The Student Debt Burden…Who is to Blame???

By: lawrene Posted: May 17, 2012 Posted in Borrowing for College| College Trends| Financial Aid| Grants and Scholarships| Tax Strategies| Uncategorized

Those who know me know that the only reasons I would read the NY Times or watch MSNBC are to get the view “from the other side”.  This week, I have come across several alarming trends in our culture… the “blame game” is alive and well.

‘New York Times’ Room for Debate blog asks experts what can be done to ease the college debt burden on students. Education Sector’s Kevin Carey thinks colleges themselves should take some responsibility: “Right now, a mediocre private college that encourages a student to borrow $100,000 to get a B.A. in art history bears no consequences when that student defaults on her loan, can’t get a mortgage, delays starting a family, and endures constant harassment from collection agents.” Ownership of some of this debt would force colleges to think twice about offering students such damaging financial aid packages, says Carey.  ’

WHAT?!??!???  You mean these poor students are so naive and financially illiterate that they didn’t KNOW what they were doing when they had an adult with good credit co-sign for them?  Let me get this straight:

1- The STUDENT applies for the college.

2- The college lists their cost of attendance on the college website (mandated by law)

3- If the student didn’t qualify for need based financial aid, or didn’t even apply, then there are only 3 ways to pay for college:  Savings, Income, or Loans.

4- If the student ropes a friend or family member into co-signing on a loan, how is that the colleges fault?  Unless the student has good credit, they can’t take out a big student loan.  And most students out of high school in this area have no job, no income, no assets, and no credit.  By law, the Stafford Loan is the only entitlement loan for students, and that is capped at 31k over the undergrad career.

5- If the student is going to college with a goal to earn a living in his chosen field or major, then choosing a marketable major is pretty important…yes?

Our goal here at GetCollegeFunding is to match the students to the best fit (financially, academically, culturally) colleges while guarding the parents’ retirement.  And while he never advocate jeopardizing the family financial health, there are those who will jump off the cliff anyway, and get in WAY OVER THEIR HEADS.  That is not the colleges fault, or the banks fault.

The first lesson to teach a college student is BEFORE college, and that is that we are all responsible for our OWN actions.

CUSD–Grade “incentives” = Grade INFLATION

By: lawrene Posted: May 17, 2012 Posted in College Admissions| College Selection| College Trends| SAT/ACT Test Prep Tagged ,

Being an independent college counselor, the following notice to parents/students from CVHS disturbed me greatly.

” Once again this year, the CVHS math, English, science, and social science departments will offer opportunities for grade incentives tied to performance on the STAR California Standards Tests (CST), which will be given May 17th, 18th, and 21st to all 9th, 10th and 11th grade students.”

It goes in to state that students who improve from BELOW proficient to PROFICIENT levels on the test will get a retroactive grade boost of 3%, for ADVANCED, a boost of 5%, etc.  And the student has to go back and ask their teacher to adjust the grade accordingly if they win this inflated grade percentage.  Like teachers don’t have enough non-academic minutia to do!

CVHS may call this “grade incentives” but I call it Grade Inflation.  Here in Capousd (and other districts we work with, with the exception of high end private schools), students have been given an overly optimistic view of themselves.  It used to be that there was ONE valedictorian per high school class…last year, Dana Hills had 86!  We see hundreds of students every year that apply to colleges they don’t have a chance to get into, let alone get money for, as their confidence has been puffed up unrealistically.

Whatever measuring stick is used to get the coveted “state funding” should have NO effect on students grades.  Is dangling a prize really going to cause a student to do better?  Just as those ridiculous memos to parents, telling them to make sure their child gets rest and eats a good breakfast so they can test well…Do parents REALLY need to be told that…really?

C’mon Capo… This year (especially), we have seen some of the MOST AMAZING students come from Capo.  You have some great things going for you…please don’t feed the students any more of the “entitlement stew”.  There is a certain dignity and respect from EARNING a good grade…especially if the teacher was seemingly unfair, or harsh.  It’s LIFE.  In the words of that famous philosopher Mick Jagger…”You can’t always get what you want”.

 


By: tom Posted: March 18, 2012 Posted in Uncategorized

All admission deadlines are passed, and the time is ticking until May 1…yet  Single Parents are frozen in their own confusion and often don’t do anything pro-active High achieving students definitely should apply to private schools. For many families, it often costs less money out of pocket to attend a very expensive ($40,000 to $50,000) private university than a public school costing much less. Schools such as Pepperdine and Chapman typically offer families a large amount of financial aid with most of it being grants (free money), often called gift aid.

When you submit the FAFSA form to the Department of Education, officials calculate your Expected Family Contribution. This EFC is subtracted from the college’s cost of attendance and the difference is your “need.” Many private colleges will meet most, if not every penny, of your need. If your annual income is about $50,000, your EFC could be less than $5,000. This means that for a $45,000 school, you are eligible for $40,000 of financial aid with the vast majority of this being offered in grants with a small portion being deferred-payment student loans and perhaps a work-study program.

When to Think About Financial Aid

By: lawrene Posted: March 15, 2012 Posted in Borrowing for College| College Trends| EFC Topics| Financial Aid Tagged ,

Q.  Our daughter’s high school counselor says there’s nothing we need to do regarding financial aid until her senior year. Is this correct?

 A. Unfortunately, this is what most school counselors say. They tend to focus on college admission requirements and SAT/ACT preparation, but they miss the college funding element almost entirely. High schools (public and private) often limit their financial aid instruction to a “How to Complete Your FAFSA” presentation in December or January of the senior year. This is like attending “How to Complete Your Tax Return” on April 14 with no prior instruction on topics like itemizing deductions or contributing to a 401K.

What is missed by schools (and therefore parents) is the most critical part of college funding – the planning stage. Just as tax planning can optimize a family’s tax situation, so can college funding planning optimize financial aid results.

The first step is learning your EFC (Expected Family Contribution). This calculation is the primary factor in determining eligibility for most of the financial aid awarded each year. Some families can actually reduce their EFC — which can directly reduce out-of-pocket college costs — when they understand how it’s derived and they learn it early enough.

Parents should learn their EFC during the student’s sophomore, or at the very latest, junior year. The most common question we get is: “Why didn’t anyone tell us this sooner?” Sadly, moms and dads have never been told this by anyone. What they are told is that learning how to complete the FAFSA form line-by-line in January of the senior year puts them right on track. So they file their FAFSA, learning only now from the Department of Education what their EFC calculation is, and they are often shocked at how high the number is. There’s little time for planning, because their child is leaving for college in just a few months.

Whether your EFC is high, low or somewhere in between, the optimum college search strategy for your student is often contingent upon this very EFC calculation. Many parents realize their search would have varied dramatically had they only known their EFC early on. We’ll offer some of these college search strategies in a future column.

Go to our website for a very accurate and flexible EFC calculator.  We also have a variety of free resources, seminars and WEBinars.  www.GetCollegeFunding.org

HeartBreak of Achievment

By: lawrene Posted: March 12, 2012 Posted in College Admissions| College Selection| EFC Topics

This time of year is very bittersweet for us as college planners. Every spring we receive distress calls from families that are heartbroken rather than excited about their child getting into a dream school.

The students have done everything they were told to do. They took all the right courses, they earned the grades, they got impressive test scores, they spent part of their summer working on college applications and writing essays, they visited colleges (but not the financial aid department), they prepared their list of six to ten schools (including “reach” schools like Cal), and they submitted their applications well before the deadlines.

And then comes the good news: They’re accepted into their dream school. But the bad news comes a week or two later when they receive their financial aid “award” — often in March, less than two months before their commitment to the school, just five months before they are to leave for college. The award consists of two loans – an unsubsidized Stafford loan (for $5,500) and a PLUS loan (for the balance).

The parents assumed their student’s academic achievement would generate some grants and scholarships. They heard about the Cal Grant, the federal Pell Grant and work-study programs. They even filed their Free Application for Federal Student Aid (FAFSA) form mid-January, well before the March 2 deadline. “So what went wrong?” they ask.

They didn’t understand the process. This award is typical (and predictable) for families whose EFC’s (Expected Family Contributions) are $25,000 or greater. We should never rely on a merit award from a public college. Parents need to learn their EFC before the summer going into their child’s senior year, and they need to have a plan in place to pay for every college on their child’s list. (Go to www.LearnYourEFC.org for an accurate EFC calculation.)

The element of planning for college funding is as important as admissions counseling and SAT preparation. Not having a plan to pay for college before applying for admission is like setting your heart on your dream home not knowing its cost until you’re in escrow.

Seminars: and WEBinars. For details, visit www.GetCollegeFunding.org and register online.

Early Action/Early Decision NOT An Admission Strategy

By: tom Posted: October 29, 2011 Posted in Uncategorized

The topic of Early Admissions is often one of confusion and misunderstanding. Students often see this as an admissions strategy that will enable them to gain admittance to those otherwise unattainable “dream schools” on their College List.

As a rule of thumb, unless a student is in the top 25 percentile of the incoming applicant pool for a given college, they shouldn’t even consider applying early. The reason for this is quite simple: the early applicant pool (especially at the most highly selective institutions) is THE most competitive pool you can imagine. Statistically, a student may have a BETTER chance at being admitted in the regular admit pool if they’re in the “middle 50%” range. Students risk the likelihood of a flat denial if they’re not in the upper echelon of the early applicant pool.

What adds to a student’s confusion on Earl Admission as a strategy is the common misinterpretation of the statistics. As an example, let’s say the Admit Ratio for Early Decision at a highly selective college is 36% and 12% for Regular Decision. The conclusion one might (erroneously) draw from these stats is that a student is 3 times as likely to be admitted if they simply apply early. The flaw in that calculation is that the early admits would have been admitted in the regular pool, so this becomes an “apples and oranges” comparison.

Early Admissions does indeed have its positives – perhaps the biggest one being the relief of having a college (or two) in your “back pocket” by Christmas break! But families need be aware of the biggest difference between the two TYPES of Early Admission: Early Action (EA) and Early Decision (ED).

EA is “non-binding”, meaning that even though the college offers admission before January 1, there is no commitment required to accept admission until May 1 (National Deposit Day, as I call it). Early Decision on the other hand is a binding agreement. The student has made a commitment to attend the college that offers an ED acceptance. Early Action is therefore far less risky, because the student may very well receive other offers with which to compare.

Parents often ask me before applying ED, “So how do get OUT of it if we can’t afford the college once we receive their financial aid offer?” This is fundamentally NOT the attitude a family should have if they’re considering ED as an option. If you are not certain you can afford the school, then don’t apply ED.

One scenario by which it would be appropriate to apply ED is for a family that has the financial wherewithal to “write a check”, and they’re not counting on scholarships or grants to make the college affordable. For a family who cannot write the check, however, they need to approach the Financial Aid Office for an “Early Read”. If the school’s financial aid packaging policy is such that mom and dad’s financial profile and/or the student’s academic profile provides assistance from the school so that it is indeed affordable, then and ONLY then should they proceed with ED.

One closing comment regarding ED, unless there is a truly compelling reason to choose a particular college for ED, it should likely avoided. Too often, families have not properly researched the college under consideration and ED is viewed as a “strategy” to see if they can “get in”. This is indeed ill-advised.

Community College: Access vs Success

By: lawrene Posted: October 25, 2011 Posted in College Selection| College Trends| Uncategorized

Here is a great article on attempting to fix our community college system. While over half of our local students end up at community colleges the first couple years of college…the results are DISMAL. There are now changes in the works…

California Community College Task Force Pushes Big Changes

Seniors: Your College List is DONE… Right?

By: tom Posted: October 22, 2011 Posted in College Selection

It always surprises me every year as we approach November and I find so many seniors nowhere near being finished with their College List. This task SHOULD be pretty well completed by the end of the JUNIOR year (hint, hint – juniors and sophomores!).

The College List is THE single-most important task in planning properly for college. Actually, let me rephrase that: Constructing a REALISTIC College List is the single-most important task in planning properly for college. So what do I mean by a “realistic” list? Simply stated – a list of excellent-fit colleges for the student that are affordable for the family.

“Excellent-fit” has many components including academically challenging (but not TOO challenging), good social fit, good spiritual fit and political fit (as applicable), and a good match for the student’s learning “style”.

“Affordable” means the family has the savings, cash flow, and borrowing capacity in place to sustain the student for the next 4 to 5 years to support the undergraduate out-of-pocket costs – in a way that does NOT jeopardize mom and dad’s retirement plans.

With only 1 out of 2 students graduating from the colleges they enter as freshmen, both of these components are necessary in order to not become another “statistic”.

Final College Lists Should Integrate “EFC”

By: tom Posted: September 7, 2010 Posted in College Selection| EFC Topics| Financial Aid


Before a senior’s College List is complete, mom and dad SHOULD have a working knowledge of EFC (Expected Family Contribution) as well as the Financial Aid packaging policies of all the colleges under consideration.

Sadly, very few families accomplish this in an efficient and timely manner.  Ideally, the family should have a solid “working knowledge” of EFC when the student is in the sophomore or junior year.

Attention JUNIORS: Take the PSAT

By: tom Posted: September 7, 2010 Posted in Grants and Scholarships| SAT/ACT Test Prep


With very few exceptions EVERY junior should take the PSAT.  Many students don’t realize that the junior sitting is the ONLY PSAT that counts for National Merit Scholarship qualification.  This year the PSAT will be offered Wednesday, October 13th and Saturday, October 16th.

Registration occurs at your high school (or another high school in your area).  You cannot register online for the PSAT, and the high school administering the test determines on which of the two test dates they’ll offer it.