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Strategies to Decrease the Cost of College #2 – COA Surprises

cost of attendance
Surprises, they can be good or bad.
Good, such as pulling a forgotten $20 out of a jacket pocket not worn over a long, long winter, an unexpected message or letter from an old friend, a thoughtful gift.
Or not so good, such as opening your tuition bill and realizing it is going to cost thousands of dollars more than you expected. How can this happen? Don’t colleges and universities advertise costs?
Yes and no.
Colleges typically advertise cost in terms of Cost of Attendance (COA). Federal financial aid guidelines define COA as:
    • Tuition & Fees
    • Room & Board
    • Books & Supplies
    • Transportation
    • Personal Expenses
Many (dare I say most) institutions are less than transparent when advertising the “true” cost of an education – typically they only market and advertise these five COA components. 
Now the rest of the story…
Smart higher education consumers need to play detective, sleuthing through brochures, web pages, letters, etc. to unearth hidden costs – to determine your “true” cost of attendance.
What are these shadowy hidden costs? From differential tuition rates – to loan origination fees and everything in between, hidden costs come in all shapes, sizes, and forms – real money out of your pocket. Let’s examine a few:
A common hidden charge is a differential (extra) tuition rate. It is fairly common for students majoring in nursing, engineering, business, computer science (to name a few), to be charged an extra fee on top of regular tuition rates – see examples below:

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Most families do not realize advertised room and board COA charges are the “average” rate a student can pay. The real cost can span thousands of dollars as evidenced by these 2018-2019 rates:

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Look at this statement from a college web site – “All students receive a laptop as part of our laptop program.” Cool! Not so fast. Dig deep enough and you find students are not receiving a laptop, they are paying for the use of one – the real cost:
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per semester.
Let’s talk disingenuous. In reviewing a financial aid award letter for a student this spring (see partial letter below), I noted the school understated their own cost of attendance (as calculated by their own Net Price Calculator) by thousands of dollars.
Note how they seem to have “forgotten” personal expenses or transportation in their “estimated” COA. “Luckily” when this was pointed out to the director of admission, this student’s award was adjusted upwards to include these real costs. 

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How about matriculation (new student) fees, course and lab fees, capital enhancement fees, tuition payment plan fees, credit card fees, excess credit charges beyond a full-time credit load, stadium fees, parking fees, health center fees – I digress… but I could go on and on and on…
Smart consumers need to shield themselves from COA surprises, by determining their “true” cost of attendance before choosing to enroll. Unearthing the “true” cost of attendance in many cases will be the difference between choosing one school over another – saving you thousands of $$ on the overall cost of your education.
Need help finding good match colleges. Contact me. and I can work with you to shave thousand’s of $$ off a college degree.  

Jeff has spent 30+ years working in higher education as a Registrar and Director of Student/Academic Services. As an educational college planning consultant, he uses his experience and insights to save you $$$ by helping you in identify “good match” colleges to fit your academic, social and financial needs.


Strategies to Decrease the Cost of College #8 – Sticker Shock

What do mattresses, new cars, and college tuition have in common?
You rarely pay full price.

Sticker Shock Tuition

When I do college planning workshops, I frequently hear – “that college is too expensive to attend”. 
Too many families mistakenly eliminate a school as soon as they see the “Sticker Price”. The result – paying more than necessary for a college education. Why?
Colleges (especially private schools) need to discount tuition from advertised prices to compete with other colleges and universities.
Many families I work with are surprised to learn in many instances a so-called “more expensive” college will cost them less out of pocket than schools with cheaper advertised prices. 
How can this be? First, you need to understand how colleges calculate a financial aid package. The primary consideration is demonstrated need. At it’s most basic this is the financial aid formula all colleges use:

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EFC is the amount of money you are expected to contribute for one academic year. It is calculated by completing the FAFSA and/or the CSS Profile (not required by every college). 
Your EFC is the same regardless of how much a school charges, thus your need varies based on the cost of attendance (COA). 

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To illustrate, let’s assume your family EFC is $5,000 and you are considering the University of Minnesota (UMTC), the University of North Dakota (UND) and St. Olaf College.
In addition to understanding how EFC is used in financial aid calculations, it is also critical to research (understand) what % of need a college historically meets.
Historically, the UMTC meets 76% of demonstrated need.
UND 64%.
St. Olaf 100%.
Why is this so important? Since your EFC is constant ($5,000), your financial aid offer from these schools will vary considerably. 

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UMTC will likely offer you $17,657 in aid. UND $10,924. St. Olaf $55,990.
In the right circumstance the “more expensive” St. Olaf will cost you less out of pocket than the “less expensive” UMTC or UND. 


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Will this calculation work exactly the same for every family. No!
Many factors are used to determine a financial aid award, such as how much they want your son or daughter to attend (called preferential packaging – a topic for another day). Preferential packaging determines how much “free” money they will offer in the form of scholarships and grants versus loans.
Yet, the reality in today’s admissions environment – most colleges and universities need to “compete” to enroll your son or daughter. 
Ask yourself, can Gustavus Adolphus College really attract all the students it needs to meet its enrollment goals if they charge every student $57,280 (Fall 2018 published COA) versus the UMTC which charged $28,233? 
No like, most colleges Gustavus will “discount” tuition from their published sticker price for many many students. 
Thus, it is really is not uncommon to receive a financial aid award which makes a “more expensive” college if not the less costly alternative, then comparable to a school with a low sticker price. Use this knowledge to your advantage to save $$$ on the cost of a college education. 
The best time to eliminate a school is at the end of this process after you have learned what a school is willing to offer you. Not at the beginning, when you see the advertised price!
You have choices.
Contact me today to learn how I will save you $$ on the cost of a college education.

Jeff has spent 30+ years working in higher education as a Registrar and Director of Student/Academic Services. As an educational college planning consultant, he uses his experience and insights to save you $$$ by helping you in identify “good match” colleges to fit your academic, social and financial needs.

Strategies to Decrease the Cost of College #9 Tuition Banding

#9 – Tuition Banding – Rule of 120/126

Successful businesses leverage the 80/20 rule. Investors the rule of 72. You can use the rule of 120/126 to save on college costs.

What is the significance of 120 and 126? To graduate with a four-year college degree generally requires 120 to 126 completed credits.

Back when I went to school the majority of colleges charged tuition by the credit. The current trend – a banded (flat rate) tuition model. The most common model is to charge the same rate of tuition for between 12 – 18 credit hours.

At the University of Minnesota (UMTC), for example, you are charged the same tuition if you take 13 or 15 or 19 or 25 credits in an academic term. You don’t need to be a Math major to leverage the rule of 120/126!

U. Minnesota

U. Minnesota Twin Cities

Anyone can save $15,000 on the cost of a UMTC degree How? Simple math. Multiple 18 by 7. You get 126. Enroll in 18 credits per semester at the UMTC (or many other colleges) and you can graduate in 7 semesters. Savings = $15,000 (based on estimated Fall 2019 cost of attendance). 

Today, it takes the average student 5.2 years (basically 11 semesters) to graduate. Is it any wonder so many students leave college with huge amounts of student debt. Every semester beyond the fourth year is typically funded by student loans…

Failing to follow the basic Rule of 120 = more $$$ for your degree. 

UW Eau Claire

UW Eau Claire

It’s not hard to graduate in four years. 15 credits represent a typical academic load. 8 * 15 = 120.

Never, never, never fall below 15 credits per term – you would be surprised by the number of students who do and end up paying more for a college education than necessary. 

Fall 2018 Cost of Attendance at UW – Eau Claire for an MN resident taking between 12 – 18 credits is $20,289. Don’t pay an extra 20+ grand for your degree, i.e., 8 * 15 = 120.

I know, I know. Not every student is equipped to handle 18 credits per term. And you have to sequence courses correctly to graduate in 7 semesters. And life does happen, so sometimes 15 credits a term is not feasible, but…

Sprinkle in a summer class at a local community college (at lower tuition rates). A dash of AP or PSEO in high school. A J-Term course. A planned transfer. Etc. Anyone can cook up savings using my rule of 120/126.

You have choices!

Contact me today to learn how I will save you $$ on the cost of a college education.

Jeff has spent 30+ years working in higher education as a Registrar and Director of Student/Academic Services. As an educational college planning consultant, he uses his experience and insights to save you $$$ by helping you in identify “good match” colleges to fit your academic, social and financial needs.



Scholarships – The Holy Grail

You’ve completed the FAFSA.  Seen your Expected Family Contribution (EFC) figure for the next academic year. Likely are thinking, “how am I going to pay for this?” You are in same boat as the vast majority of families – make too much to qualify for Federal Aid, but can’t simply write a check for the cost of college.
Your thoughts turn to scholarships… the Holy Grail of college funding.
We’ve all seen the headlines screaming, “How I Helped My Son Win over $100,000 in College Scholarship $$… and I Can Show You How You Can Too”.  Don’t believe the hype.  The secret – sweat equity.  The rule of thumb for national scholarship competitions:
  • For every 100 scholarships you find, you
  • May qualify for 10, and odds are you “might” win
  • One!
There are no magic wands.  Don’t be romanced by the headlines or focus your entire strategy on the big payout potential of national competitions like Coca Cola Scholars or the Gates Millennium Scholarship Program. Why? Exactly two students from Minnesota were recognized as Coca Cola Scholars in 2016. Wisconsin three. California the most populous state, 15. The odds are long. The competition is intense.
The minuscule % of families who manage such headline grabbing awards often employ a scholarship or two or three a day approach.  If your child has the gumption to research, apply and submit as many as three scholarship entries a day, by all mean have at it. For the rest of us lazy souls?
Turn your attention to the greatest source of scholarship $$. The colleges themselves. To get you started visit my College and University Scholarships page which will link you to the freshman merit or general scholarship opportunities at many colleges.
Look first for automatic scholarships. Many colleges offer them based simply on test scores, GPA, and academic rank. Don’t stop there. Dig deep. The linked College and University scholarship pages do not represent a schools comprehensive list of free money. Dig into the college web site to unearth opportunities for transfer, sophomore, junior, and senior students. Hint: you will often (but not always) find this information within individual academic departments in the form of scholarships, grants, stipends, fellowships, etc. or on the schools financial aid page.
The next best source of scholarships? Local opportunities, which too many families overlook. Don’t underestimate the potential payout from local sources. You will likely qualify for many many more $500, $1,000, or $2,000 local scholarships then any national competition. Last year Cola Cola Scholars had 150 winners and upwards of 70,000 applications. Your local credit union = three $2,000 scholarships and maybe 25-30 applications, 100 tops – have to like those odds.
The first places to look locally are:
  • chambers of commerce
  • fraternal organizations (Lions, Elks, Rotary, VFW, American Legion, etc.)
  • your church
  • your financial institution
  • counseling/guidance office at your high school
  • your employer
  • athletic organizations
  • charitable organizations
  • my list of scholarships open to MN residents
Don’t have the time to do the research. Don’t know where to start? Need help crafting a strategic scholarship search or strategy to find good match colleges where your daughter/son may qualify for merit scholarships?  Give me a shout.




Tips for Completing the FAFSA

Tips for Completing The FAFSA

Tis the season for the annual college financing rite of passage, October 1, 2016 means it is time to complete the FAFSA for the 2017-2018 academic year. What do you mean October 1st?????

The US Department of Education announced a big change to the FAFSA Financial Aid application process last year. The opening date (Oct. 1, 2016 is the first day the FAFSA is available, not the deadline as is being erroneously reported by some media outlets) to submit your FAFSA has moved up to October 1, 2016 (from January 1, 2017) for the 2017-2018 academic year and all subsequent years. The change was made to more closely align the awarding of financial aid with the college admissions process. The net benefit; (1) families will be able to submit applications earlier, (2) use the previous years tax returns and (3) financial aid awards will be known earlier to assist in making informed admission decisions.

Tip #1: Don’t leave $$$ on the table

Many families do not bother to complete the Free Application for Federal Student Aid (aka, the FAFSA) because they do not believe they will qualify. Don’t make this mistake! What many fail to understand is that most colleges and universities will not consider you for institutional awards (scholarships, grants, etc.) if you have not completed the FAFSA. Don’t leave free money on the table. Get your pencils sharpened and file the FAFSA on or soon after October 1, 2016.

Tip #2: Get Your FSA ID before Oct 1st.

October 1st is right around the corner. To submit your FAFSA both parents and students will need a FSA ID. This ID is necessary to sign and submit your application. If you don’t have a FSA ID (which replaced the FAFSA Pin #) avoid the October 1st rush and request yours today at Federal Student Aid.  

Get it soon. The FAFSA system will be flooded with requests on and around October 1st. Avoid potential filing delays – remember many institutions award financial aid on a first come first serve basis.

Tip #3: List Your Earnings Correctly

Getting ready to fill out the 2017-18 FAFSA or CSS Profile?  When you do make sure to double-check your figures for accuracy. Make sure the amounts are accurate and don’t reflect over inflated assets (a common mistake). Check for these common errors:

Make sure the figures you report on the FAFSA and CSS profile (a little over 300 schools require this second financial aid form) match.  Failing to do so will trigger a financial aid audit, delaying your financial aid award and in many cases requiring you to send copies of your filed tax returns to college financial aid offices.

List your earnings correctly. Questions 88 and 89 ask – “How much did your parent(s) earn from working in 2015?  The question and directions are somewhat vague and you want to enter the largest number possible (to maximize your award). Why? The FAFSA formula uses this figure to calculate an allowance (the amount you are allowed to shelter against reported income (roughly $7,000 for public schools and $40,000 for private schools). What should you do? Look at your W-2 and enter the amount from Box 5 – your income before 401k contributions are removed. If self-employed enter the profits from your business not the gross income.

Listing earnings incorrectly won’t break the bank, but doing so will likely net you a couple of hundred dollars each year. Add this up over four years and it will significantly reduce your out of pocket cost to attend college.

Tip #4:  Know What Assets Count

The FAFSA methodology does not consider the home you live in, your retirement plans or insurance as investments.  When answering the “What is the net worth of your parents’ investments, including real estate” (Question #91) don’t include your primary residence.  Your primary residence is a protected asset on the FAFSA and does not need to be included.  Your other real estate holdings – a second home, rental property, vacation property, etc. are not protected and do need to be included when answering this question.

Do not include the value of your retirement accounts.  This is a protected asset. Do not include the value of qualified retirement plans, such as 401(k) plans, 403(b) plans, pension plans, annuities, traditional IRAs, Roth IRAs, Keogh, profit sharing, SEP and SIMPLE plans. Doing so will likely increase your Expected Family Contribution (EFC).  Note: Tax free contributions to a qualified retirement plan and distributions from a qualified retirement plan are usually reported as income.

529 Plans Special Rule of 2009.  Reporting a 529 plan as a student asset is a common mistake.

Per FAFSA Directions:  “Investments also include qualified educational benefits or education savings accounts (e.g., Coverdell savings accounts, 529 college savings plans and the refund value of 529 prepaid tuition plans). For a student who does not report parental information (independent student), the accounts owned by the student (and/or the student’s spouse) are reported as student investments in question 41 (Student Assets). For a student who must report parental information (dependent student), the accounts are reported as parental investments in question 91 (Parent Assets), including all accounts owned by the student and all accounts owned by the parents for any member of the household.”

Incorrectly counting a 529 plan as a student asset will likely increase your Expected Family Contribution (EFC).  Rather than being counted in the parent assessment at a rate of 5.64%, it is assessed at a student rate of 20% in the EFC calculation.

Tip #5 Value Real Estate Correctly 

Parents who own a rental or second home shouldn’t enter its market value (a common mistake).  Instead, enter its net worth – the value minus any debt owed on it.  When valuing such property’s start by using the IRS definition of the properties quick-sale value – 80% of the property’s fair market value – or what it could quickly sell for.

Tip #6 Don’t List your business if you don’t have to.

Question #92 asks “What’s the net worth of your parents’ current businesses?  The answer for the vast majority of family’s who file the FAFSA is probably nothing, even if they own one. Since 2005 families who control more than 50% of a business with 100 or fewer full-time employees are exempt from reporting.

Tip #7 Avoid Common Errors

  • Failing to sign the FAFSA (both student and custodial parent need to sign).

  • Leaving a data field blank, instead of entering a zero (“0”).

  • Using commas instead of decimal points  – all amounts need to be rounded to the nearest dollar.

  • Adding an extra zero, for example writing $700,000 instead of $70,000.  Happens more often than you think…

  • Using nickname(s) instead of your legal name(s), i.e., Jeff instead of Jeffrey.

  • Transposing letters or digits.  Most commonly with Social Security and Phone numbers.

  • Don’t miss deadlines. Pay attention to the deadlines that schools post on their web sites. Some colleges and states have very early deadlines for filing the FAFSA. Some award aid on a first-come, first-served basis until the money runs out.

  • Don’t file the wrong year’s FAFSA.  Note: When filing your FAFSA you will notice two options:


Additional Financial Aid Resources

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