2018 FAFSA Filing Is Approaching, What You Need To Know

2018 FAFSA Filing

The 2018 FAFSA filing is approaching here is what you need to know. Like for the current academic year, families can file the Free Application For Federal Student Aid (FAFSA) as early as Oct. 1 (instead of Jan. 1 as families have done in the past) for the upcoming 2018 -19 school year.

What you need to know: Each college will have their own deadline and will vary from school to school and some deadlines can be as early as Nov. 1 and as late as of Apr. 1. The second deadline is determined by the family’s home state. Starting Oct. 1, families can check their state’s deadline here. Some states have hard deadlines and other states have suggested deadlines to make sure you get priority consideration for college money. There’s also a group of states that offer first-come, first-served financial aid.

If you would like more information on FAFSA and how to properly file your financial aid forms, please contact our office.

5 Facts Parents Need To Know About Student Loans

Here are 5 facts parents need to know about student loans.  I want to first mention the drawbacks of a private student loans that may include the interest is often variable, less flexible repayment options, the student may have to start making payments while they are still in school, there is a higher limit on lending which will mean the student will be paying more interest, the loan will be dependent on the student’s credit score, and if the lender requires a co-signer, the student may be putting that person at financial risk.

  1. Borrow only what you need.
  2. Be clear in what you are signing.
  3. Know the differences between subsidized and unsubsidized Federal loans.
  4. Never turn down a subsidized loan.
  5. Shop around at local banks and credit unions to learn what they have to offer in private loans before utilizing any unsubsidized Federal Direct Stafford loan. Why? Friendly terms! Over the last 2-3 years I have been learning from some of our clients that they have secured a private loan with a lower interest rate then a Federal loan. For example, I talked to a client recently that retained a private loan at a 3% rate.

If you need more advice about student loans, financial aid, FAFSA, CSS Profile or scholarships please don’t hesitate to contact our office.  We offer a complimentary consultation to see if our service would be a fit and help your family reduce the out of pocket cost of college.

What You Need To Know About 529 Plans 2017

529 Plans 2017

Here is what you need to know about 529 plans 2017 update.  A 529 savings account allows you to build an education fund within an individual investment account. Money you contribute is invested in one or more specific investment portfolios.

I recommend families create the account in the parents name since the three formulas colleges utilize to determine how much financial aid a student may receive will assess students assets much higher than the parent’s assets.

As 529 plans, both college savings plans and prepaid tuition plans offer significant federal tax advantages. Funds in each type of plan grow tax deferred, and withdrawals from either plan used for the beneficiary’s qualified education expenses are completely income tax free at the federal level. As a general rule, I don’t recommend parents utilize multiple plans. However there are occasions that call for multiple 529 plans:

  1. If your children are more than a couple of years apart in age, you will most likely have different investment objectives for their college savings. You may decide that one particular 529 plan has better equity-weighted investments (suitable for a young child) while a different 529 plan is more attractive for its conservative options (suitable for an older child).
  2. If you have a sense of which particular schools, or types of school, your children are likely to attend, the choice of institution may influence your selection of a 529 plan. This is especially true if your state offers a prepaid tuition plan, or if you are considering the private-college Independent 529 Plan. A few of the 529 savings plans also offer extra benefits for students attending certain schools.
  3. If you’re simply not sure about your choice of 529 plan, you can hedge your bets by spreading your contributions among two or more 529 plans. You might also achieve some more diversification in your investments by doing so, at least in regard to the fund managers handling your college savings.
  4. If you will need to fund a child’s education with money out of your pocket, it’s almost impossible to find a scenario a 529 plan does not makes sense.

When shopping for a 529 plan, you should always consider your own state’s 529 plan, even if you ultimately decide to go with an out-of-state 529 plan. Special tax or other benefits may be available for using your in-state plan.

In some states, you may be able to take full advantage of a state tax deduction by enrolling just one of your children in the state’s 529 plan, giving you more freedom to search outside your state for a 529 plan for your other child. In other states, however, the full state tax benefit is obtained only when both of your children are enrolled in the in-state 529 plan.

If you would like professional advice and assistance completing the financial aid forms correctly and working the system all while saving you time and stress please contact our office for a complimentary consultation.

Disparity In College Financial Aid Offers

Good news! Financial aid awards are starting to arrive in student’s in boxes. The bad news, unfortunately there is a lot of disparity in college financial aid offers due to the fact that the format of awards are dictated by each school so many factors and questions come into play when reviewing and comparing offers.

First the family needs to know if the initial offer(s) is a fair one. That’s tough because generally parents doing this for the first time don’t have anything to compare to.

Second, what methodology is the college is using? There are three possible formulas. There is the Federal Methodology (FAFSA), the Institutional Methodology (CSS Profile), and the Consensus Methodology (CSS Profile). If the CSS Profile is required, the college will calculate a EFC (Estimated Family Contribution) which many times will not appear on the award. So it would be difficult for a family to know how much of the true need was met. If the college requires only the FAFSA, the family will see their EFC (Expected Family Contribution) on their Student Aid Report (SAR). In this scenario, they will have a good idea if the award is fair and will be less difficult to compare with other offers.

Third, the family needs to know what is the college including or not including in their total college cost or comprehensive fee. Every college is different in what they include or don’t include which can make an offer look good on the surface when it is not.

In conclusion some good news. Our staff with 26 years of experience are here to advise you accordingly. If you would like us to confirm and clarify if your child’s award is appropriate, please contact our office.

7 Tips On Lowering College Costs

7 Tips On Lowering College Costs

We all know that the cost of a college education is off the charts and for many families affording a college education can be a real challenge. Here are 12 tips that families can use to save money in the process:

  1. Compare housing options
  2. Don’t buy new textbooks
  3. Consider dual enrollment
  4. Get a tuition discount
  5. Attend a college with fixed-price tuition
  6. Utilize a work study program
  7. Graduate on time

Two bonus tips…

  1. Consider a community college in the first year or two
  2. Consider being a resident advisor. Many colleges will offer free or reduce room and board

Explore all of your aid options. With that said, parents need to be savvy when it comes to the financial aid process. The more they know about the process, the more likely they will retain more gift-aid. The more gift-aid, the less loans needed. Regarding loans, never turn down a subsidized loan(s) if offered and more importantly if needed.

Parents should consider retaining professional guidance. A trained expert will assure the family will retain the most financial aid possible. Also students should always pursue outside scholarships which will help to lower their out of pocket cost for a four education. Once on campus, the student should walk into the financial aid office to ask if there are any “in house” scholarships that they can apply for. Parents should set up a 529 plan early on.

If you wish more tips or information on how to lower college costs, please contact our office.

Amazon Prime Student Loans. What You Need To Know.

Amazon is stepping into the student-loan marketplace with Wells Fargo to offer discounts to customers of the online retailer as Amazon Prime Student Loans.  A student-loan discount will be offered to Amazon Prime Student members. The online retailer has entered into a partnership with San Francisco lender Wells Fargo& Co. in which the bank’s student-lending arm will offer interest-rate discounts to select Amazon shoppers.

Before considering private loans for college, families should always utilize all  Subsidize Federal Loans (Stafford and Perkins) offered. With that said, if a family still needs additional educational loan assistance, they should shop around at various lending institutions large and small  for the best terms.  Over 70% of families borrow less when their financial aid forms are filled out correctly. Unfortunately the majority of families who do not retain professional guidance will make mistakes. Please contact our office to lower your out of pocket cost for your child’s education.

Amazon Tiptoes Into Banking Business Through Student Loans
News Source: Wall Street Journal

FAFSA Changes 2017-18

Starting with the high school graduating class of June 2017, the timetable and tax year associated with the FAFSA changes 2017-18. The high school class of 2017 will be eligible to file the FAFSA starting on October 1st, 2016, three months earlier than in previous years. They will use 2015 Federal income tax returns (known as Prior-Prior Year (PPY)).

Take special note there is some uncertainty for the high school class of 2017. For example, the deadlines for institutional aid may change at some colleges. Also, students may initially receive estimated financial aid packages because college costs for the coming year may not be finalized and/or because state grant data may not be available. If this is the case, the families will subsequently receive confirmed financial aid packages. In addition, financial aid is based in part on the family’s income, and if that changes during that two-year period, the family could either lose money or have to file an appeal and go through a lengthy process to retain it. Instead of streamlining it, for a small portion of people, it adds an extra step if their circumstances change. Many things can happen in a year.

One thing that parents need to know is that they have the option to utilize their 2016 tax information to file FAFSA and the CSS Profile and they should if there is less income reported compared to 2015.

If you would like more information on FAFSA Changes 2017-18 and information on how to increase your financial aid options, please contact our office.

12 Tips For Parents and Students On Paying Your Way Through College

12 tips parents students paying way college

These are our most basic tips for parents and students on paying your way through college. Every year we consult with many families, single parents and even students who want to make college more affordable. These are the things we believe without fail you need to do to reduce the cost of college.

  1. Students should always walk into the financial aid office the first day they are on campus and ask if there are any “in house” scholarships they can apply for. Many times there are and students are not aware that they exist.
  2. Pursue outside scholarships keeping in mind that they should never pay for a scholarship service.
  3. Set up a 529 plan.
  4. Whenever possible purchase used textbooks and sell them when they are finished with them.  You are never going to use them again.
  5. Utilize work study on campus whenever possible.
  6. Keep credit card debt at a minimum and always pay it down on time.
  7. Choose the right meal plan.
  8. Set up a student checking account. Most of them are free. Keep organized regarding their spending habits.
  9. Get the right cell phone plan.
  10. Utilize alternative transportation.
  11. Consider being a resident advisor. Many colleges will offer free or reduce room and board. If the college is close to family or relatives the student should consider living at home which is one of the most economical ways to get an education. If money is short in the beginning, the student should consider a community college. There are now many quality 2 year programs around the US that will allow a student to transfer their credits to a four year school.
  12. Retain a trained expert in the financial aid process. These people can save families thousands of dollars in their 4 year education.

If you wish to consult with one of our fine experts, please contact our office.  Just like a great accountant for 26 years we have been experts in financial aid. We would love to look at your FAFSA and CSS Profile and see if we can help reduce the out of pocket expense even more.

High School Junior Students Need To Plan For College Now

Financial Aid Awards

Any high school student that is junior needs to start a plan now to reduce the cost of college.  Beginning this summer, here are five things you should be doing to get ready for college:

Research & Visit Schools

If you haven’t already begun visiting colleges, you should get started. The summer is a convenient time to explore colleges and universities. You should also visit school web sites, attend college fairs in their area and talk to their guidance counselors about potential schools.

Continue Taking Challenging Classes

The most important factors that colleges weigh most heavily when evaluating an applicant is your grade point average and the caliber of the courses that you take. Your GPA is a greater predictor of college success than standardized test scores.

The grades that you receive your junior year will often carry more weight than earlier ones. However, you should not take classes just to get a weighted grade or that would be too difficult. You are not going to impress anybody by getting a “C” in AP Calculus.

Know What College(s) You and Your Parents Can Afford

Sit down with your parents to discuss what is going to be expected from you and them in affording a particular school(s). Knowing ahead of time what your family can really afford will allow a more efficient college search.

Check Out Net Price Calculators

When researching schools, use a school’s net price calculator, which is located on the institution’s website keeping in mind the majority of calculators are not totally accurate. However, they will give you a sense of what to expect.

Take the SAT and or ACT

If your score for the ACT and or SAT are disappointing, consider looking at schools that are test optional. About a third of the nation’s 100 top liberal arts colleges are SAT and ACT optional.

Next Steps

If you would like more information on any aspect of your college pursuit, please contact our office. With our 26 years of experience, we are able to inform you on what you should expect from a particular 4 year state or private university in the United States.

How To Avoid Financial Aid Awards That Shrink Every Year

Financial Aid Awards

Many parents approach me after their son or daughter has started their private or public school education and ask how to avoid financial aid awards that shrink every year. Assuming the decrease in aid was not do to financial reasons, here are some suggestions for parents and students to avoid the trap:

  • After receiving your financial aid offer for the first year and before you commit to the college, ask them what you can expect from them in the following years
  • Keep your grades up. If the student retains a high GPA, it will be less likely the school will play money games with your financial aid awards
  • Like the GPA, get involved with school activities and be an asset to the college
  • If the college is still playing the game, the student may want to consider one of the college’s rival schools. Many colleges don’t want to lose students to their competitors due to only issues to financial aid awards
  • The family may want to consider retaining a trained and proven financial aid expert. This person will be able to negotiate with the college to better their award

If you are like most parents you are well-intentioned in attempting to maximize the financial aid for your family without help. College Aid Consulting Services has over 26 years of experience working with federal institutions, colleges, universities and others that decide how much money you will receive. If you are reading this we hope you take advantage of our complimentary consultation and contact us today.

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