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CollegeFinancialLady

What is “Income” on the FAFSA?

Many families– and also many financial professionals– believe that reducing their adjusted gross income by increasing 401k contributions will result in a lower Expected Family Contribution from the FAFSA. Unfortunately that’s not the case: the FAFSA uses total income, not adjusted gross income. What does that mean for non-finance nerds? The FAFSA calculates “Available Income”– the income you could spend…

Borrowing Outside Federal Loan Programs

More than 90% of student loans are federal loans, and with good reason: the federal student loan programs are broadly accessible and have a range of borrower protections. However, some borrowers choose private student loans either to borrow or to refinance. A smaller share of families use non-education loans such as home equity lines or 401k loans to pay for…

Loans: Many Choices

Families who borrow for college have a lot of choices: federal or private student loans, personal loans, home equity loans, 401k loans… How do you decide? Let’s look at pros and cons of some of these, starting with the federal loan programs. Federal direct loans– whether student or parent loans– have a number of benefits: Fixed interest rates Income-driven repayment…

It’s Never Too Late to Start Saving

Savings creates choices. When it comes to college, more savings means more choices: if you can spend $25,000 annually from savings for four years, your student will have a wider range of choices than if you can only spend $10,000 annually from savings. You’ll have good choices at both of those price points, but students with more savings will (almost…