Archive for ‘paying for college’

September 8, 2014

Freelancing may be ideal for college students

by Grace

Freelance jobs can be a good way for college students to earn money and enhance a resume.

… Getting a stable job is tough because classes and studying will take up an unpredictable amount of time. Thus, one of the best ways to survive college is to find freelance work….

Some ideas include IT support, graphic design, tutoring, and almost any other type of freelancing.  Baby-sitting and home improvement services are often in demand in college towns.  Check out the complete list of 15 freelance jobs for students to get more ideas.

August 27, 2014

Step-by-step planning for college is one way to reduce the stress

by Grace

Families are stressed out about getting into college.

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They’re also stressed out about paying for college.

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All this is not breaking news to most families with teenage children.  However, since these survey results are from readers of  Princeton Review’s “Best Colleges” guidebook and users of their website, they are not really representative of the general population.  These survey respondents are more likely to be overly obsessed with the college application process than the average person.

Most families believe providing a college education for their children is very important, but are probably not “extremely” stressed out about it.

It is important to plan for college, but it’s unhealthy to become obsessed with the process.  Here’s some advice from parents and children on dealing with the stress.

Don’t spend too much time comparing notes with others going through the process. Makes people crazy. …

Make sure to take the college process in steps and you won’t feel so overwhelmed….

Don’t freak out. College is not the end of your life. Everything will be OK….

Have fun with it! If you enjoy the process along the way, the outcome will hopefully be more beneficial….

Thoughtful planning is good, and deep breaths can also help.

August 25, 2014

Buying and selling college class notes is made easier by technology

by Grace

Selling class notes can be a way for college students to make extra money, but is it a good idea?

Every student could use a little extra spending money, and selling your class notes and study materials is one way to make some on the side for something you’re doing for free already. Flashnotes lets you sign up by school, post your notes for specific classes, and sell them to other students.

Sharing class notes and tests has been going on for years, but somehow using technology to escalate this practice to an efficient business transaction seems to go over the edge.

… Flashnotes says their average students pick up a couple hundred dollars on the site, and that their in-house team reviews and monitors materials uploaded to make sure the notes being sold are actually of decent quality before they’re posted. Plus, you can preview any notes before you buy them, to make sure you’re not shelling out for what amounts to be useless. They also offer a money-back guarantee if you’re displeased with your purchase. For their part, Flashnotes doesn’t add listing fees, but they take 30% of every sale, so price accordingly….

Some pushback in the comments to the original article included a discussion about the legality of profiting from someone else’s intellectual property, which apparently is not a problem since the students’ notes are considered “their own personal interpretations of what has been taught within the class”.

At least one commenter gave several reasons why buying and selling class notes is generally a bad idea.

Speaking as a college professor of 4 decades’ experience, please, please don’t do this. Buying classnotes is a lucrative business for the resellers, but leaving aside the issue of intellectual property, buying classnotes is no substitute for being present and taking notes yourself. Buying notes is to entirely misunderstand why we take notes: it’s not in order to capture a set of objects, but in order to process heard & seen data intellectually into our own words, which form unique mnemonics and significantly enhance recollection, synthesis, and critical thinking. With respect, Alan: please reconsider this recommendation—it is highly problematic, possibly unethical, and certainly unstrategic and counterproductive for learning. I respect Lifehacker enormously, but this is a very bad idea.

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Alan Henry, “Flashnotes Offers College Students a Place to Buy and Sell Class Notes”, Lifehacker, August 8, 2014.

August 19, 2014

Families are finding various way to cope with rising college costs

by Grace

Sallie Mae reports that American families are finding various ways to cut college costs.  They are relying more on out-of-pocket contributions and less on student loans.

Cost-Saving Measures

How America Pays for College 2014 finds that families are adopting multiple strategies to reduce the cost burden of paying for college, such as opting for in-state tuition (69%), living closer to home (61%) or at home/with relatives (54%), filing for education tax credits (42%), getting a roommate (41%)6, accelerating the pace of coursework (28%), or not deferring payments on student loans (23%). Not only was the choice of an in-state school the most frequently mentioned response, it is also most likely to be mentioned if only one cost-saving measure is adopted by the family. Most families, however, are likely to adopt a combination of cost-reduction approaches, such as opting to go to school in state and living at home or with relatives (43%).

Paying from current income and savings increased while borrowing decreased.

Out-of-Pocket Contributions

A significant source of college funding comes from the income and savings of families known generally as “out-of-pocket” contributions. In 2014, American families reported that out-of-pocket spending from parents and student combined was $8,850, accounting for 42% of the total amount paid for college. This breaks a three-year trend in decreasing out-of-pocket spending (46% in 2010, 41% in 2011, 40% in 2012, and 38% in 2013). Compared to 2013, American families increased their contributions from income and savings by $839 while decreasing the total spent on college by $295.

 

How the Typical Family Pays for College, Year-over-Year

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Borrowing

Families’ use of borrowed money used to pay for college in 2014—a combined parent and student amount of $4,610— dropped to the lowest it has been in five years. Borrowed funds paid for 22 percent of college costs in 2013-14, a decline from 27 percent the prior year. Student borrowing (15%) accounted for twice as much as parent borrowing (7%).

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How America Pays for College 2014, Sallie Mae & Ipsos Public Affairs, August 2014.

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June 4, 2014

Home equity loans regain popularity as college costs continue to rise

by Grace

A rebound in house prices and near-record-low interest rates are prompting homeowners to borrow against their properties, marking the return of a practice that was all the rage before the financial crisis.

College costs continue to rise, so home equity loans may rebound in popularity as a tuition-funding vehicle.

Ian Feldberg planned to open a $200,000 Heloc this week with Belmont Savings Bank to help pay his son’s college tuition. The medical-device scientist purchased his home in Sudbury, Mass. for a little over $1 million in 2004, and estimates that its value dipped as low as $800,000 during the financial crisis. However, after applying for the line of credit, he found that its value had completely recovered.

“I’m very pleased about that. My options for tuition fees were either that or to cash in on my pension prematurely,” he said.

A too-big-to-fail bank steps up home equity lending, and Tyler Durden of Zero Hedge expresses some concern.

The Wall Street Journal reported yesterday that home-equity lines of credit (Helocs) had increased at a 8% rate year-over-year in 1Q14. Some banks are more aggressive than others, and perhaps we shouldn’t be surprised to see TBTF government welfare baby Bank of America leading the charge, with $1.98 billion in Helocs in the first quarter, up 77% versus 1Q13.

What could possibly go wrong?

As HELOC delinquencies are off their highs (for now) but remain elevated… (we are sure this renewed ATM usage on the back of created wealth and stagnant wages won’t harm that downward trend at all…) – will we never learn?

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And then there’s this.

Think about that for a minute. A “medical-device scientist” can’t send his kid to college without either a Heloc or cashing in on his pension.

Life goes on.

Related:  “Federal Direct PLUS or home equity loan for college costs?” (Cost of College)

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Tyler Durden, “Home Equity Loans Spike As Americans Scramble For Cash”, Zero Hedge, 05/31/2014.

May 28, 2014

American teens are not interested in summer jobs

by Grace

Fewer teens are working.

… In 1978, nearly three in four teenagers (71.8%) ages 16 to 19 held a summer job, but as of last year, only about four in 10 teens did, according to data from the Bureau of Labor Statistics for the month of July analyzed by outplacement firm Challenger, Gray & Christmas . It’s been a steady decline, seen even during good times: During the dot-com boom in the late 1990s, when national unemployment was only about 4%, roughly six in 10 teens held summer jobs….

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And they are not very interested in getting jobs. Only 8.3% of teens who were not working last summer said they even wanted a job.

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This doesn’t mean that teens are simply tanning by the pool or binge-watching Bravo (though some certainly are). Challenger says that many teens are in summer school (rates of summer school attendance are at one of the highest levels ever, he says), volunteering, doing extracurricular activities to pad their college applications and trying out unpaid internships. And all of these are worthwhile endeavors (well, minus the tanning and Bravo), especially as it becomes more competitive to get into many elite colleges.

Lack of work experience can be a disadvantage.

That said, experts say that paid work has value for a number of reasons — and that teens (even those who plan to go to college) who don’t do it may be at a disadvantage. “It’s critical for teenagers to work, to begin to understand the working world, the value of a paycheck” says Gene Natali, co-author of “The Missing Semester” and a senior vice president at Pittsburgh investment firm C.S. McKee. “Choosing not to work a paid job has consequences.”

The good old days?

One of my older relatives had a job in high school delivering both the morning and afternoon newspapers.  He and a friend would rise early each day to roll up and deliver papers before their first class, and then repeat the routine after school.  He was also in the school band, played varsity tennis, and maintained good grades, clearly demonstrating he was able to manage his time effectively.  A generation or two later, it’s hard to imagine many kids successfully maintaining a similar schedule of activities. Many of them need reminders to take their Adderal in the morning, and think they are too busy for a part-time job.  Maybe my relative was a remarkable young man, but many of his peers also worked during high school.

Times have changed.  Expectations have changed.  Kids have changed.

Related:  “Teens are too busy preparing for college instead of working” (Cost of College)

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Catey Hill, “American teens don’t want to work”, MarketWatch, May 3, 2014.

‘Teen Summer Job Outlook Teen Employment Culd Remain Flat as More Say “Nah” to Summer Jobs’,  Challenger, Gray & Christmas, Inc., April 28, 2014.

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May 27, 2014

What is the maximum 529 plan contribution limit?

by Grace

So you want to contribute the maximum amount to your child’s 529 plan?  Maybe you received a generous inheritance, and want to set aside enough funds to assure your child will be able to attend any college he chooses.

Here’s what the IRS says:

Q. Are there contribution limits?

A. Yes. Contributions can not exceed the amount necessary to provide for the qualified education expenses of the beneficiary. If you contribute to a 529 plan, however, be aware that there may be gift tax consequences if your contributions, plus any other gifts, to a particular beneficiary exceed $14,000 during the year. For information on a special rule that applies to contributions to 529 plans, see the instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.

In practice, “the amount necessary” varies and is determined by each state-sponsored plan, with amounts ranging from about $335,000 to $400,000.  Check out Savingforcollege.com for a complete list of state maximum amounts.

Here is how the New York 529 Advisor-Guided College Savings Plan explains the maximum contribution.

How much can I contribute to my account?

You can contribute on behalf of a beneficiary until the total balance of all Program accounts held for the same beneficiary reaches an aggregate maximum balance, currently $375,000. If there’s more than one account owner contributing for the beneficiary, this is the total for all accounts. Once this limit is reached, you can no longer make additional contributions, but you can continue to accumulate earnings.

Gift and estate tax implications

Since a 529 contribution is treated as a gift to the beneficiary for tax purposes, another consideration for donors is to understand how amounts greater than $14,000 could trigger tax liabilities.

… your contribution qualifies for the $14,000 annual gift tax exclusion and so most people can make fairly large contributions without incurring the gift tax.

For contributions greater than $14,000, 529 plans offer a unique gift-tax exclusion feature.

… Specifically, you can make a lump-sum contribution to a 529 plan of up to $70,000, elect to spread the gift evenly over five years, and completely avoid federal gift tax, provided no other gifts are made to the same beneficiary during the five-year period. A married couple can gift up to $140,000.

A good explanation of the details on how this works can be found at the Ameriprise website.

Related:  “Most families are not taking advantage of 529 plans for college savings” (Cost of College)

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May 21, 2014

Apply now for the New York State STEM full-tuition scholarship

by Grace

The deadline to apply for the newly introduced New York State STEM scholarship is August 14.

The NYS STEM Incentive Program provides a full SUNY or CUNY tuition scholarship for the top 10 percent of students in each New York State high school if they pursue a STEM degree in an associates or bachelor degree program and agree to work in a STEM field in New York State for 5 years after graduation.

The dual goals of the program include helping students pursue STEM careers and promoting the state’s economy.

Innovative programs like the STEM Incentive Awards will help students compete in academic fields essential to the future of our state and nation,” said CUNY Interim Chancellor William P. Kelly.

“Through this program, New York State is helping to foster a connection between a student’s interest in STEM and their ability to successfully pursue a STEM career,” said Elsa Magee, Acting President of New York State Higher Education Services Corporation (HESC), the state agency that will administer the program. “These awards will encourage more of our most talented students to pursue their love of science, technology, engineering and math in New York State, which benefits our State economy directly and the global economy, generally.”

Failing to fulfill the program requirements can result in significant penalties.  For example, if a recipient does not complete the STEM degree or does not follow through after graduation on the requirement to work “full-time for five years in the fields of science, technology, engineering, or math in New York State, while maintaining residency within the State”, he must pay back the award.

The full list of approved occupations includes farmers, computer programmers, web developers, actuaries, cartographers, engineers, and secondary and postsecondary science teachers.

There does seem to be some flexibility in the choice of occupations.

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Related:  “Free tuition at New York state universities for top STEM students?” (Cost of College)

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 Sarah Darville, “State launches STEM scholarship for SUNY, CUNY-bound grads”, Chalkbeat New York, May 6, 2014.

May 7, 2014

College financial aid advice for mothers going through a divorce

by Grace

Forbes contributor Jeff Landers answers a few of the most common questions that women going through a divorce have about college financial aid. First, he explains which parent should file the FAFSA.  (The answer is the custodial parent.)  Then he explains why this matters.

Why does it matter who completes the form?

The FAFSA contains many detailed questions about a student’s family’s income and assets. The responses are entered into a formula that determines the Expected Family Contribution – in short, how much money you will be expected to come up with toward your child’s college expenses.

If you are the custodial parent, it’s your income and assets that go on the form. So if, for example, your ex-husband makes $500,000 a year in his business, and you make a tenth that much working part time from home, your child would likely be eligible for more financial aid if the eligibility is determined based on your income alone.

If the custodial parent remarries, the new spouse’s income and assets have to be listed on the FAFSA. Unfortunately, while it may not seem fair, that can lower your child’s eligibility for financial aid.

In his next answer, Landers goes on to shed light on the sometimes confusing details of non-federal financial aid.  Click on the link at the top of this post to see all the questions and answers.

Related:  Divorced or absent fathers are let off the hook in paying for their kids’ college (Cost of College) 

April 30, 2014

Student loans ‘Voxplained’

by Grace

Vox Cards explain student loans.  Here’s the first card.

What is a student loan?

A student loan is money that banks or the federal government lend to students or parents to pay for higher education. Student loans can be used to pay tuition, fees and room and board, and they can also be used for living expenses and books. Student debt refers to the total amount of outstanding student loans from students, graduates, and dropouts.

The majority of students — more than 70 percent of all bachelor’s degree recipients — now borrow money to pay for college, a higher proportion than ever. Those students owe $29,400 on average at graduation. Student debt drew public attention and concern as the recession hit and graduates fell behind on their loans. There’s now agrowing consensus among economists that student debt is a drag on the economy, too, because indebted graduates and dropouts have less money to spend on other things.

The federal government has by far the largest share of the student loan market. Until 2010, the federal government lent money to students by guaranteeing and subsidizing loans from banks like Sallie Mae. In 2010, the Education Department cut out the middleman and became the sole student lender.

Here is their explanation on how student loans are treated in bankruptcy.

Why can’t student loans be discharged in bankruptcy?

Student loans are almost never dischargeable in bankruptcy, unlike credit card debt, mortgages, car loans, and most other forms of consumer debt. As lending to students has grown, so has the difficulty of discharging federal loans through bankruptcy. Getting rid of student loans now entails suing the lender (often, the federal government) and proving to a judge that circumstances are so dire there’s no way the loans will ever be repaid. Fewer than 1,000 people, out of more than 32 million student loan borrowers, try this each year.

There are a couple of reasons for this: some people are concerned that college graduates could decide it’s better to declare bankruptcy while they’re young and take the hit to their credit for several years, rather than repay tens of thousands of dollars of student debt. Federal student loans also offer consumer protections and repayment flexibilitythat credit card bills and auto loans generally do not.

Until 1998, federal student loans could be discharged or restructured in bankruptcy after a waiting period of several years. Private student loans were dischargeable in bankruptcy until 2005. Some people think these restrictions should be relaxed: Senate Democrats have proposed legislation that would make private loans dischargeable in bankruptcy again, and the Center for American Progress has called for a two-tier student loan system that would make some loans dischargeable.

In case you’re not yet familiar with Vox Media’s recently introduced Vox Cards, Margaret Hartmann at New York Magazine offers an explanation.

“Vox Cards,” which explain complex topics in a format that’s a mix between Q & A and a slideshow. The editors say:

They’re inspired by the highlighters and index cards that some of us used in school to remember important information. You’ll find them attached to articles, where they add crucial context; behind highlighted words, where they allow us to offer deeper explanations of key concepts; and in their stacks, where they combine into detailed — and continuously updated — guides to ongoing news stories. We’re incredibly excited about them.

Basically, it’s like a more attractive Wikipedia page written by one well-informed nerd on the internet rather than many nerds on the internet.

Too much spoon-fed information?

I’m not completely sold on the Vox Cards format, but they do seem to offer some utility.  Will this spoon-feeding of information in the media become more widespread?  It seems to have become more common in our schools, where prefabricated study notes are frequently distributed to students in advance of exams.

The entire student debt card stack can be accessed on the Vox Media site:  Everything you need to know about student debt,  By Libby Nelson, April 21 2014

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