11th Grade, heading to college -- What should I be doing for admissions and financial aid?

I'm in 11th Grade what should I be doing now for college admissions and financial aid?


The first answer is, "Keep moving." What I mean is, you don't have as much time as you may be thinking. College applications are not on your radar until next August. True. However, between now and then you have a lot to think about and decide. Financial aid is tied closely to five topics.

Here are the topics, and in reverse order.
5. Where are you going to apply?
4. Have I visited every college I am applying to?
3. What are my academic qualifications?
2. What will I major in?
1. What do I see as my future career?

The most important question to answer, now, is "What career?" (Purchase my book here.)  Going to college without an outcome in focus is a HUGE mistake. Across America, for students attending a public university at in-state, resident rates, the annual, actual costs will exceed $20,000.00. At that price, how much time can you afford to meander through five or six years to a degree? Yet, that is the mistake the majority of college students in the USA make.

My students invest in a really good career assessment. It points them in the direction of what they are suited to do (aptitude), but more importantly, what they will enjoy doing for 40 years, more or less.

For example, I am good at taking and transcribing the minutes of meetings. But I do not enjoy it very much. I am willing to do it, but if given a choice, I'd rather not. Another example is I have had students who were science scholars. A medical career might be a logical choice, right? Many of them, however, freak out at the sight of blood. So maybe something else!

Do whatever it takes to figure out what you will love doing after college, and what is required by way of academic preparation to do that. What are the prospects for earning a living in that career? Is that job market expanding or shrinking? Check out www.BLS.gov. That's the Bureau of Labor Statistics. Great website, and updated regularly.

Check back next week for continued discussion of questions 2,3,4 and 5, or call us today.
 

Posted in College Planning, College Planning Strategies. Tagged as Financial Aid.

529 Plans -- yes or no?

A 529 Plan, should I start one?  We (http://www.succeedwhereitcounts.com) hear that question, or some variation of it, often.  There is no one-size-fits-all answer.  Consider these facts and factors: 

FACTS 
  1. 529 Plans - established by the U.S. Congress; run by states and by colleges.
  2. 529 Plan - an IRS designation relating to taxability and penalties.  Those two words should not be ignored.  Click the link to the relevant section (http://www.irs.gov/uac/529-Plans:-Questions-and-Answers). 
  3. 529 Plan a cash asset available for college expenses.  Your Expected Family Contributions (EFC) (http://www.fafsa.ed.gov) may go up and your financial aid offer go down.
  4. 529 Plans - unlimited contributions allowed (subject to the parent/child gift exclusion; refer to the IRS Q&A linked above).  Large accounts, however, may leave an undistributed balance, which may be subject to taxes and penalties.
  5. 529 Plans may be shared within families; given to friends or anyone else.
 FACTORS 
  1. Conservative investment practices may mitigate market risk for a 529 Plans.  The flip side of that is a history of  modest gains inside of 529 accounts (http://www.forbes.com/sites/learnvest/2013/07/18/529-savings-plans-9-mistakes-people-often-make/). 
  2. Families with large EFC-exposed assets (http://www.fafsa.ed.gov) may benefit the most from 529 Plans for the tax savings possibilities.  However, the IRS gift exclusion allowance should also be considered (see Forbes article linked above).
  3. Families with high Adjusted Gross Incomes (IRS 1040, line 37) may also derive a benefit from 529 Plans. 
  4. If scholarships and college tuition concessions are of little or no importance, the taxes saved in a 529 Plan are worth considering.
  5. You have to spend the money on "qualified educational expenses," not necessarily on what you think your student needs for a particular year of college (a car; off-campus housing; airfare home at a holiday).
  6. Distributions drain the account The magic of compounding is eliminated.  
  7. Consider a college savings strategy that has the option of using your asset as collateral, while continuing to enjoy uninterrupted compounding growth.
Is a 529 Plan right for you?  The facts and factors discussed above, when carefully considered, will help you arrive at the answer.
  
 

Posted in College Planning, College Planning Strategies. Tagged as 529 Plan, Cost of College, Financial Aid, Save for college.

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