You can now follow us on Twitter @CFGScholarBank for the latest in local, private scholarships! We will be bringing you new listings, upcoming expirations, and helpful news and tips.
The good folks at The Project on Student Debt have released student loan numbers for the Class of 2013 and we see a mixed report. A few takeaways: 70% of the Class of 2013 had student loan debt; the average loan amount for that group was $28,400; averages and percentages very significantly across states. Virginia students were right in the middle: 59% of students had debt, and the average amount was $25,780.
Faced with these debt levels upon graduation, it’s important that recent graduates get their financial lives in order right away. Choosing the correct repayment plan is part of that process, as well as making a sensible spending plan that allows them to enjoy their new life while planning for the future.
The report can be found in its entirety here.
We all want to avoid mistakes, especially expensive ones. Sometimes all it takes is a little planning and thinking ahead. Here are three common mistakes that parents make when it comes to paying for college.
Selling investments at the wrong time
You might have some investments that you’ve socked away to pay for college. Great! If they are in a regular investment account (not a 529), when you sell them you will incur capital gains. Capital gains will increase your income which will increase your Expected Family Contribution on the FAFSA. As a result, you will not qualify for need-based aid that you might qualify for otherwise.
So what do you do? You can still sell, but you have to sell earlier than you think. Let’s say your daughter is a risking junior in high school. You will file your first FAFSA in January of her senior year. The FAFSA will ask about your income during the calendar year that she is part junior (spring) and part senior (summer and fall). This means that if you want to sell some investments, you should do so before December 31 of your daughter’s junior year.
(Note: the CSS Profile form that some colleges use will still pick up this income.)
Taking a retirement plan distribution
The FAFSA considers retirement plan distributions to be income in the year received. The increased income will hurt your chances for need-based aid. You won’t have to pay a penalty if the money is used for college, but you will have to pay taxes on the earnings and your EFC will go up. Even a return of Roth contributions is picked up on the FAFSA as untaxed income.
So what do you do? It is possible in for the financial aid office to adjust your EFC if the retirement plan distribution was made for certain specific circumstances. (Just needing the money to pay for college is not going to be one of them.) If your distribution was one-time and you have a documented hardship, it might be worth pursuing an adjustment. We can help you with that. In general, though, if you have not taken the distribution, don’t!
Grandparents paying the college bill
This happens far too often – grandparents who want to help but aren’t sure how, and they learn that there are estate tax benefits to paying tuition directly, so they do. They’ve done a very nice thing, but it will likely hurt your financial aid.
So what do you do? If you are lucky enough to be in this situation, you want to be very careful in how you structure your funding plan. Don’t do anything until you’ve considered all the options and how they will impact your family. This is a great example of how ‘what works for one family doesn’t necessarily work for another’ holds true. Understand the implications on your aid and your EFC and you’ll make wiser decisions.
Don’t miss the deadline for the VTAG scholarship!
If you are a Virginia resident and plan on attending a private, non-profit college this year, you most likely qualify for the Virginia Tuition Assistant Grant. The amount of the award can change annually based on what the General Assembly does, and the maximum amount for 2014-15 is $3,100 for undergraduate and $1,550 for graduate students.
The deadline for applying for the grant is July 31!
How do you apply? The application can be found on the SCHEV website here. If you are not familiar with VTAG, the best place to start is to call your private college’s financial aid office and make sure you are going about the process in the right way.
This is low-hanging fruit when it comes to paying for college and most schools do an excellent job of communicating with families about VTAG. However, with summer schedules and vacations, deadlines can creep up on you. Don’t miss this one!
SCHEV also provides a detailed brochure about VTAG if you’d like more information.
A full list of participating schools is below:
Appalachian College of Pharmacy
Averett University
Bridgewater College
Christendom College
Eastern Mennonite University
Edward Via Virginia College ofOsteopathic Medicine
Emory & Henry College
Ferrum College
George Washington University (VA campus only)
Hampden-Sydney College
Hampton University
Hollins University
Liberty University
Lynchburg College
Mary Baldwin College
Marymount University
Randolph College
Randolph-Macon College
Regent University
Roanoke College
Shenandoah University
Southern Virginia University
Sweet Briar College
University of Richmond
Virginia Intermont College
Virginia Union University
Virginia Tech Carilion School of Medicine
Virginia Wesleyan College
Washington & Lee University
Richmond Times-Dispatch
Richmond Times-Dispatch
“That college may not be out of your range“
Norfolk Virginian-Pilot
“College degree = job = high salary? It depends.“
Fairfax Times
“Cost of college a multi-layered proposition”
Fairfax Times
“Deciphering financial aid terms often tougher than college itself”
Charlottesville Daily Progress
“New data improve college cost, earning comparions“
Charlottesville Daily Progress
“Know how to decipher award letters“
WWBT NBC12
“Website launched for local scholarships“
Roanoke Times
“Graduates earnings inform expectations”
The Richmond Times-Dispatch ran a good story about paying for college – another excellent article by reporter Karin Kapsidelis! Here are a few excerpts with a link to the full article:
High school seniors weighing financial aid packages may be excused if they feel they already need a college degree to understand what they’re getting themselves into.
Financial aid, a mix of loans that must be repaid and grants that do not, is designed to lower the sticker price if not the eventual shock.
Here’s advice from a higher-education administrator, a financial adviser and a student on how to avoid pitfalls that pile on the debt:
Also contributing to the debt problem is the way in which students receive what’s left of the loan to cover their expenses after colleges deduct tuition and fees, said Jonathan West, director of College Funding Group in Richmond.
This money is part of a student’s loan, but it is oddly called “a refund.”
“It’s misnomer,” West said. “You always know around campus when the refunds are in because it’s like payday for 18-year-olds.”
The refund is meant to last a semester, but at some schools it goes on a debit card and even the student ID, “and all they need to do is swipe it,” he said.
“It’s convenient, but it’s really too convenient,” West said, especially with no one looking over a freshman’s shoulder to see whether it’s spent on pizza or a textbook.
“There’s nobody intervening,” he said, to tell the student “you’re going to be paying this back for 10 years. That Domino’s pizza is really expensive.”
Graduate in 4 years or less
It’s the ultimate strategy to lower the cost of attendance. For a 120-credit bachelor’s degree, that means taking 15 credit hours per semester, but they have to be the right courses.
So be deliberate about your course selection: Don’t sign up for classes just because they sound fun, [Luke] Schultheis said.
Apply for scholarships
Students too often think a scholarship for a few hundred dollars isn’t worth their effort, but win a few here and there and they add up.
That’s been the strategy of [Lorraine] SantaLucia, who said all her awards will allow her to graduate without debt.
SantaLucia, whose scholarships have ranged from $250 to $5,000, founded the group Scholarship Sharing to spread her philosophy. She hopes to turn the idea into a nonprofit when she graduates.
Her advice: Shop local for scholarship opportunities. The offering from a local organization may be smaller, but you’re not competing against thousands of other students to win it.
Students who do that often earn more credits than they need but not necessarily the ones required to graduate on time.
Some schools, including VCU, have software programs to help students stay on track with the courses necessary to complete their degree program.
Fill out the FAFSA
FAFSA — the Free Application for Federal Student Aid — is the starting point for receiving all types of aid, including need-based grants, federal student loans and the Plus loans for parents.
Some colleges also require the PROFILE, administered by the College Scholarship Service, to determine how they will award institutional financial aid.
PROFILE takes a deeper look at a family’s finances. While FAFSA doesn’t include a family’s retirement accounts or home value, PROFILE does.
West recommends listing a realistic value for your home — what you would expect to get in a quick 30-day sale.
And because a student’s assets will factor into aid awards, it makes sense to use those funds to buy a computer and other college necessities before filing either the FAFSA or
PROFILE forms, he said.
Start planning early
Part of the problem is that “colleges let you in and then tell you how much it’s going to cost,” West said.
The worst time to decide how much to borrow is after the acceptance letter is received, but that’s what many families do, he said.
“They don’t figure out how much they can afford to borrow. They just borrow what they need to borrow,” he said, with long-term repercussions for the family’s finances.
“Money shouldn’t be the sole determinant, but the truth is, for many families it is a very important factor,” he said.
West recommends beginning to narrow the “college universe” based on affordability in the 10th or 11th grade with the help of the U.S. Department of Education’s FAFSA4caster, which gives an early estimate of eligibility for aid, and with the net-price calculators that schools must post on their websites.
The best of these calculators incorporate the college’s resources, philosophy about aid, government grants, and possible merit scholarships all into one summary, West said.
But be aware: The calculators are also marketing tools, because higher education is a business, too, he said. “It’s not all warm fuzzies and ivy-covered walls.”
Parents often think their bright teen will coast through with merit aid, but that’s unlikely. West describes merit aid as a pot of money that colleges use as an inducement to enroll the most desirable students.
“They want to give you just what it takes to get you to attend, but not more than that,” he said.
Full article: Primer on Student Debt
Welcome to visitors from the VCU Scholarship Sharing College Funding Panel!
We’ve put together this resource page to help you with some of the questions that came up at the panel. You can also send us an email with your questions and we’ll be happy to give you additional suggestions.
Student loan repayment
Students have a grace period of 6 months from graduation before payments begin. You will be contacted by your loan servicer with instructions and repayment plan options. There are a number of choices but the standard repayment plan is fixed monthly payments for 10 years. You have 45 days from being notified of your options to make your choice, or the servicer will enroll you in the standard repayment plan.
Use this 6 month period to determine what your best repayment plan is. Login to studentloans.gov with your PIN to estimate your payments.
Know what you owe by visiting www.nslds.ed.gov. This will show you all your federal student loan debt. If you have private student loans, you will need to contact your lender for similar information.
Do not automatically consolidate your loans. This is an important decision and it should not be done without a clear understanding of what you are doing.
If your income is low relative to your loan payments, you may qualify for one of the income driven repayment plans. This means that your loan payment is a percentage of your income and your payments change as your income changes. You have to apply for it each year and be approved.
The most attractive plan is called Pay As You Earn. If you have not repaid your loan in full after 20 years of qualifying monthly payments, the balance of your loan will be forgiven.
Public Service Loan Forgiveness is a plan that allows your loan balance to be forgiven after 10 years of payments if you work full-time in certain jobs, making the right kind of loan payments
Teachers have special loan forgiveness and repayment options.
Other careers also have special repayment assistance programs: Peace Corps, AmeriCorps, Military, and National Health Service Corps.
If you cannot make your loan payments, contact your servicer immediately and talk about the options. Don’t wait to become delinquent. There are a number of options available to federal student loan borrowers.
Deferment means that you work out a plan with your servicer for a period where your payments are delayed. An example of this would be while you were looking for a job.
Forbearance can come into play when you do not qualify for a deferment. Forbearance means that you are given a certain period of time by your servicer when you don’t have to make payments. You have to ask for it, so if you cannot make your payments, talk to your lender.
Read more about deferment and forbearance here: http://studentaid.ed.gov/repay-loans/deferment-forbearance
Deferment and Forbearance are not always the best choice. Think first about income driven repayment plans.
We can help you sort through the choices and make a repayment plan that fits with your current financial situation.
Paying for college
There are two approaches to the cost of college: what you pay and how you pay. What you pay means to reduce what college will cost your family. This is done through scholarships and grants, managing your out of pocket expenses, and taking advantage of tax breaks for education. “What you pay” strategies do reduce the amount you pay for college.
How you pay is different than what you pay. How you pay is all about your specific funding plan. It means using your family income and assets, 529 plan, retirement account, student and parent loans, work-study, tuition payment plans, and other payment methods. How you pay is important but it does not reduce what you are paying to the college.
Together, what you pay and how you pay make up your college funding plan.
If loans, either student loans or parent loans, are part of your plan, you should be sure you have addressed future loan repayment as part of your decision making.
For more tips on paying for college, please consider subscribing to our free newsletter, On Course For College. We cover all these topics and more.
Scholarships
We are huge fans of local private scholarships!
Our CFG ScholarBank database includes hundreds of local scholarships that you can search and investigate. For students currently in college, we maintain a shorter list (shorter simply because most scholarships are for high school seniors!) of local scholarships for college students.
Our free newsletter, Scholarship Spotlight, contains helpful tips and information on finding and using scholarships as well as special insights on different awards.
Area high schools also offer wonderful leads for students to investigate. Check with your counseling office to find out what information they have. J. Sargeant Reynolds Community College also has a fantastic scholarship blog that you surely want to check out.
How do you find scholarships that you have a good chance of winning? The best way is to apply to those that are closely aligned with your personal attributes. The better the match, the better the chance of winning. It’s your job to make sure the scholarship judges can see what a good match you are!
Look first in your own backyard. What groups, fields of study, civic associations, employers, stores, financial institutions, and religious organizations are you and your family members aligned with? Do any of these sponsor scholarships? If so, you’ll have a head start.
As good as scholarships are, you need to know your college’s policy on how outside scholarships impact your financial aid package. Many families mistakenly think that the scholarship will reduce their out of pocket costs. That’s unlikely. Here’s why. Some colleges want the scholarship money to reduce the grants the college awards you. Other schools reduce your loans, and other schools reduce unmet need. The impact can also be different depending on whether your aid is need-based or not.
Ask what your college’s policy is on outside scholarships. If your college will reduce unmet need, that’s good. If they will reduce loans, that’s good. If they reduce their grants, that’s not good.
For more tips and strategies on private scholarships, subscribe to our free Scholarship Spotlight.
Out of school – now what?
College is in your rearview mirror and you are starting to realize that you have a number of financial decisions to make. What’s the “right” way to spend your money? How much should you be saving? Should you pay more on your student loans? What about filing an income tax return?
It’s pretty normal to have financial questions when you are starting out. The trick is in finding good answers to your questions. Most advice is cookie-cutter, save X% and spend Y%, that sort of thing. Most financial advisors don’t want to talk to you unless you happen to have a trust fund.
We believe it all starts with your personal cash flow plan. Identify your financial goals, both short term and long term. What’s most important to you? Getting out of debt? Saving for a house? Living within your means? Whatever your answers are, you can be sure that your plan will be personal to you.
Devising your personal cash flow plan is only half of the battle – good implementation is the difference between success and failure. We guide you through the options and assist you in setting up a system that works for you. It’s anything but cookie cutter!
In the end, you will be squarely on the path to achieving your financial goals. If you’d like to know more about our personal financial coaching for young adults, please let us know.
What is a college funding plan?
A college funding plan is your road map to paying for college. It answers the two big questions: “How much does college cost?” and “How do we pay for it?”
Why do we need a plan?
You only need a plan if it is important to you to keep a lid on college costs so they don’t spill over and hurt your other financial goals and objectives. If that’s not a big deal to you, you can wing it.
Doesn’t our financial plan cover paying for college?
If you mean a comprehensive financial plan (only about 1/3rd of people even have one, and fewer than that actually follow them), then it probably does have a section on education. However, a good college funding plan covers far more than just saving for education. When your plan was put together, did you know exactly where your teenager would be going to college and what that college would cost?
Don’t we just have to pay what the college says we owe?
Yes, when you get the invoice you have to pay it. However, “what the college says we owe” is a moving target. Your invoice will be different than that of other students, in the same way your airfare is different than other passengers.
A good college funding plan addresses ways to reduce what the college will say you owe, well before the invoice arrives.
What goes into our plan?
The first part of your plan will focus on what college will cost your family – that’s different than what college costs. In-state schools, out-of-state schools, selective private schools, community colleges all have different prices and different financial aid resources. What you pay may be significantly different than another family of a student in the same class. Your plan addresses ways to both figure out and reduce what college will cost.
The second part of your plan is to identify all available sources of money. It is perfectly possible to borrow 100% of the cost of college (including spending money) from the federal government through student loans and parent loans, but is that wise for your financial situation?
Our checklist starts with your family’s cash flow and savings to see what can be reallocated to college costs. What education tax credits will you qualify for? Do you have the generosity of a grandparent or other relative to count on? Do you have a 529 plan or prepaid plan? Can you count on income from a part-time job for your teenager? Can a tuition payment plan help?
These are just some of the items we examine. The important thing is that your plan includes all the items that are relevant to your family.
Loans can be part of a college funding plan, they just should not be the first thing you turn to. Loans have to be repaid at some point, so you are going to need to come up with the money eventually. If a careful analysis shows you have confidence in your ability to do that, loans are an option.
What about all the “other” costs of college, like books and spending money?
The extra costs are significant and can add up to thousands of dollars per year. 40% of families report having some major expense they did not expect. Your plan should identify these costs and address ways to proactively lower them.
Here’s a huge cost that is often a surprise: the fifth year. It is increasingly common, especially at state schools, for students to need an extra semester or two to graduate. Nothing will blow your budget like an extra year. Your plan should help keep you on track to a four year graduation.
Why don’t colleges tell us about all this?
Colleges can be wonderful institutions, but it’s not their job to tell you how to pay them less money. That’s your job. Fortunately, your college funding plan will do just that.
When should we get started with our plan?
Today! What you can do will vary depending on the age of your child, but it’s never too early for information and it’s never too late to make changes. Ideally, parents of sophomores and juniors have more flexibility than parents of seniors or current undergrads.
Our son or daughter has graduated with student loans. Can you help?
Yes. Student loan repayment is incredibly complicated and college graduates are not prepared to make the important choices that are required of them. We go over the different repayment programs, cover the immediate and long-term implications, and help your son or daughter create a loan repayment plan. As situations change, the repayment plan will also change.
Can’t I make a plan myself?
Yes, absolutely. A college funding plan is not incredibly complicated. If you’ve been through the college process lately, understand how financial aid works and how to lower your net price, can tell when a financial aid award should be appealed, can compare the various and misleading aid award letters, are able to get a grasp on the 15+ education tax provisions and 10 loan options, know how to complete the FAFSA properly, and can manage your costs while in school, you do not need help.
Or, if you’d like help, or are just too busy for all that, we can get your plan started in about an hour.
We’ve just launched a new email newsletter focused on finding, winning, and using local private scholarships! If you’d like to subscribe so you don’t miss an issue, please click here. You’ll get in-depth tips and advice as well as important input from area counselors. Scholarship season is heating up, you won’t want to miss an issue!
Local scholarships are just part of the tremendous generosity in Richmond – thank you scholarship sponsors.
Make sure to check with your own school’s financial aid office to verify deadlines. The following dates are reported by college websites as of January 2014:
| College | Deadline |
|---|---|
| Christopher Newport | March 1 |
| George Mason | March 1 |
| James Madison | March 1 |
| Longwood | March 1 |
| Mary Washington | March 1 |
| Norfolk State | March 15 |
| Old Dominion | February 15 |
| Radford | February 15 |
| UVA | March 1 |
| VCU | March 1 |
| Virginia State | March 31 |
| Virginia Tech | March 1 |
| VMI | March 1 |
| William & Mary | March 1 |
| Emory & Henry | March 1 |
| Hampden-Sydney | March 1 |
| Hampton | February 15 |
| Hollins | February 1 |
| Lynchburg | March 1 |
| Mary Baldwin | March 1 |
| Randolph | April 1 |
| Randolph-Macon | March 1 |
| Richmond | February 15 |
| Roanoke | March 1 |
| Shenandoah | March 15 |
| Sweet Briar | February 15 |
| Washington & Lee | February 15 |
From our October newsletter
It’s understandable if parents are a bit jaded these days about college. It seems like the schools hold all the cards – they don’t even tell you what it will cost you until after you are in, and then you only have a few weeks to accept.
Talk about no transparency! Admissions are a black box – incredibly qualified students are passed over in favor of others. Why? We figure there are reasons but it’s all so secretive.
Now there’s a shocking revelation about the FAFSA. According to a story in Inside Higher Ed, colleges are using the FAFSA in a way it was never intended both for admissions and awarding aid.
Remember, the goal of a college in awarding financial aid is to give you enough money to say yes, but not one dollar more. They have consultants, they have enrollment management programs, it’s all quite sophisticated. They know you better than you know yourself it seems.
So back to the FAFSA. When you submit the FAFSA, you need to list the schools you will send the information to. You can list up to 10. But how do you list them, in what order, and could that possibly be important?
We’ve been telling parents for some time that the order might matter, and we offer suggestions and strategies on how you might consider listing your schools, just in case. Here’s why it matters.
To read the entire article, click here to subscribe – it’s free!
This goes way beyond “print preview not working.” Obamacare and electronic benefits cards aren’t the only thing crashing these days.
The New York Times report on problems going on this weekend with the Common App:
Forbes gives an update after the website crashed on Monday:
http://www.forbes.com/sites/maggiemcgrath/2013/10/14/mass-panic-as-common-app-crashes/
Remember: many CSS Profile schools require early admission applicants to file their CSS Profile early.
1. Be a tech Luddite: In this day and age of “cloud this” and “swipe that”, we tend to take for granted how we push the envelope tech-wise. Not every website can keep up with all the browser variations and operating systems that are out there. You don’t want to find out that something about your computer doesn’t agree with the Common App’s computers.
The Common App lists system requirements on the homepage (look near the bottom.) If at all possible, pick one computer to use that meets these requirements and stick with it throughout the process. Once you’ve started, don’t rush to upgrade to the latest and greatest. Stick with an arrangement that works. For example, some people don’t like the Common App on Safari.
Have plenty of ink on hand for your printer. Most color inkjet printers these days require the color cartridges even to print black text.
2. Provide your best SAT/ACT scores in each area, even if they are from different test dates. If you plan on taking future tests, answer “yes” to that question so the admissions office will be on the lookout for those scores. It’s also a good idea to check the specific test reporting policy of each of your colleges which you can find on their websites.
3. Say yes to financial aid and merit scholarships, even if you don’t think you will get any aid. You can always turn down any financial aid that is offered so say yes now.
4. Submitting the completed application does not mean you are finished. You have to also submit the supplements to your colleges and you have to pay. Consider these to be three separate steps. Make sure you do each and then check your My Colleges page to be sure the status for each application is correct.
5. Print Preview matters – a lot! When all required questions have been answered, a PDF will be generated for your review once you click on “Start Submission.” Print it and read it carefully. Check each line to be sure characters were not cut-off. The fact that you could type the characters on the screen does not mean that they will print out correctly.
Bonus tip: Don’t wait until the last minute. If you are planning on doing the Common Application over Christmas Break, for example, many college offices are closed. That’s not the time to be trying to get your questions answered. The My Colleges tab will show you the deadline information for each of your schools.
Bonus tip #2: Add to your email contacts so important messages don’t get marked as spam.
Have questions? We’d be glad to help. Drop us a note at info@collegefundinggroup.com.
UVA has coined one of the best euphemisms of all time. But what else would expect from our leading state university? Instead of calling a planned tuition increase a tuition increase, UVA is calling it an “academic excellence fee.” This makes you wonder if you can just choose the “average” education and avoid the fee.
The plan is not yet set in stone and has only been reported in the newspapers. The fee for this academic excellence for juniors and seniors would start at $500 this fall and increase to $2,000 by 2016. The business program already has a differential tuition plan in place which we wrote about here. Engineering students will be asked to pay $2,000 extra as well as a $750 lab fee that exists now.
This fee is in addition to a discussed tuition increase of 2.9%. This has not yet been approved.
UVAs chief operating officer noted that the planned fees were less than what the market would bear. That statements holds the answer to the question, “why does college cost so much?” Because they can get away with charging it.
An academic excellence fee. Really?
April is the month for acceptance and award letters. It can be incredibly frustrating to try to decipher the language and format of different award letters from different colleges. Our April newsletter gives you some tips on how to do that, and we have a special offer for new subscribers too.
If you sign up for our newsletter during April, and would like help understanding and comparing financial aid award letters, we will do a side by side comparison of up to 5 letters for free.
To take advantage of this offer and sign up for our newsletter, please click here.
Congratulations to the Robotics teams from Midlothian, Tucker, Deep Run, and Godwin high schools for advancing to the world robotics championship in St. Louis!
Read the official press release here about Godwin, Tucker, and Midlothian moving on from the Virginia Regional. Deep Run advanced by winning the Chariman’s Award at the North Carolina Regional. Great job!
In addition to the technically challenging aspects of designing, building, and operating the robots, FIRST is all about building teams and building minds.
FIRST also is a pathway to a number of college scholarships. The full list can be found here:
http://www.usfirst.org/about/scholarships/scholarship-opportunities
Many students are getting fantastic letters from colleges detailing awards, scholarships, and grants that come with the offer of admission. Great job! These awards are NOT need-based, they are merit aid. The colleges want you to attend, and this is one of the tools they use to get you to say yes.
But is your award amount fair based on what the college has done in the past?
We’d be glad to help you determine that. If you sign up for our newsletter in March, we will send you a list of average merit aid awards for Virginia colleges. In addition, we will do the research for other colleges on your list, just drop us a note.
Merit aid is the best aid there is, but college remains a huge financial transaction. Be thrilled you received some, but be sure the amount is fair.
To take advantage of this offer and sign up for our newsletter, please click here.
It’s pretty easy when you are living at home and don’t have to worry about rent, about food (other than Moe’s and Chipotle), about car insurance and maintenance, about laundry, cell phone bills and utilities and all the rest of it, to forget that you are just a few short years away from being financially independent.
You want to be independent in many ways, just not necessarily financially (yet).
But that time is coming fast, and the way you handle the money you have now will make a huge difference. Even if you don’t have a steady job, money passes through your hands. Gifts, allowance, part-time work, whatever the source, you are in control of a certain amount of money. When you get to college, that amount will increase. How responsible are you being with what you have spend right now?
Here are a few ideas.
If you have a checking account, balance it. If you don’t know what that means, send us an email and we’ll help.
If you use a debit card, write down your purchases when you make them. Don’t rely on online banking to tell you how much money you have. In fact, speaking of mobile banking, do you really think it’s safe and secure? Why?
When you make purchases, do you try to get good deals or do you just impulse buy? With sites like FatWallet, Slickeals and Retailmenot, it’s hard to defend not looking for bargains.
Have you ever talked to your parents seriously about money (and a conversation that begins with “Can I please have…” does not count)? For starters, try asking them about their regular monthly bills so you can get an idea of what you can expect in the real world. How much does this standard of living to which you’ve been accustomed cost?
On a bigger scale, do you understand or pay attention to what is going on in Washington? Do you see “the government” as some magical provider of benefits like roads, education, and health care, or do you know that the government just takes money in from taxpayers and lenders and then pushes it back out?
Finally, when you think about money and financial matters, what’s your biggest unanswered question? Finding answers to those questions now can avoid mistakes later.
As you start to treat money with a sense of responsibility, you’ll develop good financial habits that will put you ahead of the game. Please let us know if we can help you along the way.
Excerpted from our February newsletter – if you would like to sign up for free, please do so here
You might think a word as simple as “cost” would have a simple definition. It doesn’t when it comes to college.
What does college cost?
There are two ways to answer this question. The first is to look at the annual, published sticker price. The second is to examine Net Price, the amount that a college will cost your family after deducting any grants and scholarships.
The current cost of the freshman year at UVA for an in-state student is $25,354. That number is the 2012-13 Cost of Attendance (COA) for UVA. It is the sticker price and it includes the following components:
|
Tuition and Fees |
$12,224 |
|
Room and Board |
9,440 |
|
Books and Supplies |
1,220 |
|
Travel |
360 |
|
Personal |
2,110 |
|
Total COA |
$25,354 |
You’ll never see an invoice for $25,354 and in fact you might pay more or less for your first year of college. Let’s consider the items one at a time.
Tuition and Fees: This is paid directly to the college. You do get an invoice for this, on a semester basis (actually, your teenager will get the invoice – watch their face when you ask them how they are planning to pay for it!). We’ve written before about tuition payment plans and what a help they can be in making the payment of Tuition and Fees more manageable.
Some schools charge extra fees or tuition for special programs. Known as differential tuition, these programs are becoming more common, especially with engineering and business majors. Some science programs have extra lab fees as well. Your actual invoice might vary from the amount included in the COA, but for most students it will be similar.
Room and Board: Now things start to get tricky. Many larger schools have a number of housing options. Single rooms vs. doubles vs. suites and some dorms cost more than others. What that means is that there is no single cost for housing. Colleges handle this by using an average or typical amount in the COA.
If you are living off-campus, your costs can be significantly different than the amount in the COA. You could be paying rent to a landlord, a student’s parents, or a management company. Tip: for upperclassmen, learning to pay monthly rent can be a great financial literacy step in a relatively safe environment.
Meal plans vary widely too. Off-campus students might decide to not participate in a meal plan at all and cook their own food (read: eat at Moe’s). How much that costs is anyone’s guess, and you’ll be wise to establish a food budget in advance. Most schools require freshmen to select a meal plan.
Finally, Room and Board costs can be exorbitant at some schools, over $14,000 per year. Some accommodations are nothing short of luxurious. Know what you will be paying and what you will be paying for.
Books and Supplies: With all the different courses and options for books, there is no way the school knows what your student’s cost will be, so they throw a number out there and move on. Our tips on saving money on book purchases are a great place to start. The biggest mistake you can make is to wait until you get to school in the fall to buy your books at the college bookstore. Ouch!
Transportation: Gas money or air fare? Where are you going to? How many trips per year? This number is another wild guess and you’ll see lots of variation from school to school. UVA’s number is low and reflects the idea that most students come from in-state. (But the same is true for James Madison students, and JMU uses $2,112 for travel.)
Personal: Who knows what this includes. UVA adds a footnote that it does include loan fees for student loans, if you get any. The rest of the category is for college student spending money: entertainment, pizza, Target, this list goes on and on. Again, you’ll see variety across schools. UVA uses $2,000 but Virginia Tech uses $1,200. College students don’t spend 45% more at UVA than Tech. The numbers are little more than a guess.
Add each of these numbers up and you get the Cost of Attendance, but as you can see by now, the number is largely random and very subjective. Understanding the numbers is the first step in figuring out what college will cost.
For families with juniors who are putting together college lists, our free Student Research Sheet can be a great help in organizing the information. We include a section on Cost, where you itemize the components of the COA for each school. If you would like a copy, please drop us a note.
As you can see, your actual out-of-pocket costs will vary based on a number of factors. Many families benefit from putting together a personal cash flow plan for college that takes into account realistic spending and funding amounts. Let us know if we can help you with your plan.
January 2013 is here– it’s time for the FAFSA! We have a few tips to help you through this challenging time. If you get stuck, please drop us a note.
“Where are you applying?“
Why do relatives do it? Why do they ask you so many questions about college? And what should you do about it?
Thanksgiving has always been a great time with family, but you know this year will be different because everyone from Aunt Minnie to Uncle Earl will be asking you where you are applying. You really don’t want to talk about it! Aargh!
First, take a deep breath, and think about why the older relatives bring this up. The primary reason is that this is the first topic in years that they feel they can talk to you about! You don’t get together that often, and they don’t really know that much about what is going on in your teenage life (that’s a good thing). That makes having a conversation difficult for them.
But now, this year, they can have a conversation with you on a topic they know something about. College. So when they ask where you are thinking about going, don’t be offended, it’s just their way of trying to connect.
Some people say you should nicely tell them you don’t want to talk about it. I disagree. You are moving into adulthood, you need to learn how to have difficult conversations. However, that doesn’t mean you need to offer up your list of schools and hear Uncle Earl pontificate on what strange choices you have.
This is actually a great opportunity for you. Here’s one way to approach it and have fun:
First, practice with your parents this week, before you get together. Get on the same page so your parents aren’t working against you. You don’t need your mom to call out, “Jessica, come tell Aunt Minnie where you are applying,” if that’s not what you want to do. Talk about how much you are willing to divulge and how you can remain respectful and steer the conversation.
You can actually learn from your relatives. Ask them where they went to college and what they liked most about it back in their day. Ask them what other schools were in the running and how they made their final choice. Ask them if looking back on it all, if they are happy with the choice they made.
You’ll end up honoring their desire to connect and learning something in the meantime. And enjoy your turkey!
Mom told you to get it done early!
Hurricane Sandy has shut down many businesses, schools, and families up and down the East Coast. This comes as many students are facing a deadline this Thursday, November 1, that of early application to college. You might think that students who are so certain of their number one choice would have their applications done early, but you’d be wrong in many cases. As many as 50% of students wait until the last day, in some cases the last hour, to hit submit. With no power, are you out of luck this year?
No. A number of colleges have extended their deadlines, so if you are facing November 1 as a drop-dead date, call the college admissions office and see if they will grant you some leniency. Here is a sampling of decisions:
UVA will accept applications for early-action through 11:59 p.m. Sunday
University of Maryland has extended the priority deadline of November 1 by an undetermined number of days.
Johns Hopkins has extended the early decision deadline of November 1 by an undetermined number of days.
Washington and Lee offers flexibility with the Early Decision 1 deadline of November 1. If you will miss the deadline because of Sandy, please contact the school at (540) 458-8710. Hopefully you have a friend reading this.
Duke has moved its early decision deadline to November 4.
Vanderbilt is offering flexibility for those impacted by Sandy.
Stanford has extended the deadline to 11:50 p.m. Pacific Time (not that you would wait to the last minute) on Monday, November 5.
Yale is also observing a November 5th deadline but says it will only apply to those in the Northeast.
Elon has moved the early decision deadline to November 5th.
Many other schools have made changes so please check with your school directly to verify the current deadline. Even the above dates and times might change, this is too important to trust to a blog post. Get on the phone and find out for yourself!
And, as Mom says, please don’t wait ’til the last minute!
Update: The New York Times has published a more comprehensive list of extensions. It can be found here.
$26,600. The Project on Student Debt is back with the annual update and estimates that 66% of college seniors who graduated in 2011 has student loan debt, and the average is $26,600. But wait, there’s more.
37% of working young graduates had jobs that did not require a college degree.
19% were either working part-time or had given up looking for work entirely. Given up at age 24?
The unemployment rate for the young grads was 8.8%.
High debt and depressed income is not a recipe for success. The twenties are the time for you to get ahead financially and get out of debt, not to struggle and get further behind. Your daily decisions about spending will make a difference for years. Financial education tools are widely available for free, so there is no excuse to be uninformed. If you are the kind of person who does better with guided help, our financial coaching program might be the ticket for you.
Parents, if you see your kids struggling with financial matters or student loans, please urge them to get some advice. They might not want to hear the advice from you, but that doesn’t mean they won’t listen to anyone.
Seniors never had it so good! Juniors, watch out. Next year’s Common Application will not have the “topic of your choice” essay prompt that has been so popular with students. Instead, four or five topics will be listed for you to choose from. These planned changes were discussed at the recent conference of the National Association for College Admissions Counselors.
The word length requirements will also be strictly enforced (minimum of 250 words, maximum of 500). The new Common App will be available on August 1, 2013. Just one more thing for juniors to think about.
The University of Richmond is in the midst of a disagreement over the recent decision taken by the board of trustees to make some changes to the sports programs. Men’s soccer is to be replaced with men’s lacrosse and men’s indoor and outdoor track will be eliminated as well. The dicussion is both emotional and complex, and both sides have important points.
But the trend toward lacrosse is not just a U of R thing. Lacrosse is being used at some schools to attract desirable high school students. The USA Today wrote about it last spring here. Quoting in part:
Lacrosse players are desirable for several reasons, but the main one is that they tend to be what enrollment professionals call “full-pay” students, or students whose families tend not to qualify for need-based aid. Because of that, they must pay an institution’s sticker price unless the college offers non-need-based grants and scholarships.
According to USA Lacrosse, the sport’s national governing body, lacrosse players tend to come from more educated households than the general population, with 85% of adults involved in the sport as either players or parents having graduated from a four-year college. They also tend to be wealthier. Less than 10% of lacrosse players come from households with incomes of less than $50,000, and nearly 75% of all lacrosse-playing families value their primary residence at $200,000 or more.
That certainly is a desirable group. The article does not give comparable demographic information for soccer players, and soccer as a sport seems more popular across the country and across the population. Lacrosse seems to be faster growing. At the college level, the administration has to consider the number of scholarships and the different sports offered. There’s no question it is complicated.
It serves as a good reminder for all students that just because a college offers a program you are drawn to, whether it is academic or athletic, it does not mean that things cannot change. Budgets are cut and academic offerings and majors are removed all the time. Entire degree programs are jettisoned. Do your homework. Read school newspapers. Talk to professors or coaches about the future if those things are important to you. There are no guarantees, but if you do your due diligence, and you don’t choose a college for one single reason, you’ll stack the odds for a good outcome in your favor.
How many colleges should you apply to? We recently addressed this common question with our answer here. If you look around on the internet, you’ll find many different answers, many different approaches. The takeaway is that there is no one single answer for all students, you have to decide on the approach that works for your family.
Application costs are not insignificant, both in terms of money and your time. US News posts a list of ten colleges with the highest application fees, they were in the range of $75 to $90. Some schools have lower online application fees, so be sure to look for any discounts or waivers that you can get.
Time is often underestimated by students, but think about the time you’ll invest in your essays, alumni interviews, asking for recommendation letters, and all the rest. You will be doing all this while trying to get straight As and be Mother Theresa-like in your community service, maybe playing a sport or being involved in extracurriculars too. Can you handle the stress? Are you well organized? Do you have a plan or are you just going to wing it?
One of the best resources you can turn to for answers is your parents. Your parents, amazingly, will have a different perspective. Bring up your thoughts and concerns and listen to their input. How many different applications do they think you have time for? Do they consider you to be organized? How can they help you with your concerns?
It’s a great chance for some project management and teamwork if you invite your Mom and Dad in early. If you wait until December, you’re going to hear nagging and “I told you so.” Use their knowledge and wisdom to your advantage.
This is prime season for college admissions officers to visit your high school. Depending on your school, there might be 75-100 visits scheduled in the upcoming weeks. How should you handle these visits? Should you even bother to go?
College visits are absolute musts. What a fantastic opportunity! You get to learn about schools you are interested in and you get to meet someone directly connected to the admission process. You now only want to attend, you want to make a good impression. That doesn’t mean you turn into Eddie Haskell (your parents will get that joke), but you don’t want to show up late, not take any notes, and not ask any questions.
Plan ahead. The guidance office can help with this, but don’t be surprised by a visit that’s taking place in 10 minutes. Know when the schools you are thinking about are coming, you might need to make some changes to your schedule.
There’s no magic number, but the rule is more is better. Visit every school that you or your parents have even talked about. This is not the time to say, “I’ll never go there.”
Listen and take notes. The admissions officers will be telling you important information about their schools and how they might fit you. Colleges are different, this is a great chance to hear about their differences.
Even if you have visited the school or done a tour, you still want to go and meet the admissions officer. Do not just think, “They know I’m interested” and use that as an excuse to skip it. Schools keep track of your demonstrations of interest, and every little bit helps.
Ask at least one good question, either in the meeting or afterward. Admissions officers see a number of students, but they also are trained to remember them. Separating yourself from the pack will help them remember you, hopefully favorably!
Fill out the information cards at the meeting and leave it with the officer. Make a note of the name and email address of the representative visiting your school and send him or her a short “nice meeting you” type of note. This isn’t the place to go into a long discussion of your special case, just let them know on a personal level that you made a connection.
Colleges have personalities. The best representatives reflect those personalities. Notice the differences between the tone and content of the meetings. Are they talking about academics or other aspects of college life more? What they talk about is what is important to their schools. If you listen to the presentation, and it is not clear to you, there’s your question: “Describe your school’s culture and uniqueness.”
If you’d like a list of other possible questions to ask, drop us a note.
It’s incredibly nice when grandparents want to, and are able to, make a financial contribution for college costs. Parents want to honor that, but there are good ways and not-so-good ways for those contributions to be made. Here are some guidelines.
Sometimes grandparents have some strong feelings on how they want to make their contribution. They might not know the intricacies of the financial aid system and what the ramifications can be of doing it wrong. For example, when made incorrectly, a $13,000 contribution can reduce financial aid by $9,100. No grandparent would want that to happen! Still, you want to honor the grandparents wishes, so it can be a delicate situation.
The main thing to keep in mind is, “Will this help affect our eligibility for financial aid?” To answer that, you need to know where you are likely to fall on the financial aid spectrum. If your family is likely to get need-based aid, you want to be very careful with grandparent contributions. If your family is clearly unlikely to get need-based aid, you can pretty much handle the grandparent help in any way they prefer.
If you are “maybe yes, maybe no” when it comes to need-based aid, you’ll want to lean to the side of being careful. The best place to start is the EFC Calculator at null. This will give you an estimate of your Expected Family Contribution, the minimum amount that the federal government (and colleges) expect you to be able to pay. If that number is close to or less than the cost of the colleges on your list, you might be in the running for need-based aid, so be careful.
The timing and the amount of the gift are important. It can be awkward to ask about these details when your parents are being so generous. But the details matter. Why? The gift will count as “income” when it comes time to fill out financial aid forms. If the grandparents give the money directly to the student, it will be “income” to the student. That’s bad. However, students can have income of roughly $6,000 and it will not impact the EFC, so if the gift is less than that amount, and the student does not have any other earnings, the grandparents can give the money directly to their grandchild. But what if the gift is larger or the student has income from a job?
The better alternative would be to give the money to the parents. Parent assets are counted at a relatively low rate in the EFC formula. But you cannot stop there because now the timing of the gift becomes important. In the best case scenario, the grandparents would make the gift before December 31 of the student’s junior year in high school. That’s far in advance of college application season, but due to the way the EFC is calculated, it is the best way to avoid extra “penalties”.
Another approach is to open a grandparent-owned 529 account for the student. This approach has some benefits in terms of financial aid but it also has one serious drawback. When the money is withdrawn from the grandparent 529, presumably during the college years, it will count as income to the student in that year. This could reduce aid by up to 50% of the amount of the distribution.
To avoid this and still use a 529, the parents could open the 529 as a parent-owned 529 and then the grandparents could make a deposit to the account.
When grandparents are making a very large contribution, they often wonder about using a trust. Trusts are fine legal entities, but they will pretty much end any need-based aid hopes. Run the null BEFORE that is set up so you know where you stand.
Grandparents are sometimes motivated by estate tax considerations. 2012 might be the end of a fantastic opportunity for moving money out of an estate, and setting aside a chunk for the college costs of grandchildren is one strategy to reduce the size of their estate. Also, one option is direct payment of tuition to the college (not room and board, just tuition.) Again, this will significantly hurt need-based aid, but if you won’t get it anyway it doesn’t matter. Some grandparents like this option because it is a good estate planning tool and because there is no question how the money is being spent.
One other option that many grandparents choose is to set some money aside, keep it, but earmark it to help pay off student loans after graduation. This approach does not impact financial aid at all. However, it does open up the potentially uncomfortable question of what happens if the grandparent is not alive to give the money to the grandchild after graduation. If something happens, you want to be sure those original wishes are honored.
As you can see, grandparent help quickly becomes a complicated situation. We’ve only touched on some situations here and this is not a complete guide to all the possibilities. We can help sort out the details of your family’s circumstances as part of your overall college funding plan.
There is cheating at Harvard. This might sound like gambling at Rick’s Café, but it actually is quite embarrassing for the elite school. 125 students are suspected of collaborating on a take-home test. Harvard is vowing to study the problem. The behavior was deemed “unacceptable”, but that doesn’t necessarily equate to punishment.
We’ll see how Harvard handles this but most high schools in our area wouldn’t need to “study” the problem of kids caught cheating. One novel idea Harvard is considering is to establish an “honor code.”
Contrast this with a recent article on Davidson College, and its honor code:
Incoming students must sign the Davidson Honor Code, pledging to refrain from stealing, lying, or cheating on academic work. They also must report any honor code violations; failure to do so is itself a violation. Infractions are brought before the Honor Council where punishment is decided.
“We take it very seriously,” says Tianna Butler, a senior from Salisbury, Md. “You’ll see laptops on the lawn, or somebody will leave their MacBook in the library and go into the other room to take a nap. People don’t steal your stuff here.”
Very few colleges actually have an honor code. When you are considering schools for your college list, how important to you in an environment of refraining from stealing, lying, and cheating vs. an atmosphere of “cheat or be cheated?”
More on the Harvard cheating scandal here and here. By the way, the name of the course that the 50% of the students are suspected of cheating on? Introduction to Congress.
Fidelity Investments recently came out with their College Savings Indicator study and check out these findings:
These numbers show a shocking disconnect with reality. Parents, don’t fall into these traps. Learn the ropes and how the system works before you get locked-in to your college plans. If you need help figuring out what college will cost your family, drop us a note.
Virginia Moose Community Awareness Scholarship
November 20, 2025
Williamsburg Descendants Scholarship
August 11, 2025
Liquid Commonwealth: The Art and Life of Water in Virginia Art Contest
July 18, 2025
Karen Von Bernewitz Memorial Scholarship
June 4, 2025
Raymond W. Walsh Video Production Scholarship
June 4, 2025
