Kiplinger 100: Best Values in Private Education

College rankings are, for the most part, useless. I believe that college selection is an individual choice that cannot be summed up by rankings. Still, many students chase the same elusive top schools, as though "winning" admission to one of them is the only means by which their high school success (and future success) can be measured. Yet, what may be the #1 school for one student may not be on another students radar. I don't know how that gets factored into rankings.

Kiplinger's, as usual, provides some specific, targeted advice in their current article, Kiplinger 100: Best Values in Private Colleges. The idea behind their rankings is to compare colleges, both research universities and liberal arts colleges, on the basis of the quality of their education versus the relative costs to the students and their families. Also, the article brings to light some disturbing issues that many students face at this time of year.

When Andrew Kositsky applied to colleges several years ago, complicated circumstances prevented him from receiving much family support or qualifying for need-based aid. Rather than abandon his dream of attending an Ivy League institution, Kositsky, of Lummi Island, Wash., considered borrowing $100,000 to foot the bill. "I thought it would be worth it because I'd only go to college once. I wanted the decision to be made irrespective of money."

Fortunately....

Then he talked to Caltech, where a flexible approach to financial aid meant that he could attend a top program without mortgaging his future. "Not only was Caltech understanding in the first place, but it was also willing to listen in case the dynamic changed," says Kositsky. His package, which includes federal and institutional aid, covers about three-fourths of the cost. Kositsky and his family pay the rest.

When Kositsky graduates next year, he plans to share his enthusiasm for math by teaching, a profession he couldn't have pursued had he been saddled with six-figure debt. This brainy kid now recognizes a no-brainer: "Looking back, I'm glad I made the choice not to take out those loans."

I suspect that all too many students (and their families) approach paying for college more in line with Kositsky's first statements - "I only go to college once..." is a familiar refrain.

So, which colleges do manage to blend high quality education, while remaining light on the wallet? The top 10 universities are as follows:

Rank	Name	State	Undergrad. Enroll.	Admission Rate			Total Costs	Cost After Need- Based Aid	Need Met	Aid From Grants	Cost After Non- Need-Based Aid	Non-Need- Based Aid	Average Debt
1	California Institute of Technology, Pasadena	CA	891	17%			$41,595	$14,270	100%	96%	$11,777	20%	$5,395
2	Yale University, New Haven	CT	5,409	10%			$44,000	$16,068	100%	93%	$44,000	0%	$14,306
3	Harvard University, Cambridge	MA	6,649	9%			$44,655	$16,338	100%	92%	$44,655	0%	$8,769
4	Rice University, Houston	TX	3,185	25%			$37,364	$20,475	100%	84%	$31,210	25%	$14,166
5	Duke University, Durham	NC	6,534	22%			$44,532	$20,604	100%	86%	$20,516	6%	$24,391
6	Princeton University, Princeton	NJ	4,906	11%			$45,412	$18,944	100%	93%	$45,412	0%	$4,370
7	Massachusetts Institute of Technology, Cambridge	MA	4,066	14%			$44,650	$20,406	100%	87%	$44,650	0%	$19,748
8	Emory University, Atlanta	GA	6,510	37%			$43,428	$22,192	100%	77%	$25,443	10%	$22,175
9	Columbia University, New York	NY	4,225	11%			$45,844	$23,062	100%	82%	$45,844	0%	$16,080
10	University of Pennsylvania, Philadelphia	PA	9,841	21%			$44,790	$23,074	100%	80%	$44,790	0%	$21,133

Now, this is an impressive list of schools. They are Top 10, after all. But, how realistic is this collection of schools to the average - heck, even top college students. Only one school admits more than one-quarter of their applicant pool, and Emory (37%) is still no guarantee for most students. 60% of the schools on this list (the Ivies and MIT) offer no merit-based scholarships, so if you don't want to open the pocketbook at these schools, you need to exhibit financial need. Even the schools that do offer merit awards only do so for the top of the applicant pool, or students with special talents that the university seeks.

You can find the complete list of liberal arts colleges here. The statistics are going to be eerily similar. Here, four of the Top 10 admit more than one-quarter (Davidson, Washington and Lee, Colgate, and Wellesley), but only one admits more than one-third (Wellesley - 34%). Getting in will be more than half the battle here, too. Five of the ten do not offer merit-based scholarships, either.

Scour the lists, though, as there are a number of schools that admit a good percentage from their applicant pool, and offer excellent merit-based scholarship opportunities. A brief, cursory glance yields a list including these choices:

Centre College, KY - 63% of their applicant pool admitted; 83% receive some merit aid.
DePauw University (IN), Austin College (TX), Wabash College (IN), Agnes Scott College (GA), and Illinois Wesleyan all admit more than 50% of their applicant pool and offer more than 50% of their admitted students merit-based aid.

On the university side, Trinity University in San Antonio, TX meets the same 50/50 profile. So does Case Western Reserve (OH), Whitworth College (WA), Drake University (IA), Gonzaga University (WA), Butler University (IL), and Valparaiso University in Indiana.

It seems to me that based on those results your best bets for affordable quality schooling can be found in Indiana and at some of the country's better faith-based schools. As with everything else, though, these rankings should be taken at face value, and only considered as part of the college admission decision process.

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Financial Aid Independence

A Long Overdue Response...sorry...I was out of town for a few days and then the real world kicked in. We have been absolutely slammed at work with folks visiting from out of town. Trust me - it is not a complaint, but when I get home, the last thing I want to do is sit down and write some more.

Still, I promised a commenter on an old thread a response, and I hate to have it buried in the recesses of a year-old post. The commenter wanted to know about "principle residence" and how a second home might qualify the family for additional aid benefits.

If we own second home (recreation) about 45 minutes from primary, is there a way in Junior year our son can claim living on his own at the second home address (maybe paying us rent)so that he can obtain more benefits on financial aid? In essence they would NOT look at parents assets??

There are a number of factors at play here, and the first thing that I would suggest is to contact the financial aid office at the schools that you are considering to see if they have any advice. The reason for this is that while there are some universal guidelines, every school has the opportunity to administer financial aid under the auspice of "professional judgement," which allows for some leeway in some unusual circumstances. My answers below should be considered "common practice," what you might expect at MOST schools.

1. Living at a separate address (especially a house owned by a student's parents) does not mean that you are independent for the sake of financial aid. Generally, there are four (common) circumstances in which a student is considered to be independent for the purposes of financial aid.
(a) The student reaches the age of 24 during the year in which aid is awarded;
(b) The student is married;
(c) The student is a single parent, with custody of child(ren);
(d) Both of the students parents are deceased.
(a) and (d) are not really things that one can control (members of the Menendez family are obviously excluded), but just circumstance. I would not recommend engaging in (b) and/or (c) EXCLUSIVELY for the purpose of gaining additional financial aid. Why do colleges enforce this rule? Students who are not dependent on their parents for funding their education are dependent on the university for funding their education. It is in the school's best interest to ensure that students and families are linked for as long as possible.

2. Some schools have residency requirements that require students to live on campus for a certain number of years. Other schools link their academic scholarship offers to living on campus. Be sure that you are aware of all the rules regarding housing and residency before considering this as a plan to reduce costs on housing.

3. The second home may be killing your chances at financial aid now. While equity in your primary residence is considered an excluded asset, the same is not the case for a second (vacation) home. While you can use a mortgage to offset the value of the second home, it is still considered an asset, and the net value will be included in the FAFSA calculation. If you own the home outright, this could be substantial. Also, some private colleges may view ownership in a second home as a luxury and may be less willing to provide additional need-based institutional aid.

I hope this helps. Further, I hope that my delay in responding was not too inconvenient for you.

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Too Late to Apply to College? Not Hardly!

The application deadline has passed at schools like Duke, Cornell and George Washington, but is all hope lost if you haven't even begun to start the college application process? No way. US News and World Report, the folks who write the Bible on college rankings, have compiled a list of schools with late application deadlines and rolling admission.

How did this topic enter my mind? One of my colleagues (another person who works in the ADMISSION office) has a daughter who has not yet applied to any college. This is a smart kid, who, it has always been assumed, will attend the college where her father is on staff (serious tuition remission benefit). The girl is smart - but may be looking for a different collegiate environment, may not want to live (even on campus) so close to home, etc. For whatever reason, she has dragged her feet in getting applications out to colleges - ours or others.

I was amazed at the sheer number of schools that still accept applications - even schools with a posted deadline. There are a handful of schools with application deadlines AFTER we begin Orientation and fall classes. I suppose that is their subtle way of really utilizing rolling admission while appearing so selective as to have a deadline? With such a daunting list, where does one begin? Well, by now, hopefully, you have some idea of the characteristics you want in a college. There are colleges on this list that could still meet almost any student's academic, geographic, social, and faith-based goals. Even the military academies application deadlines haven't all passed yet!

Looking for the larger state university experience? Quality state universities, such as the University of Kansas, University of Houston, Arizona State University, Colorado State University, and the University of Memphis are just a handful of the quality public schools with application deadlines on or AFTER April 1.

There are top-notch private liberal arts colleges, as well. College of Santa Fe, Manhattan College, Marietta College, Lake Forest College, Albertson, and Mercer University all have deadlines on or after April 1.

Perhaps you are considering a specialized school, say, in art, theater, food, or fashion. The Culinary Institute of America (the Harvard of cooking schools!), Fashion Institute of Technology (the Harvard of the fashion world!), Savannah College of Art and Design (the Harvard of....OK, you get the picture!), Johnson and Wales University, and Columbia College (Art, in Chicago) all have deadlines after April 1.

I am a huge sports fan - and I almost made my college choice based on my ability to watch big time college athletics. This year, of the ten schools that made the Bowl Championship Series (BCS), you can still apply to three of them - Louisville, LSU, and Boise State University. You can still apply to nearly half of the current Top 25 Division I men's basketball schools - Pittsburgh, Kansas, Memphis, Nevada, Washington State, Butler, Marquette, Southern Illinois, Indiana, Oklahoma State, West Virginia, and Arizona. From the six major D-I athletic conferences, applications are still being accepted at nine Big East Schools (WVU, USF, DePaul, Marquette, Rutgers, Seton Hall, St. John's, Pittsburgh, and Louisville); eight Big 12 schools (Nebraska, Oklahoma, Oklahoma State, Texas Tech, Iowa State, Kansas State, Kansas, and Missouri); seven SEC schools (Ole Miss, Auburn, Arkansas, Mississippi State, Alabama, Tennessee, and LSU); six Big 10 schools - which many consider to be the most academically rigorous of the major college conferences (Iowa, Michigan State, Minnesota, Indiana, and Purdue); three Pac-10 schools (Arizona, Arizona State, and Washington State); and two ACC schools (Clemson and Florida State).

Of course, you may not have to give up that Ivy dream yet - even if you haven't started the application process. The University of Toronto, sometimes described as the "Harvard of Canada" will accept applications through March 1. Southern Methodist University (SMU), one of many schools that has earned the moniker "Harvard of the South" is still accepting applications, as are Beloit College, the "Harvard of the Midwest;" Embry Riddle Aeronautical University, the "Harvard of the Sky;"Gallaudet University, the "Harvard of the Deaf Community;" and Hiram College, the "Harvard of Northeastern Ohio." Maybe you are not a Harvard Man (or Woman). You can still apply to Samford University, the "Princeton of the South;" or Truman State University, the "Princeton of the Prairie."

In all seriousness, there are a number of excellent colleges out there that are still accepting applications - and many of them will continue to do so right up until the time classes start in August. That said, if you want a solid chance at one of these schools, it could be time to get a move on, as they say. Getting in is one thing - financial aid is something else, and that money will start disappearing quickly.

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Why Letters of Recommendation are Irrelevant

As part of my job, I read college applications. I take this pretty seriously. If a student took the time to submit a complete application, I think that I should give it due time to review. Many admission decisions are pretty cut and dry without spending too much time meticulously combing through the entire file; others require a deeper perusal, to include verification of proper high school curriculum, a variety of extracurricular activities, and the letters of recommendation.

Unfortunately, all too many letters of recommendation give me no more insight to a student's ability to succeed in a college environment than a Magic 8-Ball. Most letters don't warrant more than a cursory glance because I have read all of the glowing letters that spout over-the-top plaudits for (usually) average students. Still, once or twice a year, I get a noteworthy letter, and this year was no exception - usually one extraordinary in it's helpfulness and one extraordinary in it's uselessness. My extraordinary (positive) letter came from a good friend who used to work in college admissions and now works as a counselor at a private high school. The letter was forthright, but had style and personality. It also gave me insight into the student that I could not have gleaned from the application or even a personal interview with the student. My OTHER letter arrived this past week:

To Whom It May Concern:

[Student's Full Name] is the student who is going to make a difference in your classroom. I have had the pleasure of knowing [student] for two years. I taught English 11 and World Literature 12. He is a mature young man who gives positive direction for the other students. He is a true role model for others to follow. [student] is intelligent, creative, mature, hardworking and wants to create a positive influence in all he deals with. He excels in all he does with great determination.

[Student] has demonstrated high levels of initiative in learning. wants to make a difference in his life; he is not going to settle for second best. He realizes life is very competetive. knows that he has to earn everything that comes his way. [Student] realizes that education is a privilege and he is going to take full advantage of it. Based on performance, his rite of passage into college will be a smooth one.

[Student] realizes that school is a multi-faceted experience. [Student] is a vital part of [High School Name]. He has strong leadership qualities.

[Student] has left a great mark on me. He realizes education is the foundation cornerstone in starting a rewarding career. [Student]'s initiative to study in your college shows that he has taken the time to find the college that is going to put him on the right foot and in the right directions to give him every opportunity to use education to make a desirable candidate in any profession he chooses to follow.

[Student]'s hard work, responsibilities, creativity, long hours hitting the books, extra curricular activities, self esteem, and strong Christian values has prepared him for the tasks he will be expected to complete in college. [Student] is well rounded and will be a desirable candidate ofr you to consider.

I highly recommend without hesitation [Student] to your institution. He will be a positive asset to your school. You will end up being as proud of him as I have been and [High School Name]. Please do not hesitate to call me with any questions.

Sincerely,
[Teacher's Name and Subject Area]

Stop for a second and try not to focus on the grammar and syntax errors (if you can read my writing, this should be a piece of cake!). The reason why this letter is useless is not really in the content. Rather, the reason why this letter is useless is that it appears to have absolutely no basis in fact.

The student in question submitted a transcript that includes an overall grade point average of 1.7 and standardized test scores almost 33% below our average - almost to the point that one would wonder if the score was for one section of the SAT or the composite score. Lastly, the student earned a grade of 'D' in the course which the letter writer claims to have taught. What about the grades and test scores that this student earned supports the letter that this teacher sent? Why on earth would a teacher who graded a student as barely passing offer up this positive letter of recommendation.

This student was clearly not going to gain admission with or without the above letter. Unfortunately, the letter leaves me with a negative impression of the writer. If I were to receive another application with a letter of recommendation from this person, how could I take what they say seriously? Further, won't this experience come to my mind when I read another application from this high school? I surely don't mean to indict an entire high school on the basis of one bad letter of recommendation, but I think it would be hard to not think of this when I receive the next application(s) from this school.

I can only think that the letter writer was just phoning this one in. I get asked all the time how many letters of recommendation should accompany the application. People give me a baffled look when I give them my standard answer. I usually tell people that they only need one - but, one good one, which they are not likely to get. I go on to explain that sending me five letters that all say pretty much the same thing - how wonderful the student is - "she plays six varsity sports;" "he is working on curing cystic fibrosis;" "when he farts, it smells like roses!" - are not helpful. I would trade five letters filled with unabashed praise for one clear and concise assessment of a student's strengths AND weaknesses. Yes, believe it or not, most 17 year-olds have weaknesses. You would never know it from most letters of recommendation (see above), but the letters that ignore any possible areas in which the student can improve often hold no weight with me. Letters that directly address any student flaws immediately cause me to go back and readdress the letter writer's assessment of the student's positive traits.

Teachers and counselors have the ability to return the letter of recommendation to some relevance, but in it's current form, these letters serve no purpose other than to make the average student's file a touch thicker.

**Welcome Carnival of Education readers! If this is your first visit, you may want to stop by the Introduction page. That will give you a brief overview of what to expect to see elsewhere on this site. This is not a single-focus blog, so you will find posts here on more topics than just education. I do travel a lot for business, so I have quite a few posts (and pictures) of where I have been and the food I have discovered on the road. My finances are equally as important to me, and my work in college admissions allows for some unique perspective on the college search and financial aid.

I am glad you stopped by, and hope that you might poke back again sometime soon. The newest posts can be found by clicking on the "Home" tab at the top of the page.

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Time for a Career Switch? Try Grocery Stock Clerk!

Working in college admissions provides me with a lot of job satisfaction (on most days!), but, as I have mentioned before, it does not provide me with a pocketful of $100 bills on a bi-weekly basis. I have grown to accept that (to some extent). I accept that I will be underpaid relative to society - police officers, teachers, doctors, fast food employees, etc.

OK, the fast food thing was a joke....I think.

This week, Money magazine released it's annual list of the 100 Best Companies to Work For 2007. Surprisingly, my employer was not listed among these fine 100 companies (I was shocked!). My favorite supermarket, however, was ranked #57. Publix is a fine company, and I spent one summer working there in between my freshman and sophomore years of college. I worked in the deli, and it was a decent job until I decided that I could make more money working my own business over the Thanksgiving weekend than I could working in the deli. Apparently, Thanksgiving is a busy time in the grocery business. Who knew?

Florida Today had an article about Publix' ranking today. In the hard copy of the paper, there was a chart that highlighted some of the figures mentioned in the article. The one that stood out for me was the average salary for the most common hourly wage job - grocery stock clerk. On average, these folks make $27,453 per year! More than $27k for stocking groceries! Why did this number, in paricular, leap out at me? The starting salary in my office for an entry level admission counselor is $27,500. An extra $57 per year over the average stock clerk, and yet our office generates nearly 80% of the university's operating budget of about $119 million.

Yes, I know that I am comparing starting salary with average salary. It doesn't matter - the comparison is staggering, and surely doesn't make me feel better about my job. I also don't think that my university is unique in underpaying their admission staff. Admission counselors are charged with recruiting new students, a process that includes many days and nights of business travel - time away from family and friends. Most typical business travelers earn more than the average stock clerk at the supermarket. In addition to recruiting, we are also charged with evaluating prospective students' applications - and holding their hands through the entire process - have you sent your SAT scores? did you send all of your recommendation letters? do you have questions about financial aid? etc. Yes...the people who decide whether or not your children get into college make marginally more than the guy who puts cans of soup on the shelves at the supermarket.

The long-standing perception is that the people who work in the admission office are the people who couldn't get "real jobs" after graduation, so they took this entry-level position until something better comes along. There are some people, though, who find that they truly enjoy representing their university to prospective students - they enjoy seeing families moving students into their residence halls on the first day of Orientation - they take pride in seeing "their" student recruits successfully traverse the stage on the morning of commencement, because they just "KNEW" they were going to make it.

Next time you are at the grocery store picking up a dozen eggs and a jar of pickles, think of the guy moving pallets around the docks and the people back at the university reading your daughter's college application.

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Stuff You Oughta Know About Student Loan Debt

Stop the presses...student loan debt is rising! Maybe this is news to some, but working in the admission office of a private university, it surely isn't shocking to me. I know students who have left college owing more than they would on a mortgage for a house. That said, while I believe in living a debt-free lifestyle, and I am working towards that goal, I do understand that student loans are the only way some people will ever finance their college education. Now, does this mean that there aren't better ways to manage that debt? No. But, given the overall sense of entitlement permeating the country, not many are willing to accept something that they perceive as second choice if there first choice is within their grasps - albeit with a touch of debt thrown in.

Government data says that the average 2003-o4 college graduate owed nearly $20,000 in student loans on graduation day. It is not unreasonable to think that this amount will rise significantly in the coming years, too. The government recently raised the amount that students can borrow, so naturally, this number is likely to rise. Frankly, the story is probably even worse than stated. It doesn't seem that this study takes into account the amount that parents borrow to send their kids to college, most likely in the form of PLUS Loans (Parent Loan for Undergraduate Studies). "Gap" or "alternative" loans also increase the total amount of money borrowed to pay for college. PLUS Loans and gap loans also carry higher interest rates than federal student loans, so they are an even more expensive option for paying for college.

Why the exponential spike in loans for college funding? The simplest answer is that the cost of attendance at both public and private universities is rising faster than the money available in gift aid (scholarships and grants, both from the institution and the state and federal governments). For example**, the amount available in Pell grant money to the students who theoretically need the most to attend college was $3,354 in 1990. In 2006, that amount is $4,050. Using the inflation calculator, you can figure that a Pell grant was worth nearly $5,200 in 1990 in current dollars. Not only has the Pell grant not kept up with the increasing costs of college education, it has effectively been CUT. So, if the poorest students have less access to education grants from the government, and still want to attend school, logic says that the money may have to come from loans.

How about the cost of attendance? If the aid is not increasing, surely the cost of attendance can't be going up much, right? Ummm....not exactly.

Average College Tuition and Fees 2005-06 versus 2004-05

• At four-year private nonprofit institutions, tuition and fees average $1,190 more than last year ($21,235 versus $20,045, a 5.9 percent increase). Total charges average $29,026 ($1,561 more than last year's $27,465, a 5.7 percent increase).
• At four-year public institutions, tuition and fees average $365 more than last year ($5,491 versus $5,126, a 7.1 percent increase). Total charges average $12,127 ($751 more than last year's $11,376, a 6.6 percent increase).
• At two-year public institutions, tuition and fees average $112 more than last year ($2,191 versus $2,079, a 5.4 percent increase).

Average College Tuition and Fees 2005-06 versus 1989-90

• At four-year private nonprofit institutions, tuition and fees average $9,235 more than 1989-90 ($21,235 versus $12,000). That makes for nearly a 77% increase, nearly 30% more than the inflation rate, in general terms over the same period.
• At four-year public institutions, tuition and fees average $2,591 more than 1989-90 ($5,491 versus $2,900). That makes for an 89% increase, almost 40% more than the inflation rate, in general terms over the same period.
  
• At two-year public institutions, tuition and fees average $1,091 more than 1989-90 ($2,191 versus $1,100). I don't even need to do the math to see that tuition almost doubled since 1989-90, while inflation overall stood at about 55%.

Given all this data, it is easy to see how people need to rely more heavily on debt to finance their education. Tomorrow, I will examine ways to manage this debt -- yes, I do believe that there is a way to do this!

**Data source: Paying for College

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Sometimes It's Hard to Not Be Judgemental

Since I have started writing and reading a number of blogs, I have found myself becoming increasingly judgemental about other people's issues -- especially financial ones. Believe me, I am in no place to judge anyone. My finances have been screwed for the last 10-plus years, and while I am making progress getting things together, I still do the kinds of things that other people would surely consider stupid.

Yet.....

It was hard not to read this week's USA Today article from their series "Couples and Their Money." I'll try to paint the picture for you, before I got judgemental.

Tim earns more than $100,000 a year as a senior bank loan officer; Caren makes about $65,000 a year as a physical therapist. Yet despite their ample salaries, they say they're "absolutely unable to put money aside, except with retirement accounts."

This inability to save also has them in over $400,000 worth of debt. I will admit that I don't know how anyone finds themselves in almost a HALF MILLION dollars worth of debt, but I still don't really think any less of them at this point -- they just spend more than they make, which doesn't really make them that much different than many other Americans. Further, almost 3/4ths of this debt is from the couple's primary home mortgage, so maybe the huge debt can just be attributed to keeping up with the Joneses? You would think, though, with a family income of $165k, a house with a $285k mortgage is not out of range, no?

Apparently, expensive dinners out, extravagant gifts given to one another and their son, and house fixer-upper projects (you would think that for $285k+, it would already BE fixed up, no?) all add up. While these may not be the financial choices I would choose to make, there is still no need to be judgemental, right?

How about this?

One thing they're not worried about is the cost of Edson's college education. They've decided that college expenses shouldn't derail their retirement savings.

"We basically told him that he can work his way through college," Caren says. "He can get loans; he can get a job. That's what makes the world go 'round."

And the nominees for Parents of the Year are....The Mayberry's. It's bad enough to dig themselves a financial hole, and teach their child that this is "normal,"and be so materialistic that having "stuff" trumps financial responsibility, but to set your ONLY son up for a possible financial hardship because of sheer selfishness is absolutely beyond me.

Families who make $165k per year should have no trouble funding one child's college education. Instead, because of their income, their son will have very limited access to anything except loans when it comes time to applying for financial aid. "Working his way through college" is a nice image, but why would you want to start you only child off behind the proverbial eight ball? Because it is more important to have a boat? Lovely priorities and a lovely message to send to your kid.

Others have commented on parent's responsibilities to their kids. The general concensus is that children are not entitled to extravagant weddings and expensive private school educations, but parents should take some control over their expenses to make sure that their children are at least somewhat taken care of when needed -- most seem to believe that it is not too much to expect parents to contribute at least the cost or the equivalent to a public university education, if it is realistically within the family's means. It still comes down to a measure of "to each his own," but just remember, your kids are the ones who will determine which old folks home you will be spending your golden months living in. Your call, Dad -- the nice, modern facility, or the crooked home that they showed on last week's '60 Minutes?'

If I were the Mayberry's, I don't know if I would want my son picking my 'home.'

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Stuff You Oughta Know About Filing the FAFSA

This is actually Part II of a previous post. I know it was promised "tomorrow." I don't suppose you are willing to believe that today is yesterday's tomorrow?

I was talking about things you can do (legally and ethically) to reduce your EFC and increase your chances of getting a favorable aid award from colleges. What follows is a list (by no means complete) of some suggestions to help you do this. If you have any ideas of your own, please post them in the comments section. The advice included is that which should be considered for filing the FAFSA, and assumes their Federal Methodology. Some universities consider additional information not submitted on the FAFSA -- the more people game the system, the more colleges have to figure out a way to get the accurate picture they need to dole out their resources.

There are some key things to keep in mind. Analyzing this type of information is not something that most colleges are fond of. An argument can be made that these actions are designed to make wealthy people, who can theoretically afford to pay for college, appear "poor" to get something for nothing. I have yet to meet too many folks who can simply write a check to pay for college, and until those folks become the rule rather than the exception, I think it is a good idea to share some tips. Also, remember that these ideas are those of some guy you are reading on the Internet -- a guy who does have some experience dealing with these situations, but a random "guy" nonetheless. This advice should not replace talking with financial aid professionals at the schools you are deciding between (all schools' Financial Aid offices operate differently), your tax consultant, or a certified financial planner. If you want to know, keep reading...

Plan BEFORE You File
Filing the FAFSA is pretty much the same thing as taking a photograph of financial picture at that one specific date. Your income, assets, marital status, and all other circumstances are all static at that time. If you plan on following ANY of these suggestions, you will receive the most benefits by doing so BEFORE you file.

Reduce Your AGI
This doesn't sound like a good plan yet, does it? You might be thinking, "the best way for me to pay for college is to make LESS money?" Well, no. If you just want to "PAY" for college, then just make MORE money, and write the college a nice, fat check. Since that isn't likely to happen, maybe my idea has some merit. First, we are talking about "Adjusted Gross Income." There are ways to do this:

Increase contributions to your IRA to the maximum allowed. This is something that you can still do for the 2005 tax year. 2005 IRA contributions can be made up until April 15, 2006. If you are planning ahead, have your employer withhold a greater amount of your income for your 401k/403b contribution.

Minimize your capital gains. In most cases, capital gains are treated like ordinary income for the purpose of determining EFC. Try to schedule selling stocks for which you will have a large capital gain either before your child's junior year of high school (before the tax year for which you will be filing your first FAFSA) or late into your child's junior year of college (after the tax year for which you will be filing your child's last FAFSA). For tax purposes, you can use capital losses to offset regular income, but for FAFSA filing, this is generally not the case. You can, generally, use capital losses to offset capital gains, but you would do best to check with the college's Financial Aid Office to check first.

Postpone your annual bonus. Some companies will allow you to defer your annual bonus, some will not. It doesn't hurt to check. Since your child is likely to be in college for more than one year, this is really only delaying the inevitable. But, in the course of one year, you may be entitled to more aid, and you now have one more year of time to plan for next year.

Take an upaid leave of absence. OK...this one seems a little drastic, but if you were considering it anyway. Included in this suggestion is to reduce salary taken from your own business (works if you are a C Corporation). There will be an increase in the value of the business (an asset), but that usually has less negaive reprecussions than income or savings.

Reduce Your Savings
Now that I've got you making less money, you should also spend frivously that which you have saved until now. Ummm...no. But, the two things that are considered above almost all else in determining eligibility for financial aid are the parents' income and assets. The first asset that is called upon in determining EFC is cash on hand -- money in your savings. Making that number lower is one way to increase eligibility for aid. How to do this:

Increase contributions to your IRA to the maximum allowed. Remember, this is something that you can still do for the 2005 tax year. 2005 IRA contributions can be made up until April 15, 2006. Is this starting to sound like deja vu? It should. Maxing out your retirement contributions reduces your income and reduces your cash on hand. Retirement savings are considered excluded assets when calculating EFC. Even better, funds held in a Roth IRA can be used for higher education expenses. Are you with me? Making the $4,000 annual maximum contribution to your Roth IRA reduces your savings account by $4,000 for calculation purposes, but if you choose to use the money to pay for education, there is no penalty for early withdrawl. Also, as was discussed above, increasing your 401k/403b contribution for next year will shelter more money that would otherwise be savings.

Reduce your consumer debt as much as possible. In addition to saving a considerable amount on high interest credit card debt, paying off your credit card balances will reduce the amount of cash you have on hand. Most outstanding consumer debt is not considered when determining financial aid. In addition to credit cards, this also applies to car loans -- so, paying off the SUV will reduce your savings, save you money in interest payments to the bank, and allow you the flexibility of an additional +/-$400 per month.

Pay down the mortgage on your primary residence. Equity in your family's primary residence is not considered at all in determining financial aid. Also, the mortgage on a second home can be used to offset assets -- debt which is secured by property is considered in the need analysis.

Don't transfer money to your soon-to-be college student. This goes against what your tax planner has been telling you for years, no? Yes, you can reduce your TAX obligation by gifting money to your children. However, getting aid to pay for college has nothing to do with your tax obligation. First of all, any money that you give to your children becomes their assets -- and that has a number of ramifications. They may choose to use the money for college, or not. It's their money. If they do choose to use the money for college, chances are they will eliminate all or most of their chances to receive aid. Students' assets are calculated differently in the Federal Methodology -- they are expected to contribute a much greater percentage of their earnings and their assets to their education.

Don't wait to make impending purchses. There are a number of items that are excluded from the Federal Methodology of determining EFC. Cars, computers, school supplies, clothing, and believe it or not, boats are excluded assets when determining EFC. I am not suggesting that you go out and blow all of your money, but acquiring excluded assets with cash will increase your chances of receiving financial aid. If you were planning on purchasing a new car anyway, then you should do that BEFORE you file the FAFSA. Keep in mind, though, that student assets are treated much differently than parent assets. So, buying your little angel a $35,000 BMW for their high school graduation gift seems like a good idea (does it, really?), student assets are counted differently and should be factored into that decision.

There are a few more topics to be discussed, including 529 Plans, Grandparents, the students' actual financial situation, and "special circumstances." I will try to get that post done and up in the next day or two, but I am done making promises.

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Stuff Parents of College Bound Seniors Should Know

...in theory, before filing the FAFSA. This will be the first in a series of FAFSA-related posts. I will try to do one post per night until I am done, but I make no promises!

Your kid is headed off to college next fall, has applied to a dozen different schools, her younger brother is bringing you design plans from a local contractor to turn his sister's bedroom into something more his own...and you now realize that you will need to pay for this. Ugh. I wouldn't want to be you. As if the college admission process isn't daunting enough, the financial aid process is probably worse. The stakes are higher -- kids are trying to "game" the system to get into the same 25 colleges, so the colleges change what makes a candidate attractive, or at least their evaluation methods. The same is true with financial aid. More and more people are chasing after fewer and fewer education dollars -- and desparately trying to game the system to get their fair share. Well, what's fair is (a) debatable, (b) subjective, and (c) not at all a static metric.

There are some simple (and some more complicated) ways to help good, honest, hard-working people get as much benefit as they can from filing the FAFSA. Understanding what the FAFSA determines and what methodology is used is crucial in maximizing your potential to reap any benefits from filing.

The acronym stands for Free Application for Federal Student Aid. The form is free to file. In other words, there really is no excuse to not file. I have heard folks say that they don't want to file because they know that they won't get anything. Well, you surely won't get anything if you don't file. I have heard others say that they don't want to file because they don't want "them" to know how much money they make. Umm...the federal government is the processor for the FAFSA. They already know how much money you make. If they don't -- you have bigger problems.

FAFSA determines Expected Family Contribution (EFC). EFC is basically how much the government thinks you should be spending to send your kids to college. This may be a shock, but sometimes you and the government may not see eye to eye. You will receive a copy of your EFC, as will all of the schools to which you wish to submit this information. The colleges then use EFC to determine your eligibility for need-based aid at their institution and communicate that information to you. Offers of financial aid should be received from all schools to which your child has been accepted and you sent FAFSA information. The first key to getting the most aid is to follow all of the school's instructions and deadlines. Our school has a "priority deadline" for financial aid of March 15. That basically means that all students who file the FAFSA with the federal processor by March 15 will get the same equal access to available aid. That does not mean that students who do not file until after March will not get any aid, but the available pool of funds is usually greatest at the beginning. Find out the dates of all financial aid deadlines for the schools you are interested and make sure that you are done by the earliest of those dates.

Some folks claim that they cannot file the FAFSA early because they have not prepared their taxes for the previous year yet -- and do not want to because they owe money and don't want to pay until it is due on April 15. That claim is bogus. You do not need to have your taxes filed to prepare the FAFSA. You can file using estimated data, and as long as your family's financial situation did not change drastically, then your data from last year is a good starting point for estimating.

We need to operate under some presumptions. One is that people are honest in their dealings. Honesty is something that I would like to just take for granted, but the reality is that I have seen too many people trying to game the system resort to illegal/unethical/immoral means. The advice I have to offer is to those who wish to operate within generally accepted ethical and moral guidelines. If you don't think that you can discuss your FAFSA filing strategy with your clergyman (or your mom), then it is possible that you may be doing something that is not right. In other words, if your strategy involves maxing out your 401k contributions to reduce your AGI, you are probably OK. If you are planning on submitting falsified documents, then maybe not so much.

Part II tomorrow.

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Stuff College-Bound High School Students Should Know

This is the first in what is planned to be a series of entries over the next few months that will deal with the college search process. If you have any ideas for topics that you would like addressed, please email me.

I found this article on college visit tips. Before I get to the article, let me say that I hate when writings like this have no date attached to them. I would like to say that it is a recent article, but I am not really sure that it is because it refers to families "beginning the spring/summer college tour circuit." Well, it is neither spring nor summer, so I can only assume that this "new" article is only one that is refurbished from last year.

College visits are especially important to me. Part of my job responsibilities include training our campus tour guides and coordinating our campus visit program. I sift through the kudos and the complaints that come in the form of our visit evaluation form. In general, we know that we give a pretty good campus tour and have a solid visit program because we have a pretty nice conversion rate of people who come to visit campus who eventually choose to enroll.

The author of the above article discusses how many people do not get the full value from their college visits. It can be debated if the cause of this is because colleges are not providing the correct information or if prospective students and their parents are not asking the right questions. The reality is -- it is probably a little bit of both.

Tomorrow, I am sure that my work email inbox will include a number of disappointed folks who wanted to visit campus over the last week and change during the holiday break. These will be the people who came down, did not schedule an appointment in advance, and discovered that the school was closed from Christmas Eve through New Year's Day. This is in addition to the number of disappointed people who tried to schedule appointments during this time and were told in advance that we would be closed. Apparently, our closing for the holidays is inconvenient. Given that we (collectively, who work in college admissions) do not make much money, one of the lures to the job is our coveted time off. In the past, we have tried to find volunteers from the office who were not traveling over the holidays to come in and give an admission presentation and brief tour of campus to families who "insisted" on coming during the time we were closed. The reality is that those visits are a waste of time for the folks visiting and a waste of time for us -- because these are the same people who are visiting the other schools on their list while they are open for business. We think that we are offering an additional service and doing our prospective students a favor by coming in to work on an off day and they would appreciate this. Instead, the visit evaluations show that they wanted to see a professor or sit in on a class and were disappointed that they couldn't do that! So, they visit another school for their Open House or such, and visit us when we are closed -- they do get to look at some impressive empty buildings! -- and then try to make a valid comparison? That is silly. If this topic interests you, click below for more.

The contra argument is that these are the times when it is convenient to come and visit; parents are off from work , students are out of school, it's warm here at Christmas time, etc. Trying to squeeze in a college visit in between Thanksgiving dinner at Grandma's house, a trip to EPCOT, or sunning yourself on the Florida beach SEEMS like a really good idea. But, you have to take into account what you are going to see if we are not able to accommodate a full campus visit. All the reasons you would want to see us in the first place -- the academic facilities, access to faculty, interaction with current students, etc. -- are not available when we are not open for business.

Some tips, in addition to the ones listed in the article, include:

Before making your travel arrangements, call the school or check their web site to see what days/dates are best for your visit.

Call and schedule an appointment. There may be special opportunities available to students that can only be planned in advance. Try to give the school at least one week's notice of your visit.

Allow at least one full day to visit each school. If schools are VERY close together -- think Drexel and University of Pennsylvania -- then you may be able to schedule more than one, but call the school and ASK if it is feasible.

Talk with your guidance counselor or trusted teacher. S/He may be able to offer some additional suggestions of nearby schools to visit or call a contact in the admission office to alert them of your interest.

Come prepared. Check the school's web site before you leave home to get a feel for what you might expect to see; have a GOOD list of questions to ask; manage your expectations; and be ready for anything unexpected that might come up.

Your visit may include an interview, an information session, an overnight visit, and other school-specific opportunities. Keep in mind that while you are evaluating the school, the school is also evaluating you. Even if you have already been offered admission, your behavior during your visit can still adversely affect you, and admission can be withdrawn. This is particularly important for overnight visits. Don't do anything that you wouldn't do in front of your parents.

Eat a meal on campus. Trust me, we didn't make anything special for you. If you are coming to our school, you will likely have to live and eat on campus your first year. One easy thing to check out that is not on the regular tour is the dining service.

While dining, don't sit by yourself! Plunk yourself down next to some current students and talk with them about campus life. The people that you meet as tour guides are usually the campus superstars -- the people that you meet in the dining hall could be anyone.

It doesn't matter if you secure admission to the school and then visit, or visit before applying. The school doesn't really care, though some more selective institutions do require an interview as part of their admission process. Many schools, however, do include "demonstrated interest" in the admission decision -- and a campus visit would certainly help indicate demonstrated interest.

Another good resource can be found here. The author states:

Since every college visitor isn't looking for the same thing, the same questions won't work for everyone. The important thing is to ask the questions that deal with your particular needs.

College is a very large financial commitment. Most folks wouldn't buy so much as a television or stereo without doing significant comparison shopping. Yet, the college decision sometimes gets short changed in favor of more pressing commitments. If you make an effort to get the most out of your college visits, you will have a better chance to get the most of your college experience.

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