FAP882: Cutting college costs, free stuff challenge, saving money

October 31, 2008

FAP882: Cutting college costs, free stuff challenge, saving money

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Weekly Financial Aid News Roundup
+ No gift cards this holiday season!
+ State of the student loan industry
+ How to cut college costs up to 50%
+ Part 2 of reducing college costs
+ Next week I release a public beta of our Scholarship Search Secrets eBook version 5!

Scholarship Update
+ Tonight is the drawing for the Student Loan Network $10,000 scholarship!

Mail Bag
+ How much should you put on the FC for the CSS profile?

Public Service Announcement
+ VOTE on Tuesday, November 4, 2008 - I don’t care who you vote for, but vote.
+ Not sure where to go? Google Maps will help you.

Free Stuff Friday
+ Poladroid
+ Infant formula
+ Dunkin Dark
+ Your free stuff mission from now until New Year’s Day
+ None of this stuff will cost you money, but lots of it can be used by someone else - infant formula by shelters, coffee by homeless programs
+ Get free stuff whether you need it or not and donate it!
+ For the election, for iPod Touch and iPhone, Vote Report
+ No iPod/iPhone? Use Twitter!
+ iPhoto to GMail
+ A preview of the November read-a-thon giveaway

Free Song of the Week
+ Ingrid Michaelson, Be OK

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Reminders
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+ Financial Aid Podcast Show Notes at FinancialAidPodcast.com.
+ Free scholarship search secrets eBook at StudentScholarshipSearch.com/ebook
+ Free college scholarships contests!
+ Open an FDIC-insured savings account today!
+ Stafford federal student loans at StaffordLoan.com
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+ Graduate student loans at GradLoans.com
+ Private student loans available at any time - visit AlternativeStudentLoan.com
+ Private student loan consolidation at StudentLoanConsolidator.com
+ FAFSA form tutorials and free help at FAFSAonline.com
+ The Financial Aid Podcast is a publication of the Student Loan Network.

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Daily Aid 32: FAFSA EFC and the CSS Profile - How Much You Can Pay For College

October 30, 2008

Daily Aid 32: FAFSA EFC and the CSS Profile - How Much You Can Pay For College

Student Financial Aid News

From Inside Higher Ed:

At Shenandoah University, there have been a few senior-level administrators who have decided to forgo their raises altogether, placing the money in an emergency fund that is being used to help existing students who are struggling to afford to stay enrolled.

Commentary

I applaud anyone who is willing to take a pay cut - and forgoing a raise when inflation is eating away at the bottom line is effectively a pay cut - to help students stay enrolled. That said, it might be more cost effective for Shenandoah and other colleges to reduce the overall cost of education at the top line.

One of the things I think you’ll see become very prominent in the next year is a trend towards finding the most affordable solutions to pay for college possible. Everything from testing out of classes to early graduation to distance learning and online degrees is on the table as students, parents, and families try to figure out how to make college more affordable.

Looking at the many options before us, I’d suggest this strategy for right now.

1. Earn as many scholarships as you can. Free money can’t be beat. Scholarship Search Secrets, our free scholarship eBook, goes to “press” next week.

2. Start saving as early as possible. Save money like crazy. Cut back on discretionary expenses. Put money away. Use as many money saving strategies as possible.

3. File your FAFSA as early as possible. I’m almost done with the 2009-2010 FAFSA guide based on the draft FAFSA, and this year’s guide is going to be more detailed than ever, line by line.

4. Talk to your college about which courses you can test out of using CLEP exams or your school’s own credit-based exams. Prep, then test out of them to reduce cost per credit hour and get basic courses out of the way.

5. If you can manage the workload, work during the summer AND take either an online degrees/distance learning course or two, to earn some credits. If you’re not set up for an online education experience, check in at your local community college about credit transfer and take a class at night.

6. Only after you’ve been able to reduce the overall cost of your education should you look at borrowing money and taking out student loans.

One final piece of opinion: if you think that a community college offers a lower quality education than a traditional school, you’re almost certainly wrong. When I was working at AT&T back in 1998, I took a C++ course at Raritan Valley Community College, not too far from where I was living back then. The instructor for the course wasn’t some hack who couldn’t cut it in a traditional school - the instructor was a senior programmer at AT&T who moonlighted as a college professor. She was one of the best professors in computer science I ever had, because in addition to being able to teach, she was also able to explain the material in very concrete, practical terms. Her day job required her to make practical use of her knowledge on a daily basis, and for me, being able to ask very specific, task-related questions and get experience-based answers was invaluable.

Don’t overlook your local community college. You’d be surprised what you’ll find there.

Scholarship Update

The Student Loan Network $10,000 scholarship drawing is TOMORROW. Enter to win NOW.

Mail Bag

In the past few days, I’ve suddenly been swamped with calls and emails about a question on the CSS Profile, a fee-based financial aid form similar to the FAFSA used by some colleges. The specific question is how much are you willing to contribute towards the cost of education?

The answer I’ve been giving people is that this is a number the FAFSA already comes up with, called the Expected Family Contribution, or EFC. The EFC is based on a whole slew of questions about your family’s finances and represents the government’s guess about how much you can afford to pay for your education.

For some families, this is zero. If you receive a zero expected family contribution result from your FAFSA filing, put the same down on the CSS Profile. For some families, this is thousands of dollars. Chances are, your college will compare what you put in that line with your FAFSA results, so if you put down anything besides the EFC, you might be asked to justify it. In some cases, this will be easy to do - for example, the FAFSA does not take into account debt you currently carry, including mortgage and other debts. Thus, an EFC in the thousands might translate into more money per month than you can possibly afford.

Here’s how I’d suggest you tackle this. First, take your EFC, whatever it is, and break it into a monthly cost. If your FAFSA EFC is $24,000, then you have an effective monthly EFC of $2,000. Put together your personal budget and determine what the mandatory expenses are - rent/mortgage, utilities, etc.

Subtract only the mandatory expenses from your monthly EFC - thus, if you pay $900/month in rent, $100/month in utilities, $200/food (NOT dining out, just groceries), you have a mandatory expenses sum of $1,200. You need a place to live, food to eat, and heat so you don’t freeze to death in the winter.

Take your EFC minus your mandatory expenses, multiply by 12, and that’s what you should be able to contribute towards paying for college. In this example, that’s $2,000 - $1,200 ($800/month) * 12 = $9,600.

When you go before your college’s financial aid office, because mandatory expenses can be easily documented, you can show a simple budget worksheet to your financial aid officer to show why the EFC is wrong for you.

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Daily Aid 31: How to cut your cost of college education in half

October 29, 2008

Daily Aid 31: How to cut your cost of college education in half

Student Financial Aid News

From all over the place - lenders are curtailing credit cards by increasing credit requirements and reducing available credit, including student credit cards. Defaults have been rising across the board on all forms of lending, but credit cards have been hit especially hard since the housing bubble burst. If you’re thinking about getting a credit card, you’ll want to do that sooner rather than later.

From NASFAA and USA Today:

“For months, the Wall Street credit crisis has made many families nervous that the widespread availability of student loans will dry up,” writes Michael Dannenberg in USA Today. “But no matter how many banks fail, there is no danger that families will be deprived access to federal student loans. None. The real danger during bad economic times is that tuition often skyrockets. Here’s why: A bad economy depresses state tax revenue. To meet state balanced-budget requirements, states cut funding for higher education. To make up those cuts, public colleges hike tuition. Competing private colleges see the increases and feel empowered to increase their tuitions markedly as well.”

Commentary

Expect tuition to rise across the board, at both public and private universities. Public schools will indeed take a bigger hit from declining state budgets, but private universities are certainly not immune. Plan on significant tuition increases - around 10% per year - over the next 3 years, and budget your financial aid plans accordingly.

Scholarship Update

Do Something Grants. Do Something is a directory of grants available for students who pursue social change and lack funding to do so.

Details at our free college scholarship search site.

News You Can Use

As part of my research into online degrees, I’ve stumbled across the CLEP, or College Level Examination Program, a program administered by the College Board that lets you test out of undergraduate coursework and receive credits for your exam results. About 2,900, or more than half, of the colleges in America will grant course credit for sufficiently high CLEP scores.

CLEP exams are $70 each whether you pass or fail. When you compare the cost of a CLEP exam to its equivalent credit hour cost at even a public university, a CLEP exam is a bargain as long as you pass, ideally on the first shot. Take a look at the list below; each of the subjects is between 3-12 credits, assuming a one semester course is 3 credits.

Now take the rough cost per credit hour - from $75 at community colleges to $600 for top schools - and you begin to see the massive cost savings that testing out of courses can yield. If you’re a very talented, smart student, you can rack up significant savings by testing out of as many courses (especially generic course requirements at liberal arts colleges) as your school will allow. Could you finish a 4 year degree in 3 years? Absolutely. Could you pay 25% - 50% less for a college education? Absolutely.

The catch, of course, is that you have to be able to pass the CLEP exams for each of the subject areas, and your school has to honor CLEP exam results with course credits. If you can do that and your school is willing to grant credits for CLEP results, then an incredibly affordable college education is easily within your reach. Consider using free services like iTunesU to supplement your reading and work towards CLEP exams.

Ask around at your college’s administration for how your school deals with CLEP credit. If you’re not in college yet, make that one of your admissions requirements - acceptance of CLEP results as course credit for as much course credit as you can rack up.

Composition and Literature

+ American Literature
+ Analyzing and Interpreting Literature
+ English Composition
+ English Literature
+ Freshman College Composition
+ Humanities

Foreign Languages

+ French Language (Levels 1 and 2)
+ German Language (Levels 1 and 2)
+ Spanish Language (Levels 1 and 2)

History and Social Sciences

+ American Government
+ Human Growth and Development
+ Introduction to Educational Psychology
+ Introductory Psychology
+ Introductory Sociology
+ Principles of Macroeconomics
+ Principles of Microeconomics
+ Social Sciences and History
+ U.S. History I: Early Colonizations to 1877
+ U.S. History II: 1865 to the Present
+ Western Civilization I: Ancient Near East to 1648
+ Western Civilization II: 1648 to the Present

Science and Mathematics

+ Biology
+ Calculus
+ Chemistry
+ College Algebra
+ College Mathematics
+ Natural Sciences
+ Precalculus

Business

+ Financial Accounting (New in 2007)
+ Introductory Business Law
+ Information Systems and Computer Applications
+ Principles of Management
+ Principles of Marketing

5 most recent Financial Aid Podcast posts

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Student Loan Debt Grows

October 28, 2008

I became a father for the first time earlier this year which was the best moment of my life. Every decision I

now make is with Barrett in mind, which includes going back to school. I’m currently enrolled in classes with the aim of bettering myself, providing a better life for my family, and becoming a more well rounded person. I want to add to our countries GDP numbers. The only problem is my loan volume from school is now skyrocketing upward like a five star Sarah Palin wardrobe.

Did you know the average college graduate carries more than $20,000 in debt? That is a 6% increase year over year. When you combine that with starting salaries for recent grads, which only rose by 3% over that same time period according to the Project on Student Debt, it’s even harder for students to repay those sizeable loans. Of course many students have been unable to land jobs at all and have been forced to place their loans into forbearance where more interest will accrue inflating that total payback number.

It’s really an interesting dichotomy. Go to school and be in debt thousands vs. entering the work force right away with no debt at all. They both have pros and cons but the long term benefits and typical salaries for those with an education will far surpass those without – even when debiting the loan cost from the bottom-line.

To help make those monthly payments more affordable you may want to consider consolidation. Consolidation extends out your loan term and helps minimize your monthly student loan expense. There are also no prepayment penalties so if you have extra money to put toward your loan you can do so at any time.

I know consolidation is going to be in my near future when I graduate. That way I’ll be able to afford my loan payment each month and still buy that new bike for Barrett!

Fighting Foreclosure? Open a Haunted House

October 28, 2008

Homemade haunted house

Ghoulish apparitions, the undead, and bloodthirsty monsters used to send shivers of fear down our spines around Halloween. But, if you’re a homeowner, you’ve undoubtedly become rather blasé about these sorts of things because you’re facing down the most terrifying of demons: foreclosure. For those of you looking for a good fright, the state of the housing market is a excellent start. In the third quarter of this year, foreclosure filings were up 71% from the same period in 2007. That’s enough to elicit a bloodcurdling shriek from any homeowner with a mortgage.

So, yeah, things are bad; you probably already knew that. Here’s what you don’t know: homeowners, you can shamelessly exploit Halloween to your advantage and get yourself off the Foreclosure Express. How, you say? It’s simple — turn that soon-to-be-foreclosed-upon home of yours into a haunted house. Haunted houses, of course, charge admission, and that’s money you can then use to keep up on your mortgage payments. Brilliant! We’re even going to give you pointers on how to do it.

Turn That Money Pit into a Moneymaker

Converting a home with frightening mortgage payments into a just plain frightening home is surprisingly easy. Almost anyone can do it. Case in point: a gaggle of teenage boys in Sylvania Township, Ohio, built a 2,000-square-foot haunted house in their backyard. If a bunch of pubescent males from Nowhere, USA did it, you can, too. Here is a breakdown of the basic steps:

Task #1: Make the exterior spooktacular. The basic premise here is that you want your home to look haunted to prospective customers, or “visitors.” Windows have the singular effect of making a house look suspiciously unhaunted, so you’ll want to black those out from the inside somehow. Black trash bags work well for this task. Now about those porch lights — change the bulbs to red or orange or go with a black light. Use heavy-duty paper to decorate your front door to look like a coffin. You’ll also need to do something about that Brady Bunch picturesque yard of yours. The best way to make a yard look Halloweenesque is to buy some of those cheap Styrofoam headstones you can probably find at the dollar store. Finally, don’t forget the audio effects. You want weird organ music or an eerie noise soundtrack blasting from discreetly positioned speakers at all times.
A frightening foyer. The first thing your visitors see when they walk inside your house will set the tone for the rest of the tour, so you will want to go all out here. A dead body is a must, preferably hanging from a chandelier or a similar object. You can stuff old clothes to make the body and decorate the bottom of a bleach container for the face. Artificial fog is a staple of all impeccably haunted homes, so you may want to round up some dry ice or see if any of your rock star or roadie friends have a fog machine you could borrow. Blood, detached body parts, and spider webs are also nice little touches for the entrance. To help guide your visitors, you can block off the rooms, hallways, or staircases that aren’t part of the tour with black garbage bags or cheap black shower curtains. For added shock value, you might recruit one of your friends to spritz your visitors in the face with water when they walk in. The goal is to startle and awe to get them in the mood for the rest of the tour.
The rest of the house. The remainder of the house mainly hinges on the artistry of your ghoul assistants. You can position your costumed helpers behind off-limits doors that you have disguised with decorations, so the ghouls/monsters/what-have-you can leap out and startle your guests easily. Another little delightful fright you can provide along the way is to peel back grapes and use them as eyeballs. Strategically place them throughout the tour in places you know your visitors will have to touch. The key for a successful haunted house tour is to appeal to as many of the guests’ senses as possible. For an added tactile effect, you can have your visitors walk through spider webs made from stretched cotton and/or hang wet yarn from the ceiling in dark places. Slimy string-like objects feel especially creepy when your visitors have no idea what they are. If you can get a black light in each of your rooms, then you can make decorations pop by using black light sensitive materials. Otherwise, you can just change the bulbs to different colors or use strobe or colored flood lights in strategic places.
Do a walk-through. Go through your haunted house as if you were a visitor. Fill in any gaps with extra decorations and remember your goal of appealing to as many of the five senses at once as you can. Map out a plan with your ghoul assistants and do a practice run to make sure they know when and where they are supposed to appear. If your ghouls are in good shape, all the better because they can add to the suspense by chasing after guests once they pop out of their respective hiding places.
Advertise. Make up signs that advertise your haunted house and put them up in and around your neighborhood. You might even hand out flyers at an event or at a Halloween store. Use billboards, the Internet, mass texts, or whatever you need to do to get the word out. You could even appeal to a nobler purpose by embellishing the truth and saying that the proceeds go to charity. No one has to know that you are that charity.

Set Admission Prices & Rake in the Dough

Your haunted house is all set up, you’ve done your marketing, and now all you have to do is set an admission price and open your house up for business. You may be able to get away with charging more as it gets closer and closer to Halloween because people are more in the mood for fear. After Halloween is over, count your profits and get ready to celebrate because you can make your mortgage payment. . .at least for this month. But remember there are always the ever-popular Thanksgiving-themed house tours, Santa’s workshop tours, Valentine’s Day love canal rides in your pool. . .the possibilities are endless.

Loan-Topics.com

FAP882: Cutting college costs, free stuff challenge, saving money

Daily Aid 32: FAFSA EFC and the CSS Profile - How Much You Can Pay For College

Daily Aid 31: How to cut your cost of college education in half

Student Loan Debt Grows

Fighting Foreclosure? Open a Haunted House

Turn That Money Pit into a Moneymaker

Set Admission Prices & Rake in the Dough

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