college costs

Does your kid need expensive SAT prep?

April 21, 2014 By Liz Weston

Back when dinosaurs roamed the earth, I bought a fat paperback test prep book to help me study for the SAT (which, back then, was still known as the Scholarship Aptitude Test). I didn’t buy the book until after I’d already taking the SAT the first time. After studying, I took the test again–and did worse.

Not that I suffered for this experiment. I scored high enough to become a National Merit Scholar, which meant big bucks for college.

I recently asked a friend my age who was also a National Merit Scholar how he prepared for the test. He vaguely remembered being taught a few test-taking strategies in school. But that’s it.

The world’s changed in the past few decades. College is a lot more expensive and elite schools are a lot more competitive. High scores give kids an edge not just for admission but for all-important merit scholarships. Which is why SAT test prep is pretty much a given among upper-income parents. Even less affluent parents are spending hundreds or even thousands of dollars trying to boost their kids’ scores, as I write in my Reuters column this week, “Resist the urge to go overboard with test prep.” Not investing in test prep feels like a gamble that could leave your kid trampled in the dust.

These parents aren’t foolish or deluded. Scores matter, and most teenagers could use some help. My column mentions some free resources, and I highly recommend reading Debbie Stier’s book, “The Perfect Score Project: Uncovering the Secrets of the SAT.” Even if you can’t afford private tutors, you can do a lot to help your get your child ready for the test.

Beware college financial aid letters

April 8, 2014 By Liz Weston

If you want to see what’s wrong with many financial aid letters today, check out the one that Georgia Institute of Technology has so helpfully posted on its Web site under the rather ironic headline “Understanding the Letter.”

The school does a few things right. Not all colleges include the total cost of attendance on their financial aid letters, and many don’t include the “expected family contribution”–what the family is expected to pay according to the Free Application for Federal Student Aid or FAFSA. Subtracting the expected family contribution from the total cost results in the family’s need. In this case, the need is $31,787.

The total award figure of $41,690 seems dazzlingly generous compared to the family’s need. It’s not.

Like many schools, GIT lumps together gift aid (scholarships and grants) with loans and work study.

In this case, the gift aid is just $8,242, which includes a $2,000 scholarship the student won on his own.

The vast majority of the “aid”–$27,548–are parent PLUS loans. PLUS loans are designed to help the family pay its expected contribution, which in this case is $11,903. PLUS loans don’t reduce the family’s $31,787 need.

This award that seems so generous actually meets a quarter of the family’s actual need with gift aid. When work study and the student’s loans are included, the percentage of need met is only about half.

Too many financial aid letters are even more obscure, as I write in this week’s Reuters column, “Don’t get fooled by financial aid letters.” Some don’t include any cost information, while others list partial information. Some don’t spell out what’s a loan and what’s not. Fewer than half of schools use the federal “Shopping Sheet,” which was designed to help stop misleading financial aid letters and allow families to compare aid offers. You can find the sheet here, and using it to parse letters like this can really help you understand how generous–or not–a college is actually being.

Get all the (college) credit you deserve

March 27, 2014 By Liz Weston

One way to save money on college, families are frequently told, is to start at a two-year school and then transfer to a four-year institution.

The problem with such advice is that a lot of students never make it to the four-year college.

Even when researchers control for family background, achievement and ambition, those who start at two-year schools are far less likely to complete a bachelors degree.

One of the reasons may be that credits earned in community college often don’t transfer to the four-year school. Students who aren’t savvy about the transfer process may not realize how picky four-year institutions can be.

That’s leading a lot of otherwise capable students to drop out, according to two researchers from the City University of New York who reviewed 13,000 students’ records. My Reuters column this week, “For students who transfer, lost credits can doom college hopes,” has details about their study.

Community college students are more likely to be first generation, which means they can’t turn to their parents for advice about navigating the college transfer process. They’re trying to figure this out on their own, often without much help from the schools.

Some states have tried to ease the way by creating pathways between community college and their public four-year institutions. These pathways guarantee admission and credit if the students take recommended courses and maintain a minimum grade point average.

But students have to know such pathways exist and how to follow them. In states where these pathways haven’t been created, students must try to determine which courses are most likely to transfer and which aren’t.

To do that, kids need help. College consultant Todd Weaver recommends that community college students make a point of getting to know their academic adviser. The advisors’ caseloads may be huge–hundreds of students–but seeing them once every four to six weeks can help create the kind of relationship these students need to get specific advice on navigating this complicated process, Weaver said.

At the macro level, the researchers believe more needs to be done to smooth the transfer process. Most new jobs in the 21st century will require a four-year degree, and a more educated population is necessary if we want to compete in the global economy and have a viable middle class.

Given what’s at stake, students need all the help they can get.

A free guide to filling out the FAFSA–get it now!

February 24, 2014 By Liz Weston

Exciting news: One of the most-respected experts in financial aid has written a book about filling out the Free Application for Federal Student Aid (FAFSA)–and right now you can get it as a free PDF download.

Mark Kantrowitz, who helmed FinAid.org for years and is now publisher of Edvisors, has this to say about the book he co-authored with David Levy, who has 30 years’ experience as a university financial aid director:

The book is packed with 250 pages of insights and advice about filing the Free Application for Federal Student Aid (FAFSA), along with a step-by-step guide to completing the application form. There are tips about increasing eligibility for need-based aid, avoiding the most common errors and appealing for more student aid. I have attached a tip sheet about Filing the FAFSA that is based on the book.

If you have a kid heading off to college, this book is a must read. To get the book, register (also for free) at the Edvisors site. The book is also available to buy on Amazon in paperback for $24.95. The Kindle version is $8.95.

High school graduates are losing ground fast

February 21, 2014 By Liz Weston

We’ve known for awhile that incomes have been dropping for people with only high school educations. But there was a statistic in a recent Pew Research Center study that really set me back on my heels: 22% of people aged 25 to 32 who graduated high school, but not college, live in poverty. That compares to 6% of people with college degrees.

The poverty rate overall and for the college educated has doubled since 1979, when the early wave of the Baby Boom was in the same age bracket. For those with just a high school diploma, though, the rate has more than tripled.

Meanwhile, the earnings gap between college graduates and high school graduates is the widest it’s been in 50 years.

For more on the Pew study, read my latest Reuters column. You can subscribe here to weekly updates of my education column.

Don’t think college is worth it? Read this.

February 11, 2014 By Liz Weston

The earnings gap between young people with and without college degrees is the widest in half a century. Recent college graduates are more likely to be employed full time and far less likely to be unemployed than high school grads.

And all that debt college grads had to incur? The vast majority of college grads aged 25 to 32–72 percent–say their education has already paid off. Another 17 percent believe it will in the future.

Those are just a few of the fascinating statistics from the latest Pew Research survey, aptly titled “The Rising Cost of Not Going to College.” Read, learn, and use the statistics to combat those who say a college education isn’t a good value.