09.27.06
Education Tax Breaks May Not Be Renewed
The Washington Post is reporting that:
“Congress appears likely to leave Washington later this week without having extended several popular tax breaks that expired at the end of last year…Lawmakers … haven’t revived two other deductions claimed by millions of people: a deduction for college tuition and fees, and a separate deduction for elementary and secondary-school teachers and other educators. …Even if Congress does renew the provisions later this year, some lawmakers and IRS officials warn that delaying action that long will create major headaches for taxpayers — and the Internal Revenue Service.”
I can tell you from personal experience that these tax breaks can save you a LOT of money. I claimed one of the educational tax breaks while paying for graduate school, and it allowed me to not pay taxes that year – that can be a lifesaver when you’re on a student budget and trying to make ends meet.
Please note that a paid subscription is necessary to view the entire article.
09.26.06
University of Virginia stops early admissions
The University of Virginia is following Harvard and Princeton in cancelling it’s early admissions program. You can read all about it on the Inside Higher Ed article here. Starting with the class entering Fall 2008, Virginia plans to make January 2 the application deadline for all students.
09.25.06
Student Loans – no longer “good debt”?
Here’s a very interesting article from the Washington Post. Michelle Singletry ask:
“We’re told over and over again that student loans are good debt. The conventional wisdom says that, like a home loan, student loan debt will turn into an asset. But what happens when it doesn’t turn out that way? What happens when people take on tens of thousands of dollars in loans that may take decades to pay off?”
I highly encourage you to read the entire article, but you can probably see the answer she comes to. So what does this mean for parents?
Do what you can to eliminate debt. Grants, scholarships, savings… there are things you and your childcan do to lower your debt burden.
Scholarships!!! Your child will need student loans – unless you’re very lucky or very wealthy, that won’t change. But yuo can lower the burden by applying for scholarships that DO NOT need to be repaid. Many students – including my self – and think that $500 isn’t worth the effort. Well, if you get 10 $500 loans suddenly that’s $5000 and that’s nothing to laugh at.
09.20.06
Consolidation – What you can save!
Check out this post from my friend Brooke on what you can save if you consolidate your Federal Student Loans (e.g., Stafford, PLUS, Perkins loans) while you’re in your 6 month grace period. She makes it very easy to understand!
Check it out!
09.19.06
Princeton follows Harvard – no more early admission
More great news for the average student – other colleges are starting to follow Harvard’s decision to drop its early admissions program. You can read more about Princeton’s decision here.
09.15.06
Stafford Loans 201 – More of What You Need to Know!
Here are some very important items you need to know to help your children in financial aid decisions:
1) Stafford Loan is a TYPE of loan, not a loan company. A Stafford Loan can be taken out through many different companies, such as StaffordLoan.com or directly from the federal government through the Direct Loans program.
2) You have to fill out a FAFSA and submit it to be awarded a Stafford Loan.
3) Deadlines ARE important. There is a limited amount of financial aid each school has to award, so it’s important to get your FAFSA filed on time so that you’re considered early on in the process. If you submit your FAFSA late, you may miss out on financial aid completely!!
4) Not everyone who submits a FAFSA will get a Stafford Loan. Subsidized Stafford Loans are only for need based students, but unsubsidized Stafford Loans can be awarded to anyone. The important thing to remember is that to be awarded financial aid, your family’s Expected Family Contribution (EFC – what the government thinks you can contribute towards the cost of education) must be lower than the cost of attendance. If it is equal to or higher than the cost of attendance, then you won’t get federal financial aid.
09.13.06
Harvard ditches early admissions
You’ve probably heard about this already on the national news, but in case you haven’t, read this article.
Harvard has cancelled its early admissions program. This is actually great news for students, because early admissions students favored the wealthy students who could afford tutors, private school, etc. Now Harvard will see all candidates in one pool, and will be better able to pick and choose students in one batch, not two.
I’m hoping this causes a snowball effect and that other schools will follow suit. Early admission really isn’t for most people, as most schools demand automatic acceptance if you’re approved early. At least when I was 18, I wasn’t ready to choose a college in December of my senior year!
09.05.06
EFC – expected family contribution, and the problems therein
THe EFC (expected family contribution) is great in theory. It impartially calculates what a family should be able to afford to pay for a child’s education. Unfortunately, it doesn’t always calculate cost-of-living in an accurate manner. Take for example, this article on Nantucket, an island of the coast of Cape Cod, Massachusetts.
Nantucket’s image is of a summer playground for the rich and famous. The locals, however, are not rich, and must pay to have everything – EVERYTHING – shipped from the mainland as Nantucket’s only major resource is fish. Though salaries are higher than those on the mainland, folks actually net less money, because of the much higher cost of living. Colleges don’t take this into account, though. Read on:
Rich on paper, islanders denied aid
By GABRIELLA BURNHAM
THE INQUIRER AND MIRROR
Constance McDonough-Thayer has a hard time convincing financial aid directors that she is not well off. They see her family’s yearly income and assumptions are made.
McDonough-Thayer, a 2006 Nantucket High School graduate, is not alone. Many of her peers, who like her are bound for college this week, have similar stories to tell.
While Nantucket incomes may look high by mainland standards, they are offset by the high cost of island living. Food, clothing, housing, gas, heating oil – practically everything – costs far more on Nantucket than on the mainland.
But college financial aid offices don’t take that into account when parceling out monetary assistance.
That puts Nantucket graduates at a disadvantage when applying for financial aid, and often jeopardizes their ability to afford college.
”The financial aid office at the Hartt School of Music at the University of Hartford looked at my family’s income, which would be high for somebody living off-island. But on Nantucket it’s different. My mom has to pay rent on the nursery, and most of my dad’s work is in the summer,” said McDonough-Thayer, who received only a $2,000 loan from the school based on her family’s estimated contribution, which would not even put a dent in the $36,000 yearly bill.
Fortunately, she received $14,200 in scholarship money from the Nantucket community and high school. She also worked full time this summer to raise $3,000 to finish paying off her first semester bill, which will go toward her tuition.
Once the second semester bill rolls around, it is going to be the same struggle all over again, but this time she will not have the scholarship money to put toward the bill, and the $3,000 she earned over the summer will already have been spent.
”Probably what’s going to happen is I’m going to maintain my GPA (grade point average) that is required for my community service scholarship and apply for merit scholarships and non-need-based grants … And I’m going to get a job second semester,” she said.
Her situation is not uncommon for Nantucket High graduates who, in the eyes of the U.S. Department of Education, are considered wealthier than most applicants based on their parents’ annual salaries, said Jim Dalzell, the high school’s guidance counselor.
In actuality, the income of Nantucket working families is relative to the price inflation of the island, which does not get considered on the Free Application for Federal Student Aid, or FAFSA. This can pose serious problems when total college costs, including tuition, room and board and a meal plan, may cost $40,000 or more a year.
It does help that the Nantucket community offers an abundance of scholarships, Dalzell said. More than $400,000 in scholarship money was awarded to this past year’s graduating class, not including the two free rides the Nantucket Golf Club gave to Rachel Schneider and Kelsey Fredericks, making Nantucket in the top 5 percentile in the state for high school scholarship awards.
”It’s funny, when you’re at school, you say you’re from Nantucket and people automatically assume that you’re rich and that you’re like the people who come here in the summer,” McDonough-Thayer said. ”But you have to understand that Nantucket isn’t just a vacation spot, or a place to party. People live there and are trying to support their families,” she said.
(Published: September 4, 2006)
09.01.06
Confirming what we’ve known for years.
This article on USA Today was really interesting. We’ve all seen the huge tuition hikes in recent years and financial aid not keeping pace. Now we’ve got definiteive proof, and some very interesting statistics.
Financial aid can’t keep pace
By Mary Specht, USA TODAY
Financial aid for students attending public flagship universities increased from 2002 to 2005 — but not as much as tuition and fees did, suggests USA TODAY’s annual 50-state survey.
The survey collected financial aid data from 65 of the 75 flagship schools contacted. It took into account state, federal and institutional need- and merit-based scholarships and grants, but not loans.
Students who received aid got an average of about $1,000 more last year, the latest year for which data are available, than they did in 2002, the first year for which data were collected. The median aid increase nationally during those years was 17%. That is compared with about $1,465 more in tuition and fees, a median increase of 34%, in the same period.
“Long term, that trend is very troubling because that means the ability to pay is eroding, and it’s eroding most quickly for the lower-income population,” says Jamie Merisotis, president of the Institute for Higher Education Policy, a think tank in Washington, D.C.
The University of California, Berkeley reported the highest average amount of aid to students who received it: $12,021. Slightly more than half of its students received aid. Purdue University in West Lafayette, Ind., was another top provider of aid. The 92% of students who received aid got an average of $11,673.
Two other schools also averaged more than $10,000 per student receiving aid: the University of Virginia in Charlottesville, at $11,738, and the University of California, Los Angeles, at $10,301.
Of the schools providing data, average aid was lowest at Kansas State University in Manhattan, Kan., at $2,389, where in-state tuition is $5,779.
The survey suggests that slightly more students at state universities are getting aid than did four years ago: 60% received aid in 2002, compared with 65% last year.
At eight of the schools surveyed, 90% or more of the students received some aid. At the University of New Mexico in Albuquerque and the University of Florida in Gainesville, 95% received aid. (The University of Florida also had the lowest tuition of the 75 schools this year, $3,206.)
About 23% of students received aid at the University of Wisconsin-Madison, the lowest percentage among the universities surveyed.
