Special Bulletin: Tuesday is May 1 — A Key Deadline for Most Prospective Freshmen!

May 1 is probably a big day for your high school senior. Most likely it’s the deadline by which the colleges and universities in which he’s interested require him to accept their one of their admission offers. And many if not most of these institutions also IMG_2075require other things of him by this date. Among these:

  • Payment of a non-refundable enrollment deposit: If this deposit isn’t paid by May 1, he’ll lose his place in this coming fall’s entering freshman class. He may be able to get a place on his selected school’s waiting list, but there’ll be no assurance that he’ll be permitted to enroll in its fall classes.
  • Payment of a housing deposit: This deposit is probably non-refundable, too. Paying it by May 1 or whatever other deadline the institution has established is necessary to ensure that he’ll have a place to live in on-campus housing when he arrives at school.
  • Acceptance of financial aid offered by the institution: This offer will most likely be cancelled if it isn’t accepted by May 1 or, again, any later deadline your student’s Been given. And while any Federal Pell Grant or Federal Direct Student Loan that gets cancelled can be reinstated later, other aid he was offered probably cannot.

If your high school senior’s already selected the college he wants to attend, and if all the steps described above have been completed, congratulations!

But if you aren’t sure whether or how your student’s selected college is applying a May 1 deadline to him, contact the school right away to find out. And if May 1 is his deadline for anything, be sure all that needs to be done is done. Failing to do so by midnight on May 1 can really foul up college plans!

Contact College Affordability Solutions at (512) 366-5354 or collegeafford@gmail.com for a free consultation if you need assistance on any aspect of financing postsecondary study.

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During College: Advise Your Student to Avoid Dropping Courses, Especially Late In The Term!

The end of another academic term is approaching, and students struggling with courses are no doubt assessing their options. Should they drop these courses? IMG_1947Probably not.

Dropping now is a bad idea for several reasons:

  • Students who drop courses late in a term usually receive little or no refund of tuition and fees paid for the courses. So they get no return on the money they invested, and repeated drops can force them to enroll for one or more additional terms, costing them thousands in extra tuition, fees, and other costs of attendance.
  • If dropped courses are necessary to satisfy academic requirements — either in the “core” curriculum or to fulfill the demands of a student’s major — the student will eventually have to retake them or similar courses. Result? The student pays twice to complete requirements once.
  • Dropping courses can also jeopardize financial aid eligibility. To get federal aid, Washington requires a student to meet institutional standards for Satisfactory Academic Progress (SAP) toward graduation. These standards — usually postedIMG_1948 on financial aid office websites — obligate the student to successfully complete a certain percentage of the courses in which she enrolls. Many scholarship providers, schools, and states apply similar requirements for their aid programs. But if dropping would put a student below these percentages, she could lose future financial aid.

Because of all this, students should avoid the temptation to drop in order to avert grades that are good but, for whatever reasons, aren’t considered good enough. Some students, for example, can’t tolerate anything less than an A for reasons of personal pride. Others may worry that Bs or Cs will ruin their graduate or professional school applications.

Is there ever a time when a student should consider dropping a course? Yes. SAP also requires at least a 2.0 undergraduate Grade Point Average (GPA), and most institutions have minimum GPAs that students must remain at or above in order to remain enrolled. If a student is certain her final grade in a course will put her below these minimums, dropping may be her best option.

Students may appeal lost aid if they fail to maintain SAP. These appeal processes are usually described on aid office websites. Successful appeals generally (a) document extraordinary circumstances (e.g. illness or family emergency) that undermined academic performance and (b) describe steps the student has taken to overcome these circumstances.

IMG_1949Instead of dropping, it’s usually better to seek academic assistance — and to do so ASAP. Visit with the instructor, get a tutor, join a study group, consult an academic advisor or campus counselor, etc. These actions can go a long way toward avoiding all the costly negatives stemming from a dropped course!

 

Got questions about how to avoid making college attendance more expensive than it needs to be? Contact College Affordability Solutions for a free consultation at (512) 366-5354 or https://collegeafford.com.

During College: You Should Be Protesting If Your Student’s Not Detesting Cryptocurrency Investing!

It’s bad enough that 75% of college students gamble. But now another perilous student behavior has emerged. A recent survey by The Student Loan Report indicates that 21% of student borrowers invest in cryptocurrencies such as Bitcoin.IMG_1834

As a responsible parent you of course advise your student not to gamble. But also urge him to stay away from cryptocurrency investments!

Unfortunately, these investments are easy to make. After loan and other aid money pays tuition and fees for an academic term, your student gets the remainder to cover that term’s books and other necessary expenses. Now he could have up to a few thousand dollars in hand.

He can invest these funds — hopefully in a safe and secure bank account, but also in high-risk opportunities such as cryptocurrencies. Wherever he invests, he’ll still need to pay for necessities like books, housing, and food as the term progresses.

IMG_1779What makes cryptocurrencies so dicey for college students? It’s what investment professionals call “volatility.” Cryptocurrencies can become really volatile really fast!

For example, Bitcoin’s value on January 10 was $14,890.72. But by February 5 it’s value dropped to $6,914.26 — a 54% loss! So if your student bought a $2,000 share in Bitcoin on January 10 and sold this share just 25 days later, he lost $1,080 of his investment! Meanwhile, thousands in costs for the term remain to be paid.

Some call Bitcoin the potentially biggest “bubble” in history. A $1,080 loss from his IMG_1782limited pool of funds could easily place your child among the 52% of college students facing high levels of food insecurity, or the 12% college students who are homeless.

Difficulty paying for basic needs undermines academic performance, and money shortages have long been among the most common reasons why students leave college without degrees, so cryptocurrency financial losses could also end up placing your student among the 25% who drop out every year.

Far better for your student to spend as conservatively as possible and, toward the end of the term, if he has money he doesn’t need, return it to the government. For every $100 of his spring Federal Direct Unsubsidized Loan he returns within 120 days of its disbursement, Washington will immediately cancel all fees and interest applicable to that $100. The result is that for every $100 he returns, the total amount he’ll ultimately repay on this loan will be cut by up to $191!

There’s an old saying, “Never gamble unless you can afford to lose the money.” If your student needs loans and/or other financial aid to help pay for college, he certainly cannot afford to lose money on erratic investments such as cryptocurrencies!

College Affordability Solutions has 40 years of experience in counseling students and parents on ways to manage their dollars for college. Call (512) 366-5354 or email collegeafford@gmail.com for a no-cost consultation.

Before and During College: Games the Government Plays — Federal TEACH Grants

Maybe your high school senior is planning to be a teacher, or your college student’s already an education major. Her 2018-19 financial aid offer may include a Federal TEACH Grant. If so, she needs to be extremely careful about that grant!

IMG_1648TEACH Grants aren’t grants at all. Financial aid pros call them “groans” — grants that all-too easily turns into loans.

TEACH Grant Basics

TEACH Grants provide up to $4,000 per academic year. Their eligibility requirements include financial need and:

Teachers must submit forms for each year they plan to fulfill TEACH Grant service requirements in low-income schools, then submit proof they completed those requirements — all to FedLoans, a private company hired to administer TEACH Grants.

The Risk

If your student fails to timely document four years of required service within eight years of leaving the major for which she got a TEACH Grant, her grant will turn into a Federal Direct Unsubsidized Loan. Interest then gets charged going back to the dates her TEACH Grant was disbursed. For example, if a $4,000 TEACH Grant received eight years ago converted to an unsubsidized loan today, your student could end up repaying $9,360 in principal and interest.

So it’ll be quite costly if your student receives a TEACH Grant but then moves to IMG_1651another major (80% of all students change majors), doesn’t teach, or teaches in a school or subject that doesn’t fulfill TEACH Grant service requirements. Small wonder a recent U.S. Department of Education study shows that 63% of TEACH Grants have been converted to unsubsidized loans.

Compounding the Risk

Some teachers also allege their TEACH Grants were falsely turned into loans due to minor paperwork errors or FedLoans losing their documents.

IMG_1658The situation’s so bad that at least one state’s Attorney General is trying to sue FedLoans for “callous disregard” of ex-students’ needs. But the current Secretary of Education is protecting FedLoans by asserting that it’s immune from state consumer protection lawsuits as a federal contractor. Ultimately, the courts will have to resolve this matter.

A Bad Deal!

If your student’s awarded a TEACH Grant, suggest she request other grants instead. If she must take the TEACH Grant, stress the importance of completing its service requirements and carefully documenting everything she does to provide FedLoans with proof that she fulfilled them. Even then, that TEACH Grant may still be a bad deal!

Need help deciphering financial aid offers? Contact College Affordability Solutions at (512) 366-5354 or collegeafford@gmail.com for a no-cost consultation!

Before College: Games Colleges Play — Deposit Deadlines

By now, your high school senior probably has 2018-19 admission offers. If so, a key deadline is coming. If any colleges impose earlier deadlines, they’re likely being unethical.

IMG_1518Most prospective freshmen must pay non-refundable deposits to secure enrollment, on-campus housing, and even places in summer orientation/registration sessions at their colleges of choice by May 1. Often, that’s also the last day for them to accept financial aid offered by those schools.

The May 1 deadline is specified on pages 5-6 of the National Association of College Admission Counseling’s (NACAC’s) professional code of ethics. All NACAC-member schools — including most 2 and 4-year nonprofit and public colleges and universities — agree to use it.

Why one national deadline? Most 17-18 year olds (and their families) require time to evaluate their college options — to figure out which institutions are good “fits” for them; confirm their tuition and fees and other costs of attendance at these institutions; and to assess how much their financial aid offers, most of which arrive in late March or early April, will discount their costs.

Put another way, if colleges could set their own deadlines, some would lock prospective low and middle-income students in or out with exorbitant, non-refundable deposits that come due well before students and parents are ready to make careful, well-informed enrollment choices.

Most NACAC schools take the May 1 deadline very seriously and seldom, if ever, IMG_1519violate it. But if one does try to force your student into paying a non-refundable deposit payment before May 1, here’s what to do:

  1. Search NACAC’s membership directory to make sure the school’s in NACAC.
  2. If it is, contact it’s admissions director and president. Demand it hold to the May 1 deadline.
  3. File a complaint with NACAC (see pages 13-15 of NACAC’s professional code of ethics) if necessary.

NACAC permits two exceptions to May 1. One is for Early Decision admission programs (see page 6 of NACAC’s code); the other applies to refundable deposits at colleges lacking the capacity to house all their freshmen on-campus (NACAC code, page 7).

Otherwise, any NACAC-member school trying to rush your student into a pre-May 1 deposit payment is being unethical. So think carefully — do you trust such an institution to take care of your student for the next 4 years?

College Affordability Solutions provides guidance at no charge on ways to make higher learning less expensive. Call (512) 417-7660 or email collegeafford@gmail.com if you have questions.