Have You SEEN this Chart?

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Have you seen this chart?

It’s absolutely mind-boggling to see just how much federal student loan debt has risen in the past decade.

This includes debt held by parents on behalf of their kids – remember, more than 57% of parents will raid their retirement to help their children pay for school.

Obviously, recklessly borrowing for school is bad.

Whether it’s in the kid’s name, or a PLUS loan on the parent’s dime, it’s JUST NOT SMART to engage in out-of-control borrowing.

It can lead to serious hardship for the student, and especially the parent, down the road.

This is a huge reason we do what we do…

We give families an alternative to reckless and undisciplined borrowing for school.

Now…not all school loans are a bad deal. Strategic borrowing can actually be a very smart move.

There’s a huge difference between the two.

It’s like taking a trip using GPS compared to a trip with just a map, or no map at all.  One is superior to the other.

This is just one of many reason families engage our services and implement our plans.

They want to be shown a different path, one that doesn’t involve reckless borrowing for school.

For assistance in proper implementation of a loan repayment strategy, or for overall assistance in the design and implementation of your family’s college planning campaign, contact our Professional College Planners to schedule your free, no-obligation evaluation.

Senioritis – A Costly Infection?

You’re child has received the last of the admittance letters, having been accepted to 4 of 6 schools, one of which was the school of choice…

You’re waiting on the last 2 financial aid award letters so you can compare and leverage them (assuming you know how)…

Your son/daughter thinks he/she is set and, VOILA, Senioritis rears it’s ugly head!! Laziness sets in…

HUGE MISTAKE!!!

The schools that have admitted your student will closely review academic performance during the final half of the school year.

They’re identifying whether or not the student has the discipline and maturity to maintain, even improve, grades and the ability to resist the temptation to sit back and rest on success-to-date.

Don’t waste all that hard work by dropping the ball Senior year, especially the last half of the year.

By the way, and this may have been missed in the “fine print” of the acceptance letter, most schools stipulate that the student continue to perform well until graduation.

The school can and often will withdraw its acceptance offer if academic performance dips too far below its standards.

Finally, don’t let senior pranks get out of hand. If a prank in which your student participates gets out of hand, thereby requiring disciplinary action or completion of a police report, your high school may notify the schools to which you’ve been accepted.

Don’t let your student reward himself/herself for all the hard work until AFTER graduation. There will be ample time to celebrate the end of one era and the beginning of another.

For assistance with your college planning campaign, contact our Professional College Planners to schedule your FREE evaluation.

Popular Scholarship Myths – Don’t Believe Them!

Your child is incredibly smart, on track to be valedictorian/salutatorian. Or, your child’s a gifted athlete; maybe not elite status, but better than most of his teammates or competition.

Yep, you’ve got it made! When that award letter arrives, it’s gonna scream “FULL RIDE!”

Magic words, they are. But, don’t be mislead – – An all-expenses paid college experience is RARE!

Let’s look at a few myths surrounding scholarships…

A scholarship will cover all costs.

Most only cover a fraction of the cost-of-attendance and are directed toward college-related expenses. They won’t cover a laptop or travel to/from home. And, some are good for one year only.

Your student must be a “A” student.

While your child need not be an “A” student, he/she must demonstrate qualities desired by the scholarship sponsor (e.g., community service, artistic or musical talent, leadership, or other non-academic quality).

Talents and achievements automatically earn scholarships.

The fact is, there are thousands of outstanding students competing for the same money. Your child may be awesome, but you can’t just wait for money to appear. You will need to find and apply for scholarships.

Millions go unclaimed.

Sure, it’s true. But, those scholarships have narrowly-defined criteria (e.g., specific name, hometown, employer, etc.). Don’t fall for it. Use a free search tool (e..e.g, fastweb.com or and app called Scholly).

We can wait until senior year to look.

It’s NEVER too soon to begin. Deadlines will be set throughout junior and senior years, sometimes long before receipt of acceptance letters and aid awards packages. Plan early.

Only needy students get scholarships.

Merit-based scholarships are not based on need and do not require financial information.

Too much work, too little return.

True, scholarship apps are time-consuming. But, essays written for scholarship apps can be reused for admissions essays, and vice versa.

Scholarship money does not affect financial aid.

Actually, it can. You are required to report to the schools any aid received from private sources. And, if a college has met your full need, federal rules require that it deduct outside scholarship money from your need-based federal aid. Also, the school may even reduce gift aid.

For guidance throughout your college planning campaign, contact our Professional College Planners to schedule a free, no-obligation evaluation.

How Schools Award Financial Aid…

You’ve applied to the “magic number of schools (6-8) and been accepted to all. Now, you await the financial aid award letter, which arrives sometime between early-February and mid-April.

You’re anxious – you have a favorite school, but the awards received can greatly impact total cost and, ultimately, the choice of schools. After all, affordability is, perhaps, the most important criteria for your family.

So, how do school determine the amount and type of aid to award?

The EFC.

The first number they consider is your Expected Family Contribution (EFC). This amount is the base amount the schools (and the government) expect your family to pay toward the cost-of-attendance. All schools use the EFC, as calculated using the information provided on the FAFSA you submitted.

Some schools also require the CSS Profile and use the information provided to calculate an additional EFC. The CSS Profile formula considers many more factors (e.g., home equity, income from step-parents and non-custodial parents, etc.). These schools use the CSS to determine aid awarded from their own resources.

Note: This is why it’s important to start your campaign early, before your student’s sophomore year if possible, so that your income and assets can be recharacterized in specific ways in order to increase your eligibility for aid.

Need.

Schools then look at their cost-of-attendance (COA), their calculated cost to attend that school for one year. The COA includes tuition, fees, books, supplies housing, meals, transportation, and miscellaneous personal/educational expenses. The school subtracts your EFC from the COA to determine your financial need.

Aid Based on Need.

Schools then identify types of aid to meet your need. This includes gift aid (e.g., scholarships and grants) and self-help (student loans and work/study earnings). From your perspective, gift aid is preferred. Only gift aid reduces the net price of the school – the amount your family pays out-of-pocket.

Aid Based on Merit.

Many schools offer merit aid – aid based on the value a student brings to a school. It’s offered to attract top students, meaning those with high grades or those with a talent or other quality sought by the school. If merit aid is received, it counts toward meeting your need Justas any other form of financial aid would count.

The Award Package.

Schools combine the gift aid and self-help aid when preparing an award package. Each school allocates aid differently.

Some schools leave a gap of unmet need. If your final choice does this, your family will need to add this amount to its EFC. Schools doing this can use its limited resources to provide aid to a larger group of applicants.

Some schools use aid to encourage choice. Using the “preferential packaging” strategy, a school awards desirable students a high gift-aid package that fully meets need, while others get loan-heavy awards.

Miscellaneous. Some schools award loans and work/study first, then gift aid, as they have smaller aid budgets to work with. Other award the reverse, keeping loans to a minimum. Still others award more gift aid to student who file early, meeting financial aid deadlines.

Identifying the best schools providing the highest amount of gift aid is just one piece of the very large college planning puzzle.

If you’d like to discuss how our Professional College Planners can assist you with piecing your puzzle together, contact us to schedule your free, no-obligation evaluation.

Beginning Your Trek to College…

Good morning!

With over 4,000 4-year schools to choose from, it’s easy to find yourself paralyzed with indecision, intimidated, and overwhelmed with the enormity of the task at hand.

You may have no idea where to turn, who to talk to, how to begin…

Believe me, those feelings are normal.

I’d like to share with you these simple steps that, if you implement, will start you moving in the right direction:

  1. Consider the reasons your child is college-bound. Does he have passion about a certain field of study? Does she have a passion to identify her passion? Assess the motivation behind your child’s attendance.
  2. Chat with the Guidance Counselor. If your student is in high school, or even middle school, use the counselor to identify the curriculum that will help him/her to become a strong college candidate. Identify the standardized tests to be taken. Assess how to bolster your student’s academic resume.
  3. Have a family chat. Share your dreams with your son/daughter. Discuss what you think may be ideal for them. Develop a plan for how college expenses will be paid, as well as the costs your family can afford to pay out of pocket. (Note: engage the services of a college planning advisor and you may be pleasantly surprised. Quite often, with our assistance, families find they can afford much more at less stress than they otherwise imagined.)
  4. Have your student speak with some college students. Friends of your children may have siblings in college. Your son/daughter should talk to them, learning why they chose their school and what they like/don’t like. The responses may help your student think about a school in an entirely new way.
  5. Explore schools online. Find out what schools are like. Visit their websites. Attend college fairs and presentations. If your son/daughter takes the PSAT, he/she will soon begin receiving multitudes of brochures to review.
  6. Visit schools near home. When the time’s right, say sophomore year, your student should begin visiting a variety of schools – big/small, public/private, rah-rah/quiet, rural/urban/suburban. Chat with students, sit in on classes. This should help him/her learn what criteria they should consider when picking a school.
  7. Understand the school’s financial aid process and budget. All schools offer some form of financial aid to help families cover expenses. Some schools offer more free money than others; some make loan availability a large portion of their award packages. Be sure to know the school’s financial aid budget and what its average award package might be.
  8. Allow things to evolve. The first college list is the starting point. Opinions will change as more is learned and the final list may be very different than imagined.

These are merely a few of the items to be considered in a college planning campaign. Should you find yourself completely overwhelmed, contact our Professional College Planners to schedule an appointment.

The Best College Fit – Financially

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When fantasizing about your dream school, it’s ok not to think about cost. However, when it’s decision time, affordability must be considered. Financial fit must be included on your list of criteria – it’s one of the best ways to reduce the cost-of-attendance.

You should never pick a school just because the “price is right.” But, if you have found a school meeting key criteria, definitely consider cost. Deal with the issue early so that you can realistically choose between schools.

By or before junior year in high school, the parents and the student should have discussed what the family can afford. If you don’t fully understand the nuances of the financial aid process, you may believe you can afford much less than you truly can. This is one place where the services of a college planning advisor can be most beneficial.

Some signs that a school may be “financially friendly” include:

  • A history of generous gift aid (scholarships, grants);
  • A history of meeting a high percentage of student need (many schools fail miserably);
  • A policy of not reducing gift aid after freshman year (many schools do);
  • A history of providing generous merit aid (e.g., based on academic performance); and,
  • A history of low student debt upon graduation.

Most schools offer the best award packages to those students that occupy the top 25% of the incoming freshman class, thereby encouraging them to enroll. Be sure to know how your stats compare before applying.

Be sure to consider other cost-affecting factors. Such factors include low 4-year graduation and retention rates, taking more than 4 years to graduate (due to change in major), or transferring school if the new school doesn’t accept certain credits.

For assistance with identifying the best schools for your student with the highest gifting formulas, contact our Professional College Planners to schedule an appointment today.

Why are You Hesitating?

By now, if you’ve been keeping up with my blogs, you’ve learned how overwhelming planning for college has become.

It’s nothing like it used to be! Believe me…I’m going through the process right now!

If your child is a high school senior, you’re now at least 2 years behind in properly planning for the cost-of-attendance, identifying the best loans, and developing a loan repayment strategy that allows for an affordable, comfortable retirement.

This doesn’t mean we can’t help you salvage the situation, we can. It just means options that may have been available earlier in the planning phase are available no longer.

If your child is a high school junior, you’re now at least 1 year behind. Everything in the paragraph above applies to you family.

If your child is a sophomore or younger, whether you believe it or not, it’s time to act! It’s time to begin your college planning campaign!

Sure, it seems like college is just across the horizon and you can wait until tomorrow to get started, to schedule that meeting with a college planning advisor…

Then, POW!!!

You wake up and your son or daughter is now a junior or senior and options are limited…

Why are you hesitating?     Why are you waiting?     Why aren’t you calling?

To schedule a free consultation and to begin your family’s college planning campaign, contact our Professional College Planners at your earliest opportunity.

How Most Families Pay for College…

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Typically, parents hit the panic button when they finally realize the true cost-of-attendance.

How do families cover the cost?

They employ a variety of resources, from financial aid to tax credits/deductions:

Paying with your own resources. The first option is savings, whether personal or tax-advantaged (e.g., 529 Plans, Coverdell ESAs). It may include money from grandparents, student funds, asset sales, etc. In fact, 57% of parents raid their retirement funds to help cover the cost, thereby negatively affecting their retirement.

Paying with borrowed funds. Realistically, loans will paly a role in most families college funding strategy. And they should, as today’s money need not be used to repay them. Student loans usually have the lowest rates and the most that can be borrowed is $31,000 over 4.5 years. Parents can access PLUS loans or loans from private vendors.

Paying with tax credits/deductions. The government offers tax breaks. Learn the rules and take the credit/deduction best for your family’s situation.

Paying with need-based financial aid. Families that demonstrate an inability to cover the expense are eligible for need-based aid. This can be a major source of funding.

Paying with merit-based aid. Based on academic performance or other talents, not on need, schools may offer it as an incentive to enroll. Other sources include private scholarship providers, employers, and service organizations. Be careful. Some schools reduce the aid they award by the amount of the private source scholarships the student receives.

For assistance in developing a family-specific campaign funding and loan repayment strategy, contact our Professional College Planners to schedule your free, no-obligation evaluation.

6 Ways College Differs from High School…

While it’s difficult to know what college is really like until you get there, quickly comparing it to high school helps draw attention to a few significant differences. Who’s in charge? The student…

1. The student, not the school, manages his or her time.

Perhaps the biggest challenge facing freshmen is the inordinate amount of “free” time. There may be 3 classes one day, none the next. There may be temptation to just “kick back;” but, it’s up to the student to allocate time to studies, to socializing, and to other pursuits.

2. Professors expect students to learn and think independently.

Another shock – students are now responsible for learning all course material on their own, even assigned material not covered in class. They are expected to speak up and debate key issues – they may be graded on participation.

3. Cramming doesn’t work.

While cramming for high school exams may prove successful, college exams occur less often and are more difficult, demanding more in written responses and a demonstration of content mastery. Students must set aside time for study during the week and they should not skip any classes.

4. Social life is wide open.

Students meet many new people, hanging out and staying up as late as they want. College may seem to be as much about fun as school work. Successful students quickly learn how to balance school work with fun, giving priority to school work.

5. Students share very small personal space with strangers.

Even if used to sharing a room with a sibling, doing so with someone you’ve never met can be quite challenging. Negotiating everything from “lights out” to what’s considered “neat” may be needed. While a roommate may not become a best buddy, he or she can help the student expand horizons through introduction to new cultures, academic fields, and recreational experiences.

6. The student is responsible for himself or herself.

There may be rough patches in college – shyness, disappointment in grades, over-spending, or over-indulging. Many students reach a point where change is needed. Fortunately, professors hold office hours to assist students and most campuses have health care centers and counselors to provide help and a listening ear when needed. It’s up to the student to take the steps needed.

Many freshmen report that it takes time, often months, to understand what freedom means to them. For most, college becomes immensely rewarding, from developing solid new friendships to having stimulating new experiences inside and outside the classroom.

Contact our Professional College Planners for help in developing your individualized college planning campaign.

 

 

Non-Campus Visits

While visiting a school before you apply is ALWAYS a good idea, doing so is not always possible. Whether due to a shortage of time or money, when a visit’s impossible, there a many ways to check out schools without leaving home.

Visit school websites.

Every school website is crammed with information bringing that school to life – YouTube videos, dorm photos, cafeteria menus, and so much more. Useful areas include: school news; academic departments; admissions; financial aid; and, student life.

Tour the school virtually.

Many schools, via their website or smartphone apps, offer virtual tours, guiding you through campus and providing many visuals. They also may include admission requirements and deadlines.

Review student newspapers.

Most schools have one or more newspapers written by students. Typically, current and prior editions can be found on the school’s website. They show what students consider important, how they have fun, and a variety of informal activities that may be available.

Speak with school representatives.

Ask your guidance counselor or browse the school’s website to learn how to contact local representatives of schools that interest you. Local reps can answer questions and help you determine if you’re a good fit for that particular school. Don’t hesitate to introduce yourself.

Attend college fairs.

Schools send reps to fairs to meet students and parents and to introduce them to their particular school. Having prepared questions in advance, you can learn a great deal in a short period of time.

Welcome and appreciate school mailings.

Interested in information about a particular school? Visit its website and add your name to its mailing list. Each time you receive a mailing, scan it for new information and visuals.

Contact our Professional College Planners for more information on running an efficient college planning campaign.