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Last-minute Tips for Paying for College – a Critique and Alternative

Are these “TIPS from the Pros” all they have to offer?

The root cause of the struggles of funding college is exemplified In the article “Last-minute tips for paying for college” by Jessica Dickler. Her article is based on tips from two financial advisors – Richard Polimeni from Merrill Lynch and Liz Miller of Summit Place Financial Advisors, along with Joe DePaulo of College Ave Student Loans and Eric Greenberg of Greenberg Educational Group. From these so-called “Pros” she put together five tips on how to put together a successful college funding strategy – even at the 11th hour.  One would think that these “tips” are provided as “it’s not too late to come up with a few last-minute strategies to ease the burden of the sky-high cost of college.”  Let’s look briefly at each one and provide a bit of context respectively. (Click to view the article.)

1) Fill out a FAFSA – “Cobbling together”

Her point of filling out the FAFSA as a gateway to aid and scholarships for the next semester is absolutely true. Federal student loan funding will be available next semester for your student. There is the interesting phrase “you can cobble together a bunch of these”; this seems to indicate that there is no need to have an over-arching college funding strategy. This “cobbling together” often leads parents and students signing their name on any accessible funding source without understanding the consequences.  In my experience, “cobbling together” is not a valid way towards creating a successful college funding strategy.

2) Take out a Loan – Really?

The first rule of thumb, which seems to be missed in this article, is that loans MUST be paid back. The second rule is that is missed: you sign it, it is yours.  The thought process to Continue reading

Parents as Teachers

Parents: A Key Player in the College Decision

In every family there comes a time when the child needs to decide which college (post-high school path) to attend. This “college decision” does not take place in a vacuum.  The place where this decision is most often made is “around the kitchen table”. At that time, there are no school counselors available. There are no “college-coaches” around. The recruiters from the colleges are absent as well. This decision is made by the student and their parents. It will be based primarily on two factors Their College Acceptance Letters along with the available financial means.

Many Parents experience their Children’s College Failure

The quality of the college decision varies from household to household. The current statistics show that the quality is not too good. Roughly 40% of students starting at a four-year college will leave that college without a degree within their first six year. At two years colleges, about two-thirds do not earn an associate’s degree or a certificate within the first three years of studies.  I often think parents feel these statistics are “far away” – they happenContinue reading

College Planning for Parents and Students

A Really Big Decision for a Teenager – Often One that is not very Good

Deciding which college to attend is a big deal in most families. As parents, we often want to leave the college-decision up to our child. This sounds all find and good.  The same holds true for the pre-college process. For the most part, we expect our children make the best choices leading up to the college decision.

However, when we realize that only about half the students starting four-year colleges will finish with a Bachelor’s Degree within six years, at two-year colleges, only about a third of the students finish with an Associate’s Degree (or Certificate) within three years of studies, we might want to reconsider this approach. If the poor graduation rates are not enough to raise a yellow flag, just look around at how the $1.4 trillion student debt is impacting families and friends.

The Decision-Making Ability of a Teenager

While we understand the desire for parents to have the child make the decision, we want to express our reservations of having kids lead the college preparation process.  I think most us parents, looking back, Continue reading

How Do I Get Money for College?

College Bills must Paid

Every family with a student in college (post-secondary education) is confronted with their own “cost-of-attendance” expenses. The fact-of-the-matter is, these bills must be paid in a timely manner.  These outlays typically run between $8,000 and $70,000 per child/per year. The question at hand today is not so much where does one get money for college, but that of “how”.  Understanding the dynamics of the “how” is the first step in obtaining money for college.

Scholarship and Grant Funding

Scholarship and grant funding are the two most sought-after financial resources for paying college expenses. Neither of these need to be paid back. Let’s take an abbreviated look at both.

How to get Scholarship Funding for College

Scholarships are awarded based on the meritocracy principle.  The more “talent” the student brings to the college, the more the college will typically reach into their endowment resources to attract the student. We use the word “talent” to refer to the contribution your child would likely make in a certain field or discipline. For example, if this is a math program, then the talent is a “high aptitude in math”. If the program is sports related, then the talent would be “being able to run fast or throw the football with great accuracy”.   Each college or department within a college is looking to attract students they consider to be a “worthwhile investment”.  The more talent your child brings, the more “worthwhile” they are to the department. This attraction or enticement consists, in part, by paying a larger portion of the student’s cost-of-attendance expenses.Continue reading

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