Let’s Stop Calling Student Loans ‘Financial Aid’

May 03, 2018

One of the more common calls we take on our Financial Helpline these days is young professionals looking for guidance on paying down massive student loans. One recurring theme we’ve noticed is that many of these people didn’t actually understand what they were getting into when they accepted these loans. They had completed the Free Application for Federal Student Aid (or the FAFSA), which by its very name leads you to believe that it’s “aid” you’re receiving and not just a loan application in many cases. This leads me to state what seems obvious, but is often missed in this process: student loans are NOT financial aid. They are a financing mechanism. Those are two different things.

Defining ‘financial aid’

What is financial aid? Aid is money directly applied to reduce the tuition and related costs of a college education that does not have to be paid back if the conditions of receiving the aid are met. For those families with a zero or low expected family contribution (EFC) as determined by the FAFSA formula, they may be eligible for federal student aid in the form of a Pell Grant up to the annual limits. For those Pell-eligible students, their university may also determine that they are eligible for a Federal Supplemental Educational Opportunity Grant of $100-$4000. There is also a federal work study program where the student can earn money to cover books and incidental expenses.

Some colleges and universities offer additional direct aid, either needs-based or merit aid (scholarships). Keep in mind that non-federal aid, especially merit-based aid, often requires that the student maintain a certain grade point average (GPA) in order to be eligible. In general, the lower the family’s EFC, the more likely the student is to be eligible for direct, needs-based financial aid.

When not enough aid is offered (if any)

However, direct aid is often not enough to cover the full cost of tuition, housing and expenses, and the student and/or parents are offered the choice of borrowing the difference. Most university financial aid departments describe student loans as financial aid, but yet a loan is something that has to be repaid by the borrower. Even studentaid.ed.gov, the federal website on student loans, describes federally-backed student loans as something to, “help cover the cost of higher education.” It would be more accurate to say, “finance the costs of college or career school.”

The different types of student loans

Under certain circumstances, Federal Direct Student Loan interest may be subsidized, meaning that interest accrued on the loan is paid while the student is in school. There are also federally backed PLUS loans for parents with good credit. In addition, a parent or student may seek a private loan through a bank to meet financing requirements.

In almost all cases, the borrower must repay the loan plus interest. There are certain exceptions such as loan forgiveness for students who enter public service. Student loans stick with the borrower forever and generally cannot be discharged in bankruptcy. According to a U.S. News and World Report study, 68.8% of students who graduated in 2014 have student loan debt, with an average balance of $28,077.

Let’s call that for what it is – financing. That’s not aid. So what can students and parents do to maximize their eligibility for aid, as opposed to just financing?

Maximizing your eligibility for receiving aid

Start the financial aid application process early. Create your FAFSA ID and begin assembling a file as soon as financial aid season opens, which is October 1st of the year prior to your student starting the school year. Earlier is better, especially for applying for merit-based aid and scholarships. Your target school may have internal deadlines that are sooner than federal deadlines.

Run some numbers, and discuss them with your student. You can forecast your expected family contribution and even run a net price calculation for a particular college. Make sure your student fully understands the costs of college and what borrowing will mean for your child’s financial future.

Cast a wide net. Financial aid officers say that the most merit aid goes to students who will be in the top 25% of their class in terms of grades and test scores. Your student may get a much better financial aid package, with more aid and less loans, from a good school where they are a strong recruit. It’s normal for a student to fall in love with their top school, but if their second choice gives them a much better deal, that is well worth considering. Check out these tips for maximizing merit aid.

Research alternatives for paying for college. It pays to do your homework. Websites like Fastweb.com and ScholarshipExperts.com are helpful online tools. Check out your school’s guidance department, your local library, and community organizations for additional resources.

Most importantly, judge a financial aid package offered to your student by the amount of actual aid, not including student loans. Let’s stop calling student loans “financial aid.” After all, would you rather get a gift or a loan?

 

 

How College Financial Aid Packages Are Affected By What You Own

April 09, 2018

If you have a graduating high school senior and haven’t completed the FAFSA form yet, it’s time to get moving — some aid is given out on a first-come, first-served basis, and since you can now start filing as early as October of the year prior to the school year where the aid will be used, time is of the essence. As you prepare to complete the form, it’s important to understand how different assets, such as your retirement savings or a 529 plan, will affect your eligibility for aid.

File, no matter what

Even if you don’t think you’ll qualify, it’s worth it to file. Families with significant savings can be offered aid, depending on circumstances.

Because the rules recently changed to have the upcoming school year’s aid based on the tax situation almost two years prior (so fall 2018 aid is based on your 2016 tax return), any income planning you may be contemplating for middle school and early high school-aged kids, like maxing out retirement accounts in the years leading up (knowing that retirement account contributions made during the base year are added back for expected family contribution calculation purposes), needs to take place during your child’s freshman spring/sophomore fall year or earlier.

FAFSA Base Year
Tax Year School Year Status
2016 2018-2019 freshman
2017 2019-2020 sophomore
2018 2020-2021 junior
2019 2021-2022 senior

This change not only makes tax time less frantic, but in cases where grandparents or other non-parental family members wish to help out with costs, it’s especially favorable due to the fact that such gifts are considered income to the student, which has the most detrimental effect on aid calculations.

A student’s aid package can be reduced by up to 50% of the student’s income during the base year. Since there’s now an almost 2-year lag between income and aid, anything after your child’s sophomore year of college won’t affect the FAFSA (assuming your child is on the 4-year graduation plan). Besides income, the FAFSA asks about a variety of different savings and asset values. Here’s how each affects the aid package that is offered to your student:

529 College Savings Plans and Coverdell ESAs

The value of 529 plans and ESAs are counted as parental assets if the parent is the owner. This is a good thing because only a single-digit percentage of a parent’s assets are considered available to spend on one student’s college. Investments or other savings in your child’s name count much higher at 20%! 529 accounts owned by grandparents or other non-immediate family members are not included as assets, but are treated as income to the student when distributions from these accounts are used to pay expenses.

You may want to wait until the second half of their sophomore year or later to use the grandparents’ 529 plan to pay expenses, if possible.

Retirement accounts

You do not have to list the value of any retirement accounts like your 401(k) and traditional or Roth IRAs. However, if you take advantage of the Roth IRA’s penalty-free distribution feature to help pay for college, that amount will count as income on the FAFSA two years after. Consider waiting until spring semester of sophomore year or later to exercise this option if needed, similar to using a 529 owned by a grandparent or other non-parent.

Savings in your child’s name

Custodial accounts, UGMA/UTMA accounts, etc. are counted as assets of your child and 20% of the value is expected to be contributed toward educational expenses each year. If these assets are for college purposes anyway, consider transferring them into a 529 savings plan, where they will count as parental assets and have a less detrimental effect on aid offered (and you might receive a state income tax benefit as well).

Keep in mind that any interest, dividends or capital gains earned from accounts in your child’s name is considered your child’s income, of which 50% is expected to be contributed toward educational expenses.

Taxable investment accounts

Mutual funds and other brokerage assets held by parents are counted on the FAFSA. Dividends and capital gains earned in taxable brokerage accounts count as income. Distributions from a mutual fund or brokerage account to pay for college count as income.

Life insurance and annuities

Any cash value built up in insurance policies does not have to be included. Before you move any of your child’s money into an annuity though, consider that if you have to use the funds to pay for college, the distribution will show up as income in future years. This is more detrimental than just holding the funds in savings or transferring to a 529 plan.

Other assets

Home equity or the difference between what your home is worth and what you owe is NOT counted on the FAFSA. Keep in mind, however, that certain schools may still ask for this information when figuring eligibility for need-based aid from the school. If more than 50% of a business is owned by your family and there are 100 or fewer full-time employees, you do not have to include the value of your small business.

The bottom line is that if you have middle school aged kids, knowing which year is the first base year for the FAFSA may alter your family’s plans to do things like take capital gains or convert pre-tax retirement assets to Roth. Both are income-producing activities that can reduce the amount of aid offered your child. Additionally, if you have funds in your child’s name that you intend to use for college anyway, it may make sense to shift those into 529 plans simply to reduce their effect on aid offered.

Attending College In 2018-2019? Complete The FAFSA Now

October 04, 2017

I know that it feels like this school year just started, but for people looking to maximize financial aid for next fall, it’s time to start thinking ahead already. As of October 1st, the 2018-2019 Free Application for Federal Student Aid (often called the FAFSA) is available for submission and includes a new and improved IRS Data Retrieval Tool, which makes filling it out much simpler (and safer)!

Why complete the FAFSA ASAP?

If you think you or your student may qualify for any need-based aid, it’s essential to file your form ASAP — many states and schools have a limited amount and it’s literally first come, first served. And since the “base year” that the form uses to evaluate your income and assets is now basically two years ago, you don’t have to wait until your taxes are done to file a complete form — the 2018-2019 form is based on your 2016 taxes, which, if they haven’t been filed yet, are due by October 16th this year at the very latest to avoid late-filing penalties.

In other words, you already have the numbers you need to complete the form for next year. Why not get a head start and take one thing off the list at tax time?

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Why a Roth IRA is a Great Graduation Gift

March 20, 2017

Are you bored with giving your teenage child gift cards and electronics for presents? Do you have a graduation gift to offer but don’t just want to give cash? This year, instead of something they’ll spend right away, consider giving the teenager in your life a contribution to a Roth IRA.

A Roth IRA is an after-tax retirement account which can be used for much more than retirement. As long as the account has been open for at least 5 years, earnings and withdrawals are tax-free after age 59 ½.  Anyone who has earned income below certain limits ($118,000 for a single filer) can contribute the lesser of their total income or $5,500 in 2017.

Does your teenager work?

The key is that your teenager has to have earned income. A teenager with a part-time job could contribute their total earnings to a Roth. Gifts don’t count, but you and other friends and family can make gifts to your teenager to cover the allowable Roth contribution.

For example, if your teenager earned $1,500 working at a restaurant, she is eligible to contribute up to $1,500 to her Roth for that year. Remember — you can gift your teenager the money for the contribution, though. In fact, you could even write a check directly to their Roth account.

A W-2 from an employer is proof of income. However, if your teenager’s income comes from sources like babysitting or moving lawns, keep careful records of how much they’ve made. FYI, your teenager does not have to file a tax return in order to make a Roth IRA contribution but does need to keep a record of that contribution. If they have paid income taxes through payroll deduction, they may want to file, though.

Why give a teenager a retirement account?

1. Tax-free growth can help make them rich.

Let’s say you gift your teenager $500 for their Roth IRA as a high school graduation present. Those funds are invested in a diversified, low fee index fund which earns 8% per year. In fifty years, thanks to the value of compounding, that investment would be worth $23,451. (See calculation.)

Do that every year instead of giving a wrapped gift (or until they can take over contributing on their own). After 50 years, your $25,000 worth of gifts would be worth $310,336. (See calculation.) That’s much better than a new telephone, isn’t it?

2. They can withdraw contributions at any time without taxes or penalty.

A Roth IRA account holder can withdraw their original contributions – but not the growth – in their account at any time without taxes or penalty. If needed, they can withdraw those contributions later on to pay for graduate school, fund the down payment on a home, cover expenses while on maternity leave or even handle an emergency. The growth on the investments could stay in the account, continuing to grow tax-free for retirement. For more explanation of the withdrawal benefits, see this post.

3. It’s not counted on the FAFSA.

The Free Financial Application for Student Aid (FAFSA) does not consider a Roth IRA account as an asset the student (or a parent) is expected to spend. However, if your student takes a withdrawal of earnings from their Roth, those earnings are counted as income for the next year’s FAFSA. If you need to access earnings to pay college expenses, the key is to wait until the student’s final year to take the withdrawal. For more tips on how assets and income affect financial aid, see this blog post.

Are you convinced? The next step is to open a Roth IRA at a reputable, low fee financial services firm. (See suggestions here on how to choose one). If your teenager isn’t 18 yet, you’ll need to open the account for them. When your teenager is about to turn 18, make sure to share this guidance with them – and keep helping them contribute to their Roth IRA if you can!

 

Do you have a question you’d like answered on the blog? Please email me at [email protected]. You can follow me on the blog by signing up here, and on Twitter @cynthiameyer_FF.

 

 

You Got Your Financial Aid Packages – Now What?

March 07, 2017

I was recently talking to a friend at a party about college. Her daughter is a senior and will soon be going off to college. Her daughter was accepted to four different schools, all with varying financial aid packages, and her daughter’s first choice did not offer the largest package so she was considering her second choice. I told my friend to consider doing the following:

1. Review all of the financial aid packages to determine which package is the best vs. the largest. Consider how much of your need is being met along with how your need is being met. Is the largest package with the most loans really better than the smaller package with more grants and a small out-of-pocket expense? Luckily, the CPFB web site has a tool that can help you compare the financial aid packages of up to three schools.

2. Your financial aid award package is not written in stone. My friend recently filed for divorce so her reported income on the financial aid form is vastly different from her upcoming income. I encouraged her to contact the potential college financial aid offices and appeal the award. She can do this in writing and I also encouraged her to ask for a follow-up appointment.

If your financial situation has or will change, consider appealing. Most colleges have a formal appeal process. Contact the college for more details.

3. Use the best award packages to leverage a better financial aid award package from the desired school. Since my friend’s daughter was accepted to multiple colleges and she was going to appeal all of the packages anyway, I told her to use the best packages to get a higher award package from her first choice school.

Review the award packages and what they mean for your family carefully. Consider appealing if you feel you have a case based on a changing financial need or if you can leverage multiple offers. As you go through the process of picking a school, remember the old adage, “You don’t get, what you don’t ask for.”

How to Choose a Student Loan

February 07, 2017

With the average cost of college being north of $20,000 for a public in-state school, student loans have become a big part of student’s financial aid packages. The two types of student loans are federal and private. There are important differences between them and knowing the difference can help students make the most informed decision.

Federal student loans are loans made or guaranteed by the government and private loans are essentially non-federal student loans made through lenders such as banks, credit unions, state agencies or schools. With the benefits of federal student loans, comes harsh consequences for default such as wage garnishments, difficulty discharging if you file for bankruptcy, possibly lost tax returns, and even Social Security payments. The three main types of federal student loans are:

Direct student loans, sometimes called direct Stafford loans, have low fixed interest rates and offer a variety of repayment options and forgiveness programs. They have limits as to how much of a loan you can get, which is different for undergraduate and graduate students. There are two basic types of direct student loans:

  • Direct subsidized loans are available to low income undergraduate students. Interest typically does not accrue while the student attends school, during the 6-month grace period after college and if student loan payments are delayed. Loan limits tend to be lower than the loan limits of unsubsidized loans.
  • Direct unsubsidized loans are available to undergraduate, graduate and professional students regardless of financial need. Interest accrues while the students are in school, during the grace period and during any student loan payment delays.

Perkins loans are fixed low interest loans for low-income undergraduate, graduate or professional students with financial needs. Like the subsidized loans, interest doesn’t accrue while you are in school and during your grace period, which is longer than the grace period for direct loans. Perkins offers a ton of cancellation options for a variety of situations and professions. You also have to attend a school that offers Perkins loans and the school determines the loan amounts.

PLUS loans are fixed rate loans for graduate or professional students and parents of dependent undergraduate students. To qualify, the borrower must not have an adverse credit history and interest accrues even when the student is in college. PLUS loans are eligible for nearly all of the repayment options offered by the US Department of Education. Parent PLUS loans are eligible for most of the repayment options.

Private loan interest rates and benefits vary per institution. Some offer a variety of repayment options and programs if you experience a hardship, so compare loans before making a decision. Typically, with private loans:

  • The interest rates tend to be higher than most federal student loans
  • They offer almost no loan forgiveness programs, cancellations or the variety of repayment options offered by federal loans
  • A credit check and possibly co-signing may be needed to get a loan
  • You can generally borrow a higher amount than you can with a federal loan

As you weigh your options consider the following:

Can you demonstrate a financial need? If so, you may qualify for a direct subsidized loan or a Perkins loan, which typically offers the perks of low interest rates, not accruing interest while you’re in school, and a variety of repayment options. However, both loans have limits to the amounts you can borrow.

What degree are you pursuing? If you are pursuing a graduate degree, you generally do not qualify for a direct subsidized loan, so if you have limited finances, a Perkins loan may be a consideration. A direct unsubsidized loan is a consideration if you do not qualify for a Perkins loan and may have adverse credit. A graduate student can also get a graduate PLUS loan, which typically has higher borrowing limits (cost of attendance minus any financial aid) but takes your credit under consideration. The loans offer forgiveness programs and a variety of repayment options

How much money is needed to pay for college? Federal loans typically limit the amount you can borrow. Private loans can offer a higher amount, but they generally come with higher interest rates. Evaluate your needs and if possible, tap into the federal loans before getting private loans.

What are your career aspirations? Perkins loans offers a variety of cancellation options, including options for teachers who serve low-income children, certain medical professionals, and even librarians who work in certain schools and libraries.

Student loans can be confusing. Don’t just take the first one offered though. Researching the features can help you make the best decision.

 

5 Places to Look for Scholarships and Grants

December 29, 2016

It’s that time of year when students are hearing from colleges and having to make decisions of where to go and how to pay those college bills. When it comes to reducing college costs, there are many options, but none come with the benefits that scholarships and grants have. Unlike loans, they don’t have to be paid back and unlike work study, they don’t have to be worked for. They’re basically free money. Here are some places to find them:

1) The high school guidance counselor. If your child hasn’t spoken to their guidance counselor yet, this is a great place to start. After all, it’s part of their job. They’re often notified of scholarship opportunities and can at least point your child in the right direction. In fact, I found out about the scholarship offered by my college from my high school guidance counselor.

2) Employers. Some employers offer scholarships to employees and their children. Ask your employer, your spouse’s employer, and your child’s employer about any possible programs. Even a part-time or summer job may qualify.

3) Community organizations. Many local community organizations may award scholarships to local students, especially if your child has performed community service or if either of you are members. These scholarships tend to be small, but there’s less competition for them. I remember winning a small scholarship in an essay contest by my local bar association. You can find a list of some community service programs here.

4) National scholarships. There are literally thousands of opportunities to win scholarship money out there based on your child’s ethnicity, religion, interests, academic and athletic achievements, essay-writing ability, and other skills and attributes. You don’t have to pay a scholarship search service to find them though. This article compares some of the top free online scholarship search engines.

5) The college. Finally, there’s the actual college your child applies to. They generally offer scholarships and grants based on both need and merit. While your child may not know what merit scholarships they’ll qualify for until they apply, you can estimate the need-based grants by using the net price calculator tool that each school has on their web site. In calculating your expected out-of-pocket costs, they estimate how much your child would receive based on family income, assets, number of children in college, etc.

While your child may not be able to get enough scholarships and grants to cover all of their costs, you may be surprised by what they can qualify for. All it takes is a little research and legwork. If nothing else, it will be good preparation for the work they’ll have to do in school and the rest of their lives.

How Can You Maximize Financial Aid Eligibility?

October 13, 2016

As children apply to colleges this fall, many parents are wondering how they will afford to pay those upcoming bills for tuition, room and board, and books and other supplies. While a lot of what determines your child’s eligibility for aid is out of your control, there are some things you can do to maximize how much aid they can get. Let’s take a look at some of the factors affecting eligibility:

Student Income: The biggest factor is student income which reduces aid by about 50% (over a $6,250 allowance). Most students don’t have much income to report, but be careful of taking money out of 529 plans that are not in the name of you or your child because withdrawals from plans owned by grandparents or other friends or relatives are counted as income to the child. Instead, they may want to wait and use that money for the last year of school after the aid has already been awarded.

Parental Income: Your eligible income reduces aid by 22-47%, with higher reductions typically for household incomes above $50k. It’s based largely on AGI so contributions to pre-tax retirement accounts and HSAs can reduce the eligible income. Many people don’t realize that this income also includes asset sales and withdrawals from retirement accounts. Try to take capital gains before your child’s sophomore year of high school or after their junior year of college or look for investments you can sell at a loss. If you want to use an IRA for education expenses, use it for the last year like a non-parental 529 plan.

Student Assets: Assets in your child’s name can reduce financial aid by about 20%. This is a downside of UGMA/UTMA accounts. One exception is for money in a custodial 529 or a Coverdell Education Savings account so consider moving the child’s money into one of those accounts (plus the earnings are tax-free if used for qualified education expenses). Otherwise, try to spend it as early as possible so it will count against fewer years.

Parental Assets: This only reduces aid by about 5-6%. Retirement accounts don’t count against you and debt won’t reduce your countable assets so it’s one more reason to contribute to retirement accounts and pay off debt.

Your child’s financial aid eligibility isn’t necessarily set in stone. The financial aid impact of your decisions can matter as much or even more than the tax impact. If you’re unsure how to do this, you may want to consider consulting with a qualified and unbiased financial planner.

 

 

The Number New College Students Need to Know

May 16, 2016

What’s the most important number for a new college student to know? Is it the Expected Family Contribution calculated based on a family’s Free Application for Federal Student Aid? The number of credit hours needed to graduate? The time the library closes? While all of those are important, the critical number that a student needs to know is the HCC, the “hourly cost of college” or the total amount it costs a student for each hour of school.

Why does this matter? Let me give you a personal example. When I was a freshman at Georgetown University, I had an early morning French class three times per week. The professor was quite strict, and students who were even a few minutes late were locked out of class.

I was an immature 18 year old who spent many evenings my first year of university at fun, social events instead of getting to bed at a reasonable hour. It won’t come as a surprise that I missed my fair share of morning French classes because I did not arrive on time. What exactly did that cost my family even when I didn’t go to class?

Calculating the Hourly Cost of College

Using the credit hour method, the hourly cost of college is calculated by dividing the annual total tuition, room and board, books, fees and other charges by the total credit hours taken per year. Take Georgetown as an example. What would it cost a student who skips an hour of French class today? According to the university website, the total cost of undergraduate attendance in 2016 is $69,770. I did not receive any scholarships, but if any kind of direct aid applied (not loans), you would subtract it from the total.

A student needs at least 120 credit hours to graduate, and it typically takes at least 15 credit hours per semester or 30 credit hours per year. $69,770 divided by 30 is $2,325.67 per credit hour. You’ve paid for it regardless, so if you skip a class, you don’t get what you have purchased. That’s a pretty expensive hour to blow off!

An alternative method is to divide total college costs by the amount of total hours a student spends learning. At my alma mater, students are expected to spend at least 30 hours per week studying for a semester of 14 weeks (12 weeks of classes plus 2 weeks of exams). $69,770 total annual costs divided by 28 learning weeks per school year divided by 45 hours per week is $55.37 per learning hour. In this scenario, it’s not just skipping a class that’s an expensive waste of money. It’s avoiding the library when you should be studying to hang out playing Frisbee on the lawn.

Neither methodology for calculating the HCC changes if a student attends school close to home or goes to a public university or a less expensive private college. There’s an hourly cost of college no matter the school, and it’s important that students know what it is in order to avoid or moderate behavior – like showing up late for French class – which wastes huge amounts of money.

Borrowing Increases Your HCC

Many families who send their students to a university don’t pay the full cost of education out-of-pocket. If your student is borrowing to finance part of the cost of higher education, their HCC will increase. Remember, student loans are not financial aid. They are a financing mechanism, which increases the total cost of education.

Let’s examine what would happen if a student borrowed $20,000 at 6% interest to finance some of the annual costs in our example above. The loan will be repaid monthly over a ten year period beginning after graduation, with total interest paid of $6,645. Using the conservative method of calculating HCC in this scenario, borrowing the $20,000 increases the HCC by $221.50 per credit hour. Using the “learning hour” method, it increases the HCC by $5.27 per learning hour.

Most students aren’t used to thinking of the school experience as a consumer experience, something for which there is a clear financial cost and benefit. By helping your student calculate and understand their HCC, you are teaching them an important lesson about the relationship between their personal behavior and money. In the financial behavior change process, awareness and assessment usually lead to action (going to class instead of sleeping in) and thus are critical first steps for future financial success.

How about you? What was your hourly cost of college?  Email me at [email protected] or follow me on Twitter at @cynthiameyer_FF.

 

Student Loans Are Not Financial Aid

December 28, 2015

The Free Application for Federal Student Aid (FAFSA) opens after January 1 for the 2016-2017 school year. Parents and students all over America will begin the difficult, agonizing process of figuring out how to fund an increasingly expensive American college education. In honor of the start of the financial aid season, I’d like to point out the obvious: student loans are NOT financial aid. They are a financing mechanism. Those are two different things. Continue reading “Student Loans Are Not Financial Aid”

How One Woman Got Her College Degree For Free

November 17, 2015

One of the most frequent questions we get from people is how to save money on college education. We understand that for most people, saving to pay for 100% of college costs is unfeasible and that there needs to be a college savings strategy for kids that are close to attending college with limited funds. As I started researching a strategy, my wonderful co-worker, Camille, told us about a book written by Sharla Berry, an educator in Los Angeles called Degree for Free: How To Save Time and Money on Your College Education. Continue reading “How One Woman Got Her College Degree For Free”

5 Questions to Ask About Your Employer Tuition Benefit

October 21, 2015

Despite the inflation of college tuition far outpacing the growth of wages, having a bachelor’s degree is still one of the best ways to boost earning power and job opportunities. A 2014 report found that a person with a bachelor’s degree earns over $20,000 more per year on average than someone with just a high school diploma. One way to help defray the cost of college is to take advantage of your employer’s tuition reimbursement program, but before you do, here are some questions to answer: Continue reading “5 Questions to Ask About Your Employer Tuition Benefit”

Let’s Get Ready To Rumble

September 08, 2015

I had a dad who was a huge fan of boxing. Whether it was appropriate or not, some of my earliest memories are of my trying to understand why he is so excited when people hit each other on T.V. but seems to get upset when I do the same thing to my younger brother. Eventually I got the difference (admittedly, I was a little disappointed, especially when he ripped off the head of my favorite Barbie doll) but I actually started to enjoy boxing and hearing Michael Buffer say, “Lets get ready to rumble.” Continue reading “Let’s Get Ready To Rumble”

Just Say No

August 18, 2015

I am a child of the 80s. I grew up on Happy Days, Falcon Crest, and Family Ties. In between these shows, inevitably a commercial would come on with a child being pressured into using drugs, refusing and looking into camera and saying no. Continue reading “Just Say No”

Which Colleges Make The Best Investments?

July 16, 2015

With the rising cost of college, more students and their parents are rightfully looking at their of college in financial terms. In that spirit, I saw this report on the best “value colleges” by “return on investment.” This can be a much more useful measurement than simply looking at a school’s general “ranking” but there are a few thing to keep in mind: Continue reading “Which Colleges Make The Best Investments?”

Doing the Math on College Planning

January 06, 2015

During the holidays, I had so much fun visiting family as did many of my colleagues. So as we all got back into the groove of working, we shared stories of those sometimes amusing family encounters. Tania, our Atlanta-based CFP, talked about how it was wonderful seeing her cousins, who only a few years ago she was bouncing off her knee, now that they are all taller than she is (which isn’t a stretch since she is barely above five feet tall).  Here’s her story: Continue reading “Doing the Math on College Planning”

Five Myths About Your 529 College Savings Plan

May 21, 2014

As the school year winds down and the invitations to high school graduations start pouring in, I can’t help but think about the day when my own little girl Rachel—who is finishing up her sophomore year—will be sending out her own invitations.  It all seems to be going by so fast but fortunately Susan and I have been preparing for that day by saving in a 529 college savings account.  For some of you moms and dads out there, you too have been using this savings vehicle to help pay for those oncoming college expenses but as Kathryn Flynn writes in a recent post called “Clearing up the confusion: Five popular 529 plan myths,” there are a number of myths floating around out there that could cause confusion when it comes time to using these accounts.  Understanding each one will help you and I when it comes time to funding our child’s higher education. Continue reading “Five Myths About Your 529 College Savings Plan”

4 Ways The CFPB Can Help You With Financial Issues

May 20, 2014

Are you dealing with a challenging financial issue? Whether it’s a decision you need to make or a mess you need to get out of, the Consumer Financial Protection Bureau (CFPB) exists to help. Its mission is “To make markets for consumer financial products and services work for Americans – whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.” How can the CFPB help you? Continue reading “4 Ways The CFPB Can Help You With Financial Issues”