Lessons It’s All About the Money, Money, Money Deciding On A College 101 You Want Me To Go Where?

2. Lessons • It’s All About the Money, Money, Money • Deciding On A College 101 • You Want Me To Go Where? • Some More About the Money • Where’s the Free Money?

3. Lessons • It’s All About the Money, Money, Money • Deciding On A College 101 • Deciding On A College 202 • You Want Me To Go Where? • Some More About the Money

4. The New Normal

5. Save for your retirement before you ever consider saving for your kids’ college

6. There are several options for parents to borrow for their kids’ college: Don’tdoit!

7. There are other options for parents to pay other than borrowing that still aren’t good ideas!

8. The best way to contribute to your kids college is by cutting your spending way back while they are in school

9. Two other ideas are to get an extra job/ work overtime or sellstuff!

10. It will ask all kinds of info about you and your kid’s financial situation.

11. They then put all of that info into a formula that spits out your EFC

12. The formula basically takes into account the parents’ income, savings and other assets, and age, along with the student’s incomes and assets.

13. For most families, the EFC is completely out of touch and arbitrary

14. The FAFSA spits out an EFC that has nothing to do with what you can actually afford to contribute

15. It does not take into account retirement savings

16. Beware of things that will artificially pump up your income such as selling $10,000 worth of stock: this will be counted as income for that year

17. Your student will be penalized for working and saving for college

18. The formula does not take creditcarddebt into account

19. Financial aid directors will often state that parents are only expected to contribute 5% of their savings to their kid’s college which is technically true, but that is peryear

20. Remember that people in the financial aid office work for the college, not you!

21. Bottom line is to take a look at your situation and determine how much you can afford, not what the federalgovernment tells you you can afford

22. There is a FAFSA loophole, pay down on your house

23. College scholarships are great, but becareful.

24. The average financial aid package in America today comprises 60% loans: which isn’t aid!

25. According to the US Department of Education’s National Postsecondary Student Aid Study, of families with income between $40,000 and $59,999, only 31 percent received federal grant aid and families with incomes between $60,000 and $79,999, only 2.3% received federal grant aid

26. If financial aid was so great, student loan debt would not constitute 25% of all consumer debt in this country

27. Remember: student loans are different from grants!

28. Some schools even give a great financial aid package the firstyear and then significantly drop it the second year

29. It’s basically pointless to negotiate for more financial aid because it is very formulaic

30. Make sure to compare the bottom line price out of pocket (without loans!) of a private school vs public even with “more financial aid”.

31. With all things being equal, you are much better off paying for your school with little or no financialaid

32. It is possible to get a bachelor’s degree with no savings, no loans, and no financial aid.

33. Year 1 at a Community College Average tuition and fees: $2,360 Books and supplies: $500 Room and board (at home), transportation, etc: $4,000 Year 1 total cost: $6,860

34. Year 1 at a Community College How you pay for it: Parents spend $15 per week less in budget: $780 Student works 30 hrs/week on average and saves the equivalent of 20 hrs/week at $9 per hour (after taxes): $9,360 Year 1 intake: $10,140 Year 1 surplus: $3,280

35. Year 2 at a Community College Average tuition and fees: $2,360 Books and supplies: $500 Room and board (at home), transportation, etc: $4,000 Year 2 total cost: $6,860

36. Year 2 at a Community College How you pay for it: Parents spend $15 per week less in budget: $780 Student works 30 hrs/week on average and saves the equivalent of 20 hrs/week at $9 per hour (after taxes): $9,360 Year 2 intake: $10,140 Year 2 surplus: $3,280 Year 2 accumulated surplus: $6,560

37. Year 3 at a Public University Average tuition and fees: $6,600 Books and supplies: $1,000 Room and board (at home), transportation, etc: $8,000 Year 2 total cost: $15,600

38. Year 3 at a Public University How you pay for it: Parents spend $15 per week less in budget: $780 Student works 30 hrs/week on average and saves the equivalent of 20 hrs/week at $9 per hour (after taxes): $9,360 Year 3 intake: $10,140 Year 3 deficit: -$5,460 Year 3 accumulated surplus: $1,160

39. Year 4 at a Public University Average tuition and fees: $6,600 Books and supplies: $1,000 Room and board (at home), transportation, etc: $8,000 Year 4 total cost: $15,600

40. Year 4 at a Public University How you pay for it: Parents spend $15 per week less in budget: $780 Student works 30 hrs/week on average and saves all earnings at $9 per hour (after taxes): $14,040 Year 4 intake: $14,820 Year 4 deficit: -$780 Year 4 accumulated surplus: $380

41. Don’t forget about taxcredits.

42. Pay for college monthly

43. Graduate in threeyears

44. According to the Project on Student Loan Debt, 67 percent of students graduating from four year colleges and universities in 2008 had student loans, averaging $23,200.

45. There are horror stories galore about people who have gotten drowned by their student loan debt: that are not bankruptable!

46. Many people (including parents) argue that student loans are an investment and that future earnings will more than cover the payments, so they are worth it.

47. It’s impossible to know the full impact on student loans on buildingwealth because it is such a new phenomenon.

48. A 2002 Nellie May study found that 21 percent of student loan borrowers put off having children because of their student loan debt.

49. High student loans choke off a young person’s ability to leave a job or even move cities (because they can’t quit their job)

50. Although it is hard to put a number on it (purposely of course), many estimate 1/3 of student loan borrowers will default.