You should go… even if your child is only in 10th grade and especially if s/he’s in 11th.   Here’s why. 

In this incredible age of information where your child is but one click away from filing multiple college applications, the fact remains that the admissions ‘experts’ actually doing the selecting for these said colleges are humans and therefore are capable of making human-like, emotional decisions.  Your student enjoys a great advantage if she has an opportunity to actually meet face-to-face with one of these human experts.  You see, when an admissions officer can connect the applicant’s name to a face and a voice, it brings depth and dimension to the candidate.  I have personally witnessed times where personal contact has converted a borderline candidate to a front-runner and/or a front-runner with a poor financial aid offer to a recipient of an ‘institutional grant’ at the 11th hour.  

Now on the flip side:  Much is written about how competitive it is to get into college today; but the fact is that competition among schools for good students is just as fierce.  The college fair is your student’s opportunity to be recruited and wooed.  The fact is that students cannot visit every college  — especially our students who are geographically-challenged in that regard.  Local college fairs allow them to meet, shake hands, and converse with admissions officers and trusted alumni, as well as the opportunity to gather information and learn about different educational opportunities. 

So, what should you do at the Fair?  Admissions officers LOVE to meet students who are engaging, asking questions, and inquring about their school. Here’s what I tell my clients about attending a college fair:

1. Students should take initiative, allowing (helicopter) parents to play wing man at best.
2. Have a good attitude – greet people with a smile, a firm hand shake, and with tempered enthusiasm.
3. If you see a school you haven’t heard of, don’t be afraid to approach and inquire further.  This may be your diamond in the rough.
4. Be conversational and welcoming.  Often these folks are in from out of town.  Make them feel welcome by engaging them in conversation about anything that might make them feel comfortable. 
5. You should have at least a general idea of your favorite academic subjects so that you can inquire about specific majors of study.  Make sure the school offers what you desire academically (regardless of their  success on the gridiron or hardwood).
6. Get business cards and send brief, follow up notes (email or letter) to those admissions officers who represent schools where you have interest.

Above all, remember that the admissions process involves people making decisions about other people.  In an admissions process that has become increasingly competitive, technology-driven and financially motivated,  you DON’T want  the admissions committee to first find out about your student when his application arrives at their office.   Admissions officers face pressure, they have goals to meet, they compete with other schools, they can be moody, they face disappointment,  many are away from home a lot of the time and they just want to be loved.  So if you want to improve your chances of receiving that Thick Envelope some day,  go out there this week and show them some love!

Best,
Peter

P.S. While personal contact is important, your students’ grades and course selection in school remain the most important determinant of their admissions chances (by a large margin).  But when everyone your child is competing with share similar grades and scores, personal relationships certainly tip the balance in their favor.

P.P.S. NACAC holds another local college fair in the Fall, in Ft. Lauderdale.  This February event, though, is great for 10th and 11th graders who are (and should be) canvassing the college landscape.

A little closer to home: One mom at last week’s packed class told me that it had taken her five attempts just to read through the form that would ultimately determine her daughter’s eligibility for financial aid, and she still wasn’t sure if she and her spouse (or her ex-husband and his spouse) were the appropriate household to use on the application.

Confounding the matter is the fact that the FAFSA, which is arguably the single most important document in determining how much and what type of financial aid a family will receive, has failed to keep up with the changing composition of our families and our lives. Confusion is widespread and can lead to an inaccurate portrayal of a family’s finances — one that does not fairly reflect its needs.

At last week’s class in Pinecrest, I took a few minutes to answer some individual concerns. Many of the questions are shared issues for many middle class families so I thought I’d summarize five of the more common ones here. Quick disclaimer: my responses are necessarily general and should be considered as a guideline, not a recommendation — remember, no two families have exactly the same circumstances. Finally, although it may not always be immediately clear what information should be provided, the guidelines are available through the Department of Education.

First – the student is the applicant. Any reference to ‘You’ or ‘Your’ on the FAFSA and on the CSS Profile refers to the student!

Next, on the matter of children with separated or divorced parents: Dept. of Ed. guidelines require that the applicant report the household dynamics of the legal parent who provides more support, which is interpreted as the household where the student lives the majority of the time. Two notes: 1) the other parent’s household is largely ignored on the FAFSA, but WILL LIKELY be counted in the CSS Profile formula and 2) children with divorced same-sex parents face additional difficulty when applying for aid and should contact a specialist to review their situation.

The Small Business Loophole: For most business owners I see in my practice, the proper value of their business is “zero.” Why? The rationale buried in the directions has to do with the number of employees your business has. Those with fewer than 100 employee shoud be exempt, but I’ve seen CPAs make this mistake and lose tens of thousands of potential financial aid.

Independent Students: I get so many questions from parents who want to ‘emancipate’ their children so that the parents’ assets will not be counted in the formulas. In most cases, this won’t work. The Dept. of Ed. has 6 criteria to determine whether a student can be considered ‘independent.’ And trust me, you don’t want to answer ‘Yes’ to these questions, at least not yet (like, for example, whether your child is married or has dependents of her own).

Work-Study: This is not a trick question… you probably realize that most colleges do not give out 100% free money. Most schools award a combination of free money and loans/work study. You should check ‘yes’, indicating that you wish to be considered. You can always appeal later or decline the work study offered, but it’s harder to ask for it later. Besides, if your kid works 10-20 hours a week and makes a few extra shekels, that’s a good thing.

5) Retirement, checking, savings and cash balances: Aside from questions about your income, these are the most important questions. You don’t have to disclosing the value of your retirement accounts – IRAs, 401Ks, and so forth, nor the value of your primary residence. The FAFSA specifically tells you not to include those assets, so don’t! You do need to enter the total amounts of cash holdings you have as of the day you are filing SO make any large payments (like mortgage etc.) BEFORE you file. As for other non-retirement assets, there is an asset protection allowance, and certain annuities and insurance products could also be exempt. Consult a qualified college advisor sooner rather than later if you have more than $50,000 worth of assets.

Tomorrow (1/18), I will be conducting a workshop for parents at The Sagemont School in Weston. It’s free, full of this type of information and open to the public — and it’s the last class I’m teaching before the priority financial aid deadlines. If you have college-bound children, I hope to see you there. If you don’t, please send this on to someone who does — they’ll thank you for it. Click here to register.

Best,
Peter

p.s. One last tip: As soon as I sent out last week’s note about there being no changes on this year’s FAFSA, naturally I found one. Unlike in years past, the 2012 application gives you the opportunity to view select information about the schools chosen, including graduation rates. That sounds good, right? EXCEPT – the rates provided by FAFSA are the 6-year rates, not 4-year as was the standard time back in the day. This 6-year ‘new normal’ is not only abhorent, it’s expensive. And it blind-sides most families. The Education Trust publishes 4, 5, and 6 year rates on their site and is a must-stop when researching the colleges on your student’s list.

For those who are new to the college process, January 1 is the first day that the new Free Application for Federal Student Aid (the ‘FAFSA’) becomes available.   The FAFSA  contains roughly 100 questions about your family’s income, assets, real estate holdings, household members, student’s assets, etc.  Your answers will be used by the government, and in turn the school financial aid offices, to determine how much they believe you can afford to pay for college for one child for one year.  The form is available at http://www.fafsa.gov.  It does not cost anything to complete and submit the FAFSA. (Note: Do not go to http://www.fafsa.com, as this is a fee-based website). 

The form itself is not difficult per se – understanding the rules, regulations and loopholes that go into the government’s formula is another matter.  Overstate the equity in your investment property or mis-identify a parent asset as a student asset, for example, and you can wind up losing out on thousands of dollars of aid you would have otherwise been eligible to receive.    The College Board estimates that about 90% of forms have mistakes on them, while the Department of Education states that 40% of families leave money on the table.

Every student planning to go to college must fill out a FAFSA in order to be considered for Federal and Institutional Financial Aid (note that in Florida, students who wish to qualify for the state’s Bright Futures merit scholarship must also file this form, regardless of whether they plan to apply for additional scholarship aid).  If you are considering strategies to reduce your EFC, the time to act is now.  If you  are not sure what an EFC is, the time to act is definitely now – well before (as in years before) you hit ‘submit’ on any of these forms.

And for 12th grade parents in particular, this is an emergency.  The priority financial aid deadline for most schools for first-time applicants is usually on or before February 15th, and we urge all families to meet that deadline.  Financial aid is often awarded on a first-come, first-served basis, and we are expecting a record number of applicants to be vying for money from a shrinking award pool.

The FAFSA (and it’s evil twin the CSS Profile) request income information for 2011.   Since most families have not completed their taxes yet and may not even be sure of their year-end numbers at this time, it is appropriate and EXPECTED that you will use estimates on the FAFSA.  Once your taxes are completed and submitted, you can make adjustments to your form.  Note that you will not receive a final offer until you have filed your taxes so this is not a year to procrastinate with the IRS.

And since I mentioned procrastinate…parents with 11th graders should take heed, as your financial aid base year has just begun.  (The government will use your 2012 inome to determine your family’s eligibility for scholarships).  The time to make adjustments to your holdings to ensure that you qualify for the maximum amount of aid is now — certainly before your form is filed and ideally before your base year so that your plan is in place before the ‘look back’ period.

Financial aid is not what it used to be.  Families with six-figure incomes often and yes, routinely, qualify for five-figure awards.  I know this to be true not just because the Wall Street Journal has said so (which they have),  but because I’ve seen it happen every year.  The financial aid process is like a game.  Know the rules and you win.  Stay in the dark and you risk losing out on thousands of dollars for your child’s education.  I’ll be discussing these rules and the entire college admissions and funding process (including the financial aid formula) at my workshop in Pinecrest next week.  Click here for more details and to register.  There is absolutely no cost to attend, but missing out on this info could cost you a fortune.

If you are the parent of a college-bound teen, I urge you to join me for this class. 

Best,
Peter

To clarify, there is not a single school with a January 1 financial aid deadline for students applying ‘regular’ decision.

The FAFSA application, which is the Free Application for Federal Student Aid, opens on January 1. New Years Day marks the first day that you can complete this form for the 2012-13 school year. The first major financial aid priority deadline for the incoming class (FALL 2012) is usually February 1, but you should check with the individual schools for the actual deadline. Some schools have a priority deadline of February 15 or even March 1 (or later).

In addition to the FAFSA (a must for all students applying for student aid, including for students who are applying for FL Bright Futures merit awards), some schools also require supplemental financial aid forms such as the CSS Profile. The Profile, which is administered by the College Board, ‘opened’ on Oct 1 and was due in November for students who applied early at schools that use it.

Regarding the Bright Futures scholarship application, this link opened on December 1 for students graduating in 2012. Please keep in mind that whether your student plans to attend college in Florida or go out of state, they should complete the simple Bright Futures application before they graduate from high school. Stuff happens, and even if your student starts college out of state s/he just might end up transfering back home to a Florida school, and a Bright Futures application cannot be completed retroactively.

(Note: Returning college students tend to have later financial aid deadlines, often after April 1. Schools like to deal with the first year students first, then address the financial needs of returning students. This gives parents of returning students a little more breathing room this time around.)

A good rule to live by with all college forms, but financial aid in particular is – EARLY IS BETTER! Financial aid is often awarded on a first-come, first-served basis and therefore everyone should endeavor to have all of the requested financial aid forms submitted on or before the priority deadlines. Missing the priority deadline can mean that your aid package may be a little light on cash and a bit heavier on loans or self-help.

One final note: Meeting these deadlines is but a small, albeit important, piece of the award puzzle. It’s also important to complete the applications accurately, and with proper planning, so you can significantly enhance your student’s financial aid award. For some 12th grade parents it may be too late to complete this planning, although I’ve been able to assist some folks at the very last minute. For 11th or 10th grade parents, the time to act is now, NOT at the last minute when your student is completing his/her applications.

I’m finished holding public workshops for 2011, but starting in January I will be sharing tips and strategies on the financial aid process, both in Miami-Dade and Broward. Click here for more information on what I’ll cover, and to register for a comfy seat.

There is no cost to attend, but missing out on this valuable information could cost you thousands.

Best,
Peter

P.S. Many college applications for admissions ARE due at the end of the month, or January 1. Once again, early is better. Don’t wait for the last second to hit submit as we have seen technical and logistical difficulties derail students at the 11th hour. There’s no reason to unnecessarily spoil the New Year.

Not sure if you caught this but just before Thanksgiving, 13 Long Island (NY) high school students were implicated in a ‘pay for play’ SAT test-taking scheme.  (Since then, two more students have turned themselves in.)  Aah… another day, another scandal. 

Now to be fair, as crimes go, this test-taking scam obviously pales in comparison to what’s going on to the North and West of Nassau County  (at Syracuse and Penn State), but I doubt this is an isolated incident, and it does raise some broader and generally disturbing questions about the role of standardized tests in the college admissions process.   Which is, in a word, disproportionate, as a factor on the highly subjective and influential US News & World Report ranking system, in the high school classroom and in the home.

For starters, not only will a four hour test fail to capture a student’s essence, it isn’t even a reliable indicator of future success.  That honor belongs to a student’s transcript. Most research suggests that high school grades are the only relatively accurate predictor of college grades.  Furthermore,  the standardized college tests have a well-documented  racial and socio-economic bias.  SAT scores tend to be better at predicting a student’s race and economic background than her ability.  This is NOT just my opinion – it has been well chronicled in books and papers for years.

That said, standardized tests aren’t going anywhere anytime soon.  Last year the largest number of students ever took the SAT, some 1.65 million according to the College Board (the organization that created and profits from the SAT).  But there is a real and growing movement afoot to de-emphasize their importance.  And some really great colleges and universities are beginning to adapt their admissions policies accordingly.
Today, there are currently 850 schools that de-emphasize standardized tests in their admissions process.  And that list is growing.  Some of the universities on this list are considered quite prominent nationally.  And many are among my favorites:

American University (where Jill got her MBA), Smith College (where my mom went), Union College, Rollins, Marist, Muhlenberg, NYU, Wake Forest, Bates, Bowdoin, Connecticut College…

For more information about ‘test optional’ policies or to view a full list of test optional schools, check out the National Center for Fair and Open Testing.  And remember, even if you don’t see your dream school on this list, you are way more than your score.  The admissions process at ALL colleges (whether on this list or not) is about determining who will be a good fit for their particular campus, and most will consider any and all information that expands their view of a particular student.  That means your grades count; as do your extracurriculars, your essays, even your tweets (and yes, your test scores).  So, mind your manners; put your best face on your Facebook and study hard, and have some perspective when it comes to the standardized side of the test.

Since these programs allow you to knock off dollars from your tax bill, they can be a good thing for many.  Hey, every little bit helps.  But like most complex programs, they are not without potential peril.  First the obvious. Both programs have various eligibility requirements, income limitations and ‘double dipping’ penalties.  (Uncle Sam doesn’t want familes with tax free college savings plans such as 529s and Coverdalls to pocket these tax credits for expenses paid for with money from these vehicles).  The rules are confusing, filled with loopholes and landmines that can conflict with the Financial Aid regulations.  As a result many families either wind up losing valuable scholarship dollars and/or tax credits, or inadvertantly get hit with unexpected income taxes and penalties. 

I can’t explore all of the possible permutations in a short email and generalities can only go so far.  If you’d like to know more, you can obtain the rules from IRS publication 970, ‘Tax Benefits for Education’, and as always, you should consult with a Certified Public Accountant or licensed advisor who knows the ins and outs of these rules before making any decisions or assertions. 

Wishing you and your family a wonderful Thanksgiving!

Best,

Peter

Beatrice is the ‘perfect’ girl with a simply stellar life until she almost makes a mistake.  She doesn’t actually make a mistake, but just the thought, the fear, of missing the mark causes much consternation in young Beatrice.  Her mood changes, and she becomes more pensive, worried about even the possibility of a flaw in her game.

In the end, Beatrice makes a big mistake (OK, I told you the end, but you should still read it. This may be The Giving Tree of our day.).  This is a children’s book with a happy ending, so Beatrice is able to laugh it off, and everyone laughs with her, as opposed to at her.

The book is written by Mark Pett and Gary Rubinstein.  Rubinstein is a high school math teacher at Stuyvesant High School in New York who, along with Pett, came up with idea for the book when their students were so darned afraid of raising their hands out of fear that they might actually get the answer wrong (Oh, how terrible.).  The book’s message is that it’s OK to take a risk and to be wrong, whether it’s in school or elsewhere.  In these fearful times, many are so terrified of stepping outside the box and taking a chance, even though that’s exactly what we need to get our economy moving.  And it’s what we need to teach our kids if we want them to be successful.

Some mistakes are worth making, and even worth talking about.  In fact, some colleges even ask applicants to write about a mistake that they have made, to own up to them. (What a great assignment, this from the same cutthroat environment that bases it’s admissions decisions on proximity to perfection.).  Thomas Edison spoke repeatedly about the value of his mistakes, and how each failure simply offered him one closer step to success. For example, “Many of life’s failures are people who did not realize how close they were to success when they gave up.”  Edison ended up doing quite well for himself despite, or perhaps because of, his many mistakes.

I think everyone should read The Girl Who Never Made Mistakes.  Certainly, if you have young children or know someone who does, this should be your next gift.  With the Holiday season right around the corner, this is an easy gift that will keep on giving.  The book sends a message that we can all learn from.

(Other mistakes are not worth making.  Like mistakes on your financial aid forms.  These can cost a family thousands of dollars, making the difference between a generous financial aid award or no money at all.  When families apply for financial aid, the colleges will not point out mistakes that the family may have made. Did you include your Florida Prepaid Plan or 529 Plan as a student asset?  More than likely, that’s wrong, but the college will NOT point that out, and it could cost you thousands in lost grants or scholarships. Did you include retirement assets, or even your home equity as an asset on the FAFSA?  Wrong again, and the school will not point that out for you, either. With financial aid, you need to get it right the first time.)

Those of you who have been long-time readers know that I’ve been saying and proving this for my clients for years. Thankfully, those of you who haven’t, no longer have to take my word for it.

As of Saturday, courtesy of a federal law passed in 2008, all colleges will now be required to add ‘net cost’ pricing calculators to their websites. The calculators will provide parents with an estimate of their family’s expected net price (total costs minus the average amount in grants or scholarships that their student may receive).

No question this is a good start as an early planning tool, but it’s definitely not perfect. Here’s why.

1. Not all calculators are created equal. Some colleges are using the template created by the US Dept of Education. It asks only nine questions, including how many children the family has in college, family income, and whether the student is married or has dependents. Problem: These nine questions are all that the government is requiring colleges to ask, but there are 100 questions on the FAFSA and dozens of other factors that can seriously affect a family’s expected contribution (EFC). Those inputs can be as benign as your highest level education to as complex as how to value your business, personal & student assets. There are at least 575 colleges that engaged Student Aid Services, a private company, to provide them with much more involved versions of the calculator. Given the disparity, it’s difficult to get a reliable result and/or to make a true comparison nationwide.

2. Net Price is NOT necessarily the Net Cost To You. I agree with Mark Kantrowitz of FinAid.org who cautions that many calculators figure the net to you after including student and parent loans. That’s risky. Not all schools dole out financial aid equally. Some have no or low loan policies and will offer more grants (which you don’t have to pay back), whereas others offer loans. Though at first glance the net cost may look the same, if the school is discounting its price with student loans, the long-term costs can be astronomical. Make sure that you know which schools on your list are loan averse.

3. The Results Are Not Guaranteed For Four Years. The calculators will give you an ‘estimate’ of what you might pay for the first year ONLY. Your circumstances, the school’s and the federal government’s change year-to-year. Some schools will ‘front load’ grants to induce a prospect to come. You have to re-apply for financial aid every year, and therefore it’s very important to know the financial history of a particular school to anticipate whether your costs could go up in future years.

3. They Do Not Really Account For Merit Discounts. The calculators work best when determining need-based financial aid awards, but they are less accurate when factoring how merit scholarships (awarded by the Institution) can reduce the cost of college. Although the most selective schools like the Ivies only offer need-based grants, many other good, but less competitive institutions and even great public universities looking for out-of-state applicants to boost their net revenues — will give desirable applicants incentives (in the form of scholarships) to enroll. Why? Aside from the aforementioned bump in net revenue for publics, schools are very concerned about their yield (% of accepted applicants who enroll). Positioning your student to apply to schools that are interested in having them attend should be an important consideration in the Admissions process. Since merit is fairly subjective, the net calculators will do little to inform those decisions.

Overall, the calculators can be useful as guides to families engaged in early college financial planning and as a starting point for parents to make arrangements to cover the balance. They are not, however, set in stone. Much can be done to help you afford a college of your child’s choice. It’s best to take action early, but even if you have a 12th grader, you still have a very small window opportunity. If this is you, I don’t know what you’re waiting for. Early decision apps are due next week, regular decision at the end of December and financial aid apps open on Jan 1. Your action now can mean you will have the money this Spring to reward your child’s hard work by affording his college dreams.

Best,
Peter

P.S. I’m going to be discussing the college loan crisis and how to avoid this slippery slope with radio host Lisa Wexler on WFTC Newstalk Radio (AM 1400 Conn., NY) tomorrow (Wednesday) at 4:30 pm. Here’s the link to join the conversation: http://streaming.wstcwnlk.com/_players/coxradio/index.php?callsign=WSTCAM

This is just my opinion.  After reading my comments below, you may reach a very different conclusion about the goals, strategy and future of Bright Futures.  That’s ok..  I’m just glad we’re having the conversation.

Much earlier today I read two stories about our state university system in the Herald.   Neither mentioned the Bright Futures Sholarship program.   Both should have, and it’s been annoying me all day.

First the article:  Gov. Scott wants to know why our public universities keep raising tuition prices, but turning out students who do not have the skills to fill what our workplace actually needs.  Where did all the scientists and engineers go?  In a rebuttal column, Fred Grimm editorializes in favor of the softer studies and details some of the potential consequences of eliminating academic programs solely on the basis of  employer demand.  Though Grimm had his tongue at least partly in cheek, there is a real and growing gap between what America’s employers need and what our college students are learning.  Consider this: We’re setting new records in the number of students earning college degrees and in unemployment, BUT  there’s mounting evidence that some types of jobs stay open forever.   Bet you can guess which ones…

The irony is that Florida was ahead of this problem.  When the state legislature passed the Bright Futures Scholarship Program in 1997, the hope was that more of Florida’s best high school graduates would stay in state and that the number of students graduating with highly sought science, technology, engineering and math (STEM disciplines) degrees would increase.  We were half right.   More than 150,000 students have received Bright Futures awards and our state university enrollment has indeed soared.   But enrollment in STEM fields?  That’s actually gone down in percentage terms!  One plausible explanation — our students are taking easier classes to make sure that they maintain the GPA requirements to re-qualify for the award.

And not for nothing, the legislature just made those requirements a lot tougher.

So even if they didn’t write about it today, the writing is on the wall.  It’s a widely held (and statistically measurable) belief that a properly educated, high-tech workforce can jumpstart a lagging economy.  A steady pipeline of skilled technical employees keep and attract businesses.  Our students need to become them.  Our schools need to grow them.    So long as Bright Futures remains a merit-based scholarship with GPA and test scores as the sole criterion, students will be discouraged from pursuing this type of difficult STEM study.  This is economically unsustainable.   Since the downturn, Bright Futures future has been tenuous at best.  It is ripe for an immediate overhaul as a subsidy to students pursuing STEM disciplines.  I suspect that it won’t be long before our cash-strapped government reinvents the Bright Futures as the competitive employment tool it was intended as.

What does this mean for you? Well, it’s just a theory today, but if you’re the parent of a future college bound child, I personally think it unwise to count on this program when considering your funding options.  Bright Futures’ future is anything but assured.  And since your child’s college education is likely to be one of the largest investments you’ll make, and one that will affect not just four years of his/her life, but potentially his next 40,  I’d rather err on the side of caution and consider alternate and more reliable strategies.   Unsure of what those are, you may want to check out one of my workshops.