Still Thinking? Undecided

Still Thinking? Undecided

National Decision Day has come and gone. Students have made their choices and are now thinking about roommates, orientation and summer work. Parents are shifting their thoughts from acceptance to trying to figure out how to pay the educational cost.

But what about me? I didn’t commit – I’m still undecided. You’re not alone!

Considering college after high school can be a very stressful and overwhelming experience. For some the process of deciding on what to do and where can require a little extra time.  Today the pressure to go to college straight out of high school may not be the right “next step” for all. Pursuing one’s education after high school can take multiple paths, each designed to support an individual student and family needs.

Yes, the general trend continues to be that all high school students and families to think four-year college right after high school.  Although a traditional path to college after high school is not wrong, the pressure to follow the pack is wrong. Working through one’s college plan can take a student past May 1 and for some offer alternative paths, equally important to students desired career, first job outcome.

Delaying one’s choice, stepping back and slowing the decision-making process can be a wise option for many students and families. On the fence, not 100% sure are strong reasons to invest more time. Questions related to academic and personal readiness, ability to pay and overall interest in school are all valid reasons to take one’s time. College planning is an individual experience!

What’re my options?

Enrollment at traditional college and universities did not end on May 1, National Decision Day. The truth be told, a vast number of colleges and universities across the county (400+) are still accepting and enrolling students for September. In Massachusetts alone, 25 schools (as of May 13) are actively considering new admissions applications and some even have financial aid available. Across New England, NY and the Mid-Atlantic there are 120+ college and universities actively looking for you. As the process moved past the May 1 date, rolling admissions kicks in! Interested students and families who are ready should contact the Admissions Office at their school(s) of interest to learn about their specific admissions and financial aid procedures.  Applications for admissions and financial aid will be required and details related to following up should be watched closely.

If a 4YR school is just too early than beginning at community college first is just the right thing. Completing one’s Associate Degree and transferring to a 4-Year institution is an excellent option and one that should be celebrated. In the fall of 2017, 34%1 of the total undergraduate student population was enrolled in a community college. Attending a two-year program is a great option that allows a student to strengthen their academic and personal resume and obtain an Associate’s Degree at a very affordable rate. For those who begin at a community college individual states, like Massachusetts, Maine and others offer tuition and enrollment incentives for students to utilize the Associates to Bachelors educational paths.

Ok, but if the idea of going to school after high school is just not in the cards, launching into work is a perfect way to use the gap to analyze current and future goals. Work and learn! The need for trade and skilled professionals as well as individuals working in financial services, healthcare and sales are all critically needed today. In the fall of 2017, 58% of those students enrolled in school after high school was part-time2. High school and recent graduates who are interested in this path, work and earn, are encouraged to continue with their direct employment searches, building their personal network and using a local career center. Investigating trade organizations like the IEBW is also an excellent resource for those thinking of a skilled professional or apprenticeship.

Choosing to attend college right out of high school is not an easy task. It requires a strong evaluation of the student wants, needs and expectations. It should not be based on the fact that everyone is going or even one single consideration. It is about where will the investment; academic, social, emotional, financial and career-outcome will take a student. For if the investment hits the mark then the selection for the college is the “right fit”!!


1 Community College Research Center (CCRC)

2 US Bureau of Labor
College Loan Game

College Loan Game

I hear my son/daughter can get a loan to pay their college tuition bill. I even hear they can be the primary borrower. Yes! True enough, however, there are a few more details.

The average student and family bound for college in September may find themselves in need of a way to assist in paying the remaining Net Educational Cost. College loans are part of the resource available to student and families to help supplement one’s ability to pay for school.

College Loans

Federal Direct Student Loan  

Loans, specifically the Federal Loan Programs have been a long-standing resource for students and families. Born out of the 1960s, updated and revised as the years have gone on, students and parents have been able to access the Federal Loan Programs as part of applying for financial aid. Today, the filing of the Federal Free Application for Student Aid (FAFSA) determines a student and family’s eligibility for need-based aid. The Federal Direct Student Loan (also known as the Federal Stafford Loan) is one resource awarded to students via this process. Packaged and disclosed on a student’s Financial Aid Award, 99.99% of all undergraduate and graduate students, dependent and independent receive some amount of Federal Direct Student Loans. Based on a student/family’s demonstrated need, a portion or all of the loan may be interest-free (subsidized) or interest due (unsubsidized) while the student enrolled. 4.53% is the interest rate for 2019-2020 with a 1.06% origination fee for undergraduate and graduate students. A Direct Student Loan is awarded a six months grace period after a student graduates or separates early and a wide range of repayment benefits to choice. Not a bad gig.

However, when the Federal Direct Loan is not enough, students and families must turn to other resources, including additional Federal and Private sponsored loan programs that require credit approval and are generally more expensive.

Federal Direct PLUS Loan

Offered to parents and managed primarily by the Financial Aid Office, the Federal PLUS Loan Program is a credit-based loan available to parents of dependent undergraduate students. Known in some circles as the Parent PLUS Loan, creditworthy parents can apply for a loan to help pay for school. Applicants must demonstrate good credit with no adverse credit for 90 days before the loan applications as well as no loan default, discharge, lien, and bankruptcy. The loan interest rate, set by the Federal Government is a fixed rate valid from July 1, 2019, to June 30, 2020 -7.08% with a 4,24% origination fee. Loan repayment begins with 30-45 days following the full disbursement of the loan and can be scheduled to run between 10 – 20 years.

Federal GradPLUS Loan

Grad PLUS loan is a credit-based loan available to independent graduate students. The loan is a credit-based loan with the student demonstrating creditworthiness, no adverse credit for 90 days before the loan applications, default, discharge, lien and bankruptcy. Applicants for these loans are required to complete the FAFSA, access their maximum Federal Direct Loan benefits before borrowing under the GradPLUS Program. An applicant can borrow up to their remaining net educational costs. The loan interest rate, set by the Federal Government is a fixed rate valid from July 1, 2019, to June 30, 2020 – 7.08% with a 4,24% origination fee. The loan is generally placed in an in-school deferment unless otherwise requested by the borrower. All GradPLUS Loans are eligible for a six (6) month grace period following their separation from school to establish a repayment schedule amortized between 10-20 years.

Private Education Loans

The rise in educational cost in the 1990s and throughout recent years opened up the need for alternative, private educational loans. Designed as a loan of last resort private educational loans fall into two categories, a private loan for students and one for parents. A private student loan is a credit-based loan available to a student who is enrolled at least half-time at 4-year public or private college or university*. Students who have no credit or minimum credit may be required to obtain a creditworthy co-signer. Interest rates are set based on variable and fixed rates, ranging from as low as 3.8% to 14%. Varies repayment programs are available including deferring the loan payment until six (6) months after the student separates from school. Most loan programs provide a co-signer release, which generally discontinues a parent’s (or other co-signer) financial obligation after 24 or 36 months of on-time. Loans are available through a national, regional lender and other institutions like AAA Northeast Bank.

Protecting the Co-Signer

Parents, grandparents, sibling, and relatives called upon to serve as a co-signer to assist a college student to secure education financing. The co-signer assists with determining eligibility and the interest rate. Typically, there is a co-signer release provision built into the terms of the loan. The release, generally after 36 months of on-time payments, allows the co-signer to be removed from the obligation. Unlike the Federal Direct Student Loan, a private educational loan does not carry a cancellation for death. If the unthinkable were to happen, the co-sign is held liable and will be called upon to pay the loan. Having worked on many in my career, attempting to overturn the lender’s policy is a hard road to travel. To protect the co-signer, all parties involved should consider the use of term-life insurance policy. The policy protects the co-signer during the in-school and initial stages of repayment. With the watchful eye of the holy spirit, a student has protection and resources as they grow old.

* Private loan programs for community college, continuing education, and professional development are available, but individuals need to check with their school for resources.

A private education loan specifically for a parent is also available through some national and regional lender. This loan program is similar to a standard consumer loan, credit-based in nature and where the parent enters repayment within 30-45 from disbursement.

Be a Wise Borrower

Before diving into a private loan application, consider a few things. As stated in another article on creating a payment strategy, this is an annual exercise that is part of a four-year experience. It warrants forecasting one’s four-year needs, the total cumulative cost of borrowing and how it factors into one’s career outcome. Adjusts and changes based on a student’s enrollment status, modifications in educational expenses and changes to a family’s financial profile may require less or more resources. Education Loans can be an expensive resource and should be used as a last resort. Buyer beware and when in doubt …ask questions, inquire and of course, call me


Payment Strategy

Payment Strategy

I’M IN!!!


National Decision Day (May 1) and Open Enrollment commitments have come an gone and now it’s time to figure out how to pay. The deposit was sent in but there are remaining college costs.  Referred to as the “net educational costs,” these charges will soon appear on the college tuition bill hitting the mailbox in July. Costs that unless “resolved” will prevent access to a dorm, the start of classes and earning the right to call oneself a college student. Arrangements need to be satisfied before the billing due date generally in August.

The average student and family bound for college in September may now find themselves in a new stage of stress, figuring out how to pay their remaining educational cost. Like during the search and select stage of one’s college plan, developing a payment strategy is an immediate task for all students and families. A good payment strategy requires a plan that is based on the availability of resources for not one year but the financial needs over the course of a student’s four-year enrollment.

What Was I Awarded?

Double check the Financial Aid Award Letter to determine what has been provided in the form of tuition assistance. Resources from programs administered through the college, state agencies and the federal financial aid programs. Included can be merit scholarships, Institutional Grants, a Federal Direct Loan and/or Federal Work-Study. A state grant or private scholarship may also be included in the award letter is reported to the school.  The difference is known as the “net educational cost”, the amount due to the school.

  • Cost of Education
  • minus College and Private Scholarships
  • Need-Based Grants and Self-Help (Federal Direct Student Loan or Federal Work-Study)
  • the “Net Educational Costs” – I’m what’s owed to the school!

What Are My Resources?

Looking beyond the programs disclosed on the Award Letter, students and families have four primary resources to use to pay the net costs. They include savings, monthly discretionary funds, earnings on investments/insurance and education loans. A strong Payment Strategy may include one or more of these resources. Resources that when used will resolve the tuition bill.

Savings – Investments – Discretionary Funds

Savings, funds accumulate over time, as part of a 529 Plans, education savings accounts, insurance and investments programs can be used to assist in meeting college costs. Conversations with a financial adviser prior to taking a distribution are step number one when thinking of using a resource from this category.

Home equity is another valuable resource for parents looking to capitalize on the value of their home and how it can turn into a low-interest rate and resources for their student(s). Parents in putting their home to work should consult with their local lender or credit union.

Another choice, some time overlooked is the use of a monthly tuition payment plan. When consulting with parents the question I usually ask is have you been paying out of pocket for ice time, AAU sports, sports, dance or other enrichment type programs? Did you just pay off a car loan? Or do you have a relative or family member interested in supplementing the cost of school? If the answer is yes, a Tuition Payment Plan is a great payment strategy.

A Tuition Payment Plan is an interest-free program administered by the college or university and requires ten (10) monthly payments during an academic year. Payments are made from July to April, can equal the entire or a portion of the remaining net educational cost due to the school and many times carry a small application fee. A payment plan allows extended family members to also participate in making tuition payments without assuming any direct responsibility for a student’s educational cost.

Contributions from grandparents and relatives are also a very useful means of paying the educational cost, however, impacts on financial aid eligibility must also be considered.

College Loan Game

The college loan game is the process of looking to last resort resources to assist with meeting educational costs. They include loans that students and parents can seek to obtain including a home equity loan, Federal PLUS Programs and Private Education Loans.

Federal PLUS Program

Offered through the Federal Student Aid Office of the US. Department of Education, the Federal Direct PLUS Loan, commonly known as the parent PLUS loan is a credit-based loan available to parents of dependent undergraduate students.

Private Education Loans

Typically referred to the loan of last resort, a Private Education Student Loan is a credit-based loan available to a student to meet the net educational cost to attend school.

Creating Your Strategy

Before diving into using a private loan application, consider a few things. As stated, this is a four-year process requiring annual calculations and the forecasting of four-year financial needs. Adjusts and changes based a student enrollment status, modifications in educational expenses and changes to a family’s financial profile may require less or more resources. Multiple options can be used to establish and maintain a payment strategy. Unique family resources including offers to help from extended family members (i.e., grandparents) may require more in-depth conversations and decision making. A payment strategy can be call for using one or more resource or program outlined in this piece. Ultimately a student and family should put all of their resources to work to ensure the best financial decision that minimizes excessive and long-term debt and provides the best college option for the student.


This piece is intended to provide education and guidance on strategies to pay the remaining “net educational costs.” We recommend that students and families always consult with their investment, wealth manager or tax professional to determine the impact on any and all financial decisions.