This is the time of year when students (and parents) begin their all-important campus visits. The strategic focus of the campus visit should be to insure that the college’s “personality” fits with the personality of the student. Once the student has identified colleges of interest, a direct campus visit will offer a clearer understanding of each college’s programs, policies and social setting. Only during this visit can the student experience the environment in which he or she will live and work during the subsequent four critical years.

 

While visiting each campus, the student/parents should ask strategic questions that may help them better understand if that particular college is the right fit. The following are a few of the questions that should be addressed towards each group:

 

Admission Office

1. What are the criteria used for admissions at your college?
2. How do you rank these criteria?
3. How important is the ACT/SAT test in the admissions process?
4. What is the college’s admissions deadline?
5. What is the student to faculty ratio at the college?
6. What percentage of faculty members have doctorate degrees?
7. What is the average enrollment of the freshman class?
8. What percentage of the freshmen class will graduate?
9. What percentage of graduates will continue on to graduate school?

Financial Aid Office

1. What is the total cost of college or financial aid budgeted cost?
2. What forms are used by the college to determine financial aid eligibility?
3. What is the college’s financial aid deadline?
4. How does the college financially reward a good student?
5. What percentage of my financial NEED will be met by the college?
6. What percentage of this NEED met will be in the form of Gift Aid? In the form of Loans? In the form of Work/Study?
7. What other non-need or merit grants and scholarships are available?
8. If any private outside scholarships are awarded, will the school use these to replace their own monies?
9. What is the average debt incurred by each Student upon graduation?

Career Placement Office

1. How many full-time staff members work in the placement office?
2. What job placement services are provided by the placement office?
3. How long do job placement services remain in effect after graduation?
4. What percentage of graduates will be employed prior to graduation?
5. What are the most popular majors of graduates receiving employment?
6. Which companies and organizations recruit your graduates?
7. What are the credentials of those graduates receiving employment?
8. What is the starting salary of graduates in my field or major?
9. What is the future employment outlook of my field or major?

Faculty or Department Head

1. What is unique about this department’s programs?
2. What is the likelihood of graduating from this program in four years?
3. What department facilities and special technology are available?
4. How does the faculty advising system work?
5. How accessible are the professors in this department?
6. How many full professors are on the department staffs?
7. What percentage of full professors teaches introductory classes?
8. What is the average size of the classes or lectures?
9. Can I sit in on a class?

Coach or Athletic Department Head

1. Where would you rank this particular sport at your college? In your league?
2. What sports or activities share the same facilities with this particular sport?
3. Does the college plan any additions or changes to the facilities?
4. Does this particular sport have an off-season schedule?
5. What locations are on the team’s upcoming travel schedules?
6. What is the break-down of the staff, coaches and their specialties?
7. What allowances are made for class and exam preparation?
8. What are my earliest opportunities at playing my position?
9. Does the team have a set of rules or policies for the athlete?

Students

1. What are three things you most like about the university?
2. What are three things you most dislike about the university?
3. How difficult is it to get assigned to classes?
4. What are the classes like?
5. What are the professors like?
6. What is campus life in general like?
7. What are the dorms like? 

These questions will give the student an objective method to compare the strengths of each school. Before you make that all-important campus visit, give us a call at (800) 258-0810 or, visit us at www.innovativewealthstrategies.com or, www.collegiateadvisinggroup.com. We can help you figure out the best education value for your family. We can also calculate the yield ratios of competing colleges in order to put your student in a prime position to receive tuition grants and scholarships.

Posted by Robert Shampine.

        

When it comes to the affordability of colleges and universities, there is a perfect storm brewing. There is more money being charged for tuition and less money being given to support higher education from the state and federal governments. In addition, daily living expenses for the ordinary family, such as food, clothing, gasoline, health costs, etc. are going up much faster than what the government calls the "standard inflation rate".

With the price of everything going up by the day, colleges and universities have no choice but to raise tuition. As tuition continues to rise, more students must turn to loans as a major source of funding for college. Taking on the responsibility of an $80,000 or $150,000 loan is a deterrent to most lower– to middle– class families already strapped for cash.

How are you going to handle the high cost of college without massive debt, or taking away from your retirement?  

Click here for solutions to reduce your costs... 

However, if you are a parent of a college bound student, is the cost of college really the biggest financial issue you face today? Are you missing the big picture? Consider these facts:

• The youngest baby boomer is now 44
• The oldest baby boomer is now 62
• The average age of parents with college bound kids is 40-45 years old

Now fast-forward 20 years down the road when today’s parents with college bound kids are 60-65 and they want to retire. At that time the majority of Boomers will be 70-80 years old. Consider this:

• Will you still be paying off education loans over the next 20 years?
• Will college costs keep you from adequately funding your retirement?
• Will Uncle Sam need to tax your 401k at higher rates to cover the older Boomer’s old age benefits?
• Will you have enough money to outlast inflation if you live to age 90?

These are tough questions to face and we all have a habit of procrastinating, but just take the time to put some simple numbers together – to see if college costs could possibly force you into a lower standard of living during retirement. If your numbers don’t add up and you find yourself with that proverbial "lump in your throat", then your next move is to decide to continue to procrastinate, or to start building a game plan. If you decide it’s time to build a new retirement game plan, with college expenses built into it, give us a call at (800) 258-0810. We can help!

Rising Food Costs Provide A Recipe For Change At Universities

The effects of the spike in world food prices are trickling down to university and college campuses, prompting schools to take a hard look at how they do business. With thousands of students paying for dining hall meal plans, or buying food from other on-campus outlets, food is big business.

The cost of rice, grains and other staples has soared in recent months and the skyrocketing price of fuel is making it more expensive to transport food. While some schools are holding the line on their meal plan pricing – for now – others have started bumping up the cost for students starting school this fall.

In an average year, meal plan prices may increase one to two per cent due to inflation, but this year's increases will be close to three to four per cent.

        

In recent months, the turmoil in the U.S. credit markets has made it difficult for some student loan lenders to secure the capital needed to finance college loans, leading some lenders to scale back their lending activity. With 66% of students at four-year colleges holding student loan debt, the credit crunch has generated concerns that middle-class college students and their parents will be unable to obtain the loans they rely on to afford college.

On May 7, 2008, President Bush signed the Ensuring Continued Access to Student Loans Act of 2008 (H.R. 5715). The passage of this law will increase the money that is available for federal student loan programs at colleges throughout the United States to ensure that families can continue to access the loans they need to pay for college. The new law is intended to reduce borrowers’ reliance on costlier private college loans and encourage responsible borrowing. The following are summaries of the changes in the new law:

Unsubsidized Stafford Loan Limits

Under current law, dependent undergraduate students can borrow up to $3,500 in subsidized and unsubsidized federal Stafford (student) loans during their first year of college; $4,500 during their second year; and $5,500 during their final two years of college. Over the course of their education, dependent undergraduate students can currently borrow up to $23,000 in total federal Stafford loans (both subsidized and unsubsidized) and independent undergraduates can borrow up to $46,000 in total loans.

H.R. 5715 increases the annual loan limits on federal UNSUBSIDIZED Stafford loans by $2,000 for undergraduate students, which increases the aggregate loan limits (the total loan limit over the course of a student’s education) to $31,000 for dependent undergraduates and to $57,500 for independent undergraduates.

Federal PLUS (Parent) Loan Repayment Schedule

Under current law, parent borrowers must begin repayment of federal PLUS loans starting 60 days after the disbursement of the loan.

H.R. 5715 gives parents the option to defer the repayment of PLUS loans up to six months after their children leave school, giving families more flexibility in hard economic times.

Parental Credit History Adjustment

Under current law, parents with an adverse credit history are ineligible to receive a parent PLUS loan, except under extenuating circumstances.

H.R. 5715 would temporarily classify as an extenuating circumstance delinquencies of up to 180 days on home mortgages and medical debt, thereby making it possible for parents, who are strained by the current housing market and rising medical costs, to secure loans for their children.

Additional Changes To Current Law

H.R. 5715 also gives the U.S. Education Secretary the mandatory authority to advance federal funds to guaranty agencies operating as lenders of last resort in the event that they do not have sufficient capital to originate new loans. Furthermore, it gives the Secretary the temporary authority to purchase loans from lenders in the federal guaranteed loan program, if there is a determination that lenders are unable to meet the demand for loans. This would ensure that lenders continue to have access to capital to originate new loans.

Federal And State Governments Clash With Universities On Endowment Spending

Senator Chuck Grassley (R-Iowa) is pushing hard in the Senate Finance Committee for a proposed five-percent annual spending requirement on college endowments, increasing Congress’ focus on the rising cost of attending college.

"I believe that it's fair to say that the questions that I've raised and the questions that the media have raised are having a ripple effect through academia, and that ripple effect is good," said Grassley, who is the ranking Republican on the committee. "Just like Congress is not going to be responsible if our constituents don't watch over us, university trustees and administration may not be responsible if you don't look over them."

Currently, non-profit universities and colleges receive a tax exemption, similar to foundations. Private foundations, however, must annually spend at least five percent of their endowment to maintain the tax exemption, whereas colleges face no such requirement.

Massachusetts lawmakers are also getting in on the action. Desperate for additional revenue, the state leaders are eyeing the endowments of deep-pocketed Massachusetts private colleges to bolster their state’s coffers, asserting that the schools’ rising fortunes undercut their nonprofit status.

Legislators have asked state finance officials to study a plan that would impose a 2.5 percent annual assessment on colleges with endowments over $1 billion, an amount now exceeded by nine Massachusetts institutions; Harvard, Amherst College, Boston College, Boston University, Massachusetts Institute of Technology, Smith College, Tufts University, Wellesley College, and Williams College.

The proposal, which higher education specialists believe is the first of its kind across the country, is attracting national attention by asking the question: "Have certain colleges amassed so much wealth that they no longer deserve to be tax-exempt?"

There are hundreds of little-known cash flow strategies available to families and they can add up to significant money over the long term. The question is, if you try to do your own college financial plan, will you overlook these opportunities? Give us a call at (800) 258-0810, or visit us at http://www.collegiateadvisinggroup.com/… we can help!

        

While most families do considerable research prior to purchasing a home and a car, many of these families take a more impulsive approach to financing college. Their idea of due diligence is to attend a ‘financial aid night’ at their high school, pour over voluminous college books in the library, or search endlessly through Google for answers. And while their effort may produce some grants, scholarships, and student loans, the net result is they will either write the college a large check, or take on major additional debt.

Regardless of how you pay for college, an issue you must face is the effect that this college payment will have on your ability to fund your retirement at the same time. Have you ever asked yourself these important questions:

• What will be the total cost to educate all my children?
• Will I need to use retirement funds to pay for college?
• Will I need to stop funding my retirement while my children attend college?
• What age will I be when my last child graduates from college?
• How many years after my last college payment will I need to work before I retire?
• Will college costs force me to work 5-7 years longer before retiring?
  

Like many of our clients, these questions probably never crossed your mind. This is usually due to the fact that you’re looking at your college finances from a short-term perspective. Regardless of how much income you earn though, the high cost of college is definitely going to affect long-term financial objectives that are important to you.

The solution is to approach your college plan backwards. In other words, you must insure that your retirement plan is solid first, and then work backwards on your college financial plan. After all, you can’t borrow money for your retirement. Part of this planning process involves cash flow planning. There are many cash flow strategies that can 1) increase income, 2) decrease taxes, or 3) decrease expenses in order to maximize your ability to fund college and retirement at the same time. Here’s an example of cash flow savings that even most financial professionals miss:

Education Tax Credits vs. Tuition & Fees Deduction
The Hope Credit allows a family to claim a federal tax credit of up to $1,800 for their students’ first two years of postsecondary education. The Lifetime Learning Credit allows the family to claim a federal tax credit of up to $2,000 per tax year for the taxpayer, taxpayer's spouse, or any eligible dependents for an unlimited number of tax years. The Tuition & Fees Deduction (now scheduled to expire for the 2008 tax year) is a federal tax deduction that families can claim for up to $4,000 in qualified postsecondary education expenses.

The Hope Credit, the Lifetime Learning Credit and the Tuition & Fees Deduction are all based on family income parameters and families must choose which credit or deduction is best to claim. This is normally an easy decision because when you’re dealing with federal taxes it’s almost always more beneficial to claim a tax credit than a tax deduction. But when you add state taxes to the formula you may get a surprise.

Since the Tuition & Fees Deduction reduces your federal adjusted gross income it will also reduce your state tax liability. However, the Hope and Lifetime Learning Credits have no effect on your state taxes. Therefore, when you add up both your federal and state taxes due, the result may prove that it is more beneficial to take the Tuition & Fees Deduction than the Hope or Lifetime Learning Credit, especially in states with higher tax rates.

Does this sound confusing and complicated? That’s because it is! Very few financial professionals understand how these education tax credits and deductions work. Even many tax preparers miss this savings because their tax software does not compare federal taxes and state taxes together. Yet the cash flow savings could be in the hundreds of dollars.

There are hundreds of little-known cash flow strategies available to families and they can add up to significant money over the long term. The question is, if you try to do your own college financial plan, will you overlook these opportunities? Give us a call at (800) 258-0810, or visit us at http://www.collegiateadvisinggroup.com/… we can help!

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Assistant Secretary of Education Diane Auer Jones To Headline Summit.

This is a critical moment in history for Americans seeking higher education and no better time to forge solutions to this crisis

Washington, DC (PRWEB) April 28, 2008 -— On the brink of the biggest loan and credit crisis higher education has ever seen, the College Savings Foundation (CSF), a nonprofit whose mission is to help American families achieve their education savings goals, is gathering decision makers in universities, government and the financial industry for the first time to discuss the possibility that many families and students may not be able to pay their tuition bills this summer and that the long-term lending landscape for college financing will be forever changed. “Perspectives on College Access, Savings and Debt” will be held at the Capitol View Conference Center on May 21, 2008 from 1:00-5:30 p.m.

Diane Auer Jones, assistant secretary for postsecondary education at the U.S. Department of Education, will open the Summit by framing the issues facing parents and students seeking access to affordable loans and funding for their children’s college education. She will also provide an update on the Department of Education and Congress’ initiatives to ensure that American families have that access. “This is a critical moment in history for Americans seeking higher education and no better time to forge solutions to this crisis,” she said.

“The cut in Federal loan subsidies for private lenders, the sub prime mortgage meltdown and skyrocketing college costs have collided to brew the perfect college financing storm that will bear down on families this summer when tuition bills come in the mail and thousands of students are left languishing as they search for funding sources that are no longer there as over 50 major private lenders and numerous state loan authorities have ceased making student loans,” said Vice Chairman of CSF, Peter Mazareas. “In the short term, public and private decision makers need to collaborate to devise solutions so the dreams of American families aren’t dashed. In the long term, we envision a silver lining emerging from these stormy times as families recommit to saving for college rather than borrowing and that Congress will continue to promote savings while developing more effective loan programs.”

According to Mazareas, growing numbers of colleges are applying to participate in the Federal direct loan program in which students borrow from the government, but it won’t be enough to make up for the amount of pure private funding that parents have historically relied on to either fund college or close gaps in student financing packages. At the same time that the pool of private funding has substantially diminished, the cost of college has swelled. And, while Ivy League and other heavily-endowed schools have been digging into their endowments to offset costs for students through financing, grants and rolling back tuition, it’s a drop in the ocean for the 8,000 schools that don’t have that cushion, according to Mazareas. Most institutions rely on tuition to pay the bills and the vast majority of students and families will be left to fend for themselves as they desperately scramble to find funding.       

At the upcoming CSF Summit, Mazareas will moderate a discussion, “The College Crisis: Tuition Prices and Rising Costs”, between Sandy Baum, Professor of Economics, Skidmore College and Senior Policy Analyst at The College Board; and Michael McPherson, President, the Spencer Foundation.

The average annual tuition costs of attending a 4-year public and a 4-year private college or university in 2007-2008 have increased 5.9% from a year earlier. Including room, board and expenses, the total costs are now $13,589 per year for a 4-year public college and $32,307 for a 4-year private college, according to The College Board. Assuming such costs increase by 5% a year, the projected cost of college in 15 years will be more than $100,000 for a 4-year public college and more than $200,000 for a 4-year private college.

“Many families may be faced with heartbreaking choices like the best school versus the more affordable school or no school at all,” said Liz Fontaine of the Massachusetts Educational Financing Authority and member of CSF. “We will see private lenders raise the rates for families with low credit scores to manage risk or simply turn them down all together. The federal government needs to inject cash into the system so we don’t see more families financing college through credit cards or being denied the American dream that often begins with a higher education.”

Fontaine will moderate a discussion, “The State of College Financing: The Impact of the Credit Crunch, Loan Availability and Financial Aid Uncertainty,” between Kathleen Smith, President, Educational Funding Group and Justin Draeger, Assistant Director for Communications, The National Association of Student Financial Aid Administrators. In CSF’s 2007 report on “The State of College Savings, http://www.collegesavingsfoundation.org/pdf/CollegeSurveyV8.pdf, the group warned of the impending danger in parents treating college financing as a second mortgage and encouraged families to save early, often and strategically.

“Given our current economic condition and our Federal deficit, a short term solution may not be available to families,” says Bruce Harrington, of Cogent Research. He will moderate the discussion: “The Future: Innovative Ideas and Solutions” between Joe Hurley, CPA and Founder, Savingforcollege.com and James Delaplane, Partner, Davis and Harman, and Pamela Perun, Policy Director, Aspen Institute, Initiative on Financial Security (“IFS”) and Author “Towards a Sensible System for Saving”. Harrington hopes that discussing a variety of long-term solutions including savings and government policies will begin to frame a strategy going forward.

The Summit will conclude with a College Savings & Financing Roundtable featuring all the panelists debating and answering questions from fellow panelists and members of the audience.

About The College Savings Foundation
The College Savings Foundation (CSF) is a Washington, D.C.-based not-for-profit organization whose mission is to help American families achieve their education savings goals by working with public policy makers, media representatives and financial services industry executives in support of education savings programs. For more information on CSF and its mission, please access www.collegesavingsfoundation.org.

To attend the Summit, contact Lynthia Romney, (914) 238-2145, romneycom@aol.com, or Amy Dean, (708) 445-8258 adean@deanpublicrelations.com.

        

by Kim Clark, US News and World Report

The timing couldn't be worse for college students. As private education loans are becoming more scarce and expensive, the amount of federal Perkins loans—at just 5 percent interest, the best student loan deal available—is plunging. College financial aid officers around the country are reporting that the amount of money in the Perkins pool has dropped so dramatically in recent months that U.S. News & World Report estimates perhaps 50,000 needy students who would have been offered the low-cost loans last year won't be offered one this year. In addition, even those who do manage to land a Perkins loan will likely see the size of the loan shrink. Other, more expensive federal education loans, such as Stafford and PLUS, will be available to every student and parent, however.

Financial aid workers say the Perkins reductions are especially painful because Perkins loans go only to the poorest students and are such good deals. Schools can offer undergraduates whom they determine are "exceptionally needy" up to $4,000 ayear in Perkins loans, which charge no interest while the student is enrolled or during the first nine months after a student leaves school. (Graduate students can borrow up to $6,000 a year.) They can be forgiven if a graduate spends five years teaching in troubled schools or teaching in-demand subjects such as math or science.

The Perkins program has been hammered down by a one-two political and economic punch. The federal government has failed to add money to the Perkins pool to keep up with rising college enrollment. In addition, rising interest rates on other education loans have caused those who've already taken out Perkins loans to hold on to them longer, leaving little to lend out to new students.

That combination means that thousands of current and future college students, who are just now receiving their financial aid award letters, are about to get some bad news. Michigan State University, for example, made $7 million worth of Perkins loans to 6,600 of its neediest students for the 2007-08 academic year. This fall, however, MSU expects to have only a little more than $5 million in its Perkins pool. MSU last year decided not to offer Perkins loans to graduate students. And for this fall, financial aid director Rick Shipman expects to cut the number of Perkins loans to undergraduates to about 4,400. MSU will also cut the average size of a Perkins loan from last year's $1,200 to just $1,000 this fall. "This is a huge hit...and it is happening across the country," Shipman says.

It is indeed. The University of Maryland College Park says its Perkins funding has fallen to half of last year's $2.3 million. Ohio University reports that it is so short on Perkins funds that about 100 students who would have gotten Perkins loans worth $2,100 a piece last year won't be getting them this year, a decline of 12 percent.

From 2000 to 2005, an average of about 725,000 students received Perkins loans worth an average of $2,100 a piece each year, according to the Department of Education. College financial aid officers say they expect this fall's numbers to drop back to levels seen in the mid-1990s—about 670,000 students receiving about $1,500 a piece in Perkins loans for the year.

The students who lose their Perkins loans this year will be left with much less attractive alternatives. Needy students, typically those with family incomes below about $40,000, are eligible for the next-best education loan deal: "subsidized" federal Stafford loans, which will cost only 6 percent this fall. All other students can get regular Stafford loans that have a maximum annual percentage rate of about 7 percent after all fees are counted in but charge interest even while the student is in school. A few lenders, such as MOHELA, are advertising discounts of up to 2 percentage points off regular Stafford loans, however.

Unfortunately, the federal government won't let most traditional undergraduates borrow more than $5,500 a year through the Stafford program. (Adult, non-traditional undergraduate students can borrow a maximum of $10,500 a year in Stafford loans.) The average net cost of attendance at a public four-year university (after subtracting out scholarships) is about $13,000, so many students who max out their Stafford loans still need to borrow more. Those students can ask their parents to borrow through the federal PLUS program, which charges a maximum of 9.4 percent after all fees are counted. Or they can try to get a bank to approve a private loan. But because of the recent credit crunch, banks are tightening up on private loans, rejecting all but those with the best credit and often charging even those folks higher interest rates.

The higher interest rates on other loans and the quirky rules governing the Perkins program are at the root of the Perkins shortage, says Larry Zaglaniczny, director of congressional relations for the National Association of Student Financial Aid Administrators. While the federal government guarantees that anyone who qualifies for a federal Stafford or PLUS loan will get their money, there is no such guarantee for Perkins loans. Instead, each college has a fixed pool of Perkins money it can lend. Schools have to wait until their graduates start paying old Perkins loans back to get money they can then recycle out to new students. During the first half of the decade, most college graduates paid off Perkins loans very quickly because interest rates in general were so low that many consolidated all their educational debt into one new lower-cost loan. But now that interest rates have spiked upward, most new graduates are choosing to keep the Perkins loans and their 5 percent rate over the 10-year term of the loan. So instead of getting all their money back quickly after a student's graduation, colleges are collecting a few hundred dollars a month from each borrower.

One reason Washington isn't boosting the Perkins program is because some in Congress and the administration feel the program is not fair. Perkins funding has not been spread equally to all schools. Because each school's Perkins pool was set years ago, schools that have recently seen a big jump in enrollment, for example, have much less, per student, to hand out. That means a student who would qualify for a Perkins loan at one school might not be offered one at another school. The federal Stafford and PLUS programs, on the other hand, treat all college students equally.

Luke Swarthout, higher education advocate for the U.S. Public Interest Research Group, said that while the Perkins program is imperfect, the declines are unfortunate because "it is a good program and helps a lot of students."

        

Over the last few weeks, students have been receiving college acceptance letters. The next step will be to find the money to get through school and that usually involves education loans.

While several major education lenders are no longer offering student loans, Education Secretary Margaret Spellings said in an interview last week that her department has the authority to quickly free up money from the U.S. Treasury, if needed, to finance student loans. However, as tuition costs rise faster than inflation, many students will find that federal student loans, such as Perkins and Stafford loans, will not be enough to fund the entire cost of college. Another option is to have Mom or Dad on the loan.

A popular loan for parents is the P.L.U.S. loan (Parent's Loan for Undergraduate Students) in which the the parent is borrowing on behalf of the student.

Other loans that can be used to fund college costs are private loans. However, families should avoid these types of education loans if possible because the interest rate on private student loans is variable and can range anywhere from 8.5 percent all the way up to 16 percent. This is nearly the same as paying for college with credit cards.

While you're out there searching for the money to pay tuition costs, please do your research on the various loans available and shop around before choosing a lender. Here are some common questions we receive from families about PLUS loans.

Common Questions About PLUS Loans

What is a PLUS loan?

Federal Parent Loans for Undergraduate Students, also known as PLUS loans, are fixed-interest education loans that allow parents to fund the cost of their child's education.

Who is eligible for a PLUS loan?

To be eligible, you must:

        

The Student Aid Report (SAR) is a confusing government-type report that summarizes the information that you provided on the FAFSA financial aid form. The following are some guidelines involving the SAR.

 

Your SAR will usually contain your Expected Family Contribution (EFC), the number used in determining your eligibility for federal student aid. Your EFC will appear in the upper right-hand portion of a paper SAR and at (or near) the top of an electronic SAR. If there is an asterisk positioned next to the EFC figure on the SAR, then the data you submitted has been selected for verification (audit). If you do not have an EFC number on your SAR, then more information may be needed from you to process your data.

 

If you provided an e-mail address when you applied for aid, you will receive your SAR by e-mail 3-5 days after your FAFSA has been processed. This e-mail will contain a secure link so you can access your SAR online. If you did not provide an e-mail address when you applied for aid, then you will receive a paper SAR by mail in 7-10 days after your FAFSA has been processed. Regardless of whether you applied online, or by paper, your financial data will automatically be sent electronically to the schools you listed on the FAFSA.

 

Once you receive the SAR, review it carefully to make sure it’s accurate and complete. The school(s) you’ve selected to receive your SAR will use this information to determine if you’re eligible for federal – and possibly nonfederal – student financial aid funds.

 

If you need to make corrections to your SAR, you can make them online using your PIN number. Go to http://www.fafsa.ed.gov and select "Make Corrections to a Processed FAFSA." If you received a paper SAR, make any necessary corrections on that SAR and mail it to:

 

Federal Student Aid Programs

PO Box 4038

Washington, DC 52243-4038

 

If you do not receive your SAR, call the federal processor at 1-800-4-FED-AID.

 

Once your SAR is accurate and complete and you are eligible for federal student financial aid, each school will send you an Award Letter. The Award Letter tells you the types of financial aid they will offer and how much you will receive. This combination of aid is your Financial Aid Package.

 

College Bits And Pieces

• The mortgage industry sub-prime crisis could make it harder for students to get low-interest loans due to increased default rates. New data from the U.S. Education Department confirms that while the federal loans for education will not be affected by this crisis, sub-prime borrowers may have more trouble securing a private education loan and could be subject to stricter lending practices. Student lender Sallie Mae plans to be more selective in granting loans. Possible adjustments could include higher credit scores of 20-30 points from the standard score of 620 needed secure a loan, along with higher interest rates of .5% to 1%. Other lenders may follow suit by cutting origination fee waivers, eliminating loan discounts, and increase minimum balance requirements for loan consolidation. Some lenders may even put less emphasis on the sale of federal student (Stafford) and parent (PLUS) loans and shift their marketing dollars to higher cost private student loans. 

• The Internal Revenue Service proposed regulations that are designed to prevent potential abuse by taxpayers — particularly wealthy ones — who put money away for college under Section 529 of the federal tax code. The proposed regulation can be found at: http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/E8-859.htm  

• A record high 3.3 million high school students will be graduating this spring and competing for college admissions next year. This is part of the Echo Boom, or the children of baby boomers. When the baby boomers were in high school in the 1960s and 1970s, a high of 3.2 million graduated in one year. However, the big difference is that in the 1970s, fewer than 50 percent of graduates went on to college. Today, two-thirds of the high school graduates move directly into post-secondary education. With a limited number of spaces on college campuses, schools may have to be more selective than ever. “It’s a matter of supply and demand,” said Tony Pals, spokesman for the National Association of Independent Colleges and Universities. “Institutions that in the past may have been safety schools may now be moving up to students’ first-tier selections. That’s because of increased competition.”

If you have any questions about the information contained in this newsletter, or any questions about how to better afford college, college funding, or getting your kids in the right college and on budget, or other such questions, please contact our office, or call us at (866) 309-7622.

Do you have a twitter account? If not, visit www.twitter.com and create an account and add collegewizard as a friend and we can talk freely about college ideas or other financial thoughts you might have.

        

The credit market debacle transfer to the student loan market has been coming for quite some time and now it's fully evolving.  

Sallie Mae just bowed out of the consolidation market, so watch things change in the whole industry. 

Our bet is that parent's will be awarded PLUS loans by the college, but the loan industry will attempt to convert them over to a Private loan (which will be tagged with an adjustable rate and high origination fees). 

Please reference these recent articles from THE NY Times and Businessweek:

http://www.businessweek.com/ap/financialnews/D8VV8L7O0.htm

http://www.usnews.com/articles/business/paying-for-college/2008/04/10/competition-is-tough.html

http://www.nytimes.com/2008/04/12/business/12loan.html?_r=1&th&emc=th&oref=slogin

Here is some powerful wording from U.S. News & World Report too.

"If you think getting accepted was hard, try paying for tuition in this credit crunch," writes U.S. News & World Report. " The joy of thick acceptance letters is increasingly soured by record-high tuition prices, while unprecedented collapses in real estate values and credit markets have diminished the funds that many families expected would cover their costs. The majority of '2008 students will face higher tuition bills with fewer funding options. So what can they do? Pinch pennies. Work hard. And compromise."

Well, I don't exactly agree with the last couple of options as those aren't really solutions at all. 

For families that are looking for real solutions and options to afford college, there are people out there such as myself that have invested in our education and have aligned ourselves with partners that provide people with the much needed help that they require.

We can help you with strategies on how to avoid this credit crisis using time-tested cash flow planning strategies.

Please visit us at www.innovativewealthstrategies.com to learn more, or feel free to call us anytime at (248) 391-8399 or toll free at (866) 309-7622.

Do you have a twitter account? If not, visit www.twitter.com and create an account and add collegewizard as a friend and we can talk freely about college ideas or other financial thoughts you might have.

        

As the cost of college heads for the stratosphere and student loans become more difficult to qualify for, many families may find themselves a bit cash-strapped and begin to look at their retirement fund (401k, 403b, IRA) to cover their education expenses. While it’s a natural tendency to want to do all you can financially to make sure your kids get the best education possible; we highly caution against tapping your nest egg to pay for your children’s education. Why? Consider this:

The average age of parents with college bound kids is 40-45. These parents are at the back-end of the Baby Boomer wave. Twenty years from now when these current college bound parents are approaching 65 years of age, the majority of baby boomers will be 70-80 years of age!

This huge number of older Boomers may end up draining the government's Social Security and Medicare/Medicaid coffers. Will the government have to raise YOUR taxes to offset these older Boomer's old age costs?

Did You Know That Your Retirement Plan Is Fully Taxable?

Since your 401k/403b/IRA is fully taxable at ordinary income tax rates, raising taxes to support these older Boomers at the time of your retirement could dramatically reduce the amount of money you’ll have to live on... when you need it the most!

Furthermore, if you do borrow money from your 401k to pay college expenses and then switch jobs; please be aware that the loan must be paid back right away, typically within 60 days of the time you leave. Furthermore, if you don't have the cash to pay off the 401k loan, then the loan balance may be considered a taxable distribution, which means you would owe ordinary income tax plus a 10 percent penalty if you're under the age of 59½.

Nobody can predict whether the government will raise taxes to offset the aging costs of baby boomers. However, as a parent with college bound children, you need to look at the bigger picture. You need to plan for college by addressing your retirement first. Before you ever consider taking money from your retirement account to finance your children’s education, please give us a call. We may have alternative strategies that can help you pay your college expenses without raiding your retirement accounts.



If you have any questions about the information contained in this posting, or any questions about college funding in general, please contact us.