A National Public Radio segment (November 4th., 2011) highlights the burgeoning increase in student debt.

Student loans now exceed credit card debt here in the United States.

This figure does not include debt or asset reduction on the part of parents in an effort to fund a college education without their child graduating with a crippling debt burden.

According to which survey you study, individual student debt on average ranges from $25,000 to close to $40,000 after graduation.

But these are just averages. In our world, we often see students emerging from college with debt loads in excess of $50,000.

Then, many will look for work (if they can find any) that will barely cover their monthly living expenses as well as the educational loan payment.

After you read and/or listen to the article, we recommend you check out the comments below. Review it here at NPR: “College Students’ Borrowing Hits An All-Time High” by Larry Abramson

One of the most perplexing issues for parents in this piece is the contrast between Alabama A&M whose graduates leave with an average debt of more than $31,000, while students at Williams College, in Massachusetts have an average debt of only $8,000 while the “sticker price” at Williams is around $55,000 a year (and will probably exceed $60,000 by next year).

The big difference? A&M is a state school with shrinking state support, while Williams has a $1.7 billion endowment, which allows a generous and laudable admissions and financial aid policy.

This is just one example! So what is our message here?

Get into the college planning game early!

Where should you begin?

Look at your college funding position right now, even if your college bound child is still in middle school (or even earlier).

This might sound excessive. But if you wait until the high school sophomore year, when college issues (academics, location, personal traits and environment) begin to raise their heads, your financial flexibility will be highly restricted.

And this is most likely to have a negative influence on your student’s search for the ideal college.

Getting the college Money Factor squared away early will make the college search and planning clearer and much more relaxed (we have many years of experience that have taught us this).

Here is a symptom of how this effective approach is ignored …

Monthly Google Searches* (as of 11/7/2011):

• “Grants”: 2 million + per month
• “Scholarships”: 2 million + per month
• “College Plan”: 14,800 per month
• “Planning for College”: 1,300 per month
• “Student Loans”: 1 million + per month

Does anyone sense a panic button here? A frantic scrabbling for “free” money, while objective preparation is a rare occurrence.

And then the search for loans (note that no parent loan searches are mentioned). This is just the tip of the iceberg regarding the search for money for college.

So, regardless of what stage your student is in with respect to college search and admissions, we invite you to visit the CSGP Membership. When you join, you get to use all of our content for seven days absolutely FREE.  We encourage you to enroll and then take a serious look at the Money Factor section which will allow you to research and understand exactly how your college funding position will evolve.

Your student can then review those colleges that offer an excellent education as well as a feasible financial profile.

There is no cost to review. You can continue your enrollment at minimum cost and stay with the program at your convenience (just use the material and tools that are most relevant to your needs). You are able to build your college plan’s foundation, then leave and return when the other elements come into play.

Our objective is to help students and families achieve an excellent and successful college experience while protecting the family from an excessive financial burden.

As you can see from the Google search figures above, this is not a simple task.

* Google search based on “phrase” and limited to U.S. searches

This is installment number one of our three part series on what goes on behind the curtain in the admissions and financial aid offices at over 1,000 colleges in the United States.

In this article, we discuss the use of enrollment management and financial aid leveraging by colleges who seek to enroll a first year class that can be retained and which can produce optimum revenue for the institution.

It was first explained to us as follows in the 1990’s by a former Dean of Admissions:

• A generation ago, admission into most colleges and universities was a fairly simple, straightforward process.
• Many admissions offices in the seventies and early eighties were headed by former educators with significant experience as teachers and/or counselors.
• Goals that were considered good practice and typical of the times were:

1. To match students to a college, even if it was not at his/her own institution
2. To help all students receive appropriate need-based financial aid

Then there came a “sea change” …

Enrollment Management:  The “Stealth” Game-Changer

During the eighties, college admission operations began shifting from the educational model described above to a new model utilizing a technique called “enrollment management”.

Though enrollment management can be complex and sophisticated in its full-blown form, the concept is pretty simple.

The colleges designate an executive enrollment manager (Dean or Vice President) who oversees both the admissions and financial aid offices. The mission:

• To enhance the college’s ability to achieve targeted numbers of students (new and retained)
• To do so while optimizing net tuition revenue

This seemingly innocuous, unadvertised transition changed the game dramatically for both students and parents.

Uninformed families can be blindsided by the fallout from this transition.

Enrollment management has quietly brought about increasing levels of scrutiny and competition for admission for college applicants and introduced invisible obstacles to financial assistance for parents.

Overcoming these forces to find the “right college” requires families to conduct more thorough research and to exercise due diligence in their decision making.

It is paramount to be aware that enrollment management has become the norm.

And this is not reserved to only the high profile elite private colleges.

For example, flagship state universities in many regions have adopted selective policies that adversely affect outcomes through such unusual phenomena as state lottery scholarships, diversity quotas, and admission into specialized programs such as Honors Colleges.

Diversity here is interpreted in the broadest context:

• Gender
• Geographic
• National origin
• Socio-economic factors
• Racial factors
• Academics
• Artistic and athletic interests

Some enrollment management practices offer as many as five different admission options and deadlines, and each option offers undisclosed advantages and disadvantages.

Counselors & Financial Professionals Need To Grasp This Concept

As if the tactics noted above are not confusing and stressful enough (how is the average hardworking parent or student expected to be expert in this domain?), another key building block of enrollment management is “leveraging.”

Leveraging (AKA enrollment and revenue management) is a statistically driven system designed to help colleges match aid packages to each student’s “price sensitivity.”

In other words, financial aid is leveraged toward willingness to pay vs. calculated financial need. Advocates believe that without leveraging, colleges tend to “overaward” (offering more aid than a student “needs” to decide to enroll), or they may “underaward” (not offer enough thus causing a student to go elsewhere or to not continue through graduation).

Leveraging purports to get each student the “ideal amount of aid” not just to enroll, but also to continue through graduation.

Parents and students who seek admission at colleges that are even moderately selective and that routinely reflect an annual total cost of attendance in excess of $40,000  (and rising 4-6% per year) are especially in need of professional counsel due to these practices.

Flying solo may be “penny-wise” and “pound-foolish”.

How can the average hardworking parent or student be expected to be aware of these practices let alone develop the expertise to function effectively in this domain?  The first step is to get some help and get educated.

Independent college counselors and financial advisers are in pole position to provide this essential service.

Why College Search GamePLAN Membership is Just What You Need

The information presented above came to us in the mid 1990’s,  and we have built our strategies for college search and paying for college with enrollment management in the forefront of our private practice for more than 15 years.

Later this month, CSGP members will have access to a new Special Report unveiling more specific details on leveraging and a plan to manage all of the difficult realities of the enrollment management puzzle.

This is in addition to over 20 other training modules focused on the ins and outs of developing of a comprehensive, win-win, college gameplan.

You can begin a 7 day free trial membership with College Search GamePLAN today.

Next …

In part two of this series, we will share our research and conclusions about the “Net Price Calculators.”  Our findings are based on what we discovered on 80 college websites.  We’ll also explain the relationship (or lack thereof) between the NPC you find on a college web site and that college’s enrollment management strategy.

This month we unveil a special three part series:

College Admissions and Financial Aid Today – The Inside Story

With the impending requirement for colleges and universities to provide net price calculators (also described as net cost calculators), you are not going to want to miss out on this, so keep an eye on your inbox!

In this series, Tom McGrath and I will be covering the topics of :

• Enrollment Management & Financial Aid Leveraging (the “Stealth Game Changer”)
• Ways colleges will comply with the new Federal law that calls for “net price disclosure”
• Our unique college “Affordability Review” and how this tool can help parents of college bound students combat the bewildering forces of enrollment management and net cost calculators (Visit College Search GamePLAN Members for a brief intro)

Recently, the New York Times blogged about the federal requirement to have Net Price/Cost Calculators on college web sites. This article highlights just some of the doubts and concerns regarding this application.

The bottom line is: If you do not understand college enrollment management and affordability, the entire discussion of Net Price/Cost Calculators loses relevancy.

Follow this three part series to gain a clear insight into the way college admissions and financial aid interact.

Part 1 will be released within a few days.  Stay tuned!

A financial planner asked us recently why we created the College Search GamePLAN teaching platform for college search, admissions and funding.

Our long time colleague, Tom McGrath had this image in his library, and it provided a clear answer…

We are like the grizzly old guy trying desperately to stop that woodpecker making more and more holes and sinking the ark with all its passengers.

In our case we are trying to help students and families achieve a successful college career while preventing them sinking in an ocean of debt.

The reason old Noah’s having such a hard time swatting that bird is that it is so fast and attacks so many different areas (as you can see).

And that is what we confront when providing college search guidance and planning to families with college bound students, and to financial planners who are responsible for helping families protect their assets.

The college search and financing process creates many challenges and problems. Here are just some of the main ones:

College – Total Cost of Attendance (TCOA)

College affordability is an ever increasing challenge.

Our database now shows 99 schools with a total cost of attendance of $50,000+ per year (and some closer to 60K). There were 8 schools at that level in 2009.

If you are a parent of an elementary or middle school student, what do you think you will be facing a few years from now? Or do you not want to think about it (remember the ostrich with its head in the sand?)?

And if you are a professional with clients that have college bound children, how will you help them confront this financial challenge?

And don’t believe for a moment that there are many schools with much lower costs. Today, very few are in the lower $20,000 range.

Not understanding academic competition

Even excellent students can find themselves on the margins of acceptance at many colleges, and not just because of fierce academic competition. The odds are stacked against them.

Take a look at the following example:

Harvard, Princeton and Yale, certainly three of the most highly selective universities announced that they received a combined 89,345 applications for a paltry 4,286 “open” seats, which implies that only 4.7% of those applicants will enter the Class of 2015.

4.7% is pretty skimpy (it would seem) but, in reality, even this number is inflated.

The fact is that after those schools have accepted their legacy students, international, minority, geographic, athletes, musicians, etc., there are probably fewer than the 4,286 “real” open seats available for the “average” qualified student.

And don’t think for a second that this process is limited to those three icons.

Many excellent students are limiting their opportunities by applying for early admission and/or applying only to their “dream school” (or just going through the motions with regard to back-up applications) …

The result: Many experience the deep disappointment of rejection or being waitlisted (which is pretty close to rejection).

There are many excellent “best fit” colleges out there. You just have to know how to search and identify them.

Flawed college search

Following on from the last topic …

Too many students are choosing a college before understanding their financial options. This is a recipe for disaster – putting families in situations where financial offers from some highly visible colleges, make attending their student’s “Dream School” a financial nightmare.

The myth of “Choose first, pay later” is just that, a myth. It’s imperative for families to learn what their financial options are.

Make sure you have a sound financial strategy in place before beginning the college search.

College drop outs/transfers/late graduation

We have all heard this proverb: “He who fails to plan, plans to fail”

According to which study you read, first year college drop out/transfer rates hover around the 28-33% mark or even higher.

Average graduation rates range from 5 to 6 years (for a four year degree).

With annual college costs ranging from $25,000 to $50,000+, the financial impact is immense.

What leads to transfers, drop outs and late graduation?

A whole range of factors come into play here. But the core lies in lack of planning and lack of awareness of how the college admissions process works.

The frequent result is typically a large financial hole filled with monetary and personal “costs” as well as a number of non-transferable credits left “on the table.”

College Debt

Total student loan debt in the U.S. is expected to reach $1 trillion in 2011. That’s more than the nation’s total credit-card debt.

The college graduates of today, who used loans to pay for college, will graduate with an average of nearly $24,000 in federal direct loans. That’s not even touching upon those who got into the private loan market or parental debt.

See the scary trends compiled by the National Center for Education Statistics here.

Not understanding the college search process
We are only scratching the surface here.

When we drill down deeper into the process, there are many challenges, obstacles and distractions that derail the quest for the right school.

Clearly thought out planning for college with cost, debt, “best fit”, academics and timely graduation is essential. And NOW is the time to start!

Our College Search GamePLAN program guides families (and professionals that have clients with college bound students) through this process in detail, step by step.

We offer a 7-day free trial so you can give it a test drive. Just click here.

Summer Holidays – Dreaming About College?

The weather is getting hot. Picnics, barbecues and getting in the water somewhere are the thoughts that occupy our minds.

There might even be brief occasions when a high school student might think about getting into college, or a parent might be concerned about finding money for college, but why not wait until high school starts again in September?

Or for those parents with younger children, setting up camp schedules for their 7 and 8 year-olds, planning for summer and vacations – Money for college and other college search questions can stay on the back burner. After all, those kids will not head off to college for another 10 years or so.

Yes, why worry? There is no pressure (otherwise known as “ignorance is bliss”).

If our College Search GamePLAN blog had a big air horn, we’d let it rip right now!

Remember the old saying: “A stitch in time saves nine”?

This is a golden rule if your student is college bound (no matter the age).

Since we don’t have a foghorn or an air horn like those big old trains, we’ll just try to spread the word and hope a few will listen and TAKE ACTION!

Here are just some of the issues we will be discussing over the next few weeks:

• Who should be planning for college and when should they start? (And who is “who”?)
• Money for college: When and how should you begin a college financial plan?
• Who should be involved in the college search and admissions process? (And again, who is “who”?)
• Why “scholarships” might be “fools’ gold”
• College search – Beware of “shiny objects”
• College statistics that can make your eyes water

So stay tuned. The posts won’t be super long and will address a variety of issues as well as money for college. But if they flip your college search and financing switch and help get you on the go, they will have done the trick.

For Undergraduates & Graduates In Healthcare Studies

We have been contacted again about this program, and we are happy to share it with our readers. If you know a deserving college undergraduate or graduate student in healthcare studies, please pass the information along.

This is a scholarship opportunity for students who are currently pursuing healthcare-related degrees.

Eligible students must have completed at least one year of undergraduate or graduate course of study in the Spring of 2011.

The TYLENOL® Scholarship Program is generously offering $250,000 in scholarships to students pursuing healthcare-related degrees.

Applications must be received by May 27, 2011.

Check out Tylenol.com/scholarship for more information.

We reprint here some details we received about the program:

TYLENOL® Scholarship Program

Paying for college has never been tougher, so we wanted to be sure to bring this scholarship opportunity to your attention!

The TYLENOL® Scholarship application is available online at Tylenol.com/scholarship.

Scholarships are awarded based on outstanding leadership qualities, as well as academic excellence.

Additional scholarship details:

• Eligible students must be pursuing healthcare-related degrees
• Ten students will be awarded $10,000 scholarships
• Thirty students will receive $5,000 scholarships
• Applications must be received by May 27, 2011. Winners will be selected by July and scholarships will be distributed by August 15 of 2011.

Eligible students must have completed at least one year of undergraduate or graduate course of study in the Spring of 2011 at an accredited two or four year college, university or vocational – technical school.

The makers of TYLENOL® care about the future of healthcare and recognize that dedicating yourself to healthcare is no small commitment.

That is why we are proud to offer a scholarship program dedicated to supporting some of the best and the brightest undergraduate and graduate students involved in healthcare-related fields.

Now in its 19th year, the TYLENOL® Scholarship Program supports America’s next generation of healthcare providers.

******************
Please note that College Search GamePLAN has no affiliation with Tylenol or related companies.

Good luck to all who participate.

Where is the real money?

Campus Based Merit Scholarships

Your family’s EFC may equal or exceed the Total Cost of Attendance at some or all colleges you are considering.  Does this mean you will be paying full cost?  Not necessarily!

If your student is a top performer academically, one of the strategies to employ to combat the high EFC is to identify colleges that award merit scholarships.  As in the case with need-based aid, to maximize the potential for merit money, the student must be looking for colleges where (1) merit scholarships are offered, and (2) he/she will be in at least the top 25% of applicants and preferably the top 10% of a college’s applicant pool.

Merit awards can range from a few thousand dollars per year to full tuition scholarships depending on the college and the student’s credentials.

Note:  Although merit awards do not require repayment, they do have strings attached.  These strings usually revolve around the student maintaining a specific minimum GPA while enrolled in college, so the responsibility for maintaining the award is performance.  Pure merit awards are unrelated to family financial circumstances. Some colleges do, however “blend” need and merit based money.

PRIVATE SCHOLARSHIPS

If you receive a direct mail solicitation to engage in a search for private scholarships, be wary.  Although there are a few reputable companies conducting data base searches for private scholarships, most of these companies provide little or nothing for the money they ask you to spend.  You can conduct a search for private scholarships – FREE – if you are willing to invest a little (and we mean A LITTLE time).  We advise you not to get bogged down looking for scholarships in the private sector, other than what will be available in your local community next spring.

Recommended Strategies:

Contact the Guidance Office at your school.  Most keep a list of local community scholarships for which you can apply during your senior year.  Pay attention to the deadlines.  They are non-negotiable.

Contact a state student loan guarantor.  In Vermont, and for the NH upper valley, this is Vermont Student Assistance Corporation.  VSAC will have you complete a form and they will search the College Board data base of private scholarships – FREE.

Conduct a scholarship search on the Internet – FREE.  There are a number of places that offer this service at no charge to you.  Start with fastweb.com and you’ll find plenty.

Spend no more than 6-8 hours on this process.

Remember – there will be over 2,000,000 students applying to college this year, and most of them are looking for private scholarships, too.  The number of applications these national scholarship providers receive is staggering?  The chances for success are between slim and none in the national private sector, and slim usually leaves town early.  Be sure to start investigating these programs early in the junior year of high school and be prepared for a multi-layered competition that could take over a year.

A BETTER Strategy: Stay local.  Don’t waste a lot of time.  Get the information and applications from your guidance office.  Don’t get your expectation level too high.  However, if you are to be awarded some private money, the local civic and charitable groups are most likely to be your benefactors.  Don’t ignore them.  Also keep in mind you will be obligated to notify colleges offering you financial aid if you are awarded money from these local scholarships.  The college in turn may adjust the amount they awarded you to keep the total aid within your calculated need.  The total dollar amounts may seem modest, but everything helps.

BEST STRATEGY: Give high priority to colleges offering MERIT SCHOLARSHIPS.  This means paying very careful attention to your college search and the essential attributes of those colleges and universities on your refined and final list. Focus more time getting the details about these awards than you do on the private sector awards, and you will be way ahead of the game.

The college-based merit awards are usually higher, they are renewable from year to year, and the probability of receiving a merit award, especially from a college where you fit the top 10-20% profile of the admitted students is much higher than your chances with third party scholarships.

Keep in mind these funds are not portable.  In other words, should you decide to change colleges, you cannot take your merit scholarship with you and  comparable money for transfer students (at your new school) will be extremely limited.  Give your college search serious thought. Do not commit to a college light-heartedly. The ultimate costs could be in the tens of thousands of dollars should you decide to transfer.

Happy Now We're Through It All

Juniors are in the midst of the college search process, if they are doing it correctly!

Time To Talk About The Sophomores! Freshmen Too!

“If you are prepared, you will be confident, and will do the job.” ~ Tom Landry

Key Success Factors

1. Students who do well on standardized tests do a lot of reading. Read, read, and read some more!
2. If you don’t like to read, refer to # 1
3. Set your test strategy toward the end of sophomore year
4. Take PSAT in sophomore and junior year. Take PLAN at the end of sophomore year
5. Manage your time. Don’t cram for standardized tests
6. Engage yourself in a challenging high school curriculum
7. Establish a high level of classroom performance in Math, Science, Foreign Language, and History
8. Develop your writing skills over time and get constructive feedback on your writing as often as possible
9. Understand what your candidate colleges will require of you
10. Pay attention to the official record you create! Don’t practice by taking the real test. Use diagnostic tests for practicing

Don’t forget also: “A stitch in time saves nine.”

PS – For those who missed it and are still waiting for or struggling with award letters, here’s a helping hand:
Award Letter Evaluation Tool

“If it weren’t for the last minute, I wouldn’t get anything done.”
~Author Unknown

The admissions applications are submitted! Now what? Wait until April 1st. to see if you were accepted?

Not quite. The second round of applications (for Student Financial Aid) begins now. And now is the time to submit your Free Application for Federal Student Aid (FAFSA).

The (In)Famous FAFSA

Typically, families are scrambling to gather their financial data for the 2009 tax year so that they can prepare the FAFSA for submission. While many of us would like to forget about the financial ups and downs of the last few years, colleges and universities are ready to use that information to the fullest extent of the law!

The FAFSA form for the 2010-2011 school year is now available online. It is with this form that students apply for need-based financial aid each and every year they plan to attend. Yes, EACH AND EVERY YEAR!

Procrastination Can Hurt You

“Procrastination is, hands down, our favorite form of self-sabotage.”
~Alyce P. Cornyn-Selby

I used to work in the financial aid office of a private university several years ago, and I cannot tell you how many shell shocked students I saw in the month of March, each and every year.

Why? They had simply forgotten to get their financial aid renewal forms in on time and then had to face some daunting money issues for the upcoming school year.

Many families end up waiting to file their financial aid applications forms until after their taxes are done.

Do Not Wait – Be An Early Bird!

In my experience, it is more important to get the forms (new or renewal) in on time, than to have them be filled out with completed tax information.

It is better to estimate the financial information based on the previous tax year (2008 in this case) and get the forms in on time, than it is to get all of the (2009) numbers verified before putting them on the forms.

Be Aware Of Your College’s Requirements

Also check with the schools you have applied to (or are enrolled at since the Financial Aid deadlines for new and returning students are usually different) to validate the deadlines and number and types of forms you need to file for consideration for financial aid.

Every school asks for the FAFSA (federal form required by all colleges) and several will ask that you file the CSS Profile (institutional form required by some colleges). Certain schools may even ask that their own institutional financial aid forms be completed.

The simple message is: Get your forms in ON TIME! Don’t be guilty of procrastination, or …

“A year from now you may wish you had started today.”
~Karen Lamb

Are you facing a mammoth tuition bill?

Massachusetts now has nine schools with a
“college cost/sticker price” above $50,000 per year (Chronicle of Higher Education).

As of last year, no school in Massachusetts surpassed that mark.

Last year only 5 schools in the nation had total fees exceeding $50,000. This year, nearly 60 schools charge that much per year! That’s a 1,060% increase! What will the increase look like next year?

This all makes for great headlines, and there is real cause for concern about the steady inflation of college costs.  But …

What better questions can be asked by families intimidated by the published college cost?

How important is a college’s sticker price?

The key to this question is the role of financial aid.

Sixty-six percent of all undergraduates received some financial aid in 2007-2008, according to the Department of Education. Full-time students approached a rate of nearly 80%.

While the average published private college cost last year was $37,390 (public, in-state was $18,326), that is not reflective of the actual fees each individual student may have paid based on the type and amount of grant, scholarship, loan, and work-study aid they may have received. (Note: college cost includes tuition, room and board, and allowances for items such as books, travel and fees).

Because of financial aid, there may often be a significant difference between the published “sticker” price versus the actual “net” price paid.

We hear so many stories of families insisting that their students could only apply to state schools last year because a private college education was going to be cost prohibitive.

If only they knew what the Wizard behind the curtain was really trying to hide!

By peeling back the layers of the onion and calculating their exposure (EFC) based on the Federal and Institutional Methodology, many families would discover that many private schools will end up with a net cost that may be very close, if not lower than the net cost of a public school.

Armed with this knowledge (what is the “true” college cost) before they begin the college search, rather than following the “guidance” received from the media, they’re much more likely to have a broader selection of schools that are a great fit, academically and financially.

Does the sticker price reflect superior quality?

There are some great cars out there with hefty price tags, and they certainly have quality. But let’s face it: the “snob” factor plays a pretty big role too.

There is a similar attitude towards colleges (college cost equals college quality). Yet many studies (including one by Princeton economist Alan Krueger) explain that where a bright student goes to college really doesn’t mean much in terms of finding the right career or more importantly, earning power.  The research indicates that what really matters is how well the student performs at whatever institution of higher learning they attend – not the number on the price tag.

What we can be sure of is that an informed college search is fertile ground for a savvy shopper.

* Tufts’ mascot is Jumbo, and has an interesting “tail”.