student loan - College Admission Counseling

An Easy and Fun Way To Pay for College Tuition

Jared Hobson — Thu, 16 Feb 2017 19:36:51 +0000

What should parents do when they realize that they can’t pay for their daughter’s dream college? Well, in the real world, they could go deep into debt. And this is what a lot of parents do. Which is a bad idea. Just look at the August 2016 issue of Consumer Reports, with a headline that screams, “I kind of ruined my life by going to college” because of the enormous sum of $152,000 in college loans. Approximately 42 million Americans have racked up $1.3 trillion in student debt. This debt overhang is crushing individuals and will likely have a negative impact on our economy over time.
But if you want an easy and fun way to pay a college tuition bill you can’t afford, you can always turn to the example of Will Ferrell and Amy Poehler, whose upcoming film demonstrates how you can create a pop-up casino and make money hand over (um) hand.
Have a look at the trailer. Who said being a college counselor can’t be a barrel of laughs?

Great College Advice
Educational Consultant and Admissions Expert

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Are College and Universities Bankrupting Themselves?

Jared Hobson — Sun, 15 Aug 2010 15:06:59 +0000

An opinion piece in today’s New York Times from a professor at Columbia University raises some excellent points about the skyrocketing costs of higher education in the US.
He criticizes huge expansion efforts at Columbia and New York University at a time when endowments are down, debt levels are up, and ambitions may be bigger than these institutions’ ability to shoulder new debt obligations.
This question comes at a time when the US government has reported that 149 colleges have failed its “financial responsibility test” (see the article here from the Chronicle of Higher Education–registration required). While the colleges on this list may or may not be able to bounce back from their clear financial difficulties, it seems reasonable to predict that more colleges will start to show up on this list in the coming years. Like so many businesses and individuals who spent the last decade or two living beyond their means, colleges and universities gorged on debt. And some, like Birmingham Southern College, have been in the news recently for making huge mistakes in managing their money. Some colleges are actually closing or merging. Does it really make sense for Columbia and NYU to continue feeding voraciously at the debt trough? Sure, Columbia and NYU are financially stronger than, say, Guilford and Ripon Colleges. Are these big boys “too big to fail?” Is Columbia like AIG, or like Lehman Brothers?
While I’m not ready to run around like Chicken Little quite yet, I do know that the rapidly rising prices in higher education are unsustainable. And I do think that parents–and their kids–need to take a step back and ask themselves whether they want to go into debt to a place like NYU in order to finance NYU’s debt. Like derivatives, higher education services are not anything tangible. If the investment goes south (i.e., if a child’s debt burden ends up being larger than what her future salary can bear), parents and kids will have nothing to show for it than a pile of student loans that cannot be discharged even in bankruptcy. At least if NYU’s or Columbia’s investments turn out not to be so great, they can sell off the buildings they are constructing and at least recoup something. What assets will you sell when your debts come due?
Food for thought.
Mark Montgomery
Educational Consultant

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A Caution About Student Loans

Jared Hobson — Mon, 07 Jun 2010 15:01:38 +0000

With today’s economy, more and more students are taking out loans in order to pay for college. A recent article in the Huffington Post, points out why loans may not be the best way to invest in a college education. The article highlights the fact that unlike other types of loans (like a mortgage or a car loan), you can not sell of an asset if you suddenly fee like you have borrowed too much. Another point to consider is how you pay for the loan after graduation. It is difficult to know how much money is a manageable amount to borrow if you do not know what your income will be when it is time to begin paying off you loan.
If you have questions about financial aid, it is a good idea to start educating yourself now. Also, an educational consultant can help you figure out how to play the financial aid game as you go through your college admissions process.

Educational Consultant

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New Student Loans Require Payments While in School

Jared Hobson — Mon, 23 Mar 2009 13:19:16 +0000

Sallie Mae, the largest private lender in the student loan market, will no longer defer interest until graduation. Starting today, all new student loans require payments while in school.

Payments while in school will be up to $160 per month. Payments after graduation will also go up, from $250 to $328 (but with a shorter repayment term of 15 instead of 30 years).

Some people will be up in arms about this “huge change” in student lending.

But I prefer to look at this is a healthy change: the student loan business in the past has been just as dodgy as the home mortgage business, and students and their families have been much too willing to take out larger loans than necessary to finance a quality college education.

The new Sallie Mae provisions may help reorient expectations. Of course, the changes won’t be without their negative consequences.

Some deserving students at the lower end of the socio-economic scale may have less access to funds. But these same students, if they are talented, also have access to greater need-based aid and Pell grants.

I think the biggest losers, actually, will be some of the third and fourth-tier private colleges that have ridden high in the past decade or so, due to the demographic bubble and the willingness of families to gorge themselves on student loans. Some tuition-driven colleges may find they have fewer students to fill their beds in the future.

Educational Consultant

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Taking Out a Student Loan? Listen To This First!

Jared Hobson — Wed, 04 Mar 2009 14:53:45 +0000

OnPoint, a radio production of WBUR and NPR, ran a story this past week called The Dark Side of Student Loans. The featured guest is Alan Michael Collinge, founder of StudentLoanJustice.org and author of the new book “The Student Loan Scam: The Most Oppressive Debt in U.S. History – and How We Can Fight Back.” Publisher’s Weekly apparently calls it “whistle-blowing at its finest.”

This story should be required listening for any student or parent considering taking out a student loan to pay for college tuition and expenses.

Parents and students should, indeed, consider “return on investment” before enrolling in an expensive degree program.

But more than that, parents and students should develop a decent strategy of selecting the right college BEFORE they get admitted and are faced with a lousy financial aid package. Do the research! Don’t just sign the loan papers and then plead, “gosh, I had no idea!”

As I have written many times, colleges and universities are businesses. They act like businesses. They talk about “filling beds” and “sales leads.” And yes, they use financial aid programs to their advantage…not to the advantage of the student. This is not really surprising, is it?

What is surprising is that too few families have blinkers on when it comes to financing a college education. Doing some solid research well before the applications are submitted will help mitigate the anger and hurt (and debt) that can come after the diploma is framed.

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Choose the Right College Before Tackling the Financial Aid Form

Jared Hobson — Sat, 28 Feb 2009 18:43:01 +0000

An article the other day in the New York Times highlights the pain of applying for financial aid. Entitled “The Big Test Before College,” the article raises the issue of whether the intimidating form actually does what it is supposed to do: measure a family’s financial need.
While we all love to hate these “means tests,” it’s hard to conceive of a way to simplify this process too much. Furthermore, one must remember that the FAFSA is later interpreted by individual colleges as they decide how much aid to give to families.
The FAFSA (or its eventual replacement) will churn out the “Estimated Family Contribution” (EFC). But colleges–especially private ones–will always have the power to decide whether to meet full financial need, and with what financial instruments (grants, loans, work study, arm, leg, promise of first born, etc.).
Thus choosing a college carefully before applying is essential. Too many families encourage their children to apply to whatever college they like, with the promise, “don’t worry, honey, we’ll figure out how to pay for it somehow.” The result is anxiety, disappointment, and a complete surrender of control to the college admissions and financial aid offices.
It doesn’t have to be this way. With some careful planning, honest appraisal of financial priorities, and open communication within a family, students and parents can find the colleges that will be more likely to meet their financial need, and ensure that the student receives an excellent undergraduate education.

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College Shopping Tips: When Out-of-State is Cheaper than In-State Tuition

Jared Hobson — Mon, 17 Nov 2008 06:02:03 +0000

The financial downturn has high school seniors and their parents running scared. How can we reduce costs? How can we get the best deal?

The conventional wisdom says that an in-state college is the cheapest option. As with most conventional wisdom, this assumption is wrong.

Let’s compare costs for a Colorado student considering majoring in business at three state universities in the region.

A few notes explain where these numbers come from:

CU-Boulder tuition is $10,852, but Colorado students automatically are eligible for the Colorado Opportunity Fund, which effectively reduces tuition by $2760.
Colorado students with an ACT of 28 or higher attending Montana State are eligible for a tuition discount under the Western Undergraduate Exchange (WUE–pronounced “woo-ee”). Students with even higher ACT scores are eligible for other scholarships that reduce the overall price even further.
Colorado students attending the University of Wyoming also are eligible for the WUE discount.

Sometimes what you major it makes a difference, too. Business is the most expensive major at CU Boulder. If you major in Arts & Sciences, tuition is less: $7,278 per year. Engineering, however, is $9,568.

So parents, don’t cut off your nose to spite your face! If your student is interested in going out of state to college, do your homework before you assume that staying in state is the cheapest option. Here we have compared only state schools, but even some private colleges will end up costing you less than the University of Colorado at Boulder.

As with most everything in life, it pays to comparison shop!

Great College Advice

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