When comparing the two schools my son is considering, we noticed an interesting data point: one school estimated books and supplies to cost $800 annually; the other $1,146. One of the schools my daughter applied to estimates $1,800. While I can certainly understand that different meal plans or living options might be more or less expensive at different schools, it’s hard to understand why books would cost 50% or 100% more from school to school. Continue reading Budgeting for Books and Supplies
Planning for college cash flow can be tricky. It’s not just that the average public university costs over $25,000 per year whereas the average family has saved just over $18,000 total. There’s also the combination of tax credits and their attendant rules, a confusing menu of borrowing options, and misunderstandings about how aid formulas treat savings. Add multiple children with overlapping college years and it’s no wonder many parents throw up their hands in despair. One common theme I hear from parents is a version of, “We’ll just spend our savings until it’s gone and then borrow what we need.” This may or may not be the right answer. Continue reading To Borrow or Not to Borrow
Most schools lump tuition and fees into a single line item on their costs, but students and parents should have visibility to which is which. It can take a little bit of digging to find out, though.
First, what are fees? They can be anything from health insurance to fitness center costs Continue reading Tuition & Fees
One of the big changes to the tax bill was making our young adult children less valuable to their parents from a tax perspective. The dependent exemption is gone and the child tax credit for 18- to 23-year-old dependents is only $500. The change does open a door to higher-income families for the American Opportunity Tax Credit, though. The AOTC phases out at MAGI of $160,000, so it’s not unusual for families to be ineligible but to still find college unaffordable.
Here’s how the AOTC works, from irs.gov: Continue reading AOTC And New Tax Law
I gave a financial aid talk to college and career center volunteers at our high school recently. One question stood out: “This is a lot of information to absorb at once. Can you break it down into some specific suggestions by grade?” Two ideas are important here: College planning is a process that should start well before senior year, and there are things that can be done at any point to make things go more smoothly when the time comes to start applying. So here goes. Continue reading College Prep by Grade
Apologies for my recent absentee-ism. Between our (hopefully) last college visit and my nephew’s wedding, it’s been a busy couple of weeks here!
Our hopefully last college visit was with both kids at our in-state flagship school. My son loved it; it’s where he was already intending to go and the visit really confirmed that, as well as increasing his excitement about being there next fall. Looking at it from his perspective, the visit increased my happiness about the circus-free nature of attending Continue reading Honors Colleges, Dual Enrollment and Majors
It’s the busy season for insurance and annuities hucksters who tell parents of college-bound students that spending their assets to buy an insurance policy will yield all manner of financial aid benefits. Before you start making expensive moves that end up costing more in the long run, you should figure out what will really benefit you. Continue reading FAFSA Asset Do’s and Don’t’s
Next year’s FAFSA will be available on Oct. 1. That doesn’t mean you need to rush online and complete it on Oct. 1. Here are a few things that should factor into your timeline for completing it. Continue reading Preparing for the FAFSA
Step 1 in figuring out how to pay for college is estimating your EFC. You can use the FAFSA4caster, or the more detailed EFC Formula Guide (note that’s for 2018-2019; the 2019-2020 version should be released this month). But EFC is just a starting point: schools aren’t required to meet your need, and they certainly aren’t required to meet it through gift aid. That’s why net cost and aid packaging are important concepts to understand. Continue reading EFC, Net Cost and Aid Packaging
On our recent college odyssey, we heard about a lot of need-blind admissions policies, and no loan/100% of need met financial aid policies. These are mostly good things but perhaps not as good as they sound on the surface, so it’s worth unpacking them. Continue reading Need-Blind, No Loan, 100% Need Met Policies