Got a Scholarship? Write a Thank You Note!

Receiving a scholarship is a great honor. Don't forget the important step of writing a thoughtful thank you to the donor.

A well written thank you letter not only shows how much you appreciate the financial support, but more importantly it also helps to ensure that the donors continue to offer their scholarships to future students.
https://resume.io/blog/how-to-write-a-scholarship-thank-you-letter


Gaming the College Ranking System. Who Can You Trust?

In Games Colleges Play Greg Spears reveals how some colleges and universities have manipulated the national college ratings systems to appear much better than they are in reality, providing doctored or fraudulent data to the raters. Michael Thaddeus, a Columbia University math professor "demolishes his employer’s U.S. News ranking as the second-best college in the nation. He also suggests there are better sites to use when evaluating colleges."

"In his paper, Thaddeus compared Columbia’s reported U.S. News numbers against publicly available information. He found Columbia stretched the truth quite often to raise its ranking."

"For example, Columbia told U.S. News that 100% of its faculty have PhDs or terminal degrees in their field, a higher percentage than Princeton, MIT, Harvard or Yale. Looking through faculty bios, Thaddeus found 66 cases where this was not the case—although these faculty may still be great teachers and one, in fact, has a Nobel Prize. Still, just 96% of the Columbia faculty have earned the highest degree in their field, according to Thaddeus."

"Columbia reported that more than 96% of its faculty are fulltime. Thaddeus’s research yielded a figure of 74%. Columbia claimed that 82% of its classes contain fewer than 20 students. From the data he found, Thaddeus concludes the true number is at most 67%. Columbia reported its student-faculty ratio is 6:1. Thaddeus comes up somewhere between 8:1 and 11:1 based on the information he could find."

Columbia charges $86,000 per year in tuition, fees, room and board. 

Columbia is not the only institution to fudge its numbers to get a higher ranking. Spears offers numerous other examples in his article on the Humble Dollar website. 

So who can you trust? 

Thaddeus recommends three websites to evaluate colleges. “College applicants are much better advised to rely on government websites like College Navigator and College Scorecard, which compare specific aspects of specific schools. A broad categorization of institutions, like the Carnegie Classification, may also be helpful.”

"What you won’t find on these sites are any hierarchical rankings or bragging rights. You become the judge of the best schools, given the raw data and what you know about your child."

Thanks Greg for this valuable information!

https://humbledollar.com/2022/09/games-colleges-play/?utm_source=mailpoet&utm_medium=email&utm_campaign=another-ses-test_7

 

Considering Study Abroad?

 50 facts and statistics about the most popular countries to study abroad https://moneytransfers.com/study-abroad-facts-and-stats/ in 2022

If you or your child is considering study abroad, this publication provides a great overview of the reasons for study abroad and a variety of statistics.

"It’s often said that your university years are some of the best, most inspiring years of your life – made even more enjoyable and valuable if you choose to take a year out and study abroad."

"If you ask the graduates who have, they’ll likely agree that becoming an international student away from home can massively enrich your personal, professional, and academic lives. It’s no wonder millions of students choose to pack their bags and take the plunge every year."

While Russia was among the top ten countries for students coming from abroad at the time of the publication, I doubt that it will be a popular country for most students in the coming year. 

The publication also provides links to many additional resources. Check out https://moneytransfers.com/study-abroad-facts-and-stats/

 

Student Loan Forgiveness

Under President Biden's federal student loan forgiveness program:

• up to $10,000 in federal loans (does not apply to private loans)
  
• up to $20,000 for Pell Grant recipients
• if income is <$125,000/individual or $250,000 for couples
• student loan payment freeze is extended to December 31, 2022
• interest rates remain at 0% until repayment starts
• if you voluntarily made payment during the repayment freeze, you can apply to your servicer for a refund. 
• Typically loan forgiveness is treated as income by the IRS, BUT cancelled student debt is exempt from federal taxes. 

• Borrowers in 7 states may be taxed on their student loan cancellation: 

  1. North Carolina
  2. Indiana
  3. Mississippi
  4. Arkansas
  5. Minnesota
  6. Wisconsin
  7. California

  "The U.S. government has instructed student loan servicing companies not to mail a federal 1099-C form to the millions of borrowers who receive debt relief. This matters, a lot."

  "In the past, the 1099-C form has been sent not only to borrowers who receive debt relief, notifying them of their tax burden, but also to state tax authorities."

  "This year, though, because debt relief is not considered taxable income at the federal level, the U.S. government won't be sending out 1099-C forms." Source: https://www.npr.org/2022/09/09/1121717824/biden-student-loans-debt-cancellation-taxpayer-impact
  

Stay tuned to the federal student aid website for details on how to apply.

About 43 million Americans owe federal student loans. One-third of students borrow to pay for college, with average balance of $37,667.

• 1/3 of those owe < $10,000
• 1/2 owe < $20,000
• The Department of Education estimates that almost 90% of the relief in the measure will go to those earning less than $75,000 a year
  

If you have trouble repaying federal student loans, apply for an income-driven repayment plan. 

If you worked for a government agency or nonprofit, you may be eligible for Public Service Loan Forgiveness Program. 

For readers who think this is a give-away to get votes, remember that Republicans have repeatedly (since Reagan) passed tax cuts for the wealthy, most recently in December 2017. Fifteen percent of the benefits went to people making under $75,000 a year, and 85% went to people making over $75,000 a year. People making over $250,000 a year got nearly half of the benefits of the GOP tax bill and are getting 0 dollars under this student loan forgiveness plan.

Remember, there was very little objection to the forgiveness of 10.2 million Paycheck Protection Program (PPP) loans to businesses, with $72,500 being the average dollar amount forgiven.  

After World War II, the U.S. funded higher education through a series of measures that increased college attendance while keeping prices low. Beginning in the 1980s, that funding began to dry up and tuition prices rose to make up the difference.  The shift to “high-tuition, high-aid” caused a “massive total volume of debt,” according to Assistant Professor of Economics Emily Cook of Tulane University.

I was fortunate enough to complete college and grad school with no student loans (I didn't own a car) because the taxpayers of the states adequately funded the land grant colleges that I attended, unlike today. Back then a student could work a minimum wage job and actually pay for a realistic amount of college costs. So folks who paid their way through college and/or repaid student loans may object to helping out today's student loan debtors but they may be the same people who vote for politicians who promise to NOT raise taxes or even lower their taxes. 

College Planning Guide for Students With Learning Disabilities

 "Learning disabilities present unique challenges when you’re planning to attend college. The National Center for Learning Disabilities conducted a survey in 2016 of 800 parents, and 72% said it was hard finding information about college disability services. For these students, getting the right information and support to excel in college requires a persistent strategy."

"In this extensive planning guide, we give you the tools you need to be successful in understanding the college environment for students with learning disabilities as well as your rights and potential accommodations. Whether it’s in-person or online college you’re pursuing, we’ll show you where to find the best resources to achieve your goals."

See: https://www.intelligent.com/college-planning-guide-for-students-with-learning-disabilities/

Understanding Your Finances: The Guide for College Students

Understanding Your Finances: The Guide for College Students

https://upgradedpoints.com/credit-cards/students-guide-to-credit/

Here’s what we cover:

1. How to pay and save for college

2. Getting college scholarships and grants

3. Managing your credit score as a student

4. Best financial advice for college students

And some of the insight we explore:

• Private student loan debt volume hit an estimated $12 billion in the 2020-2021 academic year.

• The average monthly student loan payment was $300 before the White House instituted the repayment moratorium (the suspension is in place through May 1, 2022).

• To help reduce discrimination in credit scores, the US Government passed the Fair Credit Reporting Act (FCRA), which helps ensure the fairness, accuracy and privacy of your credit information.

 This comprehensive guide is geared to college students but covers a lot of personal finance information that is applicable for all adults. 

College Scorecard: Find the right higher ed fit for you

The Department of Education's College Scorecard website https://collegescorecard.ed.gov/ is designed to help you find the best higher education institution for your needs. You can ask to "Show me Options" to search nearby schools, institutions where most students graduate, and other options. Search "Fields of Study" to find the best institution for your career goals. Already narrowed down school choices? Check out and compare your options. 

Explore: 

• Costs
• Graduation and Retention
• Financial aid and Debt
• Typical Earnings
• Student Body Characteristics
• Test Scores and Acceptance Rates
  

Information is provided on:

Alternative Pathways to a Career 

Learn More About Paying for College 

 

 

Your financial path to college graduation

 The Consumer Financial Protection Bureau (CFPB) offers lots of help for college students. https://www.consumerfinance.gov/paying-for-college/

Check out:

 "Your financial path to graduation" https://www.consumerfinance.gov/paying-for-college/your-financial-path-to-graduation/?utm_source=newsletter&utm_medium=email&utm_campaign=gradpath&houx=826&fdx=340&clhx=87&trnx=324&hltx=121&entx=94&retx=22&taxx=-6&othx=385

This tool can help you:

• Understand your financial aid offer
• Plan to cover the remaining costs
• Estimate how much you’ll owe and if you can afford that debt
• Compare offers from different schools
• Decide what to do next
  

Keep coming back as your plan evolves.

For many students, planning how to pay for school is complicated. It may require multiple conversations with family, advisers, and the school financial aid office to get more information. As you figure out your best options, come back and update your plan as many times as you need!

This tool does not save your personal data. Learn how we got the numbers and guidelines for our calculations.

To start, you will need:

• Your financial aid offer(s)
• An idea of how much money you and your family can put towards school
• A private loan offer (if you have one)
• The phone number or email address of someone in the financial aid office – it’s their job to answer your questions!

You may want to use this tool with someone you trust who can help you weigh your options.

 

College Rankings

"Among the most prominent sources for finding college rankings is the U.S. News and World Report, which offers expanded profiles for nearly 1,800 schools in America and ranks schools or programs according to different criteria. As a magazine for finding reliable business and finance information, Forbes also composes a list of “America’s Top Colleges” at the undergraduate level. Princeton Review is another popular resource that publishes rankings for the best national and regional colleges based on 62 different categories, including vibrant party scenes, beautiful campuses, comfortable college dorms, and great financial aid packages." https://www.bestdegreeprograms.org/

This website also provides lots of other information about colleges, including rankings of international programs and ow to afford your degree.

How much of your college scholarship is taxable?

Wait! What? My scholarship money is taxable?
Many students have no idea that their scholarships might be taxable.
Due to the coronavirus the income tax deadline has been extended to July 15, 2020.
Payments and interest on federal student loans for 6 months of relief....

So, about those scholarships and possible taxation.
Any aid used for living, travel and other expenses is taxable income.  The Tax Reform Act of 1986 made aid used for living (housing, food) and travel expenses taxable. Financial aid use to buy textbooks and college supplies remains free of taxation.

Calculating the amount of tax owed is confusing. Students receive a 1098-T tuition statement which shows how much a student received in total financial aid and how much they paid in tuition and fees. Check the annual IRS tax guide and guide to tax benefits for education to find out how much tax you might owe. Be informed and prepared so you aren't blind-sided by a tax bill.

See: "Reporting Scholarships and Fellowship Grants" on p. 6 of the IRS 2019 guide to tax benefits for education.

A variety of organizations have been working to restore tax-free status to financial aid used for living and travel expenses.

I remember the good old days where I earned a B.S., M.S. and Ph.D. without taking out any student loans. I was lucky to have a New York State Regent's Scholarship to pay undergrad tuition, a job as a resident assistant my junior and senior years which paid room junior year and room and board senior year. With some help from my parents and summer jobs I was able to pay for the rest of my expenses. Of course this was back when the minimum wage was wroth far more than today and before the strong anti-tax movements of the Reagan years when citizens understood the value they received for paying taxes. Of course, like most students, I didn't own a car so escaped that expense. I saved enough while earning my master's degree to be able to travel in Europe during the summers. I used to wait until the last day to pay (in person) my quarterly doctoral program tuition with my credit card. Payment wasn't due until the quarter was nearly finished so I kept earning interest on my savings, back when savings accounts paid real interest.

College Debt Resources

About 45 million Americans owe more than $1.6 trillion in student loan debts. Let those numbers sink in a moment...
And there are plenty of too-good-to-be-true offers to help out.
Where can you go for reliable help?

Federal Resources
Office of Federal Student Aid (for federal student loans) https://studentaid.gov/
provides free info on managing loans and programs like the Public Service Loan Forgiveness and income driven repayment plans. Check out their Student Loan Simulator https://studentaid.gov/loan-simulator/ to help locate the best repayment plan for individuals.

Low cost/Free resources
Forgive My Student Debt http://www.forgivemystudentdebt.org/
Higher Ed not Debt https://higherednotdebt.org/ 
National Consumer Law Center's Student Loan Borrower Assistance Project https://www.studentloanborrowerassistance.org/
National Foundation for Credit Counseling https://www.nfcc.org/
Financial Counseling Association of America https://fcaa.org/
The Institute of Student Loan Advisors (TISLA) https://freestudentloanadvice.org/

The last 3 organizations on the list can help with a variety of credit difficulties. 

Choosing a college: Tops in prestige doesn't always lead to top salaries

"The value of a college degree has traditionally been pegged to the prestige of the college itself. But new research suggests that choosing the right program of study can matter more than a prestigious diploma when it comes to good starting salaries..." writes Lisa Ward for The Wall Street Journal, 5/27/20.
According to Anthony Carnevale, director of the Georgetown University Center on Education and and Workforce, focus on a specific program at a particular university, NOT on the schools prestige. Depending on the program, students at less well known colleges with specific majors can out earn graduates of prestigious universities.

Examples:
Median earnings for all schools: English majors: $26,600
Columbia University English grads: $41,500
Monmouth College English grads: $42,400
Cal State Fresno:  $13,400
Median earnings for all schools: Civil Engineering majors: $58,200
Stevens Institute of Technology: $72,700
Virginia Military Institute: $40,400

Main points:
Specific programs matter more than the institution. 
Subject area can matter more than a school's reputation when it comes to earnings.
Lesser degrees and certificates can be rewarding, depending on the field. 

• In certain fields, it's not uncommon for associate degree graduates and vocational certificates earn higher starting salaries than bachelor's degree holders.  Nursing is one example.

What Parents Need to Know Before Borrowing Money to Pay for College

"With college costs burgeoning, parents often consider taking on debt to help their children cover tuition. It could be a smart move. But it could also have a devastating financial impact, so parents should understand the pros and cons of each option."
Thanks to Cheryl Winokur Munk, writing in The Wall Street Journal, 11/1/19.

Federal Direct Plus loans

• "Graduate and professional students can use these loans, as well; when parents do, the loans are commonly known as Parent Plus loans."
• offer some protections that private loans don’t.
• can be consolidated into a federal Direct Consolidation loan to access an income-based repayment plan.
• eligible for economic-hardship deferments; disability or death discharge; graduated or extended repayment plans; and Public Service Loan Forgiveness.
• charge higher interest rates and fees than other federal student loans.
• "There is no annual percentage rate provided on these loans. But free online calculators such as the Experian APR Calculator can help families calculate the APR and better compare the costs with loans from private lenders."

Private Parent loans

• every lender has different rates, perks and requirements, and some have application, origination or disbursement fees.
• private loans don’t have the same types of consumer protections of federal Plus loans.  

Home-equity line of credit or home-equity loan

• Credit Line: floating interest rate, and 10 to 20 years to repay. 
• Home-equity loan is a one-time lump-sum with a fixed interest rate. 
• limited repayment options compared with other types of college loans, 
• loans must be repaid if the home is sold. 
• Any unspent proceeds are counted as an asset on the Free Application for Federal Student Aid (Fafsa)

It is more important for parents to invest for retirement than to help their children pay for a college that may be beyond their ability to afford. Children can find less expensive ways to attend college.

How "No Loan" College Works (It doesn't mean free)

Although rare, more private colleges are joining the club of offering sufficient grants and work options to help students avoid or minimize student loan debt. Princeton started the trend more than 20 years ago. (Good luck getting accepted).
Writing for The Wall Street Journal, (12/9/19), Cheryl Winokur Munk explains.

1. "No loans" doesn't mean no out of pocket costs. Once the college determines a student's financial aid needs, they expect a contribution from parents and the student. So plan on working summers in high school to save some money for college.
Example: Cost of attendance (tuition, room, board, other costs) = $65,000. Depending on the family circumstances, they may be expected to contribute $25,000/year. The remaining $40k might be offered as grants and student employment.

Expected family contribution: https://studentaid.gov/help-center/answers/article/what-is-efc

2. Few schools offer "no loan" options and they tend to be selective.
While about 6 dozen institutions offer the program, that's a tiny segment of higher education. They are the highly selective, competitive institutions.
Examples: Amherst, Bowdoin, Brown, Colby, College of Ozarks, Columbia, Davidson, Harvard, Johns Hopkins, Princeton, Swarthmore, U of Pennsylvania, Vanderbilt, Washington & Lee, and Yale.
However, that means that "smart students from poorer families could end up paying less to go to a top private university with a no-loan policy than to a state school with a lower sticker price."

3. No-Loan policies vary
Every institution has it's own policies so check the fine print.

4. Still... you may still graduate with loans.
Some students may choose to take out loans to cover their expected student contribution rather than working as much as might otherwise be required. 

The Economics of a College Education

For Many, A College Degree Is A Bad Investment

Richard Vedder Contributor Distinguished Professor of Economics Emeritus at Ohio University, writing in Forbes makes the following observations:

 

"The conventional wisdom is that attending college is a good investment. College graduates over a lifetime make, in present value terms, on average about $1 million more than those with high school diplomas. Since the cost of obtaining a degree, even including costs associated with earnings foregone while studying in college (as opposed to working full-time) is vastly less than$1 million, obtaining a college degree is a good investment."

"A more correct nuanced view is that obtaining a college degree is a good investment for a significant subset of the young American population. However, for another large segment of the population, it is actually not a viable proposition on strictly economic grounds."
"For every 100 students entering a four-year college on a full-time basis, only about 60 obtain a bachelor’s degree after six (not the advertised four) years. Moreover, according to the Federal Reserve Bank of New York, about 40 % of that 60% who graduate actually become underemployed —taking jobs typically filled by those with lesser education, especially a high school diploma. Thus out of every 100 students who start college full-time, only about 36 typically actually both graduate and get a good job in a timely manner. College is a risky investment."

A really big factor in the financial analysis is student loan debt of about $1.5 trillion. Too many students borrow far too much money when their prospects of earning a degree in a field that will provide sufficient salary to repay the debt is poor. As a retired university professor I can attest to the many students who attend college because it seems to be the thing to do yet they are not prepared for the rigors of college and are not motivated to excel. They would be far better off taking a gap year or two to earn money, explore career options, and mature to the point where they are prepared for college.

Will we have enough plumbers, machinists, mechanics, and other 'blue-collar" professionals in the future? 

https://www.forbes.com/sites/richardvedder/2020/01/27/for-many-a-college-degree-is-a-bad-investment/#14b1aefe4f52

Avoiding scholarship scams

If it sounds too good to be true, it probably is. C.W. Munk, writing for The Wall Street Journal (1/6/20) offers this advice to students seeking scholarships:

1. Never pay for scholarship opportunities. 
Students should never pay to become eligible for a scholarship; avoid "money-back" guarantees. Instead of randomly searching online for scholarships, use resources provided by college counselors; see related Blog post.

2. Be wary of unsolicited offers. 
Some scammers use scholarship offers to obtain personal and financial information from students. Unsolicited offers are a major RED FLAG. If you receive a check and congratulations for a scholarship you haven't applied for notify the Federal Trade Commission at FTC.gov. "Legitimate scholarship providers don't distribute money randomly to students, and it's likely the check will bounce, or the student might be asked to send funds back for 'processing' or for an 'accidental' overpayment" all ways to bilk students.

3. Avoid giving personal information.
Beyond providing your name, year in school and email address, never give out personal information like Social Security number, driver's license, bank or credit card info. All the info the scholarship provider needs is available from the Free Application for Federal Student aid (FAFSA).

4. Beware of pressure tactics. 
If you feel you are being pressured, it could be a scam. Guarantees and unrealistic promises are further red flags.

Colleges mislead high school student into applying

Numerous reports are coming out with reports that many colleges and universities are recruiting applicants who have no chance of being accepted to their institution. The goal of the colleges is to reduce their acceptance rate, making them appear to be more selective. This process hurts students who may pay substantial application fees to institutions where they have no change of acceptance, bruising their confidence and steering them away from realistic college choices.

So beware of enticements to apply to institutions where your SAT/ACT scores and grades indicate you are unlikely to be accepted.

Source:

For Sale: SAT-Takers’ Names. Colleges Buy Student Data and Boost Exclusivity

By Douglas Belkin (11/5/19)

For 47 cents, the College Board will sell an individual’s information, feeding admissions frenzy

Help choosing a college major and potential career

The Utah legislature mandated creation of a website to help college students choose a major and explore career options. Check out: https://www.utahfutures.org/

It is still a work in progress with features under construction. It's a good way for high school and college students (and their parents) to explore the important decisions facing post-secondary students.

 Thanks to Eric S. Peterson, Tori waltz, and McKhelyn Jones writing for The Salt Lake Tribune. 10/9/19

How to afford college

"COLLEGE STUDENTS who borrow graduate with an average $37,000 in loans. While many people believe loans are the only way to finance a college education, that’s simply not the case."
Author Kristine Hayes is a departmental manager at a small, liberal arts college.

Here are five ways to get an advanced education while minimizing debt:"

1. Stay close to home.

2. Comparison shop. On paper, private schools typically appear to cost more than public institutions, but it’s worth digging into the details.

3. Scholarships. Billions of dollars in scholarships are given to college students every year.

4. Condensed degree programs.

5. Tap your employer. Some employers offer tuition reimbursement programs

"Many hospitals offer these types of programs for students interested in nursing. It’s even possible to attend medical school for free. Kaiser Permanente recently announced that the first five cohorts of students to attend its new medical school will pay no tuition. With medical doctors typically graduating with nearly $200,000 in debt, Kaiser’s program will no doubt generate significant interest."

 Read the full article for details: https://humbledollar.com/2019/09/educated-consumers/

College endowment per student: larger means more financial aid

"The endowment per student is an overall measurement of the financial strength of an institution. In general, colleges and universities with the largest endowments per student -- money or assets under their control that fund operations -- tend to offer more financial aid to more students."

Topping the list: Princeton, Yale, Stanford, Harvard,MIT... no surprises there but Soka university of America??? Grinnell College in Iowa is in 11th place. 

It pays to peruse the list when choosing private colleges.

Check out the list: https://www.collegeraptor.com/college-rankings/details/EndowmentPerStudent