Monthly Archives: January 2015

President Obamas speech sparks new interest in saving for college with 529 Plans.

The 529 College Saving Plan lives to fight another day!

The 529 College Saving Plan just got about 7 days of the finest publicity you can’t even buy…the free kind! All this, courtesy of the President of these United States, no less.

Way to go, Mr. President, apparently you scared the socks off of middle America as a way of galvanizing public attention. Well done…that is, IF proposing to tax 529 College Saving Plans was just a clever ploy!
Before you read on, take a short refresher course in 529 plans by watching my video on the subject:

It was during the State of the Union address that the President introduced his budget proposals which included ways to fund his ideas to improve college access for millions more students. One of those ideas was to make tuition for community colleges free. But, nothing is really free, so where would the money to pay for this come from? Well, how about taxing the college savings of millions of American Moms and Dads? It’s all right there in those lovely 529 plans. Those Moms and Dads would gladly give up their tax-free earnings to help others, right?

At this point I thought you might like to see what the President looked like when he was putting forth his proposal. Pretty calm, right?

Why worry?
The president exhibits preternatural calm.

Let’s assume for a moment that he actually knew what he was doing…raising awareness about the 529 College Plan. Let’s also assume that he really wanted folks to wake up and notice that it’s time to save for college. Moreover, maybe he wanted to make sure this plan would be around for a long time to come. Free publicity, people!

Wow! Genius! Look at the firestorm of tweets on the subject. And this went on for days!

Loads of Tweets
Angry/concerned Tweeters

Newspaper articles were written, TV and radio guests discussed, and blogs got posted, endlessly explaining the facets of the 529 College Saving plan. If you were alive at all you could not miss the clamor. And you could not avoid thinking about getting a 529 plan for YOUR kids’ college years.

The publicity also had an unforeseen destabilizing effect. People thought that the 529 College Saving plan was permanent and could not be changed. Faith in the system was shaken. Commentators wondered aloud if their Roth IRA’s would be raided next.

Then came the anger and the political wrangling, followed by the online petition drives. The No529Tax.org petition built up enough steam to gain White House attention. And finally a bi-partisan effort was launched to convince the President to remove the 529 Plan tax proposal from his budget. Thus, on day 7, the President decided his little ruse had run it’s course, and BOOM the proposal was gone!

Now, nobody likes to be called stupid, even an outgoing President. But that’s what the pundit people and even the real people were saying about him. Maybe crazy-like-a-fox might better describe whatever happened. Or not. I’m just glad that about the results. People are awake and ready to fight. Realizing that the 529 Plan could go away was huge (contributions would have dried up if the proposal had become law, effectively killing the plan).

In the near term, I will wager that 529 plans get a blast of new contributions. Plus, people are now on the alert to make sure retirement plans and health savings accounts don’t become threatened. Hey, that’s another great result of the President’s public awareness ploy! Well played sir, well played. 😉

President Obamas speech sparks new interest in saving for college with 529 Plans.
More people know about these great college savings plans than ever before thanks to our President.
How to graduate on time.

Play “Graduate On Time”. It’s like a giant board game. Losing is costly, very costly.

Here’s how to catapult your high school senior into the future when he can barely think about next week: Talk about the “Graduate On Time” game and it’s rules. It’ll be particularly riveting when you show him how much money an extra year in college will cost your family. Then there’s the potential 5 figure salary that he, personally, might lose each year. Whoa!

Watch my latest video about graduating on time. Don’t worry, there are only 6 rules!

In the video, the part about making a chart is very important. Several of the top-rated private non-profit universities have installed charts in their advising system websites. Students can use these charts to design their paths to graduation with the help of their advisors.

The chart used by the majority of MIT students caught my eye. It’s called Courseroad and it was designed by current senior (’15) Danny Ben-David

MIT's Courseroad Designer
Danny Ben-David, designer of MIT’s Courseroad App.

when he was a freshman. Danny saw a flyer for a contest and designed the Courseroad app as his entry. When he won the icampus prize, MIT’s administration gave him some monetary incentive to finish the app over the summer. Danny’s Courseroad app has become quite popular on campus even with no advertising other than word-of -mouth. Danny says he may open-source Courseroad in the near future to encourage developers at other universities to design their own. One big advantage for Danny in developing Courseroad was MIT’s unique course numbering system. For instance, math is Course 18, not math. All math courses start with 18 followed by a decimal point and one, two, or three places. Differential Equations is 18.03 for example.
Danny included a Courseroad example, shown here,

Danny Ben-David's Courseroad example
Danny used one of his own Courseroad scenarios as an example.

based on his own academic path in a guest blog-post he wrote for the MIT admissions blog. Here a link Danny’s post.

Getting a major is the other big deal. Without a major, a student can’t even start to fill out a chart or Courseroad or Flightpath or any of the other apps designed to organize one’s academic career.

Complete College America, a well-funded organization that advocates for students to graduate on time, recommends that colleges require incoming freshmen to make a choice. The students would choose one of 7 “Meta-Majors” including STEM, Health Services, Business, Social Sciences, Humanities, Education and Arts.

Meta-majors
Meta-majors is a concept advocated by Complete College America.

The idea is that as the student progresses along a well-defined path, he or she would be able (with the help of advisors) to narrow the scope of the meta-major. For example, a meta-major of education might be narrowed to a major in elementary education. Course choices would become ever more limited as graduation time nears, and staying on track would be facilitated by a process called “Intrusive Advising”.

We shall watch and report.

How to graduate on time.
Help your child graduate on time.

Should Community College Be Free?

The President thinks tuition at community colleges should be free for all eligible students. His plan is expensive and controversial, but it shines a much needed spotlight on community colleges.

Here is  my video explaining why community colleges are so valuable to folks who think they can’t afford the high price of going to college. Please watch and then read more about the President’s plan.

The President’s plan aims to help make public community colleges more affordable to high school graduates so that they can ultimately get better paying jobs. Some students may start work after getting their AA degree, some may move on to 4-year colleges, and some may earn occupational certificates for specific lines of work.

Most education writers opine that this proposal has little chance of passing in the current political climate. But most everyone sees the need to raise the overall education level of the U.S. workforce.

So whether it’s this idea or another, we need to get cracking!

Here’s how the President’s plan lays out:

First and foremost, the feds will contribute three-forths of a student’s tuition. The State will contribute the other one-forth. States can decide whether to opt in or out of the plan.

The federal money would comprise what is known as the “first dollars” of the tuition contribution. This is important because other scholarships and grants can then be used for non-tuition educational expenses.

States that agree to opt in must bring their community colleges up to four-year college standards. Credits earned in a state’s two-year college should be seamlessly transferable to that state’s four-year universities.

Community colleges that have occupational certificate programs must offer courses for in-demand jobs and show good graduation rates.

Students must maintain a C+ average and attend at least half time. They need to show steady progress toward a degree or certificate.

I personally like the plan’s aim to expand community college capacity nationwide. With that goal accomplished, the for-profit colleges that so ill-serve American students will be banished to the dustbin of higher education history.

So, keep your eye on this proposal and others that will be sparked by the controversy surrounding it. College students and their families need a break!

President proposes free community colleges.
Maybe someday we will have free tuition for all students at community colleges.

The Federal Work-Study Program Gets Studied!

Brush up on the topic of Federal Work-Study programs by watching my video. Then please read my blog entry to get the latest info!

 

The Federal Work-Study program has been a feature at a large number of colleges for many years. But lately a report done by the student advocacy group called “Young Invincibles” and funded by the Bill and Melinda Gates Foundation, has called for reforming the system.

The report is titled “A Federal Work-Study Reform Agenda to Better Serve Low-Income Students”. Here is the link to the PDF:  http://younginvincibles.org/wp-content/uploads/2014/09/Federal-Work-Study-Reform-Agenda-Sept-181.pdf

The report says that too much of the federal work-study money goes to large private colleges that have been in the system the longest. For-profit colleges get a hefty amount based on their numerous Pell Grant students. Newer community colleges get the least money, even though they also enroll low-income students.

The report studied how this large pot of Federal money (more than $1 billion) could be better used.
It recommended that the Federal Work Study program should reward schools that enroll low-income students, graduate them at high rates, and make sure they have the skills to get good jobs.

Read between the lines and you’ll find that the notorious for-profit colleges get righteously excluded from work-study funds, even though they “serve” more needy students than anyone else!

The Young Invincibles report also emphasizes the need for work-study jobs to better relate to a student’s field of study. If these reform recommendations were implemented, many of the jobs traditionally grabbed by students who want to work AND study at the exact same time, would disappear. No more manning desks in dorm lobbies or library entrances. Instead, work-study jobs might look more like paid internships where students get real-life career experience.

I can’t see a downside to this. Let me know what you think.

Work, Study and Earn!
Federal Work-Study Programs Are Financial Aid You Earn!