Monthly Archives: July 2013

Would you Pay for a FAFSA Prep Service

A few weeks ago I posted a review of Dave Ramsey’s College Planning Service. You all had mixed reviews of the product, and many people have come down hard on Dave for the product.

So, because I am not Dave, and because I do not have a cushion of millions to fall back on if a product/idea goes bust, I wanted to float an idea by you all before pursuing it any further.

Considering a FAFSA Prep Service

A coworker of mine was talking to me recently about how the lines at our local community college’s financial aid office are out the door each semester. Their office is woefully understaffed and the people who truly need help filling out a FAFSA, or answering their financial aid questions, are swamped.

Do you think these same people would pay to have help completing their FAFSA? Rather than wait in a long line in a financial aid office, would they rather go sit in a cushy chair across from a personalized advisor, and pay to have help filling out the FAFSA?

Consider this, FAFSA.com, the non-government entity run by Student Financial Aid Services, Inc. completes tens of thousands of FAFSA applications each year and they charge $79 for each application. People still pay this fee even though the FAFSA can be completed for free at www.fafsa.ed.gov.

Why do people pay this? To be fair, I know that many folks stumble across FAFSA.com and think it is the official government site, even though it clearly states it is not. SO a portion of these customers are there because of a lack of knowledge.

The rest however, have made it very clear that they are willing to pay for this professional service, and to have personalized assistance in completing their FAFSA.

In talking with a number of these folks, they view it as no different than paying someone else to complete their taxes each year. They know they could do it themselves for free, but they are too busy/confused/lazy to do it themselves.

Does it Defeat the Entire Purpose of Financial Aid?

Does a service of this kind defeat the entire purpose of financial aid? Most often, the people submitting a FAFSA application are the ones who need to qualify for need-based aid. They don’t have $79 lying around to throw away on professional FAFSA assistance.

Would it be highway robbery to provide this service at a cost to college students and their parents?

These are the questions that I am wrestling with. There are many other physical limitations to a service of this kind, but before I move any further in the planning phase of this business, I need to iron out the ethical dilemmas.

I am looking forward to hearing your thoughts!

I’m Writing My First Book – Help Keep me Accountable

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Part requirement for my Master’s thesis, part lifelong dream, part income generation tool, and part social promotion strategy; my first non-fiction book is currently under development. As part of my Master’s course work, I have known that this day would come for a few years now. Getting to this point however, has been a struggle, and it is hard to believe this is actually happening.

Regardless of all of that, the first pages have been written and my book is under way!

I don’t have a title chosen yet, although the working title is “The Smart Way to Pay for College, Post Great Recession”. Please let me know if you have any brilliant ideas for a title.

As you can likely deduce from the working title, the book is a non-fiction guide to helping students, parents, and other family members make smart decisions with college financing. I introduce some unconventional means of raising money to pay for college, and hope to provide a great resource for anyone struggling with the rising costs of college.

I hope that this book can be a handbook to paying for college in 2013 and beyond. The college finance landscape has changed dramatically in the last 5 years, and old tactics won’t work any more. We need to re-tool our thinking if we want to have any hope of being able to afford college when our children decide to go.

As much as I would like, this book’s goal is not to battle the high cost of college tuition. That is a separate beast and one that I can’t tackle alone. My goal however, is to help you manage those rising costs and find ways to negate the rise in college tuition.

Where You Come In

The entire purpose of my book is to help you (students, parents, grandparents, or others) understand and better manage the college finance system.

This is my full-time profession so I feel like I have my finger on the pulse of the hot button issues, but I crave your help in letting me know what questions you have!

What are the burning questions you have about paying for college?

What makes you the most angry about the college finance process?

If you could change one thing (besides getting free tuition…) what would it be?

What are your views on working while going to school?

Do you plan to take out student loans?

I also plan to post outlines, chapters, and excerpts from my ongoing book project here on Money for College Project. My goal is to hold myself accountable to you through my blog, and I hope you will help by calling me out on my progress, and checking in to see how things are coming.

Oh, and if you would be up for an interview let me know because I need to conduct a number of them!

Student Loan Interest Rates Doubled! Are You Ready?

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By now you have likely heard that last Friday, Congress failed to pass an extension which would keep student loan interest rates low. Because of this failure, yesterday, Stafford Subsidized student loans doubled in interest rate from 3.4% to 6.8%!

Yes, these are the loans that are made available to students who come from low to middle income families and also qualify for the Federal Pell Grant. Yes, these are need based loans that just received a doubling of their interest rates.

Both isles of Congress seem fairly set on passing legislation that will reduce these interest rates back to their former levels, but for now, the infighting has prevented any actual measures being passed. Until Congress takes action and changes this interest rate back, any new Stafford loan disbursements made after July 1, 2013 will be under the new interest rate increase. The good news is that if Congress does pass this measure, it would be retroactive in time for the upcoming Fall 2013 semester. So please let your Congressman know how much you would like the interest rates to stay at 3.4%.

What Should You Do?

Unfortunately, if you are in a situation where you need to take out student loans, there is really nothing that you can do. Stafford subsidized and unsubsidized loans are the most competitive interest rate student loans available, and their repayment options are by far the most flexible of any loan type you will find. If you need a student loan, this is still your best choice for a loan.

You can however, try to guard yourself from having to take out student loans at all. You should always max out any “free” financial aid before you consider student loans as an option. Many financial aid award packages automatically bundle student loans in with your financial aid award, but you do not have to be so quick to borrow.

You can maximize your scholarships searching by checking out the free listings at your local library, your high school guidance counselor, your department at college, or your professors. These resources are often excellent resources for scholarships, that not many other folks think to explore.

You could also consider becoming an entrepreneur and starting your own business to pay your way through college. You could buy and sell used textbooks, you could start a furniture moving company moving stuff into and out of dorm rooms, you could start a computer repair service on campus, you could start a mobile coffee cart business, or you could freelance write online for some extra cash.

All of these methods will earn you money which you can then use to pay your tuition outright. In my mind, there is not much more satisfying than working hard and paying cash for something you are passionate about. Paying your own way through college also makes you appreciate what you are paying for and will likely help you be more invested in your education. You will also pick up some very valuable business skills, and develop an entrepreneurial mindset that will benefit you throughout your entire life.