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.

Finding College Funds: Investigate State Aid

Finding funds for college is one of the most daunting tasks associated with college financial planning.  Most people start with an internet search for scholarships.  For many, this “simple” search turns out to be not so “simple”.  Not only is it not so simple, but it can be dangerous, as there are many scams to avoid.  However, if you do not search, you will not find.  So today, let’s go on a hunt to find college aid funds.  And let’s be specific in our hunt and investigate state aid.

Now remember there are only two forms of aid, gift aid and self-help aid.  For more information on those types of aid, see our post regarding understanding your award letter.  We are going to do this together.  So go ahead and open up your favorite internet browser to your favorite search engine and let’s get started.

State Aid Search

You can start by doing a simple search of the words, “State college aid”.  Search results will vary among search engines, but my search found 8 million results.  Don’t worry, you won’t have to look at all of them.  For a more specific search, insert your state’s name.  For me that would read, “college aid for Connecticut”.  This time, my search found 19 million results.

On the first page of my result, I see a site that was on both my searches.  So, I am going to open it first.  The site is collegescholarships.org.  This is in no way an endorsement of this website, but rather, just a way to show you what I have found.

State Aid: Gift Aid

On this site, I discovered that there were many gift aid options available.  Remember, gift aid is aid that does not have to be paid back.  We usually refer to this kind of aid as scholarships or grants.  For my state, there are a few options available, but they all carry some kind of restrictions.  There is aid available for veterans; aid available for senior citizens; aid available to those who will be attending an in-state college.  There are even some career specific offerings.  Some of these offerings are tied to individual need, and some are not.  If any of these state aid offerings apply to you, make a note and read the specifics.  Make sure you make note of any deadlines for filing.  When it comes to receiving gift aid, there is always some work to be done, but receiving the aid will be well worth the effort.

State Aid: Self-help Aid.

I also found some self-help aid information on this site.  It appears that my state offers a really competitive loan option.  I need to make a mental note to investigate this further to see if it will be a good option once all other options have been exhausted.

I would not settle to just investigate one site from our search result, but what you will find is that after a few sites the information will all seem the same.  That’s because your state’s aid is the same no matter what site you view.  It is just packaged a little different.  By spending a little time searching, you could save a few thousand dollars in college costs.

Be sure to let us know in the comments section what you have found in you state aid search, or what other sites you may have found beneficial.

 

College Students and Taxes: Student Tax 411

Tax season is upon us.  While most students don’t really pay a lot of taxes, you need to know that tax season is just as important to students as it is to parents.  Let’s examine some important tax preparations that could benefit both students and families, and give you some Student Tax 411.

Student Tax 411: Gather Financial information

The First part of every tax preparation season is gathering your financial information.  There are certain things that both students and families will need before they are ready to prepare their tax returns.  There are the normal forms that disclose your incomes (W2’s, 1099’s, etc.)  But for the college Student, they will also need their 1098-T.  This identifies what you have paid for tuition over the last year.  It also identifies the student as a full time student.  This will be important as there are many tax advantages that are available once a full time student has been identified.  You should have already received this document, but if you have not, you will need to notify your school(s) or log-in to your school financial portal to secure them.

Student Tax 411: File Your Taxes

The big question on students mind is, “Do I need to file a tax return?”  This is a common question, and the simple answer is yes.  There are some benefits to filling you tax return.  One benefit is that you should receive a refund for any taxes you paid from your past years’ work.  A resource worth investigating is the Student Income Tax Return Guide from Efile.com.  They offer some valuable information on why you should file taxes every year.

For parents, filing taxes is a non-negotiable.  It’s the law!  And it is especially important during these college years.  The information needed to file the FAFSA will be readily available on your tax returns.  In fact, the FAFSA has a retrieval tool that will auto-populate much of your information directly from your federally filed tax return.  So file your taxes by April 15th and you will be ready to fill out the FAFSA in October.

Student Tax 411: Understand Tax Advantages

Two of the largest tax advantages for college students and their families are the The American Opportunity Credit (formerly The Hope Credit) and the The Lifetime Learning Credit.  These two tax credits can be very beneficial in your college financial planning.  Not every one will receive the same benefit, but they are worth the time to investigate.

The American Opportunity Credit: 

The American Opportunity Tax Credit (AOTC) is a credit for qualified education expenses paid for an eligible student for the first four years of higher education.” (1)  This tax credit offers a benefit of up to $2500.00.  If you have no tax liability, up to $1000.00 can be refunded to you.  This credit is only available for the first four years of undergraduate college expenses.

The Lifetime Learning Credit:

This tax credit offers a benefit up to $2000.00.  Here is how the IRS website states the possible benefit.  “For the tax year, you may be able to claim a lifetime learning credit of up to $2,000 for qualified education expenses paid for all eligible students.” (2)  The benefit of the Lifetime Learning Credit is that there is “no limit on the number of years the lifetime learning credit can be claimed for each student.” (3)  There are various restrictions pertaining to who can and can not receive this credit, so you may want to speak with your tax professional or find more information online.

Student Tax 411: Update your FAFSA

Tax preparation is so important to updating your FAFSA.  In fact, once your taxes are filed, you can use the “Data Retrieval Tool” to import vital financial information from your filed taxes right into the FAFSA application.  This will save you vital time and correct some of the most common errors on the FAFSA.

While tax season may be a frustrating time, it is also a valuable time for college financial preparation.  A little preparation now, will benefit you greatly later.  So take time to prepare your taxes knowing you have the Student Tax 411 and that there is a benefit to your college planning needs.

 

(1) https://www.irs.gov/individuals/aotc 
(2) https://www.irs.gov/publications/p970/ch03.html
(3) https://www.irs.gov/publications/p970/ch03.html

 

College Decision Day: Where will you attend?

You have researched colleges, visited campuses, applied and been accepted, evaluated your award letter, and now it’s time to make your final choice.  May 1st is the date that most colleges would like you decision and deposit, but you are free to make the decision earlier if you would like.  You have worked hard to get to this moment.  What will your college decision be?  Here are some final thoughts to consider as you make this most important decision.

College Decision Day: Show me the college
College Decision campus visit

By now you have probably visited the college at least once, but you may want to take a more leisurely visit before your final decision.  Take a stroll around the campus, have a picnic on the quad, take some time to experience the campus and college life.  Sometimes, when you go for a scheduled visit you are too busy with your itinerary to slow down and really experience what the normal routine may be.  Try to image what a normal day of college life might be for you at that particular college or university.  You can learn a lot by slowing down and observing.

College Decision Day: Show me the money

Whether you like it or not, college is a financial decision.  So take a moment to look through the financials.  You may even want to schedule a family discussion about college plans.  This is a great time to make a college spending plan.  There is also still time to apply for some scholarships.  You may want to check your employers, local service organization, an other community involvement agencies.  Do as much work as you can now to help your financial picture for your first year of college.

College Decision Day: Make the Decision

Once you are confident in your decision, you need to submit your deposit and any final paperwork necessary.  Most students show their decision by wearing a T-shirt proudly declaring their college decision.  It’s a time of celebration….a right of passage of sorts.  The high school years will soon be over, and a whole new door of opportunity awaits!

So celebrate your decision now, for classes will begin sooner than you think!

 

 

The Value of College Mentors

Mentoring is a term that is often used in the college arena.  “Mentorship is a relationship in which a more experienced or more knowledgeable person helps to guide a less experienced or less knowledgeable person.”(1)  There is great value in college mentors.  But what kinds of college mentors are most beneficial to your college needs?

College Mentors: College Life

Many colleges are aware of the need for incoming freshman to be connected with an existing student for the purpose of adjusting to college life.  This mentoring relationship provides a vital support for new college students.  As the University of Texas Dallas mentoring program explains, “The mentors in the program are successful undergraduates prepared to engage freshmen in campus activities and refer them to resources that can help them achieve their academic and personal goals.”  The needs of every student is different, so by having an individual college mentor you are setting yourself up for success.

College Mentors: Academic

We sometimes think of academic college mentors as tutors.  But that limits the true value of an academic mentor.  Tutors are mentors, in that they guide the student in a specific subject.  However, an academic mentor is more wholistic in their approach.  They offer advice about class scheduling, particular professors, general study habits, etc.  While a student may need specific academic mentors, they may also need someone to help them adjust to college life.  Many colleges try to meet this need through freshman orientations and student services.  Don’t be afraid to use these services, as they may lead to greater success in your college endeavors.

College Mentors: Sports

Sports mentors have many different names.  These mentors are coaches, fitness trainers, personal trainers and other team members.  But their goals remain the same as any other college mentor.  Their purpose is to help the student athlete perform in peak effectiveness.  For the student athlete, much of their student life revolves around practice, training and athletic events.  Without the help of a sports mentor, many find themselves unable to balance their academic and sports schedule.

College Mentors: Financial

One of the most overlooked areas of college mentoring is the area of finances.  These mentors offer advice on a variety of subjects such as college budgeting, scholarship management, and debt counseling.  For many students, college is the first time they really  need to manage their own finances.  They may have very little money skills, which can lead to improper management and increased debt load.  Developing a college spending plan (a budget) and evaluating that plan from time to time can be very beneficial.  This is one of the many services that we provide families who partner with us for college planning.

As you can see, college mentors play a vital role in success during the college years.  However, many students do not know or choose not to use the resources available to them.  Make sure you connect with and utilize these services.  For more information about financial mentoring, contact our offices today.

 

 

(1) https://en.wikipedia.org/wiki/Mentorship