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.




Winter Break Planning

The Winter break is soon approaching.  While this is a busy time for most college students and families, with a little planning this time can be the most profitable time of the year.  So here are some ideas to make your Winter break planning more profitable.

Spend Time with Family and Friends!
winter break

Winter break is a time to relax and catch-up.  For many students, the rigors of the school semester keep them from enjoying the more pleasant things in life, such as: sleep, favorite home-cooked foods, childhood friends, family fun, etc.  The Winter break is a great time to catch up on some of these fond events, or to enjoy a new event with family and friends.  Use your Winter break to relax and enjoy.

Evaluate your Financial Plan!

Every family should develop a financial plan for each college year.  The Winter break provides a great time to evaluate your financial plan.  Here are a few areas where you will need to evaluate:

  • The upcoming semester’s bill
  • Books and other school supplies needed for the upcoming semester
  • Spending money
  • College Debt

Once you have identified any area over the past semester where you have spent money or incurred debt, it’s time to evaluate.  Ask yourself a few questions:

  • Are there any areas where you are out of balance with your initial plan?
  • Is there any way to reduce expenses?
  • Do you need to adjust your plan for the upcoming semester?

If you need to adjust your plan, the Winter break is a great place to adjust.  Make an amended plan and start to follow that plan.

Build a Resume/Portfolio!

Another great way to enjoy your Winter break is to begin building or continue building your resume/portfolio.  Spend some time recording any new skills that you may have learned over the past year.  Make a written record and even provide some visual examples of this new skill.  Create a detailed description and a brief description as you may need both depending upon the requirement.  You can also create an online location to showcase these new experiences by photo, video or file.

Plan for the upcoming semester!

The Winter break is also a great time to get ready for the upcoming semester.  You can get a head start on setting up your schedule.  Have you already bought your books for the next semester?  Why not do some book shopping to get the best price available.  You can also check up on your school supplies.  Now that you have at least one semester under your belt, you have a better understanding of what you need.

While some much needed rest is in order, if you are not careful you could miss a great opportunity over Winter break to get an early start on your next semester.  So consider some of the planning ideas mentioned above to get the best financial, as well as academic and social, start for the upcoming semester.




The 2016 Olympics have been such a source of American effort and pride.  While watching a soccer match over the past few days,  I was reminded of the importance of each and every G..O..A..L!  Yes, I am referring to that announcer who goes crazy and extends that long pronouncement that a particular team has just scored.  Well, that G..O..A..L, is the result of many small milestones that were set and rehearsed over the course of many, many years.  That got me thinking about another kind of goal…the kind of goal that each and every student should be setting at the beginning of each and every year that will help them prepare for the college years and beyond.

High School Freshman…GOAL

Yes, planning for the college years starts here.  Actually, it should start much earlier, but for most people, the freshman year marks the beginning of their college preparation.  Why?  Because every academic grade you make from here on out has a direct impact on your college future.  So here is the GOAL…Develop good study habits!  Parents, help your student stay on top of their studies.  Help them develop proper academic planning techniques (Buy a planner).  Learning the skill of asking good questions both in and out of class will be essential.  Keep on top of you grades.  Remember, this year’s grades will be on your transcript, and college will see these grades.  Therefore it is essential to develop good study skills early.

High School Sophomore…GOAL

Here is a quick GOAL…Start saving for college.  Getting into college is a family affair and the saving doesn’t have to fall entirely on the parents’ shoulders.  Having your student share some of the responsibility can help build character and will teach him/her life skills that will be beneficial throughout his/her life.  Teach him/her to save some money, as well.

You’ve worked hard for your money.  Protect that money by talking to our College Funding Advisor about keeping those dollars out-of-sight from the financial aid formulas.

High School Junior…GOAL

You are half way through your high school years and college is right around the corner.  Good study habits should be in place, and there is a small savings account in place.  So what now?  Here is a GOAL for your Junior year…make a list of potential colleges.  Make a list, check it twice, and then collect as much information as you can.  We have actually already spoken about this in one of our previous posts.  So check that out here.  The college list is important, because you begin to see a clearer picture of the finances needed for the college years.

As you can see, there are important goals in the student’s life on their way toward college.  Next week we will look at a few more goals that will help prepare for the college years and beyond.

College Debt Statistics (2016)

College Debt is on the Rise

Around this time of year, our offices look to see the new college debt statistics.  These statistics reflect the amount of indebtedness associated with the most recent graduating class.  These numbers are always on the rise.  For instance, in just four years the amount of indebtedness has risen 37% (27,000.00 in 2012 to 37,000.00 in 2016 as reported by Mark Kantrowitz, of  In 25 years the amount of indebtedness has risen almost 200% (12,000 in 1990).

The untold story is that while college indebtedness has continued to rise, wage growth has remained relatively steady.  Huffingtonpost reports that “Median wages have increased 1.6% over the last 25 years while median debt has risen 163.8%.”  They project that “student debt at graduation for the typical bachelor’s degree recipient could exceed annual wages by 2023.”

To further complicate the problem, grants and scholarships for college have not risen to meet the heavy financial demand.  There is a widening gap between the cost of college and the award packages offered by many colleges.  This leads many people to leverage their future with a heavy load of debt.

College Financial Planning is essential

This is why financial planning for the college years is essential.  There are many options for each individual to prepare for the college years.  These options range from savings accounts, to investment options, to college decision counseling.  While not every option applies to every family, many of the options available could save thousands of dollars over the course of one’s college experience.

Our best advice is to seek out a financial planner who specializes in financial planning with the college years in mind.  This is an area of special focus for our offices.  We have a varied approach that includes: college mentoring, SAT/ACT preparation, financial planning, and much more.  Each plan takes into account the individual goals of each client to minimize the debt load of the student.


College Road Trip

A college road trip can be one of the most fun and informative steps in your college planning endeavors. Disney captured this special trip in 2008 when they released College Roadtrip. (See the official trailer here.)  Some time in between the end of one’s junior year and first part of one’s senior year of high school is the best time to take a college road trip.  So pick out a few of your top school selections, navigate the best route and head out onto the open road.  But before you go, here are a few suggestions that will make your college road trip more beneficial.

College Road TripExperience campus life

When you visit your college campus you want to experience as much campus life as is possible.  While this may be a bit more difficult in the summer, you can still tour the campus.  Call ahead and arrange a campus tour.  You will want to see the dormitories, a classroom, the library, the cafeteria, and the grounds.  If you are playing sports, you will want to see the area where your sport will take place.  Even a summer visit will yield great information about your campus life.  If at all possible, see if you could speak with a current student.  One may be available even in the summer months.

Meet your Admission Counselor

Make sure you meet with your admission counselor.  Chances are, you have already exchanged emails a few times.  But an email is not the same as a face to face meeting.  Let them get to know you, but also have a list of questions ready to ask them.  Ask about the admission process, roommate selections, student to faculty ratio, career services, and much more.  Also ask if there is anything outstanding for you to provide for the admission process.

Meet the Department Representative

If you have already declared a major, the college road trip is a great time to meet with your department representatives.  Again, questions are the best way to find out the information you want to know.  Most colleges already know what they want to tell you, but that may or may not be the information you want.  Make a list of questions you want answered.  Ask about course requirements, typical class size, office hours for professors, etc.  A little early planning will make your college road trip more beneficial.

Meet the Financial Office

Do not leave the campus without taking the opportunity to talk with the financial aid department.  You can ask about additional scholarships, payment options, financial aid deadlines, online work options, etc.  This meeting can help you better prepare your financial picture for the college years.

There are many great benefits to taking a college road trip.  But as you can see, a small amount of planning before the trip can pay great dividends during your trip.  Our staff at College4Less are ready to help you prepare for your college road trip and your college financial needs.  Contact our offices for additional information.

College Tips for the High School Freshman

You may think that you have plenty of time to plan for college when your child is a high school freshman.  But that is just not the case.  The high school years have a tendency to fly by.  So we wanted to share some college tips when your child is a high school freshman.
helpful tips
College Tip #1: Our first college tip for the high school freshman is to start a dialogue with your child about college.  No, it’s not too early.  In fact, we think that conversation should have already started.  So if you have not opened the dialogue, now is the time begin.  Start the conversation off slow.  Maybe say, “I know you are just starting high school this upcoming year, but have you thought about college?”  They may think it is too early to talk about college plans, but assure them it’s not.  And it’s okay, if they do not have any specific plans.  But it’s not okay to simply dismiss the conversation because you and they think it’s too early.

College Tip #2:   Our second college tip for the high school freshman is to build a “Life Resume”.  This is different than a job resume where we are recording work history, this is more like a journal of interests and activities.  These life events will help your student see what they really enjoy and areas where they really excel.  You can record sport activities, academic achievements, significant life achievements, community service, and much more.  Make notes about specific classes that captured your student’s passion and even notes about classes that were a struggle.  This “Life Resume” will help guide your student in choosing majors, colleges, and even life direction.

College Tip #3: Our third college tip for the high school freshman is more a tip for the parent.  You need to assess where you stand financially.  It’s never too early to start to think about the financial aspects of the college years.  We believe that even the middle school years are not too early to start financially planning for the college years.  Savings is where most people start, and sadly where most people end.  But to prepare for the full weight of the college years, you may want to consider putting together a more holistic financial plan for college.  We would recommend that you set down with your financial planner to put together a college funding plan that takes into account your entire investment portfolio.  If you do not have a financial planner to assist you with such a plan, call our offices and you can come in for a free college planning consultation.


The ACT and SAT and College Planning

The ACT and SAT exams are the most common tests used by college admission officer to see if a student is ready for college.  But these tests are also tied to the financial aspects of the students college application process.  Therefore, these test scores are vitally important in the college financial planning process.  Have you ever considered the difference between the two tests?

According to the College Planning Network “The ACT is considered to be a curriculum-based exam, meaning it is based on material you may have already seen in the classroom. The new SAT is now aligned with the Common Core. It will be more focused on the skills and knowledge at the heart of education.”  Another thought to consider is that each student tests differently.  The ACT may suit a particular student better than the SAT.  And of course the opposite can also be true.  You can see a comparison here.

To further complicate the issue, the SAT has been revised.  Here are a couple of changes for the new SAT:

  • The essay will be optional
  • Obscure vocabulary words are eliminated and replaced by words that are more commonly used in college and employment.
  • Mathematics questions focus on three areas: problem solving and data analysis, algebra, and passport to advanced math.
  • Questions require multiple steps to get an answer.
  • and more

The decision on which test to take is vitally important to college success.  Here are a few reasons why.  First, test scores are critical to a students college opportunities.  If test scores are low, certain colleges may not be interested in the student.  Second, test scores are tied to the financial aid awards.  Most merit-based scholarships are tied directly to ACT and SAT scores.  While some colleges are breaking with this tradition, most still place a high value on ACT and SAT test scores.

Make sure you evaluate which test may be the best for your student.  A little investment of time up front may gain you thousands of dollars in college assistance.