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Get a good education. Dream big. You can be
anything you want to be. Sound like familiar motivators for young
people?
Ask some enthusiastic, high achieving high school students about
their future educational plans and you’ll hear, “I want
to go to (college name) to become a (career)“. Ask their parents
and you’ll hear, “How can we possibly afford that?”
Because most financial aid packages are typically made up largely
of loans, parents and students often face a high debt burden during
and/or after college in order to make the degree a reality. But,
a new trend among some elite colleges may affect the way families
approach the college loan dilemma.
According to a December 31, 2007 article by Linda Wertheimer in
The Boston Globe,
“A number of top universities, including Harvard, have tantalized
parents of college-bound students in recent weeks with their decisions
to eliminate loans from financial aid packages and replace them
with grants. But the majority of the nation's more than 3,000 colleges
do not have the resources to be so generous, say financial aid experts
and officials from a variety of schools.
Most of the colleges doing away with loans belong to an exclusive
group of roughly three dozen schools with sizable endowments - $35
billion, in Harvard's case. Their shift is increasing pressure on
less-affluent colleges to come up with new strategies to sweeten
financial aid…”
A new opportunity exists for middle and upper-middle income families
to consider a debt-free, elite education. If you are seeking a best-fit
college, you may be tempted to go for one with a higher price tag
than you ever imagined. Caution: admission to these top-tier colleges
remains extremely competitive.
In 2008, most college-bound students will choose one of the 3,000
plus colleges that cannot afford to eliminate loans from the financial
aid equation. However, the no-loan trend may help families fashion
a fresh approach to selecting an initial list of colleges.
1. Identify your dream college.
2. Identify a handful of other good-fit colleges for academics,
co-curricular opportunities, location, and setting. Create a price
mix so your financial aid packages will truly differ from each
other. Real choice requires distinctly different options.
3. Ask, research, learn about financial aid policies and practices
at each identified college. Know and understand
• what scholarship money (based on merit) and what grant
money
• how much the college relies on loans as a form of financial
aid
4. Evaluate the financial pros and cons of each college on your
list. For example, is it likely that the student will be saddled
with high debt for many years after college, or the parents with
immediate debt?
After financial aid offers are received,
families do their best to compare them, but there’s never
been a better time to investigate financial aid prior to applying
to different schools. Whether you are a parent or someone who
works with parents, information on the type of aid packages offered
by prospective schools is critical. If the family is strongly
considering a college that relies on loans for financial aid packages
(which includes the vast majority of colleges in the country),
now is the time to research the types of available loans.
From government to private loans, from student to parent loans,
all education loans are not created equal. For more information
about researching loans, check out our free webcast at http://www.simply-college.com/webcast/.
Our workbook, “Financial Aid Simplified”, also has
an entire section on loans.
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Do you have a story to
share about student or parent loans? Click on the “conversation”
icon to the right, and tell us about your experience. We may
publish it in our next newsletter.
To pass this along to relatives, friends, colleagues, click
on the “forward to a friend” icon; then they can
join the conversation too.
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A quick check for those
who already have the Simply CollegeTM workbook/organizer “Financial
Aid Simplified”
High School Seniors:
• You should be at workbook
tab: March senior year: Comparing financial aid award offers;
Building a budget.
• You should be reviewing webcast
segments # 7 and # 8: Comparing financial aid award offers
and Building a budget.
High School Juniors:
• If you’re on track,
you’re working the March junior year tab: Researching
and tracking scholarships; Researching loans.
• Parallel webcast segments #
3and # 4 provide an Introduction to the workbook and tips
on Getting organized. |
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