College Students Hide Hunger, Homelessness was the headline for the NPR (National Public Radio) news story from July 27, 2010.  The story described the dire straits that some college students find themselves in like Diego Sepulveda at UCLA.  Sepulveda became a causality of the down economy when he lost his job at Subway and was without a place to stay.  The article went on to describe how some students are battling against the tough economic situations they find themselves in.

These are tough stories to read about.  Frankly, they frustrate me to no end.

Earlier this week, I was looking at relative EFC (expected family contribution) in relation to the median income in this country.  It is shocking how many students are most likely not going to college and leaving thousands of dollars on the table.  Many students like Diego who are in college are leaving thousands on the table at no fault of their own.  They have believed those myths about state colleges being cheaper, or the sticker price determines what you pay, or who knows what others they’ve been trapped with.

There are so many opportunities for financial help for students in tough financial conditions.  Why are these students not getting the message?  Are high schools ignoring financial preparation for students?  Are the students oblivious to the sources available to them?  Are the generous schools that bad at getting the word out?

I suppose I could ask similar rhetorical questions for hours, but that won’t make a difference.  We will just keep working to educate students and families.  I am looking forward to EduLaunchpad going live soon.  It will be a powerful tool to combat this despicable problem.

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Many colleges are already seeing significant cuts in work-study positions for next year.  Federal officials in Washington are decreasing funds available for work study by as much as 40%.  This means 2 out of every 5 work study jobs could disappear next year.  The cuts come in the face of dramatic increases in student loan programs.  Apparently the federal government does not like students earning their education, but it does like putting them in debt for their education.

These cuts highlight the importance of applying to colleges with generous track records.  Students cannot rely upon government sources of funds alone.  They need to make sure the schools to which they apply have several sources of funds which go beyond the government.  This often means making sure to include private colleges in the mix of schools for application.

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One of the aspects of the new health care bill that is leaving many Americans scratching their heads is the takeover of the student loan industry.  What in the world did student loans have to do with health care, and why is the government taking over a whole industry with no visible debate?

As for the first question, I have no idea; but for the second question, it’s not nearly the take over that you may suspect.

Shortly after taking office, President Obama announced that he intended to eliminate the FFEL program where various banks provided Stafford and Perkins loans to students; and transfer all federal student loans to the Direct Loan program.  For more information, check out Feds want to take over student loans.

The inclusion of the student loan provisions within the health care bill is just a convenient way to codify changes the administration announced last spring.

So what will be the impact to you the consumer?  One impact will probably be welcomed by many of you.  You will no longer have to pick a lender for those Stafford loans when there is no difference in any of the loan terms.  Another impact is likely, but will not be realized for a year or two.  The government is not exactly known for customer service.  There will probably be many comparisons of student loans and standing in line to get your driver’s license.

This will not have any impact on the private student loans which will still be available by several lenders around the country.

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by Lynn O’Shaughnessy, link here

What schools offer the best college financial aid?

Last month, I wrote this post: 51 Colleges with the Best Student Financial Aid.

Please take a look at the list because it includes schools with awesome financial aid policies that will reduce your stress about how you will pay for college. Researchers from the University of Pennsylvania and Amherst College assembled the names of colleges and universities that offered financial aid packages that didn’t include student loans.

You can also find a list of schools with great college financial aid at ProjectOnStudentDebt.org.

But here’s a problem: The list of colleges with the best student financial aid is in flux. The days of no-loan financial aid programs could be ending for many middle-income and affluent families. In fact, at least two colleges on the list of the 51 Colleges with the Best Student Financial Aid, wouldn’t even qualify anymore.

Last week Williams College announced that it was reducing the eligibility for its gold-plated college financial aid help.  Dartmouth College announced yesterday that it was ending its no-loan student financial aid policy. From now on families with incomes above $75,000 will have to borrow some of the tab.

I suspect the announcements will keep coming.

It was hardly a surprise that elite colleges, which traditionally offer the best financial aid, would start rolling back their cushy financial aid programs. You see these colleges launched these aid programs back in late 2007 and early 2008 –  right before the stock market collapsed and endowments started tanking.

When the no-loan financial aid policies first began in 2007, elite institutions didn’t want to be left behind so within a breathtakingly short period many super selective colleges and universities piled on. Now that Williams and Dartmouth have made their moves, I wouldn’t be surprised if many more colleges become stingier.

Lynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller, and she writes a college blog for CBSMoneyWatch. Follow her on Twitter.

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The waiting game is the hardest part of the college financial and selection process.  Everybody has to play this game.  But if you cut this game short, you could lose a lot of money and spend more on college than you need.

During the fall, students and parents are consumed with college admission applications.  For many families, they longed for the day when the admissions applications would be over.  Sometimes it took months to finish.  Then when December and January rolled around, the financial applications started.  Maybe yours only took a day.  For a few unlucky contestants, days turned into weeks.

But now for most of you, the admissions applications are done, and the financial applications are history.  So what’s the next step?  Do you jump at that admissions offer from your student’s top choice?  Do you take the school with the lower sticker price?  What if you haven’t heard anything out of the schools yet?  Have they forgot about you?  What do you do now?

This is where the hardest part of the college selection process starts.  It’s nerve-wracking.  It’s frustrating.  It’s going to play with your mind and make you feel like you don’t know what you are doing.  It’s… waiting.  Yes, waiting.  The one thing that Americans are the worst at of any people on earth… waiting.  Just think of it as a character building experience arranged for you by God Almighty.  He always said that patience was a virtue.  Now you get to prove it.

Colleges and universities need time in making these decisions.  They’ve got thousands of applications to sort through.  Some are faster than others.  Some are slower than others.  But don’t fret.  This is just the way the game works.  What’s the old proverb from the military… “hurry up and wait”

You need to wait for all of the financial offers to come in from the schools you or your student applied to.  Then you need to take your time to compare those offers.  Then you need to formulate your appeals back to those colleges (negotiate) if appropriate.  It is very likely you will not actually pick a college until April or sometimes as late as May.

Now in the meantime, you might want to consider putting down the housing deposits for any schools you or your student is exceptionally interested in.  Housing deposits are often non-refundable, so you have to be willing to give those up if you decide on a better offer at a different school.  But at least putting down a housing deposit will give many students comfort in the face of risking the dreaded “temp-housing”.

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A new and unfamiliar question has popped up at the end of the FAFSA this year… “Select the rigorous high school program of study that you completed.”  This question has confused a lot of parents and students; particularly when one of the available answers is the Department of Defense education activity course.

This question specifically addresses the student’s eligibility for the Academic Competitiveness Grant (ACG).  To qualify for the ACG, the student must:

1. Be eligible for the Pell Grant
2. Be entering the Freshman or Sophomore years of college
3. And have completed a rigorous secondary school program of study.

So what is a rigorous secondary school program?  According to the Department of Education, a rigorous secondary school program of study meets any one of the following five criteria.

1. Rigorous secondary school programs designated by state education agencies (SEAs) and state-authorized local education agencies (LEAs) and recognized by the Secretary of Education.
2. Advanced or honors secondary school programs established by states.
3. Secondary school programs identified by a state-level partnership recognized by the State Scholars Initiative of the Western Interstate Commission for Higher Education (WICHE) of Boulder, Colorado.
4. A program for a student who completes at least two courses in the International Baccalaureate (IB) Diploma Program with a score of four or higher on the course examinations or at least two Advanced Placement (AP) courses with a score of three or higher on the College Board’s exams for those courses.
5. A secondary school program in which a student completes, at minimum:
• Four years of English;
• Three years of math, including algebra I and a higher level class such as algebra II, geometry, or data analysis and statistics;
• Three years of science, including one year each of at least two of the following courses: biology, chemistry, and physics;
• Three years of social studies; and
• One year of a language other than English.

For most students, the last two qualifiers are likely to be the ones to fall under.  Either your student has taken AP courses or they have completed the classes indicated in #5.  For those students who have gone to military provided schools (either state-side or overseas), you would fall under the Department of Defense Education Activity Course.

According to a source at FAFSA that I spoke to, it is fine to leave this question blank and then go back and amend it after your student has completed the necessary course of study.

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“How do I file as an independent on the FAFSA?” or “How do I qualify as an independent student?” are some of the most common questions asked this time of year.  Once students and parents start digging into the FAFSA form, they quickly realize that independent students have lower EFC’s and therefore have a much better opportunity for financial aid than dependent students.  When this realization is coupled with the common position that “College is my student’s responsibility, not mine…” families quickly look to find out what does it take for a student to file as an independent on the FAFSA form.  It’s difficult… very difficult.

It is not as simple as not claiming your child as a dependent on your tax forms.  That is only a very small, if even insignificant aspect of student dependency status.  Below are the questions that the FAFSA form uses to determine dependency.

1. Are you older or will you be older than 23 during the award year?
2. Are you married?
3. Are you working on a graduate level degree?
4. Are you currently serving in the US Armed Forces other than training?
5. Are you a veteran?
6. Do you have children you support more than 50%?
7. Do you have other dependents you support more than 50%?
8. At any time since you were 13 regardless of present condition… are your parents deceased, or in foster care, or a ward of the court?
9. Are you or were you an emancipated minor as determined by a court?
10. Are you or were you in legal guardianship as determined by a court?
11. At any time on or after July 1, 2008, did your high school or district determine you to be an unaccompanied youth who was homeless?
12. At any time on or after July 1, 2008, did the director of an emergency shelter or federally funded transitional housing program determine you were a unaccompanied, homeless youth?
13. At any time on or after July 1,2008, did the director of a runaway or homeless youth center determine you to be an unaccompanied youth who was homeless or were self-supporting at risk of being homeless?

Questions 1 through 8 were the standard dependency questions for years.  Not until last year have the questions been expanded.

These questions are pretty straight forward.  If the student can answer “yes” to any of the above questions, then they can file “independent” status.  If they cannot answer “yes” to any of the above questions, then the student will be considered a dependent student.  In some very unusual circumstances, students can get a waiver from the financial aid office at the college which they are enrolled.  But a parent’s desire for a student to take care of their own college expenses is far from likely to merit a waiver from a financial aid officer.

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The FAFSA is the standardized financial information form used by all colleges and universities across the country.  For 2010, sweeping changes have come to the FAFSA form.  This 60 minute webinar will orient you to the FAFSA in its new form.  We will be covering:

• FAFSA on the web
• The PIN website
• Financial Aid Priority Deadlines
• The FAFSA worksheet
• EFC and how it impacts you

The webinar will be at 7pm (central time) on Wednesday, January 20th.  Register below.

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The 2010-2011 FAFSA Worksheet has been out for a while now.  You can get a PDF copy here. Frankly, it’s simplicity concerns me.  Let me explain.

For years, most colleges and universities have relied upon the FAFSA for the needed information to determine not only a student’s eligibility for federal financial aid sources, but the state’s, and the college’s own money as well.  The feds in their attempts to make the financial aid system simpler have stripped the FAFSA down to such little information that it will be useless for the colleges and states.  What families can expect to see in response to the stripped down FAFSA are far more complex institutional forms, more state forms, and more colleges being forced to subscribe to the CSS Profile.

What we are about to see is another great example of the law of unintended consequences.

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College Finances 101: Introduction to college funding and financial aid is now available for review.  This recording was made on the evening of December 8th, 2009 and covers the following:

• The college funding environment
• The college financial aid system
• Expected Family Contribution (EFC)
• FAFSA
• CSS Profile
• Financial Aid Priority Deadlines
• College Financial Track Records
• College Application Strategies
• College Financing
• Strategies and Tactics to Minimize College Costs and Increase College Financial Offers
• Negotiating the College Financial Award

This overview runs about 71 minutes. After you have finished watching, click the link below the video to request a PDF of the presentation be emailed to you.

Should you have any problems viewing the video, you may need to update your computer’s flash player.  You can do that at the Adobe website.

Webinar Response Form

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