College Financial Aid still available despite down economy, rising tuition
Recent economic reports have made it difficult to determine whether college is getting more or less affordable. We hear that state education budgets are dropping but the federal government is allocating more. With record numbers of students enrolling in colleges, does this mean that colleges are benefitting from more income or that they have less grant money available for each student? While the reports are confusing our advice is to stay positive as the overall outlook is still promising.
Discounting on the Rise
First, the good news. A recent report from the National Association of College and University Business Officers (NACUBO) found that the average discount rate (the share of tuition and fee revenues used to award aid) for full-time freshman increased 3 percent between fall 2007 and fall 2008 and preliminary estimates show another increase for fall 2009.
You may ask “how can this be?” With all of the economic issues, budget cuts and staff reductions, it would lead one to believe less financial aid is available. But colleges are not exempt from the realities of student enrollment. Just as airlines often provide discounts to ensure their flights are full, colleges must also compete for students to ensure their classes are full.
By shifting workloads, implementing hiring freezes and delaying construction, smaller colleges are transferring the savings into increased financial awards. The Ivy League schools may not be providing any additional aid, as they continue to have more applicants than openings, but the smaller private colleges, with small endowments, will make the necessary aid adjustments to keep students from going elsewhere.
Continued Tuition Hikes
Unfortunately, another way they can keep the aid percentage high is by implementing parallel tuition increases. The annual 6-10 percent increase doesn’t seem to be going away anytime soon. Also, as we discuss in our classes, schools also work to attract students willing to pay the sticker price.
Award letters are currently being mailed to college-bound families and this is a great time to compare and contrast. If the student “fits” the college criteria, the awards will be generous. If there is less of an award, there is less of a fit. Focusing on the colleges that want you, and have provided good award letters is the best plan for getting the best discounts. Also remember that you still have the option to negotiate if you feel the college did not fully consider your situation.
Student Loan Relief
The recent passing of the educational stimulus bill is also encouraging for college-bounds students. It’s very likely that families will benefit from a more straightforward loan application process and lower interest rates on programs like PLUS and Stafford loan, which already have good benefits. However, most of the funds are going to fund Pell and Access Challenge Grants, towards programs at Community Colleges and for minority serving colleges. These can be tricky for most families to qualify for but services like ours can help fully maximize all available options.
We hope these recommendations help you navigate the current college financing environment. If this is still a little confusing, contact us to help you navigate the process.
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With spring break approaching, it’s a popular time to start planning visits to prospective colleges and universities. Since campus visits are so critical to making an informed decision, here are a few tips for maximizing your time.
Timing is Key
If not attending an organized preview event, be sure to work with an admissions counselor to schedule your visit. You’ll need to make sure the school is not on spring break or other holiday, especially if you’re planning an overnight visit. The university should be operating “normally”, to allow you to get the best feel for campus life. That doesn’t mean you shouldn’t plan your visit to correspond with a fun event that’s of interest to you such as sporting events, theatre or musical performances. These can be great opportunities to observe the campus culture and have casual conversations with different members of the community.
When touring out of state colleges, try to visit when the weather is not at its best. When it’s June in Phoenix, a trip to the northeast will feel like a heavenly relief. But you’ll make better decisions if you go in the winter and get a real feel for what you’ll be living in for several months out of the year. Now would be a great time to visit California during the spring rainy season.
Ask the right questions
In our classes, we suggest the following questions be asked of the admissions officer, who is usually tasked with giving you a PR-heavy view of campus life.
- What are the most important admissions criteria?
- How are these ranked?
- How many of your students graduate “on time”?
- How many come back after freshman year?
- What is your enrollment yield?
Also, write down your own list of questions. Ask for campus safety statistics, job placement statistics and anything else that is of personal importance.
Talk to current students
Ask your admissions counselor to put you in touch with students in your intended major or sports and clubs that you are interested in.
Come prepared with a list of questions you would like answered, so when you get an opportunity you don’t get tongue-tied. These could be about the nightlife, Greek culture, drug culture, academic competition, academic support, diversity, campus amenities…whatever is important to making your decision.
Sure it can be a little scary trying to fit in with college students, but most of them remember what it was like to be in your shoes, and will enjoy sharing candidly about their university experience.
Visit the rights places
A guided tour will introduce you to the overall lay of the land, but there are a few places you might want to return to. Like the library. This could become your home away from home, so wander around and look for a nook you could see yourself using to study.
Be sure to eat in the cafeteria – you’ll be spending a lot of time there. If you find the selection doesn’t suit you, you’ll need to investigate the minimum required dining plan and what nearby grocery stores are available.
Where else do you expect to spend time – the fitness center, computer lab, art or music studios? Then check out the amenities and get a feel for the vibe in these places.
Listen to your inner voice
Overall, pay attention to your gut feeling. Do the school’s values and culture seem to mesh with your own? Does the general personality of student body fit yours? Could you imagine yourself being friends with at least some of the students or prospective students you meet? Is this some place where you could make a home?
Most importantly, have fun! Campus visits should be an enjoyable part of the process.
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JUST IN TIME FOR COLLEGE PLANNING …
OK, so you have a college bound senior and you are preparing a budget for their freshman year, and you have included tuition, books and other assorted expenses. After looking at all the numbers at least twice, you are no doubt asking yourself, “Is there any way to reduce the total?!”
The answer is YES! There’s a new $2,500 college tax credit for 2009 and 2010. At this point in time, it is only valid for 2009 and 2010, since it was part of the stimulus bill authorized in February. It is officially known as the American Opportunity Tax Credit. The credit may be extended, but it will take government authorization, so we will wait and see what happens after 2010.
For parents of sophomores and juniors, it is never too early to start planning ahead for college and we’ve outlined four strategies that will help you get started.
1. Start a state sponsored 529 plan. This popular option allows you to deduct all or a large portion of your contributions on your state income tax return. The earnings on a 529 plan are also allowed to grow on a tax deferred basis. Aside from the tax benefit, if the 529 plan funds are used to pay for college expenses then the earnings may be tax free at the state and federal level.
2. Establish a Coverdell ESA. This is a useful strategy as contributions to a beneficiary account can total up to $2,000 per year. While not tax deductable, contributions to a Coverdell ESA and any earnings are not taxed on the distributions as long as qualified education expenses are equal to or greater than the distributions.
3. The Uniform Gift to Minor Act (UGMA) is another way to fund the expenses of a soon-to-be college student. Donors are allowed to contribute up to $12,000 per year without any gift tax considerations.
4. The child tax credit of $1,000 is also available for children under the age of 17, which can reduce tax payments and allow those funds to be set aside for college savings.
With careful planning; the tax credits, college plans and UGMA’s mentioned above should provide a basis for preparing an effective plan to fund the upcoming college expenses of one or more high school students.
As with any new tax year, there are many changes to the tax law. Be sure to check with your tax professional regarding all the criteria for the new college tax credits and other plans available to assist with college expenses.
One of the primary goals of A-Z College Solutions is to reduce a family’s college expenses before the student starts college, but we also want to make sure we keep you informed of any other items which will help make the college experience a bit more pleasant. If you would like more information on how we make college simple, please learn about our process on the web or call us. We also offer FREE seminars to help you navigate the college planning process with success and confidence.
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Success is no accident.
Successful people are very seldom born, they just make good choices. In fact, the differences between a Harvard grad and community college drop out, are slight. Sure, some have more natural talents and abilities than others, but without the constant development of those talents and abilities, even their success is limited. How you choose to develop or not to develop is what determines your success.
Success come by purposeful action.
To make the right choice, create a plan of action. No matter how small or grand the goal of success may be, it will not be achieved without a plan of what needs to be done. If you do not create your own plan, you will be falling into someone else’s plan.
When you see it, you can have it.
As with any journey, knowing your final destination is critical. A plan of action can only be prepared when the final goal is known. In general, most students have a passion or desire that leads them to a specific area of interest or involvement. Continued involvement in that area or interest is usually the foundational basis for one or more goals.
Move now.
Once your goal or goals have been clearly identified, a plan of action prepared, the next step is the timeline to accomplish the plan of action. Without a timeline, the best laid plans will not produce the desired goals. A plan of action will always include specific steps, but unless the steps are performed in a timely manner, the plan will fade with little or no results. Establish a timeline for your goals, and make sure each step in the plan of action supports the goal and final deadline.
A big part of this step is identifying all of the benefits you will receive in accomplishing your goal. So be sure to write down the benefits and keep them where you can see them every day to reinforce the success you are about to achieve.
Remember…
*What you think about determines your direction.
*What you believe will eventually show up.
*Your friends will move you closer to your goals or further from them.
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Essentials on How to Choose the Right College
“So many schools… how do I decide?!” I panicked. It was 10:30 on a Tuesday evening in August of my senior year. At this point, I had resorted to choosing any college outside of a 300 miles radius of my house. My rationale decision-making and keen logical reasoning resembled something of Elle Woods (Legally Blonde) in an accessories store. I only thought emotionally.
college decisions highway
Sound familiar? High school juniors and seniors face many decisions regarding college today. With thousands of colleges from which to choose, where does one start? Our advice… breathe. Have some fun but don’t get swept away too easily or too early by any one school. Here are some useful tips to help you avoid the wrong college as well as improper decision-making.
1. The more (unbiased) information, the better. Never make a commitment to a college without the right information. For example, would you buy a car without looking under the hood or, better yet, taking a test drive? No. Follow the same rules when deciding where to go to college. Looking “under the hood” so to speak at your top picks will help you know the truth. Yes, sometimes the truth hurts–better earlier than later.
2. A college visit is the best information. One of the quickest college visits by a student in our company’s history happened in five minutes, literally. The student arrived on campus, walked into a public restroom, walked back into his parent’s car and said “let’s go home.” Do you think his parent’s would have driven home if this situation occurred on the first day of classes? I don’t think so (especially my parents). Plan to visit your top picks during your summer and winter break before making any major decisions.
3. Talk to alumni and current students about their school. Ask the right questions. Don’t be afraid. Be honest. If they are happy with their school, they will tell you. If they are unhappy, they will also tell you. It’s a win-win situation. Just remember to talk to more than one person and not just admissions counselors. The most ideal situation would be to talk to students in your intended major and visit clubs that you are interested in joining. Don’t know how to do just that? Use your personal network. Send out a facebook message or talk to one of your classmates that is also interested in a particular school. Last but not least, take a tour of the campus and sit in the most crowded area. Approach someone that looks friendly, they won’t bite I promise.
We hope these tips are helpful and that you find what you are looking for. Good hunting! Please feel free to ask us questions or leave a comment below.
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Clueless about what to study in college? Choosing a college major, besides choosing the right college, is the most important decision you will ever make for your education.
Contrary to popular belief, choosing a major for college is not about deciding “what I want to do for the rest of my life.” Most working people don’t even know what they want to do for the rest of their lives, let’s be honest. Rather, let’s take a look at the overall purpose of a college education.
Why even get a college degree? Students we work with list the following reasons (in no particular order):
- learning is fun
- college will prepare me for life
- I want to work in ____ (field/industry)
- I am passionate about X, and I want to study X
- everyone goes to college
Yes, learning can be fun. But when you are pulling the infamous “all-nighter”–on purpose or just so you can say you did it–the fact is that you will be challenged (if you picked the right school). Of course, college will prepare you for many things in life. However, there are some things that are impossible for which to prepare (i.e. the economy or having babies). Lastly, it is great that many students have an interest in a certain career. Truth is, however, 7 out of 10 working professionals today are employed in a different career than that which they studied in college.
Here’s our answer to “how should I choose a major?”
- choose more than one major (or at least one minor course of study)
- choose a major that fits your personality
- choose a major that fits your academic strengths (capacity)
- choose a major that corresponds to a job that you see yourself enjoying daily (passion and values)
Our formula: personality + capacity + enjoyment = correct major(s)
Once you have several majors in mind:
- take elective courses at your community college for your intended major(s)
- shadow a relative or family friend who works in your desired field
- read relevant industry news, literature, and/or books on the subject
Finding out that you don’t like a certain major BEFORE leaving for school can not only save you time/energy but also your parents’ lots and lots of money (and precious graying hair). We will post later on how to choose a major based on personality, capacity, and enjoyment. If you found this post useful, please feel free to leave a comment or attend one of our upcoming seminars.
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Recent economic reports have made it difficult to determine whether college is getting more or less affordable. We hear that state education budgets are dropping but the federal government is allocating more. With record numbers of students enrolling in colleges, does this mean that colleges are benefitting from more income or that they have less grant money available for each student? While the reports are confusing our advice is to stay positive as the overall outlook is still promising. 
The recent passing of the educational stimulus bill is also encouraging for college-bounds students. It’s very likely that families will benefit from a more straightforward loan application process and lower interest rates on programs like PLUS and Stafford loan, which already have good benefits. However, most of the funds are going to fund Pell and Access Challenge Grants, towards programs at Community Colleges and for minority serving colleges. These can be tricky for most families to qualify for but services like ours can help fully maximize all available options.
