January 22nd, 2024 by CPAdmin
Usually at this time of year, I’m neck deep in preparing and submitting financial aid documents on behalf of my students (note: these documents must be re-filed each year your child is in college – like a tax return but based on an entirely different and complex set of rules, regulations and formulas).
Typically both financial aid applications — the FAFSA which is required by all colleges, and the CSS Profile, required by some colleges and mostly private ones — become available on Oct 1. This year, however, we’re still waiting for the federal government to release the ‘new’ FAFSA – the Free Application for Federal Student Aid. Note that although they are very different forms, and utilize a different set of financial rules and calculations to determine eligibility, you want to ensure that the data you enter is the same on each AND that your contribution is as low as legally possible according to the formulas.
But this year the FAFSA won’t open until December. When, exactly, in December we still don’t know because the Department of Education, which manages the application, hasn’t confirmed publicly when the FAFSA will launch. They only said “December”. Today they confirmed that it will launch “by December 31”. Again, December. Your guess is as good as mine, but I’m thinking the 2nd half of the month, perhaps even after Christmas. That’s because the government is completely overhauling the FAFSA, and with budget cuts at the Department of Ed., they’re working overtime to deliver before the ball drops on New Years Eve.
With this delay will come a condensed preparation and submission process – colleges will likely not be offering filing extensions. High School seniors (and the parents who love them) should still plan to submit these applications in advance of priority deadlines (see below)! Financial aid can be a first-in, first-awarded proposition. Note that the CSS Profile, which must also be accompanied by the aforementioned FAFSA, in particular, is the gateway to the largest institutional scholarship awards – five figures in many cases. I have 17 years of multiple offers from all types of colleges to demonstrate. If you’re a middle and upper middle class parent with a college-bound teenager at home, and you’d like to pay substantially less than the sticker price for college, you’ll want to carefully and accurately prepare these documents and submit them as early in the process as possible.
As a preparer I’ve had a chance to preview the new FAFSA, and though I’ve covered FAFSA Simplification before, I’d like to revisit those changes again now to help not only current 12th grade families who may be scrambling soon, but to offer some proactive advice for younger families as well. All families should know that the income year considered on these applications (and in the scholarship formulas) begins January of 10th grade and runs through December of 11th grade.
That said, here’s a little background in this year’s FAFSA delay. It’s connected to the FAFSA Simplification Act of 2020, a piece of legislation that was attached to a Covid relief bill and, at the time, received scant attention outside of higher education. But now, with Covid mostly a memory, it’s time for that FAFSA legislation to go into effect.
As the name on the legislation suggests, the FAFSA is being simplified (at least in theory), streamlined from 108 to about 36 questions. Truth is the form remains rather complicated; and it’s more than 36 questions, and now, depending on your marital status and/or tax filing status, it can get even more complicated. I won’t bore you with those details.
Once again, although the FAFSA will not be open until next month, the Financial Aid deadlines will not change. As mentioned, the FAFSA will open sometime in December. If the launch is early in the month, it should still give families ample time to meet financial aid deadlines. These can be as early as January 1, but more commonly February 1 or even March 1. If the FAFSA launches later in December, then families will feel more pressure with deadlines looming. While there is no need to panic, families should be prepared for the launch of FAFSA and begin working on their applications soon after. (There’s nothing like filing a FAFSA in your Christmas PJs with a glass of eggnog, with Bing Crosby or Mariah Carey singing in the background). Even if there is some flexibility on the part of colleges when it comes to submitting the FAFSA by financial aid deadlines, for many colleges, especially the private schools, financial aid season “opened” on October 1 with the CSS Profile. Unlike the FAFSA, the CSS Profile has not changed much since last year, and it remains a lengthy and intrusive financial aid form. You should check to see if the schools on your (or your child’s) list require the CSS Profile — and if so, you should already be preparing it. As well, you can begin to put together your FAFSA information so it’s ready to go. To do so, you’ll need to understand some of the key changes, so here they are:
Key Changes to the FAFSA formulas
1. The new formula emphasizes wealth over cash flow
There are some key changes to the FAFSA formula which will impact who is considered “needy” and therefore eligible for financial aid. The income protection allowance is increasing, which will reduce the impact that income has on the Student Aid Index (SAI). I should also mention that the SAI is replacing the EFC (expected family contribution) as the key acronym which defines how much a family can afford to pay for college, according to the new government formula. An increase in the income protection allowance combined with some key changes to asset protections, places a greater emphasis on wealth relative to income. For example, in the past small business owners and farmers did not have to disclose the net worth of their businesses or farms, respectively. That’s no longer the case for families with an Adjusted Gross Income over $60,000.
2. The new formula no longer takes into account the number of children in college at the same time
This change is a huge detriment to families with multiple children in school simultaneously. In the past, for such a family with multiple children in college, the expected family contribution was proportionally reduced. That’s no longer the case, as if suddenly these families have more to spend on higher education (NOT!). The CSS Profile formula (known as the Institutional Methodology) has not changed on this issue, which will create major confusion come spring time when financial aid is awarded. Some schools will hide behind the new federal formula and decline additional aid, while others may be more flexible. This is where a proper, well-prepared and well-executed admissions strategy can prove to be favorable in delivering a more generous aid package.
3. For divorced families, the parent who provides more financial support should complete the FAFSA, as opposed to the parent where the child lives over 50% of the time
In the past, the FAFSA was usually completed by the parent whose household the student lived in over 50% of the time. That has changed, so that now it’s the parent who provides “more financial support”. If such support is equal, then it’s the parent who earns more or has more wealth. But what if one parent has a higher income and the other has more net worth? The new formula isn’t clear, creating both confusion and an opening for interpretation. I expect more confusion, delay, and opportunity for financial aid appeal on this question.
4. The definition of “untaxed income” will change
Untaxed income used to be a killer when it came to the financial aid formula. This included contributions to retirement plans (i.e. 401K, etc.), child support, untaxed social security, and military/clergy housing benefits, all of which were added back to the adjusted gross income to determine “available income”. Going forward, 401K contributions are exempt but IRA contributions are not; military/clergy housing benefits are exempt, and child support is now treated as an asset, with a reduced impact on the formula. Overall, these changes to untaxed income should benefit most families.
If you’re the parent of a high school student, these changes and more may impact how much you will pay for college. The time to get educated on this is NOT when your child is a 12th grader. By then it’s almost too late.
You need to wake up to this in 10th grade, because that’s when you’re “on the clock”. The first base income year, or the tax year under examination by colleges for your child’s freshman year, is referred to as the “prior prior” year return, or two years before your child graduates high school. So if your child is in the Class of 2026 (hello, 10th grade parents!), then the first base income year is 2024, which is just six weeks away (I can hear Auld Lang Syne already). And remember, you apply for financial aid each year your child is in college, using the “prior prior” tax return. We have software that can run projections on your contributions for each school on your list. Often the earlier you start in the process, the greater your financial (scholarship/grant) opportunities.
If you have questions about paying for college, applying for financial aid, or the complex and competitive college admissions process, we’re only a phone call or email away. This isn’t an exercise where you can just wing it, nor should you. A four year college education can cost anywhere from $90,000 to $360,000 depending on the school. But most families don’t pay this, and the average discount rate is 56% according to the latest NACUBO data. We can help you increase your chances at such a discount.
As you’re building your holiday shopping lists, consider this an opportunity where you can save a bundle. I look forward to chatting!
January 22nd, 2024 by CPAdmin
With Thanksgiving just days away, I wanted to re-impart a message to high school students (and the relatives who love them) about how best to handle inevitable, often uncomfortable, conversations surrounding college admissions and post-high school plans. I first wrote this message in 2015 to help my own niece and daughter navigate our family’s Thanksgiving Day table talk when they were in 11th grade.
Like my own family’s gathering, I know that between the delicious food, the beverages, the football, Thanksgiving traditions and the reconnection with extended relatives, these get-togethers can also be uber-stressful for high school students who are applying or who plan to apply to college. Once you’re through the initial greetings, Uncle Billy or Aunt Cathy will eventually get to The Question… the one that can leave a teenager teetering on edge.
“So, where are you applying to college?”
It seems like such a simple question, and from an adult’s point of view it is. But the answer, and the conversation that follows, can come with so much emotion, stress, and pressure for students, most of whom would rather pet the dog, or watch the football game, or play on the Xbox. Over the break, especially for students in the throes of the application or standardized testing cycle, college is the last thing most teens want to discuss over turkey and stuffing. But it’s largely unavoidable, so herein lies the potential conflict that awaits – and more importantly, how to sidestep it effectively:
Kids, please be patient. Uncle Billy and Aunt Cathy have life experience and opinions, and they want to express them. They want to tell you their stories…and they also just want to have a good conversation with their tight-lipped, teenage relatives. To most adults, what happens after high school seems like an obvious, safe and easy conversation starter. The best way to deflect this question AND have a meaningful interaction with your family is to ask them about above-referenced life experiences. Like, for example, when Uncle Billy asks about your plans for after high school or what you’re thinking about studying, be curious. Respond to his query by respectfully asking him about what his college or post-high school life was like. Ask him if he would do something different today and why? And then, listen – I’m sure he has some valuable nuggets he’d really like to impart.
Remember, Uncle Billy and Aunt Cathy mean no harm by their questions, or the comments that follow. They’re just being conversational and expressing their interest in you. After years of helping families navigate these types of conversations, I’m confident that with an appropriate response to your family’s interest, you can ease your emotional burden and shift the focus back onto Uncle Billy or Aunt Cathy.
So, when asked this year, try saying the following:
“I’m considering lots of college options. So tell me, Aunt Cathy…where did YOU go to college?”
In some ways, this is exactly what Aunt Cathy wants to talk about anyway. Get her to start talking about her own post-high school or college experience, and before you know it you’ll be finished with your sweet potatoes and ready for dessert, or to watch the 2nd half of the football game. Aunt Cathy doesn’t mean any harm by her line of questioning. Uncle Billy just wants to start the conversation. Try not to be defensive, and instead try to enjoy your family’s company.
Now to Aunt Cathy and Uncle Billy and all of our older (read: more experienced) folks. Please see above, and be inquisitive and open-ended with your questioning — and try to keep it to something they are currently doing (other than completing tests or college apps). Keep in mind it’s much easier for a teenager to discuss the tangible, as in what they’re doing in the moment than what they’re considering for their future.
If you want to inquire, perhaps start with, ‘what are you liking in school these days? Any particular project or activity you’re enjoying?’ instead of of where do you want to go to college (or what do you want to do after high school). To many High school students, any questions about their future feel fraught with judgment and may engage a knee-jerk, fight or flight fear response. They fear that you’ll find their choices or indecision about their choices – or their inability to articulate what they’re really thinking — to be lacking — either in ideas or ambition or ability.
And even if they do engage and name several colleges they’re considering or articulate their most recent post-high school plans, keep the conversation going by avoiding the ‘Whys’ in your follow-up. Like, instead of “Why are or aren’t you applying to {Fill in Blank} University? Your cousin Frank went there and now he works on Wall Street!”, try saying something like, ‘Oh that’s interesting, tell me more about XY or Z’.. or try responding without a follow up question at all and talk instead about your own recollection of the pressure and experiences as a teenager with planning your post-high school life — good and bad.
Also please take note of other very uncomfortable questions that teens despise hearing from loving relatives, including:
“What did you get on the SAT (or ACT)?”
Or
“What do you want to major in?” Followed by the Most Dreaded, “What do you intend to do with that?”
If you’re an Uncle Billy or Aunt Cathy, and you want to have a productive conversation with your nephew or niece, try to steer the conversation towards something that the teen enjoys doing. Ask about what they do OUTSIDE of school. After all, these kids are on vacation. They would rather sit in the dentist chair than discuss their grades, GPA, test scores, or college admissions with you.
We know that Thanksgiving can be a stressful family event, especially with teenagers, but it can also be full of joy, love, and of course apple pie. My wish for our students at this Thanksgiving holiday is to embrace their family and their inquisitiveness. It typically comes from a place of love, so view it through that prism.
And to my older readers (parents and other adult relatives), be sensitive to the pressure that your younger teenage relatives may be feeling and try to both embrace whatever they give you while sharing a little piece of your life with them.
Be confident in their ultimate success. You are your family’s own best subject matter expert, so approach these gatherings as an opportunity to connect with those who care most about you.
May we all make lasting, loving memories this holiday season.
From my family to yours, Happy Thanksgiving! Be sure to save room for dessert.
January 22nd, 2024 by CPAdmin
“Get a college degree and you’ll get ahead.”
That is the message that has inspired young people for generations to study, save and sometimes even beg, borrow (too much) and sadly even steal (hello, Varsity Blues) to get one. But is it worth it? That’s a question on a lot of folks’ minds. Especially now. Candidly, I’m fielding calls daily from parents and colleagues alike, questioning whether it’s worth it to pay thousands, sometimes tens of thousands, of dollars for a ‘traditional’ college experience.
It’s a fair question, though not a new one. I have been talking about the value proposition of higher ed, especially for ‘forgotten middle class’ families, for years. Incidentally, my answers about whether college is worth it might surprise you. Again, it’s about value – making sure the return matches the investment (financial and mental), because the net net of it is this: there is little doubt that today’s and future generations of students will need education and training well beyond what high schools today are providing to become financially successful. And that will require some level of upfront effort and investment on your part. You can learn more about these numbers right here at collegepete.com, or check out this book I wrote a few years back on college affordability for the ‘forgotten’ middle class.)
Anyhow, back to what has me pondering this topic today. Last week I met with an 11th grader and their parents. The student has an excellent academic record. S/he’s earning mostly As in rigorous classes and has deep extra-curricular involvement.
The standardized test scores are…good; not top tier, but they could be. As it stands today, the scores would be high enough to earn the Bright Futures FL Medallion Award but not enough to earn a Bright Futures FL Scholars Award which would include 100% of tuition and fees at a FL public university. Here’s the dilemma.
With the right test prep, I’m confident that this student could crush that 1340 barrier and not only earn the FL Scholars Award, but also deliver a score that is highly competitive to earn significant Institutional Merit Scholarships at many of the more generous universities under consideration. In this case the math makes sense for making an investment in test prep (assuming that the student would apply the mental effort to accompany the financial one). For an investment $1-2K in prep today, this family could yield a minimum $6K, and perhaps many times that number, as a scholarship return. The problem is that this student is not too keen about signing up for test prep, which brings me to my next point.
It’s not troubling to me that the value of a college education is being called into question. I welcome that discussion. What’s bothersome is the lack of conversation about how to ensure you will extract the value inherent in your post-high school education (regardless of where you go for that education). Outside of my conversations and writing, I haven’t seen much light being shed on where the real value in higher ed can be found and how to make that value accessible AND affordable to regular families in the first place. Though I did see this report last week out of North Carolina, showing a substantial ROI ($500K) for a college degree from that state’s university system. Surely, other states can show similar results.
I’ve done the research and the math — and have been able to demonstrate over and over again that with the right strategy, college should cost about the same (or less as a percent of your income) as it did in 1957, in 1987, in 2007 and today (Why College Should Cost Less in 1957 Than Today). Hint, though colleges have raised their published prices by more than 250% over that time period, they have also introduced a discounting strategy, with the average discount rate now exceeding 56%.
But even beyond the numbers, there is the oft-overlooked component that includes a student’s preparation and readiness for post high school life. We shouldn’t treat college as 13th grade…our students need to have focus and intent when approaching where they’ll thrive academically, aspirationally and socially. Take a look at 5 year graduation rates (yes, 5 year) and then consider the cost benefit of your child being able to buck this trend. Our guidance program, and others like it, prepare our students not just to ‘get into’ a college, but to succeed at the right college for them (which includes one that offers a path that actually complements their skill set and interests them – and is offered to them at a net price that their parents can comfortably afford). In doing so, our families enjoy a real return on their college investments.
If your child is in 10th or especially 11th grade, now is the time to ensure that when they are entering 12th grade, they do so with a financially sound admissions strategy AND a completed college application that will help him/her gain admission to (and graduate from) a college that you can actually afford — with a degree they can use in today’s world.
Are there real concerns about the tenor on college campuses today and our turning into an over-educated, under-employed and deeply indebted people? Yes, there are. But there are also real personal strategies that you can implement to ensure your child is at the right place – for the right price point. But, you have to take action. Don’t let this year end without learning the difference between what a college education costs and what a college education should cost YOU (hint: it’s rarely the sticker prices you see on school websites).
You can find out now — not after your child has fallen in love with a photo of autumn foliage on a brochure – how to research and select schools that are the right fit for your student and the right price for your family. If you don’t know where to start, give me a call, or at the very minimum, search this site for the articles I referenced above.
And, if you have already come to one of my webinars, or met with me, it’s probably time to get off the proverbial fence and give us a call today, while we can still do something to make college more accessible AND affordable…well before the applications are due or the bill is in hand, when you’re in crisis mode and you’re options are limited. Every year I hear from parents, “I wish I met you a year or two ago!”. Please don’t be those parents.
January 22nd, 2024 by CPAdmin
Last week, many colleges announced their results for Early Decision and Early Action. Needless to say, it was an emotional week for a lot high school seniors (and of course, the parents who love them). Locally to my home office, no school garnered more attention that Florida State, which saw nearly 22,000 students across the state apply Early Action (FSU’s Early Action program is exclusively for Florida residents). For perspective, this represented a 28% increase in the number of applicants from last year’s already record setting applicant pool.
In my 17 years of practice, I have seen Florida State University go from what was perhaps perceived as a 2nd tier, state university with a 62% acceptance rate (2005) to a more selective, seriously competitive in-state top option with a 24% acceptance rate (with a record 72,000 applicants under consideration). In case you’re wondering, in that same time period, FSU has NOT increased the number of seats available to incoming freshman resulting in an accompanying big increase in average SAT/ACT scores, transcript requirements and essay scrutiny. Consider: last year, FSU admitted applicants with an average SAT score of 1370. This year, among the early applicants the average score was 1410, with 38% admitted.
Once the final numbers are counted in February 2024, I expect to see a similarly selective result for the Class of 2028. So, as I’ve been telling my Florida-based students, if you’ve been looking at FSU as your ‘safety’ school academically, you’d be doing so at your own peril.
This goes for most schools that are ‘popular’; Duke, for example, saw a 28% increase in their early applications; Dartmouth was up 18%, Barnard set a record (1694 ED applicants), Georgia and Notre Dame were up 3% and the list goes on.
With all of this ‘application inflation’, I’m not surprised that many students learned last week that they were deferred from FSU, or from other schools. And I think it’s extremely important to remind students that a deferral does not equate to denial or rejection from a college or university. Over the years we have had multiple students go from ‘deferred’ to ‘accepted.’!
Fact is, there are many reasons, and rumored reasons, for a ‘deferred decision’. Among them: they want to see your 1st semester grades because your transcript may be inconsistent; perhaps they want you to take the SAT or ACT once more; or they had more applicants than anticipated and were truly overwhelmed, so they didn’t yet have the chance to thoroughly review yours. Maybe they’re waiting to see the size of their overall applicant pool to manage their ‘Admit Rate’. Perhaps they are waiting to see who withdraws, now that binding Early Decisions have been received, in order to manage their ‘yield.’ We’ve discussed all of these with our colleagues and with admissions officers directly, and we’ve heard all of these reasons floated. Perhaps we’ll never know about your application specifically, but what we do know is that unlike a rejection, you can actually do something about being ‘deferred’. And doing the right somethings, can help a deferred applicant become an admitted one!
If you have been ‘deferred’ AND it is truly a school that you want to attend, here is your opportunity to communicate with your admissions officer (yes, you can actually talk to them), demonstrate some interest and possibly move the needle in your direction! Granted, you should have been corresponding with them already – either way, now is an opportunity. If a school shares specific instructions on next steps to address a deferral, such as sending updated test scores. or a 1st semester grade report, or an updated SSAR, be sure to comply as soon as you can. And if there is anything new in your life since your application was submitted, perhaps an award, or new leadership position, or a new job, be sure to let them know.
That said, it does mean that for some, you’ll have to live with the ambiguity of ‘wait and see’, which we know is much easier said than done! Unfortunately, ambiguity is PART of the College Admissions process and part of life. However, that doesn’t mean that it feels fair. Let’s face it – most of us have at some point in our lives felt as if there was a ‘game’ being played around us where we weren’t given the rules to win. We hear this a lot about the college admissions process. As in, ‘it’s just NOT fair.’ For the most part, they’re right. The College Admissions ‘Game’ (which includes both access and affordability) is NOT played on a level playing field. Those students with greater access – to test prep, to good guidance, to an engaged parent who graduated from the college they’d like to attend – do have a leg up on those who don’t. It doesn’t mean they are necessarily smarter or better students, but they do have more resources or leverage and if they are utilizing them to be better prepared for this particular process, perhaps the odds do seem to tip in their favor. I hope, however, that the takeaway from this piece is that there are steps any applicant can take (e.g., demonstrate interest) to improve their deferral prospects – and I hope you’ll take them.
Now then, a note to parents: Unlike admissions decisions, financial aid offers are far less final, and therefore you have more room to maneuver, to appeal, even (gasp!) negotiate. Notice the language difference: admissions decisions, and financial aid offers. The latter can be countered, as in a counter-offer or appeal. Oftentimes there are very good reasons to appeal a financial aid offer, such as a recent job loss, a medical issue that results in high expense or time away from work (lost wages), a natural disaster, or some other event that has a significant financial impact. I have written about financial aid appeals before, and surely next spring I’ll have an update for you on that topic. Stay tuned!
On what I hope is a more upbeat note, I want to recognize YCC’s Class of 2024 for earning acceptance into the following schools via Early Action, Early Decision, or Rolling Admission (so far). While we may have assisted many of these students, all credit goes to them for their success. Congratulations!:
Arizona State University, Babson College, Bard College, Bard College Berlin, Eckerd College, Florida Atlantic University, Florida International University, Florida State University, Fordham University, Indiana University, Louisiana State University, Loyola University Chicago, Michigan State University, North Park University, Northwestern University, Nova Southeastern University, Ohio State University, Ole Miss, Penn State University, Rollins College, Stetson University, Tulane University, University of Alabama, University of Arizona, University of Central Florida, University of Denver, University of Georgia, University of Missouri, University of Pittsburgh
Final note, please don’t let a deferral define your December. If you take proper action, you (hopefully) will get admitted into and receive a much desired financial aid or merit scholar package at many schools you covet. That’s my wish for you and your family for the Holidays and New Year.
January 22nd, 2024 by CPAdmin
I have in my office an 8-1/2 x 11 piece of paper that has survived many iterations (not to mention years and office moves). It’s a list of 40 ‘Old-Fashioned Skills’ that every child should acquire by the time they’re ‘an adult.’ I’m talking about the kind of life skills that all fully formed adults need but are rarely developed inside today’s high school classrooms: simple skills like “How to write a letter” to more complex skills like “How to weigh out the pro’s and con’s of a decision”.
And yes, I do realize that this is a bit of a departure from the more pragmatic college planning advice you’re used to receiving from me, but hear me out.
There’s been a ton of writing, Ted Talks etc. on the absolute need for better executive function development among our youth. And after helping literally thousands of students through what is often their first truly independent expression of self (the college application process), I can tell you that it’s the students who have had a chance for personal growth outside the classroom whose applications are most successful. These kids often do better both in the process and once they arrive on campus. And I’m not the only one who knows this.
It is apparent when a student’s application demonstrates an authentic voice and a well-defined sense of self. This is critical when compared with students who share almost equally competitive test scores and transcripts. It is refreshing to weary, overworked and underpaid college admissions representatives who thumb through tens of thousands of college applications when they land upon a student who displays real passion, whose story aligns with their stated interests and activities – whom they can see will share that energy on their campus. And these students are often rewarded for it with a “Yes, we’d love to have you next Fall!”
If you’ve got a college-bound teen at home and you’d like to learn more about:
A) why it’s critical that they maximize their free time; and,
B) how best to help them do so; then,
I’d like to invite you to join me next week for a very special webinar: How To Build A Better College Resume This Summer. I’ll be joined by my colleague Carla Holness (a former Admissions Representative) as well as Andrea Maldonado, PhD, Director of Educator Relations at the National Student Leadership Conference and Scott Ingram, Director of Admissions at Rustic Pathways. Please click here to see the topics we’ll be discussing and to reserve your spot on Thursday, January 11th at 6:30pm. I look forward to speaking with you then.
