Posts
We are interested in hearing from homeschooling families about the college selection process. While we work to bring The RealCost of College ™ Calculator to the public we would like to learn how homeschooled families approach the process.
• How do you choose what colleges to apply to?
• How do you learn about the financial aid process?
• Is the college selection process different for homeschooled families?
• What online resources do you use?
• At what age do homeschooled students generally start attending college?
This is just a sample of questions, please feel free to address the subject area as it interests you and applies to your family.
Jennifer Hoffman
Sunday, December 12, 2010
Monday, July 26, 2010
Record numbers of students request financial aid.
One of the pluses of Community Colleges is a program that has expanded dramatically over the last few years known as "guaranteed admission." Students completing their associates degree in Community College are guaranteed admission to further their education at their choice of a long list of schools. In Virginia as in many other states, the community college system has guaranteed admission agreements with most of Virginia’s four year public universities, numerous agreements with in-state private colleges, as well as agreements with some out of state colleges; a total of 25 agreements in all. Students must have an acceptable grade point average which is disclosed in the guaranteed admission agreements.
Community colleges are experiencing some tough growing pains however. The Daily Progress article highlights just some of the staggering numbers they are dealing with in terms of growing enrollment and growing demand for financial aid.
"In addition to the increase in enrollment, another factor in the increased demand for financial aid is the rising price of tuition at Virginia’s community colleges. Tuition has climbed as the state has slashed the colleges’ budgets."
Community colleges are experiencing some tough growing pains however. The Daily Progress article highlights just some of the staggering numbers they are dealing with in terms of growing enrollment and growing demand for financial aid.
"In addition to the increase in enrollment, another factor in the increased demand for financial aid is the rising price of tuition at Virginia’s community colleges. Tuition has climbed as the state has slashed the colleges’ budgets."
Proposed rules seek to protect students from taking on unsustainable debt.
We are going to start to read a lot about the debt students have been saddled with now that they can't find jobs to pay back the loans. This is an interesting and sobering article on the Department of Education website.
"The median federal student loan debt carried by students earning associate degrees at for-profit institutions in 2007-08 was $14,000 – almost double the median debt for their peers at non-profit institutions. The majority of community colleges graduates during the same time period did not borrow. In addition, while 88 percent of recent borrowers from nonprofit institutions and 80 percent of borrowers from public institutions were able to pay down the balance of their student loans in recent years, only 55 percent of borrowers attending for-profit institutions were able to pay off more than accrued interest."
"The median federal student loan debt carried by students earning associate degrees at for-profit institutions in 2007-08 was $14,000 – almost double the median debt for their peers at non-profit institutions. The majority of community colleges graduates during the same time period did not borrow. In addition, while 88 percent of recent borrowers from nonprofit institutions and 80 percent of borrowers from public institutions were able to pay down the balance of their student loans in recent years, only 55 percent of borrowers attending for-profit institutions were able to pay off more than accrued interest."
Monday, February 15, 2010
Find a Certified College Planning Specialist Near You
The National Institute for Certified College Planning Specialists provides a directory of members who can help you and your family understand the financial aid process.
Higher Education Federal Tax Benefits Guide - 2009 Tax Year
From our source at NICCP.com
There's great news for parents and students: the federal government provides a number of tax incentives that can help defray the cost of higher education. These incentives come in a couple of forms:
Tax credits, which directly reduce the amount of tax you are liable for; and Tax deductions, which reduce the amount of income that you pay taxes on. You may qualify to use more than one of the benefits, but there are
some restrictions against this as well. It's a good idea to figure your taxes multiple ways so you can get the maximum benefit available to you.
Tax Credits
The American Opportunity Tax Credit
The Hope Tax Credit
The Lifetime Learning Tax Credit
How to Claim Tax Credits
Tax Deductions
Tuition and Fees Deduction
Student Loan Interest Deduction
More Tax Topics
The 1098-T Statement
Taxability of Educational Assistance
The American Opportunity Tax Credit
The American Opportunity tax credit is new for the 2009 tax year. It offsets the cost of tuition, fees, course-related books, supplies, and equipment for higher education by reducing the amount of income tax
you are liable for. In addition, the credit is partially refundable—meaning that you may be able to claim the tax credit and receive a check from the IRS even if you owe no income tax!
The amount of the credit can be up to $2,500 per student. Up to $1000 of the credit can be refunded to you if your credit is more than the amount of tax you owe. You are eligible for the credit if your
modified adjusted gross income is $90,000 or less (for married couples filing a joint return, $180,000 or less). The amount of the credit varies depending on income and how much you spent on higher education
expenses, and how many eligible students are in your family.
The American Opportunity tax credit is a temporary replacement, for 2009 and 2010 only, for the Hope credit. It has more generous benefits than the Hope credit and was authorized by the economic stimulus bill,
the American Recovery and Reinvestment Act of 2009.
Qualifications:
Expenses that count towards this credit are tuition, fees, course-related books, supplies, and equipment for higher education (less the amount of certain scholarships and grants received) during
2009 for yourself, your spouse, or someone whom you claim as a dependent on your tax return.
Only expenses incurred for the first four years of undergraduate study count for purposes of this credit. The student must have been enrolled at least half-time in 2009 in an eligible program leading to a degree,
certificate, or other recognized credential at an eligible* school.
You must file a federal income tax return to get the credit (even if you are otherwise not required to file a return). If you are claimed as a dependent on someone’s tax return, only the person who claims you
can apply for the credit. If you are not claimed as a dependent on someone else’s return, but were under age 24 at the end of 2009 and your earned income was less than one-half of your support, you can
claim the credit to reduce any tax you owe, but are not eligible to get any refund.
Students convicted of a felony for possessing or distributing a controlled substance are not eligible for the American Opportunity tax credit.
The Hope Tax Credit
Because the Hope credit was temporarily replaced for the 2009 tax year by the American Opportunity tax credit, only families which have at least one student attending an eligible* institution in a Midwestern
disaster area can claim a Hope credit.
The amount of the credit can be up to $3,600 per student, but it is non refundable— the maximum credit that you can receive is limited to the amount of tax you owe. Eligible families can take this credit only
if they choose not to claim the American Opportunity credit for any student in the family. The maximum Hope credit for other students in the family, if they do not attend school in a Midwestern disaster
area, is $1800. You are eligible for the credit if your modified adjusted gross income is $60,000 or less (for married couples filing a joint return, $120,000 or less). The amount of the credit varies
depending on income and how much you spent on higher education expenses, and how many eligible students are in your family.
Qualifications:
Expenses that count towards this credit are tuition, fees, course-related books, supplies, equipment, and a room and board allowance (less the amount of certain scholarships and grants received) paid during 2009 for yourself, your spouse, or someone whom you claim as a dependent on your tax return who attended a school in a Midwestern disaster area. Other students in the family can only claim tuition, fees, and amounts required to be paid to the institution for books, supplies and equipment if they didn't attend school in the Midwestern disaster area.
The expenses must have been incurred for the one of the first two years of undergraduate study, and the student must have been enrolled at least half-time in 2009 in an eligible program leading to a degree
or certificate at an eligible school.
You must file a federal income tax return and have a 2009 income tax liability of any amount to get the credit. If you are claimed as a dependent on someone’s tax return, only the person who claims you can
apply for the credit.
You may only take a Hope credit for two years for any one student. If you have already claimed the Hope credit in two previous tax years for a student, that student may qualify for the American Opportunity tax
credit.
Students convicted of a federal or state drug felony before the end of 2009 are not eligible for the Hope credit.
The Lifetime Learning Tax Credit
The Lifetime Learning credit is available for all types of post secondary education, unlike the other credits. Use the Lifetime credit once you have exhausted your eligibility for more advantageous credits. This credit may be particularly helpful to graduate students.
You can claim a tax credit of up to $2000 per tax return (not per student). The maximum is $4,000 if at least one family member was a student in a Midwestern disaster area school. The qualifying student(s) can be anyone in the family. The Lifetime Learning credit is non refundable— the maximum credit that you can receive is limited to the amount of tax you owe. You are eligible for the credit if your modified adjusted gross income is $60,000 or less (for married couples filing a joint return, $120,000 or less).
Qualifications
Expenses that count towards this credit are tuition, fees, and amounts required to be paid to the institution for books, supplies and equipment (less the amount of certain scholarships and grants received) during 2009 for yourself, your spouse, or someone whom you claim as a dependent on your tax return. If a student attended school in a Midwestern disaster area, other expenses may be included.
You don't have to be pursuing a degree or certificate to qualify for the Lifetime Learning Credit. You can claim it for all years of post secondary education and for courses to acquire or improve job skills.
You must file a federal income tax return and have a 2009 income tax liability of any amount to get the credit. If you are claimed as a dependent on someone’s tax return, only the person who claims you can
apply for the credit.
If you claim the American Opportunity credit or the Hope credit for one or more students in your family, you can't use their expenses to figure your Lifetime Learning Credit. You can still take a Lifetime Credit for family members for whom you are not claiming the other credits.
Unlike other credits, students who have felony drug convictions do qualify to take the Lifetime Learning credit.
How to Claim Tax Credits
To claim any of the three tax credits, you must report the amount of your qualified expenses (less certain scholarships, grants, and untaxed income) on IRS Form 8863 - Education Credits. Complete instructions for using this form and more details are available from the IRS.
Tuition and Fees Tax Deduction
The Tuition and Fees tax deduction can reduce your taxable income by as much as $4,000. This deduction may be helpful to you if you are not eligible to take one of the tax credits. It is taken as an adjustment
to income, which means you can claim this deduction even if you do not itemize deductions on Schedule A of Form 1040.
You are eligible to take the deduction if your modified adjusted gross income is $80,000 or less ($160,000 if filing a joint return). The amount of the Tuition and Fees deduction you are eligible for depends
on the amount of qualified tuition and related expenses paid for eligible students.
Qualifications:
Expenses that you can deduct are tuition, fees, and amounts required to be paid to the institution for books, supplies and equipment (less the amount of certain scholarships and grants received) during 2009 for yourself, your spouse, or someone whom you claim as a dependent on your tax return. The expenses must have been for a student enrolled in one or more courses at an eligible* educational institution.
You can't claim both an education credit and the tuition and fees deduction for the same student for the same year, but you can take the deduction for one student and a credit for another.
You can't take this deduction if you deduct tuition and fees expenses under any other provision of the law (for example, as a business expense).
You can't claim this deduction if your filing status is married filing separately or if another person can claim you as a dependent on his or her tax return.
Figure your Tuition and Fees deduction on IRS Form 8917 - Tuition and Fees Deduction.
Student Loan Interest Deduction
The Student Loan Interest tax deduction can reduce your taxable income by as much as $2500. It is taken as an adjustment to income, which means you can claim this deduction even if you do not itemize deductions on Schedule A of Form 1040.
You can deduct interest paid on a student loan for yourself, your spouse, or your dependents. You are eligible to take the deduction if your modified adjusted gross income is $75,000 or less ($150,000 if
filing a joint return). The amount of the Student Loan Interest deduction you are eligible for depends on the amount of interest paid and your income.
Qualifications:
Qualified student loans must have been used to fund educational expenses such as tuition, room and board, fees, and books for a student enrolled at least half-time and pursuing a degree, certificate, or similar program at an eligible* institution.
You cannot claim this deduction if your filing status is married filing separately or if another person can claim you as a dependent on his or her tax return.
Figure your Student Loan Interest deduction using the Student Loan Interest Deduction Worksheet.
The 1098-T Statement
You will receive information about your 2009 educational expenses in a 1098-T statement from the institution of higher education. Schools are required to send this information to each student and to the IRS by
Jan. 31, 2010. (You might receive this by mail or electronically. Be sure to save this information, or give it to the person who claims you on their tax return if you don't claim yourself.)
Some schools report only tuition and fees on this form. If your 1098-T doesn't include amounts you paid for course-related books, supplies, and equipment, and these expenses are allowed for the credit you are
taking, you can use your own records to figure the amounts paid for these items and report the total on your tax return.
Taxability of Student Financial Aid and Loan Forgiveness Programs
Scholarships, fellowships, and grants that you received and that are reported on the 1098-T may need to be reported as taxable income in certain circumstances, but are often tax-free. In general, if you are
pursuing a degree, certificate, or program of training towards gainful employment, and used the funds to pay tuition, fees, or required books, supplies and equipment, these sources of assistance are not counted as taxable income.
If you've received a student loan that states it can be forgiven, cancelled, or paid if you work for a certain period of time, in certain professions, for any of a broad class of employers, then the amounts forgiven may qualify for tax-free treatment.
*An eligible educational institution is any college, university, vocational school, or other post secondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. According to the IRS, "it includes virtually all accredited, public, nonprofit, and proprietary post
secondary institutions." The educational institution should be able to tell you if it is an eligible educational institution. Certain educational institutions located outside the United States also participate in the U.S. Department of Education’s Federal Student Aid (FSA) programs.
There's great news for parents and students: the federal government provides a number of tax incentives that can help defray the cost of higher education. These incentives come in a couple of forms:
Tax credits, which directly reduce the amount of tax you are liable for; and Tax deductions, which reduce the amount of income that you pay taxes on. You may qualify to use more than one of the benefits, but there are
some restrictions against this as well. It's a good idea to figure your taxes multiple ways so you can get the maximum benefit available to you.
Tax Credits
The American Opportunity Tax Credit
The Hope Tax Credit
The Lifetime Learning Tax Credit
How to Claim Tax Credits
Tax Deductions
Tuition and Fees Deduction
Student Loan Interest Deduction
More Tax Topics
The 1098-T Statement
Taxability of Educational Assistance
The American Opportunity Tax Credit
The American Opportunity tax credit is new for the 2009 tax year. It offsets the cost of tuition, fees, course-related books, supplies, and equipment for higher education by reducing the amount of income tax
you are liable for. In addition, the credit is partially refundable—meaning that you may be able to claim the tax credit and receive a check from the IRS even if you owe no income tax!
The amount of the credit can be up to $2,500 per student. Up to $1000 of the credit can be refunded to you if your credit is more than the amount of tax you owe. You are eligible for the credit if your
modified adjusted gross income is $90,000 or less (for married couples filing a joint return, $180,000 or less). The amount of the credit varies depending on income and how much you spent on higher education
expenses, and how many eligible students are in your family.
The American Opportunity tax credit is a temporary replacement, for 2009 and 2010 only, for the Hope credit. It has more generous benefits than the Hope credit and was authorized by the economic stimulus bill,
the American Recovery and Reinvestment Act of 2009.
Qualifications:
Expenses that count towards this credit are tuition, fees, course-related books, supplies, and equipment for higher education (less the amount of certain scholarships and grants received) during
2009 for yourself, your spouse, or someone whom you claim as a dependent on your tax return.
Only expenses incurred for the first four years of undergraduate study count for purposes of this credit. The student must have been enrolled at least half-time in 2009 in an eligible program leading to a degree,
certificate, or other recognized credential at an eligible* school.
You must file a federal income tax return to get the credit (even if you are otherwise not required to file a return). If you are claimed as a dependent on someone’s tax return, only the person who claims you
can apply for the credit. If you are not claimed as a dependent on someone else’s return, but were under age 24 at the end of 2009 and your earned income was less than one-half of your support, you can
claim the credit to reduce any tax you owe, but are not eligible to get any refund.
Students convicted of a felony for possessing or distributing a controlled substance are not eligible for the American Opportunity tax credit.
The Hope Tax Credit
Because the Hope credit was temporarily replaced for the 2009 tax year by the American Opportunity tax credit, only families which have at least one student attending an eligible* institution in a Midwestern
disaster area can claim a Hope credit.
The amount of the credit can be up to $3,600 per student, but it is non refundable— the maximum credit that you can receive is limited to the amount of tax you owe. Eligible families can take this credit only
if they choose not to claim the American Opportunity credit for any student in the family. The maximum Hope credit for other students in the family, if they do not attend school in a Midwestern disaster
area, is $1800. You are eligible for the credit if your modified adjusted gross income is $60,000 or less (for married couples filing a joint return, $120,000 or less). The amount of the credit varies
depending on income and how much you spent on higher education expenses, and how many eligible students are in your family.
Qualifications:
Expenses that count towards this credit are tuition, fees, course-related books, supplies, equipment, and a room and board allowance (less the amount of certain scholarships and grants received) paid during 2009 for yourself, your spouse, or someone whom you claim as a dependent on your tax return who attended a school in a Midwestern disaster area. Other students in the family can only claim tuition, fees, and amounts required to be paid to the institution for books, supplies and equipment if they didn't attend school in the Midwestern disaster area.
The expenses must have been incurred for the one of the first two years of undergraduate study, and the student must have been enrolled at least half-time in 2009 in an eligible program leading to a degree
or certificate at an eligible school.
You must file a federal income tax return and have a 2009 income tax liability of any amount to get the credit. If you are claimed as a dependent on someone’s tax return, only the person who claims you can
apply for the credit.
You may only take a Hope credit for two years for any one student. If you have already claimed the Hope credit in two previous tax years for a student, that student may qualify for the American Opportunity tax
credit.
Students convicted of a federal or state drug felony before the end of 2009 are not eligible for the Hope credit.
The Lifetime Learning Tax Credit
The Lifetime Learning credit is available for all types of post secondary education, unlike the other credits. Use the Lifetime credit once you have exhausted your eligibility for more advantageous credits. This credit may be particularly helpful to graduate students.
You can claim a tax credit of up to $2000 per tax return (not per student). The maximum is $4,000 if at least one family member was a student in a Midwestern disaster area school. The qualifying student(s) can be anyone in the family. The Lifetime Learning credit is non refundable— the maximum credit that you can receive is limited to the amount of tax you owe. You are eligible for the credit if your modified adjusted gross income is $60,000 or less (for married couples filing a joint return, $120,000 or less).
Qualifications
Expenses that count towards this credit are tuition, fees, and amounts required to be paid to the institution for books, supplies and equipment (less the amount of certain scholarships and grants received) during 2009 for yourself, your spouse, or someone whom you claim as a dependent on your tax return. If a student attended school in a Midwestern disaster area, other expenses may be included.
You don't have to be pursuing a degree or certificate to qualify for the Lifetime Learning Credit. You can claim it for all years of post secondary education and for courses to acquire or improve job skills.
You must file a federal income tax return and have a 2009 income tax liability of any amount to get the credit. If you are claimed as a dependent on someone’s tax return, only the person who claims you can
apply for the credit.
If you claim the American Opportunity credit or the Hope credit for one or more students in your family, you can't use their expenses to figure your Lifetime Learning Credit. You can still take a Lifetime Credit for family members for whom you are not claiming the other credits.
Unlike other credits, students who have felony drug convictions do qualify to take the Lifetime Learning credit.
How to Claim Tax Credits
To claim any of the three tax credits, you must report the amount of your qualified expenses (less certain scholarships, grants, and untaxed income) on IRS Form 8863 - Education Credits. Complete instructions for using this form and more details are available from the IRS.
Tuition and Fees Tax Deduction
The Tuition and Fees tax deduction can reduce your taxable income by as much as $4,000. This deduction may be helpful to you if you are not eligible to take one of the tax credits. It is taken as an adjustment
to income, which means you can claim this deduction even if you do not itemize deductions on Schedule A of Form 1040.
You are eligible to take the deduction if your modified adjusted gross income is $80,000 or less ($160,000 if filing a joint return). The amount of the Tuition and Fees deduction you are eligible for depends
on the amount of qualified tuition and related expenses paid for eligible students.
Qualifications:
Expenses that you can deduct are tuition, fees, and amounts required to be paid to the institution for books, supplies and equipment (less the amount of certain scholarships and grants received) during 2009 for yourself, your spouse, or someone whom you claim as a dependent on your tax return. The expenses must have been for a student enrolled in one or more courses at an eligible* educational institution.
You can't claim both an education credit and the tuition and fees deduction for the same student for the same year, but you can take the deduction for one student and a credit for another.
You can't take this deduction if you deduct tuition and fees expenses under any other provision of the law (for example, as a business expense).
You can't claim this deduction if your filing status is married filing separately or if another person can claim you as a dependent on his or her tax return.
Figure your Tuition and Fees deduction on IRS Form 8917 - Tuition and Fees Deduction.
Student Loan Interest Deduction
The Student Loan Interest tax deduction can reduce your taxable income by as much as $2500. It is taken as an adjustment to income, which means you can claim this deduction even if you do not itemize deductions on Schedule A of Form 1040.
You can deduct interest paid on a student loan for yourself, your spouse, or your dependents. You are eligible to take the deduction if your modified adjusted gross income is $75,000 or less ($150,000 if
filing a joint return). The amount of the Student Loan Interest deduction you are eligible for depends on the amount of interest paid and your income.
Qualifications:
Qualified student loans must have been used to fund educational expenses such as tuition, room and board, fees, and books for a student enrolled at least half-time and pursuing a degree, certificate, or similar program at an eligible* institution.
You cannot claim this deduction if your filing status is married filing separately or if another person can claim you as a dependent on his or her tax return.
Figure your Student Loan Interest deduction using the Student Loan Interest Deduction Worksheet.
The 1098-T Statement
You will receive information about your 2009 educational expenses in a 1098-T statement from the institution of higher education. Schools are required to send this information to each student and to the IRS by
Jan. 31, 2010. (You might receive this by mail or electronically. Be sure to save this information, or give it to the person who claims you on their tax return if you don't claim yourself.)
Some schools report only tuition and fees on this form. If your 1098-T doesn't include amounts you paid for course-related books, supplies, and equipment, and these expenses are allowed for the credit you are
taking, you can use your own records to figure the amounts paid for these items and report the total on your tax return.
Taxability of Student Financial Aid and Loan Forgiveness Programs
Scholarships, fellowships, and grants that you received and that are reported on the 1098-T may need to be reported as taxable income in certain circumstances, but are often tax-free. In general, if you are
pursuing a degree, certificate, or program of training towards gainful employment, and used the funds to pay tuition, fees, or required books, supplies and equipment, these sources of assistance are not counted as taxable income.
If you've received a student loan that states it can be forgiven, cancelled, or paid if you work for a certain period of time, in certain professions, for any of a broad class of employers, then the amounts forgiven may qualify for tax-free treatment.
*An eligible educational institution is any college, university, vocational school, or other post secondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. According to the IRS, "it includes virtually all accredited, public, nonprofit, and proprietary post
secondary institutions." The educational institution should be able to tell you if it is an eligible educational institution. Certain educational institutions located outside the United States also participate in the U.S. Department of Education’s Federal Student Aid (FSA) programs.
Wednesday, February 3, 2010
Obama Calls for College TAx Credit and Debt Forgiveness
From our friends at NICCP.com
"Obama Calls For College Tax Credit and Debt Forgiveness"
NICCP - National Institute of Certified College Planners
The Online Source for College Planning and Marketing News
From: NICCP and NICCP Plus
Sent weekly to over 6,300 subscribers.
Approximate reading time: 10 minutes
++++++++++++++++++++++++++++++++++++++++++++++
"Obama Calls For College Tax Credit and Debt Forgiveness"
President Barack Obama touted education among his top priorities in his first State of the Union address, proposing a $10,000 higher-education tax credit for families and debt forgiveness for people who have been repaying their college loans for at least 20 years.
Obama urged the U.S. Senate to join the House in overhauling the federal student-loan system, saying such a move would end “unwarranted taxpayer subsidies” to banks and help revitalize community colleges. He also supported an update of No Child Left Behind, the Bush administration education effort.
Obama said the cost of the higher-education initiatives would be offset by money saved from his plan to provide all new federal loans directly to students, instead of through private lenders. While some Republican lawmakers have opposed this plan saying it may raise college costs, the Congressional Budget Office said it may save the government $80 billion in 10 years.
“In the 21st century, the best anti-poverty program around is a world-class education,” Obama said in his speech. “No one should go broke because they chose to go to college.”
The repayment plan reflects an understanding by the administration that student debt can handicap middle class families.
Policy makers have become increasingly aware over the last several years about the burden that student debt can create in already tough times. This proposal gives a signal that if you do need to borrow to pay to go to college, and you’re responsible about repayment, you can do it in a way that doesn’t jeopardize your future.
Obama, who plans to send Congress his budget request for fiscal 2011 next week, said he’ll propose the $10,000 tax credit for families paying for four years of college and more money for Pell Grants that help low-income students afford college. He also called for an expansion of an income-based student-loan repayment program the Education Department started in July.
“Let’s tell another 1 million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years
-- and forgiven after 10 years if they choose a career in public service,” Obama said.
Colleges welcome anything that will help students pay for their education, particularly the increased Pell Grants.
These are really positive initiatives for private colleges. Anything that can reduce the load for students paying for colleges will help.
The plan to provide federal college loans directly, approved by the House in September, aims to protect student loans from turmoil in financial markets and end federal payments that Obama says are wasteful. It would discontinue the 43-year- old Federal Family Education Loan Program that subsidizes and guarantees loans made by private lenders.
Starting in July, all new federal loans would be provided through a separate program, created in 1993, that lets the Education Department lend directly to students.
Representative John Kline of Minnesota, the top Republican on the House Education and Labor Committee, said such a plan may create new expenses for students.
“Making the federal government responsible for a larger share of student debt is likely to do nothing more than exacerbate high college costs,” Kline said.
Obama’s budget plan, set to be released Feb. 1, includes a $3 billion raise in discretionary education funds next year, shielding federal school programs from his proposed freeze on some domestic spending. That’s about 6 percent more than this year’s $47 billion discretionary budget for education programs other than Pell Grants.
The $3 billion contains Obama’s proposed $1.35 billion expansion of the Race to the Top competitive grant program, which rewards states that make the most progress in raising academic standards, boosting teacher quality, tracking student gains and improving failing schools.
That program, which will award $4.35 billion in stimulus grants to states this year, has “broken through the stalemate between left and right” on how to improve the nation’s public schools, Obama said.
“Instead of rewarding failure, we only reward success,” Obama said. “Instead of funding the status quo, we only invest in reform
-- reform that raises student achievement, inspires students to excel in math and science, and turns around failing schools that steal the future of too many young Americans.”
The budget proposal would allow another $1 billion in K-12 education spending, for a total of $4 billion, if lawmakers reauthorize No Child Left Behind this year.
The 2002 law, enacted under President George W. Bush, requires states to measure student achievement through standardized tests.
While states can set their own standards to determine what constitutes an adequate education, they can lose some federal funds if they don’t show yearly progress toward those goals.
Obama and Duncan have said the law prompted many states to weaken their academic standards and led schools to devote too much time to standardized test preparation. They want states to agree on a common set of tougher, nationwide standards. They also want to give states more flexibility in meeting those standards than they now have under No Child Left Behind.
“In this country, the success of our children cannot depend more on where they live than on their potential,” Obama said.
+++++++++++++++++++++++++++++++++++++++++++
Until next week, all the best.
NICCP & NICCP Plus
niccp.com
Helping College Planners enhance their plans
"Obama Calls For College Tax Credit and Debt Forgiveness"
NICCP - National Institute of Certified College Planners
The Online Source for College Planning and Marketing News
From: NICCP and NICCP Plus
Sent weekly to over 6,300 subscribers.
Approximate reading time: 10 minutes
++++++++++++++++++++++++++++++++++++++++++++++
"Obama Calls For College Tax Credit and Debt Forgiveness"
President Barack Obama touted education among his top priorities in his first State of the Union address, proposing a $10,000 higher-education tax credit for families and debt forgiveness for people who have been repaying their college loans for at least 20 years.
Obama urged the U.S. Senate to join the House in overhauling the federal student-loan system, saying such a move would end “unwarranted taxpayer subsidies” to banks and help revitalize community colleges. He also supported an update of No Child Left Behind, the Bush administration education effort.
Obama said the cost of the higher-education initiatives would be offset by money saved from his plan to provide all new federal loans directly to students, instead of through private lenders. While some Republican lawmakers have opposed this plan saying it may raise college costs, the Congressional Budget Office said it may save the government $80 billion in 10 years.
“In the 21st century, the best anti-poverty program around is a world-class education,” Obama said in his speech. “No one should go broke because they chose to go to college.”
The repayment plan reflects an understanding by the administration that student debt can handicap middle class families.
Policy makers have become increasingly aware over the last several years about the burden that student debt can create in already tough times. This proposal gives a signal that if you do need to borrow to pay to go to college, and you’re responsible about repayment, you can do it in a way that doesn’t jeopardize your future.
Obama, who plans to send Congress his budget request for fiscal 2011 next week, said he’ll propose the $10,000 tax credit for families paying for four years of college and more money for Pell Grants that help low-income students afford college. He also called for an expansion of an income-based student-loan repayment program the Education Department started in July.
“Let’s tell another 1 million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years
-- and forgiven after 10 years if they choose a career in public service,” Obama said.
Colleges welcome anything that will help students pay for their education, particularly the increased Pell Grants.
These are really positive initiatives for private colleges. Anything that can reduce the load for students paying for colleges will help.
The plan to provide federal college loans directly, approved by the House in September, aims to protect student loans from turmoil in financial markets and end federal payments that Obama says are wasteful. It would discontinue the 43-year- old Federal Family Education Loan Program that subsidizes and guarantees loans made by private lenders.
Starting in July, all new federal loans would be provided through a separate program, created in 1993, that lets the Education Department lend directly to students.
Representative John Kline of Minnesota, the top Republican on the House Education and Labor Committee, said such a plan may create new expenses for students.
“Making the federal government responsible for a larger share of student debt is likely to do nothing more than exacerbate high college costs,” Kline said.
Obama’s budget plan, set to be released Feb. 1, includes a $3 billion raise in discretionary education funds next year, shielding federal school programs from his proposed freeze on some domestic spending. That’s about 6 percent more than this year’s $47 billion discretionary budget for education programs other than Pell Grants.
The $3 billion contains Obama’s proposed $1.35 billion expansion of the Race to the Top competitive grant program, which rewards states that make the most progress in raising academic standards, boosting teacher quality, tracking student gains and improving failing schools.
That program, which will award $4.35 billion in stimulus grants to states this year, has “broken through the stalemate between left and right” on how to improve the nation’s public schools, Obama said.
“Instead of rewarding failure, we only reward success,” Obama said. “Instead of funding the status quo, we only invest in reform
-- reform that raises student achievement, inspires students to excel in math and science, and turns around failing schools that steal the future of too many young Americans.”
The budget proposal would allow another $1 billion in K-12 education spending, for a total of $4 billion, if lawmakers reauthorize No Child Left Behind this year.
The 2002 law, enacted under President George W. Bush, requires states to measure student achievement through standardized tests.
While states can set their own standards to determine what constitutes an adequate education, they can lose some federal funds if they don’t show yearly progress toward those goals.
Obama and Duncan have said the law prompted many states to weaken their academic standards and led schools to devote too much time to standardized test preparation. They want states to agree on a common set of tougher, nationwide standards. They also want to give states more flexibility in meeting those standards than they now have under No Child Left Behind.
“In this country, the success of our children cannot depend more on where they live than on their potential,” Obama said.
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Until next week, all the best.
NICCP & NICCP Plus
niccp.com
Helping College Planners enhance their plans
Saturday, January 30, 2010
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Wednesday, January 13, 2010
Advice on Making the College Investment Pay Off From AlbemarleFamily Magazine's #1 Financial Consultant
We were pleasantly surprised to find out, although a little late, that we had won first place in the Financial Consultant category of AlbemarleFamily Magazine's reader poll! Thank you to all our clients for voting for us. Lately the college planning division of our practice has really been taking off. We don't know if it has anything to do with the notoriety from AlbemarleFamily Magazine or if it is just due to the general panic parents are in, facing college and retirement planning and saving.
Just the cost of groceries and gas alone have gone up so much, I haven't been reading much about it in the mainstream media but it has me quite worried. We are all being hit with rising costs at an alarming speed yet our paychecks are staying the same and we feel lucky just to have a job. Now more than ever it is important for students to begin grooming themselves for their job search as soon as they begin college. Gary addresses this in a lot of detail in his book, The Real Cost of College: How to Finance Your Kids' College Education Without Bankrupting Your Retirement. He appeals to parents to make sure they know where the career center is and to escort their students there on move-in day! The more successful students use this resource heavily but it should not be the best kept secret on campus. The second important tip that Gary writes about is to make sure the student gains as much work experience as possible through internships, job shadowing, volunteering, anything that will give the student real work experience.
Our son is graduating this Spring and is working diligently at finding a job before graduation. He has been working through college, selling the services of a deck/patio company, canvassing door to door in Northern Virginia. When Gary commented to him that he is gaining some very valuable sales experience with this job that will be sought after in the job market, it was apparent that our son was actually taking this for granted because he has never set out to become a salesman. He said something like, "I just smile, get the person to like me, and explain the product." A natural! Now that he is seeking employment in the non-profit sector, hoping to find work in development and fund-raising for an organization that benefits underprivileged youth, he can see that there is a lot of merit to his experience.
Students facing this job market quickly move from wanting a meaningful career to simply wanting a paycheck with benefits. Monster.com has begun a new program of Career Mapping where the job seeker broadens their horizons by considering different careers that share common attributes. The Career Centers at the colleges all have tools like this and many more at their disposal. The resume writing and interview workshops are invaluable. Encourage your student to start in immediately. Gary stresses this point in his book, that now, more than ever, we need to see college as an investment in the student's future career. Therefore, the job search should start as soon as the student arrives at school, not in their final semester!
Jennifer Nickerson-Hoffman
Just the cost of groceries and gas alone have gone up so much, I haven't been reading much about it in the mainstream media but it has me quite worried. We are all being hit with rising costs at an alarming speed yet our paychecks are staying the same and we feel lucky just to have a job. Now more than ever it is important for students to begin grooming themselves for their job search as soon as they begin college. Gary addresses this in a lot of detail in his book, The Real Cost of College: How to Finance Your Kids' College Education Without Bankrupting Your Retirement. He appeals to parents to make sure they know where the career center is and to escort their students there on move-in day! The more successful students use this resource heavily but it should not be the best kept secret on campus. The second important tip that Gary writes about is to make sure the student gains as much work experience as possible through internships, job shadowing, volunteering, anything that will give the student real work experience.
Our son is graduating this Spring and is working diligently at finding a job before graduation. He has been working through college, selling the services of a deck/patio company, canvassing door to door in Northern Virginia. When Gary commented to him that he is gaining some very valuable sales experience with this job that will be sought after in the job market, it was apparent that our son was actually taking this for granted because he has never set out to become a salesman. He said something like, "I just smile, get the person to like me, and explain the product." A natural! Now that he is seeking employment in the non-profit sector, hoping to find work in development and fund-raising for an organization that benefits underprivileged youth, he can see that there is a lot of merit to his experience.
Students facing this job market quickly move from wanting a meaningful career to simply wanting a paycheck with benefits. Monster.com has begun a new program of Career Mapping where the job seeker broadens their horizons by considering different careers that share common attributes. The Career Centers at the colleges all have tools like this and many more at their disposal. The resume writing and interview workshops are invaluable. Encourage your student to start in immediately. Gary stresses this point in his book, that now, more than ever, we need to see college as an investment in the student's future career. Therefore, the job search should start as soon as the student arrives at school, not in their final semester!
Jennifer Nickerson-Hoffman
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