By J.D. Wyczalek (why-zall-ick) Arizona’s premier college planner

Phoenix — Did you read the article in the StarTribune today?

The last paragraph of the article in the StarTribune states “Nothing is too shocking in terms of student loans,” said Paul Raymond, a Lutheran Social Service of Minnesota financial counselor who advises students at the U. “It’s not a surprise to have $60,000.00-plus dollars in [student] loans.”

It is a crime and travesty that newly graduated students are saddled with umpteen thousands of dollars of debt. Forced into debt because of poor planning or lack of understanding of the Higher Education Opportunity Act of 2008.

Are we in the process of creating a generation that will be enslaved to debt? Yes! Credit card debt is out of control as more and more college student turn to credit cards to pay for books and supplies.

What can we do about it? Learn all you can about how the financial aid system works and leverage your situation so that you can qualify for as much financial aid as possible. Educate your children about how credit and debt work.

Option one: find a cheaper school. (Less expensive may not really be cheaper if the college’s historical giving and finical aid pattern is poor.)
Option two: learn the rules or hire a professional who knows the rules. Beware of swindlers who don’t have you and your student’s best interest at heart and are looking to make a quick commission dollar.
Option three: Don’t go to college. “Workers with bachelor’s degrees earned an average of $26,000 more per year than those with only high-school diplomas, according to a new report on education trends released today by the U.S. Census Bureau,” The Chronicle of Higher Education reports.

If you truly know the (financial aid) rules you can legally and ethically stack the deck in your favor.

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Do you have an exceptionally bright child? Is your kid advanced for his/her age? Then consider the brainpower scholarship of the Mensa Organization.

Mensa is the largest, oldest and best-known high-IQ society in the world. (Heck, my father-in-law is a member!) It is a non-profit organization open to people who score at the 98th percentile or higher on a standardized intelligence test.

The Mensa Education & Research Foundation college scholarship program bases its awards totally on essays written by the applicants. Consideration is not given to grades, academic program or financial need.

*The scholarship process begins during the first week of September and ends on the scholarship application deadline of January 15.

The amount of money available for awards (nearly $70,000 last year) only had about 4000 to 6000 applicants. Applicants need not be Mensa members, you only need to live near a chapter and apply through the chapter. There are chapters is just about every state and major cities. Visit the Mensa website for details.

So if your kid is a regular Doogie Howser or Einstein why not apply. You remember Doogie Howser, don’t you? It was a TV show in the late 80’s early 90’s that dealt with the drama of a teenaged genius coping with life while being the youngest physician in the US.

Mensa Foundation

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The Free Application for Federal Student Aid students file annually to determine financial aid received is composed of six pages and 120 questions, which is longer than many tax returns. At this length, students said the form can be burdensome.

Sophomore interior design major Clancy Pannell said the form took him over two days to fill out because he had to gather the information and make sure it was correct.

“I don’t want to spend all this time filling out a lengthy form that’s frustrating,” he said. Pannell said he wanted to apply for a loan but didn’t feel he should have to fill out the form to qualify for it.

Lengthy, complex form

The FAFSA contains questions based on information from the federal tax forms and a student’s adjusted gross family income. It uses this information to determine the Expected Family Contribution of students going to college. The EFC is then used to appropriate state aid and federal loans.

Another complaint students have about the form is that it contains complicated terminology.

“I guess it’s necessary, but I’m not sure what some of it means,” junior nursing major Amanda Engelhart said.

She said the information is pulled from your federal tax form, so “you might as well check a box” on your tax form. She added she thinks more students would fill it out this way.

Junior nursing major Gina Ferrante agreed. She said she doesn’t fill it out because she thinks “it’s not worth it.” She added she would do it was as simple as checking a box.

She is not alone. According to the U.S. Department of Education, 40 percent of college students fail to file a FAFSA. Nonetheless, the department did find almost 21 percent more students filed the FAFSA in 2009 than in 2008. The department said a reason for this is the state of the economy.

Simplifying the form

President Barack Obama said he recognizes the complication and volume of the form is overwhelming for many college students and offered a similar solution to what Engelhart described. He wants to eliminate the FAFSA. Instead of the form, he would have families check a box on their tax form indicating the information can be used. This is one of many proposed options to change the FAFSA.

Mark Evans, director of Financial Aid at Kent State, said it’s “a radical change” but definitely an option to simplifying the process. He acknowledged the lengthy form could be cut down.

“There are a number of questions on the FAFSA that have no impact on financial aid, but someone uses the information to process aid,” he said.

Simplifying the form may convince students who don’t fill out the FAFSA to do so. This is a proposed change, but legislation has already been put into place to change the form.

The Higher Education Opportunity Act was signed into law by President George W. Bush on Aug. 14, 2008. The act requires the secretary of education to work toward reducing the number of FAFSA data elements by 50 percent and submit a report on the progress.

Evans said reducing the form may affect the formula for the EFC.

“If we had to reduce to 50 questions from the current form, (we) would have to know what impact to the EFC would be so there isn’t any inconsistencies,” he said.

Another change brought about by the Higher Education Opportunity Act, Evans said, is that students with a family adjusted gross income under $30,000 are eligible for auto-zero EFC and can fill out a simplified version of the form, EZ FAFSA. Also, students with a family adjusted gross income of less than $50,000 are eligible for a simplified needs test that would allow them to fill out the EZ FAFSA, too. These applicants will have the ability to file over the phone.

Students suggest changing FAFSA’s terms for filing as an independent. Sophomore nursing major Jennessa Macdonald said she dislikes the fact that she has to list her parents as a dependent when she pays for college on her own.

“I don’t see a point to it,” she said. She added that she doesn’t think you should be 24 years old to file as an independent.

Evans said there is an option available for students to file as an independent, but it only applies to a small amount of students.

If a student’s FAFSA is partially completed, the Financial Aid Office will encourage the student to talk with a financial aid specialist or get parent information. If a student can’t get parent information, then the school can request the state government to process the student as an independent. Evans said this is rare and fewer than 100 Kent State students have these circumstances.

Evans said there is a lot of energy now put into talks about simplifying the financial aid process.

He added that, in considering these proposed changes, there will have to be evaluations of smaller, shorter versions of the FAFSA to see what works.

J.D.’s comments: While many would argue to make the FAFSA form easier to fill out, the question remains how will these changes affect my child’s ability to get aid. The convince of a single click on your tax form isn’t all that it is promised to be. There are still many questions that must be answered that are not on the tax forms, such as, which college would you like to submit for financial aid, and are you a first year, second year ect. student? Here is a question for you, when was the last time the government ever made anything easier?

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You don’t have to be an economics major to see lots of appeal in President Obama’s plan to radically change the nation’s college financial aid programs.
   
The President wants to replace loans made by banks, on a for-profit basis and subsidized by the government, with loans made directly by the government — on a non-profit basis. The Congressional Budget Office estimates that making loans that way, without government subsidies to the banks that in turn make money on the loans, would save $94 billion over the next decade. The Obama administration wants to use that money to expand another student aid program — Pell Grants, which are just that (rather than loans) for more needy students.

Mr. Obama wants to convert bank profits into scholarships, in other words.

And for that, he has a battle on his hands that’s worthy of being a case study for political science majors.

The President’s proposal for expanding financial aid and, yes, limiting the profits that lenders can make on students’ college education adds to the cries that he’s recklessly expanding government. Pell Grants — once known as Basic Educational Opportunity Grants, but later renamed after their champion, former Sen. Claiborne Pell of Rhode Island — are an undisputed government success story.

Some 54 million Americans have gotten through college with financial help that imposes no debt upon them. About the worst that can be said of Pell Grants is that they’ve had the unintended consequence of some high-priced colleges suspected of using their availability to raise their tuitions even higher.

Yet here come the opponents of more Pell Grants and even direct government loans.

“The administration has decided that it wants to capture the profits of federal student loans,” says Kevin Bruns, executive director of the trade group America’s Student Loan Providers.

We’re tempted to offer to pay — through a low-cost loan or even an outright grant — for a semantics course for Mr. Bruns. “Capture the profits” sounds like piracy of sorts, and something altogether different from saving money and using those savings for the most benevolent of purposes.

Other students of what’s developing into a potential showdown might remember that the private companies providing for-profit student loans would have collapsed without a government rescue last year. Two years ago, investigations by New York Attorney Andrew Cuomo’s office found irregularities and outright corruption in that industry. Now, some members of Congress are wondering why private lenders are even necessary when the government can simply provide the money rather than guaranteeing what then become high-profit, low-risk loans.

That question could be pondered further at a seminar on the political peril of trying to do the right thing and educate more people. Mr. Obama could be a guest lecturer, explaining the huge price of the best of intentions.

The issue: The President wants to steer what have been the profits on college loans to outright grants.

The Stakes: Who would object? For-profit lenders, alas.

http://www.timesunion.com/AspStories/story.asp?storyID=789998&category=OPINION

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Did you see the news last night? Had to pass this article on to all of you to show you another example of Colleges & their staff being on OVERLOAD.

They make mistakes, sometimes huge colossal mistakes.

Last year a college in New York made an enormous blunder. They handed out thousands of dollars of financial aid and when the IRS came knocking on their door, the New York University in Buffalo (I won’t mention which one but you can figure it out). Anyway the college had to call back several hundred students who had to give back upwards of $12,000.00 of aid. Ouch!

Now another college in California is in the news because of their slip-up.

UCSD sent an email out to every student who applied with a note that said welcome to UCSD, even to those 29,000 students that received denial letters. This is a heart-wrenching slap in the face. First your child is out, now you are in, no you are really out.

Here is the link

This is the same in the Financial Aid Office and in the Admissions Office (as evidenced in the news article).

They are over-worked & under-manned.

They have Students doing Work-Study assisting in the Admissions & Financial Aid Offices.

Mistakes Do Happen, Consistently.

You must follow-up with them. You must stay on top of them.

Expect mistakes throughout the Process. AZCollegePlanning.com is here to help.

J.D. Wyczalek (why-zall-ick)

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