Don't Save for College (In Your Child's Name)

Saving for college is widely seen as something good and noble that all parents should attempt to do. And saving for college is good and noble – but it should be done in the right way.

Unless you're able to pay cash for college and your student won't need financial aid to attend, do NOT save money in your child's name. Doing so will only reduce the student's financial aid award.

In calculating awards, parental assets and student assets must be reported. The problem is that student assets have a far greater negative impact on the calculation than parental assets do.

Every additional $100 in student assets reported reduces financial aid by roughly $25, whereas an increase in reported parental assets decreases financial only $6.

Save for college, yes, but put those savings in a separate, dedicated account in the parents' names – not in any kind of student-named fund.

There's no reason to give away financial aid money!

Be smart, and save for college in a dedicated non-student investment vehicle.

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Copyright © 2006-present: Christopher R. Borland. All rights reserved.

The Junior College Transfer Option

Why pay full-fare for four years?

Transferring to the in-state flagship school after living at home and taking JC courses achieves the same credential for half the cost.

For low and middle-income families, the junior college transfer option is looking better each year. Although students taking this path forgo the "real college experience" for a couple of years and may feel a prestige hit, the drastically reduced financial burden could more than make up for these rather insubstantial benefits.

Junior colleges often have transfer agreements with particular state universities that make it easier for successful JC students to attend a top state school. For instance, Santa Rosa Junior College, our local JC, has a transfer agreement with U.C. Berkeley, arguably the best public school in the nation.

Our daughter graduated high school in 2011, took a gap year, and then matriculated at pricey Wesleyan University in Connecticut, graduating in 2016 with a double major in math and computer science. Wesleyan seemed like a good idea at the time, considering she had originally planned to major in English ... but given the STEM degree she ultimately earned at Wesleyan, she would actually have been better off transferring from SRJC and graduating with a math/compsci degree from UCB, one of the most highly regarded STEM schools in the world.

She did fine. Our daughter was offered a good scholarship to attend Wesleyan, and though her liberal arts math/compsci degree offered her fewer opportunities than the same degree from UCB would have afforded, she landed a great job soon after graduation as a software engineer at Amadeus North America in Boston.

One significant disadvantage of the JC transfer option is the lower-quality student body JC's typically attract. Although JC instruction is often excellent, top students who attend JC's won't find the same high level of intellectual interaction with peers as those who attend good four-year schools.

But if money is a family's biggest consideration, the JC transfer option could make very good sense, even if the student involved is capable enough to gain admission to big-name schools.

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Copyright © 2006-present: Christopher R. Borland. All rights reserved.

Top Lower-Income Students Should Aim High

While it’s normally true that elite private colleges and universities cost families far more than state schools, this isn’t always the case.

When family income is below certain limits, schools like MIT, Harvard, and Stanford (and even public institutions like UCB) will waive all tuition for admitted students. Excellent students from families of modest means will often get an admissions boost and pay less for a diploma from an elite college than for a similar credential from a less prestigious in-state public university – sometimes far less.

Many poor families erroneously assume that top-flight schools are beyond their financial reach, and that the only realistic option is junior college followed by a transfer to a state university. In fact, for low-income students sharp enough to gain admission, attending an elite school can often be their least expensive option.

Click here for an article listing schools offering free rides and “no-loans grant-only” aid to top students from lower-income families.

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borlandeducational.com

Copyright © 2006-present: Christopher R. Borland. All rights reserved.

ACT’s Financial Aid Need Estimator

Ready to do some initial research, and get an idea as to where you stand with respect to college costs and federal financial aid?

Use this service to estimate both your “expected family contribution” and “eligibility for federal need-based financial aid."

It’s free!

Click on this link to go there:

http://www.act.org/fane/index.html.

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Contact Chris

borlandeducational.com

Copyright © 2006-present: Christopher R. Borland. All rights reserved.

Top Universities Liberalize Financial Aid Policies

The outrageous cost of higher education in America just got knocked down a few notches.

In tow with Stanford University, both Yale and Harvard have recently announced plans to make tuition at their institutions much more affordable for Americans with low and middle incomes.

At Stanford, students whose parents make less than $60K per year will soon pay no tuition and nothing for room and board, while those those whose families earn up to $100K per year still still pay zip for tuition.

Under the new plans, the average student attending Yale will pay half what he or she paid before. Students at Harvard with less than $60K in annual parental income will now pay zero to attend (though work study will be required), and parents with incomes up to $180K will pay only 10% of their combined incomes for each child in attendance.

Other major universities nation-wide are following suit, increasing aid to middle and low income families and substituting grants for student loans so students can graduate without having to shoulder a crushing debt burden.

On Planet Earth in 2008, access to higher education divides countries that "have" from those that "have not." While other developed nations offer a free college education to any citizen who can cut the mustard academically, here in the U.S. the unmanageably high cost of college has been shutting off economic and cultural advancement to large segments of our population for some time, now.

It's about time this untenable situation was addressed and remedied. Let's hope the recent trend toward making higher education affordable for all qualified students in America continues and accelerates. Fixing this problem is clearly a matter of national economic competitiveness, and therefore, ultimately, a matter of national security.

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Copyright © 2006-present: Christopher R. Borland. All rights reserved.

Are Private Student Loans Too Risky?

Not all student loans are created equal. Are private student loans too risky?

In a word, yes.

Increasingly popular, highly marketed private student loans now make up a very large part of educational debt taken on by parents and students across the country each year. Unfortunately, these private student loans may have serious drawbacks and carry additional risks not associated with federal student loans, reported the USA Today's Sandra Block in a recent article on the subject.

These days, it seems that college costs are putting the word "higher" in "higher education," and deep educational debt is fast becoming a real concern for many American families. Although it's a truism that a college education is the single best way to ensure prosperity in our culture, many graduates could find themselves under the thumb of a crushing educational debt burden unless they're able to quickly cash in on their expensive university educations and find gainful employment. Those who cannot may come to regret their decision to opt for many of the private student loans so common today, which, though plentiful and easy to obtain, are often much less affordable, flexible, and forgiving than standard federal loans.

The question of how best to finance the costs of college is of urgent importance to more and more people each year, and if you would like more information about the potential dangers of private loans, I highly recommend Ms. Block's article on the subject.
Click here to read the entire article.

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Contact Chris

borlandeducational.com

Copyright © 2006-present: Christopher R. Borland. All rights reserved.