College Affordability Solutions Topical Index

This index links to almost 90 articles. Each describes an wat to make college more affordable. Use them to learn how to do this before, during, or after college

And don’t forget! On August 15, 2018, new articles will be posted here every Wednesday.

Before College

College Finance Plan

Cost Reduction Strategies

College Costs

College Search and Selection

Credit Cards

Deadlines

Dependent and Independent Students

FAFSA (Free Application for Federal Student Aid)

Financial Aid Application Processes

Financial Aid Offers

Grants

Money Management

Parent Borrowing

Private Student Loans

Saving and Investing for College

Scams and Rip-Offs

Scholarships

Seeking Financial Assistance

Student Loans

Tuition and Fees

Value of Postsecondary Education

Verification

During College

College Finance Plan

Cost Reduction Strategies

Credit Cards

FAFSA (Free Application for Federal Student Aid)

Financial Aid Offers

Grants

Money Management

Off-Campus Housing

Parent Borrowing

Private Student Loans

Scams and Rip-Offs

Scholarships

Seeking Financial Assistance

Student Loans

Tax Benefits for Higher Education

Working While in College

After College

College Finance Plan

Consolidation and Refinancing

Debt Forgiveness and Cancellation

Grace Period

Missed Payment

Repayment of College Loans

Repayment Assistance

Repayment Problems

Tax Benefits for College Loan Repayment

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.

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 — Financial Aid Offers

The costs of attendance (“sticker prices”) colleges publish are not always what their students pay. In addition to federal and state awards, many schools offer their own gift aid (grants and scholarships) to discount tuition, fees, and even other expenses.

If an institution promises your prospective student a certain amount of institutional gift aid, analyze its offer carefully. It may be designed to “game” your student by discounting his initial sticker price, but then maximumize the tuition he pays in the future.

Here are some tactics to be on guard against:

Bait and SwitchIMG_1387

Institutional aid offers may be part of sleazy bait and switch strategies that even some reputable colleges employ. The most obvious of these is loss leader awards — first-year gift aid without renewal commitments for subsequent years. But they can be part of more subtle and sophisticated schemes, too. For more about the latter, see “Before College: Beware of Bait and Switch.

IMG_1388Wait and See

Be careful if an institutional representative suggests your student pay expensive and non-refundable enrollment deposits now, then hold on to find out if more grant or scholarship funding can be freed up for him later. Your student may or may not get additional gift aid — absent a written commitment, there’s no assurance of it — or the added aid may not match his needs or expectations.

Curbing Comparative Shopping

Thousands of postsecondary schools reportedly provide the Financial Aid Shopping Sheet with their financial aid offers. This document lays out sticker prices and financial aid awards in a common format, making it easy to do a side-by-side IMG_1389comparison of the net first-year prices your student will face at various colleges.

The Shopping Sheet also divulges the median amount borrowed by a college’s graduates, plus graduation and student loan default rates for its undergraduates — the last two being relative measures of institutional quality.

Unfortunately, the Shopping Sheet is voluntary. Some schools don’t provide it, making it difficult to measure them against their competitors. Before your student pays an expensive enrollment deposit to such a school, ask why it isn’t revealing it’s comparative data. In short — what is the school trying to hide?

Even colleges making honest and straightforward aid offers can be expensive. So help your student avoid falling prey to the games some schools play with aid offers so his higher education will be as affordable as possible.

College Affordability Solutions has 40 years experience with strategies that help make education beyond high school more affordable. For a no-charge consultation about such strategies, call (512) 366-5354 or email collegeafford@gmail.com.

Special Bulletin: Now Ask Your Senators to Preserve Your College Tax Benefits!

The U.S. House of Representatives recently passed its tax bill. This bill would repeal many of the higher education tax benefits on which millions of college students and parents rely. But it isn’t law yet.

The U.S. Senate will soon act on a similar bill. But as currently written, the Senate’s bill IMG_0078would keep the House-targeted college tax benefits in place and unchanged. These benefits include:

  • College Savings Bonds: The House would start taxing students on money they use from such bonds to pay college expenses.
  • Coverdell Education Saving Accounts: The House would prohibit new deposits into these accounts.
  • Death and Disability Debt Discharge: The House would tax student loan debts forgiven for borrowers who die or suffer total and permanent disabilities.
  • Employer-Provided Educational Assistance: The House would subject what your employer spends on your tuition, fees, books, and supplies to taxation The Senate would leave current law as is — so only employer spending above $5,250 would be taxed.
  • Graduate Tuition Reduction Exclusion: The House would make all tuition reductions awarded to graduate research and teaching assistants taxable income.
  • Interest Deduction on Student Loans: The House would end this $2,500 per year deduction.
  • Lifetime Learning and American Opportunity Tax Credits: The House would repeal the Lifetime Learning credit that applies to what you pay on a course helping you get a degree or a job skill. Instead, it would expand the American Opportunity credit from 4 to 5 years. But the American Opportunity credit applies only to degree-related courses. The Senate would leave both credits unchanged.
  • Tuition and Fee Deduction: The House would kill this $4,000 per year deduction for what you pay in tuition and fees for yourself, your spouse, and your dependents.

All these changes would take affect in 2018 unless the Senate causes them to be dropped.

The Senate will amend, debate, and vote on its bill soon after Thanksgiving, so there’s little time to contact your Senators (their contact information is here). Urge IMG_0081them to use the Senate bill to preserve the tax benefits described above.

The House and Senate must negotiate to finalize all differences in the bills they pass, and such negotiations often lead to one or the other bill’s differences being dropped. So the last, best hope for preserving these tax benefits is a Senate tax bill that opposes the House’s plan to kill them.

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

Special Bulletin: Stop Congress from Eliminating Your College Tax Breaks!

IMG_9916The Ways and Means Committee of the U.S. House of Representatives is finalizing HR 1 and the full House will soon vote on it. It’s called the “Tax Cut and Jobs Act,” but as currently written this bill would eliminate federal tax breaks now available to you if you’re a current, former, or future college parent or student.

But HR 1 hasn’t become law yet. You can still influence it by telling your IMG_9919Representative you want these tax breaks left intact. So find your Congressperson’s contact information here and call or write immediately!

The higher education tax breaks you’ll lose if HR 1 becomes law as currently written include:

  • Tuition and Fee Deduction: HR 1 would end your right to deduct up to $4,000 per year for what you pay in postsecondary tuition and fees.
  • Scholarship and Fellowship Exclusion: Under HR 1 the government would IMG_9917tax scholarship and fellowship amounts that pay for your tuition, fees, books, and class supplies.
  • Lifetime Learning and American Opportunity Tax Credits: HR 1 would eliminate the Lifetime Learning Tax Credit. For an unlimited number of years, this credit allows you to reduce your federal income taxes by up to $2,000 per student for what you pay toward tuition, required fees, books, and supplies for courses leading to a degree or to acquiring or improving job skills. To partially offset this loss, the American Opportunity Tax Credit of up to $2,500 per student would be expanded to cover five, instead of four years of these expenses — but only for at least a half-time degree or certificate-seeking student.
  • Student Loan Interest Deduction: HR 1 would end your tax deduction of up to $2,500 per year on student and parent loan interest you pay.
  • Employer-Provided Educational Assistance: Today the first $5,250 your employer pays on tuition, fees, books, and supplies for courses you take is excluded from what determines your federal income taxes. HR 1 would end this, and you’ll be taxed on such assistance.
  • Coverdell Education Savings Accounts: HR 1 would make 2017 the last year to make new deposits into Coverdell accounts.
  • College Savings Bonds: HR 1 would tax students on money they use from federal college savings bonds to pay for college.

The House votes on HR 1 soon. So if these or any of its other provisions would affect you, hurry up and exercise your rights as a citizen!

Got questions? Feel free to contact College Affordability Solutions at (512) 366-5354 or collegeafford@gmail.com.

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.