Is College Worth Today's High Prices?

Let me start out by explaining that, emotionally, this question might have wildly different answers. What we are discussing in this publication is more about ROI, or return on investment. It is also an answer that very well may have a variety of answers, depending on how you were taught to do the calculation.

Here are a few examples.

Last week, I was sitting at the counter in one of my favorite diners having breakfast, when a gentleman said, “I paid cash for my oldest granddaughter’s college education.” I asked what she was now doing with her education. He told me she is a physical therapist in the Chicago area. She is making about $65,000 a year. When I asked how much he paid for her education, he proudly said, “One hundred eighty-six thousand dollars for her 6-year degree.”

The next example was a former employee of ours, who said a few years ago that her daughter went to a local college for 5 years, and the cost was over $124,000 in total. The daughter had obtained a teaching degree and a certificate to teach in Pennsylvania. She didn’t find work locally and ultimately moved south. She now earns about $36,500 a year.

In each of these cases, one needs to look at how the costs were financed. What if all or a large part of the college costs were in the form of a Parent PLUS loan? What if the student borrowed all or most of the money? The answers would be anywhere from a great deal higher, to, the student would not earn enough to pay back the loan without significant help and might have to interrupt her 4-year education for a 5-6 year time period to complete her degree.

Most parents don’t understand that students cannot, in today’s high-price world, borrow enough on their own to finance their education without some form of co-signer. We have also learned that a large number of parents don’t understand that once they obtain a Parent PLUS loan for their student, the loan cannot be transferred to the student. Articles have been written about how a student can refinance their student loans after they finish college. This is more difficult than it appears, because the student doesn’t have an established loan repayment history or even a reasonable FICO score.

Don’t go down the path of, “We’re going to borrow the money or my student can pay for their own college education; after all, I paid for my own college education,” without consulting a professional with experience in all aspects of this intensely complex endeavor.

Mike Giffin, President

8 Steps to Acing the College Admissions Interview

The personal interview is an often misunderstood part of the college admissions process. A good interview, however, can make the difference between getting accepted or rejected by your top school. Typically, interviews take place during the student’s senior year. As with every other piece of the college planning process, it’s important to be prepared!

Does every school require interviews? No. Many of the more competitive private schools will require (or “strongly recommend”) that students participate in admissions interviews, either on campus or with alumni if you live out of state. This means, if you skip the interview, you most likely will not be accepted. At some schools, the interview is optional—which means you should still elect to participate for the best chance of admission. Other schools, however, do not offer interviews at all. Every school will be slightly different. It’s important to research the schools you’re interested in ahead of time so you understand their policies and requirements.

Read on for some steps you can take for a successful interviewing experience.

1. Do Your Research.

Visit the college’s website before your interview. Make sure to read about the program of study that you’re interested in. Think about what makes this school special. You should be prepared to tell your interviewer why this school is the right fit for you.

2. Schedule In Advance.

For some schools, you will need to submit an interview request before a certain deadline. Other schools will contact you by phone or email—after you have completed your application—to invite you to interview. Either way, it is a good idea to schedule your interview for the earliest date possible. The sooner you interview, the greater the chance that your interview will be given careful consideration in the decision-making process. Remember, after the interview, your interviewer needs time to write a formal summary and submit it to the school. If you put off the meeting, you run the risk of interviewing too late in the game to really influence the admissions decision.

What if you're invited to interview on a day that's not ideal for your schedule? Make it work! Declining an invitation to interview, canceling at the last minute, or even asking to reschedule can signal to the school that you're not really interested. There's a good chance your "yes" will turn into a "no."

3. Dress Neatly.

While you need not show up in formal attire, it is a good idea to wear clothing that is neat and clean. Many schools recommend “business casual” attire for interviews.

4. Practice.

Sit down with a family member or friend, and practice! For many high school students, the college admissions interview is one of their first experiences with this type of conversation. Don’t memorize a script, but practice answering some of the basic questions you can expect to encounter. Be prepared to talk about why you’re interested in attending this particular college, why you’ve chosen your desired major and career path, and how you spend your time outside of school. Practicing ahead of time will help you to calm your nerves and come across more naturally in your interview.

5. Prepare Questions.

Don’t be taken by surprise when your interviewer says, “Do you have any questions for me?” The worst thing you can do is to have zero questions for the interviewer. In fact, it’s a great idea to prepare school-specific questions in advance. You should be ready with questions that are specific to the school you’re interviewing for, whether those questions relate to academics or campus life. This is another reason why it’s important to do your research beforehand. Asking the right questions shows that you’ve put some thought into this particular college.

6. Be Positive.

Try to phrase your responses as positively as possible. Interviewers are looking for enthusiasm and personality. Avoid taking a negative, bitter, or bored tone during the interview. Positivity includes body language! Sit up straight, make eye contact, and smile.

7. Relax.

Take a deep breath, and be yourself! The interviewer is not expecting you to use big vocabulary words or have the “perfect” answer to every question. It’s okay to take your time when answering questions. Interviewers are looking for thoughtful responses that reflect who you are outside of grades and test scores. The best interviews are conversational and authentic.

8. Say Thank You.

After your interview, it’s a great idea to send a handwritten thank you card to your interviewer. Thank the interviewer for taking the time to meet with you, and reference something that you talked about in your conversation to show that you were paying attention. These days, it’s becoming less common for students to send thank you cards after their interviews, so you will impress your interviewer by going the extra distance.

Mike Giffin, President

Financial Aid Season Is Upon Us: Five Keys to Success

For many high school seniors, financial aid season is upon us, and families of younger students can start preparing by knowing what's ahead. What can your family do to ensure that you stay on top of deadlines, submit all the right information, and get as much financial aid as possible? Follow these five steps to put you and your student on the right path.

1. Make A Timeline

When it comes down to the admissions and financial aid process, nothing is as important as deadlines. Make a timeline that includes every school your student is applying to, along with all of the admission due dates, financial aid requirements, and follow-up schedule.  This will guarantee that you miss no deadlines, submit all of the correct forms, and make sure that the school has received all of the information that they have asked for from your family.

For Ensphere families, we will guide you through each step of this process. Our financial aid software lists all of your deadlines and requirements in one place.

2. Know What the College is Asking For

Many colleges, especially when considering early decision applicants, will ask for additional information that your family may not have had to submit with the CSS PROFILE or FAFSA forms. For instance, Cornell has asked for a copy of the parents’ 2013 tax return for all Early Decision applicants. It is important to check each college’s website along with our financial aid software to see if your schools have any additional requirements. Again, if you miss a deadline, it could be the other person who submitted their tax returns on time that gets accepted, leaving you on the outside looking in.

3. Don’t Be Afraid to Ask Questions

If you aren’t sure whether the financial aid office needs something, ASK! Applying to eight or more schools can get crazy and confusing.  Different schools ask for different kinds of documents and data. If you aren’t sure what the school needs, it is better to be safe than sorry. A 30-second phone call is all it takes to ensure that the correct documents are being sent to the financial aid office.

4. Negotiate, Negotiate, Negotiate

There is a reason we tell students to apply to over 8 schools, and it isn’t just to guarantee you are accepted to at least one. It’s all about matching the student to the school that wants him or her the most, and using that financial aid package to increase your leverage against other schools. One school may give a lower offer than expected, but if you have a better offer from another school, you may use that to try and raise the offer from the low-offer school.

5. Hire a Group of Professionals

Hiring a professional who works with high school and college-aged students every day about the financial aid process will pay dividends. Whether it be to help you maintain your timeline of financial aid forms, to answer questions about income or assets a college is asking for, or to help assess different financial aid offers. True college planning firms have the knowledge and experience to maximize your family's opportunities for receiving financial aid.

Chris, College Planning Specialist

College Costs and Financial Aid

Many of our clients are in the midst of applying to colleges. They are also dealing with the reality of a four-year college education costing six figures. How does a family pay for a college expense that is equal to and in many cases greater than the mortgage on their home? What can you do to reduce the cost of college?

Let’s explore what you need to do and think about as you and your student go down this path:

THE “RIGHT FIT”

One of the most important decisions contributing to college cost is choosing the right school for your student; i.e., finding the school that matches your student’s need in terms of areas of study, selectivity, public vs. private, location, campus “culture”, etc. These are more important than cost. Why? Because matching your student’s needs with the college that really wants your student leads to success and lower costs. A student who is attending the right school will finish college in 4 years; not 4 ½, 5, or 6 years. The average time to get a degree today is approaching 6 years. Do the math. That can cost you an additional $20,000 to $60,000!

MAJORS AND COURSE OFFERINGS

Many students choose colleges based on where family members attended, what their high school counselors are pushing, and where their friends are going. Not a sound basis for making a choice that may cost $100,000+. Believe it or not, many students choose a college based on amenities such as dorm rooms and bathrooms! What’s really important here? Does the college offer what you are interested in studying? Don’t know what the student is interested in? Seek help! Do research! Explore!

PUBLIC VS. PRIVATE

Most families look at colleges’ “sticker” price and immediately rule out the higher-priced private school. But look deeper. Most private schools give more financial aid to the right student. And a large percentage of the aid is in free scholarships and grants. If your student has above average scholastic credentials, be sure to apply to a good sample of private schools. One of our families thought that the only choice for their twins was a state school with a price tag of $30,000 or less. We recommended that the girls explore Dickinson in Carlisle, PA with a “sticker” of $60,000 plus. Guess what? Dickinson came in at $5,000 less a year than Pitt per student!

SELECTIVITY

If you have an above average student, consider choosing schools where they will be in the top 25% of applicants instead of the high-profile schools where every student is the cream of the crop. Colleges sometimes called “sub-Ivies”, such as Bucknell, and smaller private schools, such as Allegheny College, know who their competition is and know that they will have to “pay up” to get that excellent student. Colleges want to show great statistics in terms of graduation rates and job placements, therefore, they are willing to pay to get the student who will excel.

HOW DO I FIND THAT “RIGHT FIT”

Students need to apply to at least 10 schools with a good balance between private and public. Why? You need at least 10 because you don’t know which school is looking for your child’s profile. Every year, the game changes. Colleges adjust what they are looking for in new students based on a variety of factors. Did they meet their enrollment goals last year? How well did their endowment funds do? Do their student demographics need adjustment? Is the college promoting a new program and willing to “pay” to attract students? We know that enrollments are declining. The number of graduating high school seniors peaked in the last three years. That means there are fewer students applying to colleges. Colleges will need to compete to find their ideal student match.

FINANCIAL AID OFFERS

Your applications are done. Now comes the time to apply for that financial aid. First, know the deadlines and apply early. There is usually a finite amount of scholarships and grants, and the early bird catches the worm. For most colleges, your application automatically puts your student in the running for scholarships. So, get those college applications submitted in early fall. Do not wait until the final due date. For certain courses of study, such as music, engineering, health care professions, there may be separate applications for specialized scholarships and honors colleges, and there may be an audition required, such as for music. Secondly, understand what forms are needed to apply for financial aid. All schools use the FAFSA to determine aid from the federal government programs.  Approximately 500 colleges use additional financial aid forms such as CSS/Profile and their own private forms. Thirdly, understand the forms! Every piece of information collected is there for a reason. Also, understand the definition of each piece of information. For example, what does the form mean by “retirement” accounts? Why do colleges ask for the parents’ highest completed level of education? What is a student asset and why is that important? And there are many more “pitfalls,” so do your homework.

KNOWING THE TYPES OF FINANCIAL AID

Yes, student loans are financial aid! So when you are reviewing that financial aid package, know which aid is free and which aid you need to pay back. Work study is also financial aid.

NEGOTIATE

How do you know that the financial aid offer that you received is a fair offer? You don’t, unless you know what the college has done in the past. More colleges are “holding back” on their offers. In other words, they are willing to pay more if you ask and if you are able to provide a valid reason for more aid. So, do your homework.

LOANS

When all else fails, many families need to borrow money to fund college. And this is where it all begins to fall apart. Most student and parent loans are deferred and cumulative. Deferred means that you don’t have to pay until the student is finished with college, and cumulative means that you have new loans every year stacked on top of what you already borrowed. How many parents and students actually sit down and calculate what all of these loans are going to cost, what will the payment be when college is finished and for how long? Not many. Let us ask you, how many of you would buy a house and not know what your monthly mortgage payment will be? Heads up! Your college loans will approach the size of a mortgage and usually with a shorter time to pay! And guess what? In most cases, you can’t declare bankruptcy on student loans. Recent college graduates are putting their lives on hold because of student debt. They are not buying houses, they are not getting married, and they are not having children. Many students live with their parents. Many parents must delay retirement to pay their share of college costs, or worse, sell their home and other assets to pay off debt. So, buyer beware. Understand what you are getting into before you and your student sign on the dotted line.

Ensphere College Planning Services