Showing posts with label financial aid. Show all posts
Showing posts with label financial aid. Show all posts

Thursday, January 17, 2013

4 Ways to Get Free Money for College


Written By Guest Author Vivian Kerr

Who wouldn't want someone else to pay for their education? While getting a full “free ride” from a big school is getting more to be a rarity these days, it’s possible to attend even the most expensive private university with a combination of scholarships/grants, loans, work-study, and savings. Follow these 4 tips to maximize your financial aid and minimize your debt!

Make friends in the Financial Aid office. When you get your financial aid package from your school, it’s not the “final” amount. It’s just the opening offer! Remember that your financial aid package is arranged by a computer and a very few people. Those numbers can definitely change, and the people in the office do want to help you attend their institution. Don’t hesitate to contact them and ask what you could do to qualify for more money. If it’s a question of a few thousand dollars, an adjustment is highly possible.

Do extensive online research. College Board’s Scholarship Search and Fast Web are great sites which offer searchable databases of scholarships. Create an online profile and watch as scholarships are matched to you based on your gender, race, religion and field of study. There’s a number of other excellent resources on this Scholarships and Financial Aid Learnist board as well.

Get the FAFSA done early. The Free Application for Federal Student Aid ( FAFSA) is a major requirement for most schools to apply for a Financial Aid Application. The FAFSA for the current school year is available after the first of each year online (http://www.fafsa.ed.gov/).  Parents often need to estimate income for the rest of the fiscal year in order to get the FAFSA done early, so make sure you plan ahead! Students may also need to fill out the CSS Profile. CSS stands for the College Scholarship Service Profile. Schools that have Early Decision usually require the CSS Profile since the FAFSA is not available until Jan 1st.

Stay positive! While the application process will be done in January, applying for financial aid scholarships is an on-going process that will take you well into the late spring (or even into the summer). Scholarships are competitive, so you may apply for dozens before landing one. Stay organized and keep motivated. Six months of hard work might mean you’re debt-free for years after undergrad!

Remember to keep your eyes open – in recent years there are more scholarship “scams” out there as well! If something sounds too good to be true, it probably is. Always confirm a scholarship from multiple sources. The guidance counselors at your high school are a great resource for this!

About the Author:
Vivian Kerr: Vivian Kerr has been teaching and tutoring in the Los Angeles area since 2005.  She graduated from the University of Southern California, studied abroad in London, and has worked for several test-prep companies including Grockit & Kaplan for whom she taught ACT, SAT, GRE, GMAT, and did admissions counseling.

Friday, December 21, 2012

Interested in Conquering (and Maximizing) Your Financial Aid Awards?


Our New, FREE video workshop will unveil little known financial aid secrets to help you get the most out of your applications!

We here at the College Resource Center realize this is a hectic and often stressful time of year. As if holidays, get-togethers, cooking and shopping frenzies weren't enough? Now college financial aid deadlines are quickly approaching, and those complicated, money-saving applications are not to be forgotten either. Overwhelming? To say the least! 

Whether you are currently applying for aid, or will be in the years to come, we are making available a FREE video workshop on managing financial aid applications that will help you understand the full process and what you need to do to keep focused and get the job done right the first time! 

This workshop will provide insight into:

·         Why "the early bird gets the worm" concept applies for maximizing awards.
·         How to understand the "lingo" and avoid common mistakes that could cost you.
·         Why clearly understanding the whole process will help you get the job done.
·         How you can to gain control over your awards offers. 


We hope that you will take advantage of this timely resource that will make your financial aid applications (and maybe even your holidays) a little less stressful!

Click here to get access to these helpful college financial aid strategies!

Pass it on! If you know anyone who might also benefit from this information, feel free to share it!







Wednesday, December 19, 2012

Planning Ahead Can Save Thousands On College Expenses (Part II)


Author's note: Are you the parent of a student either currently enrolled in college - or who is planning on attending a post-secondary school next fall? You don't have to be told that college is expensive and planning is time consuming.  This two-part series, designed for parents and employee assistance (and other) professionals who are assisting them in this often-difficult process, can really help!

In part I of this two-part series, I outlined some of the issues that are just the "tip" of the college planning iceberg influencing whether today's "modern" family will be able to actually afford a 4-year college.  In this post, I will go over more key points.

Most EFC calculators pivot off a handful of data points- our calculator actually pivots off close to 20 significant data points that provide a more accurate picture of what your expected family contribution (EFC) might be. By knowing this number ahead of time,  you can create a more efficient plan for how best to pay for college. While EFC is mostly “income”-driven in nature, our work with families has uncovered additional “peripheral” areas, like assets, that can influence what a family’s “true” EFC looks like. Did you know that assets held in a student’s name can often be assessed as high as 26% in some formulas? 

This is because assets that are held in a student’s name typically do not have an asset protection allowance. There is over $150 billion in financial aid available each year if you know how to get it and with the competition for admissions becoming increasingly competitive, students need to know how best to present themselves to their targeted colleges.

If you are like many of the thousands of families who feel they are not receiving the kind of attention from their high schools that is needed during the college application process, take a peek at some of the various web-based tools that we have launched to help simplify this process. (www.smarttracktoolkit.com).

Be sure to monitor deadlines (both admissions and financial aid) for each college you are applying to.  Believe it or not schools often have different deadlines for their admissions applications versus their financial aid applications.  For students applying to state schools, did you know that different states have different deadlines for families to submit their FAFSA (Free Application for Federal Student Aid) forms? States like Kentucky, Tennessee and Vermont award aid on a first come, first-served basis so its critical to have your forms submitted in January (as a general rule of thumb) before most of the available aid disappears by late spring.

If you are a parent of a senior in high school or you have kids who are currently in college and are applying for financial aid, you can get a head start by using our College Funding tool to actually submit all of your financial aid forms on time (including the FAFSA & CSS Profile forms) and be entitled to a professional review with one of our experienced college funding advisors. 

Remember to use the promo code: “Impact” to receive 20% off when you purchase any of our 5 components and feel free to contact me with any questions you might have: jay.robie@smarttracktoolkit.com or 800 863-9440 ext. 277. Good luck!

About Smart Track™ Toolkit: The toolkit is a web based service that assists families with everything from admissions and test prep, to student athletics and financial aid.  Our intuitive software and on-demand workshops are key components to making sure students find their top choice colleges, and families can afford to send them there.

About the author: Jay Robie is the VP of Business Development in the Corporate and Education channels with the College Resource Center, LLC.  Jay has previous work experience as an Admissions Counselor at St. Lawrence University and Boston College as well as the Director of the Corporate Internship Program at Notre Dame High School.  Jay also has consulted for Road to College as an Admissions Planner.

Monday, December 17, 2012

Planning Ahead Can Save Thousands On College Expenses (Part I)


38 minutes. The average length of time a high school guidance counselor is able to spend with a student discussing college-specific items. 476:1 The national average ratio of high school students to guidance counselors. $1 trillion in student debt that has eclipsed credit card debt for the 1st time in history.. College costs that rise 6-8% on average per year. A larger and more competitive applicant pool.  These issues and averages are just the “tip” of the college planning iceberg influencing whether today’s “modern” family will be able to actually afford a 4-year college. 

Much of this information has been penned already by many other authors, so I do not want to rehash something that has already been “beaten” senseless into the American public but rather highlight a few pointers that might help folks to mitigate some of their anxieties and fears. Our firm, the College Resource Center, has worked with thousands of families over the years on creating viable plans for how best to pay for college without going broke and while each family’s situation is different, there is a common link amongst them- they are all very concerned with how best to approach what can be an overwhelming process. 

Have a plan. If you don’t, your plan will arrive in the mail when you receive your 1st tuition bill.  Determine what your EFC (Expected Family Contribution) will be. This is one of THE most important figures to know and basically lets a college know how much per year you can afford to pay to have your son or daughter attend that fine institution.

To get started, you can use our EFC calculator at Free Trial to register for a free trial and learn not only what your personal EFC is, but how much it potentially could be lowered by. (Your free trial will also give you access to an eCalendar to help you keep track of important dates and deadlines in the college admissions process)

Use the promo code: “Impact” to receive 20% off when you purchase any of our 5 components and feel free to contact me with any questions you might have: jay.robie@smarttracktoolkit.com or 800 863-9440 ext. 277. Good luck!

COMING NEXT: More on EFC calculators, admissions deadlines, and more.

About Smart Track™ Toolkit: The toolkit is a web based service that assists families with everything from admissions and test prep, to student athletics and financial aid.  Our intuitive software and on-demand workshops are key components to making sure students find their top choice colleges, and families can afford to send them there.

About the author: Jay Robie is the VP of Business Development in the Corporate and Education channels with the College Resource Center, LLC.  Jay has previous work experience as an Admissions Counselor at St. Lawrence University and Boston College as well as the Director of the Corporate Internship Program at Notre Dame High School.  Jay also has consulted for Road to College as an Admissions Planner.



Thursday, April 5, 2012

Does Financial Aid Make College More Expensive?

This Story Appeared in The Boston Globe
March 25, 2012
By Paul Kix


If a college economics class does its job, students will soon realize that even their professors don’t understand why their schools are so expensive. Over the past three decades, college tuition has increased at more than double the rate of inflation. Outstanding student loan debt in the United States now exceeds $1 trillion, a national burden even greater than that of credit cards.

Yet no one agrees on what makes college tuitions so high. Plush state-of-the-art gyms? Classroom technology? The cost of health care, the glut of administrators, too many professors focusing on research at the expense of teaching?

Then there is another theory, one that for 25 years has remained as controversial as it is counterintuitive: that the culprit is federal financial aid. Schools know that students have access to tens of billions of dollars in grants and loans, the thinking goes, and they raise tuition because the aid lets them do it.


This idea — essentially, that federal aid enables college administrators to get greedy — is known as the Bennett Hypothesis, after William Bennett, the conservative thinker who was President Reagan’s secretary of education. Since he first floated it in the 1980s, the Bennett Hypothesis has been debated in economic journals, congressional reports, and popular books. Studies have affirmed it, affirmed it in part, refuted it entirely, kind of refuted it, and many gradations in between.

It is, to say the least, a tough thing to test. And its unruliness stems in part from the colleges themselves. All traditional colleges accept federal aid, and they spend their money in idiosyncratic ways. Is a college public or private? Has its home state just slashed higher-ed funding? How does it fare in the U.S News & World Report rankings? Are there other competing universities nearby? These differences tend to shield the whole issue in opacity.

But a recent study has looked at the effects of financial aid in an unexpected place: for-profit colleges. The for-profit sector — national chains like The University of Phoenix as well as smaller technical institutes — has grown tremendously in recent years, and it offers new and little-examined data on the price of an education. For an economist, the beauty of the for-profit sector is that such schools can choose to either receive federal aid or not, allowing for a cleaner comparison than with traditional schools.

The recent paper, by economists at Harvard and George Washington University, compared more than 2,650 programs within for-profit schools in three states over multiple years, and found that the schools receiving federal grants and loans set their tuition roughly 75 percent higher than those institutions that go without government support. This discrepancy in costs has everything to do, the authors write in the study, with the aid the schools receive — “lending credence to the ‘Bennett hypothesis’ that aid-eligible institutions raise tuition to maximize aid.”


The National Bureau of Economic Research published the paper in February, and since then the argument over the Bennett Hypothesis has returned to the front of the debate over college costs. Conservatives crow that the study proves what they’ve known all along. Even liberals admit the hypothesis seems legitimate. Six days after NBER unveiled the paper, Vice President Joe Biden told an audience at Florida State University that “government subsidies have impacted upon rising tuition costs.”

The authors of the study caution they researched the for-profit sector only, and haven’t tried to test the hypothesis among traditional four-year colleges. Even if their finding holds and is applicable to conventional schools, it still leaves a very tough question: What to do next? Conservatives have already proposed cutting aid as a weapon against tuition increases. But it’s unknown whether that would stall the escalating cost of college or just limit the number of low- and middle-class students who might attend. If college is already too expensive, and aid only exacerbates the problem, it raises the unsettling prospect that making college cheaper might actually exclude some poorer students.

***

College tuition wasn't always a national crisis. As recently as the 1970s, the price of tuition actually declined by 17 percent at public universities, and 13 percent at private ones, according to data from the American Council on Education, a leading higher-ed lobby.

By the 1980s, however, things had changed. The price of tuition started to climb: By the end of the decade, it was up 47 percent at public universities and 54 percent at private schools, according to the council. What was different? Student populations were changing; college degrees were becoming more important. And Congress had mandated more federal assistance. In 1978, President Carter inaugurated the modern era of financial aid by signing the Middle Income Student Assistance Act, which had the effect of offering federally subsidized student loans to anyone who qualified for college, regardless of income. During the Carter and Reagan administrations, the government further expanded federal aid, including Pell grants and Perkins loans for needy students. From 1978 to 1981, total available aid grew by 70 percent, to a total of $14.7 billion, according to the Congressional Budget Office.


As Bennett tells the story today, he formed his theory while serving as Reagan’s secretary of education from 1985 to 1988, touring roughly 60 universities and meeting with provosts and presidents. For a Republican like Bennett, that meant asking them why college tuition was so high. Why was it growing two to three times the rate of inflation? Bennett says university officials told him the answer had to do with the federal assistance the schools received. When parents or students balked at higher prices, college administrators could tell them not to worry; federal aid meant the true cost of college would be much lower. The argument had a cyclical perversity to it: As tuition climbed, so did the number of students who relied on aid to offset it. The very loans meant to help students afford college were making college more unaffordable.

Bennett took to The New York Times’ opinion page, and on Feb. 18, 1987 wrote: “[I]ncreases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase.” Though federal aid policies may not directly cause tuition to rise, Bennett argued that “there is little doubt that they help make it possible.”

The research done on the hypothesis since then is enough to induce whiplash. In their 1998 book, “The Student Aid Game,” economists Michael S. McPherson and Morton Owen Schapiro said public colleges and universities tended to increase tuition by $50 for every $100 in aid. In 2001, however, in a report for Congress, the National Center for Education Statistics found no evidence to support the Bennett Hypothesis anywhere. A 2003 study by Cornell University economists Michael Rizzo and Ronald Ehrenberg didn’t find evidence among public schools, but a 2007 study from University of Oregon economists Larry Singell and Joe Stone found a nearly dollar-for-dollar match at private institutions.


The professor whose work sparked the latest brouhaha didn’t set out to start one at all. She wasn’t even looking at the Bennett Hypothesis. Stephanie Riegg Cellini was an assistant professor of public policy and public admninistration, and economics at George Washington University and interested in the for-profit education sector, an industry that other academics seemed to be ignoring. She found that even the federal government had no idea how many for-profit schools there were. In California, the government estimated there to be 500 such colleges, but these were only the schools that received federal aid for their students. Cellini counted roughly 2,000 for-profit colleges in the state, most of which did not receive federal aid and were not accountable to anyone but the board that licensed them. (Some schools choose to forgo aid for various reasons, one of them being the accreditation that accompanies it is too expensive.)

Cellini presented her findings at a lecture at Harvard in December 2009. Afterward she met with Claudia Goldin, an economics professor there, who recommended they pair up. “I’m a data digger,” Goldin says. The data from certain states were rich with details. And because some of those colleges offered aid and some didn’t, one thing Goldin and Cellini could test was the Bennett Hypothesis.

They focused on colleges in Wisconsin, Michigan, and Florida, three states in which they could see comparable data on tuition and programs offered. The authors discovered that the schools that received aid charged roughly 75 percent more in tuition than the schools that didn’t.

The economists tried to control for quality. Maybe the aid-receiving schools graduated more students or offered more and better classes. They didn’t. They charged higher tuition, it appeared, because they got aid. “Sound economic theory suggests that if you can get more money to raise tuition, you will,” Cellini says. The National Bureau of Economic Research published their paper last month.

***

Their work came at a timely moment. The National Association of Consumer Bankruptcy Attorneys issued a statement in February saying they feared student loans will be the next “debt bomb” to ravage the country. The new education plan President Obama outlined in January uses federal aid as a stick, proposing to tie how much schools receive to how low they can keep tuition. And Vice President Biden, out promoting the plan at Florida State, said something must be done because the Bennett Hypothesis seemed to be real: “It’s a conundrum,” he added. (A White House spokesman, Matt Lehrich, tells The Boston Globe: “There is no evidence to suggest that federal aid is a driver of tuition increases, but it’s absolutely true that the formula we’re using to distribute campus-based aid right now has not created the right incentives to bring down costs and promote affordability in higher education.”)


Days after the study was made public, and partly in response to it, Andrew Gillen, an economist at the free-market Center for College Affordability and Productivity, issued a 32-page report that he called “Bennett Hypothesis 2.0,” arguing that to prevent further tuition increases, it was time to start limiting federal student aid to only those who need it, and only at the dollar amounts they need. Richard Vedder, an economist at Ohio University and scholar at the conservative American Enterprise Institute, took Gillen’s proposal a step further, arguing on the higher-ed website Minding the Forum, “The federal government needs to wind down its financial aid commitment. Restrict eligibility for aid to truly low-income students. Impose performance criteria for aid recipients: mediocre students will lose aid. Make the college absorb some of the risk for loan defaults — a lesson we should have learned from the financial crisis.”

But it’s unknown whether cutting aid would actually work, in part because it’s hard to draw a clear causal link between aid and tuition, especially among the not-for-profit colleges that make up most of American higher education. Goldin and Cellini both declined to comment on the applicability of their paper within the traditional, four-year sector.

Higher-education advocates tend to point to state funding as a more important driver of tuition: As states cut support, students need to pay more; when universities have more support, they’ve sometimes actually lowered tuition. In California, for instance, tuition declined in eight out of the 10 years in the 1990s, says Terry Hartle, senior vice president of the American Council on Education, because the dot-com and real estate booms helped the state Legislature fund colleges at adequate levels, easing pressure on the state’s large public higher-ed systems. On the other hand, nationwide college prices climbed from 1984 to 2009 regardless of whether state funding levels were down or up, according to a report from the State Higher Education Executive Officers. Moreover, as Neal McCluskey at the free market Cato Institute pointed out in a recent blog post, cuts in state funding don’t explain “constantly increasing private school costs.”


Because the data contradict themselves, it’s always more politically expedient for members of Congress and a sitting president, regardless of anyone’s political leanings, to expand federal aid. That way no qualified student is denied access to college. To put Bennett’s idea to the test — to cut large swaths of federal funding to hopeful college students — takes a courageous politician, who risks the wrath of not only students and their parents but American universities and their leaders.

This is why federal aid keeps growing. Last year, for the first time in history, students took out $100 billion in loans — money that will end up as revenue for colleges and as debt for students. President Obama wants to lower these costs of tuition by tying the flow of aid to the value schools offer. Gillen thinks one way to do that is to make more college graduates take an exit exam that quantifies what they learned, and that future students could use to decide if they were getting their money’s worth. “It’s not as hard as some people think to begin to reform the system,” Gillen says. But given the huge amounts of money involved, he points out — for the students, the government, and the schools at the heart of it — it won’t be easy either.






Wednesday, February 8, 2012

Tips on Completing your FAFSA



If you’re the parent of a student who is in college or is headed off to college soon, then you’ve no doubt heard of the “Free Application for Federal Student Aid”, or the “FAFSA”. If you’ve never heard of it though, the FAFSA is the Federal Government’s application for financial aid for college. It determines how much you are expected to pay for your student’s college education, one year at a time. Oh, and in case you think that “free” means “easy”, a few years back our Secretary of Education Arne Duncan told Congress, “You basically need a Ph.D. to figure that thing out!”…and he’s a Harvard guy.

The FAFSA is arguably the single most important application in determining how much and what type of financial aid a family will receive. However, it has failed to keep up with the changing composition of our families and our lives. Confusion is widespread and can lead to an inaccurate portrayal of a family's finances.

A more recent example: One of our advisors just attended College Goal Sunday, an event dedicated to helping families complete the FAFSA for their students in one afternoon. After attending, this advisor couldn’t believe the amount of difficulty that people were having. I had to remind him that even the most “basic” questions to college guys like us could be complicated and complex for the everyday person. If you don’t deal with college financial aid everyday, how can you be expected to automatically understand one of the most daunting financial aid applications out there?

When our company hosts local college workshops, we try to take a few minutes to answer individual concerns. Many of the questions tend to be the same for middle and upper middle class families so I thought I'd summarize five of the more common issues here.  Quick disclaimer:  these responses are general and should be considered a guideline, not a recommendation -- remember, no two families have exactly the same circumstances.  Finally, the guidelines for the FAFSA are available through the Department of Education. Keep in mind that it may be similar to deciphering Greek or the entire IRS Code, but these guidelines are out there.

1. The student is the applicant. Any reference to 'You' or 'Your' on the FAFSA and on the CSS/Profile refers to the student! Don’t make the mistake of accidentally listing parent income or assets under the student’s name. This can cause a huge problem and may result in the colleges thinking you can afford more than you’re supposed to.

2. On the matter of children with separated or divorced parents: Dept. of Education guidelines require that the applicant report the household income and assets of the legal parent who provides more support. This is typically the household where the student lives the majority of the time. Just keep in mind that the non-custodial parent's household is largely ignored on the FAFSA, but will likely be counted in the CSS/Profile formula.

3.  For most business owners, the proper value of their business is “$0”.  Why? Well according to the FAFSA, a “business” is only a “business” if it has 100 or more employees. Those with fewer than 100 employees should be exempt, but  I’ve seen CPAs make the mistake of reporting a value greater than $0 when trying to fill out a FAFSA and lose thousands in potential financial aid.

4. I get so many questions from parents who want to 'emancipate' their children so that they can be considered “independent” on the FAFSA. Unfortunately, “independent” for the FAFSA and “independent” for your tax return are two completely different things. The Dept. of Education has certain criteria to determine whether a student is “independent” and trust me, you don't want to answer 'Yes' to these questions, at least not yet (like, for example, whether your child is married or has dependents of their own).

5. Work-Study is a great program. You probably realize that most colleges do not give out 100% free money.  Most schools award a combination of free money and loans/work-study.  You should check 'yes', indicating that you wish to be considered. You can always appeal later or decline the work-study offered, but it's harder to ask for it later. Besides, if your kid works 10-20 hours a week and makes a few extra bucks, that's a good thing.

6. Cash, checking, savings, and investments:  Aside from questions about your income, the FAFSA will also ask about assets. A key point is this: You don't have to disclosing the value of your retirement accounts or the value of your primary residence! The FAFSA specifically tells you not to include those assets, so don't! You do however, need to enter the total amounts of cash holdings you have as of the day you file. So, if you have to, make any large payments (like mortgage, etc) BEFORE you file.  As for other non-retirement assets, there is an asset protection allowance, and certain annuities and insurance products could also be exempt. A good rule of thumb: consult a professional college advisor if you have more than $50,000 worth of non-retirement assets.

We do cover a lot more information than just this in our workshops, so if you are local to the greater Boston area, we encourage you to come out over the next couple of weeks.  We conduct our workshops at venues like high schools and libraries, and they are of course open to the public. If you have college-bound children and want to attend, simply click here to register. If you don't, please send this on to someone who does -- I'm certain they'll thank you for it.

If you are not local or can't make it to one of these workshops, that’s OK. Check out our brand new videos we just finished to see what parents and other professionals are saying about our online college planning toolkit. It’s nice to save time and money, not to mention have a seasoned team of professionals by your side as you try to navigate the college planning process.

Best of success,

Murray Miller, CEO
College Resource Center, LLC

Wednesday, January 25, 2012

3 Critical Questions to Research So You Can Get Grants, Scholarships and Other Financial Aid You Deserve


So how do you beat the colleges at their own game? Here are three areas to research.
 
1. Determine what percentage of financial need each college on your list has met historically. All things being roughly equal, wouldn’t you rather attend a more generous school compared to a stingy one?
2. Determine how that college meets need – i.e. the breakdown between free stuff (grants and scholarships) and self-help (loans/work study.) Two colleges could meet the same overall percentage of need, but your financial aid could be vastly different between the two.
3. Pin down the priority deadlines – some schools require forms as early as November 1! Others may want you to file by February 15th. Make sure you research deadlines for each college on your list, since a lot of financial aid is first come, first served.

Now, a quick word on how to use the information uncovered in #1 and #2, above. The ‘formula’ used by each school to determine your financial aid award is as follows: COA (Cost of Attendance) – EFC (Expected Family Contribution) = Need. Schools award financial aid based on how much need you show. As noted above, once you identify the percentage of need that your college meets, you have a decent handle on what your award will look like. Here is a simplified example:

Assume two colleges with a $50,000 Cost of Attendance and a $25,000 EFC. Your Need is $25,000. If “College A” meets 100% of need, you’ll receive an award of about $25,000 and your cost will be your EFC of $25,000. However, only the most elite, competitive colleges in the country will meet 100% of need. Most do not. If “College B” only meets 80% of need, you may only receive $20,000 in aid, and you’ll have to pay about $30,000 (this is your EFC + the 20% unmet portion). So your total out of pocket for one year at the second school is $5,000 more than the first school, even though their sticker prices may be the same.

How can you obtain these facts? The first place is to look on the websites of each college. Understand that you will have to click around for a while – colleges don’t make this information easy to find. You can also call the financial aid office but you may end up frustrated by the lack of responsiveness, according to most of the parents we work with. Another great resource is College Board - www.collegeboard.org. The information on there is trustworthy for the most part, but you have to really dig at it. You’d be well-served to consult a qualified college finance specialist. For example, our firm has all of this information at our fingertips and we get a lot of it directly from the colleges and some from the Department of Education. Our Smart Track™ Toolkit website has the tools (many of them for FREE) to help you project what each college will award within a small margin of error, and suggest legal and ethical ways to qualify for more grants and scholarships than you would on your own. No matter whether you seek out expert help or do it yourself, preparation and research can pay off in a big way. Don’t put it off or you could lose out – on tens of thousands of dollars in financial aid.

MurrayMiller is a financial educator devoted to the college planning space for over a decade.  Murray is the President and CEO of the College Resource Center, LLC.  You may contact him by emailing info@smarttracktoolkit.com or by calling 800-863-9440. For more information, including a schedule of free college workshops, visit www.SmartTrackToolkit.com.

About Smart Track™ Toolkit: The toolkit is a web based service that assists families with everything from admissions and test prep, to student athletics and financial aid. Our intuitive software and on-demand workshops are key components to making sure students find their top choice colleges, and families can afford to send them there.

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Wednesday, December 14, 2011

7 Surprising College Financial Aid Facts That Could Save You Thousands

Although college costs continue to skyrocket in the face of our economic woes, proactive – even affluent - families will pay less than “sticker price” because they learned how the financial aid system really works. Here are seven facts that could help you pay “wholesale” for college:

1. Some Colleges Have More to Give Than Others. Although most schools use the same financial aid formulas, they differ significantly in how much they award in grants, scholarships and other financial aid. Example: the older, prestigious colleges – Ivies and other private universities– offer significant amounts of aid thanks to their large endowments. Public universities offer very little financial aid as they rarely have endowment money worth mentioning. 

2. High Sticker Price Colleges Can Cost Less Than “Cheaper” State Schools. One year at a state university can run around $20,000-35,000 (tuition, fees, room and board, etc.). A private college can cost more than $55,000. But frequently, the more expensive college is cheaper! How? Private colleges and universities use their endowments to meet 90%, 95% or more of financial need. State colleges meet roughly 50-65%. 

3. “Forgotten Middle Class” Families Receive Generous Grants, Scholarships and other Financial Aid. Recently, colleges and universities have publicly courted upper middle class families – regularly awarding five figure sums to parents with six figure incomes. DO NOT pass on filling out the financial aid paperwork if you think you won’t qualify. One study showed that 53% of eligible families did not bother applying – leaving millions on the table. 

4. Grades Have Little To Do With Financial Aid Awards. Many parents assume that their child must have good grades to qualify for grants and scholarships. This is inaccurate. Most colleges award a majority of their grants based on financial need, not merit. Merit scholarships comprise less than 2% of the total “pot.” Although it’s fun to talk about merit scholarships around the office water cooler, the big money - more than 98% - is in the need-based financial aid system. 

5. Two Families Can Have the Same Amount Saved - But One Will Receive Far More Financial Aid Because of Where They Saved. An examination of the financial aid formulas reveals that some assets count against you more than others. And some don’t count against you at all. In general, money saved in a student’s name will penalize you more than money held in a parent’s name – strange but true. You could be better off shifting assets out of your student’s name, perhaps into an asset class that’s entirely exempt (such as retirement accounts, insurance, some annuities, and some business assets).

6. Graduation Rates Differ – More Than You Realize. Unfortunately, the odds are stacked heavily against getting in and out of college in four years. Take a look at the four-year graduation percentages at your local state university (www.collegeresults.org is a good site). You’ll likely see that about 50% of full-time undergraduate students get out in four years! Why? The answer may surprise you - it’s because kids can’t get classes they need to graduate – not because they’re “slackers”.  Private colleges do a better job at getting kids through school in four years – a typical four year rate is 85% or higher at most prestigious private schools. 

7. The Financial Aid Office may not be your Best Resource …. Most people don’t understand why you’ve got a better shot of seeing Paris Hilton inducted into MENSA than getting meaningful help from a financial aid office. The reason you won’t is related to the nature of higher educational institutions themselves – they are BUSINESSES. I’ll wait for you to recover…yes, I know that they’re ivory-towered, institutions of higher learning. However, they have bills to pay – six figure salaries to pay to most University Presidents, upgrades to their facilities, high wages to pay to tenured professors. So the university has bills to pay and it maximizes its income which can limit your chances for Free money. That’s why asking an employee of that institution for help may be like calling the IRS and demanding that they reveal all their latest loopholes so you can pay less in taxes.

Murray Miller is a financial educator devoted the college planning space for over a decade.  Murray is the President and CEO of the College Resource Center, LLC.  You may contact him by emailing info@smarttracktoolkit.com or by calling 800-863-9440. For more information, including a schedule of free college workshops, visit www.SmartTrackToolkit.com.

About Smart Track™ Toolkit: The toolkit is a web based service that assists families with everything from admissions and test prep, to student athletics and financial aid. Our intuitive software and on-demand workshops are key components to making sure students find their top choice colleges, and families can afford to send them there.

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Thursday, November 17, 2011

Researching & Choosing a College


What is the ideal college for ME? Which colleges and/or universities offer the courses of study, campus size, geographical location, extra-curricular activities, quality of faculty and political atmosphere that you want or need in a school? Ideally, your final college choice should meet, or even exceed, your desired criteria.

Be careful not to select a college for the wrong reasons-- where your friends are going, where your boyfriend or girlfriend is going, where Mom or Dad went, which has the better sports teams, or where you think you and your family can afford. Choosing the wrong school can result in lost time and money in the long run.

It is likely you are going to spend at least four years at a college. Therefore, it is important to find a school that is an excellent match for your interests and needs. Don’t settle for less. But don’t start the college search process with any prejudices about any type of school. Keep your college options open.

 Seven Steps to Finding the Perfect School

1.      Compile an initial list of colleges that interest you based on specific criteria (majors offered, size, location, extra-curricular activities, etc.). Your original list of schools should include twelve to thirty potential schools that meet most (or all) of your general selection criteria.  Ask your guidance counselor if your school uses a college search software program to help with this process.  Otherwise, College Board has a good college search function that's free.

2.      Find schools where you fall in the top 20% of the admitting class. These students routinely receive more free college scholarships and grants and need less student loans and work study money. If financial aid is important to you and your family, doing this will increase your chances of receiving free college scholarships and grants.  

3.      Narrow your list of possible colleges to about fifteen by doing further research into the original list of institutions you selected. At this point you will be able to eliminate institutions from your original list based on more specific criteria.

4.      Finally, cut your list to a minimum of six. You will now be able to do more extensive research and go visit their campuses. Compile a list of your top schools in order of preference. Your final six or more colleges (we recommend having 8-12) are the ones to which you will actually apply for admission. We recommend to have at least (2 - 4) "Safety schools," colleges you're very likely to gain admissions to, (3 - 5) "Target schools," colleges that you're pretty sure you will get in to based on standardized test requirements and GPA, and (2 - 4) "Reach schools," those colleges that may lie just outside of your academic achievement statistics, but not out of the realm of reality. 
  1. Apply to your finalists.
    1. Research the requirements.
    2. Mark deadlines on your calendar.
    3. Ask for recommendations.
    4. Work on your admissions essays.
    5. Fill out your applications.
    6. Apply for financial aid.
    7. Send all documentation in accurately and on time.
6.      Analyze award packages. There is an art to comparing award packages. You must first determine if each offer is really the best you can get from that college. If not, there are often ways to successfully request more money and improve your package. 

7.      Decide and go for it! Now that you have a firm handle on the financial packages, put it into perspective with all the information that you collected from the schools, and decide which school would be the best overall choice for you. Sign on the dotted line. Obtain financing, including filling out applications for any loans you may need.

Any additional tips to share?  Leave your comments!

About Smart Track™ Toolkit: The toolkit is a web based service that assists families with everything from admissions and test prep, to student athletics and financial aid. Our intuitive software and on-demand workshops are key components to making sure students find their top choice colleges, and families can afford to send them there.

About the author: Laura Guarino is the Student Services Coordinator with College Planning Strategies, LLC. Laura has a degree in Human Development from Boston College and is currently pursuing a Master’s degree in School Guidance Counseling.  She is also enrolled in a certificate program in College Admissions Counseling.  Laura is at the forefront of the college admissions process for the families of CPS and The Smart Track™ Toolkit.

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Wednesday, September 7, 2011

A Beginner’s Guide to Financial Aid Part II

In the last blog entry, we covered some of the basics of the college financial aid system and how it is used to determine how much money you could receive. In case you have forgotten, the key formula is “COA – EFC = NEED”. COA in this case stands for “Cost Of Attendance” and is pretty straightforward (just add up the cost of everything for one year of college). What I would like to focus on in this entry is the EFC, which stands for “Expected Family Contribution”.

The first thing to do is clearly define what your EFC is. Most colleges and universities will define your EFC as “the minimum amount your family can afford to pay for one student for one year of college”. It is important to identify key components of this definition. “Minimum” implies that your EFC is a starting point and you may actually have to pay more than your EFC (depending on the college your student chooses.) Also notice the “one year of college” part. This is because you should file for financial aid every single year, which means that your EFC will likely be different every single year. The reason financial aid is filed for every year is because situations change. Jobs are gained or lost, benefits will start or stop. Even the number of students in your family attending college at the same time could change, and all of these things impact your EFC.

Now in terms of actually calculating your EFC, college and universities will use one or two methodologies (read: formulas.) The first is the Federal Methodology (FM). This is derived with a formula the Federal Government came up with and is calculated when you submit the FAFSA. Every college in the country that awards federal financial aid requires the submission of a FAFSA, which means that all of these colleges will see your FM EFC. Some colleges will go a step further and they will use their own formula to calculate your EFC. This is known as using an Institutional Methodology (IM). This can get complicated because different institutions can use different IM formulas. However the basic IM formula was created by CollegeBoard and is calculated when you submit your CSS/Profile.

Now that you know there are two different EFCs, it’s probably best to figure out what’s included in these formulas. Simply put, the FM and IM formulas use the following: parent income, parent assets, student income, and student assets. There is a handful of other information that could be used (ages of parents, ages of younger siblings, certain monthly expenses) but income/assets of parents/students are the big players.

Keep in mind that since we’re dealing with two different formulas, income/assets could be assessed differently. One example is your primary residence. Any equity in the primary home is considered an asset in the IM formula, but primary home equity is not part of the FM formula. If you happen to have more than one property though, equity in the additional properties is considered an asset in both the FM and IM formulas.

Things get more complicated when you delve into the nitty-gritty of each formula. If you’re concerned about your EFC and how you’re going to be able to afford to send your students to college, it is usually best to consult with a professional college advisor. Much like a CPA helps you with your taxes; College Advisors (the ones worth their salt) are well versed in EFC formulas and the many different avenues for paying college bills.

Once you finish your applications and the college gets your EFC, its time to create your financial aid award. In the next series entry we’ll discuss Awards and Appeals, something you may need to utilize depending on your EFC, your award, and any extenuating circumstances you think may be affecting your ability to pay for college.

About the author: Justin Munio is a Business Development Manager and Financial Aid Consultant with College Planning Strategies, LLC. With a degree in mathematics from SUNY Geneseo and 4 years working in the CPS Financial Aid Department, Justin is at the forefront of the financial aid process for the families of CPS and the Toolkit.
                       
About Smart Track™ Toolkit: The toolkit is a web based service that assists families with everything from admissions and test prep, to student athletics and financial aid. Our intuitive software and on-demand workshops are key components to making sure students find their top choice colleges, and families can afford to send them there.

Tuesday, August 16, 2011

How Parents Can Get Involved in College Admissions

We understand that going away to college is as much an act of independence as it is a smart choice for your future, but your parents’ involvement in the application process can actually make your life a lot easier. Applying to college is stressful for everyone. You want to make sure you do everything possible to get into the best college possible. Your parents want the same thing, but they might not know how to help. Here are a few tips for your parents to get involved without becoming overbearing.
Plan College Visits
While you’re studying for the SATs, have your parents schedule some college visits. At this point, you should know which schools you plan on applying to, or you can choose to visit schools after you’ve received acceptance letters.
Research Financial Aid
Even if your parents are not going to help pay for college, they have the necessary experience to better guide you through financial options and money management. Have your parents research loan options and explain the benefits and drawbacks of each plan.
Encourage Test Prep
Parents should encourage their kids to begin thinking seriously about the SATs or ACTs. Test prep books, classes (like Princeton Review or Kaplan), and online services (like Grockit.com) can be expensive but worthy investments, so parents should be able to help their kids finance them.
Remember Deadlines
While remember application deadlines should be the responsibility of the applicants, parents can help by marking these important deadlines in their calendar. While it’s important not to nag their kids, parents can and should offer gentle reminders as the deadlines approach. 
Don’t Make All the Decisions
Perhaps the most important thing a parent can do is not become too involved in the college application process, especially when it comes to choosing schools. While it is perfectly fine to offer suggestions and help research the school, your kids should ultimately make the final decisions regarding school selection.

Tuesday, July 19, 2011

A Beginner’s Guide to Financial Aid Part I

As most parents and students are aware, if you need money to go to college then you deal with the financial aid department. These are the people that are in charge of awarding grants, scholarships, student loans, and work-study packages. Figuring out how the college determines who gets money and who doesn’t can often times seem tricky, so let’s try to look at this process in as simple a format as possible.

Now, the concept is that financial aid goes to those families who need it the most. To determine this, colleges use two factors: Cost of Attendance (COA) and Estimated Family Contribution (EFC). Then, the financial aid department uses a simple formula: COA – EFC = NEED.

Your COA is pretty straightforward. It is the cost of tuition, room & board, books, fees, transportation, and an allowance for miscellaneous fees. The COA at a college can change every year, so financial aid is recalculated every year. Remember to include all of the items I just mentioned in your budget, since that is exactly what the college is doing when figuring out your financial aid. If you forget to factor in the cost of textbooks, you may not have enough money when you head off to college in the fall.

Your EFC is a bit more complicated because the college is trying to determine how much money they think your family can afford to spend on college. Unfortunately, your EFC is never going to be as low as you would prefer (unless of course it’s $0), but it is important to know what factors impact your EFC. There are many different things that go into the calculation of your EFC, but four of the biggest influences are Parent Income, Parent Assets, Student Income, and Student Assets. We will cover all of these in more detail in future blogs, so stay tuned as we continue the posts. Other factors that can influence your EFC include the number of family members in your household, the number of students in college at the same time, the ages of each family member, and even what state you live in. If this seems complicated, plenty of other families are thinking the same thing. Much like how a CPA can help you with your taxes, a good college advisor should be able to help you understand your EFC.

The last step in the process is to determine your NEED. This is high much financial aid you may be eligible for. Let’s say for example that your college has a COA of $50,000 and your EFC is $20,000. This means your NEED is $30,000 ($50K-$20K=$30K). Now, does this mean that you’re going to get a $30,000 scholarship? Not usually. Most colleges will award you some combination of grants/scholarships (free money) and work-study/student loans (self help). Keep in mind that money you receive based on this formula is called “Need-Based Aid”. Scholarships that you get for having a really high GPA or good SAT scores are called “Merit-Based” and are awarded based on separate criteria. Even if your EFC is higher than a college’s COA, you could still receive “Merit-Based” aid (so study hard!)

Next time we’ll talk about your EFC in more detail and explore the fact that there are 2 possible EFC formulas a college could use, each with a different set of questions.

About the author: Justin Munio is a Business Development Manager and Financial Aid Consultant with College Planning Strategies, LLC. With a degree in mathematics from SUNY Geneseo and over 3 years working in the CPS Financial Aid Department, Justin is at the forefront of the financial aid process for the families of CPS and the Toolkit.

About Smart Track™ Toolkit: The toolkit is a web based service that assists families with everything from admissions and test prep, to student athletics and financial aid. Our intuitive software and on-demand workshops are key components to making sure students find their top choice colleges, and families can afford to send them there.

Wednesday, April 27, 2011

“Tales from the Financial Aid Department”




Working in the Financial Aid Department of a private college advisory firm for the past 3 years, I have had the task of helping families complete all manner of financial aid applications. FAFSA, CSS/Profile, and Institutional Forms; you name it and I’ve done it.
When families think of the many different financial aid applications needed, there are usually two schools of thought. Either “these forms are very difficult to understand and require the help of a professional” (this is where I come in) or “these forms are incredibly simple; only a fool could mess them up”. Well, when I hear the latter opinion I get nervous. Unless you’ve worked in a college financial aid office, private college planning firm, or the guidance office of a high school, assuming that these forms are simple might be a costly mistake.
I recently spoke with one such family who was concerned when they had not yet heard from their daughter’s first choice college about financial aid. They had done their own applications and were worried because May 1st was just around the bend and they had to make a decision. I suggested they call the financial aid office to find out what the hold up was. The answer they got back was not one I expected.
Apparently in the course of doing their own applications, their daughter had somehow been marked as “homeless or emancipated” (of which she was neither). The college, in an effort to verify this designation, mailed home forms for the family to fill out and send back. In addition, the college was withholding all financial aid until the daughter was either proven or disproven to be homeless.
Knowing their daughter was in fact not homeless, the family ignored these forms. By the time this phone call occurred, the deadline for financial aid had come and gone. The college’s financial aid for that year had been allocated elsewhere, leaving nothing for this family. The end result was an expensive bill for the first year of college.
The message here is simple. Be careful! You should read the fine print and review each application carefully before submission. Above is just one of many mistakes that can be easily made. If you’re not confident that you can complete all manner of financial aid applications, then ask for help. It’s really no different than seeking help from a CPA with your taxes, and can save you money on your college bills if done correctly.
About Smart Track™ Toolkit: The toolkit is a web based service that assists families with everything from admissions and test prep, to student athletics and financial aid. Our intuitive software and on-demand workshops are key components to making sure students find their top choice colleges, and families can afford to send them there.

About the author: Justin Munio is a Business Development Manager and Financial Aid Consultant with College Planning Strategies, LLC. With a degree in mathematics from SUNY Geneseo and over 3 years working in the CPS Financial Aid Department, Justin is at the forefront of the financial aid process for the families of CPS and The Smart Track Toolkit.
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