January 30, 2006

If you are a student you may already be conscious of your grades for college entrance purposes. One more reason to keep those grades up is the correlation between grades and financial aid.

Students don't have to be the valedictorian or the next Rhode Scholar but good grades will equal more money. A combination of good grades & early application for financial aid is a wonderful formula for gaining financial aid. Scholarships and grants also come more easily to students who have shown hard work through good grades. If you plan early enough and study hard to receive good grades there is no reason you should not be able to gain thousands of dollars in financial aid.

January 30, 2006

The sticker price of tuition is increasingly a scary prospect. How on earth do these schools expect people to pay more than the average median income of a US family? And more importantly why must they charge these prices?

There really is no simple answer to those questions. The main thing to remember is not to get discouraged because financial aid is available and will heavily lighten the financial load families and students must bear. Tuition sticker prices are not carved in stone and can be etched away by finding the right financial aid avenues to follow.

Colleges and Universities are in a constant state of competition for top students. Therefore, they are always trying to "one up" the competition by offering bigger and better programs, buildings, educators etc. And although any given university or college may seem very well off the reality is they don't have the money to spend that they are spending. The result is extremely high tuition and fees.

January 26, 2006

Many divorced parents get confused about how their child's financial aid will be evaluated. The main thing you need to know is that the "custodial parent" will be the one to fill out the FAFSA (Free Application for Federal Student Aid) form. The US Government determines a "custodial parent" as the parent with whom the child has lived with most during the past year. If your child has spent equal time with both parents in the past year then the custodial parent is the parent who provided the most financial support in the past year. An easy way to determine this factor is to identify which parent claims their child as a dependent on his/her tax return

It is important to note that the above information applies to public colleges and Universities. Private colleges may ask to evaluate both parents’ finances. If you special circumstances such as one ex makes more than the other but is not willing to pay for your child's college etc. then include this in a tactful letter to the financial aid office. Many times the school will take special circumstances into consideration.

January 25, 2006

The Academic Common Market is an organization that sets up exchange programs for students between a league of mutually recognized states.

Students who are planning on studying a subject that is not offered by their state school may attend an out of state school for in state tuition. The school must already have an exchange program set up with your state.

Not every state participates in this program and as stated earlier the academic program the student wishes to study must NOT be offered by the student's state schools. The Academic Common Market is not commonly publicized and will require some research. You can try doing a Google search by typing in your state and the words: academic, common, market. Most high school guidance counselors and college financial aid offices will have information on this subject so it would be a good idea to check with them as well.

Participating in this program could save you thousands of dollars a year, well worth looking into. The Academic Common Market is also great for those students who are determined to leave their home state.

January 24, 2006

The Coverdell Education Savings:

This type of college savings plan can be applied to more than college. A Coverdell Education Savings Account can be used as savings for elementary through high school education as well as college. Parents or students may contribute up to $2,000 a year tax-free. A few stipulations are that single parents may not earn more than $110,000 and parents filing joint taxes cannot have their adjusted income be more than $220,000.

Any balance unused can be transferred to a sibling or another family member without penalty. As long as the money is used for education purposes (tuition, books, fees etc.) the money will not be taxed. The Hope and Lifetime Earning Credits can be used in the same year by the beneficiary of the Coverdell account as long as the same expenses are used for both benefits.

The Coverdell is typically considered the parents asset which is a good thing. Remember a child is expected to pay 35% of their assests when financial aid is evaluated as opposed to the 5.64% that is required of parents.
For more information on this type of savings please click here.

The 529 College Savings Plan:

In my research there is a lot of conflicting reports on 529 Savings Plans. People either rave about them or think they are a terrible idea.

Basically a 529 Savings Plan allows parents to put money into a state sponsored savings account. Single parents may contribute up to $11,000 a year and couples may contribute up to $22,000 a year.

Not every state offers these types of saving plans. If your state does not offer one you can find a financial advisor who can set up one for you in another state. Hidden financial fees and set up fees can make people oppose this type of plan so don't rule it out but be aware that it can exist.

The 529 Plan like the Coverdell is tax free when used for educational purposes. Friends and families can also contribute to the plan, making great gifts!

There are many other college savings plans out there. Make sure you do your homework and find one that is perfect for you and your family.

January 20, 2006

The National Association of Student Financial Aid Administrators (NASFAA) sent out a press release today calling for their members to act! Simply put the Budget Reconciliation Act of 2005 takes too much money away from student loans causing a substantial financial increase on students and families.

Luckily Senators that opposed this legislation were able to call for parliamentary procedures that made it necessary for the House to vote again on S. Bill 1932. That is why it is imperative to call or email your State's Representatives before the House votes on Feb. 1, 2006.

You can find contact information for your representative by visiting the U.S. House of Representatives website. If you would like to know how your representative voted on the Budget Reconciliation Act of 2005, S. Bill 1932 the first time please click here.

January 19, 2006

If you've searched the mainstream scholarships and come up with nothing, don't lose hope. There are plenty of alternative or just plain weird scholarships out there. For instance, there's the Zolp Scholarship. To be eligible for this scholarship you need to be 1.) Catholic 2.) Attending the Loyola University in Chicago and 3.) Have a last name of Zolp. Okay, this scholarship is a little more specific than most but someone out there fits the criteria and it could be you!

Look at all the many diverse attributes that you may have in your background or evaluate the special talents you may have. There is a way to find these scholarships. One important tip to remember if you use are doing a search with Google is remember to be as detailed as possible when you enter your search criteria. For example, if you simply enter "scholarship" or "financial aid" you are going to get a gargantuan amount of results which should and will overwhelm you. A better way to search for these alternative scholarships is to enter: scholarship, female, zolp etc.

Make sure and check out our scholarship section, there is a ton of good free scholarship information to search through!

January 18, 2005

The Budget Reconciliation Act of 2005 is casting some big waves in the world of financial aid. The 2006 academic year will have a shrinking pool of federal financial aid due to the cuts this piece of legislation has made. In addition the 2006-2007 academic year will bring with it the most students to ever attend college in the history of our nation. The lesson to be learned from all of this is to apply as soon as possible for financial aid! The actual deadline for the Free Application for Federal Studendt Aid (FAFSA) is not officially due until July 2, 2007. However, if you wait this long your chances of obtaining federal aid could be very poor.

The FAFSA is the only way you can qualify for federal aid and Pell Grants. More than 80% of students fill out the FAFSA online which can speed up the process of filing. Visit the FAFSA website to file or to gain helpful information that can walk you through the filing process. Parents try to get your taxes done early or make sure you have a good estimate of family assests and income as the FAFSA will require this information. Always keep in mind that you won't get any money if you don't apply!

January 17, 2006

The latest session of the Senate approved the Budget Reconciliation Act of 2005, S. Bill 1932. The House is expected to approve the bill later this month. All of this fancy political jargon spells bad news for students who are in need of financial aid.

In a nutshell this legislation would cut over $41 billion dollars of federal financial aid over the next five years. If you are currently seeking financial aid you must know that the timing couldn't be worse. College tuition is the highest it has ever been in history and is expected to rise.

The following points are the key pieces of the legislation that effect financial aid begining July 2006:

Stafford Loans will be increased from a 4.7% to to a 6.8% fixed rate

PLUS (Parent Loans for Undergraduate Students) will be increased from a 6.1% to a 8.5% fixed rate

Low income students that qualify for Pell Grants may qualify for newly created Smart Grants intended for students who major in math, science and certain foreign languages deemed "important" for national security

Extends PLUS loans to graduate and professional students

Increases limits on federal loans to aproximately $3,500 for first and second year students and $4,500 for juniors and seniors

Created a provision for deferral for those students who are on active military duty

Increases student loan origination fees

If you already receive financial aid or have received financial aid do more research on what this means or could mean for consolidation of your loans.

It's never too early to start planning for how you are going to pay for your child's college education. Public Universities raised the tuition for the 2005-06 academic year more than 7 %! It's scary too imagine what that cost might be in eighteen years from now.

If you have just had a baby or plan to have one very soon here are a few thoughts you might want to consider. Even if your child is older these ideas should help you plan for your child's education.

Make sure you start sorting out your finances now. If you have a lot of debt (maybe from your own college loans) make sure and keep paying them off. Investing in paying off your debts is one of the best financial investments you can make. Along that same line, try not to go deeper into debt.

Infants are not interested in fancy toys, games or expensive DVDs. Try asking family members to give your baby savings bonds or contributions to a college savings plan instead of giving toys. People are going to give you a lot of stuff for the baby regardless so don't worry about not getting the stuff you need (trust me, I just had a baby)! Financial contributions to your child's education in the begining also sets a good precedence for you to follow throughout your child's life.

Before you decide to send your child to a private school consider the advantages of moving to a better school district. A little known fact is that public schools pay their teachers a higher salary than private schools which drives excellent teachers to the public districts. Take the money you would have spent on the private school and put it into a college savings for your child. It could be better for your home investment as well!

When your little one is ready to make the switch from day care to kindergarten you may be relieved and excited to have a lot of extra money in the bank account as you will no longer be spending it on child care. Before you rush off and spend the extra money consider just automatically transfering that money into a college savings fund. Your family will already be used to the lifestyle you were living while the child was in day care.

Giving yourself a plentiful head start to your child's financial preparation for college can spare you much worry and financial stress when they are old enough to head out for campus!