Archive for the ‘Uncategorized’ Category

Go to college for free? Here’s how

Saturday, March 16th, 2019

Putting one kid through college is daunting enough, Bernice feaster had two. But she never once wrote a check to pay for their school. Scholarships paid for their tuition, room and board and everything else.

“Between two sons,” Feaster says, “We did about 1 point 6 million dollars, between the two.”

She started her college funding research with Jeremy, her first born. Starting in middle school, she began attending workshops, looking up college blogs, and educating herself on finding financial resources. Her hard work paid off.

“By the time he was 26, he had his phD at Stanford,” she says. “He walked out of Stanford owing no money and actually had money in the bank.”

photo Younger son Jalen was just as fortunate, earning a full ride to NC State.

“He beat out the valedictorian. So I tell kids you don’t have to have this super 5. 8 GPA to get scholarships. It’s just how you present yourself and market yourself,” she says.

Feaster turned her experience and accumulated knowledge into a new business, The Scholar Mom. She and her husband work with families to find scholarships and other sources of funding. She says the money is out there, lots of it. Feaster is partnering with FOX 46 to get parents results when it comes to college funding.

Feaster says the key is to start early. Talk to your child about what they’re hoping to study. They may even have a few dream colleges in mind already. Then, research the schools together to make sure you understand the requirements when it comes to minimum GPA, SAT scores and community service. Use this information to begin building a strong resume that, come time to apply, makes them stand out and appear good candidates for scholarships and grants.

Bernice recommends contacting your kids’ dream schools directly.

“Develop a relationship with these financial aid people. And say, what else is available that i can tap into that i might not know that may not be on your website.” It’s even better when your child contacts the school as well, she says. “Make sure the school knows how interested you are in going to that school. That just speaks volumes.”

Your child should be willing to commit to working hard and earning good grades. A perfect 5.0 GPA is not required but strong grades are a must when it comes to contending for scholarships.

“Encourage them to take honors and AP classes. But emphasize character and community service as well.”

A good question to pose to your child and continue asking through their high school years: What’s so unique about them that they can bring to the table that their dream school may want.

As for parents, Mike Russell with The College Funding Coach says it starts with financial clarity.

“They need to identify which resources they have available to them. First and foremost that’s looking at what they have on their personal balance sheet. And what they’re able to set aside from a funding standpoint.”

It’s a good time to invest in a 529 and see what kinds of financial aid, including Pell grants, they qualify for.

“You don’t have to wait until your child is a senior to start searching for those and applying for them,” says Russell. “We’ve had many clients who’ve had awards given to them for middle school science fairs. Or through their parents employer.”

If your child is about to graduate, it’s not too late. You may need loans to start but keep searching for scholarships. There are many available through the department in which your child is studying, or through community service and leadership activities.

Both Feaster and Russell agree: it’s a terrible idea to raid your 401K. Preserve your future even if it means your kids must take out loans. There is plenty of financial aid available if you know where to look. For more information, you can contact Feaster at The Scholar Share or Russell at The College Funding Coach.

Quick tips:
•    Look into starting a 529 account to save for college

•    Start the scholarship search
•    Begin researching your child’s dream colleges and their requirements
•    Review your financial assets and determine how much you can pay for college
•    Work with your child to bring up or maintain their grades
•    Encourage and support your child’s extracurricular activities, especially community service

•    Continue searching out scholarships
•    Get to know your child’s college counselor
•    Review financial aid options, including Pell grants
•    Encourage your child to take AP or IB classes to boost their GPA and college credits
•    Encourage and support your child’s extracurricular activities, especially community service

Link to Scholar Mom: 

Link to The College Funding Coach:

Can the student loan crisis cause the next housing crisis?

Tuesday, February 26th, 2019


Here is an idea. Let’s convince a generation of people over 70 million strong (the baby boomers) that one of the biggest and best investments they will ever make in their life is their home. We will tell them that having a large portion of their net worth and retirement savings in this investment will be a simple formula for success. You take out a 30-year mortgage (where you will pay a significant amount of interest to a bank). But do not worry, this real estate asset will appreciate in value greatly over the next forty years before you sell the home. You will likely sell it to someone much younger than yourself, and you will recoup your investment and profits too. Maybe you will sell your home and downsize, possibly moving to a warmer state with cheaper housing. (See Florida for more details). We’ll call it all the American Dream.

Then we will convince another generation also 70 million strong (the millennials) that it is a great idea to take out large sums of uncollateralized, largely publicly-funded debt (aka student loans). We will tell them that this debt will be worth it because they’ll get a great job after college and can easily pay back the debt.

Here is the tricky part. We will need to have the timing of the first generation selling their homes and retiring coincide with the timing of the next generation buying their homes. Unfortunately, this younger generation will have a very heavy debt burden which may disqualify them from being able to obtain a large enough bank loan. It may shape up to be a situation where the millennials can afford a townhome, but the baby boomer wants to sell their single family detached home.

As interest rates have come down in this country over the past forty years, student loans have become much easier to acquire.  In 2010, student loans passed credit cards as the second largest form of debt in the United States.  Currently, 44 million borrowers carry $1.44 trillion of student loan debt.  In the class of 2017, 65% of the graduates completed their studies with an average of $28,650 of student loan debt, with an average monthly repayment of $393.[1]  This debt burden is causing recent graduates to make decisions very differently than their parents did.  In a recent report from the National Association of Consumer Bankruptcy Attorneys, 80% of the 860 attorneys surveyed said the number of potential clients they encounter with student loan debt has “significantly” or “somewhat” increased over the past three to four years.[2]

In the not-so-distant future, the student loan debt crisis may create a housing crisis. According to an article published by USA Today on January 9, 2019, the baby boomer generation (those born between 1946 and 1964) are retiring at a rate of 10,000 per day.[3] They were the largest generation before the millennial generation (those born between 1980 and 1994). The younger




people in this generation are now roughly 25 and presumably in the workforce and starting their lives. These two generations could be on a collision course in housing.

If you think the student loan problem does not concern you because you do not have a student loan, consider that when people apply for a mortgage, lenders evaluate “the back ratio.” This is a debt-to-income ratio, calculating the total mortgage payments and all monthly recurring debt including car loans, student loans, credit card debt, etc., divided by the gross monthly income of the purchaser. If that number is above 43%, the applicant will not qualify for an FHA loan. Some financial planners do not like to see that ratio above 36%. The banks do not mind you being house poor, as long as they believe that you can pay them back. How student loan debt is calculated into the back ratio seems to be evolving. But, no matter what magic a bank can come up with to qualify you for a loan, only so many greenbacks are going to run through your hands every month to pay everyone you owe.

Therefore, even if a 28-year-old has a good job and earns a decent income, he or she still may not be able to qualify for a mortgage loan at the price you want to sell your house because of their outstanding student loan debt.


What does this look like at a macro level? If boomers want to sell their homes and millennials can’t buy those homes, inventory is going to increase and prices are going to decrease. A large chunk of boomers’ retirement savings is tied up in the sticks and bricks of their homes, and could be in jeopardy. Still think the student loan crisis is not your problem because you do not have a student loan?

I have been told that the millennial generation is not interested in buying homes because they do not like being tied down to one area. But it if you think about it, who is really saying that? It is my opinion that a lot of people in their 20’s do want to move around and be free. But you know what eventually changes this? Kids! Kids are like human anchors. They will root you in a community for a couple of decades or more. I often joke when boomers say something to the effect of “these millennials keep moving around.,” I reply, “Weren’t you guys the hippie generation driving around in VW buses in your 20’s?” The bottom line is that as the millennial generation gets older they will likely want the same things past generations wanted—a good home with a great family living inside.

People are concerned about the possibility of a bailout of student loan debt, now nearing $1.5 trillion dollars. To put the magnitude of that potential bailout in perspective, the bank bailout of 2008 was $700 billion. This student loan debt is increasing at an average of $120 billion per year.[1] So, it is possible that by the time you read this article the total student loan debt could be $1 trillion dollars more than the bank bailout of 2008.

Let’s go deeper into this problem and look at another possible scenario. Let’s say that the banks just ignore student loan debt as a part of the back ratio previously described. The reason they may do this is because banks need to loan out money to make more money. It is also possible that they will count a very small portion of student debt in the back ratio. Basically, they will work the numbers, so it smashes the square peg into the round hole. I recently heard from a lender that if mom and dad or an employer are making the monthly payments on the loan that it is counted very differently for the back ratio. I asked, “Are you worried mom and dad will stop making payments or their employer will cut that particular program?” At the end of the day, the student is still responsible for the loan, not their parents or employers. I got an answer that basically amounted to “We still need to sell loans.” If the student loan payment is not calculated well in the back ratio then you create a moral hazard with the home loan.

Let’s say the banks allow you to qualify for a home loan that you shouldn’t qualify for because of your student loan debt. Let’s say the back ratio would have been 55% if they didn’t use smoke and mirrors. You are in the home for two years or so and you run into money trouble. What is going to be paid first: the mortgage or the student loan? The mortgage, of course, because the house is a collateralized asset. If you do not pay you are literally out in the cold. Whereas if you do not pay your student loan there will be consequences but that piece of paper on your wall is simply not keeping you warm at night. On a macro level this is common in a recession. Student loan defaults will skyrocket, putting even more pressure on the economy. Credit scores will get wrecked, keeping people from getting loans for cars, second homes, etc. Still think this is not your problem because you do not have a student loan?


Many years ago, a simple solution was that, if financial times got tough, the easy out was to declare bankruptcy. In fact, it was not uncommon for students to take out loans for college and, upon graduation, declare bankruptcy to relieve themselves of this student loan debt. Sure, this wreaked havoc on credit scores; but most 22-year-olds aren’t buying homes, so the cost-benefit analysis suggests that they are better off by relieving the student loan debt through bankruptcy. However, in 1976, the bankruptcy code was altered so that federal student loans and loans made by non-profit colleges and universities could not be discharged during the first five years of repayment.  In 1984 this law expanded to include all private student loans, and since Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, both federal and private student loans are much more difficult to discharge in bankruptcy than other types of debt.[2]

We can’t undo a lot of the damage already done. But what we can do is stop this vicious cycle of going into unmanageable debt to pay for college. Nothing beats saving and knowing how to create a strategy for funding college correctly in the first place. Having your children graduate from college with no debt (or at least manageable debt) is one the best gifts you can give them. It is important not only for current college students but people in the work force who would like to retire one day. Are you one of them?



Freddie Rappina

Financial Planner

3975 Fair Ridge Dr, Suite 315N, Fairfax VA 22033

Tel: 571-208-6971

2018’s Most & Least Educated Cities in America

Thursday, July 26th, 2018

Jul 24, 2018  |  Adam McCann, Financial Writer

Cities want to attract highly educated workers to fuel their economic growth and tax revenues. Higher levels of education tend to lead to higher salaries. And the more that graduates earn, the more tax dollars they contribute over time, according to the Economic Policy Institute. In turn, educated people want to live somewhere where they will get a good return on their educational investment. People also tend to marry others of the same educational level. Already having a large educated population may be a good way to draw in even more people with degrees.

Not all highly educated people will flock to the same areas, though. Some may prefer to have many people with similar education levels around them for socializing and career connections. Others may want to be a big fish in a little pond. Not every city will provide the same quality of life to those with higher education, either.

To determine where the most educated Americans are putting their degrees to work, WalletHub compared the 150 largest metropolitan statistical areas, or MSAs, across 11 key metrics. Our data set ranges from share of adults aged 25 and older with a bachelor’s degree or higher to quality of the public school system to gender education gap. Read on for our findings, expert insight from a panel of researchers and a full description of our methodology.

Main Findings


Most Educated Cities

Overall Rank
(1 = Most Educated)
MSA Total Score ‘Educational Attainment’ Rank ‘Quality of Education & Attainment Gap’ Rank
1 Ann Arbor, MI 92.57 1 3
2 Washington-Arlington-Alexandria, DC-VA-MD-WV 77.39 2 36
3 San Jose-Sunnyvale-Santa Clara, CA 75.14 3 6
4 Durham-Chapel Hill, NC 72.77 5 12
5 San Francisco-Oakland-Hayward, CA 71.07 7 21
6 Madison, WI 69.47 4 109
7 Boston-Cambridge-Newton, MA-NH 67.71 6 114
8 Austin-Round Rock, TX 66.14 15 5
9 Seattle-Tacoma-Bellevue, WA 66.13 10 22
10 Bridgeport-Stamford-Norwalk, CT 65.94 8 140
11 Provo-Orem, UT 64.85 11 83
12 Colorado Springs, CO 63.63 12 79
13 Raleigh, NC 63.53 9 136
14 Denver-Aurora-Lakewood, CO 62.41 14 99
15 Portland-Vancouver-Hillsboro, OR-WA 62.07 17 42
16 Tallahassee, FL 61.91 20 24
17 Minneapolis-St. Paul-Bloomington, MN-WI 61.75 13 123
18 Trenton, NJ 61.37 16 103
19 Portland-South Portland, ME 61.27 18 64
20 San Diego-Carlsbad, CA 60.68 28 2
21 Baltimore-Columbia-Towson, MD 59.23 19 107
22 Lansing-East Lansing, MI 59.05 23 84
23 Atlanta-Sandy Springs-Roswell, GA 58.77 31 7
24 Albany-Schenectady-Troy, NY 58.72 21 112
25 Huntsville, AL 58.05 24 61
26 Hartford-West Hartford-East Hartford, CT 57.95 22 117
27 Urban Honolulu, HI 57.66 38 4
28 Anchorage, AK 57.03 32 23
29 New York-Newark-Jersey City, NY-NJ-PA 56.87 36 13
30 Asheville, NC 55.35 53 8
31 Lexington-Fayette, KY 55.32 29 88
32 Kansas City, MO-KS 55.28 27 102
33 Chicago-Naperville-Elgin, IL-IN-WI 54.84 35 55
34 Omaha-Council Bluffs, NE-IA 54.83 30 95
35 Des Moines-West Des Moines, IA 54.81 26 120
36 Santa Rosa, CA 54.80 42 46
37 Pittsburgh, PA 54.19 47 26
38 Eugene, OR 53.51 50 48
39 St. Louis, MO-IL 53.41 34 100
40 Salt Lake City, UT 53.39 41 91
41 Rochester, NY 53.36 33 125
42 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 53.26 39 94
43 Richmond, VA 53.02 45 70
44 New Haven-Milford, CT 52.98 37 119
45 Boise City, ID 52.94 56 31
46 Spokane-Spokane Valley, WA 52.70 54 56
47 Virginia Beach-Norfolk-Newport News, VA-NC 52.54 55 51
48 Manchester-Nashua, NH 52.39 25 147
49 Worcester, MA-CT 52.37 52 73
50 Albuquerque, NM 52.23 57 47
51 Columbus, OH 52.12 40 118
52 Charleston-North Charleston, SC 52.10 44 115
53 Sacramento–Roseville–Arden-Arcade, CA 51.94 48 87
54 Charlotte-Concord-Gastonia, NC-SC 51.50 63 33
55 Milwaukee-Waukesha-West Allis, WI 51.25 43 128
56 Naples-Immokalee-Marco Island, FL 50.89 61 62
57 Grand Rapids-Wyoming, MI 50.39 66 63
58 Savannah, GA 50.35 64 75
59 Buffalo-Cheektowaga-Niagara Falls, NY 50.23 49 127
60 Springfield, MA 50.16 71 43
61 Nashville-Davidson–Murfreesboro–Franklin, TN 49.86 65 78
62 Cincinnati, OH-KY-IN 49.86 62 86
63 Reno, NV 49.69 81 18
64 Syracuse, NY 49.64 58 132
65 Oxnard-Thousand Oaks-Ventura, CA 49.48 70 58
66 Tucson, AZ 49.35 51 134
67 Little Rock-North Little Rock-Conway, AR 49.09 80 28
68 Oklahoma City, OK 49.06 85 17
69 Columbia, SC 49.02 59 130
70 Dayton, OH 48.99 72 76
71 Ogden-Clearfield, UT 48.90 46 150
72 Jackson, MS 48.66 79 49
73 Indianapolis-Carmel-Anderson, IN 48.60 67 108
74 Phoenix-Mesa-Scottsdale, AZ 48.39 78 59
75 Jacksonville, FL 48.34 76 68
76 Palm Bay-Melbourne-Titusville, FL 48.19 69 106
77 Dallas-Fort Worth-Arlington, TX 48.14 77 67
78 Akron, OH 48.12 75 90
79 Wichita, KS 47.97 74 97
80 Orlando-Kissimmee-Sanford, FL 47.95 83 45
81 Santa Maria-Santa Barbara, CA 47.77 86 38
82 Miami-Fort Lauderdale-West Palm Beach, FL 47.05 96 9
83 Detroit-Warren-Dearborn, MI 47.04 68 137
84 North Port-Sarasota-Bradenton, FL 47.01 60 142
85 Cleveland-Elyria, OH 46.65 73 124
86 Tampa-St. Petersburg-Clearwater, FL 46.42 88 52
87 Harrisburg-Carlisle, PA 46.40 84 93
88 Peoria, IL 46.31 82 122
89 Fayetteville, NC 46.30 98 15
90 Birmingham-Hoover, AL 46.16 87 82
91 Springfield, MO 46.08 92 54
92 Houston-The Woodlands-Sugar Land, TX 45.65 95 32
93 Fort Wayne, IN 45.07 97 39
94 Montgomery, AL 44.88 106 20
95 Louisville/Jefferson County, KY-IN 44.68 89 104
96 Allentown-Bethlehem-Easton, PA-NJ 44.60 101 41
97 Toledo, OH 44.58 94 85
98 Los Angeles-Long Beach-Anaheim, CA 44.55 103 37
99 Fayetteville-Springdale-Rogers, AR-MO 44.33 105 35
100 Greensboro-High Point, NC 44.12 108 27
101 New Orleans-Metairie, LA 44.11 104 44
102 Knoxville, TN 43.92 99 71
103 Tulsa, OK 43.79 102 60
104 Providence-Warwick, RI-MA 43.54 90 129
105 Myrtle Beach-Conway-North Myrtle Beach, SC-NC 43.44 114 14
106 Pensacola-Ferry Pass-Brent, FL 43.20 91 133
107 San Antonio-New Braunfels, TX 43.17 113 25
108 Killeen-Temple, TX 42.07 110 80
109 Greenville-Anderson-Mauldin, SC 41.94 111 77
110 Baton Rouge, LA 41.23 112 81
111 Davenport-Moline-Rock Island, IA-IL 41.00 93 149
112 Memphis, TN-MS-AR 40.95 107 121
113 Cape Coral-Fort Myers, FL 40.88 109 116
114 Salem, OR 40.70 115 69
115 Vallejo-Fairfield, CA 40.63 100 139
116 Winston-Salem, NC 40.24 117 74
117 Augusta-Richmond County, GA-SC 39.53 120 65
118 Las Vegas-Henderson-Paradise, NV 38.83 127 19
119 Canton-Massillon, OH 38.73 124 40
120 Flint, MI 38.63 121 89
121 Chattanooga, TN-GA 38.18 122 101
122 Mobile, AL 38.14 129 10
123 Salisbury, MD-DE 37.81 119 126
124 Shreveport-Bossier City, LA 37.69 128 29
125 Gulfport-Biloxi-Pascagoula, MS 37.30 126 92
126 Scranton–Wilkes-Barre–Hazleton, PA 37.19 123 113
127 Rockford, IL 36.68 125 110
128 York-Hanover, PA 36.64 130 34
129 Port St. Lucie, FL 36.21 116 144
130 Deltona-Daytona Beach-Ormond Beach, FL 36.04 118 146
131 Lancaster, PA 35.47 131 50
132 Youngstown-Warren-Boardman, OH-PA 33.84 133 72
133 Reading, PA 33.05 132 105
134 Huntington-Ashland, WV-KY-OH 33.01 134 66
135 Lakeland-Winter Haven, FL 31.57 138 16
136 Lafayette, LA 30.64 140 11
137 Riverside-San Bernardino-Ontario, CA 29.95 136 98
138 El Paso, TX 29.56 141 30
139 Beaumont-Port Arthur, TX 28.94 139 57
140 Corpus Christi, TX 27.90 137 131
141 Ocala, FL 26.32 135 145
142 Fresno, CA 25.54 145 53
143 Stockton-Lodi, CA 24.69 144 111
144 Salinas, CA 22.98 142 141
145 Hickory-Lenoir-Morganton, NC 22.29 143 143
146 Modesto, CA 20.57 146 138
147 Bakersfield, CA 16.28 147 135
148 McAllen-Edinburg-Mission, TX 11.32 150 1
149 Brownsville-Harlingen, TX 8.75 149 96
150 Visalia-Porterville, CA 6.87 148 148


High Education Level…MixedLow Education Level…New York, NYDallas, TXWashington, DCBoston, MARiverside, CAMinneapolis, MNSt. Louis, MOCharlotte, NCSan Antonio, TXCincinnati, OHCleveland, OHSan Jose, CAVirginia Beach, VAJacksonville, FLLoiusville, KYRaleigh, NCBirmingham, ALGrand Rapids, MITulsa, OKWorcester, MAAlbany, NYNew Haven, CTEl Paso, TXBaton Rouge, LANorth Port, FLLittle Rock, ARColorado Springs, COSyracuse, NYLakeland, FLSpringfield, MAToledo, OHProvo, UTScranton, PASpokane, WAModesto, CASanta Rosa, CAPensacola, FLSpringfield, MOShreveport, LAYork, PASalinas, CAFort Wayne, INMobile, ALBeaumont, TXCanton, OHGulfport, MSFayetteville, NCSavannah, GAHuntington, WVNaples, FL0408012016004080120160Overall Education RankingAnnual Median Household Income Ranking

State Overall Education Ranking Annual Median Household Income Ranking .
New York, NY 29 16 High Education Level & High income
Dallas, TX 77 37 Mixed
Washington, DC 2 2 High Education Level & High income
Boston, MA 7 7 High Education Level & High income
Riverside, CA 137 58 Mixed
Minneapolis, MN 17 14 High Education Level & High income
St. Louis, MO 39 57 High Education Level & High income
Charlotte, NC 54 64 High Education Level & High income
San Antonio, TX 107 69 Mixed
Cincinnati, OH 62 56 High Education Level & High income
Cleveland, OH 85 96 Low Education Level & Low Income
San Jose, CA 3 1 High Education Level & High income
Virginia Beach, VA 47 44 High Education Level & High income
Jacksonville, FL 75 74 High Education Level & High income
Loiusville, KY 95 82 Low Education Level & Low Income
Raleigh, NC 13 22 High Education Level & High income
Birmingham, AL 90 101 Low Education Level & Low Income
Grand Rapids, MI 57 61 High Education Level & High income
Tulsa, OK 103 97 Low Education Level & Low Income
Worcester, MA 49 21 High Education Level & High income
Albany, NY 24 28 High Education Level & High income
New Haven, CT 44 33 High Education Level & High income
El Paso, TX 138 146 Low Education Level & Low Income
Baton Rouge, LA 110 79 Low Education Level & Low Income
North Port, FL 84 85 Low Education Level & Low Income
Little Rock, AR 67 104 Mixed
Colorado Springs, CO 12 43 High Education Level & High income
Syracuse, NY 64 70 High Education Level & High income
Lakeland, FL 135 138 Low Education Level & Low Income
Springfield, MA 60 75 High Education Level & High income
Toledo, OH 97 128 Low Education Level & Low Income
Provo, UT 11 26 High Education Level & High income
Scranton, PA 126 126 Low Education Level & Low Income
Spokane, WA 46 107 Mixed
Modesto, CA 146 91 Low Education Level & Low Income
Santa Rosa, CA 36 18 High Education Level & High income
Pensacola, FL 106 100 Low Education Level & Low Income
Springfield, MO 91 139 Low Education Level & Low Income
Shreveport, LA 124 144 Low Education Level & Low Income
York, PA 128 45 Mixed
Salinas, CA 144 40 Mixed
Fort Wayne, IN 93 103 Low Education Level & Low Income
Mobile, AL 122 137 Low Education Level & Low Income
Beaumont, TX 139 123 Low Education Level & Low Income
Canton, OH 119 112 Low Education Level & Low Income
Gulfport, MS 125 132 Low Education Level & Low Income
Fayetteville, NC 89 136 Low Education Level & Low Income
Savannah, GA 58 86 Mixed
Huntington, WV 134 142 Low Education Level & Low Income
Naples, FL 56 47 High Education Level & High income

Note: For readability purposes, the above chart displays only 50 metro areas from a total sample of 150.

Artwork-2018-Most Educated Cities report-v2

Ask the Experts

Research shows that a skilled and educated workforce provides a significant boost to the economy. For strategies aimed at increasing a city’s brainpower and the best approaches to educational development, we asked a panel of experts to share their thoughts on the following key questions:

  1. Should local authorities target policies and programs to attract highly educated people? If so, what works?
  2. Are highly educated cities better able to withstand economic shocks?
  3. In your opinion, what is the most important step we can take as a country to develop a more educated and skilled workforce?
  4. Will the Trump administration’s proposed education budget cuts — to student loans, after-school programs and teacher training, for instance — increase or decrease the level of education inequality among cities?
  5. How can the U.S. reform its immigration policy in order to attract and retain highly educated workers from abroad?
Back to All Experts

Brock T. Jolly

Managing Partner, The College Funding Coach
Brock T. Jolly

Should local authorities target policies and programs to attract highly educated people? If so, what works?

Thomas Jefferson famously said, “If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be.” In my opinion, education is the key to growth, both personally and professionally. As a general rule, people are looking to live in cities that inspire them, that allow them to surround themselves with like-minded people from many perspectives, including education. An educated population is critically important in helping a community to thrive, both culturally and economically. I firmly believe that we can learn best from a broadly-diversified mix of people. That said, I don’t know that policies for attracting these people makes sense as much as a culture of attracting them makes sense. By understanding and respecting people of diverse social, ethnic, geographic and educational backgrounds, we are all able to continuously learn, improve ourselves, understand other viewpoints and create a more energized and enriching society for all. Economically, this also helps to build the state and local tax base, which contributes to the educational infrastructure, creating a positive cycle of learning and growth.

Are highly educated cities better able to withstand economic shocks?

Certainly a more educated city should be able to bounce back in the event of an economic shock. Based upon critical thinking skills and/or creativity, the more educated a person or a population is, the more easily they may rebound after a downturn. That said, as with anything negative, the biggest factor in withstanding economic shock is attitude. A person’s mental attitude and fortitude, rather than his academic background, probably accounts more for the ability to withstand a recession or other economic shock. There are many undereducated millionaires who learned the value of hard work and hustle, while there are many desolate geniuses who never took enough initiative. Hard work, given time, beats talent every day, but education helps!

In your opinion, what is the most important step we can take as a country to develop a more educated and skilled workforce?

We need to lower the barriers to entry. Whether by improving our need-based aid formulas, lowering costs at both public and private universities or moving more to Massive Open Online Courses (MOOCs), the better. Competition creates opportunity with higher education. Many states provide free tuition at their flagship state universities for any student who meets particular thresholds, including grade point average and community service guidelines. This could be replicated across the country with positive repercussions. Income inequality and a corresponding lack of opportunity prevents so many brilliant minds from pursuing higher education opportunities.

Secondly, I believe it is critical that we begin to pay our teachers in grades K-12 a more sustainable wage. Teachers are among the most influential and underpaid professionals with whom our children interact. One of the most influential people in my life was my high school English teacher. If we can inspire our young people with an intellectual curiosity – especially in areas of interest, rather than teaching to “the middle” – then we can empower our young people to learn, thus having significant impact on our future workforce. We can do this through leveraging technology, character education, arts and athletic programs, and making education the focus of the community. In other words, invest more in our student’s education, not less.

Will the Trump administration’s proposed education budget cuts (to student loans, after school programs, teacher training, etc.) increase or decrease the level of education inequality between cities?

Unfortunately, I think the proposed education budget cuts would have a negative impact on higher education. The existing budgets are already low enough. Imagine if we cut defense spending and correspondingly increased education spending what the long-term impact on the global economy might be. In cities that are highly educated, my guess is that they will have the economic resources to survive; but in less-highly educated cities, the economic disparity will likely cause greater education inequality. With fewer opportunities – whether through after school programs, teacher training, curriculum enhancements or student loan programs – students at the lower end of the socioeconomic spectrum will be jeopardized or excluded.

How can the US reform its immigration policy in order to attract and retain highly educated workers from abroad?

I believe that the United States is a beacon of hope for international students. The potential to come to our country, earn an education and contribute to society (both in the United States and abroad) is an attractive proposition. Unfortunately, the current immigration policy tends to throw the good out with the bad. We should increase the opportunity for highly educated international citizens to remain in the country as contributing members of our society. Perhaps we allow them to come to this country and pursue education at a discount as long as they agree to work (and pay taxes) for a number of years afterwards. We are living in a global economy and in some cases there are certain skills that are better done by foreign workers. Regardless, the diverse perspectives created through international collaboration can benefit our consumers, our companies, and ultimately, our economy.

Back to All Experts

Elaine Farndale

Associate Professor, Human Resource Management, Center Director, Center for International Human Resource Studies, Pennsylvania State University
Elaine Farndale

Are highly educated cities better able to withstand economic shocks?

State College PA, the home of the main campus of Penn State, is a perfect example of this. The financial crisis years barely affected the local economy, with house prices, for example, remaining high and relatively stable as they plummeted in other cities across the US.

In your opinion, what is the most important step we can take as a country to develop a more educated and skilled workforce?

Stronger connections between local business and educational institutions (schools, colleges, universities) can be the most effective way to establish a balance between what skills are required and how they can be developed. Partnerships develop a better understanding of skills’ supply and demand.

How can the US reform its immigration policy in order to attract and retain highly educated workers from abroad?

The H1-B visa situation had been allowing some companies to take advantage of the system. Many skilled immigrants have been finding positions through third-party agencies (e.g. Indian sourcing agencies for IT skilled employees) who have acquired a majority share of H1-B visas as a result of the quota system (i.e. that there is a limited number of visas available for people entering from certain countries). The problem that had resulted was that these lower-cost highly-skilled immigrants were sometimes being used to displace more expensive local employees. This is obviously unfair workplace practice, but also discourages local people from skilling themselves in these areas as their job security is being undermined. Moreover, there is little information available about the conditions under which immigrant talent are being treated as employees. High-skill immigration policy should be reformed to ensure that it is being used for genuine cases of skill shortages and not to find cheaper labor. Moreover, immigrants entering the country should have some sense of security about their relocation, allowing them to feel welcomed and also be able to integrate into the workplace as well as society as a whole. Being perceived as taking local jobs when this is not the reality in true skill shortage situations is not helpful for this integration process. My own research in this area indicates that the US firms we spoke with prefer to develop local talent and only use high-skilled immigration when other local options have been exhausted in order to take a longer-term perspective on building their talent pool.

Please note that these are my personal thoughts and are not representative of Penn State University.


To identify the most and least educated cities in America, WalletHub compared the 150 most populated U.S. metropolitan statistical areas, or MSAs, across two key dimensions, including “Educational Attainment” and “Quality of Education & Attainment Gap.”

We evaluated those dimensions using 11 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the highest educational attainment and quality of education. For metrics marked with two asterisks (**), we used the square root of the population to calculate the population size in order to avoid overcompensating for minor differences across cities.

Finally, we determined each metro area’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.

Educational Attainment – Total Points: 80

  • Share of Adults Aged 25 & Older with a High School Diploma or Higher: Full Weight (~20.00 Points)
  • Share of Adults Aged 25 & Older with at Least Some College Experience or an Associate’s Degree or Higher: Full Weight (~20.00 Points)
  • Share of Adults Aged 25 & Older with a Bachelor’s Degree or Higher: Full Weight (~20.00 Points)
  • Share of Adults Aged 25 & Older with a Graduate or Professional Degree: Full Weight (~20.00 Points)

Quality of Education & Attainment Gap – Total Points: 20

    • Quality of Public School System: Double Weight (~4.44 Points)
      Note: This metric is based on’s ratings of U.S. public school systems.
    • Average Quality of Universities: Double Weight (~4.44 Points)
      Note: This metric is based on WalletHub “College & University” rankings Report.
    • Enrolled Students in Top 973 Universities per Capita: Full Weight (~2.22 Points)
      Note: This metric is based on WalletHub “College & University” rankings Report.
    • Number of Summer Learning Opportunities per Capita**: Full Weight (~2.22 Points)
    • Racial Education Gap*: Full Weight (~2.22 Points)
      Note: This metric specifically measures the difference between the percentage of black bachelor’s degree holders and the percentage of their white counterparts.
    • Gender Education Gap*: Full Weight (~2.22 Points)
      Note: This metric specifically measures the difference between the percentage of female bachelor’s degree holders and the percentage of their male counterparts.
    • Education Equality Index Score: Full Weight (~2.22 Points)
      Note: The Education Equality Index (EEI) is a comparative measure of the achievement gap between students from low-income families, as measured by participation in the free and reduced price lunch program, and their more advantaged peers. The EEI compares the proportion of students from low-income families who are proficient on a state assessment to all students across the state who took that same grade or subject level assessment.

*Additional context: In metro areas where women have an advantage over men and blacks have an advantage over whites, we gave extra credit compared to the metro areas with no gender-based/racial inequality.

Sources: Data used to create this ranking were collected from the U.S. Census Bureau,, Education, Yelp and WalletHub research.

New ways to pay for college

Monday, June 25th, 2018

Jun 23, 2018 @ 6:00 am

By Ryan W. Neal

Everything was going according to plan, at first.

Rosemary was investing in a diversified portfolio and saving for retirement. Over several years her adviser helped her negotiate pay raises, buy a home and pay for her dream wedding. In just a few years, she had 529 college savings plans for two newborns.

But life’s unexpected expenses come at you fast, and 18 years later she was facing tuition costs she hadn’t dreamed of when she began college planning.

“I think for some clients, it’s a see-saw battle,” said Ken Mahoney, president of Mahoney Asset Management. “If I save enough for retirement, it’s not enough for college. And if I save enough for college, am I saving enough for retirement?”

College planning is as essential for families as saving for retirement today, but the rising price of higher education is making it challenging to afford college, even for wealthy clients.

Four years at a private university will cost $303,000 by 2036, nearly double what it is today, according to CNBC. Public college could reach as much $184,000, forcing many students to take on student-loan debt that can impact their ability to start a family or start investing.

Multiple goals

Even though investments in 529 plans are at an all-time high of $319 billion, according to the College Savings Plan Network, financial advisers are increasingly tasked with finding new strategies to help families fund higher education without sacrificing other financial goals. Sometimes that strategy means giving up the expensive private university and sending kids to an affordable public option instead.

“Hopefully we as advisers can bring it out in a delicate manner,” Mr. Mahoney said. “If I just don’t see it, don’t see how its going to work, you have to have a frank conversation.”

To find out how advisers are tackling the issue, InvestmentNews reached out to people grappling with how to afford higher education for their children. We presented their case studies to college-planning experts and asked for ideas to help the families beyond the basic tenet of saving more in a 529 plan. Here are their solutions.

Though these are real-life stories, names have been changed to protect the families’ privacy.

Juggling responsibilities

Carolyn and Kevin are both 46 and have three children. The oldest is in his second year at a university for which the family is paying $15,000 annually. In the fall, their middle child will begin freshman year at a much more expensive school. She secured a grant of $35,000 per year, but she still faces $40,000 for each of the next four years in total costs. Their youngest child is 13, so while he doesn’t yet know what school he wants to attend, college is only five years away.

In recent years, the family has focused more on saving for college than contributing to retirement, amassing $57,000 in CDs and savings accounts with plans to continue saving $15,000 per year. They have $1.2 million in retirement accounts that they don’t want to use paying the full college costs, nor do they want to borrow against their home, which is valued at $475,000.

Finding a way: Carolyn and Kevin are saving for what will be three children’s college expenses.

“We’d like to help our kids as much as we can, but we need to pace ourselves so that there is still money in the college fund for our youngest son. We also expect our kids to contribute to the cost of their education — especially if they choose a more expensive option — but we also hate the idea of them amassing a large student debt,” Carolyn said. “Are we doing the right thing in putting money towards the college savings fund rather than our retirement at this time?”



Brock Jolly, managing partner at The College Funding Coach, classified this as a case of “late-stage college planning.”

Without much time and with no state tax advantage, a 529 plan is a less attractive option for the two oldest children. One strategy the family could consider is some form of cash-value life insurance, Mr. Jolly said.

“Life insurance is probably one of the most misunderstood financial products in the world today,” he said. “However, when used appropriately, it can be a tremendous college-funding tool.”

The asset would not count toward the family’s Expected Family Contribution when considering financial aid, and the money grows on a tax-deferred basis and all distributions up to the policy basis are generally tax-free as long as the life insurance policy remains in force. While Carolyn and Kevin wouldn’t be able to build up cash value quickly enough to use it right away, they could take out student loans to pay tuition, then accumulate enough money in the insurance policy to pay off the loans following graduation.

“Permanent life insurance — the right type and designed the right way — is the only asset that continues to grow even after withdrawals are taken,” Mr. Jolly said. “If structured properly, a family can fund a life insurance policy, take out low interest rate student loans to pay for college without any impact on the ability to qualify for needs-based aid, and ultimately receive back most if not all the money that they spend on college.”

As for building a college savings for their high school freshman, Mr. Jolly recommended the family begin funding a 529 plan and have the child start applying for scholarships in addition to taking advantage of an insurance policy.

Single-parent conundrum

















Hannah is a 30-year-old single mother raising two daughters, ages eight and 11. She earns a commission-based salary that can fluctuate between $45,000 and $50,000 per year, owns a home in Northern California worth $575,000 and has a $100,000 investment portfolio.

She doesn’t currently have anything saved toward college education.

Looming debt

With a single income and no grandparents of her kids to count on for help, Hannah worries about finding enough money for her daughters to go to school without going into debt.

“I would hate for the girls to take out student loans,” she said.

The good news for Hannah is there is still plenty of time before either of her daughters attend college, so that’s many years for her to contribute to a 529 plan.

Wayne Zussman, principal and senior wealth adviser at The Colony Group, recommended that Hannah consider taking a job at a college or university that offers free, or at least subsidized, education for family members. She could also get involved with local organizations that offer scholarships, such as Rotary Clubs.

Mr. Zussman also suggested the daughters start building an early resume for scholarships and financial aid by volunteering their after-school time.

“Have the children become involved in organizations that offer scholarships, such as 4-H, Girl Scouts, Junior Achievement, etc.,” he said. “Although still young, there are also various school clubs such as debate teams. Make sure there is the possibility of an ROTC program in her school district.”

Living in the city

















Alex, 18, is heading to New York University in the fall on a $40,000 scholarship. He is the first among his siblings to go to a private university. His two older sisters, 25 and 26, graduated debt-free by enrolling in public universities and taking on full-time jobs.

Alex’s mother, 54, works as a teacher and saved up money for each of them to help with college costs. But even with what she has saved for Alex, she will need to take out a loan to cover the cost of his room and board, which will be the main expense after applying scholarships and savings.

The estimated total cost for one year at NYU is $76,000. Housing will cost an estimated $18,000 per year.

Because this is a case where the student is just weeks away from starting college, Ken Mahoney, president of Mahoney Asset Management, said the options for earning and saving are limited.

Extended family

One option to consider is asking his mother to open a 529 plan and enlist other family members, like an aunt or an uncle, to help contribute. Regardless of how much she saves, money in a 529 plan is generally not taxed by state governments when used for qualified education expenses such as tuition, fees and books.

In the meantime, Alex and his mother can research different federal and private loan options and assess their benefits and risks. Mr. Mahoney said he strongly recommends she be cautious about simply choosing the loan plan that gives her the lowest monthly payment, because she’ll likely pay more in interest in the long term.

Also, while maybe not a popular choice, Alex can live off-campus with roommates and split the rent to reduce what on-campus boarding would cost.

Mr. Mahoney also recommended that Alex and his mother consider a home-equity line of credit, work-study jobs, grants or private scholarships as other ways to tackle the costs.

Full-house planning
















Alice and Dan are a young, married couple expecting their second child, a daughter, in September. They want a large family, which is why they started having children early.

Dan is 27 and earns $85,000 a year working as an engineer for Lockheed Martin in Upstate New York. Alice, 26, mostly stays at home with their first child, Neil, who is 20 months old.

“I do think a lot about how family size will affect the monetary size of any gifts we are able to give our children,” Alice said.

Currently, they have a mortgage, 401(k) and two sedans.

While they have a 529 college savings account for their son Neil, they don’t have a set amount they deposit every month. Currently they have $1,200 saved.

Given that they are planning to have a large family, Mark Kantrowitz, publisher and vice president of research at, said the couple should start saving for their son’s college education, as well as any future children, now. Time is their greatest asset.

Switch Beneficiaries

While Alice and Dan can’t open a 529 plan in their daughter’s name until after she is born and has a Social Security number, they can open one by listing one of themselves as both account owner and beneficiary. The beneficiary name can be changed to their daughter’s later on.

While the $1,200 they have saved for Neil is a good start, Alice and Dan should immediately increase the amount they’re saving per month for him. At the current rate, they will barely have enough to cover one year’s room and board.

One easy idea from Mr. Kantrowitz is for the couple to shift the money they were spending on diapers to his 529 plan once Neil is potty-trained.

And if someone throws a baby shower for their future daughter, the couple can ask friends and family to contribute to a college-savings plan for her.

Such contributions also can be made in the future in lieu of holiday and birthday presents.

If Alice and Dan remain in New York until their children are college age, they also can apply for New York’s Excelsior scholarship, which provides free tuition at SUNY and CUNY colleges for families making up to $110,000 a year. (The income threshold will increase to $125,000 by the time their children enroll in college.)

Mr. Kantrowitz said the family could also consider moving to Pennsylvania to take advantage of the lower taxes there, and contributing what they save toward a college plan.

Are You Preparing for College, or Retirement?

Thursday, June 7th, 2018

We all have a tendency to compartmentalize different areas of our life, and this is no different when it comes to financial planning.  Most of us think that paying for college and planning for retirement are our two biggest financial goals; and logically, we prepare for each one of these individually knowing this fact.

However, college planning and retirement planning are directly linked.  Even if we prepare for these two major goals in silos, the fact remains that they are directly tied to each other.  Think of it this way – if we didn’t have to pay for college, then our retirement income could be bigger, right?  Seems simple, but this is often forgotten or overlooked.  In fact, the underlying principle remains that money is a limited resource and so the more efficiencies we can create with our dollars, the more our dollars can actually do for us (in this instance, pay for college and spend/enjoy in retirement).

Now that we have a fundamental understanding that college planning and retirement planning are directly linked, here are 4 guidelines we can follow to help put us on the most efficient path to reaching both of these goals.

Start Your Accumulation Cycle as Early as Possible:

Ok, this is not rocket science.  The earlier we start saving the longer we have for total savings contributions to increase and for compounding to occur.  Below is a chart of a 40-year accumulation cycle, and you can see the impact compounding has on the back end.

Avoid Having to Start Your Accumulation Cycle Over:

Everyone has a growth / accumulation cycle that is about 30-40 years long.  If we deplete our savings at any point in the process for large expenses (down payment on a home, nice cars, home renovation, etc.), then we lose our position on the accumulation cycle.  As you can see above, the overwhelming majority of growth happens at the end of the accumulation cycle.  So, starting over at any point can compromise our ability to actually reach the end and reap the rewards of those final years.  When we pay for college — and deplete a significant amount of savings by sending money off to a college or university — we must start that accumulation cycle once again.  Said differently, we have fewer dollars compounding for us, and therefore, must save more or save longer to accomplish the same result.  See Below.  This is a chart of someone who saved the exact same amount of money as the chart above but had to start their cycle over halfway through.

Build a Strategy That Will Accumulate AND Distribute Your Money Efficiently:

Most financial strategies focus only on the accumulation of money and not the distribution.  However, getting cash from your financial products easily, efficiently, while minimizing risk, expenses and taxes is of critical importance.   Ask your advisor how well any product will accumulate and how well it will distribute.

Have a Volatility Buffer in Your Strategy.  This Will Serve You Well Both While College Payments Are Occurring and While You Are Creating Retirement Income.

One of the most difficult risks for which to prepare is called sequence of return risk.  Meaning, we don’t know what returns our portfolios are going to achieve until after the fact.  This unknown makes ANY strategy more complex. The market will go up and the market will go down.  During the distribution phase—whether distributing for college or during retirement—for any down years that occur, having a bucket of money that is not tied to the market becomes a very powerful tool.  A “volatility buffer” enables us to use another bucket of money without touching our market linked investments; and therefore, allowing our market linked investments time to recover and likely to last longer.

If you’d like a question answered about this blog post, please send an email to  Call Erik directly at (727) 417-3400.


5/29 only comes once a year but there are two types of 529 Plans!

Thursday, May 31st, 2018

Question:  We are starting an account to eventually fund our child’s education, and we have heard that the 529 Savings Plan and the Prepaid College Tuition Plan are the two best options.  Is that true and which one is better?

Answer:  This is a very frequent question that parents ask when they are taking the first steps towards college planning.  These two options do in fact vary quite a bit from each other, and so in order to determine which one is most appropriate for your situation we should start with a few baseline assumptions:

  • All financial products (whether for college planning or not) have positives and negatives. Therefore, there is no silver bullet for college planning.
  • College planning does not happen in a vacuum. What I mean by this, is that the most successful college plans occur when the planning is coordinated with other components of your financial plan (for example retirement planning, tax planning and access to cash).
  • Did you know that both plans fall under Section 529 of the tax code? We will refer to them throughout this article as “529 Savings” and “529 Prepaid.”
  • Objectively speaking, one is not superior to the other, especially when the specific college is unknown.
  • In order to make a judgement on which is more appropriate for your planning, we first need to understand their definitions. Let’s start there:

529 Savings Definition: A tax-advantaged method of saving for future college expenses. The plan allows an account holder to establish a college savings account for a beneficiary and use the money to pay for tuition, room and board, mandatory fees and required books and computers. The money contributed to the account can be invested in stock or bond mutual funds or in money market funds, and the earnings are not subject to federal tax (or state tax, in most cases) as long as the money is used only for qualified college expenses. (Source: Investopedia)

In plain English this means: a tax advantaged tool to save, accumulate and pay for educational expenses

529 Prepaid Definition: Prepaid tuition plans allow donors to lock in the future cost of tuition in today’s dollars. Because the cost of tuition is increasing faster than the rate of inflation, the rate of return on these plans is generally greater than that of guaranteed instruments such as bonds or CDs. But these plans are also guaranteed by the financial backing power of each state.  (Source: Investopedia)

In plain English this means: a tool that locks in today’s tuition rates for your future tuition payments.

Comparing the Products:  There are many ways that financial products can compared.  When consulting with your financial planner, please ask them to explain the differences in these areas: risk of investment, tax advantages, upside potential, flexibility, liquidity/control, ease of management, potential penalties, effect on the financial aid formula, and effectiveness at actually paying for educational expenses.  Knowing which of these criteria are more important to you and which ones are less important can be an indicator in your planning.

A Few Key Takeaways:

Both Products Are Good However, There Are Limitations That Can Affect The “Effectiveness at Actually Paying for Educational  Expenses.”  Here is Why:  

In 529 Savings Plans, you must pay for a “qualified educational expense in the year that the expense is incurred” in order to avoid penalty and taxation.  Putting a definition and timeline around what you can actually use the money for without penalty introduces some complexity and limitations.  The 529 Prepaid version takes it a step further – these plans generally cover tuition only and cannot be used for other expenses.

The 529 Savings’ Best Attribute Is Typically Its Upside Potential.  Its Worst Attribute is Typically Its Risk Level (100% of principal at risk)

529 Savings Plans offer strong tax advantages, great upside potential and can be very easy to manage and administer.  These plans can also be transferred from sibling to sibling without taxation, which is a nice level of flexibility.  However, as a market linked investment, it takes on a much higher level of risk compared to other tools.  For example, you could lose 10-30% of the account balance right before any year of college if the market has had a down year.  In the last 20 years, we have had 4 down years (1 in 5) and each down year the S&P lost at least 9% (Source: YCharts).  If you choose to use a 529 Savings you must plan around this risk.

The 529 Prepaid’s Best Attribute Is Typically Its Ease of Management. Its Worst Attribute Is Typically Its Lack of Flexibility, Control, and Liquidity.

529 Prepaid Plans are “set it and forget it.”  There’s no portfolio to rebalance and you can create a plan to have the same contribution level every month.  Also, these plans can be set up for public or private schools.  Anytime you can automate a financial process is a huge plus.  However, Prepaid Plans can be very inflexible if your circumstances change over time.  If your child gets a scholarship, joins the military or does not go to college, you could be forced to forfeit most of the gains inside your plan.  Also, there is no liquidity in this type of plan for other child related expenses, emergencies or opportunities that might happen in your life while you are planning for college.


If you’d like a question answered about this blog post, please send an email to  Call Erik directly at (727) 417-3400.

5 Common Myths About Paying for College

Thursday, April 12th, 2018

With the help of financial advisors from, we’re going to debunk the most common myths about applying for student aid and paying for college. We’ll also talk about the point when investment returns outweigh your…

Even Warren Buffett should file the FAFSA

Tuesday, March 13th, 2018

“I don’t want any financial aid”…said no one ever.

Well that is the path you’ll go down if you don’t file the Free Application for Federal Student Aid, commonly known as FAFSA. It is estimated that $2.3 billion in federal aid was left on the table in 2017 by students who did not file. Many parents think they make too much money to get any aid and choose not to file the FAFSA. Actually, anyone making $250,000 or less can qualify for aid, and that’s 95% of Americans. I’m not suggesting that a household making $150,000 a year is going to get their tuition fully funded, but they will be offered a Federal Direct Loan. You probably remember these as the Stafford loan, and that the interest rates are much lower than private student loans. On some of these loans, the interest doesn’t start until after you graduate. Saving money on high interest loans is like a mini scholarship in and of itself.

It is a good idea to file even if you aren’t going to take any loans. Many schools will look at a student’s FAFSA before awarding any aid including merit aid. Some admissions departments are even more likely to accept a student who has completed the FAFSA because it shows the student is more likely to attend college. Financial aid officers may be more likely to award a school-specific scholarship to a student who is just outside the need-based financial aid formula, but still could use some assistance with tuition. Some states even award aid that is not based on need at all, but will not award the aid without a FAFSA on file.

Things Change

It’s a good idea to file the FAFSA even if you end up not qualifying for aid, because a year may come where circumstances find you in a different financial position.  Some common reasons a FAFSA award can change are:

  • Parental Separation
  • Parental Death
  • Sibling Attendance
  • Loss of Job
  • Selling of an asset like a business or property

These changes could have big effects on your need for aid, but if you don’t have a previous FAFSA on file, these circumstances may be hard to prove.

Bottom Line: There is no downside to filing the FAFSA!

Authored by PJ Horan

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What if you could name your own price for college?

Friday, March 9th, 2018

Have you seen the Progressive Insurance commercial with the “Name Your Price” tool? If you haven’t, the premise is that Flo (the spokeswoman) gives the price scanning gun to the customer to let them name their price for insurance. In actuality, when a customer approaches Progressive about getting Insurance coverage, they get to pick and choose certain features of their policy until the price is where they want it. What if I told you that you can use the “Name Your Price” tool when you are shopping for college? Okay, not exactly, but the price that any college or university advertises is very rarely the price that you will pay. Don’t let sticker shock deter you from researching a college.











In 2016, the average discount rate for an incoming Freshman was 48.6%! That is like a Black Friday sale! So why do the schools advertise such high costs if they aren’t going to collect it? Because some families still have to pay full price (but I’m writing this to make sure you are NOT one of those families). At first glance, private college A might have double the sticker price of state university B, but things aren’t always what they seem. Many private schools have large endowments and lots of money to give, while most state schools are funded entirely by their state government. Some state schools do have large endowments, but they have a lot more students to financially support, almost 3-1 on average. A big state school may not be able to meet as much of your need as a small private college. Another thing to remember is that there are two types of aid: gift aid and self-help. Gift aid is just that, a gift. It is in the form of a grant or a scholarship and you don’t pay it back. Self-help is student loans and work study programs. Self help will factor in to your “net price” because technically you’re still paying.











So what can you do to figure out how much a school will cost your family?

  • Start by figuring out your E.F.C. That’s your Expected Family Contribution. There are tons of calculators out there like this one.
  • Once you know your EFC, head over to and start your research. You can determine what a school charges, how much need they meet, what % of each type of aid it is (and almost any other financial data you’d like to collect).

Just remember that picking the right school should always be the first goal. A student at the right school is more likely to graduate in 4 years with a degree which will save a lot more money than gift aid or self-help! 

Authored by PJ Horan

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10 Options To Consider If You Can’t Pay Your Student Loan Bills

Saturday, January 7th, 2017

If you are a high school senior who will attend college in the fall, you need to understand the pressure and burden that follows when you take out massive student loans to pay for college. If you are a college grad and currently staring down the barrel of an overwhelming student loan repayment, you already feel this pressure and burden.

While putting off payments and hiding from bill collectors may seem like the only immediate solution, falling behind on your student loans can have a serious financial impact, especially since the IRS is the collection agent for student loans.

However, there are options that can help you to make your student loan repayment more manageable, and here are ten of those options listed by the Boston Globe:

1. Know What You Owe

The first step in getting your student loans under control is understanding how much you owe, what the monthly payments are, and where to send them. You should always hang on to all your loan paperwork, but if you didn’t, your college financial aid office should have provided you with a complete breakdown during your student loan “exit interview.” If you didn’t hang on to your exit interview folder, visit the National Student Loan Data System for a complete list of all your federal student loans. Your private student loans can be located by requesting a copy of your credit report.

2. Know What You’re Working With

The two major types of student loans are federal (government-backed Direct Stafford Loans, or Perkins Loans) and private (non-government-backed, issued from a private lender). Federal student loans usually have fixed interest rates and offer flexible repayment plans. Private student loans often carry variable rates and less flexible payment options.

If your loans are federal, there are a variety of options to help you lower or postpone your monthly payment. If your loans are private, though, all is not lost – contact your lender immediately and let them know you can’t make the monthly payment.

3. Postpone Payment With A Deferment

Unemployment, extreme economic hardship, enrolling in school at least half-time, or active military duty may qualify you to temporarily postpone payment on federal student loans with a deferment. If your loans are not subsidized, you may be responsible for the interest that accrues during the deferment, increasing the total amount you owe.

There are many different types of deferments and each one has terms and conditions. To qualify for the unemployment deferments, you be must be working 30 hours a week or less and actively seeking full-time employment. You must renew this deferment every six months and can receive it for a lifetime maximum of 36 months. If you do not qualify for the unemployment deferment, talk to the company that collects your student loan payment or check out for a complete list of other deferment types and their requirements.

4. Extend Your Payments

If you took out your oldest federal student loan on or after October 7, 1998, and you have at least $30,000 in loans, you can extend your repayment period from 10 years to as long as 25 years. This lowers your payments, but it increases the total interest you pay over the life of the loan-making your loan more expensive. You may want to consider extending your repayment by only a few years, instead of the maximum time available, to save money in the long run.

5. Choose A Graduated Repayment Plan

If you don’t make a lot of money currently, but think you will in the future, you can lower your federal student loan payments for a while – without extending your repayment period – with graduated repayment. Graduated repayment lets you pay just the interest on your loan for two-to-four years. Payments then increase gradually so the loan is repaid in the standard 10 years. When choosing this schedule, make sure to plan for those larger payments. Graduated repayment can increase the total amount of interest you pay.

6. Base Your Payment On Your Income

If you have high student loan debt but low income, there are two different repayment plans that may help: income-contingent for Direct Stafford Loans, and income-based for Direct Stafford Loans. While the details of each plan vary slightly, basically your monthly payment is based on some percentage of your discretionary income and/or family size.

In general, you must display partial financial hardship to qualify and your repayment amount could change annually based on your financial situation. You are still responsible for interest that builds up over the length of your payment period. The Income-Based and Income Contingent Repayment options allow any outstanding balances to be forgiven after 20 years of payments.

7. Consolidate Your Loans

If you are having trouble keeping track of multiple student loan payments, consolidation could help. Consolidation loans combine one or more federal student loans into one new loan. Federal Family Education Loans and Direct Loans can be consolidated together. Standard repayment is set at 10 years but you may be able to extend to a maximum of 30 years. Consolidation loans can’t be reversed but can be reconsolidated to add additional eligible education loans. From now until June 30, 2013, you may be eligible to consolidate your loans even if you’re still in school – talk to your financial aid office to see if it’s right for you.

8. Postpone Payment With A Forbearance

If you don’t meet the criteria for a deferment, you may qualify for forbearance. In most cases, forbearance is granted solely at the discretion of the company you make payment to. Forbearances are usually reserved for cases of financial hardship or illness. You will be responsible for all interest that accrues and at the end of the forbearance, the interest is capitalized (added to the principal balance of the loan).

Deferment and forbearance are both preferable to missing loan payments. But, before postponing repayment, see if it makes sense for you to lower your payments with a different repayment schedule. There are limits to how much deferment and forbearance time you can use.

9. Have Your Debt Forgiven

If you work in a profession like teaching or public service, you may be able to have all or part of your federal student loan debt forgiven. There are many different types of Teacher Loan Forgiveness available depending on when you took out your loans, where you teach and what subjects.

Public Service Loan Forgiveness forgives loan balances of eligible, full-time public service employees after they make 120 qualifying payments. Your loan must be in good standing (not defaulted) to be forgiven and only Direct Loans are eligible. If you have Federal Family Education Loans, you can gain eligibility for forgiveness by consolidating your loans into a Direct Loan.

10. Be Proactive

If you’re having a hard time making your student loan payment, the worst thing you can do is ignore the problem. There are federal programs that can help and often private lenders are willing to work with you on a solution. Contact the company that you send your student loan payment to and be frank about your situation. Ask them about all your repayment options to avoid delinquency and default. Being proactive early will allow them to provide you with the broadest number of options, without hurting your credit rating.

The author of this newsletter is Brock Jolly.

If you have any questions about the information contained in this newsletter, or any questions about college funding in general, please contact our office.