Obama on Economy, Student Loans; Rise in Community College Enrollment

President Barack Obama shows his legitimate concern and pledges to help students pursuing higher education during these trying economic times. On September 21st, he spoke in a town forum style to a group of Hudson Valley community college students in Michigan. I know that with the lack of support for universal health care and the war in Afghanistan, his approval ratings are not exactly stellar, but I endorse his dedication and methods to improve the quality of both secondary and post-secondary education.

Did you know Obama was actually a transfer college student during undergraduate school? Prior to the President enrolling and eventually graduating from Columbia University with a B.A. in Political Science and International Studies, he attended Occidental College.

Yes, Obama attended Occidental College in California for two years as an undergraduate from 1979-81:Jim Tranquada, Occidental's Director of Communications, said: "Contemporary public documents, such as the 1979-80 freshman 'Lookbook' published at the beginning of President Obama's first year at Occidental, list him as Barack Obama. All of the Occidental alumni I have spoken to from that era (1979-81) who knew him, knew him as Barry Obama."

Although Obama did not attend community college, he is a huge advocate of the community college system. According to an article in the August issue of U.S. News and World Report, enrollment at public community colleges has grown by 30 percent since 2000. President Barrack Obama’s “American Graduation Initiative,” which would invest $12 billion in community colleges over 10 years, has created quite a buzz around two-year colleges.

Community College Fast Facts

Community College Students Constitute the Following Percentages of Undergraduates:
All U.S. undergraduates: 46%
First-time freshmen: 41%
Native American: 55%
Asian/Pacific Islander: 46%
Black: 46%
Hispanic: 55%

Employment Status:
Full-time students employed full time: 27%
Full-time students employed part time: 50%
Part-time students employed full time: 50%
Part-time students employed part time: 33%

Percentage of Students Receiving Financial Aid:
Any aid: 47%
Federal grants: 23%
Federal loans: 11%
State aid: 12%

Percentage of Federal Aid Received by Community Colleges:
Pell grants: 34%
Campus-based aid: 9%

Average Annual Tuition and Fees:
Community colleges (public): $2,361
4-year colleges (public): $6,185

Degrees and Certificates Awarded Annually:
Associate degrees: 555,000
Certificates: 295,000
Baccalaureates: awarded by 29 public and 66 independent colleges

Revenue Sources (public colleges):
State funds: 37%
Tuition and fees: 17%
Local funds: 21%
Federal funds: 16%
Other: 9%

Obama on Economy, Student Loans (CNBC) Published: 09 Please click here to see CNBC's coverage of Obama's speech at Hudson Valley Community College in which he discusses the economy and student loans. Obama's Video on Education and Student Loans

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Common App Makes Accommodations to Deal with Score Choice™ issues

Common App Makes Accommodations to Deal with Score Choice™ issues 

In response to a few glitches in the system, the members of the Board of Directors of the Common Application have agreed to adopt a “temporary” policy to deal with problems arising from implementation of SAT Score Choice™. The New York Times and Inside Higher Ed are reporting that students will now be allowed to skip—without penalty—questions requesting test dates and scores. While colleges generally evaluate students based on official scores received from standardized test organizations, the Common App asks students to self-report SAT's and/or ACT's so admissions officers can have the information to begin processing applications. Evidently, students are delaying submitting materials—official test score reports and applications—in order to evaluate their options under the new reporting program. Many are waiting to complete all testing before deciding which scores to send. For students applying Early Decision or Early Action with November 1st submission deadlines, this is highly problematic, but can easily be addressed if colleges provide clear guidance to students on their websites or send e-mails to prospective applicants. Colleges should address their recommended Score Choice™ policies on their College Facebook pages as well. The more consistent information through multiple channels is provided, the more likely students are to abide by the school's policies. 

Unfortunately, the guidance provided by the Common App on its website is not nearly as clear as what is being suggested by either news source. In fact, nowhere on the website is there any indication that students will be given a complete pass on the test section of the form. The only reference to the issue appears deep within the Common App Support Center and simply addresses the mechanics of submission:

“We recognize that you may find yourself in a position where some of your colleges require you to report your full testing history while others permit you to report your scores selectively or withhold them entirely. While the Tests section does not offer you the ability to differentiate your score reporting to reflect conflicting requirements, leaving this section blank or incomplete will not prevent you from submitting your application. Please understand, however, that colleges and universities may use the information provided in the Tests section to assist in the processing of an application before official results arrive…”

The Common App Board of Directors, representing all member institutions, seems aware of a need to communicate reassurance to students that they may skip these questions without being penalized in the application process—to hurry things along. In fact, they have been working directly with the College Board to find some resolution, according to Brian O’Reilly, President of the SAT. How this is being communicated to colleges and universities and what it means exactly remain to be seen. Common App officials suggest that the wording of the Board’s guidance was much more “nuanced” than what was announced, and it appears that further clarification may be in order.

 It should be noted that both the Common App and the Universal College App permit students to create alternate application forms and send specially-tailored test information to specific colleges or universities for SAT and ACT. Please note, however that any uploads students create to the common application, such as a personal essay or additional information, they will not be automatically transferred to the alternative word form.  The student will need to upload these into any alternate version of the application they are creating.  For those students understanding the requirements of the schools to which they are applying, this is a reasonable way to address the problem of differing score report policies. Although this was not the original intention of the function, it works for this purpose.

If you are a student that is confused about which test scores to submit to colleges that you are applying, I highly recommend that you e-mail the school's admissions officer or contact their general admissions office to clarify their test reporting requirements, including what to include on the test score section of the Common App. Ultimately, it is the responsibility of the student to conform to all score reporting policies. 

The information provided was written by Nancy Griesemer, College Explorations, and edited by Lauren Kahn, CEO of Lone Star Ed Consulting. If you would like more information about Lone Star Ed Consulting's college planning services, please e-mail Lauren Kahn or call her at 512-294-6608.

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Tips on Paying for College

Tips on Paying for College

Here are some helpful hints for parents in panic mode this fall about how to finance their children's college plans.

For some, saving money for a child's or grandchild's college education seems nearly impossible. Before you give up the battle, however, consider this: A high school graduate will earn an average annual income of $26,416. A college graduate will earn an average annual income of $34,000 to $74,000. For someone who works 40 years, that can add up to an additional $320,000 to $1.92 million in earnings. That's quite a return on an investment in a college education!

Saving for college may seem like a monumental task, but you don't need to save the entire amount overnight, and, chances are, you won't need to finance the entire expense yourself. Today, there are a multitude of loans, work programs, tax credits, and so forth designed to help put college within the grasp of nearly everyone. With a little homework, you can find all the options available to you.

Here are five sources of college funding to consider:

Grants and Scholarships: Grants and scholarships are awarded on a number of criteria, including grades, talent, heritage, race, and gender. Grants and scholarships can be offered locally, statewide, nationwide, and by particular colleges and universities. The internet, school counselors, and the financial aid offices of colleges and universities can provide a wealth of information on this topic. Grants and scholarships typically supplement college costs rather than cover total expenses. Therefore, it's important you take an active role in saving for your child's educational future.

Investments: Through the years, parents and grandparents have used savings bonds, zero coupon bonds, and growth-and-income mutual funds to help with educational expenses. All are excellent ways to save for a college education. In more recent years, however, several new tools to help save for or offset college expenses have been introduced. All make financing a college education easier than ever before.

Section 529 Plans: When you set up a Section 529 savings plan, you put money in specific investments, which are managed by the plan administrator. 529 plans can be established for a child or grandchild. When establishing a 529 plan, you choose from two options: (1) Prepaid tuition programs, where you buy future tuition credit--at today's prices --that's generally used at an in-state school; and (2) Savings plans, where your earnings are not taxed as they accumulate, and qualified withdrawals are free from federal income tax. Savings plans are the more popular of the two plans because they generally don't restrict students to certain colleges in specific states. Your plan contribution limits are high, and your withdrawals are free from federal income taxes, as long as the money is used for qualified college or graduate school expenses. (Section 529 tax benefits are only effective through 2010, unless extended by Congress. Also, a Section 529 plan could reduce your child's or grandchild's ability to qualify for financial aid. Because tax issues for 529 plans can be complicated, please consult your tax advisor.)

Coverdell Education Savings Account: Depending on your income level, you can contribute up to $2,000 annually to a Coverdell Education Savings Account. Your Coverdell earnings and withdrawals will be tax-free, provided you use the money for qualified education expenses (tuition, fees, tutoring, special-needs services, books, supplies, computer equipment, room and board, uniforms, and transportation). You can fund your Coverdell Education Savings Account with virtually any investment you choose--stocks, bonds, certificates of deposit, etc. Once a Coverdell education savings account is established, anyone--a family member, friend, or the child--can contribute to the account as long as he or she meets the adjusted gross income limits. And you can contribute to a Coverdell Account in the same year that you put money into a Section 529 plan.

Tax Credits: Even if you already have a child enrolled in college, help still may be available. The Hope Scholarship Credit and the Lifetime Learning Credit are tax credits that can be used to offset college tuition and fees. The exact amount that can be claimed depends on your family's income, the amount of qualified tuition and fees paid and the amount of certain scholarships and allowances subtracted from tuition.


"Last-Minute" Options

If you have a college-bound senior in your house and you haven't saved as much as you would have liked, don't despair. Even at this late date, you can take some steps to help pay those college bills. Here are a few ideas to consider:

Remember, you don't have to pay the full year's tuition, room and board up front. You will likely be billed in installments that may correspond to the school's quarter or semester system. This payment system doesn't lessen your overall costs, of course, but it does give you a bit of time to come up with additional funding sources. For example, if you have a bond coming due in the middle of the college calendar, you can use the proceeds to help pay for school.

Liquidate assets in timely manner. If you've earmarked certain investments for college, try not to liquidate them until it's absolutely time to write out a check. The longer you can keep your investments growing, the better off you'll be.

Look at a Roth IRA. If you have a Roth IRA, you can withdraw contributions, tax- and penalty-free, to help pay for your child's education. Certain conditions apply to penalty-free withdrawals, so you should talk to your tax advisor for more information. And keep in mind, if you start withdrawing earnings, you'll have to pay taxes on them unless you meet certain conditions.

Putting together a good college-funding plan--either at the last minute or years in advance--can test your resources and ingenuity. But by diligently exploring all your options, it's a test you should be able to "pass."

Provided by: Lauren Kahn, M.A. from Lone Star Ed Consulting. www.lonestar-edconsulting.com
512-294-6608
Written by: Randy Loren (www.randyloren.com). He has more than two decades of experience in many areas of business and finance, and is currently a financial advisor for Edward Jones and a sought-after motivational speaker who educates high school students on the value of financial literacy and sound money and work practices. He is author of a new book, Climbing the Money Mountain: The Young Adult's Guide to Reaching Your Financial Peak (FN Publications, $19.95).

Is Your SAT or ACT Score Good Enough?

When it comes to standardized test scores, “good” and “bad” are relative terms, depending on where you’re applying. Remember, the SAT is broken down into three parts; each with a maximum score of 800, amounting to a total possible score of 2400. The ACT is broken down into four core sections, plus a writing section. Colleges are most concerned about the ACT composite score. ACT score range is 1-36. When you are considering whether or not to take the SAT or ACT an additional time, you need to consider a variety of factors. You can see the SAT norms for all the schools on your current roster at the College View website, under the “Admissions” tab. There, you will find test score ranges (the mid 50 percent) and you can see if your 630 math score (example) falls within that range. For instance, if you look up “TCU,” you’ll find their middle range for math is 520-640. Therefore, your 630 would be considered a “very good” score there. On the other hand, if you look up Duke University, their median range is 680 – 790 for math. Therefore, your 630 in math is not considered a “good” score by Duke’s standards. It is ultimately up to you whether or not you take the SAT or ACT another time.

FREE TIP from Lone Star Ed Consulting (www.lonestar-edconsulting.com): Most colleges put more weight on test scores than their admission officials are willing to admit. However, don’t assess your admission chances strictly by the numbers. If your test results are below a college median, ask yourself if you have other traits that will be attractive to that school (e.g., Are you a recruited athlete? An underrepresented minority? Are you a 1st generation college applicant or have a very unusual background? Do you have any unique talents?) If you answered “No” to these questions with test results at the low end of the range as well, then your admission odds may not be that great. (Therefore, it is even more essential to have excellent essays and have them reviewed by an expert.) However, if you responded affirmatively, you may still be in the running, even when your SAT scores aren’t especially “good.”

If you're a senior, it is not too late to get crucial college admission guidance. If you are a junior, it is time to move forward with the college planning process. Contact Lone Star Ed Consulting at 512-294-6608 to speak with our lead educational consultant, Lauren Kahn. Ms. Kahn received her B.A. from Emory University (‘98) and her M.A. in Education and Human Development from George Washington University (’04). She is a member of both NACAC and IECA. She has guided dozens of students through the college application process and has students enrolled at Rice University, U of Texas (Austin), Middlebury College, Georgia Tech, and many other top 50 ranked public and private universities.
www.lonestar-edconsulting.com 

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