Dollars & Sense/College Financial Aid

The future of federal aid!!

2011-04-08T13:36:00.000-07:00

With the current budget process in flux, there are many soon-to-be college freshmen who may have received financial aid award notifications that may change. Most students will have to make a commitment to a college by May 1st, believing that they will receive the aid on the financial aid award notification. However, financial aid officers have been given guidance by the United States Department of Education that award notifications should contain disclaimers or statements which will alert students that their awards are subject to change based on potential federal funding legislation.....so what does a student and family do? They should pay very close attention to the nofications and the federal budget process. They should contact the schools to which they are applying to get the most up to date information on the adjustment of aid packages.

Amendment to this post: the federal budget for 2011 is settled with appropriations to September 2011. However, it has yet to be seen what this budget settlement will do for financial aid. Please keep an eye on posts for future developments!!

Be aware of federal aid cuts

2011-03-02T15:02:00.000-08:00

If the federal government does not pass a new funding resolution by Friday, March 4th, the federal government will basically shut down. Part of the continuing resolution, which will lead into President Obama's budget proposal is the potential reduction in federal student aid. With the current state of both the federal and state budgets, there are few expenditures that won't be examined, perhaps evaluated and potentially cut. One of the most recent articles that discuss these cuts is located at:

http://www.usnews.com/education/best-colleges/paying-for-college/articles/2011/03/02/potential-cuts-to-pell-grant-could-affect-students-in-2011

Loan repayment

2011-02-26T16:54:00.000-08:00

As a result of the CCRAA (College Cost Reduction Access Act) of 2007 and amendents built into the recent Health Care Reform Bill, there are now easier ways for students to repay their student loans. The IBR or Income Based Repayment Plan is for students who choose to work in careers with salaries are not high. Many of these careers could be in public service. Often students would shy away from careers in these public service fields because they don't pay well, even though they would have gained much personal satisfactionf from these jobs. This repayment plan evaluates students' ability to pay based on their salaries rather than on the amount borrowed.

Additionally, students who work in public service could be elgibile for the Public Loan Forgiveness Program. Students who work in public service and make 120 payments on their loan while working in public service could have the remaining principle of their loan forgiven after their 120th payment. For students who are on the standard repayment schedule, this might not be advantageous as the standard repayment plan is 10 years long. But for students in the payment plan above, may very well benefit from this program!!

7 months later

2011-02-17T12:18:00.000-08:00

More than 7 months have passed since I last posted and it is not due to any lack of happenings in the financial aid world. In fact, so many major changes have made it difficult to keep up.

That being said, the role of financial aid has grown even more important as the economic conditions improve but still are not great. There will be federal aid cut backs as well as state budget cuts. However, it becomes increasingly important for people to have a college education to remain competitive in this world.

How does a student and family do this when the costs of college continue to rise and resources seem to be decreasing? Like anything else, such as, tax issues, estate or retirement concerns, there must be planning. Financing a college education these days requires the same amount of consideration and planning.

I hope to come back more often now to update all my readers on regulatory issues as well as "tips" that could assist in making the dream of a college education a reality!!!

Income protection allowance!!

2010-07-07T18:36:00.000-07:00

I hear from many parents regarding their concern over the earned income of their children and how they are fearful about the impact that income may have on the anticipated financial aid eligibility for their children.

As has been previously mentioned, there are many non-monetary benefits for students having a job. Repsonsibility, time management and the building of professional skills are just some of these benefits. To discourage a young person from working, simply because it could impact a student's aid package would be a disservice to that student. It is apparent that the federal government feels the same way. As a part of the CCRAA legislation of 2007,increasing income protection allowances were built into the federal need analysis formula that considers income into the Expected Family Contribution only if the level of income exceeds what is protected. For example for the 2011-2012 academic year, using 2010 income, a student can earn up to $5250 during this year before any amount will be used towards the EFC. Only a percentage of the income above $5250 will count toward the EFC.

So if your dependent child wants to work, allow them to do so. I would recommend paying close attention to the year-to-date earnings just as a strategic planning mechanism. More than likely, most students working part time, (unless they are being paid a high hourly wage or are working a great deal of hours) will not exceed the protection allowance by much. But understanding the formulas and the impact of the various components upon it, helps build clearer understanding of the entrie financial aid picture!!!

Progress with Direct Lending

2010-06-09T12:58:00.000-07:00

As was mentioned in previous entries, all schools in the U.S. must now administer their federal student loans through the federal government, as the federal government will now serve as the lender. This determination was made on 3/30/10 and all schools must be in compliance by July 1, 2010. This has presented many challenges for schools and these changes have come at the most difficult time of the year, when fall tuition bills are due and students and parents are in panic mode.

That being said, schools will figure this out and there will be loan funds available for students for the coming year and beyond. Some good news to share as well. Interest rates on the federal direct subsidized loans for periods beginning 7/1/10-6/30/11 will be at 4.5%. This is a decrease from the current interest rate of 5.6%.

Another positive is that with the Federal Direct Plus Loan the interest rate is 7.9%.In the previous FFELP Plus Loan the interest rate was 8.5%.

As more information becomes available, I'll be here to let you know.

No More FFELP program!!

2010-04-15T12:46:00.000-07:00

It has truly been a long time, since a post...about 5 weeks, which is tough, but I now have very relevant important information for those students who plan on borrowing funds through the Federal Stafford Loan Program. As a piece of legislation tied to the health care reform bill (I know, where does education finance reform fit into that?), President Obama signed the bill that would eliminate the Federal Family Education Loan Program and all students will now have to borrow their student loans directly through the federal government from a program called the Federal Direct Student Loan Program.

President Obama and his administration felt that by eliminating lending through the various banks that participated in this program, approximately $87,000,000,000 would be saved over a 10 year period, because the banks would no longer receive interest subsidies from the federal government. It is proposed that these savings would go back into education funding by investing these funds into the federal Pell Grant, but that is yet to be seen.

So anyone who has borrowed a federal Stafford Loan through a bank, such as Chase, Citi Bank, or an agency like Sallie Mae, will no longer be able to do so. For any period of enrollment after July 1, 2010, students will now have to borrow through the Federal Direct Student Loan Program. This will cause students confusion when it comes to repayment, as students could perhaps be paying back several student loans to several different lenders....and this legislation was supposed to make things better for students? Time will tell!

Common FAFSA errors!!

2010-03-06T07:11:00.000-08:00

My apologies for neglecting this blog...it is not intentional! This is the busy financial aid season with FAFSA deadlines and getting ready for 2010-2011. Yes, that's right. We're getting ready for the new academic year even before most are even thinking about ending this one. This time of year, there are many financial aid application deadlines, like February 1st, February 15th, March 1st and April 15th. Don't miss the deadlines nor wait until right before a common deadline to enter data on forms such as the FAFSA. It is during these deadline times that the servers become overloaded and data entry and processing can be slow and incomplete.

Check out the article below regarding some common FAFSA errors:

http://online.wsj.com/article/SB126611543466445911.html

Financial aid is now KEWL!!!!

2010-02-04T08:26:00.000-08:00

Check out this video made to encourage young people to file for financial aid......

http://www.youtube.com/watch?v=Zw9B_QRWcjg&feature=player_embedded

If this helps young people to understand why it is important to complete their FAFSA and to do so early....more power to them!!!

New government initiatives

2010-01-28T09:31:00.000-08:00

Wow, I can't believe it has been almost a month since I have posted. January is a busy month in the world of financial aid and this month is especially so. With the President's State of the Union address last evening, we can see that student loan reform is still high on his agenda. President Obama would like all federal education loan programs administered by the U.S. Department of Education and taken out of the hands of private lenders. In fact, President Obama says the following:
"To make college more affordable, this bill will finally end the unwarranted taxpayer-subsidies that go to banks for student loans.

Instead, let’s take that money and give families a $10,000 tax credit for four years of college and increase Pell Grants. And let’s tell another one million students that when they graduate, they will be required to pay only ten percent of their income on student loans, and all of their debt will be forgiven after twenty years – and forgiven after ten years if they choose a career in public service. Because in the United States of America, no one should go broke because they chose to go to college. And it’s time for colleges and universities to get serious about cutting their own costs – because they too have a responsibility to help solve this problem"-President Obama

The House Bill, No. 3221 supports the above measures, but the Senate has yet to support the bill or come up with changes or revisions that will ultimately go to the President for signature.

States are fighting their own budget woes and New York State is one of those states. Governor Paterson has millions of dollars of proposed budget cuts specifically aimed at higher education. The TAP grant is currently under scrutiny from many directions and only time will tell if the college students in New York State will feel the economic pinch when they go to pay their tuition and fees!!!

Happy New Year!!!!

2009-12-31T11:37:00.000-08:00

Well, it's December 31st and this is a significant date inthe world of financial aid. First of all the 2010-2011 FAFSA will be available tomorrow for completion!! Make sure you have a pin number and remember, you will be estimating your 2009 income to use on this form until the actual returns are filed.

Secondly, beginning for the 2009 tax year, the federal government has put into place what is called the American Opportunity Tax Credit. This tax credit takes the place of what was previously known as the Hope Tax Credit. It is improved from the Hope credit in several ways. The maximum credit which will be available for 2009 and 2010is increased to a maximum of $2500. Taxpayers will receive a tax credit based on 100percent of the first $2,000 of tuition, fees and course materials paid during the taxable year, plus 25 percent of the next $2,000 of tuition, fees and course materials paid during the taxable year. This is different that the tuition and fee deduction which adjusts the gross income. You can't take both the tution and fee deduction and the tax credit. For most people, the tax credit is more beneficial because it actually lowers the tax liability rather than just reducing the income by a certain amount. For more details, see the following link:

www.irs.gov

There are certain income limitations and other relevant information. Once in the IRS website, put American Opportunity Tax Credit in the search engine for a Q and A.

FAFSA worksheet can be deceiving

2009-12-20T18:49:00.000-08:00

For those who will be completing the 2010-2011 FAFSA soon after 1/1/10, you can use the FAFSA worksheet to prepare yourself for the form online. However, in the Department of Education's attempt to respond to the request of the Obama administration to simplify the FAFSA process, the questions on the FAFSA worksheet have been reduced to about 37 questions from last year's 53. However, once you answer a question on the FAFSA, you may be required to complete additional questions that don't appear on the paper worksheet. For example, if you completed or will complete a 1040 tax form for 2009 and are required to do so by the nature of your income (self-employment income or you itemize your deductions, among others), the form will then ask about assets held by the student and the parents. Again, there is no asset question on the FAFSA worksheet, but that doesn't mean you won't be asked once applying online!!! Make sure you complete the FAFSA worksheet as accurately as possible as incomplete data will delay the processing of the FAFSA.

Different degrees yield different salaries!!

2009-11-24T18:03:00.000-08:00

When making decisions regarding the choice of schools and the costs associated with those schools there has to be some type of cost/benefit analysis. Students have to be realistic regarding their career choice and the salary associated with that career. Remember, the average college graduate earns about $1,000,000 more than that of a noncollege graduate. However, remember that paying back huge amounts of student loans will put a huge dent in those higher earnings!!

Check out the link below for some really relevant salary information:

http://www.payscale.com/best-colleges/degrees.asp

Get ready for the 2010-2011 FAFSA

2009-11-18T14:35:00.000-08:00

As the holidays approach, it becomes a busy season for out of the office activities for financial aid officers. We go on the road to various high schools and events to help parents and students understand the financial aid process and the forms they will complete.

I have recently seen a draft of the 2010-2011 FOTW (Fafsa on the web)worksheet and I was pleasantly surprised. The number of questions on the worksheet has been reduced from 53 in 2009-2010 to a mere 37 questions for next year's form. This is great for the families that struggle over the completion of this form. It minimizes the pain by virtually 1/3!!! This was an initiative of the Obama adminsistration bestowed upon the U.S. Department of Education and the DOE has responded.

There will also be a new IRS database match that will help families complete the FAFSA by retrieving their tax data for FAFSA form completion. However, there is one MAJOR flaw. The 2009 tax data will not be available from the IRS until June or July. Most schools will require the FAFSA to be completed within the first few months of the year. Unless the student is going to a school that does not have a deadline, the IRS database match will be basically useless....so file your returns early, keep copies and if you can't file early, estimate 2009 income and get the forms done by the deadline the school requires!!!

College costs are published!!!

2009-11-16T17:43:00.000-08:00

Just when you couldn't think that college costs could get higher, the most recent college costs are out and currently there are about 60 schools topping the $50,000 per year mark.

Here is how the schools are ranking out there::
Sarah Lawrence College
$55,788

Landmark College
$53,900

Georgetown U.
$52,161

New York U.
$51,993

George Washington U.
$51,775

Johns Hopkins U.
$51,690

Columbia U.
$51,544

Wesleyan U.
$51,432

Trinity College (Conn.)
$51,400

Washington U. in St. Louis
$51,329

Bates College
$51,300

Vassar College
$51,300

Parsons the New School for Design
$51,270

Carnegie Mellon U.
$51,260

Vanderbilt U.
$51,228

Skidmore College
$51,196

Bard College
$51,180

Harvey Mudd College
$51,137

Connecticut College
$51,115

Tufts U.
$51,088

U. of Chicago
$51,078

Claremont McKenna College
$51,035

Haverford College
$50,975

Boston College
$50,970

Barnard College
$50,969

Colgate U.
$50,940

Bowdoin College
$50,900

Bennington College
$50,860

Eastman School of Music, U. of Rochester
$50,856

Middlebury College
$50,780

Pitzer College
$50,770

U. of Southern California
$50,732

Fordham U.
$50,598

Mount Holyoke College
$50,576

Scripps College
$50,550

Oberlin College
$50,484

Hampshire College
$50,450

Union College (N.Y.)
$50,439

Stevens Institute of Technology
$50,420

Franklin & Marshall College
$50,410

Smith College
$50,380

St. John's College (Md.)
$50,352

Bard College at Simon's Rock
$50,340

Babson College
$50,324

Bucknell U.
$50,320

Colby College
$50,320

Rensselaer Polytechnic Institute
$50,310

Lafayette College
$50,289

Boston U.
$50,288

Hobart and William Smith Colleges
$50,245

Dickinson College
$50,219

Carleton College
$50,205

Tulane U.
$50,190

Northwestern U.
$50,164

Cornell U.
$50,114

Dartmouth College
$50,084

Bryn Mawr College
$50,034

Franklin W. Olin College of Engineering
$50,025

I remember it was a big deal when a school hit the $50,000 per year mark. It is amazing how just over a couple of years the list has grown exponentially!!!

Financial Aid Conference

2009-11-05T15:04:00.001-08:00

It is Fall and in New York, financial aid professionals from all over the state convene at our annual conference to learn, share, and enjoy each other's company as friends and colleagues. This conference was especially interesting as we had speakers from both the federal Department of Education as well as speakers from New York State. All I can tell you is that there are going to be changes...significant changes in the world of financial aid. I will elaborate further as decisions are made on both the state and federal levels.

NYS Proposed Budget Cuts hits educational funding

2009-10-18T12:46:00.001-07:00

Well, we know that New York State is in bad shape financially. For the billion dollars deficit that New York State is experiencing, it is estimated that the SUNY system will have to deal with $90,000,000 of anticipated cuts (or cost savings??!!) It is estimated the the New York State Tuition Assistance Program could take a hit as soon as Spring 2010, when TAP awards could be cut $120.00 with another $120.00 cut anticipated for 2010-2011. I wouldn't be surprised if there will be another mid year increase in SUNY tuitions. With tax revenues tanking and more people in New York, either unemployed or leaving the state, we are left to deal with the continuing theme of "doing more with less". Sadly it will be the students of New York State who get shortchanged by this mantra!!!

On a positive note, for those who are proactive, and applying to a school that requires the CSS Profile, the form is now available!!! Proposed changes in the FAFSA are in the works and are supposed to simplify the form, but time will tell...it will be financial aid application time for 2010-2011 before we know it!!!

Some great information in a radio program!!!

2009-10-02T17:12:00.000-07:00

I was fortunate enough to participate in a radio program with a local credit union. The credit union sponsors this show each month to bring their listeners financial information and in August, I joined the show to discuss college financing and financial aid. Check out the various link below. The program dated 8/15/09, is the specific program on financial aid, but the others are interesting as well. (I wasn't the guest on those!!!)

http://wgny.net/pages/3902637.php

Let me know what you think after you listen!!!

The feds will now control the student loan market!!

2009-09-18T17:03:00.000-07:00

Well, with the uproar of health care reform, few noticed that on Thursday, in the House of Representatives, a bill was passed that would make the federal government the primary lender of student loans. It now has to go to the Senate for final approval, where there is a democratic majority, so it is likely to pass. See the New York Times article below for details:

http://www.nytimes.com/2009/09/18/education/18educ.html?_r=1&emc=eta1

So what does this mean for current student loan borrowers? If they had borrowed through conventional lenders, like CitiBank or SallieMae, beginning in July 2010(if the feds can get it together by then), students will no longer have that option. The government will be the primary lender and students will now be part of the Federal Direct Student Loan Program. This is supposed to save the federal government over $80 billion dollars over the next 10 years. However, many in the financial aid community, including myself, have serious concerns as to whether the government will be able to handle the huge transition from FFELP to Direct lending without a phasing out period of time. Where are they going to come up with the volume of capital needed to run this program? Currently direct lending only funds about 27% of the student loan market. The customer service provided by the lenders and the guarantors has been exemplary in recent years. Will students and schools get that same type of service from another federal bureacratic agency? Again, time will tell and in the mean time, I will keep my readers informed of developments to this story.

New Congressional session!!

2009-09-08T16:36:00.000-07:00

With Congress returning from their summer recess, there will be more to discuss than just health care reform. Some major changes affecting federal student aid will be discussed and decided upon in a few short weeks. It is almost a foregone conclusion, that the FFEL Program, where student borrow loan monies through lending institutions will be eliminated. It will be replaced by the Federal Direct lending program where the federal government will serve as the primary lender.

One of the other main changes coming for 2010-2011 is a simplification of the electronic version of the FAFSA!! According to Arne Duncan, Secretary of Education, many of the repetitive questions will be eliminated and there will be a function that will allow online filers to have their FAFSA forms pre-populated directly with information from the IRS as a result of filing their taxes. That seems almost like science fiction, as there has been talk for years regarding verification of FAFSA information directly from the IRS database. We have yet to see it happen and I am dubious that it will be in place for 2010-2011. But hey, you never know; it is a new administration with more new ideas. Simplification may be be the word of the future!!!

Schools are starting any day now!!!

2009-08-23T17:28:00.000-07:00

It's back to school time and that means college too. For many, the increasing cost of higher education and the decrease in resources and savings have changed their plans. Some students have delayed their educational goals, while others have chosen part-time study versus full-time study. One of the phenomenons of this economic crisis is the increasingly important role that community colleges are now playing in higher education. All across the country, enrollment in these institutions are skyrocketing. At our local community college, enrollemnt is up 17%!!!Community colleges were generally thought of as the "college of last resort". However, they are now gaining recognition as a financially and academically competitive choice for students and their families. And why not? With the cost of tuition for a year being a fraction of that of a four year private college, it is providing many with the ability to go to college when they thought that they could not.

So perhaps this "economic crisis" has opened the eyes of many. The beginnings of a quality college education might just be right in their own backyard. They just never took the time to look there before, because they didn't have too...the community college was there all along!!!

New independence rules require explanation!!!

2009-08-10T16:25:00.000-07:00

One of the new criteria for independence for the 2009-2010 years states that if the student is declared "emancipated" by the courts, while a minor prior to the age of majority in that state, they will be considered independent for financial aid purposes. However, the trouble with that most people don't understand what that means. Often students assume that if they don't live at home and pay all of their own bills, they are considered emancipated. This assumption is incorrect. First of all, not all states have regulations regarding emancipation. For example, in New York state, there is no legal emancipation process. For emancipation of a minor to take place in a state that recognizes emancipation, there has to be an actual court hearing and declaration from the court that the individual has been emancipated from the parents, prior to the age of majority, which in most states is the age of 18.

These independence criteria are in place to assist students in unique family circumstances, whom, for whatever reasons have not had the benefits of a functional family situations. The new regulations are not in place to give people a way around the law in order to secure government education funding.

Aid changes in the air!!

2009-07-18T08:03:00.000-07:00

As I have been catching up on things since my return..I note that there are many potential changes in aid of which I want to make my readers aware!!

First, one of the oldest federal student loan programs, that hosts some great benefits, may be in jeopardy. The Perkins Loan program, formerly called the NDSL (National Direcdt Student Loan) program, is a fully subsidized loan with a fixed interest rate in repayment of 5%. There is a 9 month grace period as opposed to a 6 month grace period held by the Federal Stafford Loan Program and many cancellation benefits. This is a loan program that has long been popular with low income and middle income students.

However, under President Obama's aid proposals, the Perkins loan program would become an unsubsidized program and many of the cancellation benefits would be eliminated. While I understand the President's need to reign in costs, I am concerned about how the changes would affect the students who need and utilize this loan program the most.

With daily congressional discussion, this issue is long from dead. I will keep you up to date on this and the others as they occur!!

New loans for Fall 2010??

2009-07-15T17:43:00.000-07:00

Well, I know it has been a long month since my last entry, but that doesn't mean that all has been quiet in the financial aid world. It has been anything but quiet. President Obama is proposing to increase the largest federal grant program - Pell Grant - by eliminating the FFEL(Family Federal Education Loan)program. Instead of student borrowers being able to obtain student loans from private lending institutions, such as CitiBank or Chase, the federal government would be the only lender for these low interest federal loans. There is heavy support for this by Democrats, but many Republicans and school aid officers are dubious of the government's ability to meet the need of student's nationwide. Currently students borrowing through the federal government directly comprise only about 20% of the market. For the government to assume 100% of the student loan market, there would have to be some major work done. While this is being promised by the U.S. Department of Education, it has yet to be seen whether they will be successful with this effort.

Also remember, use the summer to do some private scholarship research!!! An hour per week for scholarship searches and applications could mean some free money in the future!!!

www.fastweb.com

www.schoolsoup.com

www.scholarshipexpert.com

A Stafford Loan reminder

2009-06-15T16:47:00.000-07:00

For any student who borrows money from the Federal Subsidized Stafford Loan Program, the interest rate for this loan will be changing for loans that are to be used for any period of enrollment beginning July 1, 2009 or after. For the 2009-2010 academic year, the subsidized Stafford Loan rate will be 5.6%, which is a .4% decrease from loans borrowed for the 2008-2009 year. However, if the student borrows funds through the Unsubsidized Stafford Loan Program, the rate is fixed at 6.8%. This is the type of loan that is accruing interest while the student is enrolled in school, so 6.8% is a definite "ouch".

With October 15,2009 as a deadline for the House and Senate to pass student aid legislation, a mere 4 months away, the life and times of certain financial aid programs may be changed forever. In the next 6 months to a year we might see the largest changes to the federal student aid programs in many many years. Student loans are a primary area of discussion in the Obama administration's proposals. Time will tell whether his proposals can actually change the ways that students and families finance higher education.

I have recently agreed to co-chair the government relations committee for our state organization, NYSFAAA, with a well respected colleague. As new legislation comes about on both the state and federal level, I hope to keep you, my readers, well informed.

Education benefits from the Stimulus Plan

2009-06-07T18:38:00.000-07:00

Again, it has been a busy couple of weeks. While the President's economic stimulus package seems like a distant memory and old news, there were several education benefits built into the stimulus package which I felt was important for you to read about.

Title IV Programs: For Pell Grant, slightly more than $17 billion is provided to increase the maximum award to $5,350 in 2009-10 and $5,550 in 2010-11, and eliminate the Pell Grant shortfall. Work Study received an additional $200 million.

Health Resources and Services Administration: $300 million is budgeted for the National Health Service Corps, which provides scholarships, loans, and loan repayment programs for behavioral and mental health care providers, primary care physicians, and other health professionals. Another $200 million is divided between health professions training programs and HRSA Nursing Workforce Development programs such as the Nursing Loan Repayment Program.

American Opportunity Tax Credit: The law provides approximately $13.5 billion for a temporary, more generous replacement of the HOPE tax credit for 2009-2010 and 2010-11. The amount of the credit is up to $2,500, of which up to 40 percent ($1,000) of which is refundable. The modified AGI phase out starts at $80,000 ($160,000 for a joint return).

529 Plans: For 2009 and 2010. the law temporarily defines computer technology and equipment, including Internet access fees, as "qualified higher education expenses" for 529 plan purposes.

I hope this information has helped and as more becomes available, especially as we get closer to tax reporting, I will hgihlight the new American Opportunity Tax Credit.

Choices and Alternatives!!

2009-05-23T11:29:00.000-07:00

This is probably the longest I have gone without posting to this blogsite and for that, I apologize!!! This month seems to have flown by with semester end activities and the preparation for summer 09 and fall 09 in the financial aid world.

In the regulatory world of financial aid, things are always a buzz. With President Obama's budget package on the table and the FFEL Program under governmental and public scrutiny, it should be a very exciting couple of months.

The job outlook for recent college graduates is grim. So the best time to be in school is right now, while the economy tries to regain momentum and strength. However, the cost of education is still rising and it is becoming more and more difficult for families to handle the costs.

In a recent article on MSNBC, some colleges may look to switch to a three-year bachelor's degree program, instead of the traditional 4 years. This is a model that is popular in Europe, especially in England. However, schools in the U.S. have been reluctant to push this type of program. However, in this economy, colleges will have to begin to think a bit outside the box in order to get and keep students at their institutions. Saving anywhere between $15,000 to $50,000 per year may be a good incentive for families to look at a particular school with this type of program. And for colleges, it might mean getting students whom may not have considered their institution in the past. Click here to see the MSNBC article.

Time flies and tuition bills will be coming

2009-05-05T17:00:00.000-07:00

It amazes me when I see that so much time goes by between my entries, especially when I have so much to say. All of the excitement that has been mounting through the acceptance and aid package receipt period will all be coming close once the fall 2009 tution bills go out to students some time in June!!!

Now is the time to sit down and truly crunch those numbers to determine how all of the financial aid and savings will be used to pay those bills. Points to remember, subsidized loans awarded to students are best as interest is not accruing while the student is in school and for 6-9 months after the student has either graduated, withdrawn or dropped below six credits. Utilizing subsidized loans are using the government's money for free!!!

Free money is best, so keep applying for any and all scholarships available!!!

Info regarding your credit score!!

2009-04-23T13:35:00.000-07:00

I wanted to share some information regarding student loan applications and a student's or parents' FICO score!! See below

'IS APPLYING FOR STUDENT LOANS REDUCING YOUR FICO SCORE?'

In credit score calculations, applying for new credit makes up 10 percent of your FICO score. Anytime a creditor or lender pulls your FICO score to determine creditworthiness and interest your FICO score is reduced due to the inquiry. According to myfico.com, “looking for new credit can equate to higher risk.” Ten percent doesn’t seem like much and for the consumer with an average credit score one inquiry will lower their FICO score five points. However, it is the consumers with little credit history or a lower FICO score that experience a greater impact.

If a consumer wants to shop around for the best loan, why should he be penalized for looking for the best deal? Myfico agrees and states when shopping for mortgages, car loans, and student loans, inquiries made in the 30 days prior to scoring will be ignored. If you find a loan within the 30 days, the inquiries won't impact your credit score while you're rate shopping. According to Jill Richardson, Scoring Project Manager for FICO, consumers should not be worried that inquiries from private or alternative student loans will reduce FICO scores if the inquiries are made within the 30 day time period.'

This is good news for your students, so I thought I would share this at this time.

This came from a colleague of mine who works for NSLP (National Student Loan Program)

Tax deadline looming!!!

2009-04-12T12:47:00.000-07:00

Well, it is almost April 15th and we all know what that means!!! It is the deadline for filing both your federal, and if you live in my state, your New York State taxes. Since this is a critical part of the financial aid process, if you haven't done your taxes, make sure they are done as soon as possible. Schools can choose to verify the financial aid application that is filed for a student, or may have to file because the federal government has chosen to verify that particular student. In either case, if selected for verification, be prepared to provide the school with the 2008 SIGNED taxes of both the student and the parent as well as the supporting w-2 statements from the employers. The form 8453 from the federal government which states that your taxes were filed electronically is not sufficient documentation. Depending on the school, they may also request any corresponding schedules that go along with the tax return.

Believe me, the school only wants to collect what is necessary, but if the school is asking for it, comply as quickly as possible. The delay in submission of the income documentation could mean a delay in the final financial aid award package. That's right, some schools send out tentative notifications based on the figures from the FAFSA and the CSS Profile if required. However, they may have to change those awards if the information on the tax returns is significantly different than what appears on the forms. So, be prompt and be accurate with the information requested from the Financial Aid Office!!

May 1st will soon be here!!!

2009-03-28T07:00:00.001-07:00

For those of you who will be attending college for the first time in Fall 2009, right about now is the time when you are receiving the financial aid award notifications. These award notifications will specify the types and amounts of awards that you could receive at that particular institution. But how do you make sense of all of that information? You want to make sure you are comparing "apples to apples".

NASFAA (National Association of Financial Aid Administrators) provides tools to help students and their families analyze the award notifications that they receive in order to make choices and financial decsions regarding college costs.

The first is a cost of attendance worksheet that allows families to look at the schools to which the student has applied and compare the costs based on various components. See that worksheet by clicking here.

The next tool is a sheet that allows the family to analyze each of the financial aid award packages according to they type of aid received and the conditions associated with that type of aid. It allows for the comparison of loan rates and renewability of scholarships. See that worksheet by clicking here.

Both of these are excellent for seeing the whole picture and allows the family to look at the numbers clearly in the hopes of making decisions that are good for everyone.

An interesting college attendance strategy!

2009-03-21T17:47:00.000-07:00

The NY Times always has some interesting higher education articles. A recent article spoke about the "gap" year, which is identified as a year that a student takes off between high school and the beginning of their college career. The article says that it may be a good financial aid strategy to do so. I feel it should be based on the individual circumstances of the student and the family and it can't be said that this plan will work categorically for everyone. Check out the article by clicking here.

Some scholarship info!!

2009-03-12T16:09:00.001-07:00

I wanted to put out some of the recent scholarship information I have received. Below is a scholarship for students in the Computer Science field. Click on the link to see more!!!

http://education-portal.com/pages/Computer_Science_Academic_Scholarship.html

Also, there will be a random drawing for a $10,000 scholarship through the StudentLoan Network. See the link below to sign up!!! The drawing will be on 3/31/09!!!!

www.scholarshippoints.com

Scholarships abound!!!

2009-03-10T15:17:00.000-07:00

There is still time to apply for scholarships that are out there!!! I recently received an email from schoolsoup.com which has one of the largest scholarship search databases and they are encouraging all to simply apply for a $10,000 scholarship to be awarded on March 25th!!! According to the information, it should take the student about three minutes to complete an application. It appears that on the link, which you can see by clicking here that there is information regarding student loans as well. Don't let that deter you from completing the scholarship information!!!

Also, there was an interesting article recently in the New York Times that spoke about public or state colleges being the bargain of the year!!! Check out the article by clicking here.

Remember applying for scholarships is not for freshmen only...returning college students need to do the same...keep those scholarship applications flowing!!!

Some colleges will be increasing their aid budgets to attract students!!

2009-02-28T05:42:00.000-08:00

While we are all concerned with the increasing costs of college and what appears to be shrinking endowments and more competition for private scholarship dollars, the New York Times had an article currently that colleges are expanding their aid to students, often while budget cuts are occurring in other parts of the college. See the article by clicking here.

While I understand the need to attract, enroll and retain students is important to the survival of any institution, if cuts are made that threaten the infrastructure of the college, thereby providing less quality and/or less services to students, won't the educational experience of these students be sacrificed as well? Food for thought!!!

A new source of information!

2009-02-21T12:14:00.000-08:00

I was recently notified by a gentleman who is the Associate Editor of a website called GoCollege.com I checked out the site and found that there is a great deal of valuable information regarding all aspects of the college and financial aid processes. I would recommend that you take a look at the site and judge for yourself. The site is divided up into four basic categories and has detailed information in each. The categories include: financial aid, admissions, education options and college survival. Each of these are important in their own right, but looking at the financial aid section, I found good information that was easily understood. The information is not lengthy or detailed, but gives a great overview of needed facts. Of course, you can always supplement the information with questions presented to your financial aid officers. Remember information is knowledge and knowledge is power!!

Tax credits for college expenses!

2009-02-12T08:06:00.000-08:00

While it is the time to file the financial aid applications, it is also the time to be concerned about tax filing and some of the tax "breaks" you can get by the payment of tuition, fees and other qualified educational expenses. Below is an article out the of the NYSFAAA Winter Newsletter regarding the tax credits. The article is written by Tasha McDaniel of the Great Lakes High Education Corporation.

Taxes make almost everyone cringe. Help make this
year’s tax day a more positive experience by brushing
up on education tax benefits. Sharing information on
the ins and outs can help you make sure your students
and families claim everything they are eligible for.
According to the IRS, over 16.3 million taxpayers were
able to reduce their taxes through one or more
education tax benefits in 2006. There are two different
types of benefits: credits and deductions. Credits
directly reduce the amount of taxes paid and
deductions directly reduce taxable income.

Hope Tax Credit
The Hope credit offers up to $1,800 per student. It
covers tuition and fees—100% of the first $1,200 and
50% of the next $1,200—and can be used for the first
two years of undergraduate education. Independent
students, families claiming dependent students, and
married students are eligible when their income is
between:
• $48,000 and $58,000 for single tax filers
• $96,000 and $116,000 for married filers filing
jointly
No credit is received for:
• Single filers with an income exceeding $58,000
• Married filers filing jointly with an income
exceeding $116,000
• Married filers filing separately
Families can claim a separate Hope credit for each
student who qualifies. For example, a family with two
dependent students in their first or second year of
college can claim up to $3,600 in Hope credits. To claim
the Hope credit, use IRS Form 8863.

Lifetime Learning Credit
The lifetime learning credit offers up to $2,000 for each
year you pay for college. It covers 20% of the first
$10,000 of tuition and fees paid by the family. The
credit is available for those who are not eligible for the
Hope credit and is applied when income is between:
• $48,000 and $58,000 for single tax filers
• $96,000 and $116,000 for married filers filing
jointly
No credit is received for:
• Single filers with an income exceeding $58,000
• Married filers filing jointly with an income
exceeding $116,000
• Married filers filing separately
The credit can be claimed only once per tax return,
which means the credit is always $2,000, even for
families with more than one dependent student. It
is also available for less than half time study to
acquire or improve job skills and can be used by
graduate and undergraduate students for an
unlimited number of years.

Tuition and Fees Federal Tax Deduction
The federal tax deduction for tuition and fees can
reduce your income by up to $4,000. Students and
families can claim the deduction if they pay
qualified education expenses of higher education,
they pay the education expense for an eligible
student, or the eligible student is themselves, their
spouse, or a dependent student for whom they
claim an exemption on their tax return. Qualified
education expenses include tuition and fees
required for enrollment or attendance at an eligible
postsecondary institution. To claim the deduction,
complete form 8917 and submit it with Form 1040
or 1040A.

Student Loan Interest Deduction
The federal deduction for student loan interest
offers up to a $2,500 deduction. Independent
students, families with one or more dependent
students, and married students may be eligible for
this deduction during any year in which they paid
interest on a student loan. The deduction is
available for both undergraduate and graduate
students, and students must have been enrolled at
least half-time in a degree program. The maximum
deduction is reduced when income is between:
• $55,000 and $70,000 for single tax filers
• $110,000 and $140,000 for married filers filing
jointly
No credit is received for:
• Single filers with an income exceeding $70,000
• Married filers filing jointly with an income
exceeding $140,000
• Married filers filing separately
Qualified education expenses include: tuition and
fees, books and supplies, room and board,
transportation, and other necessary expenses.
For more information about education tax benefits,
consult IRS Publication 970.

Coverage via the Poughkeepsie Journal

2009-02-06T17:22:00.000-08:00

As one of my responsibilities, an especially enjoyable one, I go to area high schools and speak to parents and students about the financial aid process and other related college information. I was at Beacon High School about 10 days ago where their Guidance Department is especially supportive to the needs of their students and parents. Our local paper, the Poughkeepsie Journal was there, taking photos and gathering information regarding an upcoming article. I think they did a great job presenting the challenging issues of financing college education costs today. Their quotes were accurate and their research within the article gave readers some very relevant information. I'm happy to share the article and the information with you today. No one likes their own photos, and I don't think its my best, but the message is the most important thing!!!

http://www.poughkeepsiejournal.com/apps/pbcs.dll/article?AID=2009902040341

Some helpful information!!

2009-02-02T13:54:00.000-08:00

I have a couple bits of what I hope is helpful information for you. Please see the link below for information regarding federal and New York State tax credits as well as deductions on student loan interest payments.

http://www.hesc.com/content.nsf/HESC/Federal_and_State_Tax_Benefits_Can_Help_Lower_College_Costs

Also, New York State Higher Education Services Corporation has put out information on FAFSA completion "Do's and Dont's". Please click on the link below to get the information:

http://www.hesc.com/content.nsf/HESC/FAFSA_Dos_and_Donts

And finally, if you are in search of more scholarship opportunities, you can check out the Sallie Mae site. However, remember Sallie Mae is a loan company, so there will be some advertising on the site!!!

http://www.salliemae.com/before_college/students_plan/free_money/scholarship-search.htm

New scholarship!!!

2009-01-24T12:16:00.000-08:00

I wanted to make you aware of a scholarship that I have found. However, the application deadline is quickly approaching, so if you meet the criteria, don't hesitate!!! Complete the application as soon as possible. Tis the season!!

Many states are beginning to evaluate their policies regarding the number of students that they can afford to accept and enroll for the 2009-2010 year. In an article by Sean Nealon, from the Press-Enterprise, Nealon states as follows"

"Leaders of California's two public university systems moved Thursday to reduce enrollment next fall to prepare for funding cuts expected as state officials confront a massive budget deficit.

In an unprecedented move, California State University Chancellor Charles B. Reed enacted a plan that could decrease enrollment by 10,000 students at the system's 23 campuses."

That's scary for California, but probably only the tip of the iceberg. Keep reading!! I'll be posting about these issues frequently.

Wow...it has been a long time...

2009-01-19T13:15:00.000-08:00

January 8th...last time I posted...that is horrible, but you can see how crazy the beginning of my year has been. I hope yours has been a little calmer. The financial aid arena continues to be a chaotic one. Many schools are feeling the pinch and the states that support those schools are feeling it as well. According to a recent article in U.S. News and World Reports, 44 states are going to cut funding to higher education because of budget cuts. In NYS, our state university system known as SUNY, in an unprecedented move, raised tuition $310 between the fall and spring semesters. Even with increased costs, the admission applications at schools within the SUNY system are skyrocketing. Why? Because even though costs are going up, the cost of education at a SUNY school is about 1/3 of that at a private institution. One of our state universities have seen a 102% increase in admission applications for the 2009-2010 year. What does that mean for the average college senior? Admission to these colleges will become much more competitive. While a state university might have been a "safety school", in terms of admission applications, that school might now go to the top of the student's list!!! So kids, keep those grades up, because if you don't, even a public institution may be out of reach!!!

A new scholarship....but need sophomores and juniors to apply!!

2009-01-08T14:22:00.000-08:00

It is never too early to start the scholarship search. In fact many scholarship donors or administrators want juniors to begin applying during 11th grade. Note the scholarship at the link below. This is a large scholarship and only 10 winners, but if you don't apply there is no chance of winniing...so check it out.

Click here for information on the Discover Scholarship!!

Some scholarship information

2009-01-06T17:16:00.001-08:00

Again, my apologies for the delay in this entry. I can't believe it is 2009, but the calendar says it is and the financial aid forms for 2009-2010 are out they're waiting for completion, so I guess it's true...it is 2009!!!!

If you haven't done so, it is truly time to go after those private scholarship dollars. Many of you know I use the wonderful resources provided by Christopher Penn at the Student Loan Network. On a recent podcast (which you can access from this blog, top left hand corner) Chris put out a list of scholarship information...check it out below!!

Featured Scholarships

Student Loan Network $10,000 Scholarship »
ScholarshipPoints Monthly Scholarship »
ZoomPanel $1,000 Monthly Scholarship »
Universum Employment Survey $1,000 Scholarship »
College Prowler Monthly $2,000 Scholarship »
Campus Discovery $10,000 Scholarship »
Free College Scholarships $10,000 Scholarship »
Winning Surveys.com $50,000 Scholarship »
Fast Web Scholarships »

Good Luck!!!

Countdown to FAFSA!!!

2008-12-28T17:05:00.000-08:00

The 2009-2010 FAFSA will be available for completion beginning on January 1, 2009!!! However, just because you have 4 days to wait until the wonderful opportunity of completing the FAFSA online, you can still get prepared. If you click here, it will lead you to the 2009-2010 FAFSA on the WEB worksheet. You can print this out, work on the form and then be ready for online submission bright and early on New Year's Day!!! So for accuracy, keep your partying to a minimum on New Year's Eve and feel free to ask any questions regarding the completion of the FAFSA by writing to me at slmconsulting@optonline.net!!!

Some scholarship and fun money news!!

2008-12-19T03:33:00.001-08:00

Wow, I can't believe it is 10 days since I posted. This month is truly flying by with end of semester activities and the holidays quickly approaching. It is easy to get caught up in activities that seem more fun that the college finance process, however, 'tis the season!!! That's right, a lot of time now should be spent preparing for the filing of the 2009-2010 financial aid applications and for the completion of scholarship applications!!

There is a brand new site and concept out there that could help kids raise some money for college. This is a new and awesome concept. A new website called gradefund.com was recently started by two brothers, Michael and Matthew Kopko. It works like this. The site allows students to create online profiles and invite family and friends to "sponsor" the student for the achievement of good grades at the end of an academic term. Students can also get corporate sponsorship if they are studying something of interest to specific corporations.

This site, only a little over a month old has over 900 users. About 15-25% of them are sponsors, the rest are students. This runs much like "pledging" funds when people are raising money for a particular charity, say the American Cancer Society.

This is a way to raise money by "thinking outside the box"! Now if they had a way to invest the funds a student raises, much like "UPromise" does, this could truly be a unique venue for raising funds. The idea came to the Kopko brothers when they became aware of a friend, recently graduated from college, who came out with their degree and $120,000 of student loan debt.

So students, get motivated, start studying and raise some money!!!! Right now, the highest price being paid for an "A" is $400.00!!!!!

Start collecting that paperwork!!

2008-12-09T16:11:00.000-08:00

Recalling that I have mentioned never to miss a financial aid application deadline, it is important to begin gathering the information that you will use to compile the 2008 tax documents. Since you might not have your taxes done prior to the financial aid application deadlines, make sure you keep track of documents that will help you complete the financial aid applications without your completed taxes. For example, year end pay stubs, quarter and month ending bank statements will help provide you with information to help complete the FAFSA when your taxes aren't quite done.

However, it is important to be as accurate as possible when completing the FAFSA because the results of that form will determine the initial financial aid packages offered to students. If you don't want massive changes in the financial aid offered due to large errors in the FAFSA, use what current income and asset information you have to insure the most up to date numbers possible!!!

FAFSA worksheets are on the way!!!

2008-12-03T09:17:00.000-08:00

FAFSA on the web worksheets for the 2009-2010 academic year will be available in mid-December according to the federal government. While they are usually available sometime in November, there are so many regulatory changes for the 2009-2010 year, it is not a surprise that there is a delay in their arrival. However, even though the worksheets will be available for work to begin on the FAFSA, the actual FAFSA for the 2009-2010 academic year will not be available for online completion until January 1, 2009!!

I would encourage parents and students to get a 2009-2010 FAFSA worksheet as soon as they are available and start completing the worksheet with as much information as possible. The income data may require a bit more time and you might be waiting for the last pay stubs or statements of the year, but the basic identification and demographic information can be completed on the worksheet, so that it is ready for submission any time after 1/1/09!

Preparing for scholarships - inventory time!

2008-11-25T11:27:00.000-08:00

It's about that time when students should begin to search and apply for those outside scholarships (I guess I have been on that rant for a while!!!) In any case, I did receive notification about a new source of scholarships and wanted to pass that on to my readers. Sallie Mae, which is a student loan compamy also administers scholarships through the Sallie Mae Fund. They recently announced that the application for funds in the form of scholarships will be available in early 2009!!! See below for more information:

In recognition of National Scholarship Month, The Sallie Mae Fund(R) is pleased to announce that it has awarded roughly $2 million in scholarships to deserving college students this fall. Through these awards, The Fund, a charitable organization sponsored by Sallie Mae(R), is helping roughly 800 students pursue a higher education at more than 460 institutions this academic year.
The Sallie Mae Fund(R) aims to increase access to higher education for lower-income and minority students by addressing three common barriers—awareness of financial aid, academic performance, and financial need. Since 2001, The Fund has awarded more than $14.3 million in scholarships to over 5,700 deserving students.
By 2015, there will be an additional 5 million college-age individuals in the United States. Approximately 80 percent of this growth is projected to come from minority populations with greater financial need. To help meet these needs, The Sallie Mae Fund(R) provides scholarships through a number of initiatives. Applications, eligibility, and deadline information for the 2009-2010 academic year will be available in early 2009 at www.salliemaefund.org

New tuition increase for schools in the SUNY system!!

2008-11-23T16:31:00.000-08:00

Many of my readers are from New York State and know about our vast state university system known as SUNY. Well, as a bit of recent information just released, the tuition at all state university 4 year colleges will be increased $310 for the Spring 2009 semester. This is a rare occurrence, as tuition increases are rarely made in the middle of an academic year. However, these are not usual circumstances or usual times. So full-time tuition for the Spring 2009 semester will rise to $2485. No new tuition increase has been established for 2009-2010, but with the current increase, overall tuition for the 2009-2010 year will be $620 more that it was going to cost students for the 2008-2009 year prior to this increase. Keep up with researching those private scholarships. They will be needed more than ever.

More than one child in college!

2008-11-19T16:08:00.000-08:00

Many parents and students ask the question, "What if there is more than one child in college from the same household?" That does have a significant impact on the Expected Family Contribution. Remember the EFC is derived from income information from the parent, income information from the student, asset information from the parent and asset information from the student as well as other demographic information. According to the EFC formula, the student's contribution will be calculated, then the parents' contribution will be calculated. Once the parents' contribution is calculated, the result is divided by the number of students in the household. This figure is then added to the student's contribution to come up to the total of the Expected Family Contribution. So the more students in college at one time the smaller the parent contribution will be for each individual student. The total family contribution will however be influenced by the student's earnings and assets as well.

Evaluate all of your options!!

2008-11-16T11:22:00.000-08:00

As we are approaching the FAFSA season and are already well into the CSS Profile season, many people are getting nervous about the financial aid process. Although the forms are not exceedingly complex, they do take time and focus to complete correctly.

Because the complexity of the financial aid process has increased over the years, many people are turning to the use of private financial aid consultants. But like anything else, there are good ones and there are bad ones. Many so-called "consultants" prey on the vulnerability of students and their families because they know that a college education is so extremely important to these people.

The National Association of Financial Aid Administrators has come up with a guide to help when deciding if you need a financial aid consultant and what you should stay away from for fear of being scammed. Check out their guidelines: http://www.nasfaa.org/Redesign/FANight/PDFs/ConsultantServices.pdf

As I have mentioned in prior entries, I do offer private consulting services and my mission is simply to help students and their families through the education finance process. Since I have other employment I do not need clients to "live", so I enjoy what I do without the pressure of having to have a certain number of clients or "billable hours", as full-time accountants or lawyers usually do.

Feel free to call me at either of the following numbers if you are interested in learning about my services:

SLM Consulting
(845)883-6734
(845)264-9542 cell

If you feel more comfortable writing, you can email me at the following

slmconsulting@optonline.net

I'd be happy to send you a folder with information that describes my services as well as my professional background.

Colleges are feeling the pinch!!

2008-11-08T17:17:00.000-08:00

As mentioned in my last entry, schools are having to tighten their belts just as you and I are every day. Many public and private universities are freezing hiring and postponing construction projects according to a recent article in the New York Times. Tufts University, noted for its need blind admissions and ability to meet 100% of the financial need of students may not be able to maintain these policies according to their college president. This is probably the tip of the iceberg in terms of the many changes we will see within the financing policies of high cost institutions. Many of these schools have seen their endowments shrink and see little promise of change to that situation in the immediate future.

As also mentioned in the last entry, this should make every student and family more diligent when it comes to learning about and applying for financial aid. Understanding the process and learning how to work through it will make paying for college easier in the long run!!! So, read, learn and ask questions!!! Also, keep applying for scholarships!!!

Check out this link by clicking for a new $500 award available.

The picture is bleak, but don't give up!!!!

2008-11-01T14:25:00.000-07:00

As you know, I write often on the wisdom and guidance of Christopher Penn from the Student Loan Network and the information he provides. In some recent information he provided from commentary provided by U.S.A. Today and NASFAA, the facts are that federal student loans will be available for students....period!!! Private student loans are another story, falling victim to continuing economic turmoil and the lack of funding available due to the credit crisis. However, while that is a problem, a larger problem will present challenges to students and their families. The cost of higher education is expected to rise about 10% per year for the next three years according to Penn. State schools will be hit by budget cuts. We are already seeing that in New York as Gov. Patterson tries to deal with a $2 billion dollar deficit that is supposed to rise to $10 billion in 2009. There is talk of decreasing funding of special programs as well as a rumored 10%-20% cut in the New York State Tuition Assistance Program (TAP). Private schools will not be immune from this either. Much of their investment dollars, some of which are used to leverage student tuition and supply scholarships has been hit hard by the same investment troubles as education and retirement plans. They just aren't worth what they were several months ago and with the volatility of the market, it is hard to say when those funds will be stable again.

This type of news just calls for more diligence from students and their families. It means tightening family belts, and exploring cost effective options for financing that college education!!! I'll be bringing 2009-2010 application news and changes for that year as they become more readily available.

FAFSA worksheets will soon be here for 2009-2010

2008-10-28T17:00:00.000-07:00

The FAFSA worksheets for 2009-2010 will be out sometime in November. However, remember the FAFSA cannot be submitted until after 1/1/09. However, there is a lot of preparatory work that can be done to insure that the application is completed accurately and with as little stress as possible. If you will need to submit the FAFSA prior to completing your 2008 tax returns, pull out your 2007 returns and see if there have been any major changes for the 2008 year. You can probably estimate closely if few changes have occurred.

If the student is applying for early decision, insure that the financial aid applications are completed in compliance with the required dates for the early decision process. For example, many early decision admission applications are due by 11/1 or 11/15 and the 2009-2010 CSS Profile can be due at the same time, earlier or a bit later. To insure that you have a financial aid package that truly meets the needs of the student, make sure you adhere to all financial aid application deadlines. If you can't find the deadline online, then CALL THE SCHOOL!!!

Valuable lesson to learn

2008-10-19T17:03:00.000-07:00

One of the quickest ways for the demise of a college education is when a student gets into financial trouble. Many students don't understand the use of credit and how much it truly costs to use. Still others don't or have never had to develop and use a budget. For current college students or those getting ready for the experience, I have found a great tool for them to use, courtesy of the Student Loan Network. This is a free resource to download. The student just has to register with the site, which doesn't cost anything either, but does provide a wealth of information including scholarship opportunities.

Check out the web address by clicking here.

CSS Profile time

2008-10-15T16:23:00.000-07:00

If you are a student who will be attending a school that utilizes the CSS Profile for the determination of an award from the school's own private dollars, you will be happy to know that the CSS Profile can now be completed for the 2009-2010 academic year. This is not a free application. It costs $5.00 to register the form and $18.00 for each school where you would like the Profile to be sent.

The Profile gives a school a true financial snapshot of the family and their income situation. They will ask more "nosy" questions than that of the FAFSA, including home value, purchase date and purchase price. There are even some schools who will build questions into the Profile that request information on the year, make and model of the family vehicles.

Listed below is the web address for the College Board information about the Profile. It might be in your best interest to be aware of your school's policy regarding the Profile and if they require it or not. You can check that on this page as well!!!

www.collegeboard.com

Its been a long week!!

2008-10-11T09:59:00.000-07:00

Wow, it is incredible how quickly a week goes and the things that can happen within that week!!! This has been the worst week that the U.S. stock market has ever experienced and the end doesn't seem anywhere in sight. For those, who have funds invested for college, the picture is not pretty. Those 529 plans are not worth what they were even a month ago and September was a bad month for the market as well. This is be an extremely trying time for all and especially tough for those financing college educations. While scholarship funds may diminish a bit, diligent efforts will have to be made to secure funds that are available. With so much federal money being spent to bail out the financial institutions, many people are wondering how this will affect federal aid funding for the coming years. I guess time will tell. In the meantime, I will try and bring you as much scholarship information and other relevant info as quickly as possible.

For now, check out this scholarship notification that I recently received. With an application deadline of June 2009, students have plenty of time to perfect their essays. http://www.abbottandfenner.com/scholarships.htm

Scary times ahead......

2008-10-02T14:58:00.000-07:00

Wow!!! It has been a wild week on Wall Street and we are still waiting to hear if and when there will be a federal bailout bill agreed upon by the House of Representatives and the Senate!!!! This in the realm of the current political climate with elections coming in a short 4 weeks, makes this an extremely volatile time for financial aid and increasing college costs.

What I would like to share with you hear is a very recent podcast from Christopher Penn of the Student Loan Network. Please read carefully and as Chris has said, "PLAN AHEAD!!"

Daily Aid 16: The Coming Financial Aid Crisis

"Let’s pull together a few threads quickly.

KSBY said that 8.9 million students filed for financial aid in the first half of 2008, up 16% from the year before. (7,672,000)

Salem, Oregon’s Register Guard reports complete depletion of their state financial aid budget of $72 million, with aid requests up 18%, 7% for traditional 4 year universities and 23% for community colleges.

The Chronicle of Higher Education reports Congress may need to pump $6-billion more into the Pell Grant program next year, an increase of more than 40 percent, to meet its promise of a higher per-student benefit at a time of increased enrollments and tougher economic conditions, an Education Department official has warned.

The New York Times cited government data showing that 800,000 more students had applied for Pell Grants through July than had done so by that point in 2007, and that that could result in a shortfall of up to $6 billion.

Inside Higher Ed reports up to 32% increases in federal financial aid applicants in 2008.

When you sit down and look forward into the future, into 2009, it rapidly becomes apparent that more and more students are applying for and qualifying for financial aid at a time when less aid is available. Appropriations for grants and federal student loans are relatively unchanged, while private student loans (non-government student loans) are less available due to the credit crisis.

Let’s assume that the 16% trend holds. Next year, 10,324,000 students will file the FAFSA if you assume at 16% increase in applicants again, which is not unreasonable given that joblessness has increased and many large companies such as Lehman Brothers have simply gone bust.

If 800,000 extra students can cause a shortfall of $6 billion in Pell Grants, then 2,652,000 extra students will cause a short fall of close to $20 billion.

Put another way, Congress allocated $14 billion to fund 7,672,000 Pell Grants at roughly $1,824 per student.

If increases in qualified financial aid applications spike as predicted, the amount allocated per student drops to $1,356 per student - nearly $500.

For a lot of low income students, $500 is a make or break amount, enough that it will decide whether the student attends college or not.

This is clearly a major problem in the making. In ordinary times, asking for an additional $20 billion for higher education from Congress is difficult at best, because Congress simply places higher education at a lower budgetary priority than other national priorities. However, we’re not in ordinary times. We’re about as far from ordinary times as you can imagine. Congress and the Federal Reserve Bank are spending every available dollar trying to bail out major financial institutions - the money for additional higher education spending simply isn’t there right now.

What you have, in other words, is a quickly approaching financial aid crisis, a college crunch of sorts, that will hit as soon as January 2009 rolls around and the filing window for the 2009 FAFSA opens. More students will be competing for fewer dollars than ever, and there’s a very real possibility that a significant number of students will not get aid even if they’re qualified, because federal aid is allocated on a first come, first served basis.

Here’s the lesson in all of this, in what you must do. Take the time now to start making preparations for filing your FAFSA in January 2009. Apply for as many scholarships as you can, because external scholarship availability hasn’t been affected by the economy yet. Plan to be incredibly aggressive in your quest for financial aid, because you’ll need to be. You’re competing with your fellow students more than ever for fewer dollars.

While I don’t want to encourage panic, I do want you, my listeners and readers, to be wholly prepared for what’s coming. It’s not going to be pretty, but if you’re prepared, forewarned and forearmed, you’ll weather this financial aid crisis better than most."

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Finally, increased education funds for veterans!!

2008-09-26T13:29:00.000-07:00

With the signing of a new law H.R. 2642, that was enacted on June 30th, many more veterans will be eligible for a great increase in funding to support education interests on the undergraduate, graduate or vocational/technical levels. The annual education benefit will rise to about $19,600. It will also provide funding for books, supplies and equipment and additional funds would be available for tutorial assistance as well as for licensure and certification tests. This is long overdue for the men and women who so bravely serve our country. These benefits become available for anyone pursuing their education after August 1, 2009. The benefits are available to all military members who have served on active duty since September 11, 2001!!

For those ready for college, but a bit younger perhaps than our military vets, getting ready for either the SATs or ACTs this year, you might want to take a prep course to help raise those scores. Well, check out www.schoolsoup.com, for a $100 discount on ANY Princeton Review SAT or ACT test prep course.

Keep an eye open for scholarships!!

2008-09-21T11:59:00.000-07:00

As the financial crisis worsens in the news, it is time to get serious about thinking of college costs. The ripple effect of the recent banking disasters will be felt in all aspects of the economy, including the price tag of college. Now is not the time to throw in the towel if you are concerned about the escalating costs of everything including tuition, fees and books. It is the time to get assertive, aggressive and proactive about securing funds for that most important investment - a college education.

Scholarship opportunities are available year round and that is how students should view these opportunities. At least an hour per week should be spent on the scholarship search and application process.

On the website of The Student Loan Network, a student can register and gain scholarship points which can accumulate towards scholarship eligibility. Don't hesitate!!! Begin to take control!!!

As more information regarding changes in aid processing, eligibility and FAFSA finalization for the 2009-2010 year become available, I will keep you informed!!!

Financial reasons students drop out of college!!

2008-09-15T15:29:00.000-07:00

In a recent issue of The Greentree Gazette, Paul Bylaska wrote an article that discussed the top 5 financial reasons student drop out of college. He feels they are as follows:

5. Student often use financial issues to mask the true reason(s) why they are leaving and that can include too much partying or girlfriend/boyfriend problems. Sometimes in exit counseling, if it is available at the school, they can determine that financial circumstances may just be one of the reasons a student is dropping out.

4. For low income students who rarely had the opportunity to participate in extracurricular activities in high school because of the prohibitive costs, the expenses incurred with college might be overwhelming and not entirely expected.

3. Many students have jobs that require them to work too many hours. I know of many students who are taking a full-time course load and working 25-40 hours per week as well. That is a recipe for academic disaster. However, many students choose things that cost a great deal of money to support...expensive cars, tech gadgets with all the bells and whistles...etc.

2. Many students simply fail to plan for all of the expenses that come with a college education and even upon arrival at the college have yet to develop a financial plan or budget.

And finally:

1. Many students simply are not aware of the financial assistance available to them. While the college attempts to educate students at all levels, they cannot reach each and every student. Sometimes the students whom are most under served are those we consider under served in society, including minorities, first generation college students, etc.

While these reasons are all true, I believe in the tenacity and dedication of students. For those students for whom a college education is truly their dream and a stepping stone to their future, they will find the way financially. Are there ways that more students can be helped? Of course there are!!! But this is a two way street and students need to meet us half way. They can't use their financial situation as an excuse to drop out, they need to evaluate their life circumstances, prioritize their needs and wants and put their college education costs where they truly need to be and that is at the top of their life agenda.

Some financial aid info tidbits!!

2008-09-06T17:22:00.001-07:00

In a recent REDBOOK magazine, I found some interesting information. The blurb was titled, On Campus: Higher education in America.

In terms of how we stack up globally, the statistics are pretty sad. Only 34% of America's young adults go to college. Compared with other countries, our attendance rate is 5th in the world...and our graduation rate is even worse. Only 17% of young adults complete their college education. That puts us in 16th place in the world with Japan and Portugal taking the top two spots.

A college education is still a great investment with a wonderful rate of return. The average college graduate will earn $2.1 million, over the course of their lifetime, while a high school graduate will only earn $1.4 million. This investment however has become very costly. While the nation's median income has increased 127% over the last 20 years, the cost of a college education has increased 375%.

Scholarships and grants are still the best types of aid to help with these costs because they don't have to be repaid and I have some info on some new scholarships. Click on the link here to Scholarshipsearch.com, (a service of the Student Loan Network) to see the latest!!!

Some great scholarship information!!!

2008-08-30T17:02:00.000-07:00

I recently received a scholarship flier from ScholarshipExperts.com and wanted to make you aware of some great scholarship opportunities. They are as follows:

“Education Matters” $5K Scholarship
In the second half of 2008, ScholarshipExperts.com is offering the “Education Matters” $5K Scholarship. One scholarship recipient will be chosen to receive a $5,000 scholarship.

Applicants must:

Be thirteen (13) years of age or older at the time of application
Be legal residents of the fifty (50) United States or the District of Columbia
Be currently enrolled (or enroll no later than the fall of 2014) in an accredited post-secondary institution of higher education
Complete an online scholarship search profile at ScholarshipExperts.com
Submit an online short written response (250 words or less) for the question:
“What would you say to someone who thinks education doesn't matter, or that college is a waste of time and money?”

Here is another:

Shout It Out Scholarship
In 2007, ScholarshipExperts.com received over 10,000 online applications for the ScholarshipExperts.com Shout It Out Scholarship. Five scholarship winners were each awarded a $1,000 scholarship.
In 2008, ScholarshipExperts.com is again offering the Shout It Out Scholarship and will award five scholarships of $1,000 each.

Applicants must:

Be thirteen (13) years of age or older at the time of application
Be legal residents of the fifty (50) United States or the District of Columbia
Be currently enrolled (or enroll no later than the fall of 2014) in an accredited post-secondary institution of higher education
Submit an online short written response (250 words or less) for the scholarship topic:
“If you were given a 60-second commercial spot on television that would air repeatedly during the presidential debates, what message would you shout out to America?"

Check out the above and others by clicking here!!!

Some tips for the year!!!

2008-08-27T17:26:00.000-07:00

As a new academic year begins, the chaos that co-exists with this time of year makes me think of things to tell students and parents regarding the financial aid application process!!!

1. APPLY EARLY!!!! Many students and parents are bewildered and upset to learn there is limited aid left when they filed their FAFSA applications in June, July and even August. Pay attention to the application deadlines of the schools!!! At any rate, applications for the CSS Profile can be completed in October and the FAFSA should be completed anytime after January 1st for the following Fall semester.

2. Keep copies of all tax documents including w-2 forms. According to the IRS, the W-2 form is considered part of a complete federal tax return if there were wages earned. It is amazing that so many people lose or misplace those very important documents. It is not easy to get them from the IRS (though possible), and even more difficult to get them from previous employers.

3. Be kind to financial aid office staff. Most have had an incredibly hectic couple of months. Their sole reason for existence is to help students and families make college more affordable. If you are determined ineligible for aid, more than likely, it is a result of federal or state regulations, not the staff of the financial aid office. Our decisions are not personal, and please don't kill the messenger!!!

More scholarship news tomorrow!!!

Using your salaries on the FAFSA!!!

2008-08-21T17:58:00.000-07:00

Just a bit of info that you can keep in the back of your mind in completing the FAFSA for the future. When the FAFSA forms asks for "income earned from work" the number that should be used is the figure in Box 3 from the W-2 form. This could be different from Box 1 if there is participation in some type of tax deferred annuity or retirement program. Many people naturally think that they should use Box 1 because the number is usually lower and it will reflect better on their financial aid outcome. However, the figure that is reported is used in the formula for the development of an allowance against income. The higher the number used, the higher the allowance will be and that will ultimately lower the income and the EFC.

So again, when asked to report "income earned from work", make it a practice to use the figure in Box 3 of the W-2 form rather than Box 1.

Plus Loans - Parent payment deferments

2008-08-15T16:22:00.000-07:00

As Congress worked tirelessly this spring to bring some relief to those stressing about college loans, many students and parents wondered how they were going to meet the increasing cost of college expenses with the decreasing of borrowing opportunities. But as I mentioned, the rescue came with HR5715, signed into law this Spring.

In one of the provisions of these laws, the federal government changed the payment options of the Federal Plus Loan Program. Previously, if parents borrowed through this student loan program, PLUS (Parent Loan for Undergraduate Students), repayment of the loan generally began 60 days after disbursement of the check. With the signing of HR5715, parents are now given an option. They can begin payment as stated above, or they can defer payments until 6 months after their son or daughter graduates or ceases to be at least a half time student. WOW!!! That is a big change. However, a couple of points to remember regarding this option. Number 1, you must request this deferment of principle option through the lender. They will not automatically offer it to you. And number 2, repayment of the interest should be made or else the interest will accrue and you will repay that later in addition to the principle. In other words, you will be paying interest on your interest and principle when it is time for you to repay the loan. So, it is truly best for parents not to capitalize the interest, but rather make those monthly or quarterly interest payments; you are still eligible to defer the principle.

Remember, you must request the deferment of principle payments from the lender. It will not be automatic!!!

A great link with some wonderful info.

2008-08-07T13:32:00.000-07:00

Since writing this blog, I have had the great pleasure of meeting (although virtually), many wonderful people who are a wealth of information and truly understand the critical need for good financial aid information. One of the best sources of info and a person who can make financial aid interesting, informative and fun is my colleague Christopher Penn from the Student Loan Network. Chris' daily podcast is on my blog and you can link directly to it from there.

Well, Chris has come out with an awesome 6 page newsletter that I would like to share with my readers. It is full of all kinds of very cool things, including "free stuff", e-books and information you just need to know.

So check it out below. Also, as you will see in the newsletter, Chris' podcast will move from everyday to once a week. I'm sure even on a once-a-week basis we will get a knowledge packed podcast where the information will be current, relevant and vital for anyone interested in financial aid and educational finance issues. Thanks Chris for all of your hard work!!!

http://cdn3.libsyn.com/financialaidpodcast/insidestory-20080801.pdf?nvb=20080807204226&nva=20080808204226&t=0252bd3f2a7d6b230112b

Many changes ahead!!!

2008-08-04T18:14:00.003-07:00

Well, many things are happening in the financial aid world. The house and senate passed a bill last week which renewed financial aid programs and put new rules and regulations in place. This bill is known as Reauthorization, because it reauthorizes the federal aid programs and whatever changes Congress deems necessary. I'll be going into greater detail as more information becomes available.

We haven't begun the 2008-2009 academic year and yet the 2009-2010 Draft FAFSA form is out there for inspection. There are many changes in the form, most as they relate to changes in the Need Analysis formula which changed as a result of HR 5715 and the CCRAA (College Cost Reduction Access Act). These were legislative changes as to how the determination of financial need should be determined. I'll go over more changes as the weeks go on, but one of the major changes is removal of the reporting of untaxed income, such as social security, social services the earned income credit,and the additional child credit. Where that was viewed as income (nontaxable) in the past, it will no longer be reported or calculated into the formula.

More to come...stay tuned!!!

Applying for loans could affect your credit rating!!

2008-07-28T18:34:00.001-07:00

In a recent New York Times article, a disturbing fact that few realize is that those who shop around for the best deals on student loans could actually be hurting their credit scores. It appears that those who shop around for the best auto loans or mortgages are not penalized for doing so, but those who shop for the best student loan rates (primarily on private student loans) could see it adversely affect their credit rating.

Fair Isaac is a company that helps the three credit bureaus calculate credit scores and feels that this phenomenon happens rarely, however it has been documented as occurring. Unfortunately, the full extent of this situation is not even known in the market place, which makes it even more bizzare. If there is one group of people that truly needs a fair shake, it is students and their families,as they are simply trying to obtain the higher education that will hopefully yield them a bigger piece of the American dream.

It seems that those who apply for loans at the larger national banks are affected less by this issue than those who apply at a lot of the smaller student loan establishments. Mark Kantrowitz who runs www.finaid.org says that you should utilize the knowledge and expertise of financial aid officers at the school the student is attending or others who know the student loan business. If the college has a relationship with particular lenders, the lenders might be granting students special benefits. Check them out first. But be careful, that ultimate credit score can make the difference in thousands of dollars to the borrower (students) who have the most to lose!!!

A couple of scholarship offers!!!

2008-07-19T14:44:00.001-07:00

I have some information from www.scholarshipexperts.com that I think will be useful. Many people believe that the spring is scholarship application season. The truth is that students can and should be applying for scholarships as often as possible and should spend about 1 hour per week doing scholarship research and application completion activities. They are online a lot anyway, why not take an hour and try to obtain scholarships. Check the following two out below:

« The 2008 Shout It Out Scholarship

Five students will each receive a $1,000 scholarship. Winners will be chosen based on their responses (250 words or less) to the given topic: “If you were given a 60-second commercial spot on television that would air repeatedly during the presidential debates, what message would you shout out to America?” To be eligible to apply, students must be 13 years of age or older at the time of application and be legal residents of the fifty (50) United States or the District of Columbia. Students may apply online at http://www.scholarshipexperts.com/apply.htx before September 30, 2008.

« The Education Matters $5K Scholarship

One $5,000 scholarship will be awarded to the student who best responds (in 250 words or less) to the following online topic: “What would you say to someone who thinks education doesn't matter, or that college is a waste of time and money?” To be eligible to apply, students must be residents of the United States, be 13 years of age or older, and must have completed a scholarship search profile online at www.scholarshipexperts.com . The deadline for students to apply online is October 31, 2008. Students can apply now at http://www.scholarshipexperts.com/apply.htx .

Good Luck and keep applying!!!

FERPA-What it means for students and parents!!!

2008-07-16T09:15:00.000-07:00

FERPA- what is it? Actually, it is the Family Educational Rights and Privacy Act. This act which allowed parents unrestricted access to their children's records in elementary and secondary schools is now the same act that will prohibit parents from gaining access to information about their son or daughter in college.

The rules change once the student is enrolled in a post-secondary institution of higher education (college or university). Colleges often have a difficult time implementing FERPA, as it is in place to protect the student and there are cases when the information can be released to authorities especially if the safety and health of the student or other students are at risk.

However, in this era of "helicopter parents", many become agitated with the college when they call to get information and are denied that information to insure the student's privacy.

Schools can implement FERPA within the boundaries of the law, but basically in terms of parents gaining information about their student the law states that:
When a student turns 18 years old or enters a postsecondary institution at any age, all rights afforded to parents under FERPA transfer to the student. However, FERPA also provides ways in which schools may share information with parents without the student's consent. For example:

Schools may disclose education records to parents if the student is a dependent for income tax purposes.

Schools may disclose education records to parents if a health or safety emergency involves their son or daughter.

Schools may inform parents if the student who is under age 21 has violated any law or its policy concerning the use or possession of alcohol or a controlled substance.

A school official may generally share with a parent information that is based on that official's personal knowledge or observation of the student

Schools develop their own FERPA policies within the realms of the law. For instance, in my financial aid office, information will not be released to any one other than the student unless we have a written release on file giving permission to speak to only the persons indicated. (even if they were claimed as dependents on the parents' income tax returns)

I would advise parents to contact the school(s) your children are attending to determine what their FERPA policies are. If your son or daughter needs to complete a release in order for you to speak to college officials, then have them do so. However, if they refuse to give you permission to access their records, it is not the school's obligation or issue to rectify that matter with your child. This includes, but is not limited to inquiries on grades, schedules, housing, billing, financial aid, etc.

Follow-up on deceptive loan practices!!

2008-07-11T14:42:00.000-07:00

I know this must sound redundant, but there are many people who are in the business of "student lending" for the sole purpose of tricking and taking advantage of unsuspecting borrowers. This is not the majority of lenders by any means, but as I mentioned in the last entry, you do have to beware of practices that are deceptive. In addition to the bulletin highlighted in the last entry regarding bad practices by student loan companies, the FTC has published a brochure that is essential for anyone looking at colleges, in college or paying back college loans.

Please read the brochure carefully. Now is the time when freshmen and continuing students are prime targets for these less-than-legitimate companies. Tuition bills are out and some students are finding the gap between college costs and aid their receiving is getting larger. In desperate times, some students might be inclined to take an offer that sounds good, but they don't read the fine print. Later, they pay the price, and usually a hefty one for their haste. So read the brochure and pass it on if you know anyone who you think it might help.

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre43.pdf

Let the borrower beware!!!

2008-07-03T17:15:00.001-07:00

First of all, let me apologize for the days where I haven't posted for my readers. It has been a crazy week!!! My daughter graduated from high school and everything that goes with that made the time until this entry just fly by!!! But I'm back and hopefully with information that will be beneficial to my readers.

Many parents and students will be busy researching all types of student loan options to help meet those college costs that the grants and scholarships couldn't quite take care of. However,potential student loan borrowers are prey for the many deceptive companies that are out there trying to take advantage of families in vulnerable positions.

Please take a look at the link below from the FTC (Federal Trade Commission). The article from this link will highlight many of the scams and poor practices used by some companies today to lure students and their families into deals that sound too good to be true. And you know what they say, "If it sounds too good to be true, it probably is"....SO BEWARE!!!

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre43.shtm

How schools handle scholarships from outside sources!

2008-06-25T13:43:00.001-07:00

It's that time of year when high school seniors are, of course graduating, but also learning about scholarships that they might have won through their high school. Many high schools have strong scholarship programs, where they award students monies from outside donors or through high school resources.

There are always questions about how these scholarships are handled for financial aid purposes. Financial aid officers are required to account for any funds for a student coming from outside sources. Even if the student doesn't directly inform the Office of Financial Aid at the school they are attending that they have received a scholarship, there must be a mechanism in place institutionally to make sure that information regarding the receipt of a scholarship for a student is shared by offices. This is to insure that a student is not "overawarded". Meaning, the student cannot receive funds that exceed their cost of attendance.

How schools deal with information varies according to the "outside resource policy" of each school. It is hoped that most schools would lower the overall self-help portion of the financial aid package, which includes loans and work study based upon the receipt of an outside scholarship, but that is not always the way. In order to spread their own institutional grant aid, some but not most, schools will lower their institutional grant aid commitment to the student and replace that portion with the outside scholarship funding.

The institutional policy towards outside scholarship resources may be a good topic of discussion when visiting colleges this summer!!!

College visits and pre-admission anxiety

2008-06-19T12:07:00.000-07:00

Students are barely out of their junior year in high school, and yet many of these students are planning extensive travels this summer to visit many of the colleges to which they might apply in the fall. This causes much anxiety for students and parents alike. As admissions to colleges become more and more competitive, so will the funds needed to finance that education. I always suggest to students and parents that they look at schools that are need blind, make a commitment to meet as much financial need as possible and try to limit student loan indebtedness by minimizing or eliminating loans from an aid package. That helps to narrow the choice of schools, but then how is the student going to insure a positive admission application process and "win the admissions game"? Well, if you were not fortunate enough to listen to the financial aid podcast hosted by Christopher Penn of the Student Loan Network on this topic, you are in for a treat. He has a comprehensive interview with Peter VanBuskirk, previous Dean of Admissions of Franklin and Marshall College. Mr. VanBuskirk also has worked with Peterson's Guide to Colleges and has written extensively on the subject. The interview is 24 minutes long, but there is a wealth of information that will be beneficial for students and parents alike!! Click here to check it out.

Some great cost saving information!!!

2008-06-12T11:51:00.000-07:00

Through a publication of the Greentree Gazette, which is geared to financial aid professionals, we have been provided with a list of 55 colleges where students will be borrowing less or not at all. These schools have limited or removed loans from their financial aid packages. Here they are hot off the press!!

1. Amherst College
2. Appalachian College
3. Arizona State University
4. Bowdoin College
5. Brown University
6. Carleton College
7. Claremont McKenna College
8. Colby College
9. College of the Holy Cross
10. College of William and Mary
11. Columbia University
12. Cornell University
13. Dartmouth College
14. Davidson College
15. Duke University
16. Emory University
17. Georgia Institute of Technology
18. Harvard University
19. Haverford College
20. Indiana University, Bloomington
21. John Carroll University
22. Lafayette College
23. Lehigh University
24. Massachusetts Institute of Technology
25. Michigan State University
26. North Carolina University
27. Northwestern University
28. Oberlin College
29. Pomona College
30. Princeton University
31. Rice University
32. Soka University
33. Stanford University
34. Swarthmore College
35. Tufts University
36. University of Arizona
37. University of California(systemwide)
38. University of Chicago
39. University of Florida
40. University of Illinois at Urbana- Champaign
41. University of Louisville
42. Univesity of Maryland, College Park
43. University of Michigan, Ann Arbor
44. University of North Carolina,
Chapel Hill
45. University of Pennsylvania
46. University of Rochester
47. University of Tennesee
48. University of Vermont
49. University of Virgina
50. Vassar College
51. Washington University in St. Louis
52. Wellesley College
53. Wesleyan University
54. Williams College
55. Yale University

This is a good thing, because the schools are planning on using more of their own monies to help students afford their institutions rather than having them leave college severely in debt. So consider the schools above as options...they are already beginning to look out for the overall financial welfare of their future students!!!!

New loan rates effective 7/1/2008

2008-06-08T08:43:00.000-07:00

Effective for 7/1/2008, new stafford loan rates will become effective. These rates will reflect loans with disbursements made after 7/1/2008. See the chart below.

http://www.ifap.ed.gov/eannouncements/0527InterestRate20082009.htmlWhile it looks complex, the overall effect is that some interest rates will be lower as a result of the College Cost Reduction and Access Act of 2007 signed by President Bush last September.

Watch for new posts that detail other changes that go into effect after 7/1/2008!!

Banks resist loaning to students in certain colleges.

2008-06-05T07:35:00.000-07:00

There has been a national uproar recently regarding the fact that due to the many issues discussed in this blog, including the subprime mortgage crisis resulting in the credit crunch and new regulations which will limit federal subsidies to lending institutions that participate in the federal student loan programs. Some of these lending institutions have decided to restrict student lending to certain academic institutions. Below is some national attention given to the issue this week and my corresponding comments within each.

http://www.nytimes.com/2008/06/02/business/02loans.html?_r=1&scp=1&sq=susan+mead&st=nyt&oref=slogin

http://marketplace.publicradio.org/display/web/2008/06/02/community_college_loans/

http://news.google.com/news?btcid=1019129113186d19

Crazy times!!!

Colleges change their aid policies!

2008-06-01T17:14:00.000-07:00

There has been a great deal of financial aid buzz this year. One of the hottest topics has been the use of college endowments to further assist students in meeting college costs. Congressional hearings held this year chastised many colleges for the under utilization of their endowment funds, forcing students to leave college much heavier in debt due to the increased use of private student loan funding. Colleges like Harvard and Yale have endowments in the billions, that's right, billions not millions. At the urging of Congress, many colleges have revamped their financial aid practices so that students in certain income brackets would have their financial need met at a level of 100%. Also, many of these colleges are choosing to eliminate any loan indebtedness so that a student may leave their institution upon graduation with no loans to be repaid.

Some of the colleges that have chosen this path or aspects of it include Harvard, Yale, Brown, Amherst, Williams College, Lafayette College, Dartmouth College, and Princeton. I would recommend looking each college up individually to ascertain the exact income levels and criteria of these aid policies. There are more likely other colleges that have or will follow suit.

It may be necessary in the future to start the college search process backwards, meaning isolate the schools that have the liberal aid policies mentioned above and find some in that search that meet the academic and social needs of the student. It is usually done in reverse, but with the escalating costs of college and the difficulty in obtaining student loans, the new aid policies of some of these schools become extremely attractive.

So much info in the loan market!!!

2008-05-21T13:33:00.000-07:00

It is a crazy time for education loan financing. More and more banks and financing companies are selectively deciding whether they will be able to loan money to students at colleges across the country. However, there is an interesting phenomenon occurring across the country. Schools have now been required to substantiate why they choose to endorse particular lenders on their "preferred lender lists". However, banks are now deciding with which schools they will do student loan business. Ironic as that seems, banks are turning away business from schools that they feel will hurt their bottom line. The schools particularly effected by this are community colleges and proprietary schools. Historically, students at these institutions have a lower graduation rate and lower earning potential, thereby making them a more risky investment for financial institutions that are still reeling from the subprime mortgage crisis and the tight credit crunch.

These policies significantly impact students' ability to finance their education. Should these students be deprived of assistance to an education simply because of their choice of an educational institution? I don't think so, but obviously business is business for some organizations and make decisions more beneficial for the bottom line than for college students across the country.

More scholarships available!!!

2008-05-13T12:58:00.000-07:00

Just because it is the end of the academic year doesn't mean that scholarships are gone for another year. While some are ending, there are others for which students can still apply!!!!

A website know as www.scholarhipexperts.com has a wealth of scholarships with deadlines later in June or even into October. Some require as little as a 250 word essay.

This is a free search engine, so the quicker you go on and get a feel for the site, the better it will be for the scholarship application process.

If you will be a high school senior in the Fall of 2008, start signing up for the free scholarship searches and try to prepare a scholarship essay or two. Have them ready, so when you need to submit the application, you have some general essays which may require only minor alterations to fit the specifics of the scholarship. Also, if possible, before you leave high school this year, secure one or two teachers who will write recommendations for you. Don't wait until a day before the application is due to request this recommendation. If they can do it, it probably won't be the quality that you would have hoped for. Prepare early!!!

The chart should make it easier!!

2008-05-09T07:01:00.000-07:00

I have placed a link below to a chart that was developed by NASFAA (National Association of Financial Aid Administrators) to try and summarize the loan eligibility for students as a result of the new bill signed into law on Wednesday, which was mentioned in the prior two entries.

http://www.nasfaa.org/PDFs/2008/5715AnnualLoanLimits.pdf

New bill signed into law!

2008-05-08T13:02:00.000-07:00

As mentioned in the previous entry, we were awaiting President Bush's signature on a bill called H.R.5715. Signature on that bill was received yesterday and there are some really big changes in loans and other aid program that will become effective on July 1, 2008. Clarification on new loan amounts is stated below:

The amendments made by this section shall be effective for loans first disbursed on or after July 1, 2008. For students enrolled as regular students in eligible programs:

The bill introduces an additional unsubsidized Stafford annual limit of $2,000 for undergraduate dependent students.

The bill increases the additional unsubsidized Stafford annual limits by $2,000 for dependent students whose parents are unable to borrow a PLUS loan. (Previously 1st and 2nd year students would qualify for an additional $4,000, but now will qualify for $6,000. For students who have successfully completed their first two years, the limits will increase from $5,000 to $7,000.)

The bill increases the additional unsubsidized Stafford annual limits by $2,000 for independent undergraduate students. (Previously 1st and 2nd year students would qualify for an additional $4,000, but now will qualify for $6,000. For students who have successfully completed their first two years, the limits will increase from $5,000 to $7,000.)

The amendatory language has designated a separate category for graduate and professional students; these students will not see any annual limit increases. Their additional unsubsidized Stafford annual limit remains $12,000. (Previously the Senate sought to increase annual limits for graduate students, but that provision did not make it into the final bill).
There has been some confusion about dependent students and dependent student whose parents are unable to borrow a PLUS loan. The bill divides those students into separate categories and gives each of them a $2,000 additional unsubsidized Stafford annual loan limit increase. It does not appear to offer a dependent student a $2,000 increase, and then another $2,000 increase if their parents are denied a PLUS loan.

Also, as mentioned, parents obtaining a PLUS loan would be eligible to defer payments until the student dropped below 6 credits, but interest would be accruing on the loan. See more information below:

Beginning July 1, 2008, the bill would allow parents to choose to defer payments on a PLUS loan until six months after the date the student ceases to be enrolled at least half time. Accruing interest could either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly.

Special Provision for Parents Delinquent on Mortgage Payments

The bill would allow lenders to consider parents eligible for PLUS loans even if, during the period January 1, 2007, through December 31, 2009, the parents are or were:

No more than 180 days delinquent on a mortgage payment on their primary residence

No more than 180 days delinquent on any medical bill payments

No more than 89 days delinquency on the repayment of "any other debt"

As more definitive information becomes available, I'll pass it on!!

Loan relief from the federal government or NOT!!!?

2008-05-02T13:39:00.000-07:00

In an attempt to ease the student loan crunch, Congress passed legislation this week that would increase the amount of unsubsidized federal Stafford Loans that a student would be eligible to qualify for beginning 7/1/08. This is an attempt to minimize the amount of private student loans a student would need to complete their educational costs. The federal loan amounts would be as follows:

Current: Freshmen $3500.00 Sophomore $4500.00 Junior $5500.00 Senior $5500.00
Proposed: Freshmen $5500.00 Sophomore $6500.00 Junior $7500.00 Senior $7500.00

Again, please keep in mind, any amount over the current maximums ($2000.00) would be funded through unsubsidized funds, meaning interest is accruing on the loan from the time of disbursement and it hasn't been said yet, but I would imagine the additional unsubsidized money would be at the higher rate of 6.8%, even though subsidized Stafford loan interest rates will be decreasing to 6.0% for the 2008-2009 academic year.

Also, for parents who choose to utilize a PLUS loan(Parent Loan for Undergraduate Students), the new legislation would allow parents to defer payments on the loan until the student had graduated or dropped below a particular level of credits. Included in this bill would also be the provision to allow people who had weaker credit due to missed mortgage payments or medical expenses to be able to obtain the PLUS loan. Is it feasible or fair to people who can't pay their basic costs to saddle them with additional loan debt? I believe this part of the legislation is weak at best, and disastrous at worst.

We will know more about the final regulations of this bill and if it has been signed by President Bush by next week. As I hear more news, I will pass it on here.

New private loan comparison tool!!!!!

2008-05-01T10:43:00.000-07:00

As the credit crunch keeps getting tighter, there are fewer banks participating in the Federal Stafford Loan programs and private or alternative loans will be more difficult to obtain. That being said, when borrowing through a private lender, it is important to compare and understand the private loan variables.

Simple Tuition is a company that provides information about student loans. They are not a lender. They partner with lenders to provide students, parents and financial aid professionals with timely accurate loan information.

Due to these troubled times the people at Simple Tuition are now offering a new tool to help decipher the private student loan process and compare interest rates, benefits and other factors of these products. The features of this site include the following:
* Listing and comparison tools for certified private student loans only
* Variety and diversity of loans and lenders to provide students with choice
* Loans from both SimpleTution partners and non-partners
* All loans treated equally in the display (regardless of any relationship with SimpleTuition)
* No federal loans...that will be left to the financial aid officers
* Real-time lender and loan information - they'll keep up with lender status and pricing changes in the market that can occur on a daily basis.

I have checked out the site and found it extremely thorough. You know my moto, "If you don't have to borrow, great, if you do, know what you're borrowing"
Check it out for yourselves and let me know what you think: www.CertifiedPrivateLoans.com

Some information on more changes for 2009-2010!!

2008-04-22T13:39:00.001-07:00

In previous entries, I had discussed some of the changes that will result from CCRAA of 2007(College Cost Reduction and Access Act) After onsite federal training last week, in addition to the information presented about the TEACH Grant, I came back with additional information.

Most of the information will affect financial aid programs administered beginning with the 2009-2010 year. Some of the changes are as follows:

*In calculating the EFC (Expected Family Contribution)total income will exclude distributions from qualified education benefits that are not subject to Federal income tax.

*The following benefits will be excluded when requesting income about untaxed income and benefits:
1. additional child tax credit claimed
2. welfare benefits including TANF
3. earned income credit
4. special fuels credit
5. foreign income tax exclusion
6. untaxed social security benefits

*When determining the Independent Student Definition the following additional categories have been listed as students who will be considered as independent.
1. Orphan, infoster care, or a ward of the court at any time when the student was 13years of age or older.
2. An emancipated minor or in a legal guardianship as determined by the court.
3. An unaccompanied youth who is homeless or who is at risk of homelessness and is self supporting.

* In terms of assets for dependent students, qualified education benefits are now reported as assets of the parent, even if the student owns the qualified tuition benefit.

Please note: NEW SCHOLARSHIP INFORMATION!!! For students going into health related programs, TYLENOL will be offering scholarships that total $350,000. Please click on the site to get more information: http://www.tylenol.com/page.jhtml?id=tylenol/news/subptyschol.inc#

The new TEACH Grant!!!!

2008-04-15T17:02:00.000-07:00

The TEACH (Teacher Education Assistance for College and Higher Education) Grant is a new program created by Congress as a result of the CCRAA (College Cost Reduction and Access Act) of 2007.

This program will provide grants to students of up to $4000 per year for a total of $16,000. However, in exchange for receiving the grant, students must agree to teach in a high-need field in a school that is located in a low income area. The student must complete four years of teaching full-time within the first eight years that they are out of college. If a student changes their major and fails to become a teacher or does not meet the teaching requirements of this program, the grant will turn into a Federal Direct Unsubsidized Stafford Loan. The student must then repay this loan to the U.S. Department of Education. The student will be charged interest from the date the grant(s) was disbursed. You can see why some people in the financial aid community are referring to this as a "GROAN" rather than a grant!!!

The program is available for the 2008-2009 academic year, but schools must choose to participate in the program. Some schools are going to wait a year because the final regulations won't be posted until July and schools don't feel they would have enough time to implement the program effectively.

Below is information directly from the federal government regarding the TEACH Grant. I would not recommend this grant for individuals who think they might want to teach, but aren't quite sure or they could be stuck with a $16,000 loan!!!!

Student Eligibility Requirements
To receive a TEACH Grant you must meet the following criteria:

Complete the Free Application for Federal Student Aid (FAFSA), although you do not have to demonstrate financial need.
Be a U.S. citizen or eligible non-citizen.
Be enrolled as an undergraduate, post-baccalaureate, or graduate student in a postsecondary educational institution that has chosen to participate in the TEACH Grant Program.
Be enrolled in coursework that is necessary to begin a career in teaching or plan to complete such coursework. Such coursework may include subject area courses (e.g., math courses for a student who intends to be a math teacher).
Meet certain academic achievement requirements (generally, scoring above the 75th percentile on a college admissions test or maintaining a cumulative GPA of at least 3.25).
Sign a TEACH Grant Agreement to Serve (see below for more information on the TEACH Grant Agreement to Serve).

High-Need Field
High-need fields are the specific areas identified below –

Bilingual Education and English Language Acquisition.
Foreign Language.
Mathematics.
Reading Specialist.
Science.
Special Education.
Other identified teacher shortage areas as of the time you begin teaching in that field. These are teacher subject shortage areas (not geographic areas) that are listed in the Department of Education’s Annual Teacher Shortage Area Nationwide Listing. To access the listing, please go to http://www.ed.gov/about/offices/list/ope/pol/tsa.doc.

Schools Serving Low-Income Students
Schools serving low-income students include any elementary or secondary school that is listed in the Department of Education’s Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. To access the Directory, please go to https://www.tcli.ed.gov/CBSWebApp/tcli/TCLIPubSchoolSearch.jsp.

TEACH Grant Agreement to Serve
Each year you receive a TEACH Grant, you must sign a TEACH Grant Agreement to Serve that will be available electronically on a Department of Education Web site. The TEACH Grant Agreement to Serve specifies the conditions under which the grant will be awarded, the teaching service requirements, and includes an acknowledgment by you that you understand that if you do not meet the teaching service requirements you must repay the grant as a Federal Direct Unsubsidized Loan, with interest accrued from the date the grant funds were disbursed. Specifically, the TEACH Grant Agreement to Serve will require the following:

For each TEACH Grant-eligible program for which you received TEACH Grant funds, you must serve as a full-time teacher for a total of at least four academic years within eight calendar years after you completed or withdrew from the academic program for which you received the TEACH Grant.
You must perform the teaching service as a highly-qualified teacher at a low-income school. The term highly-qualified teacher is defined in section 9101(23) of the Elementary and Secondary Education Act of 1965 or in section 602(10) of the Individuals With Disabilities Education Act.
Your teaching service must be in a high-need field.
You must comply with any other requirements that the Department of Education determines to be necessary.
If you do not complete the required teaching service obligation, TEACH Grant funds you received will be converted to a Federal Direct Unsubsidized Stafford Loan that you must repay, with interest charged from the date of each TEACH Grant disbursement.

Additional Guidance and Implementing Regulations
The Department of Education will publish regulations to implement the TEACH Grant Program after providing an opportunity for public comment in accordance with legal requirements.

IMPORTANT REMINDER
If you receive a TEACH Grant but do not complete the required teaching service, as explained above, you will be required to repay the grants as a Federal Direct Unsubsidized Stafford Loan, with interest charged from the date of each TEACH Grant disbursement.

Next Steps
If you are interested in learning more about the TEACH Grant Program, you should contact the financial aid office at the college where you will be enrolled to find out if they will participate in the TEACH Grant Program for the 2008-2009 school year.

Disclaimer
This fact sheet provides a preliminary summary of the TEACH Grant Program based on the College Cost Reduction and Access Act of 2007. The information in this document is subject to change and is not binding on the Department of Education.

Negotiating a financial aid award package!!!

2008-04-10T06:10:00.000-07:00

Decision time is looming near for high school seniors to make their fall 2008 college selection. As mentioned in the previous entry, most financial aid award letters should have been received by now and comparison activities should be taking place.

However, suppose the student really wants to go to School A, but received a slightly better financial aid package from School B. There is nothing wrong with calling School A, discussing the financial aid award package with a financial aid officer and explaining that the student really wants to come to School A and it is their first choice, but School B is making it a bit more affordable due to a variation in School B's financial aid award package. School A may offer to re-evaluate the award package offered to the student and make some adjustments to have their award package comparable with School B. However, be aware that the limitation of funds could make this adjustment impossible and a school is not required to do this. But with anything else, it never hurts to ask. You could be pleasantly surprised. Also, realize that no school will eliminate all loans and replace them with grants just to get the student to attend their institution. It just isn't realistic.

More information about the new federal TEACH Grant coming soon as I will be viewing a federal Webinar this afternoon.

Award letters are in the mail!!!

2008-04-05T15:13:00.000-07:00

For many freshmen and returning college students, they will be notified shortly, if not already, of their financial aid for the 2008-2009 academic year. For returning students, hopefully, there will be few surprises, as many students are counting on as much if not more aid for the following academic year.

For soon-to-be freshmen, the financial aid award letter can be the decision maker as to where they will attend college for the next four years. Financial aid awards will be determined anywhere from mid March through April. Most schools will require a decision and a deposit from students by May 1st in order to confirm Fall 2008 enrollment.

Hopefully, students and parents will sit down together and evaluate all of the award notifications to insure a good financial fit for the family, where ever the student decides to enroll. I would encourage that when looking over the award notifications, students read the fine print. They should make sure whatever grants or scholarships they are awarded in their freshman year are renewable. They should also understand the criteria needed for renewability. If the maintenance of a certain grade point average is needed, the student needs to be aware of it. If loans are part of the financial aid award package (and for most, they will certainly be), begin learning about the various types of loans and the process now, so when it is time, you can understand and make good choices regarding the student loan debt you are assuming.

In an subsequent entry, I'll discuss bargaining with the financial award notifications.

Trying times for funding a college education!

2008-03-27T15:04:00.000-07:00

It is rare today to turn on the television or radio and NOT hear bad news about the economy. From the subprime mortgage crisis, to high oil prices to the erratic stock exchange, there is troubling economic news at every turn.

There is increasing concern by students and parents about the affordability of a college education and questions regarding the availability of student loans. We have been assured, as well as college presidents across the country, by Margaret Spellings, the U.S. Secretary of Education, that there will be federal funding for grant, federal loan and work programs for students across the country. Although there have been several lenders recently that have pulled out of the federal student loan market, Spellings eases concerns by saying,"I want to reassure you that federal financial aid - grants, loans through both the Federal Family Education Loan (FFEL) and Direct Loan Programs, and work-study - will continue to be available to your students and their families. There are more than 2,000 lenders that originate loans in the FFEL Program. While a few lenders have chosen or may choose to reevaluate their continued participation in this program, we expect other lenders will actively compete for this loan volume and ensure that a competitive, efficient, and comprehensive FFEL Program continues to provide a variety of lending options, foster innovation, and improve customer service."

That being said, there is a great deal of fear and worry out there regarding funding for education and especially loan funding. To provide some clarification and accurate information on this issue, the Student Loan Network (www.studentloannetwork.com) will be providing a podcast addressing these many issues. Click here to check it out and register for the free presentation!!!

Many financial aid topics and daily podcasts!!

2008-03-22T15:26:00.000-07:00

As you know I have mentioned the Student Loan Network in many entries. I find the information on their website extremely valuable. The site (www.studentloannetwork.com) not only includes information about student loans, but other critical financial aid information.

The podcast gives day to day information regarding the critical, often political world of student loans and student financial aid. On a most recent podcast, (I had also gotten this information in an e-mail)it was announced that HSBC, M&T Bank and TCI Financial will no longer be participating in the Federal student loan programs. These banks have had to pull out due to recent congressional legislation that has limited fees and funding to these establishments for the administration of the federal student loans.

For more great up to date info including "Free stuff Fridays", Play the daily podcast by going to the top of this blog and click "Play my show on your site"!! You can choose from any of the podcasts listed and sit back, enjoy and learn!

New aid policies are in place for many Ivy League schools

2008-03-16T13:46:00.000-07:00

Many of the nation's Ivy League schools are revamping their financial aid practices to assist middle and upper middle class income families afford tuition at these high priced institutions. For example Brown University will expand the amount it spends on financial aid by 20%. Students from families earning less that $60,000 will not have any educational contribution. Students will then demonstrate more financial need which the college is hoping to meet.

Brown, Harvard, Yale and Stanford are all institutions, in addition to others, that have come under the scrutiny of the federal government for the huge endowments they possess, but under utilize. The federal government feels these universities can well afford to help more middle income high achieving students in their quest for a higher education.

Many colleges are adjusting their aid policies to include more funds from their endowments because through congressional hearings, many have expressed distaste for the colleges and universities that hold onto their multi billion dollar endowments, while students battle increasing tuition increases and spiraling student loan debt.

So if you are interested in these prestigious colleges, and have been reluctant to look further because of the increasing costs, look now. These institutions of higher education can become well within your financial reach.

Legislative Forum!!!

2008-03-08T11:44:00.000-08:00

I apologize for the delay in this posting, but it has been quite a week. I was in Albany(in New York, for my out of state readers)participating in the Legislative Forum. This is a consortium of various higher education interest groups and we spend the day speaking to legislators from our individual districts. I was able to speak directly to the Senator and Assemblyman of the the district where I work, and both were gracious, receptive and supportive of higher education funding issues.

However, the reality of the situation is that money is tight, especially in New York State. We are facing a $4 billion dollar deficit state wide. So while I am grateful and enthusiastic about the support that legislators are giving for higher education funding, it is more than likely that no program funding will be increased and some may face severe cuts.

I believe that this is a reflection of what will occur nationwide as well. With a weakening national economy, higher energy costs, the decreasing value of the dollar in foreign markets, the picture is bleak. Unfortunately, many of the programs that are cut are usually programs that deal with education funding, because there is a delay in the return on that dollar for dollar investment and politicians want to get the most bang for their buck in the quickest way possible. Remember, they are always looking to that next election.

In these difficult economic times, it becomes even more important for students and families to understand financial aid and the other financial opportunities that are available for higher education. Read, listen and learn....it will save you money and help your dreams for a higher education to come true.

I will post the newest scholarship opportunities as soon as they become available to me. In the meantime feel free to download your own scholarship manual from the Student Loan Network!!!

A tip for completing the FAFSA

2008-02-29T08:39:00.000-08:00

I recently completed a tax based financial aid workshop that went over the appropriate information to be used on the FAFSA from the tax documents we have. One of the areas that most filers complete incorrectly is the item that relects "income earned from work". When completing this question on the FAFSA, most people will use line 1 of their W-2 form, where it states, "wages, tips and other compensation". However, the box on the W-2 form that should be used to complete this FAFSA question is box 5. In many cases, this amount will be the same as box 1, especially if there is no contribution to a tax deferred savings or retirement plan. However, if there is a difference, you always want to use the higher number, which is represented in Box 5 because that figure is utilized to determine the FICA allowance in the EFC (Expected Family Contribution) formula. The higher the amount earned from work, the lower the EFC.

For those readers in New York State, I will be at the Legislative Forum in Albany on Tuesday, March 4, 2008. Myself and other financial aid representatives will be meeting with state legislators to air concerns regarding funding for higher education in New York. I look forward to letting you know about the experience.

Some new scholarship news!!!

2008-02-22T11:07:00.003-08:00

I was recently notified about some new scholarships available through ScholarshipExperts.com. This is a scholarship search database and there are a couple of specific scholarships that you can apply for without searching. They are:

The "All About Education" $5000 Scholarship. According to ScholarshipExperts.com, one $5000 scholarship will be awarded to the student who writes a short essay (250 words or less) about the following online topic, "How will a $5000 scholarship for education make a difference in your life?"

The other scholarship is called The "Superpower" Scholarship and five students will each receive a $1000 scholarship. The winners of this scholarship will be chosen based on their responses (250 words or less) regarding the topic "If you were granted the superpower to manipulate time, how would you use it and why?"

You can apply for both scholarships online. The first mentioned scholarship has a deadline of April 30, 2008 and the second mentioned scholarship has a deadline of March 31, 2008. So start thinking and start writing. You could be a winner!!!! It's definitely worth a try!!!

Financial Aid Podcast broadcast link below

2008-02-16T14:10:00.000-08:00

Well, I hope everyone has recovered from their Valentine's celebration and are enjoying, what is for most, a three day holiday weekend. If you have either completed the 2008-2009 FAFSA or completed your 2007 returns, its a great weekend to do so.

As mentioned a couple of entries back, I taped an interview with Christopher Penn from the Student Loan Network and that interview has just been released for podcast. However, you don't have to own an IPOD to here it. Just click on the link below and you will be able to access the interview. Hopefully there is information from both Christopher Penn and myself that will be of use to you during the financial aid process.

Click here to check it out!!!
Enjoy and please let me know if you have any questions or comments!!!

Tax benefits for college expenses

2008-02-12T14:33:00.000-08:00

In addition to financial aid, there are federal tax benefits that are available to students and parents relating to tuition and other educationally related expenses. When they were first introduced, specifically the Hope Tax Credit, it was called the Hope Scholarship, when in actuality, it is not a scholarship at all, but a tax credit. That's the best kind of tax savings, as it is not a deduction from income, but rather a true deduction from your tax liability. Of course there are specific IRS regulations and guidelines which must be met in order to qualify for the various credits. I have included the link from the NASFAA (National Association of Student Financial Aid Administrators) which will provide you with up-to-date accurate information of the various types of credits and tax advantages. Click here to get to the NASFAA page.

The Teach Grant for 2008-2009

2008-02-10T15:07:00.000-08:00

The College Cost Reduction and Access Act of 2007 put into place many new financial aid regulations. Most changes and new programs will be effective for 2009-2010, however one specific grant program will begin with 2008-2009 academic year. This is called the TEACH Grant Program. The actual name of the grant is the Teacher Education Assistance for College and Higher Education (TEACH) Grant Program. This program was put into place to benefit current and prospective teachers. The program has many good features, such as up to $4000 per year in grant monies, however, if a student does not meet the service requirements of the grant, meaning that they must full-time for 4 years within 8 years of completing a teaching program, the grant monies they received would be converted to a Direct Unsubsidized Stafford Loan, which could significantly increase a student's overall loan volume.

There are many other features of the program of which a student must be aware. I am featuring the link to this program, from the Department of Education's webpage so you can get a better overall idea of the grant benefits and requirements. Check it out here.

Back from Washington!!!

2008-02-07T10:25:00.000-08:00

Well, I arrived back from Washington DC on Tuesday, 2/5. The trip was fantastic and "negotiated rulemaking" is democracy at its finest. As mentioned in entries pretty far back, President Bush signed the CCRAA of 2007 (College Cost Reduction and Access Act of 2007) in September. In negotiated rulemaking, the Department of Education sits with about 20 other people (the negotiators) representing various constituents and hammer out the language of the exact legislation, so that it is implemented as the law was intended. This is a fascinating process. The object of the process is to arrive at consensus, meaning all parties don't have to agree totally on everything, but they "can live with" what has been decided. The issues that were on the table in this session regarded student loan repayment options, loan forgiveness and other student loan related issues. The days are long, beginning at 9:00 am and going until 5:00 pm and often the meeting breaks up so that various groups can go into caucus, which is very interesting. As college representatvies, we were allowed and encouraged to bring issues to the negotiators so that they could be brought to the table and discussed with the Department of Education representatives. As a result of this process, I have agreed to be part of the Legislative Forum in New York State, which will take place on 3/4 and 3/5. During this forum, we meet with legislators and/or their aides to go over the importance of New York State financial aid programs and the impact of these programs on the students in New York State.

Also, please take a look at this month's issue of Finanical Aid News. There is some great information about College Goal Sunday, which has been held in Massachusetts, but will be held this Sunday, February 10th in New York State, for students and their families. Check out the website here for more info!! There is also some update scholarship information that is always important to check out!!!

Check some entries soon where I will be providing some information and insights regarding additional financial aid changes beginning in the 2008-2009 year.

If you have any FAFSA, CSS Profile, or EFC (Expected Family Contribution) questions, feel free to let me know!!!

Off to Washington DC

2008-02-02T16:31:00.001-08:00

The trip to Washington DC that I mentioned a couple of entries back is all set. I'll be flying out tomorrow...yes, I will be away for the SuperBowl!!! On Monday we will be involved with Round 2 of negotiated rule making regarding student loans. I'm excited to be part of the process and I'm anxious to return and share what I have learned regarding the implementation of new regulations that will be coming down the line. I'll be away for a few days, although I don't know how many congressional representatives we will actually interact with. With Super Tuesday being on 2/5, I would imagine that many senators and congressmen will be in their home states fighting for either the red or the blue!!!

The podcast taping went well and when I know when it will be broadcast, I'll be sure to let you know. This podcast is a production of the Student Loan Network which I have mentioned in several entries.

Just as an update, feel free to download the free scholarship search book put out by Student Loan Network. It's free and full of great information!!!