Ed Bove-Beacon Blog

Finally Made It!

Do any of you remember the old Jack Lemmon film "The Out of Towners"?  (They've since done a remake, but I'm a purist and I like the original.)  It was a hilarious movie from 1970 about a small town couple traveling to New York City and everything that could possibly go wrong with their journey did.

Well, I had a similar experience tonight in reverse.  I was heading out of Newark to San Diego to attend my upcoming college planning conference.  And it was a real Murphy's Law kind of flight.  Delays...unscheduled stops...inedible dinner...car rental snafus...you name it.  So I'm just getting into my hotel room now at a time that is the equivalent of 4:45 a.m. back home in NJ.

Needless to say, I'm completely exhausted.  But at the same time, I'm very wound up.  So I figured I'd post a quick message here before I hit the sack.

I'm really excited to be here to spend the next three days masterminding with my peers and getting invaluable insights from my mentor Ron Caruthers.  I'll post more as the meetings continue, but for now, I'm going to get some much needed sleep.

Stay tuned!

Number of Colleges Costing $50,000 Or More Increases Tenfold

The number of private colleges with costs of attendance of $50,000 or higher has jumped to 58 this year, according to The Chronicle of Higher Education.  Last year only five schools charged that much.  If that's not alarming, I don't know what is!

College costs in general have risen much more rapidly than the costs of other goods and services, according to a related article in the New York Times.  Costs are up 4.3 percent this year at private colleges and 5.9 percent for in-state students at public schools, according to the article.

If this isn't a wake up call to families of college-bound students, I don't know what is!  People had better start planning on how to deal with these spiraling costs!  Planning on positioning themselves to be eligible for the most possible aid.  Planning on how to best pay for their share of this enormous tab without putting themselves in the poor house.  Planning on finding the best schools that offer the most generous aid packages, and so much more.

People spend more time planning a $2,000 vacation than they do planning for how to handle a potential $200,000 price tag for a college education.  Time to wake up America!

Revamped Tax Credit Helps People Who Are Paying For College

Many people will be able to offset their college expenses over the next two years under the new American Opportunity Tax Credit. This tax credit is part of the American Recovery and Reinvestment Act of 2009.

Here are six important facts to know about the new American Opportunity Tax Credit:

1. This credit, which expands and renames the existing Hope Credit, can be claimed for qualified tuition and related expenses that you pay for higher education in 2009 and 2010. Qualified tuition and related expenses include tuition, related fees, books and other required course Materials.
2. The credit is equal to 100% of the first $2,000 spent and 25% of the next $2,000 per student each year. Therefore, the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualifying expenses for an eligible student.
3. The full credit is generally available to eligible taxpayers who make less than $80,000 or $160,000 for married couples filing a joint return. The credit is gradually reduced, however, for taxpayers with incomes above these levels.
4. 40% of the credit is refundable, so even those who owe no tax can get up to $1,000 of the credit for each eligible student as cash back.
5. The credit can be claimed for qualified expenses paid for any of the first four years of post-secondary education.
6. You cannot claim the tuition and fees tax deduction in the same year that you claim the American Opportunity Tax Credit or the Lifetime Learning Credit. You must choose to either take the credit or the deduction, which ever is more beneficial for you.

Education Credit Expansion Will Help At Tax Time

I think my brain is ready to burst after having a ton of tax info crammed into it at today's IRS Nationwide Tax Forum in New York City.  And there's more to come tomorrow.

A multitude of tax law changes take effect that will benefit many taxpayers this year.  I'll be posting much more about all that on my tax blog in the coming days.

But before I rest my aching head for the night, I wanted to at least give a quick mention to one specific tax law change that should be of great interest to all of you reading this college planning blog.

There has been a major revamp and expansion of the Education Credit, which will result in many more taxpayers with children in college qualifying for bigger tax credits this coming tax season.

I have to get to be because I have to get up bright and early to head back to the city for Day 2 of the IRS Forum.

But keep checking back here over the next few days and I'll give you all the details on the expanded program.

This will be very welcome news for many of you!

Cash for Clunkers Program Ends Tonight

If you want to get a rebate for trading in your old gas guzzler for a new fuel efficient vehicle, you have until 8 o'clock tonight to do it.

That's when the federal Car Allowance Rebate System (CARS), as it is officially known, comes to an end.  As of last Thursday, the CARS program has recorded more than 457,000 dealer transactions worth $1.9 billion in rebates, according to the Department of Transportation.

Now you may be wondering:  What does this have to do with college planning?  Well, if you're thinking of getting a new car anyway, this program will save you up to $4,500 in rebates.  Would an extra $4,500 help put a dent in some of those college costs?  I'd say so.

Sometimes you have to think outside the box when it comes to planning for college.  It's more than just looking for financial aid or getting student loans.  Sometimes it's a matter of finding ways to free up money you might otherwise be spending to use toward your college costs.  It's all about cash flow folks.

The program provides rebates of up to people who turn in their clunkers for fuel-efficient vehicles. Most consumers have turned in trucks and SUV’s in exchange for passenger cars, according to the DOT.

Transportation Secretary Ray LaHood said that the Monday night deadline will allow car dealers and buyers plenty of time to finalize purchases and submit applications for rebate from the remainder of the $3 billion provided by Congress.

Applications for rebates will not be accepted after 8 p.m. EDT Monday.  So if you've been thinking about taking advantage of this rebate program, today's the day!  You've got no more time to waste.

For more information, visit the program's official website at www.CARS.gov.

If you want to get a rebate for trading in your old gas guzzler for a new fuel efficient vehicle, you have until 8 o'clock tonight to do it.

That's when the federal Car Allowance Rebate System (CARS), as it is officially known, comes to an end.  As of last Thursday, the CARS program has recorded more than 457,000 dealer transactions worth $1.9 billion in rebates, according to the Department of Transportation.

Now you may be wondering:  What does this have to do with college planning?  Well, if you're thinking of getting a new car anyway, this program will save you up to $4,500 in rebates.  Would an extra $4,500 help put a dent in some of those college costs?  I'd say so.

Sometimes you have to think outside the box when it comes to planning for college.  It's more than just looking for financial aid or getting student loans.  Sometimes it's a matter of finding ways to free up money you might otherwise be spending to use toward your college costs.  It's all about cash flow folks.

The program provides rebates of up to people who turn in their clunkers for fuel-efficient vehicles. Most consumers have turned in trucks and SUV’s in exchange for passenger cars, according to the DOT.

Transportation Secretary Ray LaHood said that the Monday night deadline will allow car dealers and buyers plenty of time to finalize purchases and submit applications for rebate from the remainder of the $3 billion provided by Congress.

Applications for rebates will not be accepted after 8 p.m. EDT Monday.  So if you've been thinking about taking advantage of this rebate program, today's the day!  You've got no more time to waste.

For more information, visit the program's official website at www.CARS.gov.

Unemployed Graduate Sues College For $70,000 In Tuition

A Bronx woman is suing Monroe College to get back the $70,000 she spent on tuition because she has not been able to find a job since graduating in April, according to a published report.  You can't make this stuff up, folks!

Trina Thompson, 27, field suit in Bronx Supreme Court after failing to find employment since she earned her bachelor's degree, according to a New York Post story.

The information technology student accused the school of not doing enough to help her find a job, the story stated.  She alleged that the college's Office of Career Advancement has not delivered on its promise of providing leads and career advice, according to the report.

A Monroe spokesman told the Post the lawsuit is without merit, insisting the school helps its graduates with their career development.

The graduate who lives with her mother, Carol, a substitute teacher, is barely making ends meet at the moment, according to the story.

From my viewpoint as a college planner, this excerpt from the story jumped out at me:

As if being unemployed weren't enough, Trina's student loans are coming due, saddling the family with more debt, the mom said.

"We're going to be homeless, and we'll still have a student loan to pay," Carol said.

We all know the economy is bad and it's a very tough job market out there.  But once again, as a college planner, I can't help but wonder: If Thompson had done some meaningful planning on how to fund college, perhaps she would at least not have all this debt hanging over her head now.

Bad enough she can't find a job, but now she's going to be dragged down further under the weight of huge student loans.

Don't let this be you.  There is a better way.

Comparing the Value of College Planning Services And Fees

I came across an interesting New York Times article about the growing field of "independent college counselors."  To make a long story short, the article discussed how these advisors coach families on how to get their children into the college of their choice.  And in turn, families are paying anywhere from $14,000 to $40,000 for this advice.

Yes, you read that right: $14,000 to $40,000!

Unless I missed something, I didn't see anything in the story that said the counselors were offering any type of advice on how to pay for college, how to qualify for financial aid, how to position them to get the most aid or anything of the sort.  They were paying tens of thousands of dollars just to be coached on how to get into school!!!

Please indulge me for a moment here while I blow my own horn.  Among my college planning services, I assist students in selecting schools, choosing majors, doing applications and critiquing essays.  Then I advise parents on ways to lower their expected contribution; show them how to qualify for the most aid; help them determine which schools will provide the most aid; do the financial aid paperwork for them; guide them on how to negotiate for better aid packages; and then work with them to put a plan in place to how to pay their portion of the college costs without sacrificing their futures.

AND I DO ALL THAT FOR A FRACTION OF THE FEES MENTIONED ABOVE!

This is a quote from one of the counselors mentioned in the article when asked about her fee:

“I’m at the top of my field. Do people economize when theyhave a brain tumor and are looking for a neurosurgeon? If you want to go with someone cheaper, or chance it, don’t hire me.”

I couldn't have said it better myself!  I will never apologize for my fees.  The people who hire me will be the first to tell you they've gotten back many times over what they paid me, in addition to having the peace of mind of someone guiding them through this perplexing process.

Others would rather save a buck and, sadly, have no idea how much they may have actually lost in the process.

In case you'd like to read it, here is the link to The Times story.

Rutgers Tuition And Fees Are On The Rise Again

Rutgers University is raising its tuition and fees by 3 percent, according to published reports.  The increase is part of a $1.9 billion budget approved yesterday by the school's board of governors, the Star-Ledger reported.

While the increase is less than the previous two years - 8.5 percent in 2008 and 7.8 percent the previous year - it will still hit students and their families in the pocketbook at a time of economic uncertainty.

In-state undergraduate tuition will increase by $278 to $9,546, while new out-of-state students will pay $20,456, or $974 more than last year. Average undergraduate fees rose $68 to $2,340.

The board also approved a 4.4 hike in housing costs. When all the bills are totaled, the average Rutgers in-state undergraduate living on campus will pay $22,262, or $780 more than last year.

To help offset those costs, officials said, the university added $2 million to its chest of grants for needy students.

According to the Star-Ledger story, the smaller than usual cost increase was mandated by the state budget, which caped tuition and fee increases at 3 percent for all of New Jersey's public colleges and universities.

Even so, Rutgers carries one of the higher price tags of among the nation's state colleges.

The story indicated that university officials had feared they would be forced to make massive cuts in staff, classes and student services as a result of cuts in state funding.  But anticipated deals with the two main teaching unions along with federal stimulus funding helped avert the potential crisis.

My question is:  Where's your stimulus to help you pay for all this?

I'm not just the president...

Remember those old commercials for Hair Club For Men?  The narrator always said: "I'm not only the president, I'm also a member."  Well, I can say much the same think about my college planning practice.

If you're reading this blog, it's probably because you have a high school student who's planning to go to college.  And for what it's worth, you should know that I am in the same boat as you.  In fact, that's how I got my start in this business.  When it was time for my daughter to go to college several years ago, I dutifully went through the whole college financial aid process on my own, and thought I did an okay job.  It was only later when I happened upon a presentation by a college planning expert that I found out that what I didn't know was costing me to lose thousands of dollars!

That motivated me to learn everything I could about the entire college process.  Not only how to pick the most suitable schools and maximize my aid eligibility, but also how to pay my portion of the cost without driving myself into the poor house.  And I've made it my mission to share that knowledge with others who face the same daunting task that I did.

Now, three years later as my sons graduate from high school, I have a plan in place to get all my children through college without going broke!  I'm taking advantage of every available strategy at my disposal and I'm sharing those same strategies with my college planning clients.

Are you ready for the college process?  Don't you owe it to yourself and your college-bound child to get every edge you can find.  After all, what you don't know can hurt you.  A lot.

I should know.  I've been there and done that.  But I'm not making the same mistakes this time as these guys get ready to head off to college.

Congratulations to my twins, Michael and Eddie, on their high school graduation!  Looking forward to a very bright future for you both.

New Workshops Coming In July

As a result of the overwhelming attendance at our recent workshops, I have decided to add two additional workshops to the schedule in July.  As much as I love to spend my summer days at the beach or the ballpark, I feel a sense of obligation to give as many people as possible a chance to get this vital information.

Can you imagine looking to buy a new house without first figuring out your price range or knowing anything about the neighborhood?  Well that's what it's like trying to start the college process without first gaining this invaluable knowledge.

The workshops are scheduled on Saturday, July 11th at 11:00 a.m. at the Springfield Public Library and on Tuesday, July 14th at 7:00 p.m. at the Maplewood Community Center.  For more information or to register, please visit www.beaconworkshop.com

THESE WILL BE THE FINAL WORKSHOPS OF THE SUMMER, SO DON'T MISS OUT!