Learn how to play, and when to start, the college admission game

Thursday, July 20th, 2017

"If you start the process of getting into college as a senior you are starting too late."

This was said by a mother who has a son going through the process of applying to different colleges and trying to receive financial assistance. She also said she had no idea how to find the information she needs to help her son make himself competitive not only to get into the colleges that he hopes to attend, but also receive the necessary funding that it takes these days... That was until she attended one of our workshops. So I thought this would be a good conversation piece for this article.

How does the college admittance and funding process really work?

The college admissions process is highly competitive and becoming more so each year. To improve your odds of getting in and receiving the necessary funding to attend, you must know the workings of the admission process, and how it goes hand in hand with the institution's financial aid strategies.

Colleges are in the business of providing higher education to our students. The key word here is business. Institutions have a very definitive business approach when it comes to offering admission and funding to a prospective student. Some even participate in financial aid leveraging which is a process used by colleges and universities to determine how little aid needs to be awarded to a particular student to still get the student to enroll.

For example, a college or university will typically offer admission to three (3) times as many students as they need. Why? They know that only one-third of those offered admission will attend. Colleges want their seats full, and will typically over-book the 'flight' to make sure they are. It's not good or bad - it's simply business. Also, like booking a ticket to fly, how many of those passengers paid the exact same amount for their fare? Frequent fliers tend to know the best time to purchase their flight in order to minimize what they have to pay. Learn to play the game, and you too can minimize your out-of-pocket expenses for college. Don't let the retail price of a college scare you. We have many different strategies in our tool box to help make college an affordable reality.

Now back to the admissions process. There are essentially three potential stacks at every college that your student may end up in; 1. the 'I love you' stack, 2. the 'I like you' stack and 3. the 'I need bodies' stack. The good news is that, again, you can turn the process in your favor by learning how to play the game. The proper student positioning including, but not limited to; test prep, matching a student to schools that will provide the most funding and a 4+4 Roadmap for Success will help pave the way for the best results.

Just how important are the SAT and ACT test scores?

There is a lot of misconception surrounding these tests and nearly every college or university requires perspective students to submit scores from one (or both) of the most widely recognized standard tests - the SAT (Scholastic Aptitude Test) and the ACT (American College Test). Standardized test scores help institutions better understand how a student compares with the other applicants.

And make no mistake; these tests play an important role in not only the admissions process but also the amount of free merit-based scholarships that may be offered a student. The higher the test score, the more attractive the student is to a school for admissions and funding. If you are not preparing as early as freshman and sophomore years for these tests, you are already behind your competition because they are. Again, taking advantage of student positioning strategies and a test prep plan can pay off in the long run.

When should I start?

The short answer to your question is NOW! Ideally, I joke, that your financial planning probably should have started when the stick turned blue and you had some idea that your child may go to college. With that aside, we are in the business of late stage planning and your base year for the financial aid process actually starts in your child's sophomore year of high school. Starting the financial planning stage in the freshman and sophomore years will give your family the most potential to take advantage of all the strategies available to maximize your eligibility for financial aid in the form of need-based grants and merit-based scholarships.

Don't despair if you are already past the sophomore year - even seniors in their first semester can effectively choose a college and develop a financial plan to pay but it will take a great deal of time and dedication in a relatively short period of time to do so. Your best plan is to start early.

Who really receives the most money for college and why you ask. Although college financial aid was originally intended to go to those students who needed it the most, it many cases, it may actually go to those who know the most about the process. Colleges now use financial aid as a marketing tool to attract the student they would most like to enroll. The more you know about the financial aid strategies, and the more you are able to implement those strategies into a workable plan, the more likely you are to receive the best education at the best price.

The bottom line is this...

When you begin to apply for the colleges of your choice, where do you stand against your competition? Have you done everything possible to have the funding readily available before you start? Most families have a plan. The plan may have some holes in it, but they do have a plan. Our job is to help with that plan while ensuring that you don't overpay for college.

Do you want an evaluation of your plan? We offer a free College Funding Analysis which can be conducted in our office or via a virtual appointment. Go to our Contact page, provide us your contact information and put Free College Funding Analysis in the Subject line and include your phone number in the message section. We will give you a call to schedule your complimentary review.

8 Vital Questions Every Parent Must Ask Colleges Before Applying For Financial Aid…

Wednesday, June 21st, 2017

If your child is in his/her senior year of high school and hasn't started filling out their college applications...

You Must Find Out The Financial Aid Deadlines At Each College And Make Sure You Get The Financial Aid Forms In Before The Earliest Deadline!

In addition to getting all your applications in accurately and on-time, you also want to stack the cards in your favor by asking these 8 Vital Questions to the financial aid officer at each school:

Question #1 - Does your school guarantee to meet 100% of my child's financial need at your school, and if not, what percentage of need does your school meet for the average student?

Most schools do not meet 100% of a student's financial need. It is important for you to know this information, in advance, before your child spends time and money applying to a particular school that will NEVER be able to give you the money you need to send your child to that college.

Question #2 - Does your school have a standard "unmet need" formula for students who apply for financial aid?

If a school says "Yes", you want to know by how much they leave the average student short. For example, if your child has a need of $10,000 at a school and they have an average "unmet need" of 50%, they will probably only award you $5,000, and ask you to come up with the other $5,000 on your own in addition to your estimated family contribution (EFC).

Make sure you find this out before you apply, it could end up saving you a lot of time and money!

Question #3 - Does your school have a ceiling on the maximum amount of financial aid a student can qualify for?

Some schools have maximum ceilings of $5,000 per student. If this turns out to be the case, and you are eligible to receive $10,000 -

You're Out Of Luck!

Question #4 - If my financial need remains the same for the next 4 years, will my child receive the same financial aid package in years 2, 3, and 4 at your school?

Many schools will award students a great package the first year to attract them to go to their school.

Then, in years 2, 3, and 4, they offer them a much lower package even though their financial need is the same, since the school knows there is a very slim likelihood that the student will transfer after they've already attended that college for 1 year.

Question #5 - If my family's financial need increases in year 2 at your college, will your financial aid package be adjusted accordingly, or will it remain the same?

Some schools will not adjust a student's financial aid package after the first year.

This becomes a serious problem especially if the family's income drops in the later years of college.

You must know this up front, so you won't have to make a tough decision later.

Question #6 - If my child doesn't apply for financial aid in his/her freshman year of college, can he/she apply for aid in future years?

In some cases, it may make sense for you not to apply for aid for the freshman year, especially if you have not done planning and you have all of your assets in the wrong places.

However, some schools have policies of giving priority consideration to students at the school who are already receiving financial aid.

If this is the school's policy, you may be shut out from getting financial aid for all 4 years.

Find this out before you apply!

Question #7 - Does your school have a "cut-off" date for guaranteeing that a student will receive financial aid?

If they do, make sure you get your financial aid forms in before their cut-off date, or there's a good chance you won't get any financial aid!

Question #8 - What is your school's policy on packaging outside scholarships into a financial aid award package?

Some schools will replace the FREE money you found with FREE money they were going to award you. So, in effect, you gain nothing by finding an outside scholarship.

Other schools will allow the outside scholarship to replace the loan money they were going to give you.

Obviously, it's better if they replace loan money rather than FREE money.

Make sure you find out each school's policy before you apply.

Failure to ask colleges any of these 8 Vital Questions could end up costing you a lot of time, money, and frustration.

Make sure you take the time to ask each school these 8 questions.

We promise you, it will pay off!

Check back next week for the next “College Tip” in my series where I will be discussing what you must do after you fill out your college financial aid forms -- and why it's still not too late to increase your eligibility for college funding.

Until then...

Ready to find out if you can more easily send your children to their dream college regardless of the cost – then take advantage of a FREE No-Obligation College Funding Analysis ($150 value) right now by contacting us through our Contact Us page.

How To Pick A College or University That Will Give You the Best Financial Aid Package — More FREE Money, Less Loans…

Wednesday, June 7th, 2017

 

 

 

 

 

 

In this series I am going to tell you about something that may save you thousands or even tens of thousands of dollars on your child's college education.

Most families take a completely "backwards" approach when searching for money for college.

Normally, the process goes something like this....

In the child's junior (or even worse), senior year of high school, they start picking schools they may be interested in going to, and that they believe they can get into based on their grades, SAT scores, extracurricular activities, etc.

Many students pick a grouping of "safety" schools which they know they can get into, "middle of the range" schools which they have a good shot of getting into, and "reach" schools which they would love to attend, but have a slim chance of getting into.

The next step in the process is that the student starts checking the schools’ websites for dates to visit the schools. (usually towards the end of their junior year of high school or in the summer preceding their senior year).

These trips to visit can be weekend trips that include one or more of the schools the student is interested in applying to.

This is how most students and families get a "feel" for each college campus, and determine if they would feel comfortable being a student there.

Just in case you haven't noticed...

All Of This Traveling From Campus To Campus Costs You A Lot Of Time And Money.

If you want to make this visits more cost effective, be in control of the college selection process and get the maximum amount of financial aid from each school, then you need to do some homework before you visit.

What most parents and students don't understand is that...

Your Child Will Probably Be Accepted To Approximately 70% Of The Schools They Apply To!

Unless, of course, your child is a borderline student, and they're applying to the Ivy League or the most competitive schools.

If your child is not applying only to reach schools or the Ivy League...

They Have A Good Shot At Getting Into Most Of The Schools They're Applying To!

You see, it's not like 10 or 15 years ago, when there were more students applying to college than there were available seats.

Today, most colleges are struggling to keep their doors open, and they need students (like your child) to help pay their bills.

It's the old law of supply and demand, and today, the supply of available seats at colleges and universities is greater than the demand to get into these schools.

This is great news for parents. This puts you in the driver's seat if, and only if, you know how to take advantage of this trend.

You want to know the "right" way to look for colleges and universities for your child?

You do? Good, then let's continue on.

Instead of blindly picking schools purely based on academic criteria, or sports criteria, or because your friend or relative's son loves a particular college, you must look at one other very important criteria...

Can This School Meet My Family's Financial Need And Give Us More FREE Money And Fewer Loans?

Remember, your child will get into most of the schools he/she is applying to (unless they are reaching for the Ivy's or the most competitive schools).

So the question is not, "Will my child get into this school?" Instead, the right question to ask is, "Will this school be able to give me the money I will need to send my child there for the next 4 years?"

If you haven't realized it yet - college is very expensive these days!

Even a state school can cost you $20,000 or more per year when you include tuition, fees, books, room and board, living expenses, etc.

A private university can easily run you $45,000-$60,000 per year and more!

And that's just 1 year! Remember, you have 3 more years to go after that. And what about if your child wants to go to graduate school?

It's definitely expensive no matter which way you slice it, but there are ways to minimize these costs.

One of the best ways to do this is by picking schools that historically have the best policies of giving financial aid.

A brief explanation of the financial aid process is necessary for me to explain this to you.

So, here I go.

Financial aid is awarded at each school based on a calculation of a family's "financial need".

Financial need is calculated by subtracting the Family Contribution (this is the minimum amount you will be expected to pay at ANY school) from the "Cost of Attendance" which includes tuition, fees, books, room and board, etc.

So, if a school costs $20,000 and the FEDERAL GOVERNMENT calculates your family contribution to be $10,000, your "need" at that school is $10,000.

It works like this:

$20,000 (Cost of Attendance)

-$10,000 (Family Contribution)

=$10,000 (Financial Need)

Financial need determines how much financial aid your family is eligible to receive. However, just because your need is $10,000, does not mean you will be offered $10,000 at that school.

This is where picking schools that historically give the best financial aid packages come in.

You see some schools can meet 100% of your family's financial need while others will only meet 20% or 30%.

The other thing you must know when picking schools is how much of the "need" they meet in "FREE" money, which you never have to pay back, and how much need they meet in "Self-Help" money, which includes loans that you do have to pay back.

By knowing each school's ability to give financial aid, in advance, you can pick schools that you have the best chance of getting money from.

This puts you, instead of the schools, in control of the process.

By knowing, in advance, which of the schools can meet most of your need, and give you more FREE money and less loans, you will also save yourself the time, energy and hassle of applying to schools that will never be able to give you the money you need to send your child there.

This type of planning should be done as soon as possible before your child's senior year of high school, so you don't end up visiting and applying to colleges you will never be able to afford.

If you're wondering how you can find out about this type of information, you can start by asking the financial aid officer at each school. Some of them will be completely honest about their ability to give money, and others will keep very silent about these numbers.

The other option is to use the services of a college-funding consultant who maintains an updated version of these statistics on a computer database.

Whichever way you decide to do it, make sure you know each college's statistics on meeting your financial need, and typically how much they give in FREE money versus Self-Help (i.e., loans and work study) before applying to them.

Once you know these numbers, you are in the driver's seat, not the schools.

You can also save yourself a lot of time, energy, and money by not applying to or visiting schools that will never give you the money you need to send your child to their institution.

Check back next week for the next “College Tip” in my series where I will be discussing 8 vital questions every parent must ask colleges before applying for financial aid.

Until then...

7 Strategies To Help You Get The Maximum Amount Of Money For Your Child’s College Education…

Thursday, June 1st, 2017

In this series I am going to cover 7 strategies to help you get the maximum amount of money for your child's college education.

So, without further ado, let's discuss...

"7 Strategies To Help You Get The Maximum Amount Of Money For Your Child's College Education..."

1. Have Your Child Apply To At Least 6 - 8 Colleges And Universities.

Pick an assortment of "safety schools", "competitive schools", and "reach schools".

Try to pick, at least, several schools where your child lies in the top 10% of the incoming freshman class.

Otherwise, there is a good likelihood that the schools won't give you a good financial aid package since your child won't be a desirable candidate.

Also, make sure they apply to more than just 1 or 2 schools even if they're dead set on going to a particular school.

By applying to about 6 - 8 schools, you will greatly increase your ability to negotiate financial aid packages at the end of the year by leveraging one school against the other.

2. Figure Out How To Value Your Home Properly.

Most families end up over-valuing their homes for purposes of financial aid. Don't make this mistake - it could cost you thousands of dollars in lost college funding.

Instead, the schools use a special formula called "The Housing Index Multiplier" which is based on your home's original purchase price and the year you purchased it.

Find out what your "multiplier" is and use this value for your home.

3. Do Last Minute Income And Asset Planning To Lower Your Out-Of-Pocket Costs.

You MUST set up your finances in a way that will maximize your eligibility for college financial aid.

Assets held in the wrong place will kill your chances of getting money.

Should a parent or sibling attend college part-time to increase your eligibility?

Are you properly valuing your real estate?

If you're not sure, you'd better find out the answers to these questions quickly before it's too late!

4. Don't Apply For Early Decision If You Want To Get The Maximum Amount Of Money From Each School.

If your child applies for early decision, they are locked into going to that school.

This is a huge mistake if you're trying to get the maximum amount of money for college.

The reality is that if a school knows you have to go to their school if they accept you, they have no competition offer you a lower financial aid package.

Therefore, it's a very bad idea to apply for early decision since you have no leverage to negotiate for a better financial aid package.

5. Find Out Each School's Deadline For The Financial Aid Applications - And Don't Miss A Deadline!

The earliest date you can file the Federal financial aid application (which is called the FAFSA) is January 1.

However, many private colleges and universities will also ask you to fill out the CSS Financial Aid Profile.

Different schools have different deadlines for this form.

Don't miss a deadline - it will cost you a lot of money in lost financial aid!

6. Look For Private Sources Of College Funding.

You don't want to waste too much time looking for private scholarships since they only make up approximately 2% of all the aid out there, but it's worth spending a little time looking for these sources.

Focus on local awards from foundations, organizations, and corporations. You can usually get more information on these awards from your child's high school guidance counselor.

7. Don't Let High School Guidance Counselors Or College Financial Aid Officers Give You A False Sense Of Security.

Most high school guidance counselors tell parents, "Don't worry about it - it's an easy process, just fill out the forms and sit back and wait for your award letter."

Unfortunately, it's not that simple!

If you want to get the maximum amount of money from each school, you've got to set up your finances properly, fill out the forms accurately and on-time, and negotiate with colleges and universities to get the best possible financial aid package.

Unfortunately, guidance counselors don't have the time or the training to do these things - so you can't rely on them to help you maximize your eligibility for college funding. They're normally great people but they are already very overworked and underpaid and are busy dealing with other issues such as teen pregnancies, alcohol, drugs, etc...

College aid officers may offer to help you apply for financial aid.

But going to a financial aid officer and asking them to help you get more money from their school is like going to the IRS and asking them to help you save money on your taxes!

It's not in a school's best interest to teach you how to get more money from their school. They have a limited number of funds to give out to a large number of people.

Think twice before you let a guidance counselor or college aid officer "help" you apply for college funding - it may turn out to be a very expensive mistake!

Check back next week for the next “College Tip” in my series where I will be discussing how to pick a college or university that will give you the best financial aid package -- more FREE money, less loans.

Until then...

Ready to find out if you can more easily send your children to their dream college regardless of the cost – then take advantage of a FREE No-Obligation College Funding Analysis ($150 value) with your local College Planning Advisor right now by sending a message request from our contact page.

5 Additional Deadly Mistakes Most Parents Make When Applying For College Funding – And How to Avoid Them…

Tuesday, May 16th, 2017

In this series I am going to cover 5 additional deadliest mistakes almost every parent makes when trying to get money for their child's college education.

If you make any one of these mistakes, it could end up costing you thousands or even tens of thousands of dollars in lost funding that you might have been eligible for.

I don't want to see you making these mistakes if you don't have to. That's why I’ve decided to devote this “College Tip” to teaching you how to avoid these common mistakes and make sure you get the maximum amount of money from every school your child applies to.

So, without further ado, let's discuss...

"5 Additional Deadly Mistakes Most Parents Make When Applying For College Funding - And How to Avoid Them..."

Mistake #1: Not understanding the difference between "included assets" and "un-included assets" for purposes of filling out financial aid forms

Reality: Certain assets are counted much more heavily in the financial aid formulas than others. For example, savings accounts, CD's, stocks and bonds are all included and asked about on the Federal Financial Aid form. However, it does not ask about the value of annuities or cash-value life insurance anywhere on that same form.

Mistake #2: It doesn't matter where I keep my money; it's all counted in the same way

Reality: Nothing could be further from the truth. Where you keep your money could mean the difference between you getting $10,000 in financial aid or getting nothing! For example, money in the child's name is weighted much more heavily than money in the parent's name. If you don't know how to legally and ethically position your money properly for purposes of financial aid, you could end up losing thousands in financial aid! Even the people reading this who have enough money saved to fully pay for your child to go to college, wouldn't you rather "save" some of the money you've "saved" if the school is willing to pick up part of the tab?!?

Mistake #3: "My CPA or tax preparer is qualified to fill out my financial aid forms - I'll let him/her do it"

Reality: Unfortunately, CPAs and tax preparers are experts at tax planning and preparation - not financial aid planning. For example, a CPA or tax preparer might suggest that you put some or all of your assets in your child's name to save money on taxes. While this advice is well meaning, it will usually kill most if not all of your chances of getting financial aid. Also, CPAs and tax preparers are not trained in filling out financial aid forms. In many cases, they will unknowingly fill out these forms improperly (i.e., omitting social security numbers, entering an incorrect phone number or misspelling a name, etc.), and these "minor" mistakes will bump your financial aid forms. If this happens, you will have to re-submit these forms all over again, and you will probably end up losing thousands in financial aid since it is awarded on a first come, first served basis.

Mistake #4: Waiting until January or even worse after January of your child's senior year of high school to start working on your college financial aid planning

Reality: Since financial aid is based on your previous year's income and assets, it is imperative to start your planning as soon as possible before January of your child's senior year. If you want to legally set up your income and assets so you can maximize your eligibility for financial aid, you must start working on this, at least, one year in advance - preferably in the beginning of your child's JUNIOR year of high school. The longer you wait and the closer it gets to your child's senior year, the tougher it gets to set up your financial picture without creating a "red flag" for the colleges and universities. It is also important for you to know what your "Expected Family Contribution" is so you can start saving for it. And, you should also know which schools can give you the best packages before you start visiting and applying to them. My advice is if you haven't started planning, DO IT NOW!

Mistake #5: Going Through The Financial Aid Process By Yourself Because It's "Cheaper"

Reality: If this describes you, the colleges and Federal Government are going to love you! This allows them to keep control over the process instead of you, the parent, understanding how the process works and taking back control from them. It always amazes me that people will readily use a doctor when they get sick, a lawyer when they get sued, but suddenly when they are going to send their child to college and spend between $14,000 - $34,000 per year, parents want to save themselves a couple of dollars and do it themselves. Unless you spent the last 5 - 10 years of your life studying and understanding the financial aid process, there is no way you are going to know how to get the maximum amount of money from each school. And, if you do try it yourself, you'll probably spend countless hours trying to figure it out. The moral to this story is "Don't Be Penny Wise And Dollar Foolish!" Use an expert who can help you through this process and make sure you get everything you're entitled to. (If you still insist that it makes sense to handle this yourself, I have a list of 10 books that I recommend you read word for word before even attempting to navigate your way through the financial aid jungle). On top of that, I would recommend reading the HERA (Higher Education Re-authorization Act), which is 400 pages of the smallest legal type you have ever seen and will only take you a couple hundred hours to read!

Check your email next week for the next “College Tip” in my series where I will be discussing 7 strategies to help you get the maximum amount of money for your child's college education!

Until then...

The 5 Deadliest Mistakes Parents Make When Applying For College Funding

Wednesday, May 10th, 2017

The 5 Deadliest Mistakes Most Parents Make When Applying For College Funding—And How to Avoid Them...

In this series I am going to cover 5 deadliest mistakes almost every parent makes when trying to get money for their child's college education.

If you make any one of these mistakes, it could end up costing you thousands or even tens of thousands of dollars in lost funding that you might have been eligible for.

I don't want to see you making these mistakes if you don't have to. That's why I've decided to devote this "College Tip" to teaching you how to avoid these common mistakes and make sure you get the maximum amount of money from every school your child applies to.

So, without further ado, let's discuss...

"The 5 Deadliest Mistakes Most Parents Make When Applying For College Funding—And How to Avoid Them..."

Mistake #1: Most middle and upper-middle class parents assume they won't be eligible for financial aid because they own a home and make over $75,000 per year.

Reality: Most families with incomes ranging from $50,000 - $150,000 per year who own homes are eligible for some form of financial aid. There is over 150 billion dollars available each year from the Federal Government, the states, colleges and universities, and private foundations and organizations. You just have to know how to get your "fair share". Unfortunately, most parents give up before they even start and assume they won't be eligible. This is exactly what the government hopes you will do so they can keep more of these funds. Don't make this mistake!

If you fall into this category, make sure you apply; you'll probably be eligible for SOME money.

Mistake #2: Focusing your time and energy on a private scholarship search instead of spending your time trying to qualify for "need-based" financial aid.

Reality: Private scholarships make up only 2% of the money available to you to help pay for your child's college education. The other 98% comes from the Federal Government, the state you live in, and the colleges and universities your child is applying to. Therefore, you are much better off spending your time and energy going after the 98%, rather than spending your time looking for the crumbs! These so-called "scholarship searches" you read about are normally scams and a complete waste of money. They charge you an arm and a leg and don't deliver. However, if you still insist on at least looking for some scholarships, call my office and we will give you a website that provides a free scholarship search.

Mistake #3: Assuming only minority students, athletes, and academically gifted students get financial aid.

Reality: Nothing could be further from the truth! "Need-based" financial aid is solely awarded based on "financial need" which is calculated by taking the cost of attendance at a school and subtracting the family contribution (which is the minimum amount the government feels you can afford to pay based on your income and assets and your child's income and assets). Whatever is left over after you subtract these two numbers is your "financial need" or eligibility for financial aid at a particular school. If you haven't noticed, this has nothing to do with a student's ethnic background, athletic ability, or grades. It's purely based on this simple formula:

COA(Cost Of Attendance) - FC (Family Contribution) = FN (Financial Need)

Mistake #4: Picking colleges and universities without paying attention to where your student lies in comparison to the rest of the student body.

Reality: To increase your chances of getting the best possible financial aid packages, it is imperative that you pick schools where your child lies in the top 10% of the incoming freshman class with respect to their GPA and SAT/ACT scores. Although schools give financial aid based on your calculation of "need" at their school, they will definitely give preferential packaging (i.e., more FREE money, less loans) to students who lie in the top 10% of the incoming class. The reason they do this is to attract the better students to their school. Use this to your advantage and try to apply only to those schools where your child would fit into the top 10% category.

Mistake #5: Assuming all schools are created equal and will be able to give you the same amounts of money.

Reality: All schools are not created equal and will not be able to give you the same financial aid packages. Some schools are well endowed and get a lot of money from alumni and corporations. These schools have more money to award and are generally able to meet most or all of a student's financial need at their school. Other schools, like state universities, get no private funds and rely solely on state and Federal funds to help fill a student's need at their school. In many cases, these schools leave students short and give them less money than they are eligible to receive. It can actually end up costing you more to send your child to a "cheaper" school if they don't have the money to meet your need. It is very important that you know each school's history of giving money before you ever apply, so you're not blown away when you get a bad financial aid package from your child's top school choice.

Check back next week for the next “College Tip” in my series where I will be discussing 5 additional deadliest mistakes almost every parent makes when trying to get money for their child's college education. Until then...

New college loans target parents…

Tuesday, April 12th, 2016

Have you seen the latest college loan expose from the Wall Street Journal?

It starts....

"Squeeze the Parents: New Student Loan Goes Straight to Mom and Dad. As the cost of college climbs, private student lenders are rolling out loans targeted to parents.

As rising tuition costs pile ever-higher debts on students, lenders and colleges are pushing for an alternative: Heap more on their parents.

An increasing number of private lenders are rolling out parent loans, which allow borrowers to get funds to pay for their children's education without putting the students on the hook."

Isn't this just so noble of these lenders. Sacrifice the parents to give the kids an education. Gold star for these companies. I KID!

I can't help but cringe at the parents in the article who are taking on $40k per year in parent loans (with a 10-year payback). All so they can send their child to Stanford.

This isn't going to end well for them, the monthly payments alone are going to be $2k per month in just a few years. Ouch!

That's going to be brutal on their cash-flow, lifestyle, and possibly ruin their retirement. Somebody needs to track down this family and tell them there's a better way. The SET for Life Solution™ way. This is what we specialize in here at College Planning & Funding Strategies.

Let's really take a look at this...

bank of parentsLenders see the new product as an area of growth in an otherwise sluggish lending environment. Colleges are helping push them in part because of a quirk in federal calculations. Unlike ordinary student loans, the parent loans don't count on a scorecard in which the US Education Department discloses universities' median student debt at graduation. That can ease the pressure to keep tuition increases in check at a time when heavy student debt has become a political issue.

Education loans in general, whether for students or parents, are spreading out the costs over time; they are NOT cutting college costs.

The average annual cost of a four-year, private college, including room and board, has climbed 53% in the past 10 years, to $43,921, according to the College Board. At public, four-year schools, it is up 61%, to $19,548 for in-state students.

Total student and parent college debt rose to $1.23 trillion at the end of 2015, more than double the level eight years earlier, according to the Federal Reserve Bank of New York. Despite parents' contributions, however, large numbers of students are emerging from college with debt loads that critics call unsustainable.

So, what is a family to do? When it comes to saving and paying for college, College Planning & Funding Strategies can help make a college education an affordable reality.

 

“The PLUS Loan Problem”

Monday, March 28th, 2016

PLUS loans are a BIG problem for families.

At first, they appear to be the right thing to do. They're readily available. They're easy to get. And the payments are manageable... at first.

But then years 2, 3, or 4 roll around.

And that's when it becomes obvious that the payments are spiraling out of control.

This US News article nails this point...

"But parents need to think about a borrowing decision like this through to graduation and beyond, before signing off on that first loan. A $20,000 loan for freshman year may sound manageable, but multiply that by the number of years you expect your student to be in school and the number of college bound children in the household and suddenly you owe $160,000 in Parent Direct PLUS loans, assuming you only have two children.

That works out to be about a $1,800 monthly payment under a standard 10-year plan. Parent PLUS loans aren't eligible for most income-based repayment  options."

$1,800 per month in payments would crush most families. Not to mention it would seriously impede their ability to save for retirement as well. And yet, so many families end up with this problem.

This is where our SET for Life Solution™ comes in. And why our advice and service is so valuable. We help families avoid this parent PLUS loan land mine.

Full article here: U.S. News & World Report, Education

And detailed information on parent PLUS loans here: PLUS Loans / Federal Student Aid

P.S. I didn't even get to what might be the worst part, the "loan fee" for every dollar of PLUS loan's a family takes out.

I've highlighted below the current interest rate (6.84%) and the "loan disbursement fee" (4.272%), which is alarmingly high...

PLUS Loan

FAFSA Trouble

Monday, March 21st, 2016

FAFSA

FAFSA Trouble: Why it's harder to complete financial aid applications this year

New FAFSA PIN changes are causing more problems.

Can’t say it is a surprise since we reported on this earlier in the year.

Now mainstream media is reporting on the story…

Washington Post Reports on Financial Aid Issues

It’s important to understand these FAFSA problems.

One of the biggest benefits of our services is timely and accurate filing of all financial aid forms.

This saves families time, headaches, and potentially a lot of money!

Every one of our packages includes a free FAFSA filing.

That’s a HUGE benefit in light of all the mistakes we see families make on the FAFSA.

What changes to the SAT mean to your child…

Thursday, September 18th, 2014

SAT Hated

Everyone is abuzz with the talk of the College Board’s announcement that big changes are coming to the SAT in 2016. According to David Coleman, president of the College Board, “The redesigned SAT will focus on the knowledge and skills that current research shows are most essential for college and career readiness and success.”

Starting in Spring 2016, students will take a new SAT – a three-hour exam scored on the old 1,600-point system, with an optional essay scored separately. Evidenced-based reading and writing, Coleman said, will replace the current sections on reading and writing. The math section, too, will be predicated on research that shows that there are “a few areas of math that are a prerequisite for a wide range of college courses” and careers. Coleman conceded that some might treat the news that they were shifting away from more obscure math problems to these fewer fundamental skills as a dumbing-down the test, but he was adamant that this was not the case.

It’s difficult to predict exactly how these changes will affect test takers but, as Coleman stated, one of the main goals of the test is to help students who don’t have access to test prep resources beyond what is available to them in school as the focus of the test becomes more practical and real-world-focused. How colleges and universities will react to the new test also remains to be seen. The weight placed on the SAT and ACT in the college admission process has always varied from school to school.

Certainly this will be a hot topic among students, parents, college planners, and educators (teachers/tutors) alike. And if you have a child in the 9th grade or younger, the news goes beyond the professional to the personal.

First and foremost, while change is uncomfortable, I look forward to the opportunities that the new SAT brings. In short, the new SAT will look more like the current ACT, which has grown in popularity since its inception. When the yearly number of ACT tests administered finally surpassed the yearly number of SAT tests administered for the first time last year, I think the College Board felt compelled to react… and it has. To David Coleman’s credit, he actually started his due diligence in the overhaul of the SAT to have it better reflect what students should be learning in school around the time he was appointed as the board’s next president in July 2012.

Below are a few articles that explain the forthcoming changes: 

Key Shifts of the SAT Redesign -Washington Post

SAT to drop essay requirement and return to top score of 1600 in redesign of admission test -Washington Post – March 5, 2014

A New SAT Aims to Realign With Schoolwork -New York Times – March 5, 2014

The Story Behind the SAT Overhaul -New York Times – March 6, 2014

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