An Unconventional Guide to Paying for College

Review: Dave Ramsey’s Custom College Guide

Posted by on Jun 7, 2013 in How to Pay College Tuition | 4 comments

We all know who Dave Ramsey is.

What you may not know is that Dave has recently entered into the college finance arena with his new product, the Custom College Guide. The product provides a comparison breakdown of the top 6 schools you are interested in attending and gives you a cost summary based on your personal financial situation.

It claims to take the work out of the college cost comparison process for you by automatically compiling the information for you.

The product also provides free FAFSA preparation, filing and support for you.

You can get all of this for $139.99

What I Think of the Product

I respect Dave Ramsey’s stance on finances a great deal. His philosophy on credit, living debt free, and his steady investing strategy all resonate well with me. Moving into the college finance arena however, was a risky move.

The Custom College Guide requires you to call into their service to give them your personal information. This will include your top 6 target schools and your personal financial situation, including your parents finances. From this 10 – 15 minute conversation, they will then prepare your school cost comparison for you. Here is a sample of what that could look like

 

college cost breakdown

Dave Ramsey’s service actually uses the services of Student Aid Services. They essentially pull all of the estimated cost of attendance information from the net price calculator required at every college. Every figure listed under the “Estimated yearly cost of attendance” is pulled directly from these figures on a college’s website.

The next category down includes all of the grants and scholarships that you may be eligible for. If you will notice in this example, a large portion of the scholarships are provided through military assistance. This is obviously NOT money that is available to the majority of students. SOme students may be VA recipients, some students may be active military or college ROTC, but this is not a scholarship that a majority of U.S. students would qualify for. Including this military assistance in the scholarship package can be very misleading.

I do really like the section included in the “Your Contributions Summary”. I think it is important for students to work during college, so I am very glad Dave’s folks made the decision to put this in there. Also, student loans are not listed here which is encouraging!

Then the bottom of the cost comparison you see how large your gap is, between your costs and the funding you have secured.

This information can then be used to make the decision on where you would like to go to college.

A Few Problems

First, I don’t like the fact that the military assistance plays so prominently in the online example. The military is not an option for everyone, so this can be very misleading.

Second, there are no federal financial aid benefits from FAFSA listed here. Federal Pell grants, FSEOG, and other grants could add some additional aid for students.

Third, do you really want to pay $139.99 to have someone do this service for you? I have had this debate with my colleagues and here on the blog before, but would you feel comfortable paying for this service that you can easily do yourself? I would argue that for most people, this is not a good bargain. All of this information is free and available to you, with a little time and effort. However, for many people this could be an invaluable decision making tool, and one which frees you up to work on other projects.

The Bottom Line

The Custom College Guide proclaims to be personalized to each student, but it can only go so far. It will never know what your exact college costs will be, it can never tell you the exact amount of financial aid you will receive, it cannot make the decision for you.

As with most things in life, it is important to remember that making a decision as important as where to go to college should only be made after weighing all of your options and seeking wise counsel. This product could be a good guide for you, but I would encourage you to do your own research to see how Dave’s answers compare with your own!

I would never buy this product, but I also work in college finances and am much familiar with this product than the average parent or high school student. It could be a good option for you, but just remember that this is not proprietary information. It is an information gathering service in a slick package. If that is what you want, awesome! But don’t be fooled into thinking that Dave is working magic here.

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How to Manage the Career Transition from Non-Profit to Corporate

Posted by on Jun 5, 2013 in College News | 10 comments

non profit to corporate

Many people envision a life working for a non-profit as a leisurely, stress free career path down the long road to eventual retirement. No quarterly earning projections, no mergers and acquisitions, no looming deadlines, no sales quotas, no money hungry executives, no cut throat coworkers, and no travel or overtime.

Most people envision moving from corporate america to the non-profit sector as a step back from work.

Unfortunately, this is far from the truth.

Why is it that you rarely hear of anyone moving from a non-profit to a corporate career?

Please do not get me wrong, working for a non-profit can be incredibly rewarding. There are many non-profit organizations that treat their employees extremely well, offer a satisfying work environment, and make coming to work every day fun. However, that is not always the case. Many non-profits focus 100% of their efforts on fundraising and quickly lose sight of their mission and vision. There are many instances of non-profit executives pocketing upwards of 80% of the revenue for an organization. A mismanaged non-profit can be just as bad, if not worse, than a mis-managed for profit business.

I have a good friend who is considering making a move from a mismanaged non-profit agency he has worked with for many years, to the corporate world. In talking with him, we both agreed on a few important differences that will need to be considered in making this move.

Benefits

It’s no secret that higher salaries tend to follow the corporate world, as opposed to the non-profit. However, there are a number of items to evaluate when comparing salary offers between corporate and non-profit.

1. Base Salary – This is straightforward.

2. Bonuses – These generally do not happen in non-profits. They should be considered potential income, and not guaranteed.

3. Health/Dental/Vision Insurance – Many corporate plans have better group rates because they have more participants.

4. Retirement – Many corporations offer a 401(k) match, wheras the 403(b) equivalent at non-profits is utilized much less often. However, many non-profits (which would include state and federal employment) still offer defined pension plans which are a thing of the past for the corporate world.

5. Perks – Gym memberships, company cars, discounted meals, per diem, housing and relocation assistance, free lunch, free or discounted child care are almost exclusively available in the corporate world.

6. Flex Schedules – Many non-profits offer more flexible schedules than would a corporate office. You may have the option to come in early, or stay late at your convenience. Many corporations however, do offer the ability to work remote from your home.

7. Work/Life Balance – Many non-profits excel at this, but certainly not all of them. Maintaining a healthy balance between work and home is crucial to your success. Limiting the number of hours worked, requiring used vacation days, offering paid sick time, offering options for children spouse to interact during the work day are all options.

The Decision

For my friend, the most important decision criteria was the work/life balance and the fringe benefits. The offer he received from a corporate job would pay him a higher salary and he would have the option to work from home. For him, this more than made up for the slightly higher stress level he would feel to meet the corporate objectives and be within a rigid corporate governance.

The Bottom Line

In the end, the most important component to consider is your quality of life. Maybe a lower salary would be more than compensated for with an increase in your work environment. Maybe you could use fewer vacation days if you had free lunch and a free gym membership.

This decision is a very personal one, but one that can have a major impact on your life. It’s not an easy decision but hopefully for you will be a good one!

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The Case for Adjustable Student Loan Rates

Posted by on Jun 3, 2013 in Student Loans | 10 comments

student loans

Maybe that title is a little misleading…

I struggled with what to title this post because I could not figure out what would get my point across the best. What I am suggesting is a way to mediate the student loan debt crisis going forward by offering different student loan interest rates for different students.

On Federal Stafford Loan disbursed through June 30, 2013, the interest rate for subsidized loans is 3.4% and on unsubsidized loans is 6.8%. Unfortunately, if an extension bill is not passed, these low rates are set to expire at the end of this month. Both of the rates are set to effectively double.

Millions of students receive Stafford Loans every year, and every single one of them pays the exact same interest rate regardless of their situation. No other loan that I know of charges a set interest rate to every borrower. It is very un-capitalistic.

A Discriminating Student Loan Interest Rate

When you apply for a home mortgage you understand that the bank will take into account your personal situation before they come back with a loan offer. They will look at your credit score, your income, your payment history, the term of the loan, the home you intend to buy, your down payment, and the loan to value on your home. All of these factors play a role in determining how risky of a borrower you are, and therefore the interest rate and amount of money they will lend to you.

Student loans should operate on the same principle.

Student loan interest rates should take into account the student’s major, proposed course of study, career and education plans, grades, student loan repayment history (if applicable) and the outlook on job’s in that major.

The easiest way to do this would be to set a standard rate, and then give rate deductions for having qualifying criteria in each of these categories.

For example, let’s set the Subsidized Stafford Loan rate at 5% and the Unsubsidized Stafford at 8%. If you maintain at least a 3.0 GPA then you automatically receive a .25% reduction. If your major is in a critical need area, then you can receive another .25% reduction. The private job market on the lookout for employees with your skills, get a .50% reduction. Majoring in a critical research area, another .25% reduction.

This information could all be captured when submitting the FAFSA, and the interest rate would be returned through the FAFSA application. This would not increase the work on a school’s financial aid office, and would be a relatively simple process for student borrowers.

It would also give student borrowers an incentive to keep good grades, to major in a critical needs area, or to pursue a career field that was actually in demand, guaranteeing a job, and therefore the ability to repay those student loans.

Private Loans Could Also Join The Party

Private loan lenders would be even easier to incorporate into this flexible student loan interest rate model. Their loans are already based on credit and income so they have underwriting criteria in place already. They could also work on the interest rate reduction model, giving incentives when certain criteria are met.

This would likely increase the amount of quality student loan borrowers in their ranks, and increase their chances of receiving all of their money back.

The Bottom Line

There is not a quick fix for the student loan debt crisis. However, so many students receive loans to fund an education that does not benefit them. Students in courses of study that are not employable, and student who receive loans with a failing GPA are simply milking the system. They will graduate with student loan debt and no hopes of repaying those loans.

This system could at least show the importance of being selective in the major you choose, and highlight the importance of a course of study which will teach you the skills needed to get a job!

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Want to be Lebron James Summer Intern?

Posted by on Jun 1, 2013 in College News, How to Pay College Tuition | 2 comments

lebron james

Looking for an internship this summer? How about working for Lebron James?

Lebron’s official website LebronJames.com is hiring interns who are interested in online content management and digital sports marketing.

No, you won’t get to travel with Lebron James and help him lace up his sneakers. But you could have an opportunity to participate in a VERY high profile internship.

This could be the opportunity that propels your resume to the top of the stack for the jobs you apply for after graduation. This is the sort of opportunity that helps you stand out from a crowd. This could be the beginning of an exciting career in sports marketing, online marketing, or anything else you would like to do.

Here are the details from Lebron’s website:

LeBronJames.com has internship openings for students who have an interest in online content development and digital sports marketing. The program runs through the spring, summer, and fall semesters. Candidates must be available at least 10 hours a week.

Responsibilities:

– Maintaining basketball and technology industry dossiers

– Researching trends and advancements in the technology & sports space

– Assisting the content development team with updating LeBronJames.com

– Communicating and interacting with LeBron fans around the world

Basic Qualifications:

– Must currently attend college or a four year university.

– Access to a computer & phone

– Works well in a team setting and takes direction

– Strong communication skills and work ethic

– Has a strong urge to learn and improve

– Demonstrates a strong knowledge of basketball and technology trends

– Proficient with creating spreadsheets and detailed reports (Word/Excel)

– Familiarity with leading social media and blogging platforms (i.e. WordPress, Tumblr, Facebook, YouTube, and Twitter)

– Proficient with Adobe Creative Suite (including Photoshop, InDesign)

Desired Qualifications: – Residing in Ohio, South Florida, or New York

– Basic knowledge of XHTML/CSS

– Experience in journalism, marketing, or communications

– Basic knowledge of photography or videography

– Spanish fluency

How to Apply: Apply by submitting your resume, cover letter, and a writing sample (500 word minimum) explaining why you are “The perfect person for the internship” to opportunities[at]lebronjames.com. Applicants granted interviews must provide documentation showing they are currently enrolled in school. All entries should be submitted as a Word document or rich text format (.rtf). Do not call, tweet or send us messages on Facebook!

Deadline: We will not consider any applicants after Tuesday, June 4th at 10am ET.

I will admit, I am actually fairly impressed with this opportunity. Lebron James wants folks with Spanish fluency and knowledge of CSS and Adobe Creative! This is legit. He has required high level skills for the intern positions, and I imagine they will have the opportunity to work on some real projects. Not to mention rub elbows with some very influential people.

If I was still in college, I would most certainly be applying for this internship opprtunity.

If you are looking for an internship, this could be just the opportunity for you!

 

 

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How to Dominate Scholarship Applications and Pay for College

Posted by on May 30, 2013 in How to Pay College Tuition, Scholarships and Grants | 8 comments

money for college

The scholarship search can be intimidating. The most popular online scholarships searches, like FastWeb, force you to wade through thousands of worthless scholarships. They are not worthless because they are scams, rather they are worthless because they are not personalized. In fact, in my five years working in Higher Ed I have never met ANYONE who has won a scholarship through FastWeb. Obviously people do win these scholarships, but the chance of you winning a scholarship found through FastWeb is very low.

I highly recommend searching locally for your scholarships. I have written in length about the benefits of this in the past.  Your chances of winning increase drastically when the applicant pool drops from thousands of students to less than 50 for most local scholarships.

Once you have gathered a list of scholarships that you wish to apply for, you have to start the actual application process. This process can also be intimidating, but it does not have to do.

How to Dominate Scholarship Applications

I have compiled a list of the top 8 ways to dominate your scholarship applications and ensure that you maximize your chances of winning as many scholarships as you apply for.

  • Start early!! Almost every scholarship has a deadline and many scholarships give priority to applications submitted early.
  • Compile a list of accomplishments, awards, professional experience, education credentials, and volunteer organizations. Having this list handy will save you many hours during the application process since nearly every application will ask for this information.
  • Be aggressive! Scholarships are designed to reward deserving and persistent students who are willing to “do what it takes” to further their education. A scholarship committee is not impressed by a “less than your best” effort.
  • Identify and contact at least three people who would be willing to write an impressive recommendation letter on your behalf.
  • Apply for every scholarship for which you are eligible.
  • Follow up! Don’t let your scholarship application slip through the cracks. Scholarship committees will also appreciate the dedication you show in your future endeavors.
  • Be organized! This is great time to improve your organizational skills. Make sure to keep track of all deadlines, signatures, recommendation letters, and any necessary follow-up questions from a scholarship organization.
  • Don’t underestimate the importance of applying for scholarships. After all, a successful scholarship search could land you with a free ride and money to spare!

The Bottom Line

Searching and applying for scholarships is not easy. If it were, everyone would have a full-ride to college.

FastWeb likes to say that there are millions of dollars in unused scholarships each year. I don’t believe this, but I do know that there are many scholarships which do not receive many quality applications and are forced to award their money to a less than stellar student. This is where you have an opportunity to swoop in, submit an impressive application, and win a scholarship over your classmates.

Following the above 8 tips will give you your best chance of conducting a scholarship search that is sue to land you some funds to help pay for college.

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