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  • collegepete 4:47 pm on February 27, 2013 Permalink | Reply
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    Buying and Selling in Today’s Bilion Dollar College Market 

    As the ‘thick envelopes’ begin to pour in, Decision Day looms large for our 2013 seniors.   Between now and May 1st (when deposits are due),  multiple offers will be weighed, appealed, and then weighed again.  The good news – at least from the early returns I’ve seen –when the dust settles, the vast majority of our students will have been admitted to and received considerable financial inducement to attend one of their top choices.  But this doesn’t happen by accident.  

    College is business. Big business. There is a college market with millions of truly precious buyers and sellers and literally billions at stake.  At its most basic level, it works like this:  just before 11th grade, when the heavy academic lifting begins for your student in earnest, you are the buyer.  The colleges are selling – hence the mounds of  literature with bucolic landscapes and shiny, eager faces of every race and ethnicity arriving daily in your mailbox.  Sales pieces.   This blissfull period lasts until about June of 11th grade, when the tables turn abruptly, and for a brief, but very stressful few months, you (or more specifically, your child) becomes the seller.  His sales piece:  the college application.   Yours: the FAFSA and/or CSS Profile.  

    And then — around now, mid-February — the tables turn once again.   An offer is made in the form of an acceptance letter.  If your student has chosen the right institutions, demonstrated sufficient interest, value and/or need to them, her letter should contain additional inducements (in the form of tuition discounts – scholarships, grants, etc.) to entice you.  You, as the buyer once again, have the opportunity to review this offer and, contrary to what many believe, you can do one of three things with it.  Accept. Reject. Or Appeal (which is more commonly known outside of academia as negotiate, and the nuances of which I will be discussing in next week’s article and at my NSU workshop on the 27th).  

    That’s the simple explanation of how this market works. Sometimes you’re the buyer with all the leverage… and sometimes you’re selling.  Knowing when, how and at what price to buy and sell can make all the difference.  Because in reality,  shopping for college — which includes not just where you get in, but what price you’ll pay–is still a very ‘personal’ process, managed by real people on both ends who are moved by emotion and subtleties that are not reflected in scores, GPA class rank, or even family finances.  What separates two seemingly identical students on paper (and the subsequent offers each is given) are often intangibles like the student’s demonstrated interest in a school, expressed career aspirations, potential contributions on campus, their ability to move the needle on the school’s competitiveness, etc.   

    If your goal is to ‘buy’ a great educational fit for your child at the lowest price point available, and theirs is to accept a great student for their class, sold at the highest price point possible, you have to time this market right.   When, you ask?  How about when your child is in utero?   Ok, I kid (it’s Friday).  In truth, I like to start working with families when the oldest child is in the second semester of 10th grade.   This allows us enough time to develop an admissions strategy that aligns the student’s academic needs, abilities and interests, career aspirations and co-curricular experiences… with a family’s financial objectives and needs.  
     
    This year, nearly every competitive college saw an uptick in applicants.  In a crowded field, the importance of niche positioning cannot be underestimated.    What I mean is that instead of defensively submitting more applications to ‘cover your bases’, even if  technology makes it enticing to do so,  it’s far more efficient for your student to build a targeted list of 8-10 schools that you know in advance will consider your demonstrated financial need, find value in your student (be it academically, socially or even geographically), and meet your student’s academic and social desires… and then focus your family’s energies on demonstrating those things to those schools.   (And the time to do this is before your student falls in love with one of the shiny faces on the brochures in your mailbox).

    Parting thoughts:

    • Go for depth over breadth in selecting schools to target
    • Look beyond the obvious to identify great schools where you’ll be able to leverage your student’s strengths (note: did you know that geographic diversity, academic pursuit and even gender can be a source of value at the right schools?)
    • Have an integrated admissions strategy that is driven by both the scholarly and the financial by the time your student is in 11th grade.  

    If your child is in high school and you’re not sure where to start, I suggest you come to one of my free classes.  I’m teaching one at Nova Southeastern University on Feb 27th.  I’ll be discussing the whole process, and I’ll be handing out a list of 60-odd schools that claim to meet 100% of demonstrated need.  I’ll also give a few honorable mentions to schools whose generosity has surpassed my expectations this year.

    To be clear, there is no charge to attend the workshop next week.  However, if you don’t go, it could cost you and your family thousands in lost financial assistance.  The time to take action is NOW, and not when your child is in 12th grade and it could be too late.  Click here to register.

    Best,
    Peter

    P.S. Please feel free to forward this post to a friend, neighbor or family member with college-bound high school students.  They’ll thank you for it.

     

     

  • collegepete 1:56 pm on February 13, 2013 Permalink | Reply
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    Helpful Tuition Calculators 

    I got a big response to last weeks article about IDOC, a theoretically ‘helpful’ College Board service that is causing more confusion than clarity, so I thought I’d stick with the theme.  Today’s topic:  Tuition Calculators.

    As my regular readers know, in the modern college era many schools strategically use TUITION DISCOUNTING as a marketing tool.  Case in point:  a certain Superbowl MVP’s alma mater, a public university in a small state, offers many of its out-of-state (read: full-tuition paying) students a one-year ‘scholarship’ to entice them to attend.  

    There’s often a big difference (like five-figures) between the sticker price of college — tuition, fees, books, room and board — and the net price, what you actually will be expected to pay through your college savings or excess income (best case) or personal savings and loans (worst case).  In fact, just over 66% of incoming freshman will get some sort of break off the sticker price. That’s called the Net Price of College, a term I’ve been using and my clients have thankfully been paying for years.  

    Then in 2008,  the federal government got involved, to ‘clarify’ things.  To ‘help’ families understand the difference between the sticker price they see and the net price they’ll pay, they passed a law requiring every college to provide a net-price calculator on its website.  In theory, the calculators were to provide parents with an accurate estimate of their family’s expected net price (total costs minus the average amount in grants or scholarships that their student may receive).  In practice, the calculators offer a ‘bewildering array of possibilities, with potentially troubling inconsistencies.’ (NY Times’ words, not mine – though I certainly agree with the sentiment).

    Even the seemingly basic questions — like how much do you earn — can be confusing.  Some of the calculators out there want all of your wages, others only your adjusted gross income.  No wonder I get more calls from bewildered parents who have actually done their homework than those who haven’t.    

    Look, the calculators are a good start…as an early planning tool…but they’re far from perfect and the results should be used as a reference point only.  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 competive 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 for 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 an 11th grader, you still have a small window of opportunity.  If this is you, I don’t know what you’re waiting for.  Your are now already one month into your base year, the year that will be used by the government and the colleges to determine your eligibility for grants.

     

    • Pat 2:16 pm on February 13, 2013 Permalink | Reply

      “It’s best to take action early, but even if you have an 11th grader, you still have a small window of opportunity. If this is you, I don’t know what you’re waiting for. Your are now already one month into your base year, the year that will be used by the government and the colleges to determine your eligibility for grants.” While I understand that this years financial decisions/movement of funds will affect a current junior’s CSS profile , the FAFSA will not take 2013 into account – are you saying that it is only the CSS profile that determines grant $$ as opposed to the FAFSA?

      • collegepete 2:39 pm on February 13, 2013 Permalink | Reply

        Actually, for 11th graders (class of 2014) the FAFSA that will be completed in January 2014 will take 2013 into account. So, if you move funds and incur a taxable gain, that gain will be reflected on your 2013 tax return and those gains will be reported on the FAFSA and disclosed to the financial aid office. These gains may or may not be significant. Some schools require only FAFSA, others require the CSS Profile. For those schools only requiring FAFSA, they will examine FAFSA to determine eligibility for all grants, both federal and institutional. For those also requiring CSS Profile, they will use that application for institutional aid and only the FAFSA to determine federal aid.

    • Wordpress.Com 2:34 am on February 25, 2013 Permalink | Reply

      Well crafted. Can’t suggest I agree with all of what’s layed out, but that is just my
      very own impression. Overall I like it!

  • collegepete 6:18 pm on January 7, 2013 Permalink | Reply
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    The Worst FAFSA Mistake You Can Make… 

    Happy New Year! For many, today marks the first ‘real’ day back after the holiday revelry. Most people — my wife/partner included — like to spend that first week of the New Year slowly easing back into to their routine. Not so me. Once the ball drops in NYC, I get buried in FAFSAs. I’ve prepared quite a few already and I’ve got good news and bad news. First the good news: it’s exactly the same form as last year’s. Now the bad news: it’s exactly the same form as last year’s.

    For those who are new to the college process, January 1 was the first day that the new Free Application for Federal Student Aid (the ‘FAFSA’) became available. The FAFSA contains roughly 100 questions about your family’s income, assets, investments, 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 fafsa.com, as this is a fee-based website — and using it is often the first, though not the worst (I’m getting to that), mistake made by the masses.

    The FAFSA form itself is not difficult per se – and let’s face it, neither is filling out a 1040. What is difficult (on both) is understanding the complex rules, regulations and loopholes that go into the government’s formulas! When it comes to funding your child’s education, overstating the equity in your investment property or mis-identifying a parent asset as a student asset, for example, can wind up costing you thousands of dollars of aid that you would have otherwise been eligible to receive. Yes, even for high – six-figure earners.

    I know this from personal experience with my practice; but remember, it was The Wall Street Journal that confirmed that six-figure earners were routinely qualifying for five-figure awards. The College Board estimates that about 90% of forms have big money ‘mistakes’ on them, while the Department of Education states that 40% of families leave money on the table. So…

    The number one mistake you can make with regards to the FAFSA is ‘blindly’ submitting it without first understanding how it works — and more importantly — understanding how you can make it work for you. Once you hit ‘submit’, you will be TOLD how much you will be expected to pay for one year of college for one child. And believe me, without any prior planning, this number is usually shocking (and not in a good way). But for those who plan ahead, that number can often be reduced… significantly. My point is this: while you can certainly complete your own tax return without specialized guidance, you probably shouldn’t — and the same is true when it comes to filing the various financial aid and Institutional scholarship applications required to receive a tuition discount.

    The reality is that every single student planning to go to college will some day have to fill out at least a FAFSA in order to be considered for Federal and Institutional Financial Aid — and there’s more than $150 billion up for grabs. And don’t forget 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.

    A word to the wise: 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. You are planning to send your student to college some day – that’s a fact — but that is not the same as having a real plan to do so. At this time of the year I receive far too many panicked phone calls from parents of 12th graders (unfortunately many of whom have been reading my articles for years and know they should have acted sooner) who are in an emergency. Some have already hit submit. Some of those folks, I can still help, but it’s much more difficult — and some, I have to help find a way to ‘eat’ the first year (or first child) while we plan properly for the next.

    The priority financial aid deadline for many schools for first-time applicants is often February 1st, 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) requests income information for 2012. 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.

    If you are a 12th grade parent, you’re in a code red state of emergency… And if you have an 11th grader, you should take heed, as your financial aid base year has just begun. (The government will use your 2013 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.

    Let me close with this: Financial aid is not what it used to be. As I said earlier, 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 not about filling out a form. It’s about knowing the various rules, landmines and loopholes to ensure that you receive the proper amount of assistance. I’ll be discussing these rules and the entire college admissions and funding process (including the financial aid formulas) at my workshop in Pinecrest next week and in Weston the following 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.

    Happy New Year and Best Wishes for a safe, prosperous and joyous 2013!

    Best,
    Peter

    P.S. While 66% of my readers will receive a significant discount on college — need, merit or some combination — if they know how and where to look; a full 100% will need a realistic plan or blueprint to pay for the balance without sacrificing their savings, lifestyle and/or saddling their children with onerous debt.

    P.P.S. Forward this post to a friend. Tell them to come to my class. They’ll thank you for it!

     

  • collegepete 11:35 am on December 20, 2012 Permalink | Reply
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    The Best College Advice of the Year! 

    It’s been an exciting year at College Funding Specialists, and we are grateful to you, our subscribers, for tuning in each week as we share with you college planning insights and advice from the ‘trenches’.

    As the holiday season approaches, we want to inspire you with some of the most popular posts from our blog, according to your feedback.  

    We wish you and yours a Happy Everything this season and a New Year filled with peace and prosperity for all.

    Best,
    ‘College’ Pete and Jill

    P.S. Don’t forget: The FAFSA (Free Application for Federal Student Aid) goes live on Jan 1! All 12th grade parents should plan to complete and submit this application by February 1. Should you have any related questions during the coming weeks, please contact our office. Though we will be working a reduced schedule throughout the season, we will be checking phone messages and email regularly.

    P.P.S. Click here to see our January 2013 classes and to register for an upcoming college funding workshop in your area. If you are the parent of an 10th or 11th grader, you don’t want to miss this and you don’t want to put this off.

     

    • education 2:34 am on February 25, 2013 Permalink | Reply

      Man, you definitely did your research on this one!

      I have never ever thought of some of that before.

      Good!

  • collegepete 11:59 am on December 1, 2012 Permalink | Reply
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    A Note about Florida Bright Futures 

    I’ve received several questions this week about Bright Futures, the popular Florida scholarship funded by our Lotto dollars. The application for this state scholarship opens on December 1, so high school guidance counselors across the state are distributing information to students and parents about how to apply.

    There are a few different Bright Futures awards, each with its own set of GPA and test score requirements (which are increasing), along with minimum community service requirements. These can all be found at the Florida Department of Education’s Office of Student Financial Assistance website.

    What’s probably most important to note about Bright Futures are the following:

    1. You need to complete this application before high school graduation. It’s not imperative to complete the application now; but it should be done before your student receives her diploma.

    2. Every Florida high school senior should complete a Bright Futures application, even if you plan to go to school out of Florida and even if you do not plan to apply for any other financial aid. You never know – financial circumstances can change, Johnny may find that it’s too cold up north and transfer after a year or two; or some other reason may force a return to Florida. If you don’t have a Bright Futures application on record, you can’t get the money.

    3. Bright Futures awards can be used at all accredited Florida colleges, both public and private.

    4. Although Bright Futures is currently a merit (performance-based) program, in order to receive an award a FAFSA (Free Application for Federal Student Aid) must be completed. The 2013-14 FAFSA opens on January 1.

    5. Completing the Bright Futures application is easy. Completing a FAFSA, a Federal form, can be considerably more difficult. Completing a CSS Profile (for select schools) can be a real pain in the @$$.

    6. The future of Bright Futures is uncertain. Award amounts and requirements (Bright Futures must be re-earned annually) are subject to political will and budgetary constraints. You can click here to read more about the various factors affecting the future of Bright Futures.

    And if you want to know more about college funding strategies, including tips on appropriately preparing a FAFSA and how to qualify for all types of financial aid and merit inducements, then you should check out my upcoming workshop in Weston. This is my last workshop of the year. If you are the parent of a 10th or 11th grader, don’t think you can put this off. Once the calendar changes to January, 11th grade parents are suddenly “on the clock”. The window of opportunity starts to close day by day, week by week.

    I often hear from parents, “I wish I met you a year ago, or even 6 months ago”. Don’t be this parent. Get educated on higher education now, and put a plan together to pay ‘wholesale’ for your child’s college, wherever s/he attends.

     

  • collegepete 11:20 am on February 22, 2012 Permalink | Reply
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    Students Easy Prey For Scholarship Scams 

    It’s almost March, and that means there are only two months left before parents of 2012 high school seniors will have to plunk down a deposit at Top Choice U.   And with skyrocketing tuition, a sluggish economy, and record-level college debt, many will use this time to hunt down private scholarships.  Unfortunately, they’ll be facing some pretty long odds: in any given year, a scant 6.9%, or about 14.5-to-1 of the undergraduates who apply for private scholarships actually receive anything at all.  In fact, private scholarship money  represents less than  2% of the total that’s available for financial aid (through the government and the colleges themselves). 

    What’s worse — in their desperation, many will fall prey to scholarship scams and unscrupulous financial aid providers.  The Federal Trade Commission estimates that parents lose more than $100 million to scholarship scams every year (that’s $250.00 a day). 

    To avoid becoming a victim , follow these safe search guidelines:

    1. Steer clear of any companies that require an advance fee to do a scholarship search. Instead, start with a FREE, reputable online scholarship search such as Fastweb, or borrow a scholarship book that is less than one year old.

    2. Never provide information about your bank account, social security number etc. in response to an unsolicited  (or any) sholarship offer.  Some swindlers (cleverly disguised as legitimate companies) will send out information to your student indicating that they’ve been selected as a ‘finalist’ for an award and request additional information to ‘confirm eligibility.’  You should NEVER have to provide this type of  information for a private scholarship search.

    3. Watch out for any company that ‘guarantees’ that you will win a scholarship.  Any claim or guarantee I have ever seen or reviewed came with impossible conditions and have turned out to be a scam.

    4. Check with your, your spouse’s and even your parents’ employers.  Many have scholarships that nobody knows about because they’ve never asked and never been aggressively marketed.

    5. Apply wisely.  You don’t have much time so increase your odds by casting a narrow net.  You may have a better shot at applying for less cometitive local scholarships than more widely publicized national programs.

    Although it may be too late for many of my 2012 readers, when it comes to slashing the college bill, you should focus less time on the 2% of private scholarship money referenced above and much more of your effort on the other 98% available through federal and institutional discounts.  From now until the summer (and sometimes beyond then) I will probably get a call at least once a day from parents in desperate need of help to pay the looming college bill.   Often the only available response at this point is:  ‘Oh Crap’ – here’s a family with a great student that just waited too long.  Which stinks because more than likely, if they had started their planning process earlier (i.e., had their child apply to schools with money to give, positioned him or her to be in the top 25% of some of those schools and re-allocated their non-exempt assets) they may have qualified for both merit and federal-based scholarships and grants to help offset these costs.

    I’m often asked “when should you really begin college planning and funding process?”  My response:  Now!  Or, at the latest in 10th or 11th grade, or at the very latest, at the same time that students are beginning their admissions preparation.  So, If you’re the parent of a high school student with questions about where the legitimate college money is, please come to one of my free classes.   I’ll be at Sagemont School, Upper Campus tomorrow (Wednesday, Feb 22), where I’ll be sharing many of the tips and advice that I’ve personally used to help almost 1,000 South Florida families make college affordable again.  It’s free, pitch-free, and almost completely full.  Click here to reserve your seat now. 

    Best,

    Peter Ratzan

    p.s. One final note:  if you believe you are the victim of a scholarship scam, notify the FTC immediately.  They will put you in touch with their education fraud division to assist you.

     

    • BardPsydaydit 12:01 am on September 3, 2012 Permalink | Reply

      I just like the helpful information you supply in your articles. I bookmark your blog and test again here regularly. I am fairly certain I will learn plenty of new stuff right here! Best of luck for the following! .

  • collegepete 8:56 am on January 18, 2012 Permalink | Reply
    Tags: , CSS Profile, Education Trust, , , , , , Work Study   

    5 FAFSA Mistakes To Avoid! 

    A few years back, a frustrated Arne Duncan (our Secretary of Education) told Congress, “You basically need a Ph.D to figure that thing out!” . Mr. Duncan was referring to the 106 question Free Application for Federal Student Aid, or “FAFSA.” And he’s a Harvard guy!

    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.

     

  • collegepete 7:43 pm on January 10, 2012 Permalink | Reply
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    Essential Info For the 2012 FAFSA 

    Many people spend the first couple of weeks of the New Year slowly easing back into to their routine.  Not so me.  Once the ball drops, I get buried in FAFSAs.  I’ve prepared quite a few already and I’ve got good news and bad news.  First the good news:  it’s exactly the same form as last year’s.  Now the bad news:  it’s exactly the same form as last year’s.

    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

     

  • collegepete 6:08 pm on July 28, 2011 Permalink | Reply
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    A School For Everyone: The College Tour Recap 

    After a long and very hot week touring Notheast colleges, I am thrilled that this message is coming to you from my cozy, air-conditioned office in Weston.  Jill and I toured 4 colleges in 4 days (Cornell, Ithaca College, Skidmore, and Vassar), and yes, we were pretty tired at the end of it.  But it was worth it.  There is simply no substitute to being there, and after meeting with Admissions and Business officers,  I have a few very important pieces of information to share with you regarding how you should be planning for college.

    • There is a great college for every student, and if you map out your admissions and funding strategy together and before your child begins applying, you will greatly improve the odds that s/he will pick and get accepted to schools that you will be able to afford.  Discounting is not a random exercise and it is no longer an afterthought.   Colleges strategically and intentionally use both need-based Aid and merit-based (or non-need based) aid   — though certainly not in equal measure — to induce students to attend their institution.  Without a doubt, the largest source of free money is in need-based aid (more than $150 billion worth – yes, I said billion).  It is a legitimate source of college funding for forgotten middle class families, and choosing schools that offer substantial need-based grants should be a critical component of your admissions strategy.
    • More so than ever, networking and the ‘Little Things’  can move the needle on admittance and funding offers.  Despite technology (or pehabs because of it), standing out today often requires showing up. Get out there and visit colleges!  Schools want to see you and want to know that you want to go there.  Nothing demonstrates interest like your visit to their campus.
    • Students with specialized interests such as Art or Drama should consider liberal arts schools that offer majors or minors in the specialized field.  We saw amazing theater and art programs at places like Skidmore, Ithaca, and Vassar.  At these schools and many like them, you’ll find great students, great professors, small classrooms, and a diverse student body with a wide mix of interests.  Oh, and they are MUCH more generous with financial assistance than any specialty school.
    • Just because a school has a need-aware admissions policy does not mean that it isn’t generous.  A school like Skidmore does not hide the fact that they are need-aware, but if you get admitted then they guarantee they will meet 100% of demonstrated need.  So for the students who do get in, they are awarded handsomely.  Many other schools follow the same principle.
    • And though I hate to admit it, there can be an admissions advantage to applying early decision.  This was confirmed by the officers I met with and by the numbers. However, don’t let your student apply Early Decision unless you are sure you can pay the bill.   If you apply early decision, you are ‘locked in’ and bound to attend that college – you’ll have zero leverage when seeking a tuition discount.  The student, the parents, and the high school guidance counselor must sign a contract and confirm that the Early Decision rules are understood.

    I’ll be elaborating on these and other conclusions, as well as sharing money-saving tips to help families pay the college bill, during my upcoming LIVE webinar on August 9.

    Topics we’ll cover include:

    • Why now EVERYONE, regardless of income, should apply for financial aid without exception
    • Accessing the precious and disappearing grant and scholarship dollars
    • Why it takes students 5+ years, on average, to graduate from college and how you can buck this trend
    • Dollars and Sense – how to successfully overlap your child’s admissions strategy with your ability to pay
    • How some assets can penalize you 5x, whereas other assets don’t count at all
    • How to get admissions officers to fall in love with your student

    If you are the parent of a 10th, 11th, or 12th grader, and you are stressed about the entire college process, from admissions to financing, then you should tune in to this LIVE webinar.  If you are too busy for the webinar, you can catch me in person on August 25 down in Pinecrest.  Click here to register for either event.

    Best,

    Peter

     

  • collegepete 7:04 pm on July 20, 2011 Permalink | Reply
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    Skidmore College: Location. Location. Location. 

    Check out this short video with a summary of my trip to  Skidmore College.   Skidmore is ’at the center of it all’, one of 16 schools in the region,situated in the foothills of the Adirondacks and on the outskirts of  cute, yet bustling Saratoga Springs, NY - 30 minutes from Albany and Stratton Mountain,  – and just a three-hour drive from three major cities (NY, Boston and Montreal).   It’s easily accessible from South Florida, with nonstop flights from Ft. Lauderdale daily.

    Skidmore is a small, competitive liberal arts college with an all-undergrad population of about 2,500 students, a 9:1 student-faculty ratio AND a wide variety of pre-professional curricular options, including busines, exercise science and education (among other offerings).   A generous, but need-sensitive school (see video for an explanation), Skidmore should be on the short-list of every aspiring art student, as well as those desiring a small, competitive, liberal arts college.

     

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