Category Archives: financial aid

admissions, college guidance, college planning, financial aid

Preparing your student for college graduation

Last night in the #CampusChat discussion we were talking about moving into college and what to pack. One participant stated she took her whole life with her to college because she never planned to move back home after college graduation; and to her credit she did not.

Most parents believe (or hope) that once their student goes off to college they will only be temporary visitors at home. We often talk about getting into college, but rarely discuss what happens after graduation. Unfortunately, in today’s economy, many students are forced to move back in with their parents after they graduate. For those boomerang students, the top two reasons are no job or job prospects and too many student loans exceeding their expected income.

These reasons alone make it important for parents to be involved in the financial decisions that their students make related to the college they choose and the loans they choose to incur while attending. Of course your student may WANT to go to an expensive private college, but can you, as a family, afford it? Is your student prepared for the ramifications of taking out massive student loans and not being able to repay them?

Three scenarios

After the student returns home three scenarios usually play out.

Scenario One

Your student returns home and still can’t find a job with their college degree. After weeks of depression and frustration, they make the decision to attend graduate school. Since it’s expensive, they opt to take out graduate student loans to supplement the financial aid and provide living expenses. After they complete their graduate degree, they are able to gain employment and begin paying back their loans.

Scenario Two

Your student finds a minimum wage job, defers their student loans and still can’t find a job related to their college degree and major. They end up working in a field that is completely unrelated to their area of interest, in a job they do not like, and are still unable to pay back their student loans. They borrowed too much and will probably never crawl out of the hole they dug for themselves.

Scenario Three

Your student returns home, finds a minimum wage job, defers their student loans and saves every penny they make while living at home. They are able to begin paying back their student loans with their savings and continue the job hunt while working full time. Many times, those temporary jobs end up being avenues to find college degree employment either through networking or company advancement.

With scenario one, if your son or daughter opts to pursue the graduate degree path, it’s critical they do their homework, research interest and payback rates, and degrees that are worth their investment. If they don’t, they could end up as the student in the second scenario with too much debt and no job prospects.

Summing it up (my opinion)

Advise your student wisely about debt, college value, and degree prospects after graduation. It’s not just a decision on which school they “like”. It’s a decision that affects the rest of their life and could have overwhelming negative consequences. Parents are key role players in this decision. It’s our job to point out the possible ramifications of their decisions and allow them to have input. But (and this is is hard) if they won’t listen to reason, you might have to be a parent. I know because I had to take that role with my daughter and her college choice. I had to be the “bad guy” and kept her from attending her first choice college. Today she thanks me. At the time, she wasn’t very happy with me–but she fell in love with her second choice college and graduated with minimal debt.

Being a parent can be extremely hard; we have to balance guidance with “helicoptering” and know when to take a stand for the well-being of our kids. It’s a difficult job on the best of days and downright frustrating on the worst of them. Helping them with the college choice as it relates to financial consequences is one of those “take a stand” moments.

 

admissions, college guidance, college planning, financial aid

Do you need help with the college process?

I’m hearing more and more from parents that they are desperate for help and answers. It seems they are drowning in the sea of college information out there. They don’t know who to listen to, where to go for help, and how to make the best use of the help they find.

There are two tools that will answer every question you ever had about how to handle the multitude of questions related to the college admissions process: my Parents Countdown to College Toolkit AND Paul Hemphill’s Plan for College Videos. Both resources will help you help your student navigate the college maze. If you own both you can finally sleep at night!

For a limited time only (until September 30th), Paul and I are offering parents a 2 for 1 special–buy my Parents Countdown to College Toolkit and you receive a FREE subscription to Paul’s Plan for College Video Series. These tools can save your family hundreds or even thousands in college costs and help you help your student market themselves to the colleges, thus receiving multiple scholarships.

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 The best help available to help parents navigate the college maze.

If you’re a parent of a college-bound teen, you can’t afford to pass up this opportunity. You and your student will have the peace of mind, knowing that all your questions are answered and you have done everything you can to help them get into their first choice college (with scholarships and merit-aid, of course!).

Click this link to learn more about the Toolkit,

purchase and score your 2 for 1 deal!

college planning, financial aid, in the news

College Debt = Higher Tuition and less Merit Aid

The Wall Street journal posted an article today, “Tough Times for Colleges–and College Towns”, about the tough times that colleges are facing.

The outlook isn’t good. Bain, which markets its consulting services to universities, and Sterling Partners, which invests in education companies, examined the balance sheets from 2006 to 2010 of schools in their report. They found many schools operating on the assumption that the more they build, spend and diversify the more they will prosper. They have become overleveraged, with long-term debt increasing at an average rate of about 12% a year and average annual interest expense growing at almost twice the rate of instruction-related expense.

Schools have been trying to plug the gap by jacking up tuition at rates that aren’t sustainable. The result is a fiscal hurdle that dozens of second- and third-tier public and private schools won’t be able to clear. Hundreds of schools—including some of the most prestigious institutions in the country—have tightened their belts.

It looks like the colleges are struggling, much like the students and families. Unfortunately, you know that the financial problems that colleges are experiencing will be passed along to the students by either tuition hikes or reductions in merit aid. That is not good for students and their families, especially the ones who make too much to quality for need-based aid.

What does that mean for this year’s crop of seniors? You better investigate the financial outlook of your college choices carefully and do some digging on their past merit-aid distributions over the last several years, especially if you are counting on that to pay for college.

Continue reading College Debt = Higher Tuition and less Merit Aid →

financial aid, infographics, scholarships

How to get free money for college

Did you know, the average college student graduates with about $22,000 in debt. The problem is, most of these students qualify for essentially free money for college but never apply. So, to help these and other students get the money they definitely need, this infographic on how to get free money for college through state and federal grants, as well as scholarships and more should be helpful. Some of the highlights include —

  • In 2007-2008 the average amount of aid received by students was $9,100.
  • In 2010-2011 the average amount of aid received by students was $12,400 out of which $6,500 didn’t need to be repaid.
  • Every year over 1.5 million qualifying students miss out on Pell grants because they didn’t fill out the FAFSA.
  • FastWeb lists more than 1.5 million scholarships worth more than $3.4 billion.

 

How to Get Free Money for College
From: Online Colleges Blog

financial aid, infographics

College Sticker Price

1 Comment

Most parents are shocked when I tell them to ignore the college sticker price printed in the book, catalog, or college info site. Why do they “say” it costs X amount of dollars and not charge what the printed price states? Because while most can’t pay the price, some can. It’s the same with any commodity: houses, cars, airfare, vacations, and more. They post a price because many will pay that price; others who can’t will search for the bargain. Enter the college admissions process with the mind of a bargain hunter and you’ll be pleasantly surprised what you will pay.

Following is an infographic that makes it easy to comprehend:

Tuition Prices
Created by: Online University

college planning, financial aid

10 Good reasons to file the FAFSA

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Parents of college-bound teens look forward to filing the FAFSA as much as they look forward to filing their income taxes. It’s a federal form and all federal forms aren’t exactly user friendly. Many parents are so intimidated by the form that they choose not to file, telling themselves that their student wouldn’t qualify for aid anyway because they make too much. But don’t fall into that trap.

Here are 10 good reasons to file the FAFSA:

1. College is expensive

Even if you’re rich and can afford to pay for your child’s education, it’s expensive. Why would you pass up an opportunity to help with some of the cost?

2. It’s FREE

That’s right. It’s completely free to complete the FAFSA. You’ll spend some of your time completing the FAFSA and you could get thousands of dollars of financial aid in return. So one could say, it’s BEYOND free–they pay you!

3. Getting help is easy and FREE

If you get stumped, help is available using the online help tool or by submitting a question at the FAFSA web site or calling the help number listed on the site. Many schools even host a FAFSA day where they offer help to parents and students on how to complete the free form.

4. FREE money could be waiting for you

According to a recent Reuters article, about 1.8 million lower income undergraduates who might have qualified for aid neglected to file the FAFSA and missed out on financial aid. No matter what your income level, you should file the FAFSA because there is more money out there to be awarded than just need-based aid.

5. Federal money

The federal government provides over $80 billion dollars in grants, loans and work-study programs every year. The only way to get pell grants, perkins loans, stafford loans and other federal aid is by submitting the FAFSA. Federal loans offer the best interest rates and repayment terms for student borrowers and are superior to private student loans.

6. State money

FAFSA is the gatekeeper for state financial aid programs. Each state’s programs are different but they all require the FAFSA to distribute the funds. Check with your state’s higher education agency for deadlines and requirements. In some states the financial eligibility ceilings are much higher.

7. School money

Colleges and private scholarship sponsors offer billions of dollars in financial aid. Even if you don’t have financial need, you may be eligible for these awards. Some school and private scholarship programs are specifically designed for students who were rejected by federal financial aid. Some schools will not award merit aid unless you complete the FAFSA.

8. You’re divorced

The FAFSA only asks about the income and assets of the custodial parent. For financial aid purposes, the custodial parent is the one who has cared for the student for the majority of 2011. If the custodial parent earns a modest income, a student could qualify for financial aid.

9. You have two or more children in college

With two in college, your expected family contribution (what the parents can afford to pay) drops by 50%. Even if you didn’t get financial aid with the first, file the FAFSA because having a second child in college can net you some financial aid.

10. You really don’t have a choice

Look at it this way: FAFSA is the ONLY way to be considered for federal, state and private financial aid. Even if you don’t NEED the aid you still want to get it. Who doesn’t want FREE money?

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For a different perspective, visit my colleague Wendy David-Gaines’ blog (POCSMom) for 10 Reasons NOT to file a FAFSA.

Wendy was a (POCSmom) Parent of a College Student and was once a pre-POCSmom as well. She likes to help parents de-stress during the college process and has written a book of stories and anecdotes to help parents see the lighter side of college.

financial aid, infographics

Drowning in Student Loan Debt

Here’s an infographic outlining the Obama Plan to help student’s with their student loan debt. But is it enough? In my opinion, the only way to look toward the future is to educate our kids about debt and make wise college choices that allow them to graduate with little or no debt. It’s not a “new deal”…just a band-aid.

New Student Loan Deal
Created by: Online University

college planning, financial aid, Uncategorized

Making wise college choices based on student debt

Two-thirds of college seniors graduated with loans in 2010, and they carried an average of $25,250 in debt. They also faced the highest unemployment rate for young college graduates in recent history at 9.1%. The new report, Student Debt and the Class of 2010, includes average debt levels for the 50 states and District of Columbia and for more than 1,000 U.S. colleges and universities.

Why is this information important to parents?

Part of your college decision process is based on cost factors. Examining states who have low student debt might open possibilities to your student that you might not have otherwise considered. You can also view individual colleges to determine the amount of average student debt giving you additional information to help you make wise financial college choices.

If you click on the graphic above you can use the interactive map to learn about the colleges your student is considering. Be an informed parent and teach your student about financial college responsibility.

financial aid, infographics

Financial Aid Myths

4 Comments

Here’s a great infographic that applies to the recent student loan news. The only “myth” that I might question is #5-Student Loans aren’t worth it. While the statistics show that college graduates do earn enough more over their lifetime than high school graduates, you have to be savvy about the amount of money you borrow and your ability to repay it.

Financial Aid Myths
Created by: Online Graduate Programs

financial aid, in the news

Obama’s solution to help student loan borrowers

I received this email from the Institute for College Access and Success. It was a press release issued on President Obama’s speech yesterday.

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Yesterday the Obama Administration announced important and timely new steps to help struggling student loan borrowers.  We applaud the Administration’s steps to make more federal loan borrowers aware of Income-Based Repayment and to provide additional repayment relief for up to 1.6 million current students, including a lower monthly payment cap and loan forgiveness after 20 rather than 25 years of responsible payments.

IBR has already helped nearly half a million borrowers lower their payments and avoid default, but many more borrowers are struggling to keep up with their payments in these tough economic times and could benefit from IBR and the proposed Pay-as-You-Earn option.

By encouraging more borrowers to convert their bank-based federal student loans to more cost-effective Direct Loans, the changes announced today will also help more people qualify for Public Service Loan Forgiveness. Those working for a public or nonprofit employer could see their remaining debt forgiven after just 10 years of payments. Borrowers with bank-based federal loans must already convert them to Direct Loans for their payments to qualify for Public Service Loan Forgiveness.

The Administration took two additional steps to help students and families decide where to go to college and how to pay for it.  The new model financial aid disclosure form, or draft “shopping sheet,” is designed to make it easier to compare the real cost of different college options.  The new Student Debt Repayment Assistant will help current borrowers with both federal and private student loans, as well as those about to enter repayment, better understand their options.

With these changes on the way, it’s more important than ever to make sure that the millions of borrowers who could benefit from IBR know it’s out there. With the class of 2011 about to face their first student loan payments, there’s no time to waste.

IBR has been available to borrowers since July 2009. For more about how IBR and Public Service Loan Forgiveness work and how to apply, see our consumer website:www.IBRinfo.org.

For more on the Obama Administration announcement, please visit the White House website.