,One of the things I talk to with my clients about almost daily, is student loans. The reality is that most people will have to take out a loan to pay some of the tuition bill and what loan you choose and the terms of the loan should be thought out in advance in order to make sure you put yourself in the best position.
Loan refinancng has become big business. There are ads on tv that talk about refinancing student loans and how easy it is to refinance and get a lower interest rate..TAKE NOTICE. IT"S ACTUALLY NOT THAT EASY.
Last week the Boston Globe had an eye opening article about just how difficult it actually is to try to refinance those loans! I would encourage you to read the article. If you have any question about student loans call the office and we can discuss what loans might work for you.
If you are the parent of a college-bound freshman, it is important to spend some time thinking about and planning for unexpected costs or for an emergency that might arise. This consideration will take some research and financial planning.
Before the summer begins to close, the parent should speak with his student about their financial responsibilities. A detailed plan that specifies expected costs should be developed. Some of the expected costs are: living expenses, travel, and entertainment.
The next step is to outline who will pay for what. It would be beneficial to set up a separate account for this spending.
The issue of insurance coverage should be looked at i.e.: health, car, renters and technology insurance that covers cell phones and computers. If the student remains on the parents insurance policies, the parent should decide who is responsible for payment. Parents should pay close attention to detail if the child seeks his own plan.
Parents can keep children on their health insurance plan until age 26. Some colleges do offer health insurance plans. If a parent decides to enroll in a college sponsored plan, make certain to compare the parent plan to the college plan.
Some colleges allow students to bring cars to campus while others do not. If a student is bringing a car to campus, the student will need car insurance. Rates can increase if a child is in an accident or if he receives a speeding ticket. Parents should research rates as some companies offer “good student discounts” which grant lower rates.
Credit card companies are notorious for coming to campus and marketing to students. If a parent decides to cosign for the student, he maybe left financially responsible if the student does not make appropriate payments on the card. If a parent does cosign for a credit card, he should establish clear financial responsibilities and expectations.
If the student chooses an off campus housing option and the parents cosign the agreement, the parents could be taking on a financial obligation should there be an issue with payment or damage done. Parents should be knowledgably about their financial responsibilities if this situation arises.
Parents should do their due diligence with regards to what they are continuing to be responsible for while their child is at college. Even though the child is away, there is a great deal of financial responsibility to establish and track. This is a real world learning experience for the new college student and he should earn a degree of independence if financially successful at the end of June.
This week’s blog discusses the remaining five stages of transitional stress that the college bound student could encounter. At this time of the year, everyone in the family feels a lot of stress, especially the graduating senior. Families can stay connected and remember that there are ups and downs that accompany every new experience. The following stages will discuss learning to cope and finally putting all the pieces of the college puzzle together or at least putting you on the right path.
Stage 6 — The Grass is Always Greener: About midway through the first year of college many freshmen may begin to think that all their problems with their school could be easily solved by transferring to another school. This feeling can be particularly strong among students who were undecided until the last minute about which college to choose. Students who decide to transfer should understand that they might lose priority for course assignments, campus housing and financial aid. Many colleges will not even consider mid-year freshmen transfers. I always encourage new students to stick with their school for at least one full year; what may seem insurmountable problems at the start of the year are often drastically reduced or disappear completely by the end of the year.
Stage 7 — You Can’t Go Home Again: Students who go away to college and suffer with homesickness often long to return to the familiarity and security of home and they may find themselves counting the days until they can go back. The long awaited trip may, however, turn out to be traumatic or disappointing because things are likely to have changed. The most noticeable changes may be the encroachment of a younger sibling on the student’s position in the family or the conversion of the student’s space into an office, guest room, or other sibling’s room.
After only a few days at home many freshmen come to realize that it is they who have changed more than things at home. And with that realization often comes a desire to return to campus–the very place they couldn’t wait to leave!
Stage 8 – Learning to Cope: After six weeks or so on campus, freshmen can find their way to the library, have real conversations with their roommates, and are expanding their circle of friends. New students at first tend to find one or two people with whom they feel comfortable and tend to stick close to them without going out of their way to make additional contacts. But as their confidence builds so does the desire to meet more people. During this stage freshmen begin to enjoy their classes, engage in campus activities and are, in general, willing to participate in a greater number of campus activities. E-mail makes coping much easier for both the student and their family.
Stage 9 — Fear of Failure: Midterm papers and exams can cause considerable stress as freshmen begin to fully appreciate the amount of work that must be done. Students involved in the sciences and math may experience such stress earlier in the term as those subject areas commonly give frequent quizzes rather than a single midterm exam. The best way to cope with a fear of failure is to make sure course preparation is thorough.
Stage 10 — Putting It All Together: By the middle of the second term, most freshmen find that facets of their campus life will have meshed into a well-integrated lifestyle. Students begin to see college as a ‘whole cloth’ rather than a collection of experience ‘patches.’ Once this happens they are in a better position to make decisions about all areas of college life. They are now working from a position of confidence rather than the tentative posture of the inexperienced new student they once were.
Remember to allow for mistakes. Parents and the college bound student must realize that mistakes will be made along the way. These mistakes are called life experiences and they teach us a multitude of things. When we are able to learn from our mistakes, we are better for it.
For those sending a child to college in September 2016, it is now time to turn your attention beyond your child’s acceptance letter to the jitters of preparing for the first year college experience. I have spent the last 30 years working with families, and it has been through this experience that I have come to identify the 10 stages of transitional stress that families encounter between May and December of their college bound year. I call it the “Graduation Leap,” and it takes your child across the chasm from the shores of childhood to the brink of adulthood. Since there is a lot of important information on this topic, it will be continued for the next few weeks. In this blog, I will outline the first five stages. In the following weeks, I will continue to discuss the remaining stages and how to employ good preparation and coping skills when dealing with transitional stress.
Stage 1 — Separation Anxiety: The weeks surrounding your child’s graduation may be filled with a heady blend of satisfaction and nostalgia. Romantic attachments may intensify, particularly if separation is imminent. The air around your child is charged with the electricity of unknown changes to come.
Stage 2 — Special Attention: As the summer winds down your child will become more aware that they are really going to college. Some kids manage to block the reality of their impending departure until they start packing. It is at this point that they begin to acknowledge
The approaching separation from family and friends, as well as the comfort of the support system of the high school environment. Reassurance from you will help them understand that they have their family’s support and love regardless of the outcome of their college experience. Lessening the pressure for them, or at least recognizing and understanding it, makes their success in college much more likely.
Stage 3 — “Getting to Know You”: The freshman academic program may also generate severe stress. The courses a student takes in this all-important first term have a strong influence on how their first year goes; students should avoid taking too many courses or enrolling in courses that are too advanced, either of which can make a first-term freshman miserable and discouraged.
Stage 4 — “The Honeymoon”: Freshmen arrive on campus with a myriad of expectations influenced by such films as “Animal House” and “Revenge of the Nerds.” Perhaps the strongest influence comes through carefully choreographed admission recruitment weekends that draw your child into a heightened sense of excitement and euphoria by making them feel as if they are part of campus life while not experiencing actual day-to-day living conditions. They are ready to be enthralled by everything they see, which is good because there are indeed wonderful things to see and experience, although some students may feel they are not happening fast enough.
The Honeymoon stage is also a time when many students experiment with or extend their experience with alcohol, tobacco, drugs, and/or sexual activity. Campus life presents them with more opportunities to do so with two additional factors: they are not under the watchful eye of their parents, and they are influenced by older college students and more experienced peers.
Stage 5 — “The Honeymoon’s Over”: As freshmen settle into campus life the realization dawns that much of college consists of hard work coupled with some frustration and disappointment. Nothing, however, will prepare a freshman for the shock of those first papers and quiz grades because they are almost always respectively tougher and lower than what a student was used to in high school. This can be particularly difficult for students who ‘coasted’ through high school, and some may encounter unexpected hardships during this stage.
In next week’s blog, I will discuss the final five stages and how to best deal with transitional stress. The moral of this blog is “forewarned is forewarned.”
This is the time of year when students are thinking, stressing and ultimately making their college choice. Most colleges have May 1 as their deadline for making a decision.
When it comes time to choose the college, cost, location and programs tend to be areas of major focus. Committing to a college requires reanalyzing your priorities. This will assist in determining which college will be the right choice personally and financially.
Finances should be a major part of the decision making process.Some parents decide to appeal their package, especially if there are wide discrepancies between schools. Michael Stridel, the director of undergraduate admission at Carnegie Mellon University, stated that “his school sets aside slightly under $1 million a year of freshman aid allocation” to be used for renegotiation. Parents need to tell the schools something that they do not know in order to be successful in the renegotiation process, such as a change as a change in job or family medical condition. Also, it is risky to send a copy of another school’s financial aid package for comparison, as that could backfire.
Another important last step is to revisit the student’s college of choice, its campus and its student life. Feel free to talk with a professor in the desired field of study, have lunch with the students and arrange for an overnight stay if it is an option.
Lastly, don’t let the college decision cause short-term satisfaction with long-term repercussions. The repayment for college is typically spread over 15 years after graduation. The federal government limits the amount an undergraduate can borrow to $27,000 over four years. The amount borrowed should not exceed the expected first year salary of the student.
The importance of a well-thought-out financial plan is vital and should be included as part of the overall plan and decision. When making this life decision, do so intelligently and informed. Remember to consider the plan, the goals and the future results.
The college admissions process can be a bruising affair. It's a courtship between a prospective student and the college he most desires and sometimes the relationship is over before it starts.
College seniors spend a great amount of energy, time, money and focus applying to their choice schools. And then, they wait. And wait. And wait. For many college-bound students, when the fat envelope arrives, they're elated. But what about the recipients of the skinny envelope? How to handle that rejection?
Before your child beats himself up for not being good enough, smart enough, skilled enough, take a deep breath. It may not be as bad as it seems. First of all, in my experience, if your child doesn't get at least one rejection letter, then he (or she) has probably aimed too low. In other words, the bright side is that your child has challenged himself to apply for reach schools — and that is a good thing.
It may also help your child to keep in perspective that colleges base their decisions on factors such as how much financial aid he requires or whether or not she's an athlete — it's not strictly a decision based on GPAs, class rank or community service hours.
The college application and rejection process is a teachable moment, even before your child steps into a college classroom. It's a chance to help your child understand that everyone experiences rejection and disappointment at some point in their lives. It's not the end of the world. And come fall, there will be a college waiting for him that will benefit from his presence.
“I can’t believe this!” is the reaction of every parent who is lucky enough to receive a financial aid package. Unfortunately 80% of recipients don’t feel they are getting enough money from the colleges. Normally this causes a knee jerk reaction of “I’m going to call them and tell them I need more money” which is the simplest and easiest thing to do, but it won’t accomplish anything except create frustration and anger toward the financial aid counselor.
If you think about everyone doing the same thing – they are all arguing with a harried, overworked and underpaid financial aid counselor who has been instructed to give no one a break because “our college does not negotiate.” Many financial aid offices do not even have chairs for visitors because they are not encouraged to sit down and talk. Some phone calls are even blocked when their system has reached full capacity.
From my experience about 45% of financial appeals will be successful if the parent does 3 things:
1) Determine the cost of attendance
2) Subtract their Expected Family Contribution (EFC) to determine their eligibility
3) Develop an approach based on what the colleges don’t know about them
There are many reasons why a college would consider revising a financial aid package. The complete list can be seen by clicking here.
There are many strategies someone can use to appeal an aid package. Since there are too many to list here, I’ll give a couple. All appeals should be in writing and addressed to the Director of Financial Aid. The appeals need to be in writing (snail mail or email) so there is a paper trail in the student’s file. Lastly, make a friend in the Aid Office. Even if you don’t have any success this person will be there in subsequent
If you’ve managed to survive the perplexity and stress of completing the Free Application for Federal Student Aid form (FAFSA), then congratulations are in order. It’s a complex journey and we can help you with all of the confusion. Once you’ve submitted your FAFSA you’ll receive a student aid report (SAR). The SAR gives you your expected family contribution number (EFC). This is the dollar amount the government believes you can afford to spend on your child’s education for one year. The number is in five digits. For example, if your EFC says 15540, this reads fifteen thousand, five hundred forty dollars. If your EFC number is 03333; this is three thousand, three hundred thirty-three dollars.
People are often confused by the EFC, they think it’s the amount of student aid they will get; in fact, it’s the dollar amount that Uncle Sam thinks you can afford to spend on college. Understanding your EFC can help you establish a financial plan. The lower your EFC, the more financial aid you should be eligible for. Carefully review your SAR for mistakes. You will be able to correct any mistakes on the Information Review Form, which is on the back side of a paper version and is the last page of a computerized SAR report. If you need to make corrections to your information, click “Make FAFSA Corrections on the ‘My FAFSA’ page. You must use your Federal Student Aid PIN to access your record online. If you need additional help with your SAR, contact your school’s financial aid office or the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243). If your mailing address or e-mail address changes, you can make the corrections online or call 1-800-4-FED-AID and ask a customer service representative to make the change for you.
All colleges that you listed on your FAFSA will get a copy of your SAR. The financial aid offices at the indicated schools will determine your financial need, according to their own financial aid policies. That being said, your EFC may differ from school to school and from year to year.
There are catch phrases that you have to be familiar with. Another name for the COA or cost of attendance is the “all in cost”, what college is going to cost you. Your “need” is the difference between the cost of college and your EFC:
Cost of Attendance or Your “All in Cost”
– Expected Family Contribution (EFC)
= Financial Need
This “getting my kid into college” process is complicated stuff, we understand that. Check our website www.collegeplanningservices.org where we offer helpful tips. It’s always a good idea to hire a professional college planner; it’s his/her job to help you make sense of these annoying applications and better yet, help you fill them out correctly. The College Board reports that 90% of all FAFSAs are filled out with errors or inconsistencies. A good college planner will review your finances, tell you which colleges offer the most free scholarship money and inform you about the numerous ways to pay your tuition bill.
Each year, an estimated 300,000 students and parents are cheated by scholarship scams, according to the Financial Aid Information Page, a financial aid web site. “Fraudulent scholarship and loan companies are counting on families in desperate need of financial resources to not thoroughly investigate their company,” cautions Bob Williams, President and CEO of the Better Business Bureau. Scholarship scams have existed for years but with increased usage of the Internet, they are on the rise. Dr. Kenneth Hartman, author of the College Board’s “Internet Guide for College-Bound Students,” and contributor to the College Board’s web site, provides the following warning: “Scholarship scam artists lurk on the World Wide Web, and they could be hazardous to your bank account.”
Several warning signs have been reported to the Financial Aid Information Page and the Better Business Bureau. The following are just a few: Scholarship services requiring fees. Questionable addresses. Unusual requests for personal information.Recently, the Federal Trade Commission found a number of Web sites with deceptive practices. Companies posing as scholarship search or financial-aid foundations charge from about $25 to provide lists of scholarships, to more than $800 to guarantee eligibility for a minimum amount of financial aid. These promises of guarantees are not possible. To identify false claims, consult the following web site: www.ftc.gov/scholarshipscams Beware of services that do “all the work”. Students must apply for scholarships and grants. Advice: Don’t give out credit card or bank account information to “hold a scholarship.” Scholarship lists are available at schools and libraries or at www.fastweb.com and www.collegeboard.com
Source: Dallas Martin, Ph.D., president, National Association of Student Financial Aid Administrators, Washington D.C. www.nasfaa.org
Source: A Fall Issue of “Higher Education Access” a publication of the Higher Education Center at the Boston Public Library.
Your child has gone through 13 years of schooling, and your 17 or 18 year old is about to enroll in four more years of higher education. These are all comfortable, familiar numbers that capture an important rite of passage your family is about to experience.
But, does the number $63,000 per year for college expenses scare you? For many people, that figure is a frightening prospect. And there are others just as alarming:
•Prices for New England colleges have risen 410 % in the last 30 years, while family income has only risen 145 %.
•Twenty years ago, the average college graduate had $9,000 in loans, but today, that figure is in excess of $33,000.
•Financial aid forms have 225 questions spanning three taxable years.
However, before you get too overwhelmed by those numbers, don’t despair. Consider these figures instead, which may surprise you – and inspire you.
•Many families I work with are able to slice 25 percent off per year of their child’s college tuition bill. That could be as much as $10,000 to $12,000 per year.
•Our clients routinely receive $15,000 to $40,000 in scholarship money each year. This is free money, which is, in effect, a financial windfall.
•There is $55 billion in free scholarship money awarded each year by the US Department of Education and colleges.
•There is another $35 million in scholarship given out through private companies, foundations and civic groups.
So before you let the high cost of a college education muddle your mind and keep you up at night with worry, consider the many ways there are to capitalize on the help that is available to you and how you might secure that support to realize the dream of an affordable college education for your child.