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financial aid

What you need to know about paying for college

January 15, 2015 By Liz Weston

My recent Reuters columns have focused on some of the most common issues families face in trying to pay for college, from getting the most financial aid to how to cope when you haven’t saved enough. Read on, and please share these columns with people you know who might benefit.

Increase economic mobility by busting college myths

One way to improve economic mobility in the United States may be to fix the misconceptions that high-achieving, low-income teenagers often have about college.

Avoid easy-to-make mistakes on your financial aid application

One of the worst mistakes you can make with college financial aid is simply failing to file the all-important Free Application for Federal Student Aid. But there are plenty of other ways to mess up this application.

Last-minute moves to boost financial aid

Financial aid filing season starts Jan. 1. It may be too late to rearrange your finances this year, but here are some ideas for maximizing what you can get in future years. First, though, make sure your hopes are realistic.

What to do if you have not saved enough for college

Soaring college costs and stagnant incomes mean many families will not be able to save enough to pay for a typical undergraduate education. But there are still ways to find a college degree you can afford. The good news is that most people will pay significantly less than the sticker prices.

Busting the myths of haggling for college aid

My daughter learned this little ditty in preschool: “You get what you get, and you don’t get upset.” Parents who are convinced they can haggle their way to a better financial aid package might want to learn it, too.

No need for irrational fears of student loans

The next generation of college students has heard the message loud and clear about the perils of taking on too much student loan debt – so much so that many are unwilling to go into debt at all in order to attend college. The drawback to this wariness is that most of those who do not borrow are unlikely to get four-year degrees.

Filed Under: Liz's Blog Tagged With: college, college costs, College Savings, EFC, estimated family contribution, FAFSA, financial aid, Student Loans

What will you pay for college? Probably more than you think

November 18, 2014 By Liz Weston

Zemanta Related Posts ThumbnailI recently used the College Board’s “estimated family contribution” calculator to see how much we’ll be expected to pay when our (currently pre-teen) daughter heads off to college.

The answer? Roughly half our annual incomes. Each year.

No colleges actually charge the amount we’d theoretically be expected to pay. So our out-of-pocket costs would be somewhat less. But the exercise drives home how important it is to run these numbers, early and often, if you want a college education for your kids that doesn’t bankrupt you, and them.

Because I know how the formulas work, I was able to tweak some numbers to lower our EFC. Moving more money into retirement accounts and using savings to pay down the mortgage helped a lot with the federal formula, and helped some with the institutional formula (which, unlike the federal, counts home equity). We still wouldn’t get any need-based help from most colleges but could get some breaks if our daughter gets into one of the most-expensive elite schools. (The total cost of the average public college is $20,000 to $25,000; $40,000 for privates and $60,000 for elites.)

If we didn’t have a fat college savings account, we likely would steer our daughter toward public schools or privates willing to offer merit scholarships to reduce the total cost. It’s much better to start a college search knowing what you can afford than to have to tell your kid, dream school acceptance letter in her hand, that you can’t send her there. Or worse, that you will–and then never be able to retire.

For more about how financial aid formulas work, read my Reuters column this week: “A guide to figuring out the real cost of college.”

 

Filed Under: Liz's Blog Tagged With: college, college costs, CSS Profile, EFC, estimated family contribution, FAFSA, financial aid

Wednesday’s need-to-know money news

November 12, 2014 By Liz Weston

Social-Security-benefitsToday’s top story: With the holidays comes identity theft. Also in the news: What divorcees need to know about Social Security, a different way to budget, and how money can wreck your marriage (but it doesn’t have to).

The 12 Scams of Christmas
‘Tis the season to protect your identity.

What Older Divorcees Need to Know About Social Security
Understanding the complexities.

Focus on Cash Flows, Rather than Expenses, to Spend Without a Budget
Static expenses vs itemizing everything.

Yours, Mine, Or Ours? How Money Wrecks Your Marriage
But it doesn’t have to!

10 Things You Need to Know If Your Kid’s Applying for College
Besides kissing your wallet goodbye.

Filed Under: Liz's Blog Tagged With: budgets, college expenses, financial aid, Identity Theft, money and divorce, money and marriage, Social Security

Wednesday’s need-to-know money news

November 5, 2014 By Liz Weston

321562-data-breachesToday’s top story: How often you need to change your passwords. Also in the news: The truth about life insurance, annuities, and financial aid, how to catch up on your retirement savings after 50, and the four necessities for a successful retirement.

How Often Should You Change Your Passwords?
More often than you think.

Consumers Beware: The Truth About Life Insurance, Annuities And College Financial Aid
How they all tie together.

Over Age 50? How to Catch Up on Retirement Savings
There’s still time.

4 Necessities for a Successful Retirement
It takes more than just money.

A Prescription for Financial Wellness
Getting yourself financially healthy.

Filed Under: Liz's Blog Tagged With: Annuities, financial aid, financial wellness, life insurance, passwords, Retirement, retirement savings

Q&A: Graduation gifts and financial aid

October 6, 2014 By Liz Weston

Dear Liz: Our grandson’s stellar high school performance and his family financial situation were such that he was admitted to his state university with grants sufficient to pay all school fees, including room and board, with no loans or work-study. His grandmother and I have a 529 account in his name that has enough money to pay about twice his estimated books and living expenses, given this level of financial aid.

His other grandparents gave him a high school graduation present of a check for four times the annual estimated books and living expenses. Does he need to amend this year’s financial aid form to reflect this generous gift? Should I suggest he put part of the gift aside for future years to diminish the effect on future financial aid?

Because of his unexpected gift, we plan to not use the funds in the 529 account until needed for his undergraduate or possible graduate school expenses. If he doesn’t need the money, we plan to transfer the balance to his younger sister’s 529 account.

Answer: Your grandson won’t have to amend this year’s financial aid forms but he will have to declare the gift on next year’s form. That could indeed reduce his financial aid package, since such gifts are considered to be the student’s income and thus will be counted heavily against him next year.

There’s not much that can be done about it now, but generous grandparents in this situation might think about holding off on their gifts until the student’s final year in college when financial aid is no longer a consideration. Paying that last year’s expenses, or paying down any student loan balances, would be a gift without repercussions.

Filed Under: College Savings, Q&A Tagged With: College Savings, financial aid, gifts, q&a

Tuesday’s need-to-know money news

September 23, 2014 By Liz Weston

procrastinationToday’s top story: Why putting things off until tomorrow can become expensive. Also in the news: Tips on college scholarships, how to have peaceful conversations about money, and how to break the cycle of living from paycheck to paycheck.

I’ll Do That Tomorrow: The High Cost of Procrastination on Personal Finance
Doing it tomorrow can cost you money.

Confessions of a Master Scholarship Coach
How to help your kids earn money for college.

How to Keep a Money Talk From Becoming a Money Fight
Keeping the peace during a stressful conversation.

5 Ways Your Yard May Be Scaring Off Potential Homebuyers
Make sure the outside looks as good as the inside.

Common “Debt Traps” That Keep You Living Paycheck-to-Paycheck
How to break the cycle.

Filed Under: Liz's Blog Tagged With: couples and money, debt, financial aid, procrastination, real estate, scholarships

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