FERPA and your College Finances

The Family Educational Rights and Privacy Act (FERPA) was enacted to protect the privacy of educational records.  But did you know, when a student reaches their college years, the parent no longer has rights to the students educational information?  The FERPA law gives all protection to the student as an individual.  Here’s what you need to know to help prepare your college finances for FERPA.

FERPA Defined

According to the United States Department of Education, “The Family Educational Rights and Privacy Act (FERPA) (20 U.S.C. § 1232g; 34 CFR Part 99) is a Federal law that protects the privacy of student education records.”  What is important to note, is that these rights are transferred to the student after high school.  The US Department of Education asserts, that “FERPA gives parents certain rights with respect to their children’s education records. These rights transfer to the student when he or she reaches the age of 18 or attends a school beyond the high school level.”  While FERPA is designed to protect the family, it also creates barriers for the parents of college-aged students.  College academics and college finances are two areas where FERPA may create these barriers.

FERPA and Your College Academics

College academics are an important part of college life for the student.  But they are just as important to the parent.  Many parents, who are paying for college, like to know how their students are performing academically.  Others parents like to be a source of encouragement in their student’s academic life.  Whichever the case, parents need to be involved in their student’s academic information.  FERPA restricts this information.  In fact, without permission from the student, this information is not accessible by the parent.

Luckily, FERPA does allow the student to grant permission for the parent to have access to their academic and financial information.  The US Department of Education states, “Generally, schools must have written permission from the parent or eligible student in order to release any information from a student’s education record.”   A sample of this document is found on the US Department of Education website.  Make sure to check with your college to see if they have a specific form that needs to be on file.

FERPA and Your College Finances

Finaid.org explains the ways in which FERPA affects college finances.  They state that “records created and maintained by the financial aid office are considered to be education records and may not be disclosed without the student’s consent.”  According to FERPA, the parent(s) should have no access to this information.  This information may include Federal loan information, student accounts, cost of attendance information, and even financial payment information.  These are important financial areas where both the student and parent(s) need to monitor.  This will help evaluate and develop your financial plan for college.

Most of the academic and financial information is now given through the student’s college portal.  Some colleges allow the parent to have a sign-on to this student portal after permission has been granted.  Each college will have different methods for handling the FERPA permissions.  What is important is that you as the parent obtain the proper permission so that you can have access to this vital information.  No one wants your student to succeed academically or financially more than you do.

How your SAT/ACT Scores Impact your College Finances.

College finances are one of the most complicated aspects of preparing for college.  There is so much pressure placed upon students and families to gain the best possible financial aid package.  Colleges go to great lengths to disclose all the important financial information.  They even try to cover as much of the financial burden as

act-test-tips
Your SAT/ACT Scores Impact your College Finances.

possible.  However, your SAT/ACT scores play an important role in your college finances.

 

Many colleges are moving away from using the SAT/ACT scores as a primary source for admission.  However, these scores still play a major role in your college finances.  Most colleges use the SAT/ACT scores to award merit-based aid.  In fact, Marie Willsey states, “a recent study by the National Association for College Admission Counseling (NACAC), nearly four out of five colleges use standardized test scores as an eligibility criterion for merit aid.”  Your SAT/ACT scores impact your college finances.  Here are some ideas for improving your SAT/ACT scores which in turn improves your financial aid.

Study, Study, Study!

You should make sure you are ready for your SAT/ACT.  This means you need to study.  There are plenty of study options available.  Depending on your particular learning style, you can learn from private tutoring to classroom training, online tools or study guides.  At College4Less, we offer a great SAT/ACT preparatory course.  You need to be ready for your test because your college finances are affected by the outcome of your test.

THE SAT/ACT Range

A simple search of your college’s financial aid web page can show the merit-based aid.  This scale is usually defined primarily by your SAT/ACT scores.  The better your score; the better your financial aid.  Each school determines its own merit based scale, but the fact remains that a better score means better aid.  Your SAT/ACT score impacts your college finances.

With just a few improvements, you can see huge dividends in merit-based aid.  In fact, one student, in our program, improved their SAT score by 40 points and receives an additional $16,000 in merit-based aid.  So while the news reports that SAT/ACT are not as important in entering in college, they are still very important to your college finances.

 

 

 

 

Is your College Major a right fit for you?

Choosing a college major can be one of the most formidable tasks in the college preparation process.  It is common for a student to enter college as “undecided” as to their college major.  And even those who have decided, few actually pursue that field of study to its end.  It is widely reported by many colleges that roughly 70% of college students change their major at least once…some change it more than once.  Here are a few suggestions to help with the arduous task of choosing a college major.

College Major Suggestion #1: Current School Activities

What are you enjoying now about school?  What are the subjects in which you excel?  If you find something you really like to do now, it may be because you have a natural ability or interest in that area.  Why not follow something in your area of current interest.  For instance, if you like inspecting, measuring and monitoring, you may want to pursue something in the field of physics.  Or if you have an interest in artistic expression, like drawing or designing, you may want to consider music or visual arts.  Remember, this is just one area of interest, but it allows you to at least begin to see what college major may be a good fit for you.

College Major Suggestion #2: Other School Activities

What are some of the extracurricular activities that capture your time?  Once you have looked at the academic side of school, now take a look at the other school activities in which you are involved.  Perhaps you are a part of the drama club, school government, fundraising, clubs or religious activity.  These areas provide some further details into our likes and dislikes.  Don’t pay much attention to the activities that are forced, but rather the activities that you enjoy.  For instance, do you enjoy organizing events or planning work activities?  You may want to consider event planning or fundraising.  Or, if you love researching information and keeping accurate records, you may want to consider research or project management.  As you travel through these suggestions, each one allows you to see greater details about which college major may be a right fit for you.

College Major Suggestion #3: Current Leisure Activities and/or Hobbies

What are the activities that you do just for fun?  These activities offer some of the most important insights into who you are.  For instance, if you enjoy recording the events of your day in a journal.  You may want to consider writing.  Or, if you enjoy playing sports, you may want to consider physical training, performing, or even coaching.

As you walk through these self-introspecting suggestions you can begin to see a more accurate picture of what college majors may be a right fit for you.  One of the services we offer to our clients is a tool that helps students find the right college major for them.  Finding the right college major will save you time and money.

College Freshman Parent Survival Tips

They have made it!  Your student(s) has successfully completed the high school years and are looking forward to their first year of college life.  They are so excited, but you may be more nervous than excited.  You may be a but anxious about your “baby” heading off to the fresh air of the college campus.  Even if they are staying locally, college life is a whole new world.  And you, as the parent, have a whole new role.  So here are some parent survival tips for those with college freshman

Parent Tip #1: Remember you are not forgotten.

The number one concern parents have about their child entering college life is losing touch with their student.  And it makes sense that this is a concern.  For the past 18-19 years, the parent has been right there for every major event in the life of their student.  But now, there is a strange separation.  You should celebrate your child maturing into an adult.  But sometimes this separation causes a great deal of anxiety.  So remember, you are not forgotten, but you should take deliberate steps to stay connected.  That brings us to the second of our Parent Survival Tips.

Parent Tip #2: Remember to stay Connected

The number one way you stay connected with your student while they are in college is to communicate with them.  This may be a bit tricky because college schedules can get crazy.  However, you can find time.  Many families choose to have a specific time that they connect with their child.  You can schedule time on the calendar before it gets taken by classes, study, work or party time.

Also, you need to know that once your child enters college, their privacy is protected by the Family Educational Rights and Privacy Act (FERPA).  You should familiarize yourself with the the particulars of this law.  FERPA was designed to protect the private information of the college student.  You as the parent(s)/guardian(s) have to ask for permission to view this information.  Here is how the law reads, “schools must have written permission from the parent or eligible student in order to release any information from a student’s education record.”  So make sure you and your student sign the pertinent documentation if you would like access to this school information.

Parent Tip #3: Remember to evaluate the plan

The third of our Parent Survival Tips is to evaluate the plan.  As you connect with your student, make sure you evaluate your college financial plan.  If you are wise, you and your student has developed a college financial plan.  You will need to include all the income and spending plans for the semester/year.  Then evaluate this plan on a monthly basis.  It does not need to be a thorough evaluation, but rather a check-up.  For many students this is the first time they will need to be concerned with a budget.  Financial planning is an important lesson your child will learn during their college life.

We are sure there are many other parent survival tips that you will learn over the coming months.  Be sure to comment below to share some of your favorite parent survival tips.

Survival Tips for College Freshman (Student Edition)

You made it!  You have successfully completed high school and are looking forward to the fresh air of the college campus.  While college life does offer its fair share of niceties, it also has its share of pitfalls.  Here are a few survival tips for college Freshman.

Survival Tips: 1 – Remember to Stay Focused.

College life offers so many options that many people lose their focus.  It is easy to get sidetracked by all the activities on campus and forget the reason why you are there.  Stay focused!  That does not mean that you can’t have a good time, but it certainly means you should at least attend classes.  While you are at it, make sure you get to know your professors.  Maybe even engage in a study group with other classmates.  Don’t allow the optional to take you away from the essential.  Remember you are there to receive an education which will act as the foundation for the rest of your life.

Survival Tips: 2 – Remember to Stay Connected!

When you first arrive on campus everything is new.  There are new living spaces, new sights, new classrooms, new food, new coffee shops; in fact just about everything is new.  But just because you are in a new environment, surrounded by new friends, does not mean that you should disconnect from everything from your past.  Stay connected!  Stay connected with friends.  Stay connected with family.  These connections act as anchors when the new storms of life arrive.  It’s okay to phone home.  It’s okay to send a message or a snap to a friend.  These connections offer a safe familiarity in the midst of an ever changing Freshman year.

Survival Tips: 3 – Remember to Stay Disciplined!

Of course, there will be plenty of new rules to follow, but that’s not really our focus here.  You need to stay disciplined when it comes to your finances.  If you have created a financial plan for college, you will need to monitor that plan to ensure you are staying disciplined.  If you do not have a financial plan for college, creating a college budget is where you might want to start.  Once your  plan (budget) is in place, it will take discipline to follow it.  Stay Disciplined!  Follow your plan!  Discipline in your finances is a life lesson that is well worth the investment.

Although these are not the only survival tips that may be beneficial to the Freshman year of college, they are important ones.  We hope that your first year of college will be great.  But remember… Stay Focused!  Stay Connected!  Stay Disciplined!  Coming soon…survival tips for the Freshman year (Parent Edition)!

The Unexpected Expense of College Textbooks

It’s hard to plan for every expense that a college student can incur.  But everyone knows that they will need textbooks for each and every semester.  Many people are surprised at the unexpected expense of college textbooks.  Probably the easiest way to get your textbooks is from your campus bookstore, but there are many ways you can save money while shopping for your college textbooks.

Order your college textbooks from the college bookstore

By far the easiest way to get your college textbooks each and every semester is to order them from your college’s campus bookstore.  Usually, this process is just a few simple clicks and you can walk in the first day of class and pick up every book you need in a nice little shrink-wrapped pile.  It’s easy!  But it will also be the most expensive way to obtain your college textbooks.

Even buying your textbooks from the campus bookstore may offer some money saving options.  For instance, many bookstores will also allow you to rent textbooks for the semester.  You may even be able to purchase a used textbook instead of a new textbook for a particular class.  So, don’t rule out the campus bookstore, it is definitely the easiest option if you are willing to pay a little bit more for your textbooks.

Order your college textbooks online

For those with a more adventurous (read frugal) spirit, there are other options for acquiring your college textbooks.  You can buy your textbooks from multiple online vendors.  This method requires some time and effort.  It’s definitely not the easiest way of gathering your college textbooks, but it can reap a load of savings.  Here are a few of the ways college students are saving on their textbooks:

  • Amazon Search: The easiest way is to use a source like Amazon Marketplace.  A quick search of the ISBN will show multiple vendors with varying prices.
  • Internet Search: If you want to widen your search a bit, simple type in the ISBN in your favorite browser.  You will find pages of resources ready to sell you that specific textbook.  Just make sure you get the correct edition of the text.
  • College Classifieds Search: Another resource may be your college’s classified listing.  Students from the previous semester may be looking to sell their slightly used books.

Many people are taking advantage of these money saving tips on college textbooks.  In 2016, the national average for a student’s annual textbook expense was $602.00.  That’s a 14% decrease of the national expense of 2007-2008.  This may be the only area of college expense that is decreasing!

 

Creating a College Budget

The most beneficial assignment in preparing for your college financial needs is creating a college budget.  In fact, it’s probably one of the most powerful tools in the entire financial planning industry.  But for college students it is particularly significant.  By creating a college budget you will experience a greater freedom in your finances than many of your peers.  Here are some of the basics you need to know for creating your college budget.

Creating a College Budget: Why?

Creating a college budget gives great financial freedom.  When many people hear the term budget, they automatically think of restraint.  They automatically think of what they can not do.  But a budget is the exact opposite.  A budget is a financial plan that is designed to guide your spending and saving to reach your designated goal.  The goal of your budget may change over time, as will your budget, but the usefulness of a budget will remain.  Once you have created your budget, you will experience greater freedom in your spending routines, because you will know that your spending is in line with your financial goals.

Creating a College Budget: How?

So, let’s get down to the basics of starting a budget.  There are three steps needed to develop your college budget.

Track your Income and Spending – This first step may sound simple, but after years of financial advising, we are still amazed at how many people have no idea where their money goes.  So the first step to take is to track your income and spending.  How much money do you make each and every month?  How much money do you need to pay the bills?  How much money do you spend on coffee?  You want to track every penny.  Once you have tracked your income and spending, you need to move on to the next step.

Establish your Goal – You need to determine your goal.  Here are a few good goals for college students: graduate college with no/low student debt, live off my summer income, pay for my car, etc.  This list could go on and on.  Your goal is your financial dream.  But we want to move it from a dream…to a plan…to your reality.

Plan your Budget – Now that you have tracked your income and expenses and have decided your goal, it’s time to craft your plan.  Start with income.  What is you total income?  This may not be steady income, but rather a lump sum.

Next, determine your goal.  Let’s take one college student’s goal.  They said that they wanted to live two semesters (Fall and Spring) on money they had raised over the summer.  They had raised roughly $2400.00 while working during the summer (Income).  This was important to them because they wanted to avoid consumer debt (Goal).  Here were their spending needs: Gas to commute to college ($309.00), car insurance ($783.00), coffee ($468.00), school supplies ($60.00), and allowance ($780.00).  Some of the expenses in these categories are set in stone, while others may be a bit more flexible.  This student’s plan works.  Their income and spending aligned to meet their goal.  Success!

Creating a College Budget:  Success!

Now that you have your budget, there is still some work to be done.  You need to evaluate your spending to ensure you are staying true to your plan.  Many people fall short in this area.  They forget to check in with their plan and make corrections.  What good does a budget do, if you do not compare it with your income and spending?  None!  However, if you check in with your plan and ensure you are following it, you will experience great financial freedom, and you will be establishing a discipline that will benefit you for the rest of your life!

Do you have a College Budget?  If not, why not start today to create a college budget for your college financial needs.  If you do, you are already at the head of your class.

The Student Debt Juggernaut

More and more college graduates seem to be talking about the same thing.  How am I going to pay off my college loans?  We have created a student debt juggernaut that is overwhelming.  According to Student Loan Hero, a website that tracks the student debt statistics, just last year the average student debt of a graduate rose 6% to a new all-time high of $37,171.00.  Nationally, the student debt load rose to 1.4 trillion dollars.  That’s greater than what Americans owe for car loans and credit card debt.  In fact, this issue is so great that it was in the national spotlight during the campaign season last year, with both democrats and republicans seeking to resolve the issue.  If we are not careful, the student debt juggernaut will keep growing and cause many college students to stumble for years after their graduation.  What is the solution?

Student Debt: The Governmental Solution

Student debt has become so large that both republicans and democrats have taken notice.  And, although their solutions are quite different, even their acknowledgement of the problem should cause us to take notice.  President Trump, on the campaign trail, proposed revising the federal loan forgiveness program.  His idea was to shorten the length of the debt forgiveness program by making the minimum payments higher.  But many believe that this would only create a greater rate of default.  The current rate of delinquency and default looms around 11.2%.

Other governmental solutions include: eliminating PLUS loans and privatizing all student loans, using federal loans to refinance private loans, or even using some form of employer contribution system.  No one is turning a blind eye to the situation, however, no solution seems to be within reach.  The only prediction…greater student debt.

Student Debt: Good Financial Planning

Even though there are many who graduate college with a load of student debt, there is another alternative.  But this alternative is not for the timid.  It takes hard work and sacrifice.   It is possible to put a plan together that will allow you to get a college education and not incur a mountain of student debt.  Not many people plan enough for their college years simply because loans have become so readily available.  Again, you can create a college financial plan that will meet your needs.

Do you have a good financial plan for the college years?  The best plans start when the future college student is still in preschool.  But there is no bad time to start planning.  These plans should include both financial planning and college preparation.  Start a plan today.  If you need help designing a good plan, contact us!

 

College Finances: Words of Confusion!

Have you ever watched the Presidential Press Secretary giving a press briefing?  It is quite amazing.  No matter your political affiliation or lack of affiliation, if you watch the press secretary during a briefing, you can see that there is as much not being said as there is being said.  There is a delicate dance of words happening.  Of course there are many things that they can’t say, there are some things they need to say, and there is the delicate ground in between that often leads to confusion.  This delicate dance of words is found in many areas of life.   So it should not surprise you if it is found in college finances.  Here are a few of those college “Words of confusion” that need greater clarification.

Words of Confusion: Cost of Attendance (COA)

The COA is one of the most important figures to know with planning for college.  You can research online to find the expected COA of any college.   You will also find the COA in your financial award letter.  The confusing part of the COA is just what is included in this calculation.  For instance, there may be travel costs that can vary from location to location, and there are book costs can vary greatly depending upon the vendor one uses.   Even simple things such as living expenses and room set-up supplies all can make the COA a bit confusing.  It is important for you to have a great understanding of your specific COA in order to make proper financial decisions.

Words of Confusion: Expected Family Contribution (EFC)

Another common phrase that falls into the “Words of Confusion” category is the EFC.  There are many formularies available to figure out your family’s EFC.  What makes this confusing is that people believe that their EFC is the most they will have to pay for their yearly college expense.  This is not the case.  The EFC is actually the least you will have to pay for your yearly college expense.   A “need” may still exist between the COA and the EFC.  That leads to our final “Words of Confusion” phrase.

Words of Confusion: Financial Need

Let’s define the financial need.  Simply stated, the financial need is the COA minus the EFC.  Let’s say the college you want to attend has a COA of  $35,000.00, and your EFC is $17,000.00.  This would leave you with a financial need of $18,000.00.  Simple right!  Colleges want to make sure each student can attend their college,  so they strive to meet as much of this need as possible through scholarships, grants and loans .  The family and student will find this in their financial award letters.  But a growing trend in college is to say that they meet 100% of the financial need.  And herein lies the confusion.

In a recent US News and World Report article, Farran Powel, notes:

“Financial awards from colleges and universities use a combination of loans, scholarships, grants and work-study to cover the gap between the total cost of attendance and the amount a family is expected to pay. A school that claims to meet 100 percent covers the gap entirely.”

In fact they go on to list a number of colleges meeting the entire financial need in this way.  This may sound simple, but “meeting the need” by a loan is really confusing.  A loan will have to be paid by the student and/or parent.  This loan may be a federal loan, PLUS Loan, or even a state loan.  This is a delicate dance of words that you need to understand in order to craft a better financial plan for your college needs.

These words can be confusing, but they are important to understand before you make a financial plan.  The student and parent will need to look over each part of the financial award letter to see just how your financial need is being met.

 

 

 

Student Loans 101: CHESLA

College financial planning is more important than ever.  In a 2016 interview, one parent made the comment that it is “impossible to pay for college without some kind of help”.  This is becoming more and more of a reality for every potential college student.  In fact, finances are becoming the number one reason students attend a particular college.  Because of this immense financial pressure, more and more people are turning to student loans to fill the gap between their college funds and their college needs.  But not all student loans are created equally.

Student loans are not our preferred way to take care of the soaring cost of a college education.  However, we do feel it important to offer some guidance for those who may be searching for college loans.  In particular, we want to highlight Connecticut’s state option for student loans, the Connecticut Higher Education Supplemental Loan Authority (CHESLA)

What is the CHELSA?

CHESLA says its vision is to “serve as Connecticut’s leading resource for students as they plan for their college education.”  They continue by stating that they want to “encourage interest in higher education to help the State meet its workforce needs; and enhance economic development through innovative higher education programs.”  As one person said, “It’s Connecticut money for Connecticut students.”  But their mission is greater than just providing student loans.  In their own words, their desire is to “expand higher educational opportunities and enhance the State’s economic development through higher education.”  This is a great offering to those who live in Connecticut.  If you do not live in CT, it would be worth your while to see if your state offers a state sponsored funding option for your student.

Using CHESLA to Pay for college

You can find CHESLA’s loan details on their official website at www.chelsa.org.  But here are a few of the items that make this such a good offering.

  • No application fees
  • Low, simple interest
  • Payment deferral program
  • Borrow up to 100% of your college need
  • No prepayment fee

If you have done any research on student loans, these features are in line with other offerings.  But, what sets the CHESLA apart is that the interest rate is “4.95% Fixed Annual Rate (non-tiered, simple interest)”.  This is almost 2 percentage points lower than most student loan offerings available.  We think the CHESLA is an option that every one should investigate.  It may not be good for your particular financial needs, but then again, you won’t know until you investigate.

Using CHESLA to Refinance current student loans

Recently the CHESLA also became available as a refinancing option.  Starting June 2016, students could apply for the CHESLA refinancing program.   This program offers many of the best benefits of the original CHELSA program.  Again, this option may not be the best option for your specific financial needs, but it is a good offering for you to investigate.

I must restate, that it is never the best idea to use debt as a way to pay for one’s education.  However, if you must take out student loans, make sure you do a little investigating.  Student loans can have many pitfalls, but for some, they are a viable tool available to secure college funding.  One such pitfall about the CHESLA, that is a little hard to find, is that “interest-only payments are required while in school and the repayment period.”  While this was not listed directly on the CHESLA website, it is mentioned on another website regarding CT’s 529 plan called Connecticut’s Higher Education Trust (CHET).  Before you sign any student loans, make sure you have a solution that fits your specific college needs.