August 6, 2007
Gap Year finally coming to America
I wondered how long it would take this trend to reach our shores. I lived in Britain from 2003 to 2004 and the “Gap Year” is quite prevalent there! A lot of university students are expecting to take a year off before entering university. It’s a year for exploration and self study, mostly. Kids travel a lot, volunteer in foreign countries, do internships at a relevant business in their own country – contrary to what some believe, most UK students do not just go party for a year.
I wish I’d had a gap year. I’m a computer science person who loves history and anthropology – the latter aren’t very prevalent in my daily life, as you can imagine. I would have loved to take a year and work abroad building my independence social and language skills. For additional advice, check out Gap Year Planner
Read the whole article from the Washington Post here.
More Are Taking a Rain Check on College
By Ian Shapira
Washington Post Staff Writer -Sunday, August 5, 2007; Page C01
Billy Neville was flipping through the humongous Fiske Guide to Colleges last fall, yet another senior at a pressure-cooker high school in search of a game plan, when his mother told him something unexpected.
“She said, ‘Keep in mind, you don’t really have to go to college next year. You can do something fun,’ ” recalled Neville, 18, who graduated in June from Walt Whitman High School in Bethesda. “I genuinely liked that idea, but I didn’t know how serious she was and how well a year off would work. But I started looking at the idea, and it looked better than going to college because I didn’t know what I wanted to do at college.”
Ultimately, Neville was accepted at Miami University of Ohio. But he deferred enrollment for a year, joining the ranks of maverick students who take a “gap year” — time off between high school and college. Some do it to find enlightenment and introspection, others to learn something new or pursue a passion.
There are no hard counts of gap-year students, but the National Association for College Admission Counseling in Alexandria reports anecdotal evidence from counselors that more high school graduates these days are seeking a year off. Gap-year consultants who charge $1,000 or more to advise students on how to fill the time have emerged.
Some students say they take a gap year to escape stress accumulated from Advanced Placement courses and competition over grades and class rank.
“I grew really tired of everything in school. I just didn’t like the atmosphere, especially at Whitman, where if you’re not an overachiever, then you’re just . . . I don’t know,” Neville said. “So, I was hoping, in my year off, I’ll find out what really interests me.”
Neville asked for his deferral in a letter to the admissions office. “And they came right back, saying, ‘Sure,’ ” said his mother, Clare Neville.
Ann Larson, a senior associate director of admissions at Miami of Ohio, said the university grants deferrals for medical issues, military service, study abroad and other reasons on a case-by-case basis.
“We really have no problem with students taking gap years,” Larson said. “It’s very positive what they bring back to the university. It’s a maturing experience.”
College admissions officers said they want gap-year students to improve upon an area of expertise or perform some kind of public service. John Blackburn, dean of admissions at University of Virginia, said students often seek deferrals for missionary work or public service jobs through such nonprofit organizations as Operation Smile, which performs free reconstructive surgery on children born with facial deformities in developing countries. Admissions officials at Georgetown University estimated that 25 to 30 students admitted each year in a class of almost 1,600 ask for a deferral, requesting trips abroad to learn a foreign language, intern at a foreign embassy, or even work at a foreign or domestic magazine.
Charles Deacon, Georgetown‘s admissions director, said: “Students have to have a plan that we approve of. Mostly it’s for some type of cultural enhancement.”
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October 19, 2012
Search for Scholarships with New Search Engine
StudentScholarshipSearch.com has recently been redesigned and relaunched. The goal of the new design is to provide better resources and tools for students in their search for scholarships and financial aid. The new site offers a “Scholarship Matcher” tool allowing students to answer a few simple questions to get a short list of relevant scholarships. Unlike other scholarship search sites wich require students to complete 3-5 pages of questions, StudentScholarshipSearch.com offers an open tool with no registration requirements.
Users are encouraged to search through custom lists of scholarships created by students, for students. I especially like their “Tips and Advice” section.
September 12, 2012
Student Loan Repayment and Consolidation
We often get questions about repayment of student loans and loan consolidation options. Here is a quote from the Student Loan Network website:
“Student loan repayment should be seriously considered prior to taking on debt. Typically, it will take students 10 to 20 years after graduation before they are able to repay their student loans in full.”
Review all of your loan documents to insure you know how much you owe. Talk with your lenders about repayment plans. Do a budget and figure out where you are spending your money and if there are ways you can save.
The general advice is to make sure you pay off your high interest debt first. Generally federal loans have more favorable repayment terms than private loans – so weigh your options carefully. Finally, consider consolidating your loans to reduce the number of payments you have to make. (note: you will want to keep your private and federal loans in separate consolidation. Consolidating private loans with federal loans may eliminate the benefits of the federal loan programs).
For more information, visit: http://www.consumerfinance.gov/students/repay/
May 3, 2012
Student Loan Interest Rates
There has been a lot of news about student loan interest rates recently. Specifically, the Stafford Loan Rates, which are currently at 3.4%, are scheduled to increase to 6.8% on July 1. What does this mean for you?
In short, it seems both parties are in agreement to keep the rates as in for the next year (until elections are over). The disagreement is on how to pay for this during that period. The reality is that the government does not have additional costs to provide these low rates. The government is able to raise funds at a low fixed rate and should be able to pass these savings on to students. They just won’t make as much interest on the loans as they were expecting. This is a concern as the amount of debt they are carrying for student loans continues to increase.
What should be a greater concern to students is what will happen a year from July – after the elections. The bigger problem is the cost of education, which continues to rise at twice the rate of inflation. Contact your representatives and ask them to help lower tuition costs to lower the costs for all students.
March 19, 2012
Scholarship Search Advice
What are the best resources for students and parents when searching for scholarships? To start, you need a plan. Think about how much time you can spend on the process, how early you can start, who can help, etc. Some advice – you can never start too early or get enough help.
I can provide a few links to resources but would love to get your thoughts and suggestions.
For searching, try the Student Scholarship Search website which offers a free open directory of thousands of awards, grants and scholarships. Their new design offers tools for saving scholarships that are relevant and tips for improving your chances of qualifying. They recently published Scholarship Search Mistakes which lists the top 5 mistakes students make when searching for scholarships.
Another great site is http://www.scholarshippoints.com which gives out scholarships every month with a chance to win $10,000 every 3 months!
What are you favorite resources? Do you have any advice for the rest of us??
February 6, 2012
2012 FAFSA Application
Remember to file your FAFSA early! You must complete the FAFSA form in order to qualify for most federal and state financial aid, including most school based financial aid programs. Check with your school to see their FAFSA Deadlines.
To file your FAFSA online, go to: http://fafsa.ed.gov
August 28, 2011
How do I Fill the Gap between what College Costs and the Financial Aid Awarded?
Struggling with finding the last dollar to pay that college tuition bill??? Here is a good overview of the challenges and some options to manage them…
It is no secret that college is expensive and tuition costs are continuing to rise. We put together the infographic below to examine the costs associated with a college education, including the hidden costs you may not be factoring in like health fees, gas money, entertainment and all the Red Bull you’ll consume during finals. The graphic also outlines how funding occurs and how students can fill the gaps left in paying for college. Feel free to share with your fellow students, friends and family!
August 10, 2011
Parent PLUS or Private Loan: Which is Better?
One question that comes up a lot from parents is how to fund the remainder of your child’s education, after federal loans of course. There are a variety of options out there including Federal PLUS loans and private college loans. It can be difficult to decide on which loan is right for your family, so to help you in the process, I’ve explained some of the major benefits and drawbacks of each below.
Parent PLUS Loans
Parent plus loans are available through the government and offer a variety of benefits. Benefits such as deferment, forbearance, and even some cancellation options are a perk of PLUS loans that are not always available with private loans. However, the interest rate is a fixed 7.9%, and higher than some private loans.
One of the most common questions from parents about the PLUS loan is in regards to the credit check. The credit check for PLUS loans is minimal and it’s mostly to make sure that there is no recent bankruptcy or adverse history on record within the past 5 years. If you’re still concerned that your credit will hinder your ability to receive the loan, you should continue with the application process, as students whose parent’s get denied a PLUS loan are entitled to further Stafford loans (at lower interest rates than the PLUS).
>>Read more answers to Parent PLUS loan FAQs
Private Loans
Private loans may actually be a better option than the PLUS loan for some families. Interest rates are now very competitive and come in both fixed and variable. This would allow for less interest over the lifetime of the loan than the Parent PLUS. You should also note that while the loan holder in this case is the student, most loans will suggest that a parent cosign for the student, which is generally a good idea anyway, as it improves approval chances and may lower the interest rate for the loan.
A downside of private loans is that many of the repayment benefits that you find with federal loans are not all available, however, the lower interest rates could outweigh this point. There are also other benefits of private loans to consider, such as the disbursal method. Unlike federal loans, private loans get disbursed directly to the student, so they can pay for immediate expenses such as books, or room and board.
>>Compare private student loan options
There is no real answer to “what is the best loan” because this is too subjective and is different for everyone. There are a lot of different factors to consider when looking into funding your child’s education and it comes down to not which loan is the best, but which is best for your family. To help you decide, you’ll simply have to weigh the pros and cons of each option.
July 18, 2011
Give Your Grad a Hand: 5 ways to help your child post-graduation
The first years after graduation can be stressful on students, but the stress cast on parents is often overlooked. Parents are faced with the ever-growing problem of how to help their kids land on their feet, and effectively start their own lives. While many are tempted to simply pay the student’s way, this is not always the best option for either parents or students. Parents need to start thinking about retirement, and may not be able to afford those extra years of financial support, and students need to learn financial independence. The problem is, what can parents do? Here are some ideas…
1. Teach Financial Literacy
It’s amazing how many students graduate without any idea what a 401K is or how to use a credit card correctly. These are some basic, teachable (and free) steps that can really provide a foundation for recent grads.
- Using basic accounts – Most students have checking/savings accounts well before college, but should still be aware of the basics. Are there minimum balances? What happens if you overdraft? Little tips like these can pay off big in the long run, and prevent avoidable fees while money is tight.
- One thing my parents taught me when I got my first credit card was don’t buy anything that you can’t afford right now. This has been a huge help, and while I may not get everything I want right away, I have never had an outstanding balance on my card. People may think, “well, what’s the point of having one, then?” To this, I would answer, beginners should be exceptionally careful, using the card only for what’s affordable (except, of course, for an emergency). This will help set a good foundation for lifetime credit use and help grads to avoid even more debt.
- How to save – Students hear tons of financial terms thrown about, (ROTH IRAs, 401Ks, Savings Bonds, etc.) but in most cases, have no idea what any of these things are. Sitting down with your grad to talk about different savings/investing options can be a huge benefit in the long term.
2. Stop the Pressure
With the job market at a low point (though better than last year) finding a job is incredibly stressful for many students. It’s important to keep them motivated during their application process, but do not pressure them or force them to take a job they don’t want. This, of course, is easier said than done, with student loan payments looming on the horizon. To help motivate them, think about setting goals or time limits. Knowing that they have only a certain amount of time to find a job can really help speed the process along.
On a side note: Today, more recent grads than ever are living at home after graduation. If this happens, remember that the house rules in high school may no longer apply. Your child is more adult than kid, and many fights can be avoided by bending some of the old rules, and realizing that your grad may be frustrated with answering to parents again. While this may not help with the finances, it will make this stressful time easier on everyone!
3. Keep Them Healthy
Since the Obama Administration’s recent law, grads are able to remain on parents’ health insurance until the age of 26. Saving students from the high cost of health insurance (or accidents sans-insurance!) can help while they begin to get their life in order. If they need insurance, consider: Graduate Student Insurance Plans.
4. Give Them Credit
College graduates are faced with a lot of firsts – first car, first apartment, first student loan payments, and having a solid credit history can help their future. After teaching basic credit card usage, parents can help students and grads attain their first card, which can now happen in 2 ways:
- Co-sign for a card – This provides independence, but with security. Just make sure that if you do co-sign, your child remains on top of payments, and be willing to help out a little should payments falter.
- Obtain a secured credit card – These require an initial deposit, and the amount of the deposit becomes the credit limit. These are great because you cannot spend more than you have, and teaches smart charging! A downside is that it’s more expensive up front, but you may save in the long-term.
5. Teach Them to Cook
Yes, really. Buying takeout every night, besides being unhealthy, can also really impact your child’s wallet. By teaching your grad to cook, they could save a lot of money on expensive take-out once they’re on their own!
Student Loan Info for Parents 