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Do you have a “new” member of the family? It may look like the child you sent off to college four years ago, but this is a college graduate who is quickly taking on all the characteristics of becoming an adult! Yay, you’ve done a good job in raising a child who had the knowledge and tenacity to graduate from college, so here are a few more tips to help you help your new adult get on the right track financially: • Don’t Revert to Your Old Habits: Let your graduate know that you respect him/her as an adult and set up new rules for living together. Clearly lay out your thoughts regarding job expectations – turn the tables around so that you stop giving your child an allowance and start collecting some rent. You don’t do your child any favors by continuing to provide financial support for years on end. This is part of the transition from student to adult, and there are new skills which will have to be learned. • Have a Serious Talk About Student Loans: Don’t wait until the bills start coming due to have a serious discussion on this topic. Gather information about all of the outstanding federal student and parent loans, as well as any private student loans you may have used. Find out what the monthly payment is on each and discuss who will be responsible for payment. If necessary, take the time to look into loan consolidation or income-based repayment plans. These have pros and cons, and you must make decisions together that are based on your individual financial situation. • Set Up a Budget: Help your graduate figure out how much money will be needed on a monthly basis for rent, student loan payments, car payments and insurance, gasoline, health insurance, and other expenses. This will lead to a serious discussion of the type of job that is needed to cover these costs. • Get Ready to Kick Your Child Out of the House! Yes, this sounds terrible and, no, it doesn’t have to be done right away. Your child just moved back in and you might be thrilled about that, but there should be a clear-cut understanding of how long this opportunity will last. Let your child know that he or she has a year or two to find a job, get on track financially, and move on to the next phase in life. It will be another sad transition, but it is what you have all been working for all these years. Definitely take time and celebrate this terrific achievement, but don’t let your graduate rest on his or her college laurels all summer. Continue your role as parent and provide solid input and advice on how to make financial decisions based on information. This could be some of the most important advice you give, if your now-adult learns how to handle money responsibly and gets a head start on life!

It’s easy to wax nostalgic at this time of year. Most colleges are holding their graduation ceremonies, and the high school celebrations aren’t far behind. For these classes of seniors it can be both a time of looking back fondly on what has been accomplished so far, and looking forward with eager anticipation to the next steps in your life. Once the celebrating is over, here are a few things high school seniors can do this summer to prepare for college: • Get Serious About Money: Up until now, you probably haven’t had to worry too much about money. Your parents covered all of the expenses at home, and you might have gotten a job to earn a little spending money. In just a few short months, though, you are going to be more responsible than ever for managing your own money, so it’s best to get a start on learning how to do that now. Find out how your parents budget for household income and expenses, and ask if they can help you prepare a budget for yourself. Try to think about all the extraneous expenses that will come along with being on your own, like gasoline, snacks, laundry, late-night lattes, books, and entertainment, and try to figure out if you will have enough money to cover it all. • Learn About Student Loans: Have a frank discussion with your parents to find out how much of your education is being financed with student loans, then find out the details regarding who will be responsible for their repayment. If federal student and parent loans are not enough to cover all of your college expenses, help your parents investigate private student loan options like Discover Student Loans. You’ll want to find a company that is easy to work with, and that also has competitive interest rates and payment terms. This is good experience you can use later on when you are thinking about taking out a mortgage to purchase a home or condominium. • Keep Looking for Scholarships: One way to extend your finances and reduce your debt burden is to find “free” money that is available through college scholarships. You might think you are done with this process, but there are many additional scholarships you can apply for once you have completed your freshman year or decided on a major. Keep doing research to find out about these opportunities, and put any deadlines in your calendar so you won’t miss out on a potential source of revenue. For many students, it also helps to find a job during the summer. Of course, you do want to leave yourself some time for having fun with your high school friends, but if you can save some money now you might not have to borrow as much as you thought once you start classes. It’s an exciting time – be sure your financial priorities are in order before moving on to the next phase.

Each generation develops different ways of paying for college. The Baby Boomers might have relied on college savings accounts, decided not to go at all, or used the G.I. Bill. Gen Xers might have worked a few jobs over the summer to pull down enough money to cover expenses. But Millennials face a different set of financial circumstances, and are forced to forge new paths on the road to a higher education. While college costs are increasing at a rapid pace, money to pay for it is harder to find. Parents and grandparents who might have started 529 Savings Plans watched in horror as the value of those accounts diminished with the economic crisis. Federal cut-backs and sequestration cast an uneasy pall over college financial aid. And student loans, often the only way to pay for college expenses, are receiving a lot of negative publicity. But the Millennials are incredibly resilient, and find new ways to deal with the question of how to pay for college: • Community Colleges are a Bigger Part of the Education Process: With the higher expenses of traditional colleges, community colleges are more attractive as one of the initial steps in the education process. According to the Institute for College Access & Success, the good news is that the vast majority of community college students do not borrow federal loans at all, and the few who do borrow do not take out large loan amounts. Although the vast majority (82%) of full-time community college students does rely on some type of financial aid to cover some of their costs, they are finding ways other than borrowing to make up any short-falls. • Student Loans Are Part of the Puzzle: For those attending the higher-cost four year universities, federal and private student loans are still an important piece of the payment puzzle. In a policy brief entitled, “The Student Debt Review,” Ben Miller of New America stated that the average college graduate with a bachelor’s degree owes almost $30,000 in student loans. The Millennials are using their degrees to obtain jobs that will help them repay these loans, investigating loan consolidation and income-based repayment options, or thinking about careers in public service which might allow them to have their loans forgiven after ten years of payments. • Financial Aid Affects College Choice: PwC’s report on “Millennials and College Planning” found that 60 percent of Millennials said that financial aid is a deciding factor in their school choice. The Millennials are looking closely at their financial aid packages and making decisions accordingly. • Mom and Dad are Helping: A USA TODAY/Bank of America Better Money Habits survey found that today’s young adults are three times as likely to say they got a lot of financial help from their parents as when their parents were starting out. It’s a whole new world but, when it comes to college, clearly the Millennials have found their own paths to figure out ways to pay for it.

It’s May and time for college commencements! Congratulations to all the newly-crowned college graduates. You have worked hard to get to this point and deserve to take some time and pat yourself on the back for this achievement. The months ahead will be very exciting as you move on to the next phase of your life. It may involve travel, a new job, getting back together with old friends, or starting a new relationship. Whatever path you take, money is certainly going to be a crucial factor in any decisions you make. You might have relied heavily on your parents to make financial decisions while you were in college, but now it is time for you to take control of your own financial situation. Here are some smart financial tips to get you started in the right direction: • Get a Handle on Your Student Loan Situation Now: You might think it is still early and you have six months before you have to start worrying about repaying your student loans, but you will be surprised at just how quickly that time will pass. It is best to understand your situation now, so you can take some time to make decisions. Talk to your parents about how much they plan to contribute, and how much they expect your to repay. Put together a complete list of all your federal and private student loans, and find out what the repayment terms are on each. Calculate the total amount of monthly payments that will be due. If it is more than you think you will be earning, you may need to think about an income-based repayment plan or student loan consolidation. • Draft a Real World Budget: You may think you lived on a budget in college because your parents gave you an allowance or covered your expenses, but that was nothing compared to real world expenses. Try to put together a realistic expectation of how much money you will be able to earn in these first few years after graduation. Take into consideration any living expenses, car and transportation costs, health insurance, and entertainment opportunities, as well as your student loan payments. If expenses exceed income, there are only two choices – increase income or decrease expenses. • Watch Out for Easy Credit: It may seem easy to take out an auto loan or apply for a few credit cards to get you over any initial money shortages, but you do not want to start spiraling down into a debt cycle while you are so young. Interest builds up quickly, and it could soon take all of your disposable income just to keep up on payments. Try to control your purchases, or buy only within your means, so you can build a good credit rating for future use. This is a very exciting time, and you should enjoy it, but don’t make poor financial choices that will just make things more difficult for you in the future.

Far from the “slackers” and “dudes” that sometimes come to mind when thinking about the younger generation, today’s young adults aren’t necessarily all that unwise when it comes to making money decisions. Because their family might have experienced some radical financial difficulties while they were growing up, the Millennials might have some different opinions about money, but they are still trying to use it wisely. To help ease the transition into family-based financial decisions, here are a few money moves every Millennial should consider: • Pay Attention to Those Student Loans: These don’t have to be the albatross that hangs around your neck for your entire adult life, weighing down every financial move you make. Student loans can’t be ignored and they won’t go away. Failure to make payment could affect every aspect of credit for you and your family. If you don’t repay your federal student loans, you could even face having your wages garnished or lose your federal tax refunds. Sit down and assess how many student loans you have, find out how much money is due on each, and work out a payment plan. Try to determine whether loan consolidation makes sense for you. This could result in one payment for federal loans and one for private student loans, but you have to weigh the pros and cons of each. • Find a Financial Coach: It can be difficult trying to sort out everything you need to know about owning or renting a home, saving for retirement, or paying for your own children’s college education. That is where it can be helpful to seek out the advice of a financial coach who understands your needs. USA Today says that today’s financial planners are beginning to focus less on “asset management” and more on “goal achievement” in order to better assist their Millennial clients. • Get a Plan: Nashville-based iQuantifi surveyed hundreds of people younger than 35 and found out that while almost three-quarters of the Millennials do have financial goals, only 20% of them have a plan in place to back up those goals. This may feel a little counter to the Millennials’ free-flow approach to decision-making, but it can be very helpful in getting your financial life on the right track. • Learn to Trust Someone: Fidelity recently found that 39% of the Millennials do worry about finances, but 25% don’t really know who to turn to for advice. Fortunately, you have the greatest information resource literally at your fingertips. Use all those social media and internet skills you have accumulated to talk to your social circle about financial decisions. Ask them what they are doing and how that is working out for them; find out who they go to for advice and get input on whether they think that person could be helpful for you. It may feel a little uncomfortable at first to put any effort into managing money, but the long-term rewards will be well worth any time you invest now.

Taking out a student loan, whether it is from the federal government or through a private lender, is almost a given part of the college process. It seems like an easy source of money and, in most cases, you don’t have to worry about making payments until after graduation. But, when these loans are combined with revolving credit card debt that builds up during the college years, some graduates quickly find out how difficult it can be starting their post-college life with a large amount of debt. To keep that from happening, be sure to avoid these student loan mistakes that could hurt your financial future. 1. Not Thinking About Each Loan First: In the very old days, if you didn’t have the money for something you didn’t buy it. The advent of credit cards took the thought process out of borrowing. When it comes to student loans, though, it’s important to think about what you are doing. Realize that you are incurring a debt that will have to be repaid, and make sure that fits into your future plans. Plan to work during college breaks and over the summer so that you can earn as much money as possible, and need to borrow less. 2. Borrowing More Than What Is Really Needed: Some students get a student loan and use the money as a sort of piggy bank, instead of restricting those funds to be used only for college-related expenses. Going out for pizza, putting gas in the car, and getting your nails done are not college expenses. With interest accruing over four years, you could end up paying a very high price for what should have been an out-of-pocket expense. 3. Not Understanding Debt Consequences: Most college students are young, and don’t realize the effect debt could have on their lifestyle. Parents or financial advisors need to make these young adults understand that the federal government is quite serious about collecting on student loans. Although there are income-based repayment plans, failure to make any attempt at payment could result in a bad credit rating, garnishment of pay, or loss of any federal income tax refunds. Private lenders can also be very persistent in their efforts to collect on their loans. 4. Overburdening Co-Signers: Asking someone to co-sign a student loan can be tricky. Students may ask an older relative to co-sign in all innocence, not realizing what the consequences of such an action may be. That loan then shows up on the co-signer’s credit report, and may make it difficult for him or her to obtain any other credit. Failure to repay the loan on the student’s part may result in the co-signer being forced to repay loans, often at a time when they have the least amount of financial flexibility. Student loans can be great, if you know what you are doing. Don’t make these mistakes, and you should be able to avoid repayment problems down the road.

If you haven’t decided which college financial aid package to accept, you haven’t got much time left as most college decision deadlines are May 1. If all other factors are equal among a select number of college choices, the final decision might come down to cost. Here are some tips to help you discover which financial aid package is best: • Compare Apples to Apples: Don’t just pick the college which offers the most financial aid. Get your calculator out and analyze how much it really costs to attend each school. Be sure you understand whether you will receive the full amount of your award for the entire four years you attend. Reread your financial aid letters and determine how much of each package is in federal student loans. Remember that you will eventually have to repay that money, so it doesn’t really lower your costs; it just defers a part of them. • Calculate a Bottom Line: See if any schools are expecting you to participate in a work-study program that will provide money, but could reduce the amount of time you have available for your studies. List out everything you will have to spend money on including tuition, room and board, fees, travel expenses, and cost of living at each college. Then subtract out the grants and scholarships from individual schools, along with any scholarships you won on your own, for a bottom line net cost figure. You will be expected to pay for anything that is not covered by financial aid or federal student loans. You may decide to use private lenders, such as Discover Student Loans, to help bridge this final financial gap. • Contact When Appropriate: If the bottom line is very close between two schools, but the one you are leaning towards will cost a bit more, consider contacting the financial aid office. Politely explain your situation, tell the school how much of a difference there is between your two top choices, and ask if there is anything else they can do to help you. If they can’t, you will have to decide if it is worth the extra expense to attend this college. • Consider Earnings Potential: If you have to take out federal or private student loans to attend a particular school, it may be worth the extra investment if you are able to graduate in four years and land a high-paying job. Check the schools’ websites to compare details about graduation rates, employment percentages, and starting salaries. Another potential indicator of a college’s success at turning out viable job candidates is their student loan default rate. Visit College Navigator and type in the name of a potential school. Hit “Show Results” and scroll to the bottom of the list to find something called “cohort default rates.” A high default rate may suggest graduates having trouble finding adequate employment upon graduation.  You are almost to the finish line – good luck and keep up the great work!

Every trip to the mailbox or visit to the email inbox brings news from potential colleges for parents and high school seniors. Sometimes the news is disappointing but, when the student has been accepted to a favored college, it can be very exciting. And sometimes, when the mail contains a financial aid award letter, it can be downright confusing. The final choice of college could affect the finances of your family and your student for many years to come, so you want to make sure you make a decision that’s just right for you. Here are several things to keep in mind as you are taking these last few steps: • What your financial aid award letter is telling you: The letter will give you a good idea of what it costs to attend that institution. It should list an expected Cost of Attendance, or COA. These are costs the college believes the average student incurs to attend. The COA might include tuition, room and board, books, fees, and living expenses. You will then see the financial aid package the college is offering your student. Read it carefully, as you must be certain that you can distinguish between grants and scholarships that do not have to be repaid, federal student and parent loans that do have to be repaid, and federal work-study programs where your child will be required to work a certain number of hours to earn money towards an education. • Compare financial aid award packages: Create a budget worksheet with a column for each college, and start filling in the Cost of Attendance for each. Use some of the figures provided, but think about whether your child’s expenses will be different from what is listed. Calculate travel costs back and forth for all holidays and breaks. If your child will live off-campus, add in rent and utilities. Put together a meal budget if your student won’t eat on-campus, and estimate out-of-pocket expenses for each location. Add up the total costs, and then subtract each school’s grants and scholarships, as well as any outside scholarships. Explain the work-study commitment to your child. Then subtract the federal student and parent loans to determine how much money you will need to come up with from other sources. • How to bridge the gap between “free” monies and costs: Make sure you understand that, although student loans are included in the financial aid package, they will need to be repaid. This cost should be figured into your calculation. If there is still money outstanding, you may need to find additional money through 529 savings plans, private student loans from lenders such as Discover, or additional outside scholarships. Try to estimate how much your child will be able to earn upon graduation so you can determine what will be involved in repaying student loans. The final choice also depends on intangible factors, but make sure you know what you’re getting yourself into financially before accepting any offer.