Best Christmas Gift Ever!

Have you been naughty or nice?

If you are a senior and you've been minding your P's and Q's then you can expect to have the best Christmas ever! How's that? Well, this Christmas you can expect to earn big time money for college by filling out scholarship applications in December.

Okay, I'll be the first to admit that the last thing I want to do in December of my senior year is fill out more applications. Wasn't it enough that I got my college admission apps in by November? Jeez, can't I catch a break? As my kid is fond of saying, "you can rest when it's all over!". And it ain't over until you can afford a college education without taking on massive student or parent debt that will haunt you for the next decade (if you're luckily).

College is expensive. The average state school cost about $23,ooo per year for four years and that is if you buy your books online from a discounter and don't splurge on things like study abroad and summer sessions. If you want to go to a school like Harvard ($70k) or Stanford ($62k for in-state) or Columbia ($72k in-state) or Yale ($64k) or any other top private university, the privilege is going to set you back a pretty penny.

The best way to avoid debt is to plan ahead and apply by the early deadlines so that you have the best chance at getting some form of financial aid ----- hopefully some form of financial aid that does not include loans for both the student and the parent. The best way to get financial aid that you don't have to pay back is to turn in scholarship applications directly to the college or to an affiliated endowment program that is associated with the college. Miss this step or do it after the New Year and you will take on debt for college.

I know most parents say that they are definitely not taking on loans for college but the truth is that students are only allowed to borrow such much per year then the rest of the debt ends up being Parent Plus Loans. Think it won't happen to you?

Quick Story - In 2015 a client went off to a major U. in DC. Parents were told that their DD had "full financial aid". Parents thought that meant we don't owe anything. They accepted admission. Classes started in August. The student was thrilled. Parents were proud. In October, student got an email from U. "Your tuition is overdue!" It threatened to drop DD from classes on Monday if full payment ($29,000) was not made immediately. I got a call from panicky parents. I called the U. Turns out the student's "full financial aid" was $11,000 in student loans and $47,000 in Parent Plus Loans. Her options were:

Be dropped from classes but still owe fall tuition = $29,000

Stay in classes and write a $29,000 check by Monday

Stay in classes and sign promissory note for $59,000

Which one would you take?

Plan ahead so you never have to make this decision.


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