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How COVID-19 is changing the way we finance college

Posted by Neal Schwartz on January 07, 2021

While the pandemic has taken its toll on everyone, one silver lining is the changes to core Financial Aid submission. According to a recent article in Forbes by Mark Kantrowitz, the FAFSA will be undergoing massive changes in response to the COVID-19 relief bill. According to the FAFSA Simplification Act, financial aid determination will be adapted from both the federal and institutional levels. 

However, these changes will not be coming in the near term, but rather will affect the Freshman class of 2023—current high school Sophomores. It will of course have an impact on the earlier classes as Financial Aid is required to be submitted and reviewed each year prior to a student’s college year.

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Topics: College Costs, College Applications, college admissions, early decision, early action, early decision 2, SAT/ACT, college selection, college counseling, high school senior, Guidance Counselors, virtual tours

Are the SATs and ACTs still necessary?

Posted by Neal Schwartz on December 15, 2020

Due mostly to the pandemic, nearly 75% of colleges have gone the test optional approach, many of which are extending test optional policies forward several years. The question of how important the SAT and ACT tests will be for the upcoming graduating classes has resulted in many opinions.  Is the pivot to test optional for college admission going to be a temporary or long-term situation? To predict what may happen, it is wise to take a broader historic view.

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Topics: College Costs, College Applications, college admissions, early decision, early action, early decision 2, SAT/ACT, college selection, college counseling, high school senior, Guidance Counselors, virtual tours

A pandemic outcome: early decision applications likely to continue to decline

Posted by Neal Schwartz on November 12, 2020

College students have long been tempted by applying Early Decision, where upon acceptance, a student agrees to attend a college or university. Early Decision is a great option to reinforce demonstrated interest for students that are very confident with their top college choice and chances of admission. College admissions also use Early Decision to get a head start filling their classes. However, with the sanitary crisis impacting college in an unprecedented way, students seem less willing to go Early Decision.

Although the Early application season is still in progress for some schools and the data is yet to be tabulated, the initial view this year is that due to the pandemic and the issues outlined, there is a continuance of the decline in both Early Decision and Early Action applications. This is also tied to the drop in student applications.  According to a recent article in the Wall Street Journal, applications dropped 8% through November 2nd. (Many Early applications have a deadline of November 1st).  In our area, where approximately two-thirds to three-quarters of seniors would have typically applied Early Decision to a school, the trend is that those numbers have dropped considerably.

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Topics: College Costs, College Applications, college admissions, early decision, early action, early decision 2, college selection, college counseling, high school senior, Guidance Counselors, virtual tours

Are public universities the better choice for 2020?

Posted by Neal Schwartz on January 26, 2020

With the increasing cost of private universities are public universities the best choice?

It is so hard to generalize about whether ALL public universities are a better investment than ALL private universities. Making overall claims can be dangerous. Similarly, making a decision on the whole universe based on comparing just a few colleges has its own set of extrapolations that can translate into a poor decision for a student. 

Cost Considerations: Sticker Shock now more than ever

There is a general misconception about the cost of public universities across the board. For many parents that were educated in the 80s and 90s, there was not as much of a difference between an in-state public university and an out-of-state public university. Since the downturn around 2008 and 2009, more students, at least in the Northeast, migrated to public colleges. And along with the pressure on state funding, state colleges began to charge more for out-of-state students to cover their costs.  

Yet something went very wrong. According to an article from the New York Times, with tax revenues plunging, states slashed funding to colleges just as millions were seeking to enroll. Public colleges could not adequately educate the influx of students. As their state subsidies shrank, public colleges either restricted enrollment, spent less on educating each student, or raised tuition. Sometimes, they did all three. 

There are three categories of public and private 4-year colleges: In-State Public, Out-of-State Public and Private. I selected some popular schools in each of these categories and although there are outliers from the ones I selected, it is easy to see the gaps between these three categories.  

In-State Public: $27,000 per year

Out-of-State Public: $51,000 to $56,000 per year 

Private: $69,000 to $75,000 per year

 Data source: College Navigator

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Topics: College Costs, college advice, Financial Aid, University of Michigan, Lehigh University, University of Richmond, Boston University, Binghamton University, Cornell University, University of Delaware, University of Wisconsin - Madison, University of Maryland, College graduation rates

When Grandparents plan to Pay for college, make sure you know these points

Posted by Neal Schwartz on May 31, 2016

When I first started saving for my kid’s college education, we were advised to put the savings in their name.  At the time, this seemed like great advice. As the decades passed, this information was proved to be horribly flawed.  As pointed out in the recent NY Times article: “The Best Way to Help a Grandchild with College” ,  the following facts are really important to know:

  • 20% of a students’ assets are “assessed” in the federal formula for financial aid compared to only 5.64% of parental income and non-retirement assets.  The more money in the child’s name the less the financial aid package.
  • “When”  a grandparent takes distributions from a 529 for a grandchild is also a key factor

 Also, things are different for those dealing with estate planning and tax laws.

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Topics: College Costs

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