Before College: Beef Up Math, Reading, and Writing Skills Now To Help Your Children Win Scholarships Later

Scholarships! Free money! No repayment, no interest accumulation, and students don’t work to receive their proceeds. So they’re the best way to pay postsecondary educational expenses. From birth through high school, parents can play a role in improving scholarship chances for their children when the college years arrive. Here are three major ways . . .

Boost Mathematical Skills

Math is essential in modern life. Applied fields like computer science, engineering, and information technology depend on it. All the physical sciences use it. Research and analysis that increases knowledge in the social sciences rely on it, too.

Not surprisingly, there are many scholarships for students who do well in STEM (Science, Technology, Engineering, and Mathematics) fields. Strong math scores on standardized tests and high school GPAs featuring solid math grades also help students win other, more general scholarships.

Your children don’t need expensive math camps. The Michigan State University Extension Service provides guidance on how parents can help young children grasp mathematical basics that’ll make them better with more complex math problems later. And the National PTA offers a series of Parents’ Guides to Student Success, each of which provides pointers on things students need to excel in math and other subjects during grades K-8 and high school.

Enhance Reading Ability

Lots of reading when children are young often turns them into good writers. And since many scholarship selection committees use essays to help them make decisions, reading to your very young children, and encouraging them to do their own reading as they grow, can pay off in the postsecondary years.

Top-notch scholarship essays authentically, clearly, compellingly, and succinctly reveal personal experiences and how they’ve influenced applicants. Stories that are autobiographical, biographical, or about real-life happenings — from historical incidents to contemporary sporting events — tend to have these elements.

Children who listen to and read good writing as they grow tend to have stronger vocabularies. Typically, they’re also better at framing the cohesive, descriptive phrases needed for strong scholarship essays.

Strengthen Writing Proficiency

Reading alone doesn’t fully prepare students to write effective scholarship essays. Writing is a process and, like any process, it gets better with practice.

Writing for scholarships is similar to writing for other purposes, so preparing to write scholarship essays can also help produce winning admissions essays and term papers.

Grammarly recommends five steps to practice for writing scholarship essays. They’re useful regardless of writing style, and they can be practiced in many settings — school classes and newspapers, debate and speech teams, writing camps and workshops, etc. But they can also be developed informally, at home, with family.

Collaborate with school teachers to coordinate activities that’ll build up math, reading, and writing skills for your children. This’ll make them stronger scholarship candidates. And it’ll also enhance college admission and job opportunities. In short, it’s a way amplify lifelong chances for multiple successes!

We’ll publish another article on strategies for your Pre-College Finance Plan right here every Wednesday through December. So follow this website to learn more about these strategies!

Before College: It’s Never Too Early to Start Investing and Saving for Postsecondary Education

With a year at the average in-state college costing 41% of median household income, most Americans don’t earn enough to pay for postsecondary learning from their monthly paychecks. But as master-investor Warren Buffett says, “Never depend on a single income, make an investment to create a second source.”

Postsecondary costs increase every year, so start investing as soon as possible. The longer your money’s invested, the greater it’s future value can be thanks to dividend and interest earnings.

Even if you could only invest $100/month at 1% interest beginning when your child’s born, you’ll have over $27,000 for college when that child turns 18. Unless you have big dollars to invest and save, your accounts won’t pay all postsecondary expenses, but they’ll reduce what you and your child need to borrow for those expenses.

There are several postsecondary saving and investing options. Here are some of the more popular:

  • 529 Plans: All states offer tax advantaged savings or prepaid tuition programs so parents, grandparents, others can help designated “beneficiaries” pay their educational expenses. Look here for more information.
  • Bonds, Stocks, and Mutual Funds: Most people use professionally managed mutual funds to invest in bonds and the stock market. Prospectuses are available on these products to disclose key details about them. Read these carefully before investing.
  • Certificates of Deposit: CDs and their fixed rates of return are federally insured and so very safe. But returns are low, and taxed like other income, and there are penalties if you withdraw funds early.
  • Coverdell Education Savings Accounts: Coverdell ESAs are open to those with Modified Adjusted Gross Incomes (MAGIs) below $110,000 ($220,000 if married filing jointly). Money in them grows tax free and can pay $2,000 per year of each designated beneficiary’s Qualified Education Expenses.
  • Education Savings Bonds: Series EE savings bonds are safe, reliable, and government backed. They can be bought for $25 to $10,000. Their rates of return are very low, but the interest they earn is tax-free for investors with MAGIs below $99,250 ($146,300 if married filing jointly).
  • Savings Accounts: Regular savings accounts are federally insured up to $250,000 so they’re incredibly safe. Interest earnings are low, fixed, and taxed. But with no withdrawal penalties, the money’s available whenever needed.
  • Roth IRAs: The up to $6,000 or $7,000 per year you put into a Roth IRA is taxable, but the money you take out isn’t as long as it’s been there five or more years and you’re at least 59.5 years old or you use it to pay you or your dependents’ tuition, fees, books, and educational equipment.

Will investing cause your student to lose out on financial aid? Maybe. But student grants cover just 10% of college expenses, with family income, savings, and student loans paying the rest. And investments hurt aid eligibility far less than earned income during the postsecondary years.

Don’t use money you need for basic necessities, emergencies, retiring high-interest credit card debts, or retirement to invest for college. But see your banker or a financial advisor about how to invest as much as possible today and minimize postsecondary debt tomorrow.

Investing and saving is important, but it’s just one of several strategies for your Pre-College Finance Plan that we’ll cover this fall. Become a follower of this website to access an article on new strategies every Wednesday between now and mid-December!

Before College: Strategies for Your Pre-College Finance Plan

We’ve described affordability crisis in postsecondary education. Simply put — there’s not enough money for low and middle-income Americans to pay the exploding price of education after high school.

But don’t give up! Whether you want your child to college or hope to go there yourself, you can make it more affordable with an effective plan for keeping such learning within your means — a Pre-College Finance Plan.

A Pre-College Finance Plan includes strategies you select and implement to maximize your financial resources for postsecondary learning and to reduce your postsecondary costs. Begin your plan as soon as possible, because some of these strategies are very time sensitive. But if you don’t yet have a Pre-College Finance Plan remember, it’s never too late start one.

Here’s a breakdown of possible strategies for this plan. They’re divided by the four phases in the 18 – 19 year lifespan of one who begins postsecondary study within a year of finishing high school. But even if those aren’t your circumstances, many of the can still help you.

Birth – Elementary School

  • Invest and Save: The earlier you start, the better, even if you don’t have much to put away.
  • Promote Math, Reading, and Writing: These can help children capture scholarships later.
  • Teach Money Basics: Educating little ones on money basics now can help them handle it wisely in college.

Middle School

  • Identify General Career Directions: It’s too early to decide if children should study brain surgery, but not to early to recognize their interest in, say, health care or the sciences. This’ll help cut college expenses in many ways.
  • Start Enhancing Online Skills: Even after COVID-19, web-based communication and research will be increasingly critical in navigating America’s education and scholarship systems.

High School Years 1 – 3

  • AP and Dual Credit Courses: Students can generate big savings by taking college-level courses in high school, then transferring those credits to quicken postsecondary completion.
  • Community and Extracurricular Activities: These helps make students stronger scholarship candidates.
  • Scholarship Search: Start this in the spring of junior year.
  • Summer and Part-Time Work: Student employment can generate significant savings and other postsecondary financial resources.
  • Political Activism: Work in your own, and your country’s, interests by pushing to make federal and state financial aid programs better serve needy students.

High School Senior Year

  • Dates and Deadlines: They make a big difference in whether students get grants and scholarships.
  • Rip-Offs and Scams: Beware of crooks as you seek and apply for financial aid, and understand games postsecondary schools play in disclosing their costs and scholarships.
  • Comparative Shopping: Select schools that are good fits, but don’t shun community colleges as a place to start. Be careful about high-priced private and out-of-state public colleges. Avoid profit-driven schools.
  • Year One Preparation: Help students prepare to live frugally and independently — e.g. to manage money, do laundry, cook meals (if they’re not living on-campus or at home), etc. You’d be surprised how much can be saved.

College Affordability Solutions will post an article about each of these strategies every Wednesday for the next 15 weeks. So become a follower of this website to make sure you get the latest!

Before College: Don’t Delay or Pause Postsecondary Enrollment! Take Classes Now and Make as Much Progress as You Can!

Forty percent of academic year 2020-21’s admitted freshmen recently told surveyors they’re likely/highly likely to skip college this fall. And 28% of other students indicated they’d do the same. But unless college enrollment is absolutely impossible this year, make not delaying progress on your education part of your Pre-College Finance Plan.

You have good reasons to be reluctant about enrolling. Will you be safe from COVID-19 on campus? Will fellow students may behave in ways that spread it? Will online classes be worth the tuition and fees you pay for them, especially as some schools hit you with extra fees for providing those classes.

Even so, to keep college affordable, you’d be smart to make as much progress toward your degree or certificate as soon as you can, because your out-of-pocket (net) costs of attending a postsecondary school are likely to accelerate over the next several years.

Closing campuses, moving to online classes, and cancelling intercollegiate athletics are certainly the right things to do from a public health standpoint, but they’re also generating significant institutional revenue losses. Some school endowments can offset these losses. Most can’t. And since at least 35 states have already revised their 2021 revenue estimates downward, they’re unlikely to increase postsecondary appropriations. Result? In future years, tuition and fees will likely rise faster than their 5% per year jump over the last decade.

And during the next several years, cash-strapped states will find it difficult to impossible to keep their grants, scholarships, and work-study programs at current levels. This will accelerate net cost increases for students.

Speaking of scholarships, if you’ve been awarded one for 2020-21, you may not be able to keep it if you delay college until January or next academic year.

Must you borrow? The Federal Direct Loan Program’s (FDLP’s) interest rates are 0% through December 31. Thereafter, interest on FDLP loans for 2020-21 undergraduates will be 2.75% — the lowest ever. All of this’ll save you money when you start repaying your loans. But those 0% rates end on January 1, and for each academic year FDLP rates are set anew, so FDLP interest on future year loans will surely cost you more.

You may get housing and food refunds if campus closure makes living in a residence hall impossible for 2020-21, but your chances of getting such refunds are quite slim if you voluntarily give up dorm space that your school held for you.

If this fall’s only option is online courses, you can still get a lot out of those courses by really investing yourself in them. If you conclude that online credit hours won’t be worth the costs, go take transferable courses at a nearby community college. This can help you reduce how long you need to pay for school once your campus reopens.

With a future of fast-rising costs and financial aid uncertainty, make as much academic progress as you can as soon as you can. The savings will be worth it!

Are you scheduled to start your postsecondary education after this academic year? if you follow this website this fall at https://collegeafford.com, we’ll help you gather ideas for a Pre-College Finance Plan that’ll help you keep that education as affordable as possible when your day comes.

Special COVID-19 Bulletin #14: Your New 3-Month Payment Suspension — Will It Count Toward Income-Driven and Public Service Loan Forgiveness?

Hopefully you already know that the U.S. Education Department (ED) has extended two forms of COVID-19 relief on your federally held student loans — interest on those loans will continue to be 0%, and monthly payments you would otherwise owe have been automatically suspended. Both have been extended from September 30 through December 31.

While you’re not making monthly payments on these loans, will you still be able to count October, November, and December toward time-based loan forgiveness options for them? Yes, they will!

The forgiveness options to which we’re referring go into effect after:

Do you have “federally held student loans?” Yes, if ED made them to you under the Federal Direct Loan Program, of if their ownership was transferred to ED by commercial lenders that made them under the old Federal Family Education Loan Program or by your college under the old Federal Perkins Loan Program.

This extension prolongs identical forgiveness provisions established by Congress for March 13 through September 30 under last March’s CARES Act. According to Forbes Money Advisor, it was announced at a recent press conference by ED Secretary Betsy DeVos.

If you want the latest on postsecondary educational affordability, including but not limited to student loans, be sure to follow this website.

Special COVID-19 Bulletin #13: Federal Student Loan Relief Extended Through End of 2020

As we reported, the president signed an August 8 executive memo ordering the U.S. Education Department (ED) to do things regarding the requirements and conditions to continue temporary payment cessation and interest waivers on certain federal student loans. Unfortunately, nobody quite knew what this meant. But we now have the answer.

ED has announced that all borrowers with federally held student loans will have required payments automatically suspended until calendar year 2021, and that the interest rate on federally held students loans will continue to be set at 0% until that time. Collections on defaulted federally held student loans also remain halted until the new year begins.

The term “federally held student loans” means loans made under the:

  • Federal Direct Loan Program;

  • Old Federal Family Education Loan Program (FFELP) that were made by commercial lenders, but only if those lenders have turned those loans over to ED; and

  • Old Federal Perkins Loan Program that were made by postsecondary schools, but only if those schools have turned those loans over to ED.

Are you still repaying a FFELP or Federal Perkins Loan that hasn’t been turned over to ED? And what if you’re repaying a private student loan? Sorry. You get no payment suspension or 0% interest rate.

But if you do have a federally held student loan and you wish to make one or more payments on it during the rest of 2020, you’re welcome to do so.

Democrats in Congress wanted to extend payment suspensions and 0% interest on federally held student loans for another year — through September 30, 2021. They also wanted to expand those suspensions and that interest rate to all student loans, even private and other federal student loans not federally held. However, congressional Republicans refused to agree. So, in the absence of any new law, this executive action is a relief measure for Americans struggling due to the COVID-19 pandemic.

Should changes occur on any of this, we will post another article about it.

Follow the College Affordability Solutions website to get the latest news on developments related to your efforts to control and pay postsecondary educational costs.

Before College: America’s Postsecondary Affordability Crisis

You may wonder if education after high school is worth what you pay for it. And you have good reasons for doing so, because postsecondary educational costs are way too high.

In academic year 2018-19* U.S. Median Household Income (MHI) was $63,179. Here’s the share of that needed to cover the average full-time student’s budget at various types of postsecondary schools:

The result is that, without considerable financial aid, postsecondary studies are simply unaffordable for low and even many middle-income students. But such assistance is woefully inadequate these days.

Federal Pell Grants are the nation’s single largest source of student grant and scholarship funds. But inadequate appropriations limit them to the lowest-income undergraduates. And even then, Pell Grants averaged only $4,160 in 2018-19 — just 8% to 23% of what students budget for their expenses.

Loans are by far the largest source of student financial aid, and 65% of the Class of 2018* who earned bachelor’s degrees did so after borrowing an average of $29,200 — swelling their lifetime costs for postsecondary learning by as much as $5,230 even at today’s low interest rates.

Not surprisingly, postsecondary attendance has declined significantly. Since fall 2010, when 20.1 million Americans were attending colleges, universities, and trade and technical schools, there’s been a net enrollment decline of 14%. So even before the spring 2020* COVID-19 pandemic, fewer than 17.2 million Americans were at such institutions.

That’s bad news, because in the 21st century’s knowledge-based, high-skill economy, Americans without postsecondary degrees and certificates are increasingly limited to shrinking numbers of lower-paying and less-healthy jobs.

For example, in 2017, the median lifetime earnings of bachelor’s degree holders was $1.2 million — twice that of high school graduates. And in 2019* the unemployment rate among those with bachelor’s degrees was 2.2%, considerably less than the 4.1% unemployment rate for high school graduates. Moreover, during the current pandemic, those least likely to suffer layoffs and/or contract COVID-19 are those working online from home — and they’re mostly college graduates.

Absent big changes, student costs will continue to rise and government appropriations for limiting those costs are unlikely to keep pace. So education after high school will become even more unaffordable, and student debt will keep increasing.

But if you hope to one day be a postsecondary student, or postsecondary parent, there’s a way to help offset these problems, even if you’re not rich. It involves designing and living within a “Pre-College Finance Plan.” We’ll discuss strategies for such a plan right here every Wednesday for the next four months.

So don’t miss a single one of the Pre-College Finance Plan elements we’ll be covering this fall!

* Most recent data available.

It’s never too early or too late to put together your Pre-College Finance Plan! Become a follower of this website now to make sure you receive every article we publish on such plans!

Special COVID-19 Bulletin #12: Key Questions Unanswered by President’s Guidance on Student Loan Relief Extension

This past Saturday, to great fanfare from the White House, President Trump signed some executive memos he said will provide extended economic relief to Americans in the midst of the COVID-19 pandemic. One of these documents related to student loans. The problem is that it’s impossible to know whether you as a borrower will get extended relief and what that relief will be.

The CARES Act Congress passed in March automatically waived interest charges and automatically suspended monthly payments on all student loans you owe to ED. This waiver and suspension lasts from March 13 through September 30. It also required ED to count March 13 through September 30 toward the number of months required for you to qualify for Public Service Loan Forgiveness (PSLF) if you’re a public and private nonprofit employee that would have been obligated to make payments.

Democrats in Congress wanted to extend your waivers and suspensions for another year — through September 30, 2021 — on student loans owned by ED and other parties. But congressional Republicans refused to agree, so Trump’s memo is supposed to substitute for additional changes in federal law. However, the memo directs ED only to waive or modify “the requirements and conditions of economic hardship deferments . . . and provide such deferments to borrowers as necessary to continue the temporary cessation of payments and the waiver of all interest. . . .”

Here’s what’s not clear:

  • Will you get an automatic extension or need to apply for an extension and meet rules set up by ED?

  • Will the months to which your extension applies count toward the number of months you need to qualify for PSLF?
  • Will wage garnishment will resume against you if you defaulted on your ED-owned student loan debt?

What is clear is that, whatever ED does, it will:

  • Last only from October 1 through December 31, 2020 — nine months before what would have been the new end of the extension period Democrats wanted.
  • Apply only to your student loans owed by ED — mostly loans made under the Federal Direct Loan Program.
  • Not apply to your private student loans, or your loans from private lenders under the now-defunct Federal Family Education Loan Program, or loans you got from postsecondary schools under the Federal Perkins Loans that closed down in 2018.

Stay tuned! We’ll post clarifying information on this website if and when it becomes available from ED.

College Affordability Solutions offers 42 years experience to help you understand how to best manage and repay your student loan debt, and we never charge borrowers for our services. To arrange a consultation, contact us at (512) 366-5354 or collegeafford@gmail.com.

Let College Affordability Solutions Help You This Summer!

College Affordability Solutions is taking a bit of a break from writing it’s regular Wednesday morning blogs right now but, absent the emergence of a critically issue that needs to be rapidly addressed, we’ll start publishing them again on this website beginning August 19.

Meanwhile, our Topical Index has links to more than 100 articles on strategies for keeping the costs of a quality postsecondary education within your means. These include approaches you can implement before, during, and after college. Please feel free to review these articles for college affordability plans that’ll work for you.

And just because we’re taking a little break from writing doesn’t mean we’re unavailable to you right now. Remember, we never charge any students or their parents for consulting with them. So to schedule your consultation now, call us at (512) 366-5354 or email us at collegeafford.gmail.com. If we’re not immediately available, we’ll get back to you as soon as possible to set up a time to talk.

Remember, despite the current public health emergency and economic crisis, you and your loved ones need all the education possible to prosper in and contribute to the knowledge-based 21st century. Let College Affordability Solutions help. Have a safe and healthy summer!

Before, During, and After College: Know Where the 2020 Candidates Stand on Student Loans!

Are you one of the 42.6 million Americans owing over $1.5 billing in federal student loans? Is there a chance you’ll need to join these ranks in the next few years because you need to borrow such loans for your postsecondary education? If so, understand that November’s “election may be the most consequential election in history for student loan borrowers.” But don’t take our word for it. Read this article from Forbes Senior Contributor Adam Minsky:

For Student Loan Borrowers, The 2020 Election Has Unprecedented Implications

Minsky is correct — federal student debt is today’s biggest college affordability issue, and much is riding on the outcomes of this year’s election for what you have or will borrow from your government. So you need to know where the candidates for President, the U.S. Senate, and the U.S. House of Representatives stand on issues of postsecondary debt.

How do you find a candidate’s positions? A good place to look is the candidate’s campaign website. It’ll probably have an “issues” link to the candidate’s positions on different matters, hopefully including student loans. So, first, Google the candidate by name.

If the campaign website doesn’t address student loans, look at the candidate’s official government website if he or she’s an incumbent. You can find the White House website here, your Senator’s website here, and the website for your current Representative in the House here.

Still can’t find anything on student loans? Send the candidate an email or call the candidate’s office, whether it’s the official government office of an incumbent or the campaign office of a challenger. The same websites you use to research their positions should also have their email addresses and phone numbers.

Make sure you’re registered to vote, and vote in the November 3 election. But do so after you study up! There’s so much going on in this country right now, and it’s OK if you don’t want to select the candidates for which you’ll vote based solely on student loan issues. Still, you have every right as an American to support candidates who’ll work in your best interests. Exercise that right!

College Affordability Solutions will return to its regular, every Wednesday publishing schedule again on August 19. But if you need information or guidance on an issue related to paying less for high-quality postsecondary learning, feel to contact us at (512) 366-5364 or collegeafford@gmail.com. And remember, we never charge future, current, or past students — or their parents — for consultations.