According to a recent Sun-Sentinel article, college students are racking up credit card debt to pay for their education. 30% charge their tuition compared to 24% in 2004. 92% of undergrads charged textbooks, school supplies and other educational expenses compared to 85% in 2004.
Marie O'Malley, director of consumer research for Sallie Mae, thinks families are underestimating college costs and opting for more expensive credit card debt in lieu of applying for cheaper financial aid.
"Too many students are at risk of overpaying for college by pulling out credit cards...instead of using less-expensive financial aid..." said O'Malley.
Duh! Sound familiar?
"College Pete" and I have been warning about this, broken record-style, for years. Why don't parents apply for financial aid? Put another way, why do 53% of all eligible families not bother to apply?
One reason is intimidation. You "need a PhD" to figure out the FAFSA, according to Secretary of Education Arne Duncan. The forms are annoying and a pain the in the rump, with multiple land-mines to stumble on and blow up all chances of aid.
Another reason is that parents put off their college planning until it's too late. The best time to start the college planning process is the second half of sophomore year, junior year at the latest.
What are the consequences to your children if you don't take this seriously?
One FAU graduate who maxed out his credit cards to pay for college fretted, "I wonder if I'll ever be able to get a home...with the debt I have now and the marks against my credit."
On a personal level, I’m extremely sympathetic to this student as I racked up $100,000 in debts between undergraduate and law school. My wife and I have four children and have sworn a blood oath to never put them through what I had to endure. That’s why I’m in the college planning business.
So learn about the financial aid process while there is still time to do something about it!
Andrew Lockwood, J.D., and Peter “College Pete” Ratzan, M.B.A., co-authors of the book, Never Pay Retail for College, conduct free college funding workshops throughout South Florida. Topics include: How even millionaires can save 20% off the cost of college; Think you make too much money to qualify for financial aid? You're probably wrong, dead wrong! And, Can you legally "position" yourself to receive more financial aid? More information is available at: www.CollegePlanningAdvice.com/events.
Monday, April 27, 2009
Monday, April 13, 2009
Parents of College-Bound Children - Are you holding up your end of the bargain?
If you have a high school senior, this can be a stressful time of year. By now, most seniors have heard from most of the colleges they've applied to about whether or not they got 'in.'
But now, more than ever, another letter is being eagerly anticipated - the award letter from the financial aid office.
If you didn't plan, these award letters can be crushing, when a student learns that she can't go to her top choice college – after working her tail off for years, loading up her schedule with AP's, club memberships and extra-curriculars.
She held up her end of the bargain, but mom and dad didn't - they didn't look into what college really costs and how they'd afford it.
Those that planned are being rewarded this year. Yes, the economy has caused some colleges to be a little stingy with aid, but overall, this has been a very strong year for financial aid packages.
If you've got a college-bound sophomore or junior, the time is NOW to get serious about how to pay for college.
You wouldn't buy a car without knowing the sticker price, why go "shopping" for college without understanding the costs and looking into how to cut those expenses.
Record numbers have applied for aid this year; next year it might be even worse – more families chasing fewer financial aid dollars.
Here are some questions to ask each college you are considering:
· What percentage of "Need" do you meet?
Most financial aid is based on "Need," calculated by the Federal Financial Aid formulas. The greater your Need, the more aid you should receive. However, the percentage of Need met by each university varies greatly. The schools with the biggest endowments typically are the most generous.
· How is Need met?
Financial Aid packages include free money – grants and scholarships - that does not have to be repaid, and loans, which require repayment.
Typically, the colleges with the largest endowments award a greater percentage of free money than loans. You’ll want this information before you apply.
· What are your deadlines?
Some colleges have early deadlines. You want to be among the first application, since money can be doled out first-come, first-served. Last month, we had a student who was offered a $1,000 "Early FAFSA" scholarship simply because we got his forms a few weeks early!
Of course, there are many other factors that go into your college plan - this is just the tip of the iceberg.
If you are the parent of a high school sophomore or junior, it’s time to make college planning a top priority. Before you know it, it will be April of your student’s senior year and you’ll be hoping for good news to arrive in your mailbox!
Andrew Lockwood and Peter "College Pete" Ratzan co-authored the book, Never Pay Retail for College. His firm sponsors free community workshops on college funding. Visit www.CollegePlanningAdvice.com for more information.
But now, more than ever, another letter is being eagerly anticipated - the award letter from the financial aid office.
If you didn't plan, these award letters can be crushing, when a student learns that she can't go to her top choice college – after working her tail off for years, loading up her schedule with AP's, club memberships and extra-curriculars.
She held up her end of the bargain, but mom and dad didn't - they didn't look into what college really costs and how they'd afford it.
Those that planned are being rewarded this year. Yes, the economy has caused some colleges to be a little stingy with aid, but overall, this has been a very strong year for financial aid packages.
If you've got a college-bound sophomore or junior, the time is NOW to get serious about how to pay for college.
You wouldn't buy a car without knowing the sticker price, why go "shopping" for college without understanding the costs and looking into how to cut those expenses.
Record numbers have applied for aid this year; next year it might be even worse – more families chasing fewer financial aid dollars.
Here are some questions to ask each college you are considering:
· What percentage of "Need" do you meet?
Most financial aid is based on "Need," calculated by the Federal Financial Aid formulas. The greater your Need, the more aid you should receive. However, the percentage of Need met by each university varies greatly. The schools with the biggest endowments typically are the most generous.
· How is Need met?
Financial Aid packages include free money – grants and scholarships - that does not have to be repaid, and loans, which require repayment.
Typically, the colleges with the largest endowments award a greater percentage of free money than loans. You’ll want this information before you apply.
· What are your deadlines?
Some colleges have early deadlines. You want to be among the first application, since money can be doled out first-come, first-served. Last month, we had a student who was offered a $1,000 "Early FAFSA" scholarship simply because we got his forms a few weeks early!
Of course, there are many other factors that go into your college plan - this is just the tip of the iceberg.
If you are the parent of a high school sophomore or junior, it’s time to make college planning a top priority. Before you know it, it will be April of your student’s senior year and you’ll be hoping for good news to arrive in your mailbox!
Andrew Lockwood and Peter "College Pete" Ratzan co-authored the book, Never Pay Retail for College. His firm sponsors free community workshops on college funding. Visit www.CollegePlanningAdvice.com for more information.
Friday, March 27, 2009
The Death of Bright Futures
Big article on the front page of the Sun-Sentinel
yesterday - "Bright Futures May Grow Dimmer."
This is another in a spate of recent coverage
about proposed tuition hikes that are before
the State Legislature right now.
Scott Travis, the reporter, suggests that Bright Futures
scholarships, which cover 100% and 75%
of tuition and fees (depending on the grades
and test scores of the student), might cover
far less in the future if the bill passes.
For example, a student who qualifies for
the Academic Scholar, or 100% award, might
have to fork over $4,269, or 44%, of the anti-
pated fees in 2016, according to one expert's
analysis.
So what was once a 100% full ride could turn
into only 56%!
So what is a parent of a college-bound child
to do? Apply for financial aid!
But for some parents, that's easier said than
done. A recent College Board study estimated
that 53% of eligible families don't bother to
apply for aid.
Why?
Probably because they think they make too
much money to qualify. That's silly -
everyone should apply for aid - even families
making "nice," six-figure incomes.
Or maybe the forms themselves are too
intimidating for parents - Secretary of Education
Arne Duncan was quoted recently as saying
that "You basically need a PhD" figure out the
FAFSA.
More people are chasing financial aid dollars
this year - USA Today reported that 81% of
parents said financial aid would be "extremely"
or "very" necessary.
You need to arm yourself with the latest
tested and proven tactics to make sure you are
getting the maximum amount of financial aid
that you're entitled to.
An easy first step and overview - attend one of our
upcoming, free community workshops on college
funding.
www.CollegePlanningAdvice.com/events
Topics include:
* What your Florida Pre-paid and Bright Futures will
"really" pay for;
* How families who earn "nice," six-figure incomes
and even millionaires can save $30,000 off the
cost of college;
* What can you do qualify for more aid;
* Why the advice of your CPA, money manager or
other "advisor" may actually COST you thousands
of dollars in lost financial aid; and
* The "Double-Secret" formula used by college
financial aid offices to determine how much
aid you'll receive, to the dollar!
www.CollegePlanningAdvice.com/events
Best
- Andy
Andrew Lockwood, J.D.
College Planning Specialists of Florida, Inc.
1825 Main Street
Weston, Florida 33326
www.CollegePlanningAdvice.com
yesterday - "Bright Futures May Grow Dimmer."
This is another in a spate of recent coverage
about proposed tuition hikes that are before
the State Legislature right now.
Scott Travis, the reporter, suggests that Bright Futures
scholarships, which cover 100% and 75%
of tuition and fees (depending on the grades
and test scores of the student), might cover
far less in the future if the bill passes.
For example, a student who qualifies for
the Academic Scholar, or 100% award, might
have to fork over $4,269, or 44%, of the anti-
pated fees in 2016, according to one expert's
analysis.
So what was once a 100% full ride could turn
into only 56%!
So what is a parent of a college-bound child
to do? Apply for financial aid!
But for some parents, that's easier said than
done. A recent College Board study estimated
that 53% of eligible families don't bother to
apply for aid.
Why?
Probably because they think they make too
much money to qualify. That's silly -
everyone should apply for aid - even families
making "nice," six-figure incomes.
Or maybe the forms themselves are too
intimidating for parents - Secretary of Education
Arne Duncan was quoted recently as saying
that "You basically need a PhD" figure out the
FAFSA.
More people are chasing financial aid dollars
this year - USA Today reported that 81% of
parents said financial aid would be "extremely"
or "very" necessary.
You need to arm yourself with the latest
tested and proven tactics to make sure you are
getting the maximum amount of financial aid
that you're entitled to.
An easy first step and overview - attend one of our
upcoming, free community workshops on college
funding.
www.CollegePlanningAdvice.com/events
Topics include:
* What your Florida Pre-paid and Bright Futures will
"really" pay for;
* How families who earn "nice," six-figure incomes
and even millionaires can save $30,000 off the
cost of college;
* What can you do qualify for more aid;
* Why the advice of your CPA, money manager or
other "advisor" may actually COST you thousands
of dollars in lost financial aid; and
* The "Double-Secret" formula used by college
financial aid offices to determine how much
aid you'll receive, to the dollar!
www.CollegePlanningAdvice.com/events
Best
- Andy
Andrew Lockwood, J.D.
College Planning Specialists of Florida, Inc.
1825 Main Street
Weston, Florida 33326
www.CollegePlanningAdvice.com
Tuesday, December 9, 2008
Dirty, deceptive and surprising student lending!
I bet you'll be surprised about how studentloans REALLY work. Here's what I mean.
On Monday, NY Attorney General Andrew Cuomo announced a settlement with the College Board over its former loan practices.
That's right, that's the same College Board that tortures high schoolers with the SAT, the CSS/Profile financial aid form and other familiar items. Apparently the Board was making money from sources otherthan test registration fees, like lending to students.
Attorney General Cuomo had a problem with the way in which the College Board was conducting this business.
Mario's Number One Son found that the College Board gave discounts to certain colleges, breaks related to prices paid by the financialaid offices for software and other services.
How did these colleges earn this special pricing from the College Board? By placing College Board loansin their list of recommended, or "preferred" lenders.
In other words, the College Board was alleged to have"bribed" (my word, not Cuomo's) these colleges into advertising the student loans offered by the College Board.
"Loans are hard enough to come by these days; thelast thing we need are deceitful arrangements likethis one that stand squarely in the way of students and parents getting the facts," said Cuomo.
And I bet you thought the company that issues the SAT was a non-profit or educational institution, right?
Nope, they're in business like everyone else involved in higher education. They're out to make a buck.
Not that there is anything wrong with that, of course. College Pete and I make a nice living advising parents of college-bound kids how to slash their college expenses. Everyone is entitled to make a few dollars (no matter who is President)!
The real issue is the deceptive manner in which the College Board, and the colleges themselves, allegedly made their money (they admitted no wrongdoing, not surprisingly).
When you go to apply to college, understand the main point made by this blog - that college is a BUSINESS.
This knowledge should effect almost everything you do regarding your student's college education, including where you apply for admission, how you apply for financial aid, how you apply for other scholarships and how you negotiate a financial aid award letter, among others.
If you don't understand this, you're setting yourself up to over-pay needlessly for your student's college education. You could be forcing your son or daughterto attend a "cheaper," less-desireable college than if you paid attention to the business of college.
This is exactly what we talk about in our free community workshops, "How to Pay for College Without GoingBroke or Raiding (what's left of) Your Retirement Savings."
Tonight's is sold out but we have a few more in Miami,Weston, Boca Raton and Parkland in the next 7 days.After that, it's too late - we shut down for the year.
The workshop is for parents of college-bound students. If you have a college-bound Senior, you're on life support if you haven't done anything to prepare for college costs. If you have a Junior, know that this is the most critical year for college funding purposes. If you have a Sophomore, everything he or she does now leads up to Junior year, the most important year of high school.
If you have a friend who's struggling with howto pay for college, send them a link to this post and tell them about our workshops in Miami, Boca,Weston or Parkland, too! They'll like this email better than a lump of coal in their stocking, promise!
Registration info is at:
http://www.CollegePlanningAdvice.com/events
On Monday, NY Attorney General Andrew Cuomo announced a settlement with the College Board over its former loan practices.
That's right, that's the same College Board that tortures high schoolers with the SAT, the CSS/Profile financial aid form and other familiar items. Apparently the Board was making money from sources otherthan test registration fees, like lending to students.
Attorney General Cuomo had a problem with the way in which the College Board was conducting this business.
Mario's Number One Son found that the College Board gave discounts to certain colleges, breaks related to prices paid by the financialaid offices for software and other services.
How did these colleges earn this special pricing from the College Board? By placing College Board loansin their list of recommended, or "preferred" lenders.
In other words, the College Board was alleged to have"bribed" (my word, not Cuomo's) these colleges into advertising the student loans offered by the College Board.
"Loans are hard enough to come by these days; thelast thing we need are deceitful arrangements likethis one that stand squarely in the way of students and parents getting the facts," said Cuomo.
And I bet you thought the company that issues the SAT was a non-profit or educational institution, right?
Nope, they're in business like everyone else involved in higher education. They're out to make a buck.
Not that there is anything wrong with that, of course. College Pete and I make a nice living advising parents of college-bound kids how to slash their college expenses. Everyone is entitled to make a few dollars (no matter who is President)!
The real issue is the deceptive manner in which the College Board, and the colleges themselves, allegedly made their money (they admitted no wrongdoing, not surprisingly).
When you go to apply to college, understand the main point made by this blog - that college is a BUSINESS.
This knowledge should effect almost everything you do regarding your student's college education, including where you apply for admission, how you apply for financial aid, how you apply for other scholarships and how you negotiate a financial aid award letter, among others.
If you don't understand this, you're setting yourself up to over-pay needlessly for your student's college education. You could be forcing your son or daughterto attend a "cheaper," less-desireable college than if you paid attention to the business of college.
This is exactly what we talk about in our free community workshops, "How to Pay for College Without GoingBroke or Raiding (what's left of) Your Retirement Savings."
Tonight's is sold out but we have a few more in Miami,Weston, Boca Raton and Parkland in the next 7 days.After that, it's too late - we shut down for the year.
The workshop is for parents of college-bound students. If you have a college-bound Senior, you're on life support if you haven't done anything to prepare for college costs. If you have a Junior, know that this is the most critical year for college funding purposes. If you have a Sophomore, everything he or she does now leads up to Junior year, the most important year of high school.
If you have a friend who's struggling with howto pay for college, send them a link to this post and tell them about our workshops in Miami, Boca,Weston or Parkland, too! They'll like this email better than a lump of coal in their stocking, promise!
Registration info is at:
http://www.CollegePlanningAdvice.com/events
Wednesday, October 15, 2008
The Surprising Reason High Income Earners Receive Thousands in College Financial Aid!
You will not believe this email, but bear with me.
"College Pete" and I constantly talk about howeven millionaires should apply for college financial aid, even if they think they won't qualify.
Before I get to the story I read today, let me give you a little background on college admissions. Background that you'll never hear anywhere else.
Are you familiar with US News and World Report? This magazine is at the top of the heap when it comes to ranking colleges and universities.
Many admissions heads obsess over their rankings, particularly the colleges in the fourth, third andeven second tiers, trying to figure out how to move up in rankings. Better rankings equals more applicants, more enrolled and the ability tocharge higher tuition and fees.
Like it or not, that's the way it is.
Many ambitious, upwardly-mobile colleges will do all sorts of things to improve their standing with US News. Some offer "bribes" to good students by way of merit scholarships to pry them away from Ivy League or other highly competive schools. This funding is doled out withoutregard to the family's financial picture. And it's heaped upon students with grades and scores that are not"Ivy-caliber", too!
Now check out what Baylor University did. Apparently,the SAT's of last year's incoming freshman classwas worse than that of the previous year. This would look bad in US News.
So Baylor did something creative to counter their impending drop in the rankings. They bribed their accepted, incomingfreshmen to re-take the SAT!
Yes, you read that right! Baylor offered a $300 book credit to any freshman who sat for the SAT again. And, if the student increased his or her score by 50 points, therewas another grand in it for them. About 177 qualified for even more scholarship funding.
Of course, Baylor denies that they created their SAT contest because of the US News rankings.
My point is the college financial aid game works in ways that non-insiders can't possibly understand. Even parents who make "deep" six figure, or higher, incomes can save thousands off college costs, if they know the rules ofthe game.
So take away two points from this post - do your research about what schools over this kind of aid (and what their standards are) and do NOT blow off applying for financial aid if you think you earn too much money, because you never know!
Best,
- Andy
P.S. Want more info on "How to Pay for College WithoutGoing Broke or Raiding What's Left of Your RetirementPortfolio?" We've got three more college funding workshops this month and they're than 77% booked up.
I ran last night's at Nova Southeastern and I counted only three available seats. Thank god we had 6 no-show families!"College Pete" is running one at the Posnack JCC in Davie, 6:15 and there are still 8 available slots. Then I'm doing workshops on Thursday night, 8:00 pm at the Weston Y and Saturday, 10:15 am at The Sagemont School, Upper Campus.
P.P.S. You can check availability and locations at:
http://www.CollegePlanningAdvice.com/events
or call 954.659.1234 ext. 201.
Andrew Lockwood, J.D.
College Planning Specialists of Florida, Inc.1825 Main SteetWeston, FL 33326
http://www.collegeplanningadvice.com/
954.659.1234
Co-author, "Never Pay Retail for College,"
Co-host, "The College Planning Power Hour"WFTL Sports, 1400 AM, ESPN Radio
"College Pete" and I constantly talk about howeven millionaires should apply for college financial aid, even if they think they won't qualify.
Before I get to the story I read today, let me give you a little background on college admissions. Background that you'll never hear anywhere else.
Are you familiar with US News and World Report? This magazine is at the top of the heap when it comes to ranking colleges and universities.
Many admissions heads obsess over their rankings, particularly the colleges in the fourth, third andeven second tiers, trying to figure out how to move up in rankings. Better rankings equals more applicants, more enrolled and the ability tocharge higher tuition and fees.
Like it or not, that's the way it is.
Many ambitious, upwardly-mobile colleges will do all sorts of things to improve their standing with US News. Some offer "bribes" to good students by way of merit scholarships to pry them away from Ivy League or other highly competive schools. This funding is doled out withoutregard to the family's financial picture. And it's heaped upon students with grades and scores that are not"Ivy-caliber", too!
Now check out what Baylor University did. Apparently,the SAT's of last year's incoming freshman classwas worse than that of the previous year. This would look bad in US News.
So Baylor did something creative to counter their impending drop in the rankings. They bribed their accepted, incomingfreshmen to re-take the SAT!
Yes, you read that right! Baylor offered a $300 book credit to any freshman who sat for the SAT again. And, if the student increased his or her score by 50 points, therewas another grand in it for them. About 177 qualified for even more scholarship funding.
Of course, Baylor denies that they created their SAT contest because of the US News rankings.
My point is the college financial aid game works in ways that non-insiders can't possibly understand. Even parents who make "deep" six figure, or higher, incomes can save thousands off college costs, if they know the rules ofthe game.
So take away two points from this post - do your research about what schools over this kind of aid (and what their standards are) and do NOT blow off applying for financial aid if you think you earn too much money, because you never know!
Best,
- Andy
P.S. Want more info on "How to Pay for College WithoutGoing Broke or Raiding What's Left of Your RetirementPortfolio?" We've got three more college funding workshops this month and they're than 77% booked up.
I ran last night's at Nova Southeastern and I counted only three available seats. Thank god we had 6 no-show families!"College Pete" is running one at the Posnack JCC in Davie, 6:15 and there are still 8 available slots. Then I'm doing workshops on Thursday night, 8:00 pm at the Weston Y and Saturday, 10:15 am at The Sagemont School, Upper Campus.
P.P.S. You can check availability and locations at:
http://www.CollegePlanningAdvice.com/events
or call 954.659.1234 ext. 201.
Andrew Lockwood, J.D.
College Planning Specialists of Florida, Inc.1825 Main SteetWeston, FL 33326
http://www.collegeplanningadvice.com/
954.659.1234
Co-author, "Never Pay Retail for College,"
Co-host, "The College Planning Power Hour"WFTL Sports, 1400 AM, ESPN Radio
Thursday, October 9, 2008
10 College Funding Mistakes to Avoid
Top 10 College Funding Mistakes Made By Parents of College-Bound Teens
By Andrew Lockwood, J.D., CollegePlanningAdvice.com
If you have a child applying to college, this is an exciting and stressful time for both of you. One of the most worrisome issues facing parents today is how to pay for a four year college or university. Fortunately, there is more than $137 Billion available from the Federal Government, the states, colleges and universities, private foundations and other organizations. Your challenge is to figure out how to access these funds.
Many families fail to take advantage of the numerous financial aid and other college cost cutting opportunities available. For the uninformed, ill-prepared family, the unfortunate results can range from being forced to take out high fee, high rate college loans, tapping equity built up in their homes or dipping into retirement savings. But with diligent research, you can significantly minimize or flat-out eliminate these undesirable outcomes.
To help navigate the overly complicated regulations of the Department of Education, I offer
“College Pete and Andy’s 10 College Funding Mistakes to Avoid.”
Mistake #1: Most middle and upper-middle class parents assume they won't be eligible for financial aid because they own a home and make more than $100,000, $150,000 or more per year.
Mistake #2: Focusing time and energy on a private scholarship search instead of spending time trying to qualify for “need-based” financial aid.
Mistake #3 - Assuming only minority students, athletes, and academically gifted students receive financial aid.
Mistake #4 – Applying to a college without regard to how their child’s high school record compares to the statistics of the existing student body of that college.
Mistake #5 – Blindly assuming that all colleges and universities have similar amounts of resources and will award the same scholarships, grants and other aid across the board.
Mistake #6 - Not understanding the difference between "included assets" and "exempt assets" for purposes of filling out financial aid forms.
Mistake #7 - Believing that it doesn't matter where they keep their money; it's all counted in the same way.
Mistake #8 – Believing their CPA or tax preparer is qualified to fill out financial aid forms.
Mistake #9 - Waiting until January, or worse, after January, of their child's senior year of high school to start working on your college financial aid planning.
Mistake #10 – Relying on their child’s college advisor, guidance counselor or BRACE Advisor for help with the financial aid process instead of consulting a specialist.
Andrew Lockwood is the co-founder of Weston-based College Planning Specialists of Florida. He and his partner, Peter “College Pete” Ratzan, co-authored the recently-released college funding book, Never Pay Retail for College. Lockwood and Ratzan conduct free college funding workshops, ”How to Pay for College Without Going Broke or Raiding Your Retirement Portfolio” throughout South Florida. For dates, times, locations and seating availability, visit www.CollegePlanningAdvice.com or call 954.659.1234 ext. 299.
By Andrew Lockwood, J.D., CollegePlanningAdvice.com
If you have a child applying to college, this is an exciting and stressful time for both of you. One of the most worrisome issues facing parents today is how to pay for a four year college or university. Fortunately, there is more than $137 Billion available from the Federal Government, the states, colleges and universities, private foundations and other organizations. Your challenge is to figure out how to access these funds.
Many families fail to take advantage of the numerous financial aid and other college cost cutting opportunities available. For the uninformed, ill-prepared family, the unfortunate results can range from being forced to take out high fee, high rate college loans, tapping equity built up in their homes or dipping into retirement savings. But with diligent research, you can significantly minimize or flat-out eliminate these undesirable outcomes.
To help navigate the overly complicated regulations of the Department of Education, I offer
“College Pete and Andy’s 10 College Funding Mistakes to Avoid.”
Mistake #1: Most middle and upper-middle class parents assume they won't be eligible for financial aid because they own a home and make more than $100,000, $150,000 or more per year.
Mistake #2: Focusing time and energy on a private scholarship search instead of spending time trying to qualify for “need-based” financial aid.
Mistake #3 - Assuming only minority students, athletes, and academically gifted students receive financial aid.
Mistake #4 – Applying to a college without regard to how their child’s high school record compares to the statistics of the existing student body of that college.
Mistake #5 – Blindly assuming that all colleges and universities have similar amounts of resources and will award the same scholarships, grants and other aid across the board.
Mistake #6 - Not understanding the difference between "included assets" and "exempt assets" for purposes of filling out financial aid forms.
Mistake #7 - Believing that it doesn't matter where they keep their money; it's all counted in the same way.
Mistake #8 – Believing their CPA or tax preparer is qualified to fill out financial aid forms.
Mistake #9 - Waiting until January, or worse, after January, of their child's senior year of high school to start working on your college financial aid planning.
Mistake #10 – Relying on their child’s college advisor, guidance counselor or BRACE Advisor for help with the financial aid process instead of consulting a specialist.
Andrew Lockwood is the co-founder of Weston-based College Planning Specialists of Florida. He and his partner, Peter “College Pete” Ratzan, co-authored the recently-released college funding book, Never Pay Retail for College. Lockwood and Ratzan conduct free college funding workshops, ”How to Pay for College Without Going Broke or Raiding Your Retirement Portfolio” throughout South Florida. For dates, times, locations and seating availability, visit www.CollegePlanningAdvice.com or call 954.659.1234 ext. 299.
Monday, September 22, 2008
What to do after you've submitted your financial aid application
"College Pete" here -
I had a student call me the other day, wondering how we might be able to assist her in finding a student loan to pay for her current tuition bill. This student attends a local private university, and fortunately for her she’s in her last year in college. Her EFC is under $2,000, and her FAFSA was filed way back in March.
The school had asked for Verification of her financial aid application. All this means is that the Financial Aid Office wants to actually see your tax returns for the Base Income Year (the year prior to high school graduation), as well as confirm your family information. She delayed in providing this info to the school by at least several weeks, and now, with her first tuition payment due within 30 days, the school’s financial aid office is saying that they are still processing her application and will notify her “soon” of her final award. Meanwhile, if she doesn’t pay her bill on time she will face a late penalty.
A few lessons from this situation:
1. If your EFC is below $4,000 you should fully expect that the school will ask for Verification. According to Sallie Mae, 30% of all FAFSA applications are randomly verified, but the rate for submissions with EFCs below $4,000 is dramatically higher. If you wish to receive any federal financial aid (i.e. grants, free money and even federal loans), verification must first be completed. Ignore the financial aid office’s requests at your own peril. This student should be eligible for a Pell Grant of as much as $4,000 per year or more. That’s money left on the table because she delayed in providing the verification forms to the school. And Pell Grant money is First In, First Out, so any delay endangers her likelihood for an award.
2. Financial aid goes to the student/family who continues to follow up on the application. Once the application is submitted, the family must contact the financial aid office to make sure they have everything they need. Financial Aid Officers deal with a ton of paperwork; you don’t want your file buried at the bottom of the pile.
3. Private student lenders continue to ditch the market, making it harder to find a student loan from a bank. Loans are still available from companies like Chase and Wells Fargo, but even these banks require more stringent credit ratings to get the best rates (5%), along with a co-sign.
By ignoring the Verification request from the financial aid office, this student has taken the process down to the wire, and as a result she may forfeit her Pell Grant. Her eventual financial aid package will likely include a loan, but it may not be processed in time to avoid the late penalty.
So make sure you submit your financial aid application early (FAFSA for 2009-10 opens on January 2) to qualify for maximum aid, be prepared for Verification because it might happen, and be sure to Bird-Dog your application once it has been submitted.
- Peter "College Pete" Ratzan
www.CollegePlanningAdvice.com
I had a student call me the other day, wondering how we might be able to assist her in finding a student loan to pay for her current tuition bill. This student attends a local private university, and fortunately for her she’s in her last year in college. Her EFC is under $2,000, and her FAFSA was filed way back in March.
The school had asked for Verification of her financial aid application. All this means is that the Financial Aid Office wants to actually see your tax returns for the Base Income Year (the year prior to high school graduation), as well as confirm your family information. She delayed in providing this info to the school by at least several weeks, and now, with her first tuition payment due within 30 days, the school’s financial aid office is saying that they are still processing her application and will notify her “soon” of her final award. Meanwhile, if she doesn’t pay her bill on time she will face a late penalty.
A few lessons from this situation:
1. If your EFC is below $4,000 you should fully expect that the school will ask for Verification. According to Sallie Mae, 30% of all FAFSA applications are randomly verified, but the rate for submissions with EFCs below $4,000 is dramatically higher. If you wish to receive any federal financial aid (i.e. grants, free money and even federal loans), verification must first be completed. Ignore the financial aid office’s requests at your own peril. This student should be eligible for a Pell Grant of as much as $4,000 per year or more. That’s money left on the table because she delayed in providing the verification forms to the school. And Pell Grant money is First In, First Out, so any delay endangers her likelihood for an award.
2. Financial aid goes to the student/family who continues to follow up on the application. Once the application is submitted, the family must contact the financial aid office to make sure they have everything they need. Financial Aid Officers deal with a ton of paperwork; you don’t want your file buried at the bottom of the pile.
3. Private student lenders continue to ditch the market, making it harder to find a student loan from a bank. Loans are still available from companies like Chase and Wells Fargo, but even these banks require more stringent credit ratings to get the best rates (5%), along with a co-sign.
By ignoring the Verification request from the financial aid office, this student has taken the process down to the wire, and as a result she may forfeit her Pell Grant. Her eventual financial aid package will likely include a loan, but it may not be processed in time to avoid the late penalty.
So make sure you submit your financial aid application early (FAFSA for 2009-10 opens on January 2) to qualify for maximum aid, be prepared for Verification because it might happen, and be sure to Bird-Dog your application once it has been submitted.
- Peter "College Pete" Ratzan
www.CollegePlanningAdvice.com
Subscribe to:
Posts (Atom)
