What’s Trending in College News?

Check out what’s trending in college news over the last month.  Here are some highlights from Twitter, Newspapers, Magazines, Blogs, and other publications over the last month.  The hot topics include College Admissions advice, Financial Aid tips, Student Loans, and Social Media and how it impacts college students.

 

MOOCs in 2013: Will the trend continue in 2014?  http://ow.ly/s3OZA

Confessions of a College Application Reader.  What are colleges looking for?  http://ow.ly/s3N7E

For Homeless Students, College Enrollment Means A Roof Over Their Heads.  http://ow.ly/s3G33

College Admissions: Early Admission Apps Soared for Class of 2018.  http://ow.ly/s2cUa

Financial Aid for the College bound? Get ready for puzzle of federal financial aid.   http://ow.ly/rZkz6

Social Media and Students – Has it turned into a virtual marketplace or business, art, and fashion?  http://ow.ly/rYM8H

College Applicants – The Six Most Common Blunders of College Applicants.  http://ow.ly/rWlmh

College Acceptance - This Young Man With Down Syndrome Just Got Into College.. His Reaction Will Make Your Day. http://ow.ly/rUDiw

Higher Ed Trends – Higher Education Trends Worth Watching in 2014.  http://ow.ly/rRKjm

Financial Aid – 11 strategies for getting financial aid http://ow.ly/rPlKy

Student Loans – Study: Student Debt Squeezes Middle Class the Most.  http://mrkt.ms/Tq

 

Tips on Getting the Most Financial Aid – Act Now!

This is the time of year when colleges are visiting high schools, college fairs are in full bloom, and college applications are getting filled out.  They are enticing students with glossy brochures containing beautiful pictures of the campus and facilities.  Students are being flooded with mailers and invitations.  Colleges and universities want students!  And there is constant mention of all the financial aid that is available. 

 So, with all of the money being offered, why are student loans reaching unprecedented levels?  (Check out this link for the student debt clock) Could it be possible these beautiful packets, mailers and invitations don’t tell the whole story.  It’s like a tug of war.  Colleges and universities are always looking at ways to increase net tuition revenue so there has to be a balance with financial aid awarded.  It’s your responsibility to understand the complexities of the financial aid system to take advantage of ALL of the options available to you to maximize financial aid and reduce your college loan debt.  Take the time to make your financial aid award a predictable one and not a random chance of success!

We understand getting financial aid is a difficult process that can lack transparency at times and can be oversimplified by neglecting all the details.  In order to have successful financial outcomes, it’s necessary to take the additional steps.  Consider the following steps as an integral part of your plan to get financial aid:

Tax Benefits for Education.  The cost of college may be reduced through the use of tax deductions and tax credits.  There are a range of options available for individuals as well as businesses.  Consider the following:

  • The American Opportunity Tax Credit.  In many cases a family may not qualify for the tax credit due to exceeding the income limits.  Taking the right steps to qualify may be simple or take additional research.  Many income reductions for retirement plans have specific limits on deductibility.  Certain plans (not subject to government limits) allow a 90% maximum reduction.  The end result is an additional $2,500 per year. 
  • Pay attention to your Qualified Expenses.  At times a scholarship may disallow another deduction or tax credit .  For example, the Hope Scholarship may use 100% of the Qualified Expenses.  The result may be a loss of a $2,500 tax credit. The  Tax Free benefit of 529 plans may also be negated in a similar situation.      
  • It may also be possible to take advantage of a $5,250 tax-free benefit (or income exclusion) through your employer or business ownership.  For more details on the Section 127 Employer Tuition Remimbursement see IRS Publication 970 for details.

Understand the two methods and more.  Determine your expected family contribution (EFC) using the federal methodology (FM) and institutional methodology (IM).  At the $100,000 income level, the IM was $4,400 lower than the FM.  This could provide savings of $17,600 over a 4 year period.

Change your perspective on Financial Aid.  The direction that families are taking may not be the one that yields the most money.  Many families that never thought they can qualify for need based aid may now be able to.  With the cost of college surpassing $62,000 per year, even an income over $200,000 will allow you to qualify for need-based aid.

Following the Right Path.  When it comes to college planning, reverse the trend.  With student debt reaching unprecedented levels, consider a new approach by determining your financial plan first then select your desired schools.

Our process which we call EFC Path is the most efficient financial path.  Imagine starting with a core group of schools that will provide you with the greatest financial advantage.  The EFC Path takes into consideration the different EFC formulas, the student’s profile, family profile, and balance in the components of the EFC.  The proper balance in the EFC coordinates asset ownership, asset distribution, taxation of assets, cash flow, and more while assuring the EFC calculation is reasonable and taking full advantage of available financial aid.  We feel strongly that because the cost of an education is so expensive these days it’s necessary to take advantage of other pools of funding and not have you shoulder the entire burden.  There will be more about the Six Pools of Funding in the coming months.         

The end result is getting the best value in a school by tailoring it to the student and their family.  This allows a family to expand the options they thought were possible and consider private schools that were once out of reach.  It is entirely possible to get the cost of a private college comparable to an in-state public university.

Simple questions may pay big dividends.  When you first look at a question on FAFSA, CSS/Profile, or Institutional Application the answer may immediately come to mind.  Assets such as Real Estate and Trusts may need clarification.  For example, a piece of Real Estate may be valued based on an independent appraisal, tax assessment, fair market value, recent sales comps, etc.  There may be a wide swing in values.  A $50,000 difference could cost you an additional $10,000 for college. 

Pay close attention to dates.  This applies not only to application deadlines or submitting financial aid forms.  It is important to get a form like the FAFSA filled out early and filed by the middle of January.  Financial aid is distributed on a first come first served basis.  When reporting asset values such as cash, does the form ask for a year end value or a value as of the filing date?  Let’s say you pay all your bills the beginning of the month and you use a value at the end of the prior month.  You could be artificially inflating your cash position!    

Don’t forget to exhaust all of your options.  These tips mentioned here can save you thousands or more per year in financial aid.  Contact College Plan 101 for expert financial aid advice.  You can also get daily advice by following @Collegeplan101 on Twitter.

Always consult with your Tax Professional or Financial Professional before implementing any strategies.   

Twitter Highlights and Planning for College

 

Check out these Twitter highlights over the last month.  The top tweets over the last month are related to social media.  Learn more about what forms of social media students are using and the impact of the changing social media environment on college admissions.   

 

Student Volunteers - Looking for Top Youth Volunteers of 2014. Prudential and NASSP honor outstanding student community service. mrkt.ms/1aDb0rd

 

Homeschooling Curriculum - Tutor.com rated as Top Homeschooling Curriculum for 2013 by Homeschool.com Readers. mrkt.ms/163VuF0

 

Giving Back - Student Performed 22 Random Acts Of Kindness For Her 22nd Birthday. mrkt.ms/19Kv4a6

 

Best College Food - 60 Best Colleges for Food in America for 2013. Bowdoin #1, Washington Univ. #2, VA Tech #3, Emory #4, UGA #23 mrkt.ms/1bJC0ZG

 

Apps for the Socially Conscious - 10 Empowering Apps for Social Good bit.ly/1fi5zkT

 

Students and Credit – 5 Credit Killers for College Students – mrkt.ms/1baQ27t

 

Students and Social Media - What College Students Should Be Wary of Posting on Social Media from an industry-leading online reputation mgt firm. online.wsj.com/article/HUG173…

 

Scholarships - Living the American Dream – Great story about a student paying for college with lots of scholarships! mrkt.ms/15l7dem #scholarships

 

College and Social Media - College admissions use social media to evaluate applicants. mrkt.ms/16Q33Pp

 

Colleges and Social Media - Colleges offering social media as a major. Students see the need for social media classes. mrkt.ms/1bugCrn

 

99 Tips on College Life, College Money, and Financial Aid

Don’t underestimate the power of social media when it comes to planning for college.  The amount of information using Twitter or other forms of social media is overwhelming.  The use of social media makes this a dynamic process that can change in a second.  The information that is compiled here includes highlights on a variety of college planning topics over the last few months.  Many of the tips have been sent through Twitter (@CollegePlan101) to provide up to date college and financial aid information

Here are the 99 Tips on College Life, College Money, and Financial Aid:

10 Essential Items for the Healthy College Student – http://www.usatodayeducate.com/staging/index.php/campuslife/10-essential-items-for-the-healthy-college-student

 5 tips for fighting homesickness while at college – http://blog.collegeprowler.com/2013/07/one-student-offers-5-tips-for-fighting-homesickness-while-at-college/

 6 Ways to Score Extra Cash Without Leaving Your Dorm Room – http://www.usatodayeducate.com/staging/index.php/campuslife/6-ways-to-score-extra-cash-without-leaving-your-dorm-room-2?sf15593235=1

4 Mistakes I Made with My Student Loans and How You Can Avoid Them http://go.usa.gov/jEY3 

4 Ways Your College Classes Will Be Different From Your High School Classes http://ow.ly/nnWOW 

The Hidden Costs of College & How to Budget For Them. http://ow.ly/nnX2I 

The best advice for high school graduates entering college – Get on the Dean’s list and apply for every scholarship  http://canadafreepress.com/index.php/article/56685

10 Colleges With Cheap Out-of-State Tuition  - http://www.usnews.com/education/best-colleges/paying-for-college/slideshows/10-colleges-with-cheap-out-of-state-tuition?int=8c6e90

Helping college students choose the right major - http://www.thevillagenews.com/story/72259/

10 Colleges With the Best Perks  -  http://www.hercampus.com/high-school/preparing-college/10-colleges-best-perks

Where to start your summer search for colleges and financial aid  -http://www.oregonlive.com/finance/index.ssf/2013/06/where_to_start_your_summer_sea.html

Best Flagship Universities For The Money -  http://www.huffingtonpost.com/2013/07/10/best-flagship-universities_n_3558753.html?utm_hp_ref=college

Cooking basics for the hungry college freshman - http://www.tampabay.com/things-to-do/food/cooking/cooking-basics-for-the-hungry-college-freshman/2128352

6 questions to boost college financial aid - http://www.bankrate.com/finance/college-finance/questions-boost-college-financial-aid-1.aspx

College scholarships: Student received 34 scholarships worth $1.3 million – http://articles.philly.com/2013-06-16/news/39994559_1_app-college-scholarships-christopher-gray   

STEM Scholarships Abound for Aspiring Scientists - http://www.usnews.com/education/blogs/the-scholarship-coach/2013/06/20/stem-scholarships-abound-for-aspiring-scientists   

Tips on how to fill out FAFSA and get financial aid - http://www.voxxi.com/fafsa-college-financial-aid/

College Advice: 100+ Tips for Survival – Student Finance Tips  http://www.campusgrotto.com/college-advice-100-tips-for-survival.html

Cutting College Costs – Yahoo Movie    http://finance.yahoo.com/blogs/cost-of-living/cutting-college-costs-133151433.html?vp=1

Common Student Mistakes in Financial Aid – And How to Avoid Them – http://www.distance-education.org/Articles/Common-Student-Mistakes-in-Financial-Aid—And-How-to-Avoid-Them-563.html

Secrets of the Most Successful College Students - http://ideas.time.com/2013/03/13/secrets-of-the-most-successful-college-students/

College Bait and Switch - http://www.thecollegesolution.com/beware-of-the-college-bait-and-switch/

Low Interest Student Loans (4%) for Women - http://studentaidfoundation.org/

$250M for Merit Scholarships at Centre College – “full ride plus” scholarships http://www.insidehighered.com/quicktakes/2013/07/31/250m-merit-scholarships-centre-college

How to Declare Your Independence for Student Financial Aid – http://www.dailyfinance.com/2013/07/22/how-to-declare-your-independence-for-student-financial-aid/

Clinch a Great Financial Aid Package.  Know how colleges calculate need, and then speak up – http://www.usnews.com/education/best-colleges/paying-for-college/articles/2012/09/24/clinch-a-great-financial-aid-package

4 Stubborn Financial Aid Myths – http://www.thecollegesolution.com/4-stubborn-financial-aid-myths-2/?utm_content=buffer6d40e&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer

Money-Saving Tips For College-Bound Teens – http://modoration.com/2013/05/13/money-saving-tips-for-college-bound-teens/

Is This College Worth It? Payscale.com’s Worst College ROI List – http://www.huffingtonpost.com/2013/05/08/college-worth-it-worst-roi_n_3238519.html?utm_hp_ref=college&ir=College#slide=2426087

8 Ways to Save Money on College Textbooks – http://money.usnews.com/money/blogs/my-money/2013/07/26/8-ways-to-save-money-on-college-textbooks?google_editors_picks=true

10 college majors with the best salaries – http://money.msn.com/saving-money-tips/post–10-college-majors-with-the-best-salaries#scpshrtu

How to cut back on college costs – http://www.usatoday.com/story/money/personalfinance/2013/07/10/back-to-college-save/2506173/

Family Finance: Saving on college application fees – http://www.wtoc.com/story/19847624/family-finance-saving-on-college-application-fees?utm_source=twitterfeed&utm_medium=twitter

Where the Full-Ride Sports Scholarships Are – http://www.thecollegesolution.com/where-the-full-ride-sports-scholarships-are/

6 Ways to Win an Athletic Scholarship – http://www.cbsnews.com/8301-505145_162-37242245/6-ways-to-win-an-athletic-scholarship/

Top Film Schools 2013  The Hollywood Reporter Ranking – http://mrkt.ms/18V77Rv

3 Tips for Getting the Most Money From Federal Financial Aid – http://www.payscale.com/career-news/2013/07/fafsa-facts-3-tips-for-getting-the-most-money-from-federal-financial-aid

15 Tips on Conquering Your College Freshman Fears – http://mrkt.ms/19yqpM6 

10 Ways to Save on College Costs – http://www.usnews.com/education/best-colleges/paying-for-college/slideshows/10-ways-to-save-on-college

5 Tips for Saving on College – http://www.ed.gov/blog/2013/07/5-tips-for-saving-on-college/?sf15504878=1

4 college scholarships you can apply for this summer – http://www.usatoday.com/story/news/nation/2013/06/07/college-scholarships-summer-deadlines/2401827/

11 Scholarships with Deadlines in August - http://www.cappex.com/blog/scholarships/11-scholarships-with-deadlines-in-august/

10 Tips College Freshmen Should Know (Free textbooks) - http://www.usnews.com/education/best-colleges/slideshows/10-tips-college-freshmen-should-know

Spend your money for college wisely! The 10 most important factors in selecting a college.

 

So when you’re in the process of looking for the right college what do you look for? 

 

 

 

Here are 10 of the most important factors: 

  1. Job Placement
  2. Location
  3. Size of School
  4. Student/Faculty Ratio
  5. Special Programs
  6. Religion
  7. Retention
  8. Faculty with PhDs
  9. Campus Safety
  10. Graduation Rates  

We will take a deeper look into the graduation rates of two more states.  We are finishing up the comparison of 4 year graduation rates in the Southeast Region.   The last state in the Southeast Region is Tennessee.  So we will need to move up to the Mid-Atlantic Region to find a competitor.   The nearest competitor is the state of West Virginia. 

 Today we will feature the states of Tennessee and West Virginia.   

Category

Tennessee

West Virginia

Private For Profit

23.4%

32.3%

Private Not For Profit

38.6%

36.7%

Public

17.9%

15.9%

 The Private For Profit category only included one school for West Virginia.    The state of Tennessee had better results in the Private Not For Profit category and the Public college/university category. 

Here are the top two schools in each state from this comparison.  

 

Tennessee

 

West Virginia

 

Private For Profit

 

 

 

 

 

ITT Technical Institute-Knoxville

66.7%

Salem International University

32.3%

 

South College

27.3%

 

 

 

 

 

 

 

Public College/University

 

 

 

 

 

The University of Tennessee

30.6%

West Virginia University

33.3%

 

The University of Tennessee-Martin

23.6%

Marshall University

23.8%

 

 

 

 

 

Private Not For Profit

 

 

 

 

 

Vanderbilt University

85.1%

Wheeling Jesuit University

53.1%

 

Sewanee-The University of the South

77.8%

Bethany College

47.4%

 Be on the lookout for the next competition. 

The statistics that are used for this study are from the NCES and Collegeresults.

Information about the comparison – Over the next few weeks we will be doing a state by state analysis of four year graduation rates.  The states will be broken down by region and each day two states will be compared.  The comparisons will include all of the colleges in that state and categorized as follows:

•             Private Colleges/Universities -  Not for Profit

•             Private Colleges/Universities – For Profit

•             Public Colleges/Universities.  

Three Key Questions to Ask When Considering a College? Today We Feature Mississippi and South Carolina

 

I’m surprised every time  I look at the graduation rates within a state and especially when looking at the wide range of graduation rates for individual schools.  We will continue our comparison of 4 year graduation rates in the Southern Region.  The Southeast Region will include the following states: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, South Carolina, and Tennessee

 Today we will feature the states of Mississippi and South Carolina.   

When looking at college graduation rates there are a few key questions every student should be asking.  These are important especially if the 4 year graduation rates look real low.  Here they are:

  1. Does your school offer a 4 Year Graduation Guarantee?  Many schools have started offering this program.  An additional year of college will cost tens of thousands of dollars. 
  2. Ask what is being done to improve the 4 year graduation rate if it appears low.  Understand what the trend has been and where it is going.  
  3. In what programs offered by your college/university do the majority of students graduate in four years?

Remember, this is one piece of the college puzzle and not the entirety.  Let’s take a look at the average graduation rates for the states of Mississippi and South Carolina. 

Category

Mississippi 4Yr. Graduation Rates

South Carolina 4Yr. Graduation Rates

Private For Profit

N/A

N/A

Private Not For Profit

32.7%

37.6%

Public

22.9%

31.7%

 

The Private For Profit category for Mississippi and South Carolina was not included due to a limited sample.    The state of South Carolina won both categories – Private Not For Profit and Public college/university. 

Here are the top two schools in each state from this comparison.   

 

Mississippi

 

South Carolina

 

Public College/University

 

 

 

 

 

Millsaps College

61.2%

Furman University

80.8%

 

Belhaven University

39.7%

Wofford College

78.3%

 

 

 

 

 

Private Not For Profit

 

 

 

 

 

University of Mississippi Main Campus

33.9%

Citadel Military College of South Carolina

63.3%

 

Mississippi State University

28.4%

College of Charleston

53.6%

 

Be on the lookout for the next competition. 

The statistics that are used for this study are from the NCES and Collegeresults.

Information about the comparison – Over the next few weeks we will be doing a state by state analysis of four year graduation rates.  The states will be broken down by region and each day two states will be compared.  The comparisons will include all of the colleges in that state and categorized as follows:

•             Private Colleges/Universities -  Not for Profit

•             Private Colleges/Universities – For Profit

•             Public Colleges/Universities.  

Are you looking at a college in Kentucky or Louisiana? Check out these stats!

Tomorrow is National Signing Day and many students are still agonizing over what school they should go to.  One of the factors in considering a school may be the graduation rate of the college or university they are considering.  Over the next few weeks we will be doing a state by state analysis of four year graduation rates.  The states will be broken down by region and each day two states will be compared.  The comparisons will include all of the colleges in that state and categorized as follows: 

  • Private Colleges/Universities –  Not for Profit
  • Private Colleges/Universities – For Profit
  • Public Colleges/Universities.   

We well start with the Southern Region of the U.S.  The Southeast Region will include the following states:

Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, South Carolina, and Tennessee

 Today we will feature the states of  Kentucky and Louisiana.   

Category

Kentucky

Louisiana

Private For Profit

N/A*

19.3%

Private Not For Profit

31.9%

37.5%

Public

19.9%

12.3%

 * Insufficent information on Private For Profit graduation rates. 

There will be no winner in the Private For Profit category since there was insufficient information for Kentucky.  The winner in the Private Not For Profit category is Louisiana.  The winner in the Public College/University category is Kentucky which makes this competiton a tie.   

 

Kentucky

 

Louisiana

 

Private For Profit

 

 

 

 

 

N/A

 

ITT Technical Institute-Saint Rose

22.2%

 

N/A

 

Herzing University

15.8%

 

 

 

 

 

Public College/University

 

 

 

 

 

Murray State University

37.6%

Louisiana Tech University

27.5%

 

University of Kentucky

32.9%

Louisiana State University and Agricultural & Mechanical College

26.2%

 

 

 

 

 

Private Not For Profit

 

 

 

 

 

Centre College

83.5%

Saint Joseph Seminary College

75.0%

 

Transylvania University

69.3%

Tulane University of Louisiana

58.5%

 

 Be on the lookout for the next competition. 

The statistics that are used for this study are from the NCES and Collegeresults.

The State of Florida vs. The State of Georgia – College Graduation Rates

It looks like the state of __________ has a decisive victory!  National Signing Day is approaching and many students are still agonizing over what school they should go to.  One of the factors in considering a school may be the graduation rate of the college or university they are considering.  Over the next few weeks we will be doing a state by state analysis of four year graduation rates.  The states will be broken down by region and each day two states will be compared.  The comparisons will include all of the colleges in that state and categorized as follows: 

 

  • Private Colleges/Universities –  Not for Profit
  • Private Colleges/Universities – For Profit
  • Public Colleges/Universities.   

We well start with the Southern Region of the U.S.  The Southeast Region will include the following states:

Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, South Carolina, and Tennessee

 Today we will feature the states of Florida and Georgia.   

Category

Florida

Georgia

Private For Profit

29.7%

20.2%

Private Not For Profit

36.1%

38.0%

Public

29.5%

16.3%

 

The winner in the Private For Profit category is Florida and the winner in the Private Not For Profit category is Georgia.  With the score tied the deciding category is the Public College/University graduation rate.  And the winner in this category is Florida with an average graduation rate of 29.5% compared to 16.3%.  The Public college/university sector in the state of Florida is doing  a better job of graduating students with an astounding 13.2% differential.  

 

Florida

 

Georgia

 

Private For Profit

 

 

 

 

 

Rasmussen College-Ocala

100.0%

Westwood College-Northlake

50.0%

 

Full Sail University

79.5%

Westwood College-Atlanta Midtown

33.3%

 

 

 

 

 

Public College/University

 

 

 

 

 

University of Florida

59.4%

University of Georgia

51.9%

 

New College of Florida

56.6%

Georgia College & State University

35.1%

 

 

 

 

 

Private Not For Profit

 

 

 

 

 

South Florida Bible College and Seminary

100.0%

Emory University

82.4%

 

Beacon College

73.3%

Spelman College

64.5%

 

 In this comparison it looks like Florida has come out on top!  Be on the lookout for the next competition. 

The statistics that are used for this study are from the NCES and Collegeresults.

What State has the best college Graduation Rates?

National Signing Day is right around the corner.  Many students are still agonizing over what school they should go to.  One of the factors in considering a school may be their graduation rate.  Over the next few weeks we will be doing a state by state analysis of four year graduation rates.  The states will be broken down by region and each day two states will be compared.  The comparisons will include all of the colleges in that state and categorized as follows: 

  • Private Colleges/Universities –  Not for Profit
  • Private Colleges/Universities – For Profit
  • Public Colleges/Universities.   

We well start with the Southern Region.  The Southeast Region will include the following states:

Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, South Carolina, and Tennessee

 We will start off with the states of Alabama and Arkansas.   

Category Alabama Arkansas
Private For Profit

18.2%

4.4%

Private Not For Profit

29.9%

34.2%

Public

17.0%

15.7%

 

The winner in the Private Not For Profit category is Arkansas and the winner in the Public category is Alabama.  The Private For Profit category is not a good comparison because there was only one school included for the state of Arkansas. 

We will also highlight the top 2 schools for each state in their respective categories.

The first category is Public College/University:

Arkansas

University of Arkansas                        34.5%

University of Central Arkansas          21.1%

 Alabama

The University of Alabama                 37.9%

Auburn University Main Campus       35.7%

In this battle of the Razorbacks versus the Crimson Tide.  The Alabama Crimson Tide is the winner! 

The next category is Private Not For Profit College/University:

 Arkansas

Hendrix College                                  53.9%

John Brown University                       52.4%

 Alabama

Heritage Christian University            66.7%

Birmingham Southern College          52.9%

As you can see there is a split decision on the winner.  Be on the lookout for the next competition.

Money and Affordability – Are These Topics Off Limits When Advising on Colleges?

The financial piece of the puzzle may not be looked at until it is too late!  How many schools have been recommended to a student by the time they’re ready to apply to colleges?  It’s likely that dozens of schools have been suggested by friends, counselors, teachers, and even by someone sitting at the table next to a student at a coffee shop.  The reality is that names of colleges are coming at the student from every direction.  The question then becomes ”How do these schools fit financially?”  In most cases the answer would be “I don’t know!’ or “We’ll wait to see if we get financial aid.”  I believe this approach has failed the majority of students.  I don’t think we’ll see a change in where the college recommendations are coming from although there needs to be a shift in the processes when recommendations are given by competent advisors.  In addition, the perception of those recommendations has to be elevated. 

Do the following statements paint a realistic picture of what’s taking place today?

  • Any discussion on money is taboo with most schools.
  • Those who advise on a family’s college selection have not had the training or familiarity with the financial side.
  • The primary objective of many schools is to get the student into the best college possible.  The brag list for the school focuses on names of top colleges.
  • This is an area that is glossed over or neglected by college admissions counselors.

This discussion is on College Access with Financial Aid Transparency.  When it comes to advising students on the right college, Is it possible to give advice without knowing the family’s or student’s Expected Financial Contribution (EFC).  Many times, college recommendations are given freely and without any tie to a family’s financial situation.  One of the first questions to ask is “What was taken into consideration when making that recommendation?”  Knowing what a family’s or student’s EFC is a necessity along with the following:  

 Graduation Rate It’s important to understand the graduation rate for the college or university you are interested in. The extra years can cost you a lot of money. Here are some comparisons: 

4 Year Graduation Rate

• University of Virginia (85%)

• Rhodes College (76%)

• University of Massachusetts-Amherst (52%)

• Spring Hill College (51%)

• Georgia College and State University (35%)

• University of North Florida (21%)

• University of Massachusetts-Boston (12%)

• Savannah State University (13%)

 Retention Rate The higher the retention rate the higher the likelihood the student will return after their freshman year.

 • Centre College (91%)

• University of North Florida (83%)

• College of Charleston (82%)

• University of West Georgia (74%)

 Financial Aid Formulas The two financial aid formulas used by the majority of colleges are the FAFSA,  also known as the Federal Methodology, and the CSS/Profile which is also known as the Institutional Methodology.

 Example: Expected Family Contribution with a household income of $50,000/year:

• $3,228 – Federal Methodology

• $2,694 – Institutional Methodology

This example uses income only and assets are excluded. In this case the Federal Methodology has the highest value which is not always the case.

 Qualifiers for Financial Aid When looking at colleges, consider the history, policies, and qualifiers for financial aid.

 Example: If the school has a history of giving out merit aid, it is likely the school will continue to give out merit aid. Check out the freshman class profile for the students that are admitted.

The discussion on College Access with Financial Aid Transparency provides a look into an area that may be overlooked by the majority of those who provide advice on college selection.  It identifies a specific process to help admission counselors evaluate a student’s or family’s financial profile.    When the financial side is overlooked the student loses.   It’s important to get back to the basics. 

One of the first steps is to identify the financial profile as follows:

  • Divorced or separated
  • Self employed or business owner
  • Change in employment
  • Change in financial situation
  • Low, Middle, or High income

Institutional Methodology, Federal Methodology, or a Hybrid?  What direction provides the lowest EFC.  Here are some actual examples that illustrate the importance of the EFC and the wide range of solutions: 

Business Owner – Married with 2 children

Federal Methodology (FM) Results

Parents’ Contribution for Student =$0

Student’s Contribution =$0

Total Estimated FM Contribution =$0

 

Institutional Methodology (IM) Results

Parents’ Contribution for Student =$39,798

Student’s Contribution =$1,800

Total Estimated IM Contribution =$41,598

 Based on the EFC noted above the school selection would include high quality schools with higher than average Cost of Attendance and only use the FAFSA.

 

Family of 4 with one child in school

Adjusted Gross Income    Federal Methodology     Institutional Methodology
$50,000 $3,228 $2,694
$75,000 $10,076 $8,227
$100,000 $18,225 $13,770
$125,000 $25,316 $19,559
$150,000 $33,817 $27,863

 

Assume an income of $100,000.  The school selection would include schools with a higher cost and use the CSS/Profile.

Begin with this process and you will find students you work with going to higher quality colleges, taking on less debt, and better employment opportunities.   

 

10 Key Steps for Maximizing Scholarships

With the majority of award letters coming out soon, families are looking to start locking in scholarship dollars.  This is the best time of the year to find available scholarships.  Don’t Wait, Act Now! 

Here are 10 Key Steps to maximize your financial aid opportunities.

 1. Start Early Don’t wait until the senior year in high school. Start in the freshman year and begin to get an understanding of what the scholarships are looking for. If you want to get a jump on the process, start to look for scholarships prior to high school. There are a variety of scholarships that are available to middle school age children and sometimes even younger children.

2. Application Deadlines Pay close attention to the application deadlines. Create a tracking list of scholarships you want to apply for.

3. Pay Attention to Details Make sure that you are providing everything the application is asking for. Include any supporting documentation or materials that are required.

4. Add a Personal Touch When writing essays make sure that you let your personality come through.  Determine what’s unique about you and communicate it. In addition to scholastic achievements consider including the following in your essay:

  • Community and volunteer activities
  • Club memberships
  • Sports achievements
  • Musical talents
  • Personal stories
  • Leadership roles

5. Prepare a Resume This is a great tool for organizing your activities and achievements.

6. Letters of Recommendation Ask a few people to prepare letters of recommendation for you. The letters can be used for scholarships and college applications. It’s best to have someone that knows you well prepare the letters of recommendation. You’ll want to have someone take a multi dimensional look at your life. Don’t forget to keep letters of recommendation current.

7. Scholarship Search Start your search with local scholarships and don’t ignore national scholarships. Don’t let the smaller scholarships get away. The smaller ones may be the building blocks for larger ones. Use a variety of methods and resources to search for scholarships. In addition to searching for scholarships on the internet consider the following:

  • Visit your library
  • Talk to your counselor at school
  • Pursue scholarships in your area of interest

8. Be Persistent Apply for at least 10 to 12 scholarships. Don’t apply for one or two and stop the process. You have already completed a lot of work so keep building on it. Be persistent in your search. You may look at a single scholarship offered by an organization and find out there are specific guidelines which you do not meet. Don’t quit! That organization may offer a variety of scholarships with different guidelines for each one

9. Make Copies Keep a copy of everything you submit.

10. Proofread Take time to review the essays and applications once they are completed. You may want to have someone else look them over to get another opinion.

Staging Your Financial House – 5 Tips to Maximize Financial Aid

When it comes time to selling a house you can improve your chances of the house selling by staging it.  Is it possible you can do the same with your financial house when it comes to financial aid?  You may be able to make your financial situation look better when it comes to financial aid.  It takes some work and knowledge to get it right but it can be worth it.  So when you’re preparing your financial aid forms make sure you clean up your financial house!  We’ll go over some tips to get you started.    

 
1) Assets and Your EFC – Here are some tips to consider when looking at assets. 

• Assets that are in the child’s name are assessed at a higher rate than assets in the parent’s name.  Consider spending down assets prior to filing your financial aid forms if you anticipate expenses in which you would use those accounts. 
• If you’re filling out the FAFSA, take a look at the EFC Formula to determine what the Asset Protection Allowance is.  The Asset Protection Allowance will change based on the age of the oldest parent filing the FAFSA.  By knowing the Asset Protection Allowance you can make sure you’re not spending down money that was excluded from the calculation.  

It’s always important to consider every aspect of your situation  (asset ownership, asset value, cash flow, tax impact, and financial aid impact) when making financial aid decisions.   

2) Know What Assets Should be Included or Excluded – When it comes to filing the FAFSA it’s important to know what assets should be included and what assets should be excluded.  This is also known as Assessable versus Non-assessable assets.  Here are some of the assets that are not assessed for financial aid purposes on the FAFSA: Retirement Accounts, Unexpended Financial Aid proceeds, Personal Assets, Annuities, Sibling Assets, and Personal Residence.   In the event you are also filling out the CSS/Profile they will want you to include Sibling Assets, Personal Residence, and some types of Annuities.

3) Filing Date Strategies – When filing your financial aid forms there are some key things to keep in mind.  Let’s say you’re filing your form on January 18th and you are using your balances from the end of the previous month.  It’s time to do some proactive planning to lower your Expected Family Contribution (EFC).  Go ahead and pay all of your bills and pre-pay other upcoming expenses to keep your cash balance and other asset balances as low as possible.  It’s important to know that you use your values as of the date of filing and not at year-end or other statement dates.

4) Retirement Plan Contributions – When it comes time to make contributions to your retirement plan you’ll want to know what can help or hurt your EFC.  By making a contribution to an IRA in 2013 (for Tax Year 2012) this will reduce your assets although it will not reduce your income for EFC purposes.  Any contribution made by an employer can reduce income and lower EFC.  If you own your own business it’s important to understand the type of retirement plan you have in place and the specific rules around contributions. 

5)  Pay Attention to Allowances -  The FAFSA form has a Social Security Tax Allowance.  See EFC Formula 2013 to 2014.  When computing the allowance it’s important to use Earned Income and not Taxable Income.  The higher the allowance the lower your EFC.  When planning for 2013, another option to consider is the Employment Expense Allowance.  With two working spouses you can increase your allowances up to $3,900.  Let’s say you’re a Sole Proprietor and you hire your spouse.  This hire could mean an additional $1,833 in financial aid ($3,900 times 47%).   

Financial aid is an important piece of a college plan.  Getting the right financial aid can help students afford a college they thought was unaffordable.  When the necessary financial aid is not available the remaining options for college may be less desirable and motivation can be affected. 

Keep in mind that 30% of all financial aid forms will be verified.  It’s important to be accurate when reporting your financial information! 

If you have additional questions on Financial Aid, send an email to info@collegeplan101.com.
  

 

 

Eight Days of Financial Aid Tips

With the Fiscal Cliff approaching this is a perfect time to cover financial aid tips that are available.  Some of these can be in jeopardy so it’s never too early to take advantage of them.  We also noted some education tax incentives that are available now and may expire with the Fiscal Cliff.

So what do these Financial Aid Tips mean to you.  For example, if you were to reduce your Adjusted Gross Income (AGI) by $20,000 you would reduce the assessed financial aid income by $9,400 (using the Federal Methodology at a 47% rate).  Over four years of college this can amount to $37,600 in financial aid.  That’s a lot of money!!!   Let’s put this money in your pocket!

Every day we will add another financial aid tip throughout the remainder of 2012.  The Financial Aid Tips will also be available on Twitter @CollegePlan101.  Here is the start of our countdown of financial aid tips:

Tip #1 - Tax Deduction for 2012- Reduce your AGI by taking advantage of Intangible Drilling Costs (IDCs).  Under Tax Code Section 469(c)(3)(B) investors in a domestic oil and gas drilling program can deduct intangible drilling costs, which may be in the range of 80% to 90% of the invested amount in the first year.  A diversified oil and gas program can have a multitude of wells in it to spread out risk, similar to a mutual fund having many stocks.  You have until 12/31/2012 to take advantage of this tax deduction for 2012*.

Tip #2 – Take the capital loss!- Get rid of the dogs and I don’t mean man’s best friend!  There may be a stock, bond, or other asset you have been holding on to that has not been profitable.  The IRS considers almost everything you own for personal or investment purposes as a capital asset.  This may include home furnishings, stocks, bonds, mutual funds, etc.   Typically, what you pay for the asset is considered the basis.  If you sell an asset for less than the basis you have a capital loss.  Be careful with mutual funds.  Sometimes you may have a capital gain during the year and still have a capital loss when sold*.  If this is your base year (student will be a college freshman in the fall) you will want to do all you can for financial aid purposes

Tip #3 – Asset Ownership- You can save thousands of dollars by having the right assets in the right ownership.  So how does this work!  Let’s assume you have $15,000 saved in your child’s name in a custodial account which can also be a UGMA/UTMA account.  Using the federal methodology this would increase your Expected Family Contribution (EFC) by $3,000.  Assume the same money was in the parent’s name, the asset would increase the EFC by $840.  This could amount to $8,640 in additional financial aid over four years!  Let’s make another assumption and say the value of the savings was under the parent’s asset protection allowance.  The savings could be the $3,000 times 4 years of financial aid or $12,000 in total.  Big savings for a small change!  So what do you do if the assets are in the child’s name?  Well, what about spending them down!.  Always consult with a professional*.

Other ideas involving asset ownership can include having assets owned individually or by a business.   What if you’re acquiring assets like real estate?  Have you thought of having those held by a custodian with your retirement assets?  Lots to think about!  We’ll have more tips over the next week.

Tip #4- Assessable versus Non-assessable assets- When it comes to filing the FAFSA it’s important to know what assets should be included and what assets should be excluded.  This is also known as Assessable versus Non-assessable assets.  Here are some of the assets that are not assessed for financial aid purposes on the FAFSA-Retirement Accounts, Unexpended Financial Aid proceeds, Personal Assets, Annuities, Sibling Assets, and Personal Residence.   In the event you are also filling out the CSS/Profile they will want you to include Sibling Assets, Personal Residence, and some types of Annuities.  It’s important to exercise caution with annuities for a couple reasons.  Any distribution from an annuity will likely be included on the Form 1040.  The assessed value of the income may outweigh the benefits of excluding the asset!  It’s important create a plan when paying for college that will not increase your EFC and reduce your financial aid eligibility.  This is also known as coordination of benefits.  More tips to come!

 Tip #5 - Using the Right Method- There are two methods for calculating your Expected Family Contribution (EFC), the Federal Methodology is used when filling out the FAFSA and the Institutional Methodology is used when filling out the CSS/Profile.  There are also variations of these two methods that may be used by the different schools especially when it comes to home equity.  Always check with the school for specifics.  So what method may yield better results for you.  Here’s an example-Using an Adjusted Gross Income of $50,000 your EFC is $3,228 using the Federal Method and $2,694 using the Institutional Method.  With an income of $100,000 your EFC is $18,225 using the Federal Method and $13,770 using the Institutional Method.   This example only includes income and no additional assets were included.  If your home equity is high or there are assets in the siblings names the Institutional Method will be much higher.  If you have unusually high medical expenses the Institutional Methodology will go down.  The key is to look at both methods and compare.  The difference can be significant!

Tip #6  – Filing Date Strategies – When filing your financial aid forms there are some key things to keep in mind.  Let’s say you’re filing your form on January 18th and you are using your balances from the end of the previous month.  It’s time to do some proactive planning to lower your Expected Family Contribution (EFC).  Go ahead and pay all of your bills and pre-pay other upcoming expenses to keep your cash balance and other asset balances as low as possible.  It’s important to know that you use your values as of the date of filing and not at year-end or other statement dates.

Tip #7  - Closing the Gap - When looking at the cost of a college education there is a big difference in the cost of a public university and a private college or university.  With many public universities costing $20,000 or so and many private colleges and universities costing $40,000 or more, how can the more costly colleges become affordable and comparable?  One of the strategies involves Paying for a Private School at Public School Prices. 

There are a variety of components and strategies that can narrow the gap for the net cost.  One we will discuss today is understanding Gift Aid and Self Help Aid and the percentage paid by the school.  In one scenario the school will fill 51% of financial need and this need is filled by 53% Gift Aid and 43% Self Help Aid.  If the financial need is $15,000 the Gift Aid will be slightly higher than $4,000.  In another scenario the school fills 94% of financial need with 82% in Gift Aid and 18% in Self Help Aid.  The amount of Gift Aid is over $11,500.  What you’ll find is many private schools meet a higher percentage of need and distribute more money in Gift Aid.     

Tip #8 - Know Your Numbers – When it comes time to get the most financial aid there is some important information you need to know.  By knowing the history, policies, and qualifiers for financial aid you will have a distinct advantage over the competition.  You will have a good understanding of how you are positioned. 

Let’s look at look at University of North Carolina at Chapel Hill for an example.  Let’s start with getting in – The percentage of students being admitted is 30% for a female and 33% for a male.  After admissions, what is the chance for financial aid and how much?  2,775 freshman students applied for need-based aid and 1,649 were determined to have financial need.  One key is to know your EFC before you apply.  Out of the 1,649 that have a financial need, 1620 will receive Gift Aid in the form of scholarships or grants with an average amount of $12,901.  What about financial aid if there is no financial need?  A total of 129 students were determined to have no financial need and received non-need based scholarships or grants.  The average amount was $8,232.  The Common Data Set is a big help in analyzing the numbers.  When looking at affordability it pays to know the numbers!         

 

Education Tax Incentives that may expire with the Fiscal Cliff

• Student Loan Interest Deduction:

Beginning in 2002, student loan interest of up to $2,500 per year can be deducted for the life of the loan. This change is scheduled to expire on December 31, 2012, unless the law is extended or made permanent. If the change does expire, we will go back to the rules for Student Loan Interest Deductions prior to 2002, which states that only the first 60 months of interest payments are be deductible.

• Coverdell Education Savings Account (CESA):

The 2001 “Economic Growth and Tax Relief Reconciliation Act” made certain
changes to CESAs. Beginning in 2002, contribution limits to a CESA were increased
to $2,000 per year and contributions can be made in the same calendar year that
contributions are made to a Section 529 Plan for the same beneficiary.  If the changes do expire we will go back to the rules for CESA prior to 2002, which states that any contributions made to a CESA in the same calendar year as contributions are made to a 529 Plan for yhe same beneficiary are considered excess contributions subject to an annual 6% federal excise tax.  Annual contributions will be limited to $500 per year.

• American Opportunity Tax Credit:

The 2009 “American Recovery and Reinvestment Act” provided an educational tax credit called the American Opportunity Tax Credit.  This credit is for $2,500 and is available for the tax years 2009 thru 2012 only.  If the law is not extended it is likely to revert back to the Hope Credit which allows a maximum $1,800 credit for the first two years of college.

• Employer-Provided Education Assistance (127 Plans):

The 2001 “Economic Growth and Tax Relief Reconciliation Act” extended the Employer-Provided Education Assistance (127 Plans) law until December 31, 2010. The law was extended again on December 17, 2010 under the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010”. If the law is not extended or made permanent this program will not be available after December 31, 2012.

*Always consult with you Tax Advisor.

The Right # of Colleges = More Financial Aid

 

What is the right number of colleges to apply to?  I’ll give you some facts and figures to look over to help you make your decision.  Each year the Higher Education Research Institute (HERI) produces an annual report where they interview thousands of freshman in over 700 colleges and universities.  The report is titled The American Freshman.  One of the questions they asked is how many colleges did you apply to for admission?

Here are the results of a past survey:

• One – 14%
• Two – 11%
• Three – 13%
• Four – 16%
• Five – 13%
• Six – 10%
• Seven – 7%
• Eight or more – 16%

There are a variety of things surprising about this survey.  One that comes to mind is shopping the competition.  When making a decision that costs $50,000 to $200,000 over four years it makes sense to make sure you get the best value.  There are a variety of factors that can make impact the cost of college.  Here are some of these:

• Lowest cost of attendance
• Scholarships
• Merit Aid
• Need Based Aid
• Tax Incentives

When applying to colleges you won’t be able to determine what the true net cost of college is until you are accepted and subsequently receive an award letter detailing the amount of aid given.  In order to get to the point of getting a competitive offer it would be advantageous to have a few offers or awards.  In the event there are competing offers you could be in a favorable position to get the optimal award.  The key here is to make sure you have enough applications in the pipeline to get a good number of acceptances and the second stage is to make sure the acceptances offer good financial aid packages.  Let’s say there is an acceptance rate of 75% and 1/3 of these schools would offer a good financial aid package.  If you apply to 4 schools and get accepted by three you may get a good award from one of these.  This may not put you in the most competitive position.  The bottom line is to make sure the college choice is right so you have a high number of acceptances and the proper research is done to get the best financial aid package.  Take the time to do the research it will pay off in the end!  Applying to 6-8 schools is an ideal number.   Check out the admittance rate to some colleges in the Atlanta, Georgia area, state of Georgia, and in the southeast.

Name of College or University/Admittance Rate

  • Duke University/14% 
  • Emory University/27%
  • Georgia Tech/51%
  • University of Georgia/63%
  • Vanderbilt University/16%

Imagine if you were to buy a car or TV.  You may visit a variety of stores or look online at a variety of stores or research different Consumer Guides or Consumer Reports.  The research may be exhausting.  When you’re ready to buy that new car or TV you’ll be prepared.  You can now go out and buy it.  What’s different with many colleges is that you don’t know you can buy it until they let you know.  So when shopping for colleges, use the level of research you would do for a car or TV as a starting point.  Go above and beyond to make sure you are successful with acceptances and ultimately the best financial aid or award package.     

 

 

 

Looking for Excellence in a College?

When was the last time someone or something has surpassed your expectations?  I recently had my expectations surpassed when I met with two VPs of Enrollment Management* from two very unique colleges. Here’s a recap of what Arlene Cash from Spelman College in Atlanta, GA and Evan Lipp from Assumption College in Worcester, MA shared with me about what makes their respective schools unique.  

Let’s start off with graduation rates where both colleges are doing a great job!  Assumption College graduates 71% of their students in 4 years.  Spelman College, with the second highest 4 year graduation rate in the state of Georgia, graduates 65% of its students in four years. 

Both schools also have a clear focus on how to best serve their students and the community.  The mission of graduates from Assumption College is to be known for their critical intelligence, thoughtful citizenship and compassionate service.  Spelman College graduates understand their ability to make “A Choice to Change the World” as the school’s website clearly states.

As these two VPs shared with me, enrollment management plays an integral part in instilling a culture unique to each institution.  At Assumption College that culture extends beyond the school work and into the student’s transition in the workforce.   The culture at Spelman College reaches beyond the campus to students who, while not ultimately accepted at Spelman, will now have a partner to make sure that they find the right colleges for themselves.

Enrollment Management can give prospective students additional insights into a school by revealing what the school is looking for in a student. Students can use this knowledge to better match their needs and interests with the right perspective schools increasing their scholarship opportunities.  With these insights, students are able to move beyond asking basic questions such as How much time do students typically spend on homework? or What is the average class size of introductory classes? to deeper questions such as  How would you describe the culture of your college? or What is your college’s Mission Statement?

When taking that big step in getting admitted to the college of your choice, consider a school that will guide you through the college years and ultimately shape your life. 

*Enrollment Management – is the process, or an activity, that influences the size, the shape, and the characteristics of a student body by directing institutional efforts in marketing, recruitment and admissions as well as pricing and financial aid.

Some of the typical aims of enrollment management include:

• Improving yields at inquiry, application, and enrollment stages
• Increasing net revenue, by achieving the proper mix of tuition revenue and financial aid disbursements
• Increasing demographic diversity
• Improving retention rates
• Increasing and improving applicant pools