Most students wish their grades would magically go up as they sleep, and for students at several law schools across the country, that wish has come true. As the trying economy and tough job market continue, the schools are reportedly introducing new measures to help their students stay competitive.

Gimme an “A”!

Law school is expensive, and most schools want to be sure they deliver to their students not only a solid education for that money, but also a good shot at landing a job. That is why schools like Loyola Law School in Los Angeles–which retroactively boosted student grades by 0.333 percent in July–are moving to a more lenient grading system. Joined by other schools like Tulane and Georgetown, Loyola hopes that an easier grading system will translate to more job offers for their graduates.

The problem this creates is that as each school changes its grading policy it can cause their competitors to re-evaluate their own grading policies - a scenario that could make it very difficult to determine which students truly earned an “A” versus those who happened to get one by attending a law school with an easier grading policy.

Take a “Test Drive”

Other law schools are taking a different tack–finding ways to put their future grads in networking or internship situations to help buoy their chances of employment.

Southern Methodist University, for example, has been known to pay local law firms to hire their graduates.The grads work for the law firm for free for a couple of months, giving them a chance to prove themselves. The hope, of course, is that graduates will shine and the firms will offer them a regular position at the end of the trial period.

Reading Between the Lines

I’ve written before about how important the bottom line can be to a school, and this situation is no exception.

While these colleges and universities are undoubtedly pleased to help their students find jobs, all this effort probably has more to do with their own reputations than with their students’ happiness. A number of sources rank colleges - and graduate GPA and employment rates both contribute to a school’s rank on these lists. Positive statistics mean more interest from potential future students, and more interest can mean a full class and the corresponding tuition funds… you get the picture.

So, does the above attitude matter to your family? Absolutely! The grading policy is an inside look and example of what makes colleges tick, and that can be a great boon for families in the process of paying for college. After all, a school’s “big business” attitude is part of the reason many families that have educated themselves on how the system works are able to get awarded a tuition discount!

All the best,
Deborah Fox

photo

Long time readers will be familiar with my typical warnings about private student loans.  When it comes to consumer advantages and competitive interest rates, they simply can’t compete with their federal counterparts. Yet private lenders have been so successful with their marketing campaigns that almost 2/3 of students who borrowed private loans in 2007-08 did so without using up all their federal loan options first!

As more and more federal attention is turned toward the student loan problem, private loan regulations have popped up in several current bills. If they pass, they could make borrowing from a private lender much safer than it has ever been.

Bringing Home a Watchdog

One of the key inclusions of the new financial regulation bill is the creation of a watchdog group, created entirely to uphold consumer protection policies. This entity would be the key group to watch over the private student loan industry, and would be a single hub for consumers to turn to when they had a complaint about one of the lenders or their policies.

Numerous complaints about the industry–or a particular lender–will be more likely to be noticed if this single group is created and given the power to take action when necessary as it focuses its attention on private lending.

College Integration

As it stands now, students can borrow private student loans without any interaction with their colleges. This means, if they qualify, students can take out as large a loan as they are offered–whether or not they intend to use it to pay for college costs.

A proposed regulation would require lenders to certify all loans through the student’s college before disbursing funds. This would:

• Prevent fraud by ensuring that the student is in fact attending the school,
• Limit the amount of money private lenders could offer to students, and
• Lower potential student debt by ensuring that students don’t borrow more money than they need to meet the cost of attendance.

Education About Federal Loans

Another highlight of the private loan regulations is a stipulation that would allow college financial aid counselors to encourage students (as I have encouraged my client families) to borrow federal loans before turning to private ones.

This new opportunity, combined with the certification rule I’ve just described, would allow schools to educate students who planned to borrow private loans about the advantages of using federal loans first.

Changing Bankruptcy Rules

One of the most daunting realities about student loans–both federal and private–is that they are nearly impossible to discharge, even in bankruptcy. New House and Senate bills have both suggested providing relief for borrowers in this situation, and would allow certain types of private loans to be discharged as part of a bankruptcy settlement. Federal loans, however, would still fall under the current rules.

All the best,
Deborah Fox

photo

The average student spends at least $800 per year on textbooks alone each year, but an up-and-coming trend of textbook rentals could keep some of that money where it really belongs–in your savings account!

Same Day Textbooks
When I wrote about textbook rentals last time, it was still an online-only option, but a new feature from Rent-a-Text.com has the company partnering up with school bookstores nationwide. That means that students can walk into their bookstore, rent a book, and take it home with them that same day–no waiting, no hassle with return postage. To find out if your student’s school participates in this program, simply type its name into the search box on their home page.

Online Options

If your student’s school doesn’t offer on-campus book rentals–or if you simply want to shop around–you can look at the online book rental options as well. Rent-a-Text.com has an online rental option, as do other websites like BookRenter.com, CampusBookRentals.com, and Chegg.com. Each of these offer advertised savings of 50 to 90% over purchasing books brand new.

With most sites you simply find your student’s book (usually the ISBN is the safest search option–you want to make sure you order the right text!), rent it, and your student receives it in the mail a few days later. When the semester is over, they simply send it back. Most of these sites even include free return shipping as part of the deal.

What’s the Catch?

Usability options are different with each website, so you’ll want to do some research before you choose which one to use. Some rental companies allow students to highlight in the books, while others consider any marks in the book to be “damage” and will refuse to take them back.  In this case students are required to purchase them instead, which defeats the whole purpose of renting.

Other Options

If your student prefers to own his or her textbooks for optimal markup and study-session highlighting, you can still shave a good portion off that $800+ price tag. Try one (or all) of these ideas to help save even when you’re buying:

• Buy used! Used textbooks are often in like-new or barely-used condition, and they cost a fraction of the price.
  .
• Skip the bookstore. Bookstores tend to mark up the price even on used books, so I usually recommend perusing the used books at sites like Half.com or Amazon.com (both of which offer books sold by individuals or companies willing to offer a significant price cut). These are great places to sell books back at the end of semester, too.
  .
• Buy an old edition. Most students can still work with a previous edition of a textbook, and they sell for a fraction of the price. Your student may have to borrow a friend’s book for an updated chapter, or figure out slightly different page numbers, but a little extra effort can mean big savings. Just be sure to confirm with the professor first to make sure the earlier edition will work OK for the class.  A quick email from student to teacher can set the record straight.

All the best,
Deborah Fox

image

Alabama’s Birmingham-Southern College officials had a shock when they recently reviewed their financial aid spending: they discovered that they have been over-awarding financial aid to students for years, an error that will cost them millions of dollars.

Suffering the Consequences

While the college plans to honor the award letters given out to their students, the error will mean making a 20 percent budget cut in the school’s overall spending plan, reducing it from $49 million to $39 million. They have yet to solidify where the cuts will occur, or how it will affect the campus and what it can offer students.

So what exactly caused these problems in the first place?

According to the The Birmingham News, financial aid officials have been mistakenly awarding Pell Grants to students on top of their original award packages, instead of incorporating them into the total–and Birmingham-Southern has been making up the difference. So, for example, if a student was supposed to get a total of $15,000 in aid (including the Pell Grant), the school would award those funds out of their own pocket and then add the Pell Grant, meaning that the student ended up with a total of $20,000.

This costly mistake has been costing the college $5 million every year, and was only recently uncovered. Though the errors were completely legal (over-awarding out of school funds is not against the law) and unintentional, most of the higher ups in Birmingham-Southern’s financial aid office have chosen to resign.

What it Means for Students

A mistake like this might seem like a stroke of luck to students–an extra $5,000 of “free” money could really help with the college bills–but in the end it may turn out to be more bain than boon.

For one thing, a 20% cut in the college budget could seriously affect the overall college experience. In the past schools have cut courses, staff, sports, and other student activities and campus services to help tighten their proverbial belts.

Another problem could arise when award letters come home next year. Students used to getting that larger aid number will now have to scramble to come up with a substitute for erroneously awarded money. This could mean anything from more work hours to taking on higher loan amounts, and for the lower income families who qualify for Pell Grants, that could be a severe burden.

The Boy Scouts Were Right…

…it is crucially important to “be prepared” for as many possibilities as you can. Even without a costly and confusing mistake like the one at Birmingham-Southern, the world of higher education is constantly in flux. Tuition prices go up, loan rates change, job markets can get difficult, and financial aid fluctuates depending on the college and the economy.

While part of my focus with clients is to create a financial “road map” that will see them through the college years, an equally important part is keeping that map current as both personal and outside influences change the way families pay for college.

As you plan out your college funding strategy–either with a college planner or on your own–don’t expect the first solution to be perfect. As with any part of parenting, discovering how to meet your child’s college expenses and the needs of yourself and your family must to be a fluid, evolving process. Plan for the best, but prepare for the worst, and you will come out ahead.

All the best,
Deborah Fox

image

A new study (published in the scientific journal Research in Social Stratification and Mobility) suggests that it can–and with a substantial body of evidence to prove it.  Research for the study was extensive, surveying over 70,000 people. If you think that is impressive, wait until you read this: the study covered 27 countries over a period of two entire decades.

A New Definition of Book Smarts

The results of this 20-year survey were highly convincing. Researchers found a strong correlation between the number of books in a child’s home with that child’s success in and enthusiasm for academia. For example, children who had over 500 books in their household on average completed 3 years more schooling than those whose homes had a scant number of books. A Chronicle of Education article that outlined the study noted that these students were also 20 percent more likely to finish college than their book-less peers.

One of the most surprising findings, however, was that simply owning books had a stronger correlation with children’s intellectual success than did their parents educational background, occupation, or social class.

Who You Are, Not What You’ve Got?

This type of research has shown up before. The popular New York Times bestseller, Freakonomics discussed a similar correlation between children’s intellectual accomplishments and their parents’ preference for reading and displaying books. However, the authors suggested that it wasn’t so much the presence of the books but the implications of their presence that made a difference to children.

Regardless of whatever correlation to academic success there may be by having books around the house, a trip to the library or bookstore certainly can’t hurt and there’s nothing like reading good book!

Deborah Fox

It’s that time again–students of all ages are heading back to school. Whether you’re parenting high-school aged children or sending your first (or second, or third!) off to college, you’re probably feeling the pressure of getting your back-to-school to-do list started–and I have a helpful group of articles to get you on the right track!

High School Students

Grades aren’t the only thing your child should be working on during even the earliest high school years–there are plenty of scholarship opportunities for high school students of all ages, and they should also spend time preparing for the SATs or ACTs and AP tests to increase their competitive edge.

• Private Scholarship How-tos: Search and Apply Early and Often!
• Prepare for the SAT-for Less (or for FREE)!
• Helping Your Student Prepare for AP Tests

High School Seniors

Senior year is an exciting one, full of the anticipation of next year–when your child will be heading off to college! (Where do the years go?) Help your child keep nervousness at bay by learning how to help them get a jump on their college applications, and how to choose the “right” college for your student.

• 5 Ways to Get a Head Start on College Applications
• How to Choose the “Right” College
• Making College Visits in a Tough Economy

College Students

Whether your child is going away to college for the first time or gearing up for the final year of college, you’ll want to review the “Off to College Checklist” for tips about how to update your finances for the college years, and learn how your child can help contribute to college costs as well.

• Your Must-Have “My Student Is Off to College” Checklist!
• Student Income: 7 Easy Ways for Your Child to Make Extra Cash
• How to Budget WITH Your Student & Change Your Estimated College Cost
• 3 Things Your Student Should Know About Loans

All the best,
Deborah Fox

image

With the economy still sluggish and students struggling to make ends meet, it has become increasingly common for students to pull out the plastic to cover the college bills–and that could mean trouble in a world where student debt seems to be ever increasing.

Teaching your child the ins and outs of budgeting for college and how to responsibly use credit cards could mean the difference between graduating free and clear, and stepping into the world of adulthood with a shackle of consumer debt. If you want my two cents, that difference is definitely worth a quick conversation.

Colleges, Congress and Credit Cards

While parents may not be too keen on handing their eighteen-year-old a brand new credit card, colleges are beginning to see it as the new norm. In fact, college bookstores have been lobbying hard to get their vendor side credit card fees reduced for years–and Congress has finally done something about it.

A recent amendment passed in the Senate would lower and regulate the processing fees that banks charge vendors who take credit card payments. Reducing these fees, which are often charged to consumers through higher prices, might actually end up helping students who routinely use their cards to cover the costs of books and tuition.

To Use or Abuse?

Last year I reported on a Sallie Mae statistic that showed the average college student to have $3,173 in credit card debt. That is a large number for any student–not to mention those grappling with growing student loan debt and the tough job market.

You can help your child choose to use (but not abuse) a credit card by discussing the basics of credit card use in college terms. For example:

• Do Your Research. Not all credit cards are created equal. First-time card holders should do their research before applying for and obtaining a card. Students should look for a card with a (relatively) low interest rate - not just a low introductory rate -and no annual fees.  (Keep in mind a “low” interest rate for a first-time card holder will be quite a bit higher than a card belonging to a borrower with established credit.)
  .
• Loans, Not Cards. Credit cards should never be used as a source of college funding. By filing the FAFSA, students that need an education loan can qualify for government student loans like the Stafford or the Perkins loans which have a much lower interest rate than a credit card.
  .
• Only Spend What You Have. The best way for students to use a credit card is simply to treat it like a debit card–only charge something if you have the cash in the bank. Cards should be paid off in full every month to avoid revolving debt and the interest charges that go along with it.

The Upside of Credit Cards

As intimidating as they may seem, credit cards don’t have to be a negative for your student. A properly managed card can help students establish their credit score, which can help them qualify to rent an apartment or get a car loan further down the road.

Once your student has learned to manage a basic credit card, he or she can also look into a rewards card.  Rewards cards can help them get cash back on their purchases.  Yet again, parents and students need to do their research! Not all cards are created equal–some offer cash back while others offer airline miles or points towards gift cards. Some offer a higher rewards percentage on purchases like gas and groceries than on other purchases. (Rewards cards, too, can carry high annual fees or interest rates; and abusing or neglecting a card like this can lead to a heavy debt load.)

Remember, educating your child about building good credit and keeping a low level of debt now can really give your child a boost when graduation arrives!

All the best,
Deborah Fox

photo

Choosing the “wrong” college has long been a problem for students–one that too often means extra time and money spent on obtaining that coveted college degree. Now a new study from the National Association for College Admissions Counseling (NACAC) indicates that 1 out of every 3 college students will transfer to another school–and that can spell trouble for students who want to get on the fast track to graduation.

Losing Time and Money

Way back in 2007 we found out that an increasing number of students were spending 5 or 6 years in undergraduate college programs just to earn a Bachelor’s degree, which was once considered a “4-year degree.”

As more and more students struggle to complete their degrees in the standard four years, many of them also end up battling the consequences of choosing the “wrong fit” college, and, according to NACAC, 1/3 of them end up transferring schools. That’s bad news for students hoping to graduate on time and parents hoping to save money.

Students that switch colleges mid-degree can end up spending up to an entire year longer in school simply to make up requirements that didn’t transfer from their previous institution. Not only does that set a students back a year on their career path, it also means that an additional year of tuition, room and board, travel and incidental costs add up either on the student’s (or parents’) tab, many times in the form of additional debt.

And that financial tally doesn’t include the emotional cost of having to start fresh at a brand new school, with all new classmates, course schedules, activities and graduation requirements. Talk about a stressful situation!

A Difficult Proposition

As if adjusting to the transfer process itself weren’t difficult enough, the precursors–research, transfer applications, essays and possibly another round of interviews–may be even worse.

NACAC’s recent study found that being admitted to college as a transfer student may be even more complicated than the initial college application process - simply because each school’s criteria can vary so much.

For example, most all colleges in the study agreed that a student’s post-high school GPA was the most important factor when it came to transfer admission; but some of the more selective colleges also took a hard look at factors that students cannot control, such as their state or county of residence, the quality of their high school and their race or ethnicity. Schools also varied as to whether they viewed a GED or transferable credits as positive or negative, and about 11% of surveyed schools were put off by students who wanted to enroll only part-time.

What You Can Do

If you are still in the process of trying to find your child’s dream school, don’t be seduced by an impressive website or well-known name before you’ve figured out what your student really wants and needs in a postsecondary environment. Choosing the right college is key if you want to keep your college costs down and your student happy–that’s why I’ve dedicated a whole category of posts to selecting the right college. I’ve even shared a simple 4-step formula to finding the right school for your child.

College is certainly a big step for both parents and students, but with careful planning and a positive attitude, it can be your child’s next great adventure.

All the best,
Deborah Fox

photo

You’ve probably heard (or read) a lot about grants, scholarships, and loans, but many parents have never heard of Work-Study - a common piece of the financial aid pie. If you, too, are in the dark, read on!

What is Work-Study?

The Federal Work-Study program–which, as its name implies is funded by the federal government–helps provide part-time on-campus work to help students cover the cost of higher education. Over 3,400 colleges and universities participate in the Work-Study program and they offer a wide range of job opportunities.

Federal Work-Study is not a loan, scholarship or grant. Students who qualify for Work-Study are expected to perform work as they would for any other job and, in return, receive a regular paycheck. The money is paid to the student, not directly to the school, so there are no federal strings on how the student uses the money.

The award amount (the maximum amount a student can earn in a Work-Study job) is determined by the college’s financial aid office. If your student qualifies, it will show up on his or her award letter.  Work Study is a need-based program.

How Do Students Apply for Work-Study?

Filing the Free Application for Federal Student Aid (FAFSA) is the only way to qualify for Work-Study. (It is also the only way to apply for federal student loans–read more about that here.)

Who is Eligible?

Students attending undergraduate, vocational and graduate schools can all apply for Work-Study, but they must fall into the federally established guidelines of financial need to be considered eligible. You can read more about the federal formula for determining eligibility at the Department of Education’s Work-Study site.

What Type of Wages Do Students Earn?

By law Work-Study jobs must pay at least the federal minimum wage, but many of them pay more. The wage is typically determined by the job type, with more difficult positions paying higher hourly rates.

Are Students Automatically Assigned a Job?

No, students who are awarded Work-Study are not assigned a job. Rather, the Work-Study award allows students to apply for Work-Study positions on campus (students who do not receive the award cannot be hired for these jobs.)

Note:  The current economic environment has caused many schools to cut back the number of Work-Study jobs they make available to students.  Now more than ever, it is important for a student to try to secure a Work-Study job as soon as possible because there are more Work-Study awards given out than there are jobs available.  Incoming freshmen: Contact your college’s financial aid office ASAP!

Is Work-Study Better Than a Regular Job?

The answer to this question will depend on your student’s personal situation. With the economy tight and job competition tough, it can be a real advantage to have the option of pursuing both regular and Work-Study jobs (which have a smaller pool of potential applicants.) Since they are usually on-campus positions, however, Work-Study jobs can often be more flexible about work hours (and sometimes even offer opportunities for study time.)

On the other hand, your student may find that he or she can earn a higher wage or pursue a job more relevant to his or her career goals by searching outside the Work-Study sphere. Your child’s best bet will be to consider and apply to both types of jobs. You can help your student weigh the pros and cons once he or she has a solid job offer.

All the best,
Deborah Fox

photo

Since the job market first took the plunge, new college graduates–and even new college freshmen–have worried about the effect it will have on their future careers. Last year, with the floundering economy and the job market growing fiercely competitive, many students became more concerned about finding a job than about what a job would pay.

As with much of the news during this slow-paced period of economic recovery, this year’s graduates have found themselves in a good news/bad news situation.

The good news? Students are expected to have better luck landing jobs this year than they did in 2009.

The bad news? Their starting salaries are expected to be significantly lower–at least for most college grads.

The Numbers Game

CNN Money recently reported the projected salary figures for 2010 graduates. Compiled by the National Association of Colleges and Employers (NACE), the numbers show that this year’s graduating class should expect to make an average of 1.7% less than students who were hired in 2009.

However, that 1.7% was only the tip of the iceberg. The more detailed NACE projections got much more complicated and, for some students, much more depressing. When it came to salary decreases–or increases–it all came down to the student’s career field:

Major                        % Increase/Decrease                Average Salary

Liberal Arts                          Down 8.9%                             $33,540

Business Management         Down 8%                                $42,094

Marketing                            Down 2.1%                             $42,710

Computer-Related              Up 5.8%                                  $58,746

Engineering                         Up 1.2%                                  $59,149

Electrical Engineering          Up 3%                                     $59,326

The Real World

While the NACE figures show a projection for our national average, the truth of the matter is that students’ opportunities–and starting salaries–will vary greatly based on many different variables, including everything from location to previous experience. Many students will find the application and interview process difficult and daunting, and others may be shocked at what appears to be a lower-than-expected salary (or hourly wage) offer.

The name of the game this year is realistic humility. At a time when many highly experienced adults have struggled with the job market, it is not uncommon for freshly graduated students to end up working low-wage jobs to help make ends meet. When it comes down to it, low wages are better than none at all.

Pressing Forward

Not too long ago I discussed how to prepare your child for the disappointing experiences of life, and the first job may just be one of them. If your child’s first shot at full-time work is not what he or she hoped, remind him or her that sometimes it takes time to work your way up the proverbial ladder–and help him or her come up with ways to keep moving forward.

For example, if your newly graduated student is already working in his or her dream field but not yet at the dream pay level, remind your child that this is an important time to go the extra mile–log extra hours, show good quality work and demonstrate their value to the business. If your child has taken on a job in another field–or even just a part-time job to cover loan bills while the career search continues–help him or her brainstorm ideas for networking, search for internship positions, or develop a portfolio.

Our students may be living in a different economy than the graduates of 1999, but hard work (and a healthy dose of patience) will still help your student work not only toward a better salary, but also toward a healthier appreciation for work itself.

All the best,
Deborah Fox

photo