Tag Archives: Paying for College

The new College Scorecard has brand new data.

Obama to Colleges: College Scorecard, it’s what you get when you shoot down my College Ranking Plan!

The new College Scorecard website was built on a data dump the size of Mt. Denali…in fact, it’s like data heaven for college data geeks!
HA! Try to put THIS genie back in the bottle.
Watch my video for a demonstration of College Scorecard’s main features.

 

Well, if this isn’t some fine payback by the Obama administration for all those who scuttled the President’s new college rating plan. And it’s so sincere and sounds so well-meaning that even the opposition is mumbling grudging kudos. But the word is out on colleges that don’t live up to their promises.

So much data, in such an easy-to-use format, built for mobile devices, rolled out just in time for students and their families to make critical decisions about colleges. Whatever the quality of the data, there will be some significant changes in the world of higher education. Tah dah!

Just in my ramblings around this new College Scorecard website at collegescorecard.ed.gov, I could not resist making a search for all medium and large “for-profit” schools. I kind of knew what the results would be, but it was worse than I thought. Apparently, nobody bothered to tell the University of Phoenix that their search results would show that EVERYONE who had attended their schools on all their campuses made salaries of $53,400 dollars after 10 years. Yep, everyone. Clerical error? Or, maybe Phoenix wants it that way.

And then I was wondering about where that data on the salaries of former students came from. And how about the data showing how former students were progressing with their loan repayments?
Well, turns out this info is new, never before seen in public. The federal government, apparently working for the common good, decided to combine the data from federal student loan borrowers with data from their tax records. This data produced lots of useful information. Some of it makes certain schools look good and some of it is very damaging for others. The data is out there for all to see and use.
I didn’t get to vote on the idea to combine this information, nor on the distribution of it. Did you?
Supposedly the personal identifiers have been removed from the data. Hope so.
Here are the assurances of privacy put forth in the data documentation for College Scorecard:

“All National Student Loan Data System (NSLDS) and Treasury elements are protected for privacy purposes; any data not reported in order to protect an individual’s privacy are shown as PrivacySuppressed.”

Is “Privacy Suppressed” what they really meant to say?

I don’t know about you, but I felt like my privacy was suppressed when my data was compromised at Target and at Home Depot!

Here’s hoping for the best with this new website.

Hey, it’s better than doing nothing…maybe.

Consolidate and Stay Cool!

Consolidate Student Loans to Stay Organized and Pay Less!

A young friend of mine just graduated from college and, even has a brand new well-paying job! And that’s not all, he’s newly married! What a lucky guy!

What’s not lucky is that he has student loans. In just 6 months he’ll be out of his grace period and will have to start paying those loans back.

What are his options?

The first thing he might want to consider is consolidating his loans.

Let’s say his loans are all federal direct loans and that some are subsidized and some aren’t. These loans were made in different school years for different amounts and at different interest rates.

So, even though he’ll probably have his loans grouped with one servicer by his lender (the U.S. Education Department), keeping up with all those different loans requires a lot of attentiveness. Mistakes can easily be made by the borrower. Or even by the servicer…shocking, right?

Consolidate Student Loans and Stay Organized

Consolidating his loans would give my young friend a far simpler repayment picture. His interest rates would be averaged and weighted into a rate nearly the same as if he had kept them all separate. Not only that, but he would gain access to at least one of the new affordable repayment plans.

Consolidate Student Loans and Get Affordable Payments

So far, the very newest repayment plan is not quite finalized, but is nearly certain to be available in December of 2015. It’s called the Revised Pay As You Earn plan, or REPAYE for short. My friend would be eligible for REPAYE and it might keep his payments down enough for he and his wife to save for their first house, and to start a family.

He would have been eligible for REPAYE’s more borrower-friendly older cousin, the PAYE plan, IF he had not gotten that well-paying job right out of college. Thanks to his new paycheck, he will not be poor enough in comparison to his student debt to get on the PAYE plan. Moreover, the ratio of wealth to debt for my friend gets even worse under REPAYE because the fed’s calculation of HIS income will include his wife’s income as well. Who knew he should have borrowed more? Just kidding!

But, no matter! Getting your student loan payment down to 10% of your JOINT discretionary income is still a wonderful thing! And, since my friend only has undergraduate loans, any remaining balance will be forgiven after 20 years. The forgiven amount could be taxable that year as income, but it’s likely this tax threat could be gone in the future, thanks to congressional efforts.

If my friend decides to consolidate all his student loans into a single Federal Direct Student Loan for simplicity’s sake and then decides to enter the REPAYE plan, he will have to understand one important fact. As a participant in the plan, he is obligated to send in a form which verifies his family’s joint income EVERY SINGLE YEAR. If he forgets the verification form, he will be placed in an alternate version of the REPAYE plan until he is jolted awake by the higher payments!

The new REPAYE plan will allow many more borrowers to get affordable payments as well, no matter when they got their loans and no matter how much money they earn. The older borrowers will need to get some of their “non-direct” federal loans, such as FFEL, consolidated into Federal Direct Consolidation loans. The biggest thing for older borrowers to remember is that Parent Plus loans cannot be included in these new Federal Direct Consolidation loans. And, even if an earlier consolidation loan paid off a Parent Plus loan, then that consolidation loan is considered “tainted”. It cannot be included in the borrower’s new Federal Direct Consolidation loan, whose purpose it is to access the REPAYE plan.

So you might be wondering why this latest round of cleverly acronym’d student loan repayment plans has come to be a dinner party topic. Here it is: REPAYE clamps down on the excesses of PAYE. Simple as that.

People had begun to game the system. Doctors, lawyers and other high student loan borrowers figured out that they could combine the generous features of PAYE with the Public Service Loan Forgiveness program (PSLF). In 2017, the first of many lucky borrowers will have hundreds of thousands of student loan debt forgiven. The forgiven amounts will not be taxed.

All this system-gaming has given colleges the idea that they can raise their tuitions to match the benefits of the PAYE plan and PSLF program. Taxpayers will be on the hook for the ever-spiraling debt and tuition crisis at private non-profit colleges AND to some degree at public universities.

The cry has gone up to politicians and higher education policy-makers: Put the brakes on PAYE! So REPAYE was invented, and here we are on the brink of it’s implementation.

We can only hope that this time they got it right. I’m taking bets starting now! Who’s in?

Work-Study is Valuable!

Don’t miss out on this financial opportunity!

Work-study means money in a college student’s pocket for doing campus jobs (or even off-campus jobs) that are not too demanding and possibly interesting! Students must visit their school’s financial aid department to view a list of available jobs. Then, just like with any other job, the student must apply and be interviewed. Once hired, the student will spend 10-12 hours a week earning money that has been set aside for him or her by the federal government. The college will administer the program for the government and will usually send
the student’s paycheck directly to his or her bank account.
Most students report that the work-study experience is pleasant, but if not, the student can change to another job. Some jobs allow students to study while manning an information kiosk or reception desk.
So, students should not let this valuable opportunity pass them by. I mean, where else can you get a job which must adjust itself to your schedule rather than the other way around!
Please watch my video to hear more about work-study!

Net Price Calculators Require Patience

Just when you thought getting college financial aid information was going to be a snap, it isn’t.

Getting that piece of information about grants in order to use my “Bucket Method” of comparing college affordability is, admittedly, a bit of a challenge. The unlovely Net Price Calculators now installed by law on the websites of most every college in the U.S. are, in some cases, a display of resistance and neglect by the host entities. On one hand, I am somewhat heartened by the efforts of the College Board to standardize the format of data entry and display of this online college financial aid tool. On the other hand, I am saddened by the efforts by other third party NPC providers to use clever marketing to hoodwink prospective students into making poor choices and falling headlong into giant craters of debt. Watch this video and become your own financial aid “detective”.

For Staying Out of Student Loan Debt Trouble…Knowledge Is Power!

Student loan info is the new hot commodity among financial writers.

As students are going to college for the first time, or back to college for the second, third (or even tenth) year, the number of articles I see about the issue of student loan debt are multiplying faster than I can read them online. But when an exceptionally good article appears in a real live publication in my mailbox, it’s going to get my full attention. I might even read it twice…mostly while eating (low carb, of course!). This article appears in the Fall 2014 USAA magazine, Volume 50, Number 3. It’s title is “ Escaping the Shadow of College Debt”. Here is a link to read it online: >http://www.nxtbook.com/nxtbooks/pace/usaa_2014fall/#/12 . The article contains good stories about two women, who, for different reasons, got themselves into some serious student loan debt. It lays out the scope of the student loan problem and then engages the help of some of the heavy hitters in the college financial business, including Mark Kantrowitz of Edvisors Network and Lynn O’Shaughnessy, author of “The College Solution: A Guide for Everyone Looking for the Right School at the Right Price”. It also gets a lot of great info from the very same website I use in this episode of The College Money Mom. This website is brought to you by the Consumer Financial Protection Bureau, a relatively new department of the U.S. government. So watch this episode to learn about the different kinds of student loans in a really easy to understand way! And, once you have this knowledge, you’ll be able to steer yourself, and others, out of harms’s way.

The CSS Profile – It’s important, but Yikes!!

The CSS Profile. Hard to live with, and harder still to live without.

Having just dropped off our daughter at her wonderful out-of-state college reminds me that soon it will be time again to fill out the dreaded CSS Profile form brought to us by the College Board folks. Without this form, about 250 mostly private colleges and universities would have a much harder time deciding how to use their endowments to attract the best students. And without this form, many of those students wouldn’t have a chance in the world of affording a school outside their own state’s public universities. For this we are grateful. But it doesn’t make the process any less difficult. The College Board does sincerely try to make understanding their CSS Profile possible, as my video will show. But some things still elude the comprehension of reasonably well-educated people. Even our accountant was confused by the meaning of some of the questions. So I can’t help but think that this should spawn an industry specializing in filling out the CSS Profile form. As far as I can tell, this hasn’t happened. At least not to any great extent. And, those who do offer the service are pretty expensive for those of us who actually need the financial aid. So, I (and others in the same boat) will slug it out with the CSS Profile for yet another year.

FAFSA News Sparks Snark

In a google search for FAFSA news, one of the recently published search items is a story from a New Jersey newspaper’s website titled “FAFSA confusion: College students lose financial aid due to decimal point error on application”.

Apparently, at least 165,000 college students stumbled over a quirk in the on-line FAFSA application which caused them to declare that their family’s income was WAY bigger than it actually was.

The little “.00” outside the blanks where a student fills in the family’s income is a hint that you need to round off the income total to the nearest dollar, rather than enter the small change in the blank space allowed. For example, a student declaring a family income of $22,852.19 would actually be telling the government that the family raked in $2,285,219 that year! OOPS!

That student would find herself excluded from most, if not all, federal financial aid. This would include federal grants like the Pell Grant, federal student loans with favorable rates and terms, and federal work-study funds set aside for students with lower family incomes.

According to this article, Federal officials say they will correct the aid awards if/when the errors are found. So nice, so civilized.

It’s when the reader scrolls down to the comments that the fun begins.

The vitriol rolls out thusly:

“If they can’t follow simple instructions, maybe they aren’t college material.”

“Apparently millions of college students can read…and apparently 165,000 others cannot.”

“I would think due to the importance of this form, one would check it over before actually filing it.”

“Hope the applicants were not math, science or engineering majors!”

And it goes downhill, rapidly, from there.

I love the comment sections of news stories. Without them there would be a whole lot more pent-up anger in America than there already is!

To read this for yourself (or even to add your own snark ration) click this link:

http://www.nj.com/education/2014/07/fafsa_confusion_college_students_lose_financial_aid_due_to_decimal_point_error_on_application.html

To get ready for the FAFSA rush starting January 1st of each year, watch my video on the subject:

 

Community Colleges can save you money!

Community colleges are starting to become a more important feature in the college affordability landscape, by teaming up with their state’s large public universities. I found out that rules have been made that allow for standardization of course requirements! Why did this happen? Public pressure. What else would make our elected officials take notice? Apparently, after making these new rules, naming them became a problem. Legislators had run out of really cool names for the new rules. So, after much deliberation and late night meetings, a secret code name for the legislation was seized upon, in an effort to make things perfectly clear to constituents everywhere! Watch my latest video to find out how to de-code and use this information to your greatest benefit.

College Co-op Programs Work!

College co-op programs have been around for nearly 100 years, originating (and still operating) at the University of Cincinnati. In this video, I talk about why co-op programs are valuable for students, colleges AND businesses. I also discuss why this program of alternating sessions of study and work might be a bit of a challenge for young people, even though the perks are substantial.

Student Debt – We Crank Up the Time Machine!

The Student Debt in a Parallel Universe

Travel with me to the land of your younger, less-wise self, and live to teach others your new-found wisdom! That’s the offering in this week’s episode of The College Money Mom, as we explore the overwhelming mountain of student debt many of us racked up during college. It’s not too late to get repayment under control, as we will learn in the weeks to come. But for now, we owe it to our college-bound children to keep them from stepping blindly into the same financial pit.