Tag Archives: financial aid

Grim Student Debt Statistics – Historic Levels

Student debt is now at a historic high in the United States.

Last month the Wall Street Journal reported the following grim student debt statistics:

  • Student loan debt was $364 billion in 2004 and over $1 trillion in 2013.
  • The Federal Reserve Bank of New York reported that as of the fourth quarter of 2012 only about 40% of student borrowers were paying down their loans.
  • 17% of all loans were delinquent, defined as 90 days past due.
  • 14% of borrowers who were not officially delinquent had the same balance as the previous quarter.
  • 30% had increases in their balances.
  • More students are attending college and taking out bigger loans and a weak job market has impacted student re-payment.

There are ways to graduate with manageable debt but you must take the necessary steps before you turn in a single college application.

College GuideI devote many pages in my book, The New College Guide: How to Get In, Get Out, and Get a Job to avoid graduating with a student loan bill that will impact your life after graduation.

Read the book and don’t become a negative statistic.

What Colleges and Universities Don’t Want You to Know: Financial Aid

“Few admission counselors will admit that your chances for acceptance will increase at some schools if you do not apply for financial aid. There are only a handful of colleges and universities in the U.S. that can afford to be totally and fully blind to financial need. Most schools cannot meet the full need of all the students they accept. Ask the question. I think you will be surprised with the answers you get.”

College education: how much aid is available?

Most families in the United States and around the world know that financing a college education is expensive.  

But a college degree is an investment for both the student and family.  So how much financial aid is available?

According to a report by the College Board, in 2012-13 a total of $185.1 billion was awarded to undergraduate students.  Loans represented 37% of the total amount awarded and 24% was awarded in grant aid.  This represents an increase of 132% since 2002-03.

The following statistics are important as you search for the best school for you and your family.  Last year: 

  • $13.0 billion was awarded in federal grants other than Pell grants.
  • Pell Grant funding totaled $32.3 billion.
  • Federal loans totaled $67.8 billion.
  • Private and employer grants were $9.8 billion.
  • Institutions awarded $34.9 billion in grant aid last year.
  • State grant funding totaled $9.6 billion.

mjdennisbook-cover-1000-wideIn addition to federal loans and grants, the federal government funded $.9 billion in Work-Study funding.

The New College Guide: How to Get In, Get Out, and Get a Job recommends:

  • Never eliminate a school because of the published costs.  Few families pay the full amount and as you can read in this blog, there is a great deal of money, from federal, state, institutional and private sources, that can assist you in funding your education.
  • International students should find out, before they enroll, all of the financial aid available at each of the schools on their lists.

What is a College Financial Aid Package?

You know your child is headed for college and you also know your family is going to need financial aid to pay for your child’s education.

You are certainly not alone. In the last two posts, we covered facts you need to know about college financial aid and explained the all-important FAFSA.

college graduationOnce your family has filed a FAFSA and the EFC has been calculated, the staff of the financial aid office will determine what financial aid you are eligible to receive.

The official form letter you receive will list the type and amount of the aid you will receive.  That includes funding from:

 

  • Grants
  • Loans
  • Employment
  • Federal Aid
  • State Aid
  • Institutional Aid
  • Outside organization or private funding sources.

Examples of What Your Financial Aid Package Will Include:

Grant Programs

  • The largest federal grant program is the Pell Grant Program. Awards range from $600 to $5,500.
  • Most colleges and universities, especially private schools, have their own grant programs and awards are usually based on outstanding high school grades.  Individual states also sponsor grant programs.  Check your state’s website for further information.

Loan Programs

  • One popular federal loan program is the Perkins Loan Program. The current interest rate is 5% and the maximum amount is $5,500 per year.
  • Stafford loans are federally subsidized loans and have an interest rate of 3.4%.
  • Freshmen can receive $3,500, sophomores $4,500 and juniors and seniors $5,500 to meet their educational expenses.
  • Parent Loans to Undergraduate Students (PLUS) allow parents to borrow up to the total cost of education minus any financial aid awarded.  The interest rate is 7.9%.

Work Programs

  • The federal Work-Study program allows students to work part-time usually on-campus.
  • Many colleges and universities sponsor their own employment programs.

The New College Guide by Marguerite-J-Dennis FeaturedThe New College Guide: How to Get It, Get Out, and Get a Job recommends:

  • Compare all of your estimated financial aid awards before you apply.
  • Be honest and accurate in completing all of your financial aid forms.
  • Calculate your estimated loan bill with an estimate of what your first year salary is likely to be.  I recommend allocating 15% of your first year’s salary to meeting your loan bill.
  • Make employment an essential part of your financial aid plan.
  • Financial aid counselors can exercise professional judgment to increase your award if you can make a good case.

College financial aid: What is the FAFSA?

Getting accepted at a college or university can be confusing enough but applying for financial aid can be overwhelming,  particularly at one’s first glance at the FAFSA.

Just, exactly, what is the FAFSA and what purpose does it serve? Do you really need to fill it out? (Hint: the answer is yes.)

FAFSAThe Free Application for Federal Student Aid (FAFSA) is the form families must submit to all of the colleges and universities on their list before being applying for financial aid.  

Based on the information on your FAFSA, an Expected Family Calculation (EFC), will be computed and based on that your eligibility for federal aid, most state aid programs, institutional aid and aid from private sources or organizations.

Families will be asked to complete the FAFSA with the following information:

  • Taxed and untaxed income
  • Specific assets (social security income and home equity are not considered assets)
  • Family size
  • Parental ages
  • Number of children in the family and the number in college

Families can file the FAFSA online.  It takes approximately three to four weeks for your FAFSA to be processed. You will receive a Student Aid Report (SAR) after that time indicating what your family is expected to contribute to your college expenses.

The New College GuideThe New College Guide How to Get In, Get Out, and Get a Job recommends:

  • Find out before you file a FAFSA if you can afford all of the schools on your list by meeting with financial aid counselors before you file any application.
  • You can also estimate your EFC by using a financial aid calculator. Check out the Department of Education’s website.   Another useful website is BigFuture .
  • Don’t try to game the system. It never works.  Financial aid counselors have heard it all before.
  • File the FAFSA as early as possible, even before you file your income taxes. You can go  back and amend your FAFSA after your taxes are filed. You can also have your tax returns automatically and electronically transferred into your FAFSA. 
  • If you really believe the EFC does not accurately reflect your family’s contribution, you should appeal your case to the financial aid director.

College Financial Aid Facts You Want to Know

According to the U.S. Department of Education, 71% of  undergraduate students received some form of financial aid in 2011-12.  

That is a 5% increase since 2007-08.

The average amount of aid increased from $9,000 to $10,800.

According to a report from Sallie Mae, How America Pays for College, in 2013, college expenses were covered in the following way:

  • Students borrowed 18%
  • Parents borrowed 9%
  • Parents’ savings 27%
  • Grants and scholarships 30%
  • Relatives and friends 5%
  • Student income and savings 11%.

Since the recession of 2009:

  • Parents have contributed less to meet college expenses.
  • Students borrowed more to meet college expenses.
  • Use of college savings plans increased.
  • Affordability has jumped to become the #1 factor in college selection.
  • Many colleges and universities have slowed the rate of annual tuition increases.
  • Some schools are charging different tuition rates for different majors.

The New College Guide by Marguerite-J-Dennis FeaturedThe New College Guide How to Get In, Get Out, and Get a Job recommends:

  • Finding out before you apply if you can afford the schools your list.
  • Meet with a financial aid counselor before you submit an application.
  • Ask the hard questions.
  • Debt is manageable or unmanageable only in relationship to starting salaries. Try to keep your loan payments to 15% of your first year starting salary.

Updates: The New College Guide

Update: 4/8/2014
The New College Guide is now also available in a Spanish Edition. Subscribe to our eNews to get newest updates!

How to Get In, Get Out, and Get a Job

100 Questions to Ask About  College

by Marguerite J. Dennis

The New College Guide: How to Get In, Get Out, and Get a Job is a different kind of college admission and financial aid book because it offers the reader information to consider before college admission, to financing college with manageable debt, to graduating in four years and getting a job after graduation.

Purchase Marguerite’s book here.

Dedicated to:

Future college students and their parents, high school guidance counselors and international agents

With the hope that some of the questions in this book will help you to select the best college for you and for your family and will help you to better guide the students you counsel.

Early Reviews

“If you read only one book on college admission and financing, read this one. This is the only book on the subject that takes the reader beyond admission, to graduation and getting a job after college” — Marie C. Devins, Editor/Publisher, Talbots Student-Planning Book

“The author has captured the best questions a student and their parents should ask during the important search for college. This is a good planning guide for any student or family member who wants to know the lay of the land before they start their college journey.”  –Dr. James McCoy, Vice President for Enrollment Management, University of New Haven

 “I believe this book asks many questions I never would have considered. After reading it I realize that college is not just for the wealthy, fortunate or upper class. This book is the key to my future.” — Andy Dubsky, High School Sophomore 

Marguerite talks college admissions with St. Joseph’s College television

Marguerite Dennis explains to St. Joseph’s College Telecare TV network Transforming Communities how to demystify college admissions.

The show, hosted by Theresa LaRocca-Meyer, Vice President for Enrollment Management at St. Joseph’s, and Gigi Lamens, Associate Vice President of Enrollment Management, will be replayed several times on St. Joseph’s Telecare cable network.

The interview is part of Marguerite’s book tour for The New College Guide: How to Get In, Get Out and Get a Job. And, through the good graces of St. Joseph’s and Telecare Television, we have the full interview here (feel free to share it with your friends):

More Common Mistakes to Avoid When Selecting a College

Little doubt exist that selecting a college or university is among life’s most complex and intimidating challenges – for students and parents.

But it doesn’t have to be that way.

Our most recent post listed some of the most common mistakes families make when applying to colleges and universities.   We have more:

Graduation Rates or Progression Rates

In addition to asking about a school’s graduation rates, find out the progression rate from first to second year. That will give a better indication of the academic and student services programs in the first year and a good indication of the investment a school makes in its first year students.

Academic “Map”

Make certain you get an outline from the academic department of the academic “map” you need to follow in order to graduate in four, not five or six years.

Career Counseling

Some of the best schools in the country have a four year career counseling program and you should find out what each of the schools on your list do to help students get a job at graduation.  Ask for the employment statistics of recent graduates.

Alumni Networks

Find out how each of the schools on your list involves alumni to help students get either internships or entry level jobs.  Alumni networks can be essential to recent college graduates.

Mr. Cohen cuts class, misses notes; not college costs

In an opinion piece published in the March 21 edition of the New York Times, attorney Steve Cohen suggests a quick way to cut college costs would be for Congress to reduce by 75 percent the “estimated family contribution,” or EFC, for middle class families with children headed to college or university.

I believe Mr. Cohen is mistaken and submitted to the Times a letter in rebuttal:

I must respectfully disagree with a basic premise in Mr. Cohen’s Op-Ed article in today’s New York Times.

It is folly for a family to spend time and money filing many college applications and only begin a conversation as to whether they can afford the school after an acceptance letter arrives in the mailbox.

To cut college costs, a more pro-active approach to college admission and financing is necessary. Families should have in-person ( or electronic) conversations with financial aid staff to get an estimate of Expected Family Contribution. At the same time they should also get an estimate of what the family can expect in federal, state and school funding. There are many colleges and universities meeting with parents and students in the evening or on the week-end to provide early estimates of financial costs and expected funds.

Some schools may be eliminated after this information is calculated. Other schools may stay on the college list as a result of the information.

Given the political climate in Washington, does anyone really believe, as Mr. Cohen suggests, that Congress and the President will act quickly to reduce the EFC by 75%?

The best way for families to control college costs is to take control, by getting good information early in the application cycle, of their ability to afford, or not afford, each of the schools on their college list.