“We received a TERRIFIC Financial Aid Package for our student…………”

How many times have you heard this comment from a friend or acquaintance??
Recently I was discussing the high cost of attending college with a friend.
When he mentioned the college his daughter was attending, I responded how expensive that particular school was (almost $50,000 per year!!). My friend replied that she would never have gone to that school but “they offered her a terrific financial aid package”.

That caused me to think, has anyone ever told you that their son or daughter received a TERRIBLE financial aid package? Perhaps one of the reasons we have not heard this, is that the college ALWAYS says that we are offering you a GREAT financial aid package!!

In analyzing our clients’ college financial aid packages, we have found that the offers that most parents feel are good--------------are MEDIOCRE at best.

The ONLY way to truly understand the worth of a college financial aid offer is to compare it to offers given in the past to students and families in similar situations.
Of course, our statistical database allows us to do that, and also empowers the family to negotiate with the college in an effort to increase the financial aid package.

So the next time you hear about a “terrific financial aid package”----------a GREAT response would be------------------“compared to what??”

A Real-Life Tragedy!

The average consumer has NO CONCEPT of the impact of college debt on a young person’s life and future. My wife and I experienced a tragic example of this last weekend when dining at one of our favorite out-door restaurants.

Jennie, our waitress, mentioned that she expects to graduate next May with a Master's degree in Special Education from a local college. I inquired how the local job market appeared, how long this degree pursuit had required, AND whether she had any college loans.

Jennie replied that the job market for teachers was “soft” (she expected to substitute teach for several years), it had taken her SEVEN YEARS to attain her Master’s degree, AND she will have over $85,000 in college loans upon graduation!!

Statistics indicate that 40% of college attendees NEVER consider the cost of school when making a decision where to attend...AND most families feel that “the most valuable advice with respect to paying for college comes from the college’s financial aid office."

REALLY??!!

IF Jennie obtains employment, her starting salary will be less than $40,000 per year, OR a “take-home” salary of $3,000 per month----BUT----it will cost her close to $1,000 per month to SERVICE HER COLLEGE LOANS for thirty years!!

Financial aid - or financial pain?

Recently I have had the opportunity to review many “financial aid” packages from colleges across the country. I am continually amazed at the way representatives of institutions of higher learning can mis-represent and color the facts of financial aid to families.

Let me be VERY clear----loans are NOT financial aid! They represent long term pain, at best, and financial bondage at worst!!

Some quotes from college representatives are:

“When you are thinking about where to attend college, cost should not be your main consideration.”

“I don’t think college cost should be a factor to where students apply for admission.”

And how about this one... “Students should not look at a school because it is affordable. The student's ‘college experience’ is what really matters.”

We are growing a college debt-laden generation that is being led to the slaughter by colleges who should instead be teaching fiscal conservativeness and prudent management of resources.

It seems that our only hope for college debt is a GOVERNMENT BAIL-OUT!

Would you co-sign for your child to buy a new car?

When a family evaluates the available options of paying for college, invariably college loans appear to be the only solution. Rhetorically, one might ask if it is prudent reasoning to co-sign a loan for a 17 or 18 year old----so they can purchase a BRAND NEW $25,000 car??

If this appears illogical, why is it that many families will co-sign for that amount FOUR YEARS in succession to finance a college education.

Is the entire decision motivated by the fact that a college graduates future earning’s potential can be $1,000,000 greater than a NON-college graduate?? The fallacy in that thinking is that the college graduate WILL DEFINITELY EARN that $1,000,000!!

What occurs in the college graduate’s life while she/he is attempting to PAY BACK the $100,000 in accumulated college debt----OR----does the student receive the $1,000,000 differential upon graduation??

Things that make you go hmmmmmmmmmmmmmmmm!!

A huge consumer purchase

What is the NUMBER ONE mistake families make in considering a college education for their son or daughter? I believe it's not taking into consideration that this is NO different than any other large consumer purchase...such as a house or a car.

We must look at a variety of schools, with their “return-on-investment” in mind (starting salaries for college graduates---when adjusted for inflation--- have remained FLAT at $42,000 per year for the last thirty years!!).

Remember that over 40% of students NEVER receive a degree, and 30% of students transfer colleges in the first two years.

Some thoughts on how to make sure you don't get trapped by college debt: evaluate many schools (particularly outside your geographical area), be certain each school offers ALL your major areas of interest (most students change majors four times—prior to receiving a degree) and appeal any financial aid offer for more money.

An informed consumer receives the BEST college financial aid package!

Forgive Us Our Student Debt

I recently heard about a collection agency in the Southern Tier of New York State, which has 225 collection representatives who are ALL attempting to collect $1.5 Million in bad COLLEGE LOANS; that one small center is attempting to recover over $300 Million in college loans----IN DEFAULT!!

With a bit of imagination, what are those numbers nationwide?

One of the unknown statistics about college students is that almost 40% DO NOT GRADUATE. That means that many, many college students incur huge amounts of college debt but NEVER receive degrees.

Although much has been made of the impact of the sub-prime mortgage loan debacle, very little has been written about the devastating impact of college debt. The answer IS NOT in Federal assistance. Pressure must be brought to bear on the colleges who have no downward pressure on inevitable 6% yearly price increases.

In this politically-charged election year one of the issues that MUST be addressed is the increasing impact on future generations----who feel they have no other choice but to borrow greater and greater sums to fund their education.

College Financial Aid - the 1,000 Pound Gorilla

Recently I heard Hillary Clinton denigrate “predatory college lenders” in a political TV commercial.

As I reflected on the accuracy and intent of that comment, it caused me to reflect on the TRUE REASON for these so-called “predatory lenders.”

My wife and I attended a wedding in Boston last summer where the bride and groom had a COMBINED TOTAL of $208,000 in college debt! Then, last evening at our favorite restaurant, our waitress casually mentioned that she was finishing up her senior year in college (with a degree in Early Childhood Education), and she has $78,000 in college debt!

In the last 30 years colleges have raised their prices 294%, while the average starting salary of a college graduate (INFLATION—ADJUSTED!) is still $42,000 per year!!!

Why are colleges continuing to raise their prices, on average 7% per year??? Because students and families are willing to borrow the monies to pay those prices----with a FALSE perception that it will all be WORTH IT.

This is one of the biggest lies foisted on the American family today, and is propagated daily by academia.