During College: Strategies for Your College Finance Plan

Your College Finance Plan (CFP) needs strategies for you and you student toIMG_9592 implement before, during, and after college. Let’s look at the “During College” phase.

Research at a major university indicates that, looking back, almost 4 out of every 10 seniors conclude part or all of their student loans weren’t essential for their educations. Therefore, some of these strategies focus on personal money management so students can spend and borrow less of the interest-bearing educational debt that, over time, increases college costs. These include:

IMG_9555Also, the faster your student gets her degree, the less cost and debt she’ll incur. Still, the latest national data show that only 39.8% of undergraduates earn their bachelor’s degrees within 4 years. Here are some strategies that’ll help your student graduate on-time, if not before:

 

Look here for why you need a CFP. You can find summaries of strategies for your plan’s “Before College” phase here. And next Wednesday there’ll be samples of “After College” strategies for your CFP here.
Beginning October 16, check this website every Wednesday for a more detailed account of a strategy you may want to use in your CFP’s before, during, or after college phase.

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Before College: Strategies for Your College Finance Plan

It’s best to begin your College Finance Plan’s (CFP’s) “Before College” phase when your child is born, if not before. But don’t give up if you didn’t. Instead, get going as soon as you can.

Consider initiating these strategies as your student gets closer and closer to college:

Birth through Junior High:

  • Invest and Save. Let time multiply your money, even if you can only put away a little. For example, a $50 month deposit into a 1% savings account beginning at birth will yield $14,820 through college commencement.
  • Prepare Your Child to Pursue Scholarships. Some scholarships are awarded IMG_9375based on grades and test scores, some stress essay and interview responses, and others go to students with strong resumes. So help your student do well academically, develop verbal and written communication skills, and persist in extracurricular and leadership activities she enjoys.
  • Identify a General Career Direction. He needn’t decide on cardiovascular surgery by age 15, but helping him develop in broad subject areas about which he’s passionate can save your student from being among the 80% who change majors — some two or three times — generating extra costs for extra courses.

High School through Junior Year

High School Senior Year:

  • Apply for Aid. Filing the FAFSA is a necessity. If your student’s seeking institutional or state aid, too, other application forms may be required.
  • Analyze Affordability When Selecting a College. Public data can help project what you’ll pay for a degree from each school to which your student is accepted.
  • Select a Good Fit. Fit helps reduce the chances of your student transferring, which amplifies tuition costs for repeating courses not accepted by his new school.

Why implement a College Finance Plan? Go to “Before, During, and After College: You Need a Plan!” for answers. A review of “During College” strategies will be posted on this website October 2, and “After College” strategies will be outlined here October 9. More in-depth discussions of individual strategies can be found here through the end of academic year 2017-18.

Contact College Affordability Solutions at (512) 366-5354 or collegeafford@gmail.com for free help if you have questions about your CFP.

Before and During College: Beginning October 1, File Your 2018-19 FAFSA ASAP!

IMG_8872If you’ll have a student in college between July 2018 and June 2019, apply for financial aid on October 1 or as soon thereafter as possible. That’s when the 2018-19 Free Application for Federal Student Aid (FAFSA) first becomes available to you on the government’s secure FAFSA website.

Why hurry? Regardless of institutional FAFSA deadlines, some schools quietly use FAFSA submission dates to determine the order in which they award institutional grants and scholarships, so those submitting FAFSAs early may have a better shot at these limited funds. Also, if your FAFSA data are selected for verification, early submission gives you more time to gather and supply documents you need.

No worries if your student doesn’t yet know where she’ll attend college next year. She can direct her FAFSA to 10 different institutions, and more later if needed.

The 2018-19 FAFSA needs 2016 federal 1040 data. The easiest, most accurate way to get this is to use the IRS Data Retrieval Tool (DRT). For 2018-19, there’ll be an opportunity to do this in the FAFSA’s student and parent Financial Information sections.

If you previously submitted a FAFSA but your student qualified for nothing but federal loans, why submit again? Two reasons. First, even small changes in your family and financial situations can impact eligibility for need-based grants, scholarships, and part-time work study jobs. Second, your student won’t re-qualify for past loan awards without a new FAFSA.

There are online answers to various FAFSA questions you may have including, but not limited to:

All colleges require the FAFSA, but some may require other forms to apply for state or institutional aid. Check on this with the financial aid office wherever your student may attend.

Two final notes:IMG_8873

  • If you don’t yet have an FSA ID, you’ll need it to do the FAFSA. Establish it at FAFSA.ed.gov.
  • Be sure to do your FAFSA at FAFSA.ed.gov. Otherwise, you may get scammed into paying a fee to submit this free form.

Hard to believe it’s already time to apply for next year’s financial aid, isn’t it? But remember, the early bird gets the worm . . . and better yet, the financial aid!

College Affordability Solutions brings 40 years experience to advising families on issues related to financial aid. Got questions? Call (512) 366-5354 or email collegeafford@gmail.com for a no-fee consultation.

Special Bulletin: Help’s Available for Current and Ex-College Students Affected by Hurricane Harvey

 

A little-known fact is that the U.S. Department of Education (ED) has policies in place to help currently-enrolled college students hurt by federally-declared natural disasters such as Hurricane Harvey. These policies also provide relief to disaster-affected ex-students and parents struggling to repay their federal loans.

A description of these policies, and what should be done to use them, is available on the Federal Student Aid (FSA) Programs’ Hurricane Harvey web page. Texas counties that have been declared federal disaster areas are listed on the Federal Emergency Management Agency (FEMA) Hurricane Harvey web page.

Here are some examples these policies:

  • Aid Eligibility: Harvey will no doubt undermine the ability of many families to come up with the money they planned to provide their students for the 2017-18 academic year. Students from such families should file the Free Application for Federal Student Aid (FAFSA) to request aid. If they’ve already filed their FAFSAs, students should contact their campus financial aid offices to learn what documentation is needed for them to request “professional judgment” reviews that can determine if they qualify for additional financial aid.
  • Damaged or Lost Documents: Sometimes students are required provide certain documents before getting their aid to verify the accuracy of their FAFSA data. If these documents have been damaged or lost due to Harvey, students should notify their financial aid offices. ED has given those offices the authority to not require those documents in such situations.
  • Dropping Out: Some student who’ve already received their fall financial aid may need to drop out to go home and help their families recover from Harvey. Such students should contact their financial aid offices and let them know why they are dropping out. In these circumstances, ED allows schools to waive a regulatory requirement that usually compels drop-outs to pay back federal grants received for the fall.
  • Temporary Postponement of Loan Payments: Many ex-student and parent borrowers are likely to find their ability to make federal educational loan payments disrupted because Harvey adversely affected them. Such borrowers should contact the “loan servicers” (contractors Washington hired to collect their federal debts) and request “administrative forbearances.” These forbearance allow affected borrowers to postpone their federal education loan payments for up to three months. Ex-students can get contact information for their loan servicers through the government’s National Student Loan Data System.

In the wake of all the problems stemming from Hurricane Harvey, current and ex-student borrowers who need help should review and use these policies!

Contact College Affordability Solutions at (512) 366-5354 or collegeafford@gmail.com.

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.

Special Bulletin: Status of IRS Data Retrieval Tool

A key tool used by students seeking financial aid borrowers applying for income-driven repayment plans on their federal student loans is still offline. However, a new government announcement outlines a schedule for getting it back up and running.

In March, the government shut down the IRS Data Retrieval Tool (DRT), expressing concerns about the need for extra system security. Here’s where things are now according to a recent status announcement from the U.S. Department of Education —

DRT in October for Student Financial Aid Applicants: For the next 5 months, students will need to keep finding and using recent federal tax returns for themselves and their parents in order to accurately complete their Free Applications for Federal Student Aid (FAFSAs). The government’s announcement says it’ll be October 1 when a new, more secure DRT will become available to them.

DRT on May 31 for Student Loan Borrowers: Parents and ex-students seeking to certify their eligibility for one of the 4 federal student loan income-driven repayment plans will again be able to access to the DRT beginning May 31, the announcement says. Until then, they’ll need to keep submitting alternative documentation when applying for these plans. Alternative documentation could be paper copies of their federal tax returns or pay stubs.

If and when more information about this problem becomes available, College Affordability Solutions will post another bulletin.

Special Bulletin: IRS Data Retrieval Tool Offline Until October!

Remember back on March 18, when there was the bulletin about the IRS shutting down the Data Retrieval Tool (DRT) Americans use to load key data onto their FAFSAs? Now, the IRS and U.S. Department of Education announced that parents and students should plan for the DRT to be offline until the next Free Application for Federal Student Aid (FAFSA) cycle begins on October 1m.

ED and IRS reminded parent and students that the online FAFSA continues to operate and that, to load data onto that FAFSA that would have come from the DRT, they can access paper copies of their federal tax returns and/or pay stubs, then manually transfer those data to their FAFSAs.

FAFSA filers can also get their 2015 “tax transcripts” from the IRS in order to secure the data they need. These transcripts can be downloaded online from the IRS’s Get Transcript Online website.

College Affordability Solutions will keep you posted on new developments regarding this problem in future bulletins that will be posted on this website.