Wednesday, October 29, 2008

Don’t Let the Economic Crisis Derail Your College Plans

The current economic crisis may have students and families thinking that a college education is out of grasp. But before you give up on your plans to pursue a college education consider the following strategies:

1) Develop A College Funding Plan--- College planning really is a family undertaking. Families should be having open and honest discussions about college plans, career interests, what the parents can reasonably contribute to college expenses and what contribution the child may be expected to make starting when their child is a high school junior. Make it clear if the child is expected to work during the summer and/or school year to pay for college or take out student loans. Will the parents be willing to assist in the repayment of those student loans? Revisit the plan annually or as circumstances change. This is particularly important in an economic environment such as we are experiencing now.

2) Meet & Greet with the Financial Aid Director---When there is a sudden change in the family’s financial situation, such as a loss of a job, foreclosure or bankruptcy, the family should make an appointment with the Financial Aid Director or Associate/Assistant Director ( the decision makers) at the college the child will be/is attending. Financial Aid Administrators have the ability to make professional judgment adjustments with documentation, which will take in to account these circumstances. Often this provides the student additional financial aid or makes a student eligible for aid who may not have originally qualified. I have many times used professional judgment for such circumstances, as a Director of Financial Aid. In the case of a job loss the family would need to provide a copy of the layoff letter and provide a copy of any anticipated unemployment benefits. When a family has experienced a foreclosure, the family would also need to provide documentation showing the foreclosure.

3) Consider Attending College In-State--- Families struggling with finances whose child was planning to attend an out –of- state college, may want to work with their child to find a college that is in -state and within commuting distance, thus saving on room and board costs.

4) Strike A Deal With Your Child--- In cases where the child is really determined to attend his or her first choice college, I have known parents who have worked out agreements, where the parents will pay for the tuition and require the student to take on the responsibility of paying for room and board, through financial aid, scholarship and part-time jobs. Many colleges have student employment offices that assist students in finding on-campus and off-campus employment, in addition to work-study jobs that students may be awarded as part of their financial aid package.

5) Go Public---Another option is attending a state college or university for the undergraduate degree. This is a particularly savvy financial move, when a student intends to pursue a graduate degree. Here again parents and the child may work out a plan where the parents pay for a bachelor's degree at a state college and the child pays for the graduate degree. Keep in mind that community colleges are a great bargain and the credits are generally transferrable to a 4 year public or private college.

6) Adopt A State ---Thinking of attending an out-of-state public college? If you establish legal residency in your "adopted" state by registering to vote or getting a driver's license, you could qualify for in-state tuition. Find out from the financial aid office the in-state residency requirement to get the in-state tuition rates. Generally you need to live in the state for 6 or 12 months prior to qualifying for in-state rates. This requirement is differs in each state.

7) Read Your Employee Handbook--- If a student plans to pursue a graduate degree part-time while working fulltime, a good way to fund it would be through the student’s employer. Most employers will pay for courses that relate to the employee's career. So if you work in accounting and want to earn an MBA or pursue CPA certification, the employer would generally assist with those courses. Some employers will pay for other courses, but at a reduced rate. Most employer education benefits are paid as reimbursements once you successfully complete the class. So you would need to come up with the tuition at the beginning of the semester. Applying for a Federal Stafford Loan would be the best choice, if you did not have the funds up front. You would be reimbursed once you submit an official copy of you course grade. Check with the HR department at your company for specifics on the company's program.

8) Make It a Family Affair--- In some families, grandparents (or other relatives) have stepped up and assisted children with some of the college costs. I would counsel relatives in this situation to consult with their financial planner or tax consultant before pursuing this option to minimize tax liability.

9) Go Virtual--- Students may also be able to reduce college costs by taking some of their courses online. Many private and public colleges are offering online courses and degree programs. In Massachusetts, the state colleges offer a variety of courses through Massachusetts Colleges Online at These courses can be used towards a degree not only at Massachusetts state colleges and universities, they may be transferrable to private colleges or out-of-state public colleges. As with any transfer courses, students should check with the Registrar at the college to which they would like to transfer the credit to ensure that it would be accepted, before signing up for the course.

10) Search Out Discounted Tuition--- New Englanders should look into the Tuition Break program through the New England Board of Higher Education. Through this program,for example, Massachusetts students are eligible for reduced tuition at out- of -state New England state colleges and universities in 250 approved programs. These are degree programs that are not available at Massachusetts public colleges. The NEBHE website, www.nebhe,org, has a FAQ page and a list of all programs that each New England states’ residents are eligible to attend at discounted rates at the other regional state colleges. These rates are discounts on the out- state- tuition rates that would otherwise be charged. The NEBHE site states that students who have used this program have saved on average $7,000 annually.

11) Take A Sibling to College--- If two or more family members attend the same college ( siblings, spouses, or parent & child) some private colleges offer family discounts for each additional family member that are enrolled in the college. Check the catalogue or with the Busar's Office on campus.

12) Consider A Career (Or At Least A Job) In Education--- One of the advantages of working for a college is that they provide educational benefits not only for employees but for employees’ dependents (spouses & children). So if you or your child is considering attending a local college, consider a job change.

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