MIKE’S MEMOS
The One Place To Get Insider Strategies On College Admissions, Saving Money On Tuition & Much, Much More
Use the CSS Profile for Aid From Top Colleges
Most families welcome any type of external financial aid that can help them afford college. Although they may not accept all aid offered to them, they prefer a wide array of choices. The FAFSA process is the best way to obtain aid from Federal and state governments,...
Parents Hire Their Children to Help Pay for College
Business owners hire their children for sound reasons such as instilling a strong work ethic, teaching responsibility, encouraging entrepreneurship, reducing taxes, and saving for a college education. The Tax Cuts and Jobs Act of 2018(TCJA) enables the last two of...
Testamentary Trusts: Not Just for the Wealthy
When grandparents do estate planning, they often want to provide for their grandchildren’s education. They seek to ensure that assets put aside for grandchildren are used to cover the costs of college and nothing else. Toward this end, they should consider adding a...
The Federal Work-Study Program
The Federal Work-Study (FWS) Program provides a way for students to earn money for their education by working at a part-time job while in a college or career school. There are about 3,400 schools participating in the program, which is managed by the Student Aid Office...
Saving For College with UTMA/UGMA’s
The Uniform Transfers To Minors Act (UTMA) and the Uniform Gifts to Minors Act (UGMA) are two laws that, combined, give us the term “UTMA/UGMA”, perhaps the most indecorous acronym in college financial planning. Yet UTMA/UGMA’s are a useful tool for those seeking to...
Crummey Trusts Are Useful in Reducing Taxes
A Crummey Trust is one of several methods of accumulating assets for a child’s education. It’s most helpful in cases in which the value of the assets is large and the complete distribution of them to a child before age 21 is undesirable. Crummey Trusts offer an...
Coverdell Education Savings Accounts
A Coverdell Education Savings Account (CESA) is a trust or custodial account set up to pay the college expenses of a designated beneficiary without ever incurring a tax liability on the earnings in the account. CESA’s involve two parties: a custodian, who manages the...
Section 127 Employer Educational Assistance Plans
When companies compete for the best employees, the quality of their benefits packages is a key differentiator. Prospective employees look for a comprehensive package that will improve their financial condition and help them prepare for the future. An IRS Section 127...
The CSS Profile Can Increase Financial Aid
In addition to the Free Application for Federal Student Aid (FAFSA), some college-bound students complete another application called the College Scholarship Service Profile (the Profile). The Profile is required by 240 colleges and a number of private scholarship...
The AP Program’s Impact On Secondary Education
Experts in higher education have long criticized the Advanced Placement (AP) program, but few have been as scathing as John Tierney, a professor at Boston College. In an article in Atlantic Magazine, he said, “Fraudulent schemes come in all shapes and sizes. To work,...
Court Strikes Down Use of Race in Admissions
In two recent cases, Chief Justice John Roberts, joined by all five conservative justices, held that race-based affirmative action violates the equal-protection clause of the Fourteenth Amendment and Title VI of the Civil Rights Act of 1965. According to the majority...
Biden’s New Plan for Student Loan Forgiveness
President Biden’s Student Loan Forgiveness Plan, as announced last August, was set to cancel $10,000 in Federal student debt for those making less than $125,000 or households with less than $250,000 in income per year. Pell Grant recipients would have gotten an...
Student Loan Repayment Pause Ends in August
Millions of Americans lost their jobs after the outbreak of COVID-19 in early 2020. For many, this disrupted their ability to repay their Federal student loans, so repayments were suspended in March 2020. They were originally set to resume in September 2020, but the...
Financial Safety Schools Belong On College Lists
A high school student’s College List is the set of institutions to which they’ll apply in senior year. They are colleges that that students determine are exceptionally well suited to their needs, goals, financial circumstances, talents, and preferences. A strong...
Farm Families Harmed by New FAFSA Rules
Nearly 18 million college students receive some type of Federal financial aid every year. Due to pending FAFSA rules changes, the percentage of these students who are from farm families can be expected to drop significantly. The new rules will take effect this...
The 2024-25 FAFSA Roadmap
The 2024–25 Free Application for Federal Student Aid (FAFSA) integrates major changes in the way students will apply for Federal student aid. According to the U.S. Education Department (ED), these changes will help students by enabling a better and simpler FAFSA...
FAFSA Delay Will Cause Problems
Three years ago, Congress enacted long-overdue reforms in the passage of the FAFSA Simplification Act of 2020, which substantially improves Federal student aid process. Among the many changes in the Act are a reduction in the number of questions from 108 to 36, the...
Understanding a College’s Cost of Attendance
Students and families should analyze the cost of attending a particular college. Cost of Attendance (COA) is the term used for the total of the direct and indirect costs of one academic year of undergraduate study at a college. It’s the maximum amount that a...
Appealing Financial Aid Awards – Part 1
At this time of year, many students are concerned about how they can select the best college for them from among the colleges that have accepted them. Before making that choice, students should ensure that they have received the best possible financial aid offer from...
The U.S. Military Pays College Costs
High school seniors seek ways to avoid the college debt burden that has proven such a hardship for millions of their predecessors. In a recent post, we reviewed six strategies for obtaining a college education at an expense level so moderate that incurring student...
Entrance Counseling for Federal Student Loans – Part 3
This post is a continuation of the last two that summarized Modules 1 and 2 of the Student Loan Entrance Counseling (SLEC). Module 3, “Federal Student Loans”, is summarized in this post. When a student is approved for a Federal loan for the first time, they’re...
Entrance Counseling for Federal Student Loans – Part 2
When a student is approved for a Federal student loan for the first time, they’re required to complete Student Loan Entrance Counseling (SLEC), an online course offered by the Office of Federal Student Aid (FSA), the agency within the U.S. Education Department (ED)...
Entrance Counseling for Federal Student Loans – Part 1
Federal financial aid programs for college students include scholarships, grants, work-study programs, and loans. Among these only loans need to be repaid, making them the least attractive type of Federal aid. Nevertheless, more students participate in the loan...
Gifts, Endowments, and Financial Aid
Attending a college that receives major gifts from deep-pocketed benefactors and possesses a multi-billion dollar endowment has advantages. Among these is the possibility that some of that money will trickle down to students as financial aid. As preoccupied as seniors...
Sallie Mae’s “How America Pays for College”
SLM Corporation (commonly known as Sallie Mae; originally the Student Loan Marketing Association) is a publicly traded U.S. corporation that conducts consumer lending services. It has changed dramatically since it was set up in the early...
The Disabled Are Eligible for Loan Forgiveness
If a former college student with an outstanding student loan balance becomes disabled, he or she may not need to repay the debt under the provisions of the Total and Permanent Discharge (TPD) program. To obtain debt forgiveness, the individual needs to apply...
New 529 Account Rollovers to Roth IRA’s
Congress recently passed a $1.7 trillion omnibus spending package that made substantial changes to retirement and tax rules. These have been referred to as Secure Act 2.0 because they extend the retirement provisions of the original Secure Act of 2019. One of the...
FAFSA Rules Regarding Parents
Every year, parents of enrolled and prospective college students should complete their part of the Free Application for Federal Student Aid (FAFSA) for financial aid from the Federal government, their state, and the student’s college. Over 13 million students file the...
Income-Driven Repayment Plans
Student loan balances have spiked in the last few years. The average balance increased from $29,000 in fourth quarter 2016 to more than $36,000 in fourth quarter 2021. To reduce this burden, President Biden announced the Student Loan Forgiveness Plan (the Plan) in...
College Net Price Calculators
College is expensive. Fortunately, most students pay less than a college’s published price by taking advantage of the financial aid that’s available to them. Rather than looking at published prices when researching colleges, students should focus on net price — the...
Get Ready for the Digital PSAT and SAT
The PSAT and SAT will soon be taken exclusively by computer. This is a welcome change because it affirms the continuing relevance and usefulness of standardized tests in a digital, post-pandemic, test optional era. There is likely to be a significant increase in...
Inflation and 529 Plans
College remains the highest savings priority of parents of college-bound children. Over 75% of parents in this group, when surveyed by The College Investor (TCI), indicated that they’re currently saving for college. TCI found that over 80% of parents are concerned...
Find the Colleges That Give the Most Merit Aid
Last month, we featured a post titled, “Tuition Discounts Offered as Merit Aid” about the common practice of colleges to provide partial merit scholarships, or discounted tuition. There are two reasons why this has become routine at mid-tier schools as a way to...
The Public Service Loan Forgiveness Program
One of the most popular student financial aid programs managed by the U.S. Education Department (ED) is the Public Service Loan Forgiveness (PSLF) program, and it’s easy to figure out why. PSLF promises Federal loan holders that, upon meeting requirements pertaining...
Student Debt Relief Is Blocked By Texas Court
The U.S. Education Department (ED) is no longer accepting applications for its student debt forgiveness plan (the Plan) after a Texas judge halted its rollout in a November 10th ruling. Studentaid.gov, the ED’s website for student aid programs, announced the following...
Private Scholarships — Are They Worth the Effort?
College tuition is on the rise again after a two-year hiatus brought about by the pandemic. Increases have been substantial — usually in the range of 3 to 4%. Families are more concerned than ever about the affordability of college, so they seek options to avoid...
Tuition Discounts Offered as Merit Aid
Colleges have conflicting motives when considering applicants for admission. Their prime motive is to accept qualified applicants who will pay full tuition, assuring the college that it will be able to operate at or above its desired educational level. However, the...
Launch of the Loan Forgiveness Application
In August, President Biden announced the Federal Student Loan Forgiveness Plan (the Plan), which will cancel 20% of the outstanding Federal student loan debt of $1.5 trillion. Debt relief will be granted to 43 million borrowers, eliminating the entire remaining...
Parent PLUS Loans Lead to Risk-Taking
Federal Direct PLUS Loans, commonly referred to as a Parent PLUS loans, are available to parents of dependent undergraduate students to pay for their child’s college education. There are no fixed annual or aggregate limits for these loans. The amount that a parent can...
Use the CSS Profile to Obtain Aid from Colleges
Most families welcome financial aid from outside sources to help them pay for a college education. Although they may not accept all financial aid offered to them, they prefer as wide an array of choices as possible. Two important applications should be submitted by...
The Federal Student Loan Forgiveness Plan – Part 3
In August, President Biden announced the Federal Student Loan Forgiveness Plan (the Plan), which will cancel 20% of the outstanding Federal student loan debt of $1.5 trillion. Debt relief will be granted to 43 million borrowers, eliminating the entire remaining...
The Federal Student Loan Forgiveness Plan – Part 2
Last month President Biden announced the Federal Student Loan Forgiveness Plan (the Plan), which will cancel up to 20% of outstanding Federal student loan debt. Loan relief will be provided to about 43 million borrowers and it will eliminate the entire...
The Federal Loan Forgiveness Plan – Part I
The cost of college has nearly tripled since 1980 and Federal financial aid has not kept pace. Pell Grants once covered about 80% of the cost of a four-year public college degree for students from working families, but now only covers a third. This erosion of tuition...
The Use of a Crummey Trust for a College Education
A Crummey Trust is one of several strategies for accumulating and protecting funds that are to be dedicated to a child’s education. None of these methods is superior to the others, but they have unique features that appeal to parents in different circumstances. In...
Coverdell Education Savings Accounts
Coverdell Education Savings Accounts (Coverdell ESA) are trusts set up to pay the college expenses of a beneficiary. They involve two parties: a custodian, who manages the account, and a beneficiary, who receives distributions from the account. The parties are usually...
Using a CollegeSure CD to Save for College
According to the U.S. Department of Commerce, the cost of college tuition is 1,447% higher in 2022 than it was in 1977. During that time, tuition has experienced an average inflation rate of 6.28% per year, so a college charging $20,000 for four years of tuition in...
Shifting Income to Fund a College Education
Gifts of Business Interest In previous posts, we covered methods of deferring investments in the equity markets such as Qualified Tuition Plans (529 Plans). However, a better strategy is to defer all of the child’s income taxes to their college years. There are...
Divorce Planning to Cover the Cost of College
Careful college and tax planning through a divorce transition can result in the preservation of more of the income and assets of both parents and their children. The preserved income and assets can be used to fund future college costs of the children. Property...
Using Distance Education for a College Degree
The traditional image of college education features students in a classroom with a professor lecturing them. But lately, more and more students are opting to take college courses online from home. Instead of a classroom, students engage with their coursework,...
The College Level Examination Program
The College Level Examination Program (CLEP) is the most widely accepted college credit-by-examination program in the United States. While Advanced Placement (AP) courses are usually taken by above-average students, CLEP exams benefit average and non-traditional,...