Stafford Loans are the most common form of college financial aid. If you complete the FAFSA (acts as the Stafford Loan application), your student is virtually guaranteed to receive one of the two types of Stafford Loans. Dependent students can borrow the following under the Stafford program...
Freshmen: $5,500
Sophomores: $6,500
Juniors: $7,500
Seniors: $7,500
Independent students can borrow the following under the Stafford program...
Freshmen: $9,500
Sophomores: $10,500
Juniors: $11,500
Seniors: $11,500
Stafford loans are divided into two types: subsidized and unsubsidized. The Department of Education determines which of these loans you will receive based upon the information on your FAFSA.
Subsidized Staffords are no interest and no payments while your student is in college. Interest rates on subsidized Staffords are based upon the year the money is disbursed as follows:
July 1st 2008: 6.0%
July 1st 2009: 5.6%
July 1st 2010: 4.5%
July 1st 2011: 3.4%
Unsubsidized Staffords are no payments while your student is in college, but interest accumulates. The current interest rate for the unsubsidized Stafford is 6.8%.
Both Stafford loans require repayment 6 months after graduation, after leaving school, or after dropping below half-time student status.
The All-Powerful PIN
Filing your FAFSA online is the only way we at CFS would recommend it be done. In order to sign your FAFSA electronically, both the student and one of the parent's need to have a FAFSA PIN (personal identification number). Check out the video below for more information.
You can file for a FAFSA PIN at this website, The PIN Website.
College Selection Help
CFS always recommends applying to 6 to 10 colleges. Here is some more great advice on how to select colleges.
Monday, December 1, 2008
The High School Senior Christmas shopping list
Your student doesn’t want to have money in their name in January when you file their financial aid forms.Students do not have an asset protection allowance.Every dollar they have in their name is going to increase their expected family contribution.
Therefore buy what they need for college in the fall for their Christmas presents, and use their money doing it.
Here is their Holiday shopping list.
The Gizmo’s and Gadget’s
The Computer (let’s start with the really fun one): if your student does not yet have a computer of their own, or the one they do have is outdated; you should certainly consider this as the “A” #1 gift. Consider a multimedia computer with a TV tuner card. You can kill a lot of birds with one stone here. Not only will a multimedia machine act as their computer, but it will also be their TV, their DVD player, their TV recorder, and their stereo. It is truly the Jack of all appliances. And it makes for a great entertainment system for the very few hours they will not spend studying.
A laptop is preferred. There isn't much room in a dorm room, so you don't want to take up precious space with a big desktop unit. Besides, they'll want to be able to take the computer to the library, or class, or home.
If you don’t want to send your student out the door with one do it all machine like above, here are the minimum requirements for a student computer (considering Microsoft Vista is now standard):
vProcessor: AMD Turion, Intel Core Duo (minimum 1ghz speed)
vMemory: at least 1GB (I would recommend 2GB or even 4GB; more memory is often the single most important factor to computer performance)
vHard Drive: at least 100GB
vDisk Drive: DVD+RW
vWireless and wired networking equipped
vOperating system: Windows Vista Home or Apple MAC OS X (ten)
vSoftware: Microsoft Office 2007 Home & Student edition
Standard computers would include:
vDell Studio S1535 (I am on my second Dell laptop and love their customer service)
vHP dv4 (Two of our desktop machines are HP and we’ve had great success with them)
vApple MacBook
More capable multimedia machines would include:
vApple MacBook Pro
vDell XPS
vAlienware Area 51m17x (the gold standard of super horsepower gaming machines)
vHP Pavillion dv7
vAcer Aspire 8920
I’d recommend checking out www.cnet.com for reviews and information on computer comparisons.
The Printer: although many schools and professors are now allowing students to submit papers in electronic format, this is far from being the norm. So, your student is going to need someway to print off that earth-shattering report on Machiavelli. Printers are dirt cheap today compared to what you got yesterday. You can often pick up a good printer/scanner/copier for less than $150 or even $100
Surge protector: protect the investment you just made.
Phone: I grew up in a telephone family -- literally. My family has been in the telephone business since before there was copper wire; so what I am about to say would have been heresy at my family’s Thanksgiving dinner a few years ago. Go get your student a prepaid wireless phone. Don't bother with the hard wired phones anymore.Phones can double as MP3 players as well.
A digital voice recorder for class lectures: skip the old tape recorder -- your student will likely download the recording to their computer anyway.If you bought a good phone, the phone may double for a voice recorder as well.
Digital camera: they’ll want to preserve the rest of their high school year and college.www.cnet.com has excellent reviews of digital cameras.You can get one heck of a good camera for little money these days.
Other appliances:
If you didn’t go the multimedia computer route, then your student is going to want these as well --
·TV – small LCD TV’s are very reasonable now
·DVD player
·Portable Stereo or iPod dock
vCoffee Maker – they can’t be a Starbucks all the time
vMicrowave – if you check out www.sears.com, you’ll find quite a few small microwaves for under $100
vRefrigerator – you can get several dorm-sized refrigerators for under $100 as well
vArt – Most college art isn’t much more than posters on the wall
For around the dorm room
vKitchen type tools: bowl, cup, glasses, can/bottle opener, etc.
vDesk Lamp
vAlarm clock (one with a really loud and annoying alarm -- they'll need it)
vBulletin board and dry-erase calendar board
vA small toolkit (I do not suggest the Craftsman, rolling tool chest; a small bag will do)
The Maximizing Money for College Workshop is upcoming in Rockford, and the Student Goals & Passions Workshop is upcoming in Davenport!
Our next Goals & Passions Workshop will be on Saturday, November 22nd in Davenport at the CFS Building at 3011 N Harrison Street. It will start at 10am and finish at 2:30pm. We'll order in pizza for lunch. Please call our office to make reservations before noon on Friday, November 21st.
There is some great advice available for prospective college students available on the web. Here are two videos I thought were worth you and your student's time. The first video is advice from students for students. The second is... well... umm... be careful what you ask a Ninja.
Dr. Frank Burtnett, veteran counselor and educational consultant, has written extensively on the mistakes made by college-bound students in the exploration, decision-making and application process. Following are the errors that savvy admission professionals tell Frank are commonly made, ones that should be avoided at all cost:
Mistake # 1 - You miss the boat academically
The single most importance factor in gaining admission to the college of one's choice is how well one performs in the most challenging college preparatory curriculum. Simple translation: Take tough subjects---do well in them!
Mistake # 2 - You ignore great resources
In this age of the Internet and the information explosion, too many students still fail to "zero in" on the resources and information that can help them the most. Counselors, librarians and teachers can guide a student toward these resources. Seek their guidance.
Mistake # 3 - You follow the pack
A student should explore colleges, make application and eventually enroll at the college that is best for him or her---not the one that their friends are considering. It's all about comfort and fit and the college you select should be the one that meets the student's personal criteria.
Mistake # 4 - You don't take the college for a test drive
It is amazing how many college-bound students pursue their interest in a college or university without even looking at it "up close and personal."In order to take the pulse of an institution, one needs to go there, sit in on a class or two, eat in the cafeteria, attend a concert or athletic event ---even stay overnight in a dorm room if possible.
Mistake # 5 - You decide there is only one "right" college.
The last time I checked there were more than 3,500 two and four year colleges in the United States. So don't be upset if I don't buy into your idea that there is only "one" right one for you. Create an exploration list, followed by an application list of those schools that match up with your personal criteria. Take the broad view of your options before you begin to narrow your selection. It's amazing what you will learn.
Mistake # 6 - You make price your priority
It's hard to look at colleges and not look at the price tag associated with each, but recognize a couple of things as you do. First, at some institutions upwards of two thirds of enrolled students are using financial aid in order to attend. Also, you don't really know the final cost until you exhaust all of the forms of financial assistance---many of which will bring down the final price.
Mistake # 7 - Your essay or interview "bomb"
If a college asks you to write an essay or sit for an admission interview, they are going to factor what you give them into their admission decision.The key here is to be yourself. Write about a subject that is close to you or you know something about. Be poised and curious in your interview and don't try to give answers you think the interviewer wants to hear.
Mistake # 8 - You let the dog eat your application
Your application and supporting materials are all the admission staff or committee have to examine once the evaluation process begins. The application is your voice. Make certain it is complete, accurate and neatly prepared.
Mistake # 9 - You fail to manage time
The college exploration, decision-making and application process are time consuming and come at a time when you have a lot of work to do in high school and many non-school things (i.e., concerts, athletic events, ski weekends, etc.) that can siphon away your time. Create a list of things that need to be done and a timetable for their accomplishment.Then practice good time management.
Mistake # 10 - You ignore the very allies that can help you
Counselors and college admission and financial aid officers can be your greatest allies during this period. Use them, but remember you are not the only student they are helping. They are very good at what they do and you can benefit from having their expertise and understanding on your side.
If you have conducted a smart search and avoided the mistakes mentioned here, there is a strong likelihood that a letter of acceptance will find its way to your mailbox.
Thank you to NICCP and Dr. Burtnett for this contribution.
Don't miss our upcoming Maximizing Money for College Workshop September 30th and October 2nd in the Quad Cities. The third tenet of saving money on college is wise cash flow management. I have been teaching people about this since I founded CFS in 2001, but I've never been quite satisfied with the results of my analysis. I was always pleased to find those clients for which we could demonstrate a significant cost savings, but I was disappointed when I couldn't help those who were truly in a tight financial situation. I always wanted to be able to do more. Now we can!
CFS has partnered with United First Financial. In August, I was introduced to UFirst by Dr. Jospeh Umidi, my former advisor at Regent University where I completed my MBA and MAT. I immediately recognized the immense power of the UFirst strategies. They were based on the same basic principals I had been recommending to my clients for years, but UFirst has taken the strategies light years beyond what I could have hoped for my clients.
If you have debt, any debt (mortgage loans, home equity loans, car loans, credit cards, student loans, etc.); or if you anticipate using any kind of debt for your student's education, then you need to complete our free analysis. Our first client we ran the numbers for is now in a position where they can pay off the 25 years left on their mortgage, their car loans, and their credit cards in less than five years with no refinancing, no debt consolidation, and no change to their living style and expenses! Now that's powerful!
Go to our UFirst Website and request a free analysis. Or you can contact us directly at our office.
The CFS office will be closed September 1st through the 8th. We'll be back in the office on September 9th.
This Friday, September 29th, is Natalie's last day. I want to thank her very much for the four years she has worked with me. She has been a great blessing to me and our clients. Natalie, God bless you in your future endeavors. ____________________________________
Douglas Christiansen is Vanderbilt University's associate provost for enrollment and dean of admissions. He's spent the last 20 years in admissions leadership roles in both public and private universities. Now he's using his expertise to give students practical advice on what they can do to get into the right college, in hopes of clearing some of the mystery and misconceptions surrounding the admissions process.
In a series of short and direct video clips, Christiansen tackles questions such as, "How should I prepare for my college essay—what if I'm not the greatest writer?" "My parents have decent jobs, but we haven't saved much for college. What are my chances of getting financial aid?" "As an admissions insider, what tips can you give to help me sound my best in my application?"
Christiansen also talks about when extracurricular activities can actually hurt an applicant and how to ease the stress surrounding the admissions process.
It's coming up on college admission time. So you need to start thinking about having your students fill out their admission applications. This is a great time to revisit the pitfalls of the "early decision" and "early action" processes.
Early decision and early action are two very misunderstood policies used by colleges to boost their enrollments as early as possible.
These policies make good business sense for the colleges, but do they make sense for you?Unequivocally, NO... and maybe.
Early decision is a legally binding agreement between a college and the student.The student can apply to as many colleges as he or she desires, but they can only apply to one college under the early decision criteria.Students apply under early decision hoping to have an admission decision from the college of their choice as early as possible.If the student is not admitted to the college under the early decision criteria, that students application most often is not reconsidered during the regular admission process.However, if the student is admitted to the college under the early decision criteria, then you have got a really big problem.
Any student that is admitted to a college under the early decision rules, must go to that college no matter what kind of offer they receive from any other college.In fact, most colleges utilizing early decision require students to immediately withdrawal their applications to all other colleges if they are admitted.This is well before you have seen any kind of financial package from any school.Under early decision, you are required to commit to one and only one college before you have any idea what it will cost you to go to school there.Used car salesmen can only dream of a sales tactic that is so underhanded.
Never under any circumstances agree to early decision.If you do, you will lose all hope of negotiating; and you will lose any flexibility of accepting a better offer from another college, even if it was thousands of dollars more.
Early action is a horse of a different color.Early action operates on essentially the same timetable as early decision, but it does not have the negative effects.There is no legally binding agreement between the student and school under early action criteria.However, you need to review the individual school's early action criteria because some schools may withdrawal their offers for admission if action is not taken.Early action notifies students early in the admissions process whether they have been accepted or not.If they are not accepted under early action, sometimes their applications are moved to the normal admissions process.
In many cases, early action does not have negative impacts, but you should always read the fine print.
The bottom line is never put yourself in a position that you have to make a decision to attend a college before you know what it will cost. Otherwise, you are truly buying the proverbial “pig in a poke”. Always wait for the financial award offers before committing to any college.
In April of this year, I had a mother come to me who was way behind the eight-ball. She was going through a divorce and had not filed any of the financial paperwork for her son. No FAFSA. No Profile. No nothing. Worse yet, her son was a worse case scenario. He wanted to go to Tufts University and Tufts alone. This really gives us no wiggle room to work with.
I made sure she understood that she was in a tough position, but we would do our best to see what we could make of it. She was elated just to find someone who would take the paperwork headache of her shoulders. So we went about getting the FAFSA, the Profile, and the other ancillary forms filed. And Tufts came back expecting her and her son to come up with... over $50,000 each year. Ouch.
I told her we still had the negotiations phase to go through. Now anyone in my position will tell you that negotiating this late in the year is difficult at best. It is normal to get minimal results. Well let me tell you what happened yesterday.
Joan (we'll call her Joan) received the new financial aid award on June 30th. She was in my office on July 1st. As we sat down and looked over the new award summary, it hit me. We had just blown away our previous average improvement for negotiations. For years, I've been proud of our $2,000 average annual improvement during the negotiations phase. Just that phase alone is more than double of our highest service level price. That always assured me that we provide a service that has substantial value. Well, that average is no longer accurate. Sitting with Joan yesterday, we were looking over an annual improvement of... now get this... over $35,000!
$35,000!!! Holy cow!
Folks it just goes to show you; there is no situation that is hopeless. There is no one that we should not at least try to help.
$35,000! That's good.
Click on the image below to check out the invitation to our next Quad City workshops...
We have moved to our new offices at 3011 North Harrison Street in Davenport. It took us a while to get the building ready, but we're very pleased with the work that has been done. We'll be hosting an open-house in the near future, but in the mean time, schedule an appointment and stop by to see us.
With the Democratic nomination coming down to the wire, many people are turning their attention to Pennsylvania. So let's look at two schools from the cradle of our democracy. _______________________
Family Need Met: 78% Avg Free Money: 45% Avg Self-Help: 55%
Founded in 1787 as a small, private school, the Pittsburgh Academy was located in a log cabin near Pittsburgh’s three rivers. In the 220 years since, the University has evolved into an internationally recognized center of learning and research.
Factors like performing arts, museums, sports, healthcare, and safety make Pittsburgh the "second-most attractive college town" in the U.S. among cities of its size, according to a recent survey. Pitt Arts connects our students to the extensive cultural life of the region, providing free admission to many of our neighboring museums and city events.
For more than two centuries, the University of Pennsylvania has been committed to excellence in scholarship, research and service. From its highly regarded undergraduate, graduate and professional schools to its wide-ranging program of interdisciplinary research and scholarship, Penn takes pride in being a place where students and faculty can pursue knowledge without boundaries, a place where theory and practice combine to produce a better understanding of our world and ourselves.
At the University of Pennsylvania, you'll find a historic, Ivy League school with highly selective admissions and a history of innovation in interdisciplinary education and scholarship. You'll also find a picturesque campus amidst a dynamic city and a world-class research institution.
Penn carries on the principles and spirit of its founder, Benjamin Franklin: entrepreneurship, innovation, invention, outreach, and a pragmatic love of knowledge. Franklin's practical outlook has remained a driving force in the university's development.
Now as many of you know, I am not a fan of the "Best" school lists. I think they put way too much emphasis on marketing, and no emphasis on what is the best school for your student. That said, I'm going to discuss a recent article from Business Week magazine. There is something very peculiar about it.
In the February 28th issue of Business Week, the magazine ran an article on the top 50 schools to get a Bachelors degree in Business. The article starts with Rutgers University and finishes with the Wharton School of Business at the University of Pennsylvania. But there are some glaring omissions from this list that everyone would assume would be in the top ten. No where in this list will you find the names of Harvard, Princeton, Yale, or many other excellent schools. Harvard, home of the Harvard Business Review, the gold standard of business case study education did not even make the list?
Does this mean that Harvard, Princeton, and the like have not been putting enough resources into their business schools to compete with schools like the University of Illinois, the University of Texas, or Brigham Young? No, obviously that is not the case. What this article does show is there is no practical standard that anyone can use to come up with a list of the 50 "Best" schools of anything. I will say it once again, the "Best" school lists are not much more than beauty pageants that do little to nothing to help your student find the best school for them. Avoid them.
Weather like what we've been having here in the Midwest makes me think of warmer places. So I'm profiling two schools in Hawaii: The University of Hawaii at Manoa and Hawaii Pacific University. _________________________
Family Need Met: 68% Avg Free Money: 39% Avg Self Help: 61%
Founded in 1907, the University of Hawai`i at Manoa is the flagship campus for the University of Hawai`i System. A land-grant, sea-grant, and space-grant institution, it is the only public university in Hawai`i. UH Manoa is a diverse and doctorate-level university that emphasizes academic quality; research in Hawaiian, Pacific, and Asian studies; and community services.
Founded: 1907
Location: Honolulu, Hawai`i; in the Manoa valley on the island of O`ahu
Campus size: 320 acres
Colleges: 11
Schools: nine
Degrees: bachelor’s degrees in 87 fields; master’s degrees in 87 fields; doctoral degrees in 51 fields
Average class size: 31 (freshman and sophomore)/20 (junior and senior)
Student-faculty ratio: 16:1
Percentage of faculty with doctoral degrees: 80
Accreditation: Accrediting Commission for Senior Colleges and Universities of the Western Association of Schools and Colleges
________________________
Hawaii Pacific University Honolulu, Hawaii www.hpu.edu
COA: $26,740
Family Need Met: 79% Avg Free Money: 40% Avg Self Help: 60% Hawai'i Pacific University is more than an excellent university with outstanding and rigorous academic programs, an ideal location, faculty who are well-respected in their fields, students from all over the world who come to learn in a multicultural environment, and a service orientation emphasizing individualized attention to each student. It is also a comprehensive university offering a number of unique experiences, events, and traditions for its students, faculty, and staff as well as the community.
_______________________
A recent issue of US News and World Report contained an enlightening article on the college financial aid system. Two Harvard University economists have completed a thorough study of the FAFSA process. Not surprisingly, they concluded that the FAFSA on average takes ten times longer to complete than what the schools and Department of Education claim.
Because of weather, the January 29th workshop at the Moline Public Library in Moline, IL has been rescheduled twice. We will be having the workshop on Tuesday February, 12th at 7pm. It is still at the Moline Public Library. Thank you to the staff over there for being so flexible.
In this months issue:
What to consider when you are thinking about borrowing money from your 401k to pay for your student's college education. 401k loans are very different animals when compared to your home loans, credit cards, auto loans, and education loans.
Webinars will soon be provided by College Financial Strategies.
Just for grins... my favorite picks of the SuperBowl commercials.
Does it make sense to borrow from your 401k to pay for college?
This is a common question I receive. My standard answer is "no". Here's why...
Your student has much more time to prepare for their retirement, than you have to prepare for your's. I know we all want to provide our students with the best possible opportunities, but bankrupting your retirement is not the way to do it. Don't worry, your student will have over 40 years of time to pay off their education and save for their retirement. How much time do you have as their parent? 20 years? Maybe?
The costs of borrowing out of your 401k are much greater than the interest rates. You also have the opportunity costs of your missing returns.
Depending upon what the interest rates and administrative costs are on your 401k loan, you could be looking at some very substantial losses when borrowing. The cumulative impact is much more than what you would have with more traditional types of financing such as home equity or education loans.
Webinars Coming Soon!
Keep watching CFStrategies.com. We will be announcing soon about our new Webinar schedule. This will allow us to better serve people all across the country. Our first webinars will be our Money and College presentation, and the new Student's Goal & Passions Workshop.
Just for Grins...
Ok, just for the heck of it. Last Sunday was the Superbowl. It was one heck of a game. This was one of the few years I had just as much fun watching the football as I did the commercials. That said, here are my favorite commercials.
Diet Pepsi Max...
Bridgestone tires...
SOBE...
And Audi pays homage to The Godfather...
I just get a kick out of those.
We're splitting up the newsletter. Look for the College Profiles mid-month.
CFS is a comprehensive, financial consultant that specializes in preparing families of high school students for what is often the single most expensive endeavor they will undertake… their children’s college educations.
College Financial Strategies was founded in 2001 by Scott Anderson. Scott was trained by a Fortune 500 company in the world of financial planning. He has a Masters in Business Administration, a Masters in Theology, and a Bachelors in Aviation Management. Scott is an author and has written several books and reports on the subject of college funding including STOP! Everything You Thought You Knew About Paying for College Is Wrong! He has instructed guidance counselors and teachers in the art of college funding.
