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Monday’s need-to-know money news

July 20, 2015 By Liz Weston

air-miles-cardToday’s top story: How your medical debt impacts your FICO score. Also in the news: Signs your parents are victims of a financial scam, what you need to know when hunting for scholarships, and how to fly first class on the cheap.

The Impact of Medical Debt on FICO Scores
A new formula treats medical debt differently.

5 Signs Your Parents Are the Victims of a Financial Scam
Older adults are more susceptible to scams.

Everything You Need to Know When Hunting for Scholarships
Helping your kids on the road to college.

How to fly first class for free (or on the cheap)
Bargain your way out of coach this summer.

Filed Under: Liz's Blog Tagged With: college, Credit Score, elderly, FICO, financial scams, medical debt, Savings, scholarships, travel

Why “Get scholarships!” is bad advice

April 22, 2015 By Liz Weston

Student-LoansWe had a great Twitter chat today about preparing financially for college, hosted by Experian. (You’ll find the tweets using #creditchat.)

I was distressed, though, that many believe people should look for scholarships as a way to reduce college costs. That’s not how it usually works.

If you have financial need, colleges typically deduct the amount of so-called “outside” scholarships from the free aid such as grants and their own scholarships that they otherwise would give you. Schools don’t have to reduce the loan portion of your package unless your outside scholarships exceed the grants and other free aid they were planning to bestow.

They’re not just being mean. It’s what federal financial aid rules require, according to FinAid. If you don’t have financial need, outside scholarships could reduce the merit aid a school would otherwise give you.

Does that mean you shouldn’t search and compete for outside scholarships? No. But it’s certainly not a reliable solution to the college affordability problem.

A better approach for students and families is to look for generous schools. Colleges themselves are the greatest source of scholarships, but most don’t meet 100 percent of their students’ financial need. Some meet 70 percent or less. If you want a better deal, look for schools that consistently meet 90 percent or more of their students’ need. College Board and College Data are among the sites that can help you find this information.

 

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

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

Does your kid need expensive SAT prep?

April 21, 2014 By Liz Weston

iStock_000014485809SmallBack 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.

Filed Under: Liz's Blog Tagged With: college, college costs, financial aid, SAT, SAT prep, scholarships, test prep

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