FAFSA

Another year is about to begin, so it is time to think about making some resolutions. For high school and college students, and their parents, resolutions often revolve around issues of money. Since there are many participants in the college financial aid process, here are some suggested resolutions for each group: • High School Students: Resolve to help your parents in all aspects of the college financial aid and payment process, so that you can get a better idea of what your college education really costs and start learning how to manage money on your own. Promise to help pay for your education in every possible way by applying for scholarships, participating in a college work-study program, and learning to budget. • Parents of High School Students: Resolve to spend time with your student to explain the financial aid process, and help your child learn how to budget. Help guide your student through the college application process, and be prepared to complete the Free Application for Federal Student Aid (FAFSA) as soon as possible in January. • College Freshmen: Resolve to spend some time over your first holiday break thinking about money and talking about it with your parents. Talk about the budget your parents gave you for your first semester and discuss any difficulties you are having in managing your own money. Let them know if you are having any problems learning how to use the money you have available through student loans or credit cards. Try to earn a little money for out-of-pocket expenses while you are home, and continue looking for college scholarships that can help lighten the load. Be prepared to sit down with your parents in January and help them complete the FAFSA for the 2015-16 academic year. • College Students: Resolve to find out now how much money you currently owe in student loans, and start thinking about a plan for paying them back after you graduate. As you get closer to your degree, start to learn about job application and interview skills so you will be able to find a good-paying job that will help you get a great financial start in life. • Recent College Graduates: If you have not already started making payments on your college student loans, resolve to make a plan to do so immediately. The loans you received played a big role in helping you achieve your dream of a college degree, and it is time to start paying them back so that other students can have the same opportunity as you did. If you believe there has been some type of error in the amount you owe, take the steps necessary to resolve your student loan dispute. A new year is a great time to make a fresh start, especially when it comes to money matters. Think about the resolutions you want to make regarding college financial aid, and then take the steps necessary to stick to those plans. You’ll come out way ahead in 2015 and beyond!

Perhaps you have been quite efficient and managed to get all of your college applications submitted on time. You have also met with your parents and started to collect the information needed to complete the FAFSA in January. Is there anything else you can do to make sure you give yourself the best shot to get into the college of your choice? It’s always a good idea to follow-up on your college applications. It would be quite the shame to miss out because something was not submitted on time. Here are a few steps you can take: • Pay Attention to Email: Although most high school students thrive on text messages and Tweets, college admission offices still rely on email communications. Set up an email address that is just used for this purpose, and then be sure to check it every day. Respond immediately to any requests for further information. Keep all of the emails you receive from colleges until after you have decided where you will attend. • Supplemental Information: When using the Common App, check each individual school to determine whether any supplemental information is required. • Follow Up on Recommendations: You should have already asked several teachers, counselors, advisors or other adults who know you to complete a letter of recommendation. Follow-up to make sure these have been completed. The Common App has a recommenders’ page you can review to determine which letters have been submitted. If a letter has not been received, politely follow-up with the person you contacted. For technical difficulties, dig out your Common App ID number and contact the help desk or help line. • Make Sure Your Test Scores Were Submitted: When you took the College Board SAT or ACT, you listed colleges to receive your test scores. Log into your account on these websites to verify that all of your colleges are listed and that your scores were released. • Check on Transcripts: Make sure your high school provided any requested transcripts, especially if you took advanced placement courses for college credit. If you took classes directly at a local college, you’ll also need to obtain and forward that information. • Remember Your ID Number: Most colleges will probably provide you with an ID number that allows you to log in to a website and check the status of your application. Keep these numbers easily accessible and remember to check the websites often until all materials have been received. • Say Thank You: If you had any college interviews, be sure to send a thank you note. It may be necessary to contact the college’s admissions office directly, but keep in mind that this is a very busy time of year for them. Don’t just call and ask if they received your application. Make sure you have done everything possible to ensure that all of your documents have been submitted. You have an important role to play in the college application process, and good follow-up is always part of that role.

The New Year will soon be upon us, and with that is the start of another FAFSA season. FAFSA – the Free Application for Federal Student Aid – is the key to receiving access to federal, state and institutional college financial aid. It is important to complete the FAFSA accurately as errors could lead to additional processing time. Some aid is distributed on a first-come, first-served basis, so you don’t want to miss out on any opportunity to maximize the amount of aid available. Here are some scheduled changes for the 2015 FAFSA which might affect you: • Foster Care: Students who have been in foster care may have some difficulty with questions that ask about their parents. This issue has been clarified for the 2015 FAFSA. A new question will ask whether the applicant is now in foster care or has ever been in foster care. If the answer is “Yes,” the student will receive messages about additional potential resources such as the Education and Training Voucher (ETV) Program and the John H. Chafee Foster Care Independence Program. • Legal Residence: Applicants will be asked if they became a legal resident of their state prior to a certain date. If the answer is yes, the applicant moves on to the next question. If the answer is no, applicants will then be prompted to enter the month and year they became a legal resident. • Neither Citizen nor Eligible Non-Citizen: Applicants will be prompted to select this option if they are in the U.S. and have: · Been granted Deferred Action for Childhood Arrivals (DACA) · An F1 or F2 student visa · A J1 or J2 exchange visitor visa · A G series visa · Other • High School Diploma: Clarification has been provided to state that a high school diploma means the applicant has received or will receive a U.S. high school diploma, or a foreign school equivalent, before the first date of college enrollment. • Number in College: This question will ask how many people in the parents’ household will be college students between July 1, 2015 and June 30, 2016. Always count the student who is applying for aid, but do not include the parents or any siblings who are in U.S. military service academies. • Legal Parent: Further clarification has been provided about who is considered a legal parent for FAFSA purposes. Applicants should answer all the questions even if they do not live with their legal parents. Grandparents and others caring for a child they have not legally adopted are not considered parents. These clarifications are particularly helpful in states that have recognized same-sex marriages. The form also provides further clarification about parents who are “separated.” In addition, in April of 2015 FAFSA on the Web will be updated to require users to authenticate with the FSA ID rather than the PIN. After completing the FAFSA, FSA will mail a Student Aid Report (SAR) to the applicant and make the information available to listed colleges.

When some parents talk to their college-aged children about money, it can feel like they come from two different planets, not just two different generations. The “Baby Boomers” and “Gen Xers” of yesterday are trying to help their millennial children learn to deal with the realities of life in the 21st century…and it’s not always easy. Each generation brings unique insights to the discussion. While Baby Boomers (1946 to 1964) reflected the work ethic and money sensibilities of their “Greatest Generation” parents, Gen Xers (1964 to 1981) felt that “it’s all about me.” The Millennials (1981 to 2001) are spending over $170 billion a year of their own and their parents’ money, and sometimes paying the price by having parents who are “too involved.” Is there a way to get beyond generational differences and produce money-smart millennials who don’t spend their lives in their parents’ basement? Here are some tips on providing financial advice that can ease their financial path in life: • Set Clear Financial Expectations: The millennials are a highly-educated group, and they know a good deal when they see it. Living with mom and dad is perfectly acceptable as long as there aren’t too many restrictions. But this isn’t good for the financial welfare of either party. The adult children don’t learn to manage on their own, and the older parents forsake some of their retirement capabilities to enable their children’s continued dependence. Now that the economy and job market are improving, parents need to set clear financial expectations about the amount of rent that is to be paid, and how long this relationship is expected to last. • Learn How to Budget: Perhaps this is the best piece of advice coming from a generation that has experienced everything from terrorist attacks and stock market tumbles, to recessions and housing bubbles. Don’t get in over your head. Use credit wisely to make well-considered purchases such as a house or car, but don’t use it rashly to cover everyday expenses. Always have a “rainy day” fund to help get through those unanticipated events such as a job loss or medical emergency. Far too many people living on the edge are forced into bankruptcy by one major life event. • Gain Control Over Student Loans: While education is a valuable asset that will produce a lifetime of benefits, the costs of gaining that knowledge are becoming difficult to bear. The Project on Student Debt revealed that the Class of 2013 graduated with an average debt load of $28,400, often with no idea on how they are going to repay those loans. Meanwhile, a study by PwC and Junior Achievement show that a shocking 24% of millennials said they expect their loans will ultimately be forgiven. This is a most unwise strategy which could cause a lifetime of financial difficulty. Parents may be old-fashioned and “out of touch,” but it is still their responsibility to teach their children well, especially when it comes to money.

Most of us think that students can graduate from a community college in two years, other colleges in four years, and then take additional courses for a specific profession in post-graduate classes. But a recent study by Complete College America sheds a new light on these assumptions. Entitled “Four-Year MYTH,” the report details the reasons behind the failure to graduate “on time,” and chronicles its associated costs. This information is crucial to high school and college students, and their parents, who want to assess a college’s completion rate so they can budget accordingly. Some important takeaways: • Understand a College’s Graduation Rate: Students considering a particular college are advised to inquire about the graduation rate. Now they must also find out whether “graduates” are being benchmarked against a standard of three years for an associate’s degree and six years for a bachelor’s degree. • Know the Costs: The report states that expanded graduation timeframes could cost almost $16,000 in additional tuition and fees at a “two year” college, and over $22,000 at a public “four year” college, not to mention the wages lost while spending additional time in college. • Watch Financial Aid: College financial aid is often based on criteria such as carrying a specific number of hours or making satisfactory academic progress. Failure to graduate within the anticipated timeframes could affect a student’s financial aid eligibility. College scholarships may not be extended for students who take longer than two or four years. Graduate On Time to Maintain Financial Aid Eligibility There are some steps you can take to help insure graduation within the anticipated timeframe: • Check Course Availability: Know what courses are needed to graduate with a specific degree, and make sure those courses are offered frequently enough to fit your class schedule. • Understand Remediation Requirements: Some colleges have entrance testing requirements for subjects such as math. Students who fail to meet certain achievement levels are required to take remedial classes, which can cost both time and money. Make sure you know your college’s required academic levels before beginning school. • High School Courses: If they are offered at your high school, try to take as many Advanced Placement (AP) classes as possible. These can reduce the number of hours and money required in college. • Know the Curriculum Requirements: One fault the study found was that colleges simply offer too many courses, and students have a difficult time choosing. Know exactly what is required to graduate with your desired degree and take only courses that help achieve that goal. • Watch Transfer Credits: If you decide you want to transfer, make sure the next college you choose accepts a high percentage of your credits, so you won’t be forced to take the same classes again. Talk to a professional College Financial Aid Advisor who can help make sure you understand the financial consequences of not graduating “on time.” Contact College Financial Aid Advisors (CFAA).

The College Board is a non-profit organization that plays an important role in the college process. Founded in 1900, its membership has grown to over 6000 educational institutions worldwide. The Board’s mission is to help high school students prepare for a successful transition to college, including the SAT. It also conducts research on the education industry. A look at a few of their reports provides some insights on trends in college affordability: • Trends in College Pricing 2014: This report concludes that published tuition and fee prices rose between 2.9% and 3.7% from 2013-14 to 2014-15, depending on in-state, out-of-state, and type of college. These figures are compared to the Consumer Price Index which only rose 2% during a comparable period. Despite the increase in published prices, though, it also showed that the amount paid after taking college financial aid, tax benefits, and inflation into consideration actually declined between 2004-05 and 2009-10 at certain institutions. • Trends in Student Aid 2014: The federal and state governments made adjustments to their financial aid programs to help students keep up with rising costs. As a result, grants increased as a percentage of all student aid plus non-federal loans to 49% in 2013-14. Undergraduate and graduate students received over $238 billion in grants, federal work-study, federal loans, and federal tax credits in 2013-14. Despite the increase in aid, students borrowed an additional $10 billion from private, state and other sources. About 60% of students who graduated with a bachelor’s degree borrowed an average of $27,300. • Education Pays 2013: Of course, the ability to repay student loans is based on current income levels as well as anticipated future earning capabilities. This report documents many of the well-known benefits of a college education: higher likelihood of gaining employment, increased earning potential, improved health and pension benefits, and healthier lifestyles. They also expand on these benefits in How College • Shapes Lives: Understanding the Issues from October 2013. The benefits of a college education still outweigh the negatives for both the student and society at large. Much has been made in the news media about the student loan crisis, but 58% of the borrowers are in active repayment. Some seem to think that totally revamping the student loan system will solve the problem, but that might only serve to decrease access and further separate the classes. College costs are increasing due to many factors, and any increases in federal and state aid come from the taxpayer base. The pain will only stop when we look at the true causes and take more individual responsibility in planning, and paying, for a college education. To find out more about saving for college, paying for college, and financial aid, talk to a professional College Financial Aid Advisor who can help make sure you understand all of the options and opportunities that are available to you. Contact College Financial Aid Advisors (CFAA) or visit my About.com website, Paying for College, for more information.

One huge component of college financial aid packages is federal financial aid, but most states also have financial aid programs available as well. These are designed to motivate students to attend college in their home state and to provide the opportunity for students with financial need to afford a higher education. The Education Commission of the States (ECS) recently surveyed actions from the 2013 and 2014 legislative sessions and published their findings in a report entitled, “Trends in State Financial Aid.” Their research found that states provided about $11.2 billion in college financial aid during the 2012-13 academic year. Major trends identified in the study include changes to various need-based and merit-based programs, linking financial aid programs to workforce demands to spur employment in certain industries, and state programs that are more focused on encouraging a transfer student pathway. Other key points from this report include: • At least four states have enacted programs which play a larger role in college student loan repayment assistance or forgiveness programs. Connecticut, New Mexico, Indiana and Mississippi passed legislation which links loan repayment assistance or forgiveness to an agreement to work in specific high-need fields such as teaching and medicine, and meet certain service requirements. • States are becoming increasingly aware of the increased costs of a college education, with five appointing commissions to research affordability issues. • At least 10 states created or made changes to their existing need-based programs including Maryland’s First Scholarship Program, South Dakota’s first needs-based aid program, the District of Columbia’s Promise Establishment Act of 2014, Tennessee’s Promise Scholarship Act of 2014, and expansion of the definition of “need” to include more middle-class students in both New Mexico and California. • Several states passed initiatives that use financial aid programs to meet workforce demands through grants and scholarships, Michigan, for example, established a grant program for minority students enrolled in medical programs who accept a work assignment within the state, while South Dakota started a program to grant scholarships to students who agree to teach there for five years. West Virginia has a similar scholarship program for nursing students willing to remain in their state. Although some of these programs do not take effect for some time, and they are also subject to change, it is always a good idea to be aware of the financial aid picture in your state, particularly if you are thinking of entering any of the targeted professions. As with any form of college financial aid, the first step is the completion of the Free Application for Federal Student Aid (FAFSA), since most states also base their financial aid decisions on this information. To find out about the college financial aid programs available in your state, talk to a professional College Financial Aid Advisor who can help make sure you understand all of the options and opportunities that are available to you. Contact College Financial Aid Advisors (CFAA) or visit my About.com website, Paying for College, for more information.

Who are the “millennials” and why is everyone paying so much attention to them? According to the U.S. Chamber of Commerce Foundation, the tag of millennial is being applied to those born between 1980 and 1999. Now aged between 16 and 35, their numbers are plentiful and they are having a dramatic impact on the economy. The generation set to take over from the aging baby boomers is facing plenty of money problems, too. On the one end are the younger millennials who are trying to figure out how they are going to pay for a college education. On the other end of this generational spectrum are the millennials who have already graduated. They are now trying to pay off the student loans they accumulated during their college years. Some are finding this very difficult to do, and it is impacting their ability to move out on their own, marry, buy homes, and start families. Even those that are able to land lucrative positions are finding that their past economic choices are affecting their ability now to plan for their own children’s education or even their far-off retirement. Numbering about 80 million, millennials are forging new paths that their parents and older “Generation X” siblings may not have experienced. Perhaps if some of the older millennials were to provide advice for their younger cohorts, they might say the following: • Education is Essential: Not only are millennials more likely to graduate from high school, they are also more likely to move on and graduate from college. That’s a good thing, too, because that college education will make a huge difference in their ability to earn money. Study after study reinforces the financial benefits of a college education. The difference in earning potential over 40 years by level of education can be in the millions of dollars. • Student Loan Debt Can be Difficult: The average student graduates from college with about $25,000 in student loan debt. Many find that it is difficult to make several hundred dollars in payments every month, while still leaving money in their budget for regular living expenses. The older millennials might advise the younger ones to be sure that they only borrow what is absolutely needed, and that they learn about all of their student loan repayment options. • Get Creative About College Financing: Perhaps the best advice might be to start early and think often about paying for college. Younger millennials can learn from the mistakes of their elder new agers and plan out the college financial process more effectively. A smarter combination of savings, scholarships, financial aid and work-study jobs might be just the ticket for these youngsters to graduate without the same financial burdens. One great way to make sure you are making the best financial decisions about college is to talk to a professional College Financial Aid Advisor who can help you solve the financial aid puzzle. Contact College Financial Aid Advisors (CFAA) or visit my About.com website, Paying for College.

College graduation has come and gone. All the caps and gowns have been put away, and it’s time to start thinking about repaying those student loans which helped you achieve your dream of a college diploma. Here are a few tips for the college class of 2014: 1. Make a List of Loans: First you need to find out just how much you owe. Visit My Federal Student Aid to view information about all of the federal student loans you received and to find contact information for your loan servicer. Private student loans are not included in My Federal Student Aid so you will need to put together a separate list of private student loans you took out as well. 2. Calculate Your Total Monthly Payments: List out exactly how much money you will be expected to pay each month. Use the Repayment Estimator to calculate your federal student loan payments under each repayment plan. 3. Consider Loan Consolidation: This means bringing all of your federal student loans together under one Direct Consolidation Loan, where you will only make payments to one lender each month. You might also be able to consolidate your private student loans. There are positives and negatives to this approach. You may lose some benefits, and could end up repaying more money in the long run. 4. Look at Payment Plans: To make your payments more affordable, repayment plans can give you more time to repay your federal student loans. They can also be based on your income. 5. Deferment and Forbearance: You may be able to temporarily postpone payments on federal student loans in order to avoid default. During a deferment, the federal government may pay the interest on your Federal Perkins Loan, Direct Subsidized Loan, and/or Subsidized Federal Stafford Loan. Forbearance could allow you to stop making payments or reduce your monthly payment for up to 12 months due to financial hardship, medical residency, illness, certain teaching programs, or military service. 6. Loan Disputes: If there is a discrepancy, you will need to identify the problem and contact your loan servicer. 7. Forgiveness, Cancellation, and Discharge: There are certain situations where it is possible to have your federal student loan forgiven, canceled, or discharged. 8. Keep in Contact: If you are having difficulty making payments, contact your loan servicer immediately and ask about what type of help is available for people in your situation. 9. Stay on Track: Student loan payments can get out of hand easily, especially if you have never been responsible for paying your own bills. Make sure you make timely payments. 10. Avoid Default: Failure to repay your student loans can result in financial and emotional hardship. After default, you could have less payment options. For further information on steps you can take to repay your student loans, contact a professional College Financial Aid Advisor. Contact College Financial Aid Advisors (CFAA) or visit my About.com website, Paying for College.