Before, During, and After College: You Need a Plan!

About 4 million babies will be born in the U.S. this year. Naturally, their parents want each of them to enjoy the American dream. Now, more than ever, that dream includes, even depends on a good education beyond high school.

But the dream is unraveling. It’s coming undone as the rising cost of college outpaces all but the wealthiest families’ ability to pay for it.

In 1998, the total cost of a year at a state college or university averaged $10,458. That was 27% of IMG_9377U.S. median household income. Eighteen years later this cost was $24,610, or 42% of median household income. At this rate, freshman year public college expenses for 2017’s newborns will average $33,224 — an astounding 56% of median household income.

Small wonder educational debt for recent college graduates averaged $34,000, or that 44 million Americans owe $1.4 trillion in such debt. Nor is it surprising that, in 2015, there were a million fewer students in college than in 2010; the first ever 5-year drop in our nation’s college enrollment.

How to ensure your child can afford college when he or she is ready to attend? It won’t be simple, and it won’t be easy. But a College Finance Plan (CFP) can help.

A CFP is like a mortgage — a decades-long undertaking. You (the parent) and your student (son or daughter) are its key players. It involves nothing exotic or fancy; just strategies to be adopted before, during, and after actual college enrollment. You’ll want to start implementing these strategies as early as you can, and stick to them.

A CFP won’t make college free, or even inexpensive. But collectively, its strategies can help make college costs more manageable so your student can access the best possible postsecondary education.

Want a quick look at strategies you should consider for the “Before College” phase? See Before College: Strategies for Your College Finance Plan. A review of “During College” strategies will be posted on this website October 2, and “After College” strategies will be outlined here October 9. IMG_9373You’ll also find more in-depth discussions of individual strategies here through the end of academic year 2017-18.

No matter where you and your student are in the college-going process, itake concrete steps to keep the cost of a postsecondary degree within your means. Start building your CFP now!

Got questions about college costs and how to deal with them? Contact College Affordability Solutions at (512) 366-5354 or for help at no charge.

Special Bulletin: IRS Data Retrieval Tool Back On-Line for Income-Driven Repayment Applications

Good news! The IRS Data Retrieval Tool (DRT) is once again operable for federal student loan borrowers requesting Income-Driven Repayment (IDR) plans.

When such borrowers apply for IDR plans on their federal student loans, they must provide information to the U.S. Department of Education data from their recent tax returns. The DRT the easiest and fastest way to do this but, in early March, the IRS made the DRT inoperable due to security concerns.

Now, new encryption has been added to the DRT. The Department of Education and IRS will also be back on-line to provide tax return data for the 2018-19 Free Application for Student Financial Aid (FAFSA) when that form becomes available this coming October 1.

A Year of College Affordability Solutions

College Affordability Solutions is dedicated to helping families keep higher education spending within their means. It uses this website to highlight postsecondary educational cost-management strategies at the times of the year when you and/or your student are most likely to need them.

21-of-the-most-beautiful-college-campuses-in-amer-2-20243-1428837186-9_dblbigDespite those who’ll try to talk your student out of college, postsecondary education is still worthwhile even if he or she has to borrow to pay for it. But student loans increase the cost of college, so do everything possible to minimize their use.

Over the last year, we’ve covered several approaches to keeping college and college-related debt affordable. Click on any of the links below to learn more . . .

Before College

Various investment and savings programs can help you prepare for college bills. Among these are 529 plans and college savings bonds, but you should explore them all – the sooner the better.

And be sure to apply for financial for every year of college. Complete the Free Application for Federal Student Aid (FAFSA) as soon as possible after October 1 but, by all means, before your FAFSA priority deadline arrives.

Student dependency status plays a big role in who completes the FAFSA. Other family factors do, too. But it isn’t as hard to complete as you’ve heard, especially if you fulfill 5 key steps, gather all the documents you need, and get answers to your last-minute FAFSA questions before doing so.

Long before the FAFSA, your student needs to begin aggressively searching for scholarships. It’s critical to know about the when and where and the how of doing this.

Pay close attention after you file your FAFSA to make sure you handle what happens next. Then carefully assess your financial aid offers as they arrive from colleges.

But it’s not all about financial aid and scholarships. A critical factor in college affordability is for your student to enroll in a college and major that fits him or her well.

During College

Once college begins, you can help your student keep his or her expenses within reason.140815_FF_BestCollegeCard Limited spending and indebtedness is important even with today’s low college loan interest rates.

Some of the most effective strategies for minimizing student borrowing include your student getting through college in 4 years or less while carefully managing money and avoiding rip offs such as the recent “student tax” scam. A little-known but highly-effective cost-saver involves returning unneeded federal loan dollars with 4 months of disbursement.

Help your student keep college more affordable by giving him or her some holiday gifts that’ll lower his or her reduce expenses upon returning to school and by recommending he or she generate funds through seasonal employment instead of borrowing.

After College

Seven out of 10 students borrow before earning their degrees, and over 90% of their loans come from federal loan programs. Fortunately, the government has designed  post-graduation strategies to help keep educational debt manageable.


Your student needs to understand what happens to college loans after graduation. It’s worthwhile to consider the pros and cons of student loan consolidation, an often-used tactic for reducing monthly debt payments. Equally important is knowing how your student might qualify for forgiveness on all or part of what he or she owes.

Coming in 2017

We’re taking a few weeks off for the holidays, but beginning January 4 we’ll start publishing again about plans for keeping college affordable. Here’s hoping you have the happiest of holiday seasons, and that you’ll rejoin us then!

 Find out more about College Affordability Solutions and its services at, or by calling (512) 366-5354.

Reduce the Need to Borrow With Seasonal Student Employment

With the holidays approaching, merchants and other businesses are looking for part-time employees to help them through their busiest time of year. For college students, img_4463such jobs can turn into a great opportunity to earn money that will help reduce their reliance on loans.

Consider Bob, a first-year marketing major. Bob just landed a job at a restaurant near campus. From mid-November through mid-December he’ll wait on tables — not very glamorous, but his 14-hour per week work schedule offers sufficient flexibility to study for and pass all his final exams.

Even after FICA taxes are withheld, Bob’s going to clear $500 in wages and tips. That’ll buy his spring semester book, so he can reduce the spring loan he would have needed by $500. This will save Bob as much as img_4480$880 in the principal and interest he’ll repay after college. Imagine how much Bob will save if he also does seasonal work during his three remaining years of college!

To be sure, part-time work is not for everyone. If your student can’t manage priorities or is having academic difficulties, the end of the semester may not be the right time for him or her to take on additional responsibilities.

On the other hand, research has shown that students who work a reasonable number of hours (10 – 14) per week while enrolled average higher GPAs and graduation rates than their non-working classmates.

Bob will also boost his resume by adding workplace experience. And he’ll line up an employer who’ll serve as a reference for future job opportunities — about his ability to deal with people, understand customer needs, and other qualities marketing firms seek. These, too, are advantages of “working your way through college,” at least in part.

So talk with your student about looking into seasonal work. This can be done by visiting the school’s student employment office, inquiring with employers near campus, or both. The results could help reduce indebtedness . . . and in other ways!

College Affordability Solutions offers a wide variety of suggestions designed to help lower college student borrowing costs. Call (512) 366-5353 or email if such guidance might be helpful to you.

Student Money Management — The $10 Latte

The average amount borrowed by America’s 2015 graduating class was $31,100 — $12,600, or 68% more than for the Class of 2005. Depending on how he or she chooses to img_4155repay, a member of the Class of 2015 could spend up to $57,865 to pay off a $31,100 debt.

But there’s a surefire way to graduate with less debt. Believe it or not, it’s best illustrated in an old Saturday Night Live skit, “Don’t Buy Stuff You Cannot Afford!

Funny skit, though it’s message sounds like another old cliche from those who “nag” students about controlling their spending. Still, like many cliches, there’s much truth in this message.

You have to borrow, from student loans or credit card companies, to buy something you can’t afford. And in the future you’ll repay what you borrowed — essentially dedicating future earnings to pay today’s expense, plus interest that builds up on that expense.

Fortunately, there are simple, sensible things you can do to hold the line on how much college debt you’ll have to repay.

Take Annie, a freshman. Annie finds it difficult to get going in the morning so, on theimg_4154 way to class, she spends $4.95 of her federal loan funds on a latte grande from a well-known coffee shop. Annie’ll pay another 42 cents in the sales tax on that purchase. And although the current interest rate on her federal loan is the lowest in 10 years, Annie will pay back as much as $10.00 for the $5.37 she borrowed to buy today’s latte.

If student loans can almost double what Annie ultimately pays for one latte, imagine how they’ll multiply the extra costs you’ll incur to live for 9 months in an expensive, high-amenity apartment; or to pay a campus parking fee for a car you could leave at home; or to eat out four-five nights a week instead of cooking in your apartment or chowing down in your dorm’s dining hall! As for Annie, she could get her pick-me-up and save money by drinking homemade coffee or asking for a home latte machine for Christmas.

There’s an old saying — “Borrow to live like a professional while you’re a student and your loan payments will force you to live like a student when you’re a professional!” Don’t victimize yourself! Find ways to borrow only for absolutely necessary expenses!

College Affordability Solutions can help devise strategies to limit college debt. Call (512) 366-5354 or email to request such help.

Federal Student Loan Consolidation Advantages

If you graduated from college this past spring, chances are you’ll soon enter the time when you’ll be required to pay off your federal student loan debt — i.e. your repayment period. At this point you ought to be asking, “Should I consolidate my federal student loans?”

To consolidate, you need to have at least one Federal Direct Loan or Federal Family Education Loan. You may designate all or some of them, along with your Federal Perkins Loans, for consolidation. The government’s consolidation loan repays the debts you designated. Depending upon how much you owe on your total federal student loan debt, screenshot-from-2016-06-08-135849 you’ll get more time to pay off your consolidation loan than you had to pay off the loans it replaces.

Here are good things that’ll happen if you consolidate:

(1) You’ll Lower Your Monthly Payments: The longer you repay, the lower your monthly payment amount. Use the Federal Student Loan Repayment Estimator to figure out the repayment plans for which you qualify, estimate the monthly payment amount for each plan, and see how long that plan gives you to pay off your debt.

If none of your monthly payments looks affordable, you should consider borrowing a Federal Direct Consolidation Loan. Chances are it’ll give you more years to repay and lower your monthly payments.

(2) You May Expand Your Repayment Options: A consolidation loan may qualify for repayment plans for not open to your individual federal loans, but which may be helpful to you.

(3) You’ll Maximize Loan Forgiveness Benefits: If you’re starting a career as a public school teacher or in another form of public service, you should pursue the Federal Direct Teacher Loan Forgiveness or Public Service Loan Forgiveness Programs. The lower your monthly payments, the more you’ll get forgiven by these programs. Conversely, consolidating a Federal Perkins Loan can have disadvantages.11-3-is-student-loan-consolidation-right-for-you

(4) You’ll Simplify Repayment: As its name implies, all your consolidated debts get combined with one loan servicer (a company the government pays to collect your debt(s) and give you loan-related assistance). The result? A single monthly payment and just one party to contact if you need help.

(5) You Pick Your Servicer: The government picks the servicer for all your other federal education loans. But under consolidation you make this selection. As you do, think about whether your current servicer(s) have met your needs and ask friends about experiences with their servicers.

(6) You Get One Fixed Interest Rate: All debts you consolidate will get the same interest rate. It’ll average out to the rate for each consolidated loan, rounded up to the nearest one-eighth of 1%. It’ll be fixed for the life of your consolidation loan. If you have old federal loans whose interest rates change annually, consolidation will bring that to an end.no_fees

(7) You Incur No Costs: You pay nothing for anything related to consolidating your loans.

Consolidation’s a good thing for most borrowers. But it’s also got some disadvantages. Definitely consider these before deciding whether to consolidate your federal student loan debts.

College Affordability Solutions can help you better understand the pros and cons of federal student loan consolidation. Call (512) 366-5354 or email


Federal Student Loan Consolidation Disadvantages

Consolidating your federal student loans has many advantages. There are also some disadvantages to be considered before making the choice to consolidate:

(1) You May Pay More in the Long Run: Consolidating generally lowers your monthly thrm34yz8xpayments by giving you extra years to repay. But the longer you take to repay, the more of your lifetime income that goes to repayment.

The “Total Amount Paid” column on your Federal Student Loan Repayment Estimator can show how much you’ll on your loans and consolidated versions of your loans.

On the other hand, federal loans may always be prepaid without penalty, and paying your debt down faster than required will reduce your total amount paid.

(2) No More Perkins Cancellation/Discharge: If you consolidate Federal Perkins Loan debt, your access to the Perkins Loan Cancellation and Discharge programs goes away. These programs write off all or part of your Perkins debt in return for working in certain occupations, with a portion of the debt written off annually. These programs are the surest way to have student debt cancelled or discharged so, if you borrowed Perkins Loans, think carefully before consolidating them.

(3) Monthly Payments Could Start Earlier: Normally, federal student loan payments aren’t required during a 6-month grace period that begins when you graduate, withdraw, or drop below half-time enrollment. But consolidation repayment starts 60 days after the loan is made. If you’re applying for consolidation before your grace period ends, you may keep the full period by asking for repayment to be delayed until that period ends.

(4) Federal Loans Only, Please: State and private education loans aren’t eligible for federal consolidation. And, oh yeah, you’ll need to resolve any federal loan defaults you might have before you may consolidate them.

(5) Beware of Private Consolidations: Banks and other financial services companies can page_federal_versus_privateconsolidate your federal student loans, but you probably don’t want them to. Why? You’ll likely lose all or most of the benefits of borrowing from the government. Check this out carefully before you even consider private consolidation.

(6) For Your Loans Only: A borrower may only have his or her own federal loans consolidated. This means students and parents cannot consolidate their federal educational debts, nor can spouses.

(7) All Consolidations Are Final: You can’t reverse the process. Once a Federal Direct Consolidation Loan pays off your other federal student loans, those debts no longer exist.

Despite these drawbacks and limitations, there are lots of advantages to consolidating federal student loans. Don’t take a pass on consolidation before reviewing them.

 College Affordability Solutions can help you better understand the pros and cons of federal student loan consolidation. Call (512) 366-5354 or email

Beware of the”Student Tax” Scam!

Warning! Scammers are calling college students and their parents pretending to be employees of the Internal Revenue Service (IRS). They’re demanding payment toward what they call a “student tax!” The thing is, there’s no such tax and that’s not the IRS calling. So don’t give them and penny and don’t share any information with them!

Beside the reference to a nonexistent tax, how can you tell it’s a scam? Remember, the IRS never calls to demand the immediate payment of taxes owed, and it never requires payment by one particular method — not by credit card, not by debit card, not by gift card, and not by wire transfer! If the party on the other end of the line does any of this, you’re dealing with a dirt ball who’s trying to swindle you.

Some of these calls may be robocalls, and sometimes they come as voice mails. Often the scammers use “spoofing” technology so the number on your caller ID looks like it’s coming from the IRS. It’s not!

By the way, federal education loan borrowers are also getting calls demanding immediate payment on their debts by credit card, debit card, etc. These, too, are con games. If you’re not sure, get the name and phone number of the company that’s supposedly calling you, and then find “NSLDS for Students” on the web to confirm the name and number of the company Washington actually hired to manage the loans it made to you.

If some crook tries to swindle you about any of this, call the U.S. Department of the Treasury Inspector General’s office at 1-800-366-4484 right away to report it! You could also call the U.S. Department of Education Inspector General’s Hotline at 1-800-647-8733. Above all, don’t become one of the more than 8,000 Americans who’ve lost over $44 million in the last three years to these rip-offs!

There’s a special place in hell awaiting the scumbags who try to scam money from honest people. But if you’re a college parent or student, the best thing you can do for now is to make sure these slime buckets don’t make off with your money or your information. Instead, tell them to stick it, hang up, and call the Inspector General!

College Affordability Solutions wants to help you keep your money for college safe. Suspicious about a call you’ve received? Call (512) 366-5354 or email for help.

Save Money: Return Excess Federal Loan Funds

Hanging onto unnecessary federal loan funds is a losing proposition — even if your student is “saving” them to use next term. At current interest rates, no savings account will pay more than the interest building up on those loans, and federal loan funds can’t be safely invested to earn as much as they cost in interest.

So as your student gets a feel for his or her fall college expenses, here are some tips for saving money on federal loan funds borrowed to pay those costs:

(A)  Return unneeded loan funds within 120 days: If your student figures out he or she won’t need them, he or she may contact the financial aid office and ask about how to best return the loan funds not needed for the term*. When this is done within 120 days of the funds being disbursed — i.e. paid toward tuition and fees or turned over to your student, whichever is earlier — Washington cancels its 1% loan fee, plus any interest that piled up on the returned amount. It’ll be as if those funds were never borrowed!

If your student received funds from multiple federal loans, the returned amount will pay them down in the following order — (1) Federal Direct Unsubsidized Loan, (2) Federal Direct Subsidized Loan (3) Federal Perkins Loan; and (4) Federal Direct Parent PLUS Loan.

(B)  Reduce next term’s federal loan(s) if that’s affordable: If your student is scheduled to get federal loan funds for the next term, this is a good time to consider whether or not all those funds will be needed to cover that term’s tuition and other expenses. If not, advise your student to tell the financial aid office to downsize that term’s loan(s).

(C)  Amounts returned can usually be re-borrowed if necessary: What if your student’s expenses turn out to be higher than expected? He or she can always go back to financial aid and request more loan funds, generally up to the amount that was returned. And interest won’t begin building until the new disbursement date for the re-borrowed funds. Note: Your student needs to request these funds at least two weeks before they’re needed. It sometimes takes that long for the funds to arrive from Washington.

 * Sometimes financial aid offices will return unneeded loan funds for students and sometimes they will give students guidance on how to return such funds themselves.

College Affordability Solutions offers 40 years of experience with federal student loans. Call (512) 366-5354 of email if you’re interested in getting its advice on your federal loans.

A Degree in 4 Years: The Best Way to Limit College Costs

The new school year is here! Fall semester is beginning on campuses all across America. You may have just dropped your student off at college. If you did, chances are a few tears were shed as you pulled away from campus.

Yes, the college years generate many opportunities for parental tears. One of the most common occurs every time you pay those college-related bills — for tuition, fees, books, room, board, and the other expenses your student incurs. The latest data available from College Board show that, for two semesters in 2015-16, all these expenses added up to an average of $24,062 at public in-state institutions and $47,831 at private schools.

Higher education costs are particularly subject to escalation, so every year your student’s college expenses are likely to grow faster than inflation. They’ve increased an average of 5.5% per year at public colleges and 5.0% at private universities since 2005-06. At this rate, 4 years at public and private institutions will average $110,226 and $215,938, respectively, for this fall’s entering freshman class. But only about 40% of American undergraduates complete their degrees within 4 years, so it is important to remember that, in 2020-21, the average cost of extra time in college will cost approximately:

                                                                           One Semester        Academic Year

Public College or University                           $15,725                    $31,450

Private College or University                         $30,380                    $60,760

Clearly, the best way to reduce college spending and borrowing is to get a degree within 4 years. To help reach this goal, here are five things you should coach and coax your student to do:

(1) Complete the heaviest possible course load every semester. The math is simple. Let’s say your student is in a degree program that requires 120 semester credit hours for completion. Absent transfer or credit-by-exam hours (see below), he or she will need to enroll in and successfully conclude an average of 15 hours per semester in order to graduate in 4 years.

Some colleges offer what might be called “flat rate tuition” to students who register for more than a certain number of credit hours. Under such an arrangement, your student would pay the same amount to take, for example, 15 or 18 hours per semester as 12 hours per semester. Urge your student to check into this with his or her academic advisor.

And remember, the objective is not just to register for courses, but to successfully finish them. Dropping a course not only lengthens time to degree but, even worse, you pay for it again if your student must pass it to graduate. So urge your student to avoid dropping courses if at all possible.

(2) Take courses that fulfill requirements for graduation. Yes, college is a place for exploration and self-discovery. But it’s a mighty expensive place to explore and discover to much. So you may want to urge your student to forgo courses that “might be fun” or “sound interesting” unless they also apply to core (i.e. out-of-major) or major (i.e. within major) requirements. Fortunately, many colleges and universities offer a broad menu of courses that fulfill such requirements.

(3) Transfer college credits in. While in high school, did your student successfully finish any “dual credit” courses through a community college? Did he or she pass any AP tests? If so, many colleges will accept those credits — especially as substitutes for their core requirements. So if your student has not already transferred them in, suggests that he or she go to the registrar’s office and arrange to do so.

Likewise, one way to stay on track for a 4 year degree is to transfer summer courses from local community colleges back to the schools at which students are seeking their degrees. Tuition at community colleges is lower than at 4-year institutions and, since your student can live at home, there’ll be no room and board to pay during the summer. Also, community college students can usually complete 6-10 summer credit hours even as they work part-time to save money for the rest of the school year. But note — it is important check with an academic advisor ahead of time to ensure that community college credits transferred in will count toward core or major requirements at the 4-year school. Otherwise, all summer enrollment does is generate extra tuition costs.

(4) Don’t transfer your student out if you can avoid it. Remember, if your student transfers to another college or university, chances are he or she won’t get credit at that institution for all courses completed at his or her current school. This creates another situation in which your student will have to take (and pay for) some of the same courses multiple times. Of course, if your student’s current school turns out to be a horrible fit, it may be necessary to transfer elsewhere but, if he or she can stick it out until graduation, urge your student to do so.

(5) Test out of courses if possible. Many colleges and universities have on-campus testing centers. For a relatively small fee, your student may be able go to this center and gain credit-by-exam in certain subjects. Credit-by-exam substitutes for full-tuition classroom courses — especially those applicable to core requirements. This can help your student lighten his or her semester course load while speeding time to degree.

It may not be easy for your student to implement these strategies. Extra effort and sacrifice is often required. Your student may not have as much time to socialize as much as others do. He or she may need to spend extra night and weekend hours studying. And he or she may have to persist in some difficult situations.

You’ll probably need to provide lot of encouragement and support, so don’t forget those “care packages,” phone calls, and visits! But it’ll be worth it — for both you and your student. Those who graduate within 4 years, save tens of thousands of dollars by forgoing extra college expenses and, not surprisingly, at least one study shows that such students incur  35% less debt than those who finish in 5 years.

A 4-year graduate starts his or her career 12 months earlier than 60% of his or her peers, leading to a much faster yield of college educated wages – which currently average more than $1,100 a week or $59,000 a year. So there are definite and tangible payoffs to graduating within 4 years. You’re most likely the person to whom your student listens the most, so you can help those payoffs become realities!

College Affordability Solutions brings 40 years experience to coaching families about these and other higher education affordability measures. Call (512) 366-5354 or email to learn more.