Archive | January, 2016

Student loan freakout

29 Jan

Are you freaked out about potential student loan debt?

Are you freaked out about potential student loan debt?

Are you or your parents freaking out about the possibility of student loan debt?

The media have been having a field day the last few years with horror stories of students who are graduating with student loan debt  of $100,000 or more.

The over-sensationalism of this issue has actually had a negative effect on many of my students and parents over the last several years–to the point where they are determining to work first, THEN go to college with the projected savings.

There are several facts that students and parents should face in regard to post-secondary education, its benefits, and this student loan issue:

  1. Most students have some student loan debt leaving college. Nationally that figure is about 70 percent of college graduates. In California, the percentage is 55 percent — and the average loan debt is $21,382 (the average is about $18,000 for the California State University system–a good deal!). The cost of repayment for this amount will be about $200 per month — less than the cost of the average car payment, with that car depreciating by the moment.
  2. It is very difficult for a young person to save enough money to fund the cost of a college education, especially since college costs are increasing on a yearly basis. A minimum-wage job would have gross pay of $13,720 a year. Subtracting money for taxes, transportation, and living expenses, I have computed that it would probably take nine or more years to earn enough to pay for four years of college.
  3. Financial aid in the form of grants could decrease if the student works first. If a student qualifies for federal and state grants but chooses to work, access to those grant funds could completely disappear.
  4. When students work before going to college, they often are detracted from savings by the lure of a nice car or apartment and rack up debt that would make college challenging financially.
  5. A college graduate’s income will be significantly higher than a young person’s income who went directly into the work force.

Completely free rides are about nonexistent these days. Typically, the student is expected to commit to about $5,000 in student loan debt per year. That repayment plan will not be difficult with the post-college salary the graduate will earn.

Be wise about your college decision:

  • Lay out your financial aid offers side by side before deciding on your college.
  • Be diligent to submit every single scholarship application for which you are eligible.
  • Read the fine print on the colleges’ financial aid pages. Some schools will cancel out GRANT money if you get scholarships, while other schools will cancel out loans. This was the main reason my daughter chose UC Berkeley over UC Santa Barbara.
  • DO choose Work Study if you can get it–it won’t count as income against next year’s financial aid package and you won’t have to pay taxes on it. It’s like working for a grant.
  • Be careful not to incur other debt during college (live cheaply and don’t take on a car payment).

And go for the degree: it will pay off in the short and long term.


Waitlist: Woes or wows?

11 Jan

My daughter and son-in-law both graduated from Biola University in LaMirada, California.

My daughter and son-in-law both graduated from Biola University in LaMirada, California.

Students may now start to get admissions acceptances or rejections from their more exclusive schools on their college list. Kudos to you if the first word is “Congratulations!” Sympathies to you if the letter starts out, “There were an exceptional number of qualified applicants this year….”

However, some of you may find that you are waitlisted for a college. That may seem like a rejection, but it’s not. The college has determined that you are qualified, but there were more qualified applicants than it could accept. As students do their Intent to Register by May 1, you could find a slot opens for you.

What you should do in the meantime:

  • Decide your Plan B: Choose another school and do your Intent to Register for that school by May 1. Yes, you can get out of this; you might even get back your deposit. Housing at the waitlisted school could prove to be a challenge if housing is limited–but this usually works out, too.
  • Submit additional support that could sway a decision in your favor:
    • A letter indicating why that waitlisted school is your No. 1 choice–what leadership qualities you will bring.
    • Submit others’ letters of recommendation in your behalf (always make sure these are STRONG–full-length letters with detailed support)
    • Submit additional essays if you are given the opportunity.
  • Study diligently and stay involved in your activities.
  • Request a personal interview. Be respectful and friendly as you make personal contacts–admissions personnel are very busy.

Do not have your parents call the admissions office. Be proactive in your own behalf.

‘Tis the FAFSA season!

4 Jan


Starting January 1 students and their parents have been able to file their Free Application for Federal Student Aid (FAFSA), the U.S. government vehicle for determining how much and the various kinds of financial aid that can be offered, based on financial need–mostly grants (free money), work study (work at a job, usually on campus–nontaxable), and student and parent loans (must be repaid).

The first step in this process is to obtain the Federal Student Aid (FSA) I.D. for both the student who will be attending college in Fall 2016 and the parent(s). The FSA I.D. replaces the four-digit PIN number. This FSA I.D. will be even more secure because students and their parents will provide a personalized username, password and FIVE security questions of their own design.

Because of the addition of the personalized security questions and a later verification via email/website, this process takes longer, and financial aid officers at colleges are emphasizing the importance of getting the FSA I.D. for both student and parent(s) done in ADVANCE.

The I.D. is needed for both the student and parent to sign the FAFSA electronically.

Go to to get the FSA I.D. taken care of and to do the FAFSA, for which you will need your 2015 income information as well as current info of assets.

NOTE: The California deadline for the FAFSA is March 2 for four-year college students (later for others–but keep the first-come-first-served idea in mind!). Leave a comment here if you want to know your state’s deadline (private colleges will have their own deadlines–check with the financial aid departments).

NOTE FOR ATHLETES: Colleges will want you to do the FAFSA, so that they see you are being proactive about accessing all kinds of financial aid–not just the sports scholarship.