College Planning

The Government’s Response to the FAFSA: It’s The Student Aid Report (SAR)

  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 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.

Photo courtesy of  mymcpl.org

Divorce and the FAFSA - which parent should file?

 It all starts with FAFSA!  The Free Application for Federal Student Aid, one the most significant yet perplexing applications that parents of college bound students will encounter.  A major source of confusion for undergraduate students with divorced or separated parents is: Which parent should fill out the FAFSA? 

The custodial parent is the parent that the child has lived with the longest during the preceding twelve months; this twelve month period is the twelve month period ending on the FAFSA application date, If both parents have shared custody equally during the past twelve months, the parent who has provided the majority of the financial support is the one who should fill out the FAFSA. Biological parents who never married are considered the same as parents who are divorced or separated.  Child support received from the non-custodial parent must be included on the FAFSA.

Financial Aid is not a lottery, filing first does not increase your likelihood of receiving aid; your information must be accurate. You must apply for a PIN number when filing the FAFSA.  This information can be found at The Federal Student Aid Web site @ http://www.pin.ed.gov/PINWebApp/pinindex.jsp. Filing errors could compromise the amount of aid could be entitled to. Colleges will verify supplied information by requesting a copy of your 2010 tax return. Remember penalties for FAFSA misrepresentation include a $20,000 fine and the possibility of a felony conviction. 35% of all parents do not fill out the FAFSA because they feel that they will not qualify for any financial aid. These people are misled by their assumptions if you do not complete a FAFSA form your child will not qualify for the Federal Stafford Loans.  Don’t forget that FAFSA must be completed all four years of college, not just the first year.

Never leave a field blank on the application, if FAFSA asks for a dollar amount and you are uncertain about the figure, use a zero, never use decimal points.  Haste makes waste filing errors could compromise the amount of aid could be entitled to. The College Board reports that 95% of FAFSA forms contain errors or inaccuracies.  Therefore, using a professional to help you to complete your FAFSA is a wise decision.  

Beware of the Scholarship Scam

There are all too many hustlers out there trying to separate you from your wallet. From TV miracle gizmos to foreign email schemes, most of us are skeptical enough to avoid the come on. But in the gentrified world of scholarships where hard-working parents are looking for some help to cover tuition bills, some of us might not suspect a swindle in the making.

Scholarship scammers prey upon families who need money for college - which is just about everybody, so unless you're astute enough to know what pitfalls to watch for, anyone can be a potential target. But by informing yourself, you will be better able to discern legitimate scholarship opportunities from a swindle.

Generally speaking, if something sounds too good to be true, it most likely is. Here are some red flags that should trigger a scam alert:

"The scholarship is guaranteed or your money back."
"You can't get this information anywhere else."
"I just need your credit card or bank account number to hold this scholarship."
"We'll do all the work."
"The scholarship will cost some money."
"You've been selected by a 'national foundation' to receive a scholarship."

The Federal Trade Commission, which works to prevent fraudulent, deceptive and unfair business practices, also provides lots of information to protect parents themselves from a scholarship scam shake down. There is even a link on the FTC website to file a complaint about shady scholarship programs.

So, don't get hustled. Get help.

Photo by iChaz via Flickr.

Sallie Mae is Not a Person

If you didn't know better, you might think Sallie Mae was a long lost relative or a 1950s-era television star, but if you've had any exposure to the world of student loans, you probably already know that Sallie Mae is a giant among loan lenders.

Sallie Mae actually is a nickname for the SLM Corporation which manages more than $180.4 billion in debt for more than 10 million borrowers. The company originally began in 1972 providing federally-guaranteed student loans under the Federal Family Education Loan Program, which is second only to Direct Loans. More recently, Sallie Mae, which had as many as 8,000 employees working in offices across the country, has expanded into private student loans, as well.

The organization has changed over the years since it first was entirely government-sponsored and then morphed into a privatized concern. It has also added innovative programs such as Upromise, the plan that provides rebates to consumers which can be applied to college savings accounts. 

For parents of prospective college students looking to find ways to underwrite a college education, Sallie Mae's website is worth a visit since there is information on its savings accounts, 529 plans and Upromise reward program, as well its various student loan options. It is the nation's leading saving, planning and paying for education company and since its founding, has helped more than 31 million invest in higher education. You might count yourself 31 million plus one.

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The College Board: More Than The SAT

Many of us remember taking the SATs, perhaps with a nostalgic mixture of pain and pride. That rite of passage is a hallmark of growing into adulthood, but there's lots to know about the College Board and many parents could benefit by a refresher course as their child approaches their own SAT-taking.

The College Board, headquartered in Manhattan, was first launched in 1900 as the College Entrance Examination Board. Today, it is comprised of more than 5,700 schools, colleges, universities and educational organizations and it is best known for the standardized tests that measure aptitude and ability, which it creates, scores and tracks.

Among the tests that the College Board administers are the the Scholastic Aptitude Test or later the Scholastic Assessment Test (SAT), the Preliminary SAT (PSAT), College Level Examination Program (CLEP) which provides students of any age the opportunity to demonstrate college-level achievement, and Advanced Placement Program (AP), which offers high school students a chance to gain college credit through advanced classes and test scores. The College Board also offers the CSS/Financial Aid PROFILE, a financial aid application service that many private schools use for financial aid screening. 

Perhaps lesser known are the various initiatives the College Board operates to increase achievement in underperforming schools, particularly in New York City public schools, but also in Washington, DC, Jacksonville and Chicago. So these days, it's important to know that this is not your grandfather's SATs.

Photo courtesy of the US Navy via Wikimedia Commons.

The ABCs of the FAFSA

FAFSA? What’s Thatsa? Yes, it may sound like the latest influenza, but, for the uninitiated, FAFSA is actually the acronym for the Free Application for Federal Student Aid, the official application used by all colleges to determine eligibility for federal aid.

It sounds scarier than it really is. FAFSA is the universal application used by American colleges and universities each year to gauge a family’s financial resources and their ability to contribute to a child’s college education. I say family because it is not only the parent’s income and assets that are reviewed, but also the child’s.

 

The FAFSA application can be completed online and submitted directly via the web for consideration for federal aid. There is a portion that asks for the student’s financial information and another section that surveys the parents’ financial information. To submit the FAFSA online does require a PIN (personal identification number) which can also be applied for online but takes several days to process.

The FAFSA website is user-friendly and the process of filling out the questionnaire can be as easy as A, B, C. The information can be saved online, which streamlines the process for the following year, particularly helpful since it’s an exercise that has to be done each year with up to date financial information. High school seniors have to submit their FAFSA application for regular decision by the end of January of the student’s senior year and those applying early decision should have forms submitted between November 15 and December 15 of the student’s senior year.

However, parents who feel confused or intimidated should try and find professional help since even though the website is designed to be easy to follow, mistakes can be literally costly.

Photo by joshuaheller via Flickr.

Preparing parents for the college selection process

One of the first things any successful student learns is that the best way to ace a test is to prepare for it. The same is true for parents of college-bound students: the best way they can help their child pass the grade from high school to college is to prepare for that transition.

What does that mean, exactly? I often find that the parents I work with underestimate what is involved in getting their child off to a college that will meet his or her needs and fit the family’s finances. In fact, one couple told me, “We tackled our oldest son’s financial aid forms ourselves his freshman year at college. We were certain we knew what we were doing only to find out that we had many concerns, guesses, and unanswered questions. We soon realized that there were probably steps we could have taken and other options available to us that would have helped us financially.”

It’s never wise to overpay for anything and it’s seldom a good idea to make an ill-informed decision. So parents can become a student themselves by becoming informed about the college selection and financial aid process and help their child ace their future.

Photo by casey sterin via Flickr.

How to Ace the College Application Process

Here’s the go-to list that every college applicant should read (and follow). Yes, parents, you can read it, but be sure to pass it along to your prospective college student son or daughter.

1.    Challenge yourself. You may be tempted to slack off in high school, but this is exactly the time when you should be pushing yourself. Don’t shrug off the AP or the honors classes. And, yes, college admissions offices look at all your high school grades.

2.    Get to know your teachers. When it comes to college recommendations, having a strong relationship with a teacher who believes in you goes a long way to convincing a college admissions officer you’re a worthy candidate.

3.    Show your depth. A lot of random extra-curricular activities just show you’re busy; it doesn’t show a depth of commitment. Find your passion and stick with it. This is good advice for life too.

4.    Build your confidence for exams. Whether you boost your self-assurance with SAT prep courses or practice sessions, try to walk into those ACT or SAT exams with poise and aplomb of a winner.

5.    Prepare for interviews.  Interviewing with alumni or admissions officers can feel a little unnerving, unless of course, you go in prepared and with the right attitude. Learn about the school beforehand and anticipate what kinds of questions might be asked. Then relax and be yourself.

6.    Take your time on applications. Don’t rush. Haste makes mistakes. Be thorough, read over your applications and be sure to save a copy.

7.    Start researching colleges early. Beginning the process of finding the right-fitting college can begin in your sophomore or junior year online. That’s a good start before you begin visiting campuses and scheduling admissions office interviews.

8.    Ask early for Letters of Recommendation. Teachers are inundated with requests to write recommendations, so be sure to ask in the spring rather than wait until fall. That gives him or her plenty of time to write a quality recommendation.

9.    Make the best case for yourself. Spend some time to identify your strengths and figure out the best way to showcase them. Maybe consider creating a video college essay to best spotlight your filmmaking, animation or creative skills. Or create a portfolio of your best community service projects.

10.  Ask for help when you need it. Your parents are there to support and guide you, but they’re not the only ones who have your back. Guidance counselors, college coaches and high school teachers all want you to succeed and are willing to share their expertise to help get you there.

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College Costs - Numbers that Might Surprise You

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 $50,000 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 374 % in the last 25 years, while family income has only risen 127 %.
•    Twenty years ago, the average college graduate had $9,000 in loans, but today, that figure is in excess of $27,000.
•    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 $46 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.

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Saving for College 101

In 2016, elite college tuition is projected to be $281,101 for four years. If that number doesn't shock your socks off, consider that you must save $1,737 per month at a 4 percent interest rate return to meet that tuition obligation.

That might be doable for some families, but for those who may tend to find a target of nearly $300,000 a struggle to meet, there's still hope. Of course, it's common sense that the longer you save, the more you'll have in the bank. That's true because you're saving money over a longer period of time, but it's also true because any interest you're earning has a chance to compound over time — giving you a bigger bang for your buck.

But what about those families who have already missed years of saving opportunity? Or the families who have saved routinely but haven't come close to their target, in spite of their best efforts? And what of the families whose savings strategy has been upended by unemployment, job loss or a medical crisis? How can they possibly catch up?

There is much research that can be done independently to find workable strategies for college financial planning, but sometimes the best course is the simplest one: to get the best teacher. If that's your choice, look for a professional who can offer a comprehensive service — someone who can analyze your financial status to determine your family contribution, knows how to reduce your expected contribution, is available to assist with complicated financial aid forms and can answer your questions knowledgeably and accurately.

Photo By California Cthulhu (Will Hart) via Flickr.