How to Get Smart About Money Automation Before College Bills Hit

Have you ever operated a budget — with success? 

When my husband and I have budgeted before, it’s been sort of a disaster. Here’s a sample conversation:

Him: “Uh, sorry, honey, we had some emergency car repairs.”

Me: “Well, it’s okay because I accidentally went $100 over budget on groceries. I’m so sorry.” (It was always things we couldn’t live without, I swear, like milk and toilet paper — not Pop-Tarts and ice cream!)

When you want to help pay for your child’s college education, are you thinking you’ll need the budget fairy to wave her magic wand? Are you thinking there’s no way you’ll get the hang of budgeting before college rolls around?

Budgeting isn’t always the answer to having enough to pay for college, though. And extreme cheapskate money hacks aren’t always the answer, either. 

In fact, it drives me bonkers when I see blogs and websites that encourage you to make your own laundry detergent to save $34 a year. Or the ones that suggest only showering at the gym to save on the water bill. (Those articles are admittedly fun to read, though they should all be titled “The Best Frugal Ways to Torture Yourself.”)

I read about not budgeting in “Automatic Millionaire” by David Bach. Bach’s premise is that you pay your bills, your emergency fund, tuition — everything — online. (The big takeaway is that you save for retirement automatically, too.)

He says budgets don’t work, and I tend to agree. Budgets can be so impossible because something unexpected seems to crop up every month. If you make a budget work, my hat’s off to you, because I’ve never been able to. 

It’s a really good idea to automate money before your kiddo goes off to college, and not the week after move-in day. Why? Because automating takes some getting used to. 

Why Automate Your Money Before College?

At this point, you might be asking, “This is handy and all, but what does this have to do with college?” 

Great question.

The reason I’m writing about it is because automating can help you keep your financial ducks in a row. Knowing exactly how much is automatically whisked away can help you get organized and it can also help you understand how much you have left over to help your child with college expenses. The “stuff” that’s whisked away are the steady items that you know will come out each month and that are for relatively the same amount — such as your water bill, which usually hovers between $50 to $60 per month. Automating can help you get organized and help you understand how much you have left over to help your child with college expenses. 

Even if you plan to contribute just a little bit toward college costs, automating will still help you more easily see how much is left over at the end of the month. It’s quicker and you know exactly how much is in your account.

What Can You Automate?

Remember how people (just one generation ago!) had to pay all the bills via check? I now marvel at how they had to keep track of it all. 

I remember that my mom used to sit down at the table with a stack of envelopes, her checkbook and her signature roll of stamps. She so very carefully balanced her checkbook several times a month, something I obviously never do because I don’t have to. How did she carve out the time to do that?

Automating offers the solution to a whole host of frustrations: “I don’t like to budget” to “Did I pay that bill already — or not?” Consider these massive benefits:

  • Automating helps you protect your credit. Your credit score can’t take a zillion missed payments. The three credit bureaus — TransUnion, Equifax and Experian — receive information about your financial activity from your utility company, your garbage service and your mortgage lender — everything. Automating ensures that you pay for things on time so you don’t have a ding on your credit.   
  • You get used to it. Simple, right? You get used to living on less. In terms of retirement savings, it’s the fastest way to wealth building because you don’t even miss it. For example, you won’t spend extra money on Target runs, cute new rugs for the patio and whatever else you can’t resist.
  • You ensure that you’re saving money without thinking about it. Automating works beyond paying bills! This is my favorite reason to automate: You can save for your future. Automating savings is a great way to save for college because it automatically funnels your money into an account. (The retirement savings advantages are astounding!)
  • Automating helps you practice living on less. This can be such an advantage. You can funnel your money into a 529 fund or a different type of fund. You’ll never know you’re missing it! Put money into a low-risk fund instead of a 529 plan if college is just around the corner.

Finally, there’s one more benefit: If you’re using automation for savings, it takes some effort to stop making automatic investments. In other words, it might be a major chore to stop automation for important things like college or retirement savings. For example, you might have to go online, remember your login and password, find the button to suspend payments, and on and on. Or you might have to call in and be on the phone with a representative for an hour. (Hardly something you have time to do, right?)

See how this is a good thing? The complicated steps might make it harder for you to stop payments so you continue to put money into your accounts.

How to Automate Your Entire Life

Okay, now I realize that most of you probably already automate. However, here’s the question: What are you missing that you haven’t automated yet? I just realized I’m paying doctor bills by calling into the hospital and our water bill via check. Uh, why?

And if you say, “I’m already automating everything,” are you automating money into savings, too?

It’s not too hard to figure out how to automate your money and long-term financial goals. Simply sign up for autopay at all the companies you make payments to. Automate the following: 

  • Bills
  • Mortgage payments
  • Car payments
  • 529 plan payments
  • Credit card payments
  • IRAs and other long-term investments
  • Emergency fund 

Soon, you can add college payments to the list and you’ll automate them, of course! You can sign up for a tuition installment plan that will whisk that money away before you’ll even realize it. Check out my article on tuition installment plans if you’re curious to learn more about how they work.

Put yourself on autopilot for everything!

Automating Helps You Practice Replacing Old Expenses with New

It may seem like you’re constantly replacing old expenses with new expenses as your child has gotten older. For example, as your child has grown, you may have replaced:

  • Formula for baby food
  • Diapers for Pull-Ups
  • Daycare costs for private school tuition
  • Swimming lessons for swim team fees
  • Youth soccer fees for private coaching sessions
  • Private school tuition for college
  • 529 savings for actual tuition payments 

It seems like once you’re excited to be done paying for one thing, another expense takes its place! (How does that happen?)

It can actually work in your favor when you automate because you can start thinking about which expenses you’re automating now and can later trade for college tuition payments. For example, can you trade your automatic mortgage payment for college tuition?

Here are some examples of current expenses you might be able to trade for college tuition:

  • Your mortgage (wouldn’t it be so exciting to pay it off?)
  • Expensive music lessons
  • Pricey club athletic fees
  • Private high school tuition
  • A car (kids often don’t need them in college)

You Can Still Automate Your Money if Your Child’s Ready for College this Fall

If your child’s getting ready to go off to college and you haven’t started automating your finances, it’s not too late. You can still get going now! 

Figure out how much you want to contribute for college and start socking that amount away into a separate account — just to get used to having that amount subtracted from your accounts before real payments start in July, or whenever your first tuition payment is due.

The key is to take a look at everything once it’s all automated and then figure out how much is left over, particularly now that you can do a “find-and-replace” now that high school’s over. (No private school tuition, remember?!)

Automate Starting Now

Now, I realize you can automate your money to your heart’s content, but the fact remains: You still have to have the money in your checking account to begin with in order to pay for college.

This is where you might have to get creative. If you need to pull back on certain automatic deductions to make room for college tuition, do it. (Just maybe don’t peel back on your retirement accounts unless you’re sure you’re fully stocked for retirement.)

By the way, speaking of retirement (though it’s a little off-topic, sorry, sorry): “Automatic Millionaire’s” premise is that automating your money can even make you rich. If you’ve automatically deducted money from your paycheck into your retirement fund over a number of years, compound interest will make it so easy for you to save a lot of money. And if you haven’t been deducting money automatically from your paycheck up until now, you can still save a comfortable amount for retirement. You just need to make up for lost time by saving even more. I encourage you to listen to “Automatic Millionaire” or buy the book.

Think of all the ways automating (yes, even while your child’s in college!) can help you save your pennies during your child’s college years. One of the truths I know is that you can always have your child take out a student loan to go to school but you can’t take out a loan to retire.

How to Help Your Graduate When He’s Dragging His Feet on the College Decision

How to Help Your Graduate When He’s Dragging His Feet on the College Decision

Your high school graduate may be dragging his feet on the college decision, and it’s not hard to figure out why. During this corona-crazy time, you’re trying to figure out how to put one foot in front of the other. Your teen may be struggling to a degree you can’t even fathom. 

His life has flipped upside down — arguably even more than yours. (Did you withstand a worldwide epidemic that required you to kiss prom, graduation and the senior state track meet good-bye? Of course not.) You might feel a tiny whirl of relief to know that your child may not have to decide on a college until July 1. Whew! (Some schools’ deadlines are still May or June 1, however. If your child had a pile of schools with June 1 or July 1 deadlines, never fear. Most schools still have openings past the deadline.) 

Your child might be a bit fearful of the future. As a parent, these changes have crushed you too, and you might be grieving the loss of “what should have been.” Here’s how to help pilot your college-bound child through the next hurdle (with baggage nobody could have anticipated).

Listen. Talk Less. Rinse and Repeat.

I worked in college admission for 12 years and I heard so many parents say, “It’s my child’s decision, not mine.” I never loved that response because I always knew students wanted their parents’ input when it came to making such a big decision. Now more than ever, your child needs to know that you’re there to help.  

Furthermore, your teen could be taking cues from you. Do you watch the news on a constant loop or fret about the future?

Remember that it might be hard for your teen to articulate everything he’s feeling — kind of like when he was two and couldn’t explain that his shoes were too tight. 

Create a safe communication environment and listen when your child talks. Don’t forget to check your own fears about what’s coming down the pike.

Let your college-bound teen know that you’re there to help him through the decision. Just remember, teens want their parents to help them with this decision, particularly when they’re struggling. Talk about how life can be uncertain but things will get back to normal. 

Take Advantage of Colleges’ Extended Deadlines

Carnegie Dartlet, a marketing services company that specializes in higher education institutions, surveyed 4,848 high school seniors about how current events have impacted their college search. The survey found that many students want an extension to the traditional May 1 National Candidate Reply Date — the national deadline for making a college decision.  

In fact, 67 percent of students surveyed say they want an extension, at least until June 1 or July 1, and those numbers jump to 74-80 percent for underrepresented minority populations and students with higher financial need. 

Breathe! As you can see, your child isn’t the only one who feels this way. 

Many colleges have complied with students’ wishes and extended the deadline to accommodate these needs. Take advantage of the extra time — and be proactive. Launch a pros and cons list. Dive even deeper and do a heart/gut check. Don’t be afraid to take a trip down memory lane with your child. Remind him about the awesome college visit at College ABC last fall where you snagged a picture of him beaming during his college visit.

Ask What’s Holding Your Child Back from Making the Decision

What’s holding your child back from making the decision? Is it all the changes combined — summer orientation changes, school delays and extensions? Is it the distance from home? Maybe it’s you? (Again, you may be unwittingly showcasing some anxiety yourself.) 

Get to the root of the problem. Ask straight up, “Is there any reason why we can’t put down a deposit for School X right now? It’s the school you’ve been talking about all year.” Then listen carefully to your child’s response.

Here are some common reasons that might be holding your child back.

The Coronavirus (or Worry in General)

Everyone’s plans have changed and it could also cause your child to question everything. It’s up to you to be a calming influence. Try to help your child gain some perspective on his college choice. Try as hard as you can to be a positive, uplifting influence. 

In some cases, you may recognize that COVID-19 has aggravated anxiety in your teen and it may be a wise decision for your child to stay closer to home or make a different decision altogether. If necessary, seek outside help.

Distance from Home

The majority (56.2 percent) of public four-year college students attend an institution under an hour’s drive away. Nearly 70 percent attend within two hours of their home, according to the latest Higher Education Research Institute’s CIRP survey.

Your child might be feeling a tad unsettled about making a decision to attend school 10 hours away. Ask if that’s an issue and whether there’s a school that appeals to your high school graduate that’s closer to home. Note: Your child would not be the first one to change his mind at the last minute. It happens — and it’s okay. It’s better to realize this now instead of later! 

Money

Is your cost-conscious child close to choosing a college with a hefty sticker price — which would require a handful of loans? If so, that could be what’s holding him back. (And you might be nervous, too.)

There are lots of ways to remedy this situation. Now that COVID-19 has happened, your financial situation may have changed considerably. If it has, let the college know. You may be able to fill out the college’s special circumstance form, where you can indicate a job loss or some other changes in your financial status, including excessive medical bills or another type of serious expense. 

You can also ask the admission office if there’s still money on the table. Ask:

  • Are there other scholarship opportunities available? Find out whether there are additional scholarships your child can still apply for. There may be some new ones that have popped up since the last time you talked with the admission office! 
  • Is work-study available? Work-study is a federally-funded program that can help your son or daughter pay for college. Your child will work on campus (sometimes off campus) and earn money just like in a regular job. Your son or daughter may not have been awarded work-study at all, and this is the time to ask whether it’s available. If work-study is already plugged into the financial aid award, ask if more work-study money can be added. 
  • Was my FAFSA information correct? Ask some deeper questions about the FAFSA — you might have filled it out incorrectly! Was your expected family contribution (EFC) inflated due to one-time income? (EFC is an indicative number that colleges use to determine how much financial aid you’re eligible for.) Did you include an IRA or 401(k), which isn’t required for the FAFSA? 

The bottom line: Ask the admission office good questions!

Don’t forget to communicate with colleges about changes in your financial situation. If you or your spouse has lost a job, tell the colleges on your child’s short list. Talking about financial changes could change your college-bound teen’s financial aid awards — in a good way.

Seek Answers to Objections

Help your child get the answers to what’s holding him back from making a decision. For example, if he’s worried about the strength of the engineering program between two schools, reach out to the admission counselor at each school to get some more data. Reach out to a professor. Ask more questions! Draw on those relationships you’ve built throughout the process to help your child make a final college decision.

Maybe your child’s holding back because his friends or his girlfriend are all headed to the state school down the road and he’s been planning to go to a school on the opposite coast. (I hated it when this came up when I was an admission counselor!)

If he’s starting to get cold feet, remind him why he initially chose that institution. (There were likely some good reasons!) It’s important that he chooses the best school for him.

Once you’ve gotten answers to everything, sit back and relax. In most cases, you still have time, even if the deadline has passed. When push comes to shove, every student does decide.

Do the Heart/Gut Test

The heart/gut test is something that a former college president of my alma mater used to talk about all the time. He’d explain that it’s not enough to take numbers into account. College isn’t a transactional experience — it’s about people! It’s not just about pretty buildings or the number of electives you have to take. He used to urge students to take into account the feeling you’d get — did your child feel like he belonged at a particular school?

Which campus did your son thrive on during the visit? Did he seem to come alive as soon as he met the tennis team? Withdraw when he met the abrasive engineering professor at your alma mater? Did your daughter light up when she met her admission counselor or the quirky communication studies professor with “Citizen Kane” posters plastered all over his office? 

You get the idea. Don’t be afraid to go deep on this. Also, don’t be afraid to share your observations with your child. Say, “I noticed you loved the tour at College X and chatted animatedly with the tour guide. Do you think you felt just as comfortable at College Y or not?”

Look for the academic, social and financial fit — and do the gut and heart test. Ask your child where he or she felt most at home.

When you know, sometimes you just know.

If your child hasn’t gotten that “feeling” anywhere by now, go back to the drawing board — there are still openings at schools across the country. Another visit might be in order over the summer, though without students on campus, it can be tricky to feel the same energy.

Communicate with Admission Counselors

Contact admission counselors at the schools your child’s still considering. Trust me, my experience as an admission counselor tells me that colleges want to hear from you and build relationships. They don’t want you to go through turmoil alone.

Explain what’s going on and why there are some concerns. Most colleges have trained their admission counselors on how to communicate their college’s COVID-19 response. Talking with admission counselors is also a good way to evaluate how well a particular college has handled the crisis!

Colleges should make your teen feel better about the situation, provide a real human connection and help your child make a final decision.

A Different Decision May Be Necessary — and That’s Okay

Your teen may not be able to stomach leaving to go to college 1,000 miles away at this point, no matter how many times you remind him about his last wonderful on-campus experience. 

This crisis has changed everyone. Tell your child that it’s okay to stay closer to home. Spend time thinking about what other options are out there. Remember, just because your child feels more comfortable with a semester at the local community college, it doesn’t mean he will never go to College ABC. He could be saying “See you later!” 

Take a Deep Breath and Be There 

Sometimes, it takes the good ol’ pro and con list to finally make the final decision. Sometimes seeing the solid “pro” column helps. 

What happens when the “pro” side is a mile long for one school but your daughter really feels the fit more at a different school? Hey, it’s proof that the heart/gut test works!

Teens can feel their parents take an emotional and financial hit during this downturn and need more reassurance and guidance than ever. Support your teen through this all-important decision-making process. Remember, this could very well be the very first really big decision your child has ever made. Think positive: COVID-19 could make you (and your teen’s) decision making processes stronger than ever!

Good luck! I’d love to hear about your child’s final decision!

How to Know if You’re the Victim of Tricky Financial Aid Award Tactics

How to Know if You’re the Victim of Tricky Financial Aid Award Tactics

Got a pile of financial aid awards from various schools cluttering your inbox? Are the paper versions of all those financial aid awards stacked up in your home office? I’m sure you can’t wait to toss them into the recycling bin! (Except for maybe one from a very special school — the one your kiddo’s leaning toward… Yay!)  

Your college-bound kiddo may not have quite decided where he’s going to school. That’s okay! 

Many colleges and universities have tagged June 1 as the deadline for decisions this year — and some have even extended to July 1. Check the National Association for College Admission Counseling (NACAC) College Admission Status Update for the list if you’re not sure about final decision date deadlines for various colleges and universities.

As you take a look at these financial aid awards, you know instantly that they’re not the same. I’m not talking about the types of scholarships or the work-study awards on each one, I’m talking about the layout of each award and what’s disclosed on each. Some colleges even employ a little bit of deception and as a result, may make the school look like it’s cheaper than it actually is.

This can get super confusing, and I encountered this problem a lot as an admission counselor. Parent to me over the phone: “Financial aid awards aren’t the same! Why???” To be honest, I wish there was one standard financial aid award that every college in the country would use.

They’re not standardized, so the best I can do is tell you what to watch out for!

Don't fall prey to the tricky techniques colleges use on the financial aid award! Here's what you need to know.

1: Schools Often Don’t Separate Aid that Needs to Be Repaid from Aid that Doesn’t

Many, many financial aid awards don’t separate gift aid from work-study or loans. In other words, you may see various types of aid — scholarships, grants, work-study and loans — all lumped together. Can you see why that can be problematic? 

Here’s an example. Note: The amounts, scholarships and grants I’ve listed below are part of a completely fictional aid award and for demonstration purposes only: 

XYZ Merit-Based Scholarship: $15,000

XYZ Grants: $5,000

Federal Direct Subsidized Loan: $3,500

Federal Direct Unsubsidized Loan: $2,000

Federal Work-Study Program: $3,000

Private/Alternative Loan: $8,000

Total: $36,500

Grants and scholarships don’t have to be paid back, work-study money must be earned and loans must be repaid with interest. Even when schools put forth a confusing, mixed-up aid award jumble, some colleges and universities don’t do a great job distinguishing between what you need to pay back and what you don’t — like in the example above. 

It’s your job to make sure you understand every line of the aid award and explain it to your high schooler.

Here’s the list again, broken down into categories, so your high schooler can understand it more clearly:

Does not need to be repaid:

XYZ Merit-Based Scholarship: $15,000

XYZ Grants: $5,000

Must be repaid with interest: 

Federal Direct Subsidized Loan: $3,500

Federal Direct Unsubsidized Loan: $2,000

Private/Alternative Loan: $8,000

Must be earned:

Federal Work-Study Program: $3,000

Total: $36,500

I like that layout much better — it’s much easier for a 17- or 18-year-old to understand. 

2. Some Financial Aid Awards Do Not Include the Total Cost

So, this sounds like no big deal, right? You can just look up the total cost of the institution online. Sometimes when you’re comparing financial aid awards, this can get lost in translation, particularly when a college only lists scholarship amounts and it looks like your child will get more money from that college compared to another. I remember one conversation I had with a mom over the phone when I worked in admission that went exactly like this: 

Me: “Hi, Mrs. Jones! Have you and your son, Charlie, had a chance to review our generous financial aid award offer?”

Mrs. Jones: “Hi, Melissa! Yes, we have, but Competitor College XYZ is giving him $5,000 more in scholarships and other aid. That’s $20,000 over four years!”

Me: “Oh, really? Mrs. Jones, did you realize that Competitor College XYZ is $5,000 more expensive than our college?”  

Mrs. Jones: “Oh, I guess that’s not on the aid award. Yes, yes, I’m online now and see that.”

Me: “I know our college is Charlie’s first choice. Would you be willing to pay the $200 deposit today?”

Mrs. Jones: “Yes!”

Hand to heart, that’s exactly how the conversation went. The financial aid awards that don’t include the total cost right on the award may require you to do a little digging. Make sure you know the full cost — tuition, room, board and fees. 

3: Some Financial Aid Awards Include Loans Beyond Federal Student Loans

Let’s bring back my example “aid award.”

XYZ Merit-Based Scholarship: $15,000

XYZ Grants: $5,000

Federal Direct Subsidized Loan: $3,500

Federal Direct Unsubsidized Loan: $2,000

Federal Work-Study Program: $3,000

Private/Alternative Loan: $8,000

Total: $36,500

Direct Subsidized Loans and Direct Subsidized Loans Included

Look carefully at the loans I’ve included — particularly the last line. Many schools include loans on their financial aid awards — usually Direct Subsidized and Unsubsidized federal student loans. Quick details: 

  • Direct Subsidized loans are available to needy undergraduate students. Each college determines the amount your child will receive. The U.S. Department of Education pays the interest on Direct Subsidized loans while your child is in school at least half-time, for the first six months after he leaves school and when your child defers (postpones) loan payments.
  • Direct Unsubsidized loans are available to undergraduate and graduate students but it’s not based on demonstrated financial need. Each school determines the amount you can borrow based on that school’s cost of attendance and other financial aid you receive. Interest accrues on Direct Unsubsidized loans while your child is in school.

PLUS Loans and Private Loans Might Be Part of the Mix… 

Here’s the kicker: Some financial aid awards also include Parent PLUS loans (also called the Federal Direct PLUS loan (Direct PLUS Loan) through the William D. Ford Federal Direct Loan (Direct Loan) Program). Parent PLUS loans are federal loans that parents of dependent undergraduate students can use to help pay for college or career school. The U.S. Department of Education is the lender and the current interest rate is 7.08 percent.

The government doesn’t lend private student loans. Instead, you can get private student loans through a lender such as a bank, credit union, state agency or more. Interest rates are sometimes higher than for federal student loans. (A survey of SunTrust, Ascent, SoFi, CommonBond, Discover and Sallie Mae showed fixed rates ranging from 4.29% to 12.49%, while variable rates were offered from 1.80% to 14.18%, according to Debt.org.)

When financial aid awards include alternative or private loans, it may even look like you owe next to nothing, and that’s why I’m not a fan. It takes a little bit of the critical thinking out of the equation when the college “fills in the blanks.” I’d rather see the out-of-pocket costs at the bottom so you get creative on how you handle these costs — through a side hustle, your kiddo’s summer job, etc. 

Don’t assume everything’s covered — show your kiddo how to understand the difference between loan types.

4: Work-Study May Be Part of the Award Letter

Some schools add work-study as part of the award calculation. I’m really not a fan of this tactic because it looks like work-study’s guaranteed, but nothing could be further from the truth. Your child must earn work-study money. 

Your kiddo has to go through the trouble of visiting the human resources office at the college, choosing and applying for a job and possibly interviewing. Finally, your child must show up for that job. Not foolproof, is it? (Particularly because your kiddo may realize college is a lot of work and decides he’ll need to spend more time studying rather than working. Or he might decide he’ll earn more money working for a local landscaping company or as a server at a restaurant and will forgo the work-study job altogether.)

Furthermore, most schools pay students via direct deposit. The school won’t apply these funds directly to your child’s tuition bill. Your child may need work-study money for groceries or toiletries instead. Work-study is truly meant to be spending money — which is why I never like to see it lumped together with everything else.

The bottom line: Be wary if financial aid is included in the major calculation like it was in my example from above:

XYZ Merit-Based Scholarship: $15,000

XYZ Grants: $5,000

Federal Direct Subsidized Loan: $3,500

Federal Direct Unsubsidized Loan: $2,000

Federal Work-Study Program: $3,000

Private/Alternative Loan: $8,000

Total: $36,500

It’s terribly misleading.

5. Fees Aren’t Disclosed

Do you see the full costs listed on the financial aid award? Are you sure? Many colleges and universities list only the direct costs on financial aid awards — tuition, fees, room and board (if the student lives on campus).

Look carefully at a school’s costs page online or call your child’s No. 1 choice right now to be absolutely sure that you’re considering all costs. Some colleges may require fees like these: 

  • Lab fees (if you’re child is going to major in the sciences)
  • Orientation fees
  • Campus fees
  • Athletic fees
  • Health and wellness fees
  • Tech fees
  • Transportation fees
  • Other fees

Get absolutely clear about which fees are part of the financial aid award. t ny do not list all college costs. 

6. Loan Terms and Interest Rates Aren’t Included

You’ll never, ever see how much fees and interest rates will cost you just by looking at your financial aid award. There are too many variables for that to be possible, including things like interest rate changes. I wish you’d be able to see what it could look like, similar to an amortization schedule you receive when you get a mortgage.

The only real way to estimate the full loan costs over time is to use an interest rate calculator or ask your loan servicer detailed questions about payments over time. I encourage you to do that! 

7. Colleges Leave You in the Dark on Tuition Increases

You’ll never be able to see what the tuition will be in three years, when your child is a fourth-year student. Why not? Because colleges typically don’t implement tuition increases until mid-year — they don’t even know what the increases will be yet. 

The other side of this is that in the majority of cases, scholarships don’t increase as tuition increases. So, for example, the $15,000 scholarship in my example wouldn’t increase two percent if tuition goes up two percent.

Now, it’s possible to find colleges that freeze tuition for you after your first year of college. It’s also possible to find colleges that do offer merit-based scholarships that keep pace with tuition changes. It’s just a matter of figuring all of this out ahead of time. 

Do Some Sleuthing 

I liken this part of the college search to being a detective. You really have to analyze everything, take more than a passing glance at most financial aid awards and explain them in depth to your high schooler. Even if you do get it all, he’s likely in the dark. 

Don’t be afraid to call up a financial aid officer or admission counselor and ask them pointed questions about the financial aid award. Ask them to go through it line by line with you and explain everything in detail. Here are a some really good questions to ask related to everything in this post:

  • Do scholarships increase as tuition increases?
  • Which aid must my child repay?
  • What are the college or university’s total costs? What are the fees?
  • Tell me the exact out-of-pocket cost — without loans and work-study.
  • What are the loan interest rates?

Be your own advocate and have your student go along with you for these conversations. The last thing I want is for you and your student to think your share of the costs is lower than it really is and fall prey to the tricky techniques colleges use.

What does SAT stand for? Plus, Top Tips for SAT Planning During COVID-19!

Hey, hey, are you staying healthy? I sure hope so. 

I’ve been trying to do my part by slowing the spread and doubling down at home (hence all the rapid-fire posts covering COVID-19-related tips!)

I know there’s one thing you may be thinking about if you’re the parent of a sophomore or junior: the SAT. COVID-19 may have wreaked havoc on your SAT plans. 

I worked for 12 years in a college admission office in the Midwest, so most students took the ACT, not the SAT. I even administered the ACT test every few months (those poor students were soo nervous!) so I was always a bit curious about the SAT.

Parents, it may be a few years since you’ve taken the SAT yourself (if you took it at all!) and want to know more about it. I’ll also cover some top tips on how to handle it during COVID-19.

What is the SAT?

What does SAT stand for, anyway? Let’s do a multiple-choice question, just like in the real SAT: 

  1. Scholastic Aptitude Test
  2. Scholar Assessment Test 
  3. Slippery, Atrocious Trial 
  4. It’s not an acronym for anything. It’s just S-A-T.

Got a good guess? It’s D! (Did you notice that I tried tricking you? The SAT did stand for Scholastic Aptitude Test when it was created.) 

You know that the SAT is a multiple-choice entrance exam administered by the College Board. You may even know that over 2.2 million students took the SAT in 2019, according to the 2019 SAT Suite of Assessments Program Results. But do you know the finer points of the SAT? 

The SAT does one major thing: It assesses your child’s readiness for college. Most colleges and universities use the SAT to make admission decisions. Your child’s SAT score, in addition to high school GPA, transcripts, letters of recommendation, extracurricular activities, personal essays and interviews, may also be taken into consideration for admission decisions. Some schools don’t weigh SAT scores as heavily, while others do.

Of course, it’s to your student’s advantage to do well on the SAT or the ACT. Your child is more likely to be able to attend and possibly receive more financial aid from a particular school with a higher score.

The SAT is divided up into three major sections: Reading, Math, and Writing and Language. The Essay portion is optional. Here’s a quick breakdown of what you’ll find on each test.

Reading Test

The Reading Test is 65 minutes long and features reading passages. Each reading passage requires you to answer 52 multiple-choice questions using tables, graphs, and charts. The SAT always includes: 

  • One literature passage
  • A U.S. history passage or pair of passages
  • A passage from economics, sociology or psychology
  • Two science-related passages

Your child may need to find evidence, interpret data and consider implications to answer the questions on this test.

Check out the College Board’s sample Reading Test questions.

Language and Writing Test

What’s on the Language and Writing Test? Easy — this is your child’s chance to be an editor for 35 minutes. He or she will take a look at sentence structure, usage and punctuation in portions of an underlined part of a passage. 

There are four passages and 44-passage based questions. Your child must be able to know how to manipulate words, use punctuation and sentence clauses, as well as understand verb tense, parallel construction, subject-verb agreement, comma use and more.  

Check out the College Board’s sample Language and Writing Test questions.

Math Test

The SAT Math Test covers basic algebra, problem solving, data analysis and complex equations. It’s divided up into two components — a calculator section and a no-calculator section:

  • The calculator section is 55 minutes and contains 38 questions. 
  • The no-calculator section is 25 minutes and contains 20 questions. Your child isn’t permitted to use a calculator. (These portions are conceptual and your child won’t need a calculator to complete them.)

Most of the questions on the Math Test are multiple choice but 22 percent are student-produced response questions, known as grid-ins.  

See the College Board’s official SAT Math Test sample questions

SAT Essay Test

The SAT Essay portion is optional but some colleges require it. (It’s a good idea to do some checking around to find out whether your kiddo should take the essay portion.)

The Essay Test is 50 minutes and measures your child’s ability to read, write and analyze. The two people who score your child’s essay each award between one and four points for a maximum score of eight.

Here’s how it’s done: Your student must read a passage and explain how the writer builds an argument and how that writer persuades using evidence from the passage.

How long is the SAT? 

To sum up, the SAT is 180 minutes, not including breaks. The SAT Essay Test is 50 minutes.

Reading Test65 minutes52 questions
Writing and Language Test35 minutes44 questions
Math: No calculator
Math: Calculator
25 minutes
55 minutes
20 questions
38 questions
Essay50 minutes1 essay

History of the SAT 

Okay, buckle in for a history lesson. The history of the SAT goes back all the way to the first World War, believe it or not. Robert Yerkes, a guy who knew a heck of a lot about I.Q. testing, asked the U.S. Army to let him test all recruits for intelligence using the Army Alpha.

One of Yerkes’ brilliant assistants, Carl Brigham, taught at Princeton and adapted Army Alpha as a college admissions test. It was first administered to a few thousand college applicants in 1926, just for fun. (Yeah, it was one big experiment!)

James Bryant Conant, the president of Harvard in 1933, decided to start a new scholarship program and asked an assistant dean, Henry Chauncey, to find a test to evaluate candidates for these scholarships. (Poor guy!) Chauncey met Brigham and recommended… dum da dum dum dum… The SAT! 

Chauncey talked the members of the College Board into using the SAT as a uniform exam in 1938 for scholarship applicants. The second World War changed everything in 1942. All College Board admissions tests were abolished, so the SAT became the test for everyone. 

When’s the SAT Offered?

This is kind of a trick question because the SAT’s schedule has changed due to COVID-19. The SAT’s normally offered during the following months each year: 

  • August
  • October
  • November 
  • December
  • March
  • May 
  • June

For example, the dates for 2020-2021 are the following:

  • August 29, 2020
  • October 3, 2020
  • November 7, 2020
  • December 5, 2020
  • March 13, 2021
  • May 8, 2021
  • June 5, 2021

What to Do About the SAT During COVID-19

The College Board canceled the May 2, 2020, SAT and SAT Subject Test administration due to COVID-19. 

Check out a comprehensive list of future SAT dates and registration deadlines on the College Board’s website.

Right now, the next SAT is scheduled for the first weekend of June (June 6), but that depends on how the public health situation evolves. The registration deadline for the June 6 test is May 8.

Your student’s school may have originally scheduled a School Day SAT Test, which was cancelled. The College Board is seeking multiple solutions with states and districts about School Day administrations. Learn more about the College Board’s COVID-19 response

Normally, the SAT should be taken by at least the spring of your child’s junior year. Taking it junior year gives your student the opportunity to take the SAT a second time in the fall of senior year before college application deadlines (if necessary).

This is a great time to prepare for the SAT. Your child can take practice exams and spend time preparing during quarantine. 

Should My Kiddo Take the SAT and the ACT?

I stuck this question in here because I heard it every so often as an admission counselor.

You may be tempted to encourage your child to take both the SAT and the ACT — but it’s actually not a great idea. Why?

Think about it this way. Your student will only have so much preparation time for both tests and taking both will slash that time in half. Not only that, but if you pay for tutoring, you’ll have to pay for a tutor class for both tests. 

Colleges have no preference for the ACT over the SAT or vice versa, so focus on one.   

Talk to Colleges

Now you know the answer to “What does SAT stand for?” and more. 

You might be wondering what you’ll do if COVID-19 is still a public health concern in June. Remember, there are still several dates around the corner: August 29, October 3, November 7 and December 5. 

There’s still plenty of time to test (and retest!) so don’t get stressed out about having your child take the test before college application deadlines.

Sure, it might be a bit of a squeeze to get everything done, so it’s a good idea to reach out to all of your child’s prospective colleges. Explain your concerns and hear their recommendations. (They may change their college deadlines in light of this situation, anyway. Call and find out!)

What to Do When College Investments Drop and Your Senior Wants to Go to a Pricey College

Here’s the college scenario as you probably imagined it: 

  • You’d visit your child’s chosen college one last time this spring — just to make sure he loves it.
  • You’d visit with the financial aid office and the cost piece would click into place. 
  • Your kid would be happy, you’d be satisfied. He’d be all ready to make a final decision. 

But things may not be working like that at all. To add insult to injury, the account you’d stuffed money into (since he was in diapers!) may have tanked.

Well-meaning people may have said to your kiddo, “Go to community college! Go to a trade school! Do it online! Work your way through school!”

Sure, your child could attend a less-expensive institution — there are thousands of cheaper options. But a cheaper option might not be a good fit for your child. As you’re well aware, there’s more to choosing a college than just money.

Here’s what to do if the stock market has wreaked havoc on those college invest accounts and your kid is firm in his desire to attend a school that’s, well, not cheap.

First, Here’s What’s Going On

What’s one thing investors hate? 

Uncertainty. Even if you’re not wild about economics, you can see how consumer fears can hamper the economy: 

  • Consumers are nervous about spending money so they don’t spend as much. 
  • Businesses freeze. They do whatever they can to keep operating without as many customers.
  • Unemployment increases. 
  • Many investors sell stocks and flock to lower-risk investments.
  • The value of your portfolio goes down.

COVID-19’s impact on the economy and market has taken a breathtaking toll. In fact, the entire occurrence’s been dubbed a “black swan.” There’s no predictive modeling for an illness — most of the people in the finance industry aren’t epidemiologists. So what will happen next?

Consider What May Happen 

The consensus among experts is that the economy will recover quickly from this crisis. They say we’ve cruised into the fastest bear market in history and the stock market will bounce back quickly. 

However, what about jobs? During the Great Recession, according to the Bureau of Labor Statistics, unemployment totaled:

  • Five percent in December 2007
  • 9.5 percent in June 2009
  • 10 percent in October 2009 

It took 10 years to dig out of these employment levels. It could happen this time around, too. Do you think your job’s unsafe? Could a job loss further hamper your child’s ability to attend college?

Not great things to think about. Sigh.

Analyze Your Investments

Many, many college savings plans (like 529s) automatically move from an all-equities aggressive allocation to a more conservative bond allocation as your child grows older.  

Plain English: This simply means that as your son or daughter approaches college age, risk automatically reduces.

This is how retirement savings should work, too. For example, in the early years of your career, an all-equities portfolio is appropriate, but as you grow older, more bonds (or similarly less-risky investments) should be added to your asset mix. (Check your retirement savings’ asset allocation. Ask your plan administrator if you’re not sure if your account is where it should be.)

Let’s say you invested in an all-stock portfolio and dubbed that “Junior’s College Savings.” If it’s too heavily invested in high-risk funds, don’t beat yourself up. It’s easy to lose track of it over time or listen to some bad financial advice. At any rate, you may feel more comfortable moving that money to something more low risk.

  1. If your child is going into college next year, it’s not a terrible idea to move a year’s worth of tuition into a cash-based investment, like a money market fund.
  2. Talk to your financial advisor and make sure your child’s account is in an appropriate portfolio option.

Know that Your Child’s Not Out of Options

Want to know one beautiful difference between paying for college and floating your own retirement? 

Someone who hasn’t saved a penny may not be able to retire, whereas there are always ways to fund a college education.

Even if your savings have tanked or you’re facing a job loss, your child still has options. Let’s chat about them.

1. Reach Out to Colleges About the Financial Aid Award

Colleges get it: COVID-19 means a whole slew of families may have challenges paying for college.  

Reach out to the college your son or daughter wants to attend. Be sure you’ve gotten a financial aid award from that school. Ask the following questions.

Are there other scholarship opportunities available?

Scholarships in all forms and sizes are widely available, which you may have discovered when you received your child’s financial aid offer. Many are small — between $500 and $2,000 — but they can add up. Ask the financial aid office whether there are additional scholarships your son or daughter can still apply for. The school may be happy to let your child apply for a business scholarship or last-minute theatre scholarship. All you have to do is ask.

Can my child get work-study? Or get more work-study?

Work-study is a federally-funded program that allows your child to earn money through an on-campus job.

Your son or daughter may not have been awarded work-study at all, and this is the time to ask whether it’s available.

Ask if more work-study can be added if it’s already plugged into the financial aid award.

How can student loans help? What are my options?

Loans get a bad rap. They really can be a lifesaver. If they’re done right (in the context of a well-conceived financial plan!) they don’t have to create an insurmountable financial burden after graduation.

In other words, carefully analyze how loans can be pieced into the mix after scholarships, grants and your own financial contributions are exhausted. Ask the college’s financial aid office about your federal and private loan options.

Was my FAFSA information correct?

It’s easy to make a misstep on the FAFSA. Work with the financial aid office to double-check. Did you (whoops!) include your 401(k) retirement? Was your expected family contribution (EFC) inflated due to a one-time income? (EFC is an indicative number that colleges use to determine how much financial aid you’re eligible for.)

The financial aid office at your child’s future school should be able to help you fix errors on your FAFSA.

2. Let Colleges Know You Have Different Circumstances 

Have you experienced a job loss or a significant reduction in income? The college needs to hear about it. There are other situations that could qualify as special circumstances:

  • You support multiple households. (For example, you may live apart from your spouse or you may support elderly family members.)
  • One-time income
  • Funeral, medical or dental expenses
  • Your own education debt

Make sure the college knows about drastic changes in your college savings accounts. Check with the college financial aid office to find out whether you’re eligible to fill out its special circumstance form.

3. Delay Using Funds if Necessary

You may feel as if it’s best to wait a year or consider alternatives to give your investments time to build back up. For some kids, working for a year or waiting a little longer is a good idea. For others, it’s not a good idea at all. Some kids need the structure of an academic environment right after high school.

What’s best for your kiddo? A healthy family discussion could be in order. Here are some ideas to springboard a discussion:

  • Your child could go to his desired college part-time and work part-time to help pay for it.
  • He or she could take a gap year. Almost all schools will allow you to defer enrollment. Deferring enrollment would put time on your side in hopes that investment returns would be more positive in a year’s time.

These options might not be ideal. If you all decide that your child’s best bet is to go to the school he originally chose, remind yourself that your child may be attending college for four years — or more!

There are other years you can apply the money you’ve saved once the markets have bounced back. 

Focus on the Positives

Sure, your child could always attend a less expensive community college for two years and then transfer those credits to a four-year college to earn the degree. But you know he’d be more successful at the liberal arts college or university he wants to attend. There’s some security in knowing you’re making a good decision for your child.

Remember, there’s a lot to be okay with now. The coronavirus epidemic isn’t hitting at the end of July — it’s still April! That still means that there’s time to recover and let things get back to normal before August or September.

Many schools are optimistic that a regular return to the school year will happen by fall. 

Finally, remember that your child is going to his first choice institution, and that deserves some congratulations. Again, some things are more important than “getting a good deal” on a college.

What Your High School Junior Can Be Doing Now During COVID-19

I had a post all ready to go about “how to help your high school junior” — then COVID-19 hit. I almost chucked the whole post out.

It’s easy to see why — it was about tackling the ACT or SAT, making an appointment with your child’s school counselor and more. 

Guess what? Your high school junior can still do most of this get-ready-for college stuff. Your fears that your junior will be way behind is natural. But there’s good news: Colleges and universities are now faced with a whole cohort of students who will have to play catch-up.

Things have changed, yes, but in many ways, they really did stay the same. Here’s how to help your high school junior right now!

1. Have your high school junior talk to his or her school counselor.

One of my friends is a high school English teacher. She’s been watching the progression of her juniors and told me that her school’s college counselor is holding Zoom meetings with families so they’re on track with financial planning, scholarship pursuits and registering for senior year classes.

Talk with your child’s college and career counselor — it doesn’t have to be through Zoom, but it’s a good idea to have a conversation over the phone if it doesn’t happen online. Here are a few things you may want to talk about: 

  • High school schedule for senior year
  • AP or college credit classes
  • Colleges on your child’s radar and any others that the counselor would recommend
  • College admission questions
  • College application timeline questions
  • Scholarship and financial aid options — particularly local scholarships

Gather a list of questions ahead of time with your child and yes, join the call!

2. Start getting your high school junior ready for the ACT or SAT.

The April ACT has been rescheduled for June and the May SAT has been canceled. To put a positive spin on it, this means that your child has more time to study for the ACT or SAT. (Hurray, right?!) Here’s what he or she can start doing to get ready for either test. 

Whether your child is taking the ACT or SAT (please know that one isn’t better than the other and colleges are good with either one), the most important thing to do is get familiar with each section on each test by studying for it.

Here’s a quick comparison between the two tests. 


ACTSAT
Type of testAchievement test that aims to pinpoint what you’ve learned in school.Aptitude test that analyzes your verbal and reasoning skills.
Sections of the testEnglish, mathematics, reading, science and optional essay testsReading, writing and language, math, optional essay tests
Test length2 hours, 55 minutes (3 hours, 55 minutes with essay)3 hours (3 hours, 50 minutes with essay)

First things first. Suggest that your son or daughter does a diagnostic test. Time pressure is a huge factor on the ACT and SAT, so finding out how well your son or daughter can handle that is a great place to start. For example, if your son has trouble finishing the math test but does well in all other tests, that’s a good place to focus.

Make sure your child takes an official ACT practice test or SAT practice test to pinpoint weaknesses. 

A few suggestions:

  1. Have your child time each test accurately — yes, to the second! You can be a big help here.
  2. Be sure your child takes the required break, just like the regular test. 
  3. Eliminate distractions. 
  4. Try to help your child simulate actual test conditions as much as possible. Have your kiddo go through all the tests in order to get a feel for what it’ll be like. 

Once you’ve identified which test or tests will be a challenge for your son or daughter, it’s time to practice! You can find all sorts of mock tests online that resemble the actual test and you can also buy study books, too.

3. Make a list of schools. 

In lockdown from COVID-19 right now? It’s a great time to bend your heads over a laptop and start doing some research. What are the characteristics your child wants in a school?

What’s on your own wish list? (You may have to be careful how you phrase this, depending on how open to your input your high school junior is.) Consider: 

  • Academic programs
  • Athletic programs
  • Extracurricular opportunities
  • Location
  • Scholarship opportunities
  • Parent/family connections
  • Word of mouth that a school is excellent
  • Other factors that make that particular school appealing

Next, take a look at your child’s credentials and learn the colleges’ admission rates, median GPAs and SAT and ACT scores to figure out whether there’s any chance of admission. 

  • Any school that admits only a small percentage of applicants is a reach school. A college should be considered a reach for your kiddo if her test scores and GPA are below (or at the lower end of) what a college typically accepts.
  • On the other hand, her GPA could align with that of accepted students. Bingo! You’ve identified a target school!
  • A safety school is one that accepts a high percentage of applicants. Your child’s GPA and test scores go above and beyond the qualifications.

You may want to start a handy spreadsheet to identify these schools and continue to add to the list.

4. Do a virtual visit.

So many schools are hosting virtual visits right now — they’re making their own and hiring companies to complete virtual visits if they didn’t have comprehensive virtual visits before COVID-19. It’s virtual visit time! Check out my post on technology tips during COVID-19.

Depending on the school, you might experience simple click-through photos of different buildings. On the other hand, you might encounter really cool interactive options that offer photos and videos plus 360-degree photos. Some of these sites really do a great job of appealing to visual learners!

5. Reach out to colleges. 

Virtual visits can go beyond just a virtual tour of the campus. You can reach out to an admission counselor, financial aid officer, coach — anyone who normally would have been on your list for a regular visit. Call the admission office and ask whether you and your son or daughter will be able to visit with these people using tech options. Doing this gives you a more comprehensive look at what a college has to offer. Make a list of questions you and your high school junior would like to ask, including:

  • Campus life (including meal plans and housing)
  • Majors and minors the college offers
  • Admission requirements
  • The application process (including whether that will change due to COVID-19)
  • Cost of attendance and financial aid options

And yes, join your teen on this call! It’s just like a college visit.

6. Have your high school junior laser focus on grades and updating that resume.

My high school teacher friend says, “Our school has asked that we focus more on our students’ well-being than academics, but that doesn’t mean they don’t learn anything. My juniors will finish Macbeth tomorrow!” She says she usually teaches Shakespeare by reading aloud but now uses YouTube clips, questioning and EdPuzzle to pull it all together. “My school and many others were lucky enough to already implement tools like Canvas, Blackboard or GoogleClassroom prior to this, so the challenges have been slightly less stressful,” she says.

She also told me this. “I also teach three sections of seniors, and they have divulged that they are dealing with an all-new style of senioritis. Now they struggle to get online to attend Zoom meetings because their bed is calling out to them. When attending school traditionally, the greatest senioritis temptations were to skip this chapter, do that assignment in study hall, or show up five seconds (or minutes) late. Now, classes take place in their living rooms, dining rooms and bedrooms next to televisions and gaming systems. The temptations to do something else other than school is greater than ever.”

Yikes. It’s easy to see how juniors can fall prey to this, too. But just because school is taking place in dining rooms and living rooms and feels totally not like school, it’s more important than ever to keep academics top of mind.

Some teachers have optional office hours, so students are encouraged to make contact when they are confused or frustrated. Your junior can take advantage of this to focus on that all-important GPA and even get help formatting her resume.

Your high school junior might stay camped out on a tablet, phone or laptop all day. Don’t forget to encourage regular breaks — kids need to get up, take a walk or run and get the blood going again.

7. Have the scholarship and money talk.

Have you and your child had the money talk yet? It may be time. (Check out 5 Top Tips for Easing Financial Fears About Paying for College.)

Have you had to shut off the app to your retirement account because you really aren’t interested in watching it drop anymore? Even if you aren’t paying close attention to your retirement accounts, maybe you are paying attention to your teen’s 529 plan, custodial account, savings account — or wherever you’re stashing your child’s college money.

First, the good news is that your child is a junior and many, many experts expect the stock market to recover in a jiffy once the worst of the coronavirus outbreak is over.

There’s also good news for student loan borrowers. Interest rates have dropped to record lows. Federal Direct student loans may dip to 1.5% to just above 3% for 2020 student borrowers — possibly even lower.

The Federal Parent PLUS loan could come down almost 2%. Private student loans may start as low as 3%.

Finally, don’t forget to come up with a plan to tackle scholarships! The College Board offers a scholarship search tool you can look at together and it’s a good idea to talk to your high school junior’s guidance counselor about community scholarships.

Come Up with a Plan for the Fall

Your junior will experience a time crunch in the fall. High school juniors are a hard-hit group (after this year’s seniors, of course.) Your junior will have to squish in:

  • Any of those college visits you and your junior didn’t experience this spring.
  • Any academics and extracurricular activities he or she missed this spring will be pushed into the next academic year.
  • ACT/SAT makeup dates will have to happen in the fall or winter.

What other stressors will show up later? Discuss these changes with your high school junior so you’ll both know how you’ll tackle them in a way that (maybe) isn’t so stressful.

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