Education Planning
Are there any ways to lower the cost of college?
Description: You can lower the cost of college in a number of ways. The deciding factors in achieving your cost goals may be limited only by your flexibility.
What is the college inflation rate?
Description: The college inflation rate refers to the annual increase in college tuition and fees, similar to the way that the general inflation rate refers to the annual increase in the cost of living.
How do I apply for financial aid?
Description: You should start by filling out the federal government's aid application--the FAFSA. This application is used by both the federal government and colleges when federal money is being dispersed.
What are the major federal financial aid loan programs?
Description: The three major federal financial aid programs are the Stafford, Perkins, and PLUS Loan programs.
Are my student loan payments tax deductible?
Description: The interest portion might be, thanks to the student loan interest deduction. The maximum deduction is $2,500 in 2011. You don't need to itemize to claim this deduction.
ABCs of Financial Aid
Description: These days, it's hard to talk about college without mentioning financial aid. Yet this pairing isn't a marriage of love, but one of necessity. In many cases, financial aid may be the deciding factor in whether your child attends the college of his or her choice or even attends college at all. That's why it's important to develop a basic understanding of financial aid before your child applies to college.
Education Tax Credits
Description: It's tax time, and your kitchen table is littered with papers and forms. As if this isn't bad enough, you recently paid your child's college semester bill, and you don't know where you'll find the money to pay the taxes that you expect to owe. Well, you might finally catch a break. Now that your child is in college, you might qualify for one of two education tax credits--the American Opportunity credit (Hope credit) and the Lifetime Learning credit.
Going Back to School as an Adult
Description: You've decided that college or graduate school is your ticket to a better career or the path to advancement in your current job. Or maybe you just want to take a few classes to upgrade your skills. Either way, returning to school as an adult has its challenges. You've probably heard the expression "time is money." Well, you'll need plenty of both.
How Student Loans Impact Your Credit
Description: If you've finished college within the last few years, chances are you're paying off your student loans. What happens with your student loans now that they've entered repayment status will have a significant impact--positive or negative--on your credit history and credit score.
Sticker Shock: Creative Ways to Lower the Cost of College
Description: Even with all of your savvy college shopping and research about financial aid, college costs may still be prohibitive. At these prices, you expect you'll need to make substantial financial sacrifices to send your child to college. Or maybe your child won't be able to attend the college of his or her choice at all. Before you throw in the towel, though, you and your child should consider steps that can actually lower college costs.
Student Loan Basics
Description: You vaguely remember signing a piece of paper every year at college registration time. Now that you've graduated, it's all become painfully clear--those pieces of paper were promissory notes detailing your student loan obligations. Your loans aren't going to go away, and you'll want to repay them as quickly and easily as possible. So whether you have a small sum or a small fortune to pay off, you'll want to brush up on some student loan basics.
College Application and Financial Aid Calendar
Description: Many parents begin planning their child's education at birth. Whether you've been saving and planning for the past 18 years or you just recently started discussing college plans with your child, senior year is quickly approaching, and decisions need to be made.
How many colleges should my child apply to?
Description: There are thousands of colleges and universities in the United States (and the world, for that matter). Your child can't apply to or attend all of them, so you'll need to do some research to narrow down the choices.
When are college applications due?
Description: Most colleges accept applications at roughly the same time each year. However, the exact date varies, depending on the school and program you choose. In addition to the standard spring and fall enrollment, colleges usually have separate application deadlines for students who are applying for early decision.
What expenses are included in the annual cost of college?
Description: To most parents, the annual cost of college simply refers to tuition and room and board. To the federal government, however, the annual cost of college means the cost of attendance. Twice per year, the federal government calculates the cost of attendance for each college (over 3,000 of them), adjusts the figure for inflation, and, if your child is applying for financial aid, uses this number to determine your child's financial need.
My child is heading off to college this fall. What insurance issues does this raise?
Description: As you send your child off to college, you probably have a lot of things on your mind, such as whether your child will eat right and get enough sleep, how to pay tuition, and what to do with that empty bedroom. And although insurance may seem like a low priority, there are some important issues you should consider.
Now that my child is in college, am I entitled to any education tax credits?
Description: You may be. There are two education tax credits--the American Opportunity credit (Hope credit) and the Lifetime Learning credit. To claim either credit in a given year (you cannot claim both in the same year), you must list your child as a dependent on your tax return. In addition, you must meet income limits.
Are any financial aid programs tailored especially to parents of post-secondary students?
Description: Although the bulk of financial aid is awarded directly to students, one major federal financial aid program is available to assist parents with their share of post-secondary (beyond the high school level) educational expenses. This program is known as the Parent PLUS Loan.
Are there any assets that are not counted for financial aid purposes?
Description: Yes, assuming you are talking about federal financial aid.
Can an UGMA/UTMA account reduce my child\'s financial aid for college?
Description: It can, but in the same way that any other asset held by your child can. An UGMA/UTMA account is a custodial account established at a financial institution for a minor child and managed by a parent or other designated custodian. It is established under either a state's Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA).
Can anyone get a Pell Grant?
Description: No, the Pell Grant is a federal educational grant that the government offers only to those undergraduate students who demonstrate exceptional financial need. The determination of exceptional financial need is based on the income and asset information supplied on the federal government's financial aid application, known as the FAFSA.
Can we negotiate our child\'s financial aid award?
Description: In some cases, yes. If you decide to appeal all or part of the award, follow the instructions in the award letter. In most cases, this will involve a polite business letter to the financial aid administrator (FAA) and a follow-up telephone call or meeting. Because the FAA may handle a number of similar requests, it's important to clearly label your correspondence. You should also be persistent in following up on your request, but not to the point of being a pest.
Do colleges offer financial aid?
Description: Yes, most do. Next to the federal government, colleges are the second-largest provider of financial aid. Such aid can be one of two types: need-based aid and non-need-based aid (also known as merit aid). Though aid based on financial need is more prevalent, a trend in recent years has been for colleges, especially private colleges, to offer more merit aid. This trend stems in part from the flight of top students to less expensive public colleges.
How can my child find scholarships for college?
Description: Scholarships are definitely a preferred type of financial aid because they do not have to be repaid. Consequently, they reduce your out-of-pocket costs for college. There are basically two types of scholarships--those awarded solely on the basis of talent (often called merit scholarships) and those awarded on the basis of talent and financial need. These scholarships can come from two sources--the colleges you are interested in and everywhere else.
How do I know if I\'m eligible for federal financial aid?
Description: The answer is you don't, until you apply. For most parents, even two-income parents, it's difficult to predict who will qualify for financial aid. Some families with incomes of $100,000 or more may qualify for financial aid, while those with lesser incomes may not.
How does the federal financial aid process work?
Description: For the federal government to determine your child's financial aid eligibility, you must first complete its aid application known as the Free Application for Federal Student Aid, or FAFSA. The FAFSA requires specific income and asset information from both you and your child. Independent students do not need to list their parents' information.
What happens if our child\'s college does not give us all the financial aid we need?
Description: You must make up the difference. A common misconception is that if your child qualifies for financial aid, he or she will receive 100 percent of the aid he or she needs. In creating financial aid packages, colleges aren't obligated to meet all of a student's financial need. Colleges have limited financial aid budgets and tend to offer the most aid to those students who meet their specific enrollment goals.
What is a Stafford Loan?
Description: Stafford Loans are among the most popular and available of federal student loans. If you're a graduate or undergraduate student enrolled in an eligible program of study on at least a half-time basis, you can apply for a Stafford Loan. To do so, you must fill out the federal government's financial aid application, the FAFSA, which stands for Free Application for Federal Student Aid.
Should I take out a home equity loan to pay for my child\'s tuition?
Description: If you own a home and have equity in it, you may want to consider taking out a home equity loan as a source of funds for your child's private school or college tuition. A home equity loan is secured by the equity you have built up in your home and can be structured as either a revolving line of credit or a second mortgage.
How should my child go about selecting a college?
Description: This is probably one of the biggest decisions you and your child will make together. Remember that your child could spend the next two to six years at this school. You'll want to know that your son or daughter will receive a good education and be happy there.
Can I refinance my student loan?
Description: Generally, the standard repayment option for student loans involves a fixed monthly payment for a 5- to 10-year term. With increasing tuition costs, however, it's possible you may graduate with student loan payments that are simply unaffordable. Moreover, if you have multiple student loans, you may be required to make several different monthly payments to different loan servicers. Consolidation of your loans may thus make your debt more manageable.
How will I ever pay off my student loans?
Description: As the cost of post-secondary education continues to increase and you take on further student loan indebtedness to pay for it, you may feel as if you are leaving the ivory tower with a mortgage on your back. You may be surprised to discover that some or all of your indebtedness can be forgiven if you are employed in certain public-service sectors, teach in teacher-shortage areas, or go into the Peace Corps.
I\'m having trouble paying my student loans. What should I do?
Description: The first thing you need to do is to make your lender aware of your situation. Confronting the problem is probably the most beneficial thing you can do.
Is student loan interest deductible?
Description: You may be able to deduct all or part of the student loan interest you've paid during the year, assuming you meet the requirements. You may be able to deduct up to $2,500 each year from your gross income if you've paid interest on a qualified education loan for qualified higher education expenses during the year.
Should I pay off my student loans early with a home equity loan?
Description: Generally, the earlier you can pay off your student loans, the better off you'll be. You'll save interest and improve your debt-to-income ratio, a factor lenders consider when deciding whether to offer you credit, and your good payment record will be positively reflected in your credit history and credit score.

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