Economic Crisis

Economic Crisis

“Will the recent economic crisis have an impact on college bound teens?”
As the largest class of graduating high school seniors in America is completing college applications, a new study indicates their college plans are likely to change in response to the economic downturn. 50% of families polled are now limiting their child’s college choices to less expensive options and 54% of families are now considering in-state, public colleges. According to the ApplyWise and Next Step survey, 32% of families report their financial situation has changed in the past six months and so they are seeking more economical education options for their child. Another 38% say they are concerned about the economy and are now seeking more affordable college options. Interestingly, less than one-third of those polled say their college selection criteria have not been influenced by economic factors. 54% of parents report that recent economic events have changed the way they plan to pay for their child’s college education. When asked to select which financial resources they plan to access, they responded as follows:
•67% will apply for more need based scholarships
•62% of parents plan to have students work while in college
•53% plan to get more student loans
•30% of families will send a stay-at-home spouse back to work
•27% of families plan to take out a home equity loan
•11% plan to liquidate a retirement fund
•8% will borrow money from a relative

What people don’t realize is the negative effect the above strategies could have on aid eligibility. “Getting into college has become more competitive over the years and now paying for it will be a bigger challenge for many families,” said Dr. Kat Cohen, founder of IvyWise. “As families are forced to look for more economical options, it pays to consult experts who can help them identify potential financial resources and if the schools that would be a good fit for the student. Families need to be determined, not discouraged, at a time like this.

College Admissions FAQ

Question: What is the difference between a scholarship and a grant?
Answer: In the language of admission and financial aid offers, a scholarship and a grant are basically the same thing. Each is considered “gift aid” which means they do not need to be paid back. However, this doesn’t mean there aren’t some “strings” attached. Many scholarships and grants require the recipient to focus study in a particular major. Others have a grade average requirement to keep the scholarship or grant over the college experience. Students need to make certain they know the conditions under which they accept and can maintain gift aid.

FAFSA FAQ

What are “Untaxed Benefits”?
Answer: Untaxed income or benefits not reported elsewhere on Worksheets A and B, such as worker’s compensation, untaxed portions of railroad retirement benefits, untaxed portions of capital gains, Black Lung Benefits, Refugee Assistance, disability, foreign income that wasn’t taxed by any government, etc. For parents whose W-2 Forms show combat pay, any untaxed portion of that pay must be reported on Worksheet B and the full amount must be reported as income earned from work. Do not include benefits from flexible spending arrangements (e.g. cafeteria plans), student aid or Workforce Investment Act (WIA) educational benefits.

Early Decision vs. Early Action

As one applies to college, something that may come up is Early Decision and Early Action. Hopefully, this can help:
Early Decision
•You absolutely agree to attend the college if accepted.
•You may only apply to one college in the method of Early Decision
•You apply in October or November and receive an answer by December
•You may only apply to other colleges under the regular process
•If accepted, you must withdraw all other applications from other schools
•You will typically be required to give a non-refundable deposit by May

Early Action
•Similar to Early Decision, however, not binding
•You can apply in October or November and receive an answer by December
•If accepted, you may commit then, or in the spring
•You may apply to other colleges under Early Action
•You may apply to other colleges under the regular admissions process

Brad Asbury
Access College Foundation
basburycsa@yahoo.com