only planning for one child, you sign over your GI Bill to him or her and there isn’t enough to go around because your family of three suddenly went to a family of 5.
No matter your reasoning, when TA and the GI Bill are all used up, you might find yourself seeking out a student loan. So, we’ve decided to put together a piece about USAA Student Loans—just don’t get too excited yet, the following isn’t exactly what you’re expecting to read.
Table of Contents
- USAA Student Loans
- Start a USAA College Savings Fund
- Education Costs: Community vs. University
- How to Apply for College Financial Aid
- USAA Debt Management
- 529 Plan: Saving for College
- USAA Education and Training
USAA Student Loans
Okay, so, unfortunately, now is the time to break the bad news. USAA used to offer a partnered student loan with Wells Fargo. However, they no longer do that. They offer personal loans, car loans, home loans, but not student loans. So, you could get a personal loan through USAA and use that, but that might not be the best idea, in fact, we don’t advice it because typically, the interest rates will be through the roof compared to a student loan.
USAA announced it was no longer giving its 25% discount to USAA members who got a student loan through Wells Fargo, back in 2016. However, they have made strides in continuing to help those in need of a student loan get the information that they need, and they’ll help with smart investments and savings meant explicitely for that fancy piece of paper you get when crossing the stage.
So, while we’ve basically just written an entire article about something that doesn’t exist, don’t go too far. We’re here to give you information on what to do if you’ve used USAA student loans before and wanted to get a new student loan, what to do if you currently have a USAA Student Loan, and how to refinance said loan, and how USAA can continue helping you reach your educational goals financially.
What to do if you have a USAA Student Loan
Here you are, in the middle of paying off your USAA approved Wells Fargo Student Loan, or maybe payments haven’t actually kicked in yet, and you find out USAA is no longer participating in the student loan market. What is your next move? Have things changed? Will this somehow affect your current loan? Does this mean you lose your discount? All valid questions but nothing to fret over—unless of course, you were set on getting a second student loan through USAA. Then well, yeah, we don’t have any good news for you on that one. Honestly put, you’ll just have to search some other place for a student loan.
Wells Fargo Student Loans
Bad news aside, here’s what to do if you currently have a USAA Student Loan, nothing. Continue making your payment on time, and really, nothing more. Of course, if you do have questions, feel free to ask them. But, go direct with Wells Fargo. For example, if you were thinking about refinancing for a better interest rate, then call up Wells Fargo, give them your loan number and they’ll be there to help you make the next move.
How to Refinance your USAA Student Loan
Back to our comment about refinancing your USAA Student loan: the bad news, you can’t refinance through USAA, the good news, you never could. In fact, USAA hasn’t actually been giving out the loans, it was really Wells Fargo. What USAA did was offer the discount by going through them to get to Wells Fargo. Which means, you can still refinance your loan through Wells Fargo, just not with USAA’s blessing or 25% discount.
Refinancing a Wells Fargo Student Loan
If you’ve already paid of your USAA, Wells Fargo student loan and liked the experience, the rates were good, or whatever the case, you can go back and get another student loan from Wells Fargo. Again, USAA was just the third party here, they got you the discount, not the loan. Talk to Wells Fargo about your needs, see if they can offer a military discount based on your prior experience with them and USAA.
If you’re lucky, Wells Fargo will come back with a better rate—if you’re refinancing with them. If you refinance with a new lender, Wells Fargo pays off your loan, and maybe, just maybe, you might get a better rate then too. Just make sure you check out the market and refinance only if it makes financial sense. Yes, we know it’s a headache. Often you have to talk to a real live person, and that means listening to them try to sell you their product. But trust us, it’s worth it in the end. Not all lenders offer the same discounts or rates, so shop around so you can save money on your loan in the end. School isn’t cheap, why make it more expensive than it has to be.
What to do if you need a new Student Loan
If refinancing isn’t on the horizon, but instead an entirely new loan, you’ll have to look elsewhere besides the USAA/Wells Fargo partnership. However, before you start burying yourself in a new student loan, make sure you take the appropriate steps to get all the financial aid you need.
Look into FASFA, grants, other federally based loans, scholarships, and even work-studies through the school you’re planning to attend, or you’re planning to send your child/spouse through. You’d be surprised as to what’s out there and how much you can save by not having to finance everything through a student loan. There’s even free money to be found for book expenses, you just have to take the time and look for it.
And if student loans aren’t on your radar yet because you’re little guy—or gal—is still, well, little, then USAA has plenty of advice and options to help lessen the amount of stress you’ll be feeling 17 years from now while your child is applying for colleges.
Start a USAA College Savings Fund
This might not be a new concept to you. Hopefully growing up you were told to start saving money. And if you didn’t, hopefully, the wise folks around you advised you to start saving for your future child’s college education after you got married.
If they didn’t, let us be the wise old folks for you—this is not admittance to anyone here being old, just well aged—start saving now. Don’t bet on your child getting sports scholarships, or even scholarships for being a genius. You never know what kind of child you’ll bring into this world, and it’d be a shame if they broke a leg and weren’t very bright, drastically decreasing their chances of sports and educational scholarships.
Now, this isn’t to say that there aren’t other scholarships out there. Or, that you can’t get grants and have them apply for FASFA. We’re just saying you shouldn’t put all your eggs in one basket, because that’s when you developed a hole, all the eggs fall out and now you just have a bunch of cracked eggs on the floor—and do you really want to worry about that? We’d hope not.
So, how to prepare for this stage in your child’s life—because trust us, not everyone can join the military, asthma and eczema have made sure of that. Simple answer, you start saving. However, there are various options out there to help you save better and save more. So, while USAA may not offer student loan services, they will give you some great financial advice on how to start saving for a college education. We’ve taken the liberty of covering some of the ways they’ll help you do this below, so keep reading.
Apply for a Free USAA College Checking or Savings Account
Don’t worry, we haven’t forgotten, that 18-year-olds are kids—adult children we’ll say—and they need to learn some level of responsibility. While we know few 18-year-old adult children have the finances to support a full education, that doesn’t mean they are excluded from helping fund their party-school, ivy-league, out-of-state tuition.
So, while you might have been putting away money for the past 18-years, there’s nothing to say they can’t help out. Get them signed-up with a free college checking and/or savings account with USAA, that way they can take over the loans you co-signed on or signed for on your own. Either way, there’s no excuse as to why you have to pay for the 4 times they switched majors, to end up taking Russian Literature and drop out after they realized no one cares about Russian Lit anymore.
If you set your kid up for success by starting them early in the financial world of saving, you’ll be able to set debit/ATM card limits, choose if they can make transfers and even deposits, and get text alerts when your little angel spends too much and the account balance drops too low for your comfort.
Just know, when they turn 18, USAA will automatically convert the youth account to a free classic checking account. As the guardian, you’ll be given the option to continue your joint account or letting the little birdy leave the nest—making all the financial mistakes you’d hope they’d never fall victim to—completely up to you. Of course, failing at life can be the best lesson.
Education Costs: Community vs. University
Here’s something you’d probably never guess in a million years, your child is going to become a teenager, they’re going to want to fly the coop—not the case for all, but most teens—and they will want to go to a big fancy university, because that’s where all their friends are going. Trust us, don’t fall for those puppy dog eyes, they’ll be fine going to a community college to get their electives knocked out and it will save you a LOT of money! If, they can’t succumb to this—because we all know that the college you go to will be the difference between an entry level job and…an entry level job—then you’d be smart to let them pay their own way through college and apply for 30-years worth of student loans on their own.
Now, we aren’t telling you how to raise your kids, but teaching them how to manage their money before they actually have money will 1. Give them an appreciation for the cost of that community college education and 2. Prepare them for their future expenses and save them a lot of stupid financial mistakes, like signing up for 5 different credit cards the day after they drive off to college in the car you paid for, on the car insurance under your name.
How to Apply for College Financial Aid
Paying for a college degree can seem like a daunting task. We’d like to compare it to drowning while being eaten alive by piranhas—okay, maybe that’s a bit of an exaggeration. But, seriously, college isn’t cheap. That’s why there are so many options out there to help cover the expensive costs that go with higher education.
USAA has an entire article on how to apply for something called FASFA. If you haven’t heard of it, it stands for Free Application for Student Federal Aid.
If you don’t qualify for federal financial aid, there are grants and student loans with discounted rates for those falling into a certain income bracket. There are even work-studies, which will let you basically work for your education. Typically, this is work on campus, with a schedule that works around your class schedule.
So, if you’re past the stage of saving for college and there just isn’t enough, consider applying for financial aid, because even if you only qualify for a small amount, every penny will count and you’ll thank yourself later. Or, your adult-child will thank you later for helping them through all the forms so they don’t have a 30-year student loan to pay back after they graduate.
USAA Debt Management
College is over; you (or your now older adult-child) are left with all this debt. There are student loans that need to be paid off, a monthly car payment, car insurance, rent, renters insurance, utilities, a cellphone bill, probably a credit card in the mix—because someone made questionable choices and couldn’t afford even a bologna sandwich. Oh, and someone thought it was a bright idea to get married during the college years and there’s a new baby on the way—coming with their own expenses, of course. So, what do you do? There’s all this debt, and someone has to pay it off. Luckily, you aren’t alone.
USAA might not have given you the student loan or all that other debt you’ve racked up, but they’re there to help you manage it. Simply talk to one of their advisers, tell them about your debt, let them build a debt payment plan, and help monitor your progress. You’ve made it this far, but that doesn’t mean you can’t get the advice from the financial experts at your bank. And no, a degree in finances doesn’t mean you’re an expert, so just do yourself a favor and ask for help from people who’ve already been where you are and have more than a degree, but the experience to back up their advice.
529 Plan: Saving for College
In case you didn’t know, USAA can help you save for college with a 529 plan. A 529 is just one more way you can help prepare yourself or your child for their education. The difference between this account and other investment options is the tax benefits. If you have to withdraw from the account for any educational costs, including K-12 expenses, you won’t have to pay federal income tax on it.
Pro Tip: If you open a 529 account under the parent or parents’ name, it won’t affect financial aid as much as with other funds. Also, you can earn cash back if you’re enrolled in UPromise. And if that’s not enough, USAA will let you invite your friends and family to help contribute to the educational expense through something called Ugift.
You can open an account for as little as $50 and make automatic investments of at least $50/month or make an initial investment of $250 and save yourself from having to make that automatic $50/month contribution.
USAA Education and Training
If you’re want to do a little more research on what USAA has to offer in regards to investing in your future—or your child’s—education, they have plenty of resources. If you visit their Education and Training page, here, you can start looking at what steps can be taken to save for college and securing financial assistance when the time comes.
Remember, not everyone needs a giant student loan to pay for their education. There are a lot of resources out there, a lot of scholarships, grants, other sources of financial aid. USAA can help you get in the right mindset of investing for college. So, reach out to them and get more details, because no one wants to pay more for college than they have to. Also, it’s a free service. USAA won’t charge you to ask questions. And who knows, maybe you’ll find out something you didn’t know about making investments, because remember, not all investments are created equal. Some make you pay taxes, other don’t. Some have higher interest rates, while some are lower. Talking with a USAA investment representative can help you find the best to save money for your educational needs so that you get the most out of what you put in.