Back to College -- Debt Free (Part 1)

When Bethany was four years old, she came running in the house sobbing uncontrollably. I smoothed her blond curls and held her, “What’s wrong, Bunny?”
“I don’t want to leave you and go to college!” Her chubby arms held my neck tight.
“Um, well, Bunny, you don’t have to go to college any time soon!” I soothed, while rubbing her back.
She sat up straight, “I don’t?”
Wiping away her tears, she sniffed, “Good! Can I go back to Julie’s house and play again?”
I figured out later that all the drama was because Julie’s older brother was leaving for college and her friend’s family was sad to say goodbye. She thought she was going to have to leave us and it made her sad.
Fast forward the better part of two decades and she’s now a rising senior at Moody in Chicago, majoring in media communications. She’s not crying when she goes back to school, although we miss her. The good news is that she, along with all our other kids, are graduating debt-free! We don’t have any student loans and we didn’t have to refinance our house. Here are a few quick tips to pay for college. For more info, email assistant@elliekay.com and ask for the “College Crunch File.”


1. Make the Right Choice – Choose a school not because it’s the best, but because it’s the best value. Change the conversation from “I’ll go to the best college that I can get into” to “I will go to the school where I can get the best education possible for the least amount of student loan debt.” Our son, Daniel, chose the University of Texas (Arlington) over the scholarship he got to Syracuse and TCU because he would still have 60K in student loan debt after the scholarships ran out. He graduated with honors and a degree in journalism. He’s a working writer in Texas and doesn’t regret his college choice.

2. Save Big on Books by Renting – The average student pays more than $600 for course materials – the largest expense after tuition and room and board. I’ve recently partnered with Follett and found that by renting textbooks through their Rent-A-Text program, students can cut costs by 50 percent or more. CafeScribe’s digital textbooks are another great way to save, and both options are available to purchase at more than 800 Follett bookstore locations and online through efollett.com. Students at non-Follett schools can also purchase their digital textbooks on CafeScribe.com. I ordered Joshua’s textbooks this week and saved 52%!!

3. Make Scholarships a Part-Time Job – Millions of dollars of scholarship money go unclaimed every year. This is free money that parents or prospective students who are willing to do some detective work may find more quickly than they think. Go to www.collegeboard.com or www.salliemae.com to find scholarships that might be a fit for you.

4. Create a Budget, and Stick to It – As a parent of a college student, your love for your student is unconditional, but your money is conditional. That’s what we’ve always told our kids. To ensure students are making the most of their money, set a budget for spending and manage it by loading funds on a campus card to help track spending. And determine which on-campus retailers accept financial aid to be certain you’re making the most of your college dollars.

Ellie Kay
America's Family Financial Expert (R)
 

Give the Gift of Education

Christmas is one of my most favorite times of the year and this year, more people are getting into the idea of gifting than last year. In fact, according to a recent survey, 73% of consumers say that they will spend the same as last year during the fourth quarter, and 18% of consumers report that they will spend more. So spending is back up again, but I think that strategic spending is more important now than ever.
It’s important for consumers to be careful and thoughtful in the decisions they make when it comes to buying gifts this holiday. That’s why I’ve partnered with Upromise to tell my friends about the gift of education. So while parents and grandparents (even favorite aunties) are splurging on kids, why not work on saving for kids, too by providing for that cute kid’s college education?

You can open a 529 account for any beneficiary, or gift money using Ugift into an Upromise Investments 529 plan. If you don’t already have a 529 plan, then you are really missing out because the contributions can benefit from tax deferred growth. Also, gifting into one of these plans this time of year also means that you can possibly take advantage of year end tax deductions. Just check to see if you are eligible for states income tax deductions or credits for saving for college. For example, parents and grandparents can contribute as much as $13,000 ($26,000 if married filing jointly) into a 529 plan without incurring gift taxes. A special rule allows married couples to gift up to $130,000 ($65,000 if single) as long as no additional gifts are made to that beneficiary over a five year period. This also applies to recent college grads who might appreciate a meaningful gift to help pay a student loan payment. Plus, you don’t have to be a parent or grandparent to participate, other friends and family can make contributions to your child’s 529 plan by gifting money or by buying gifts, which brings me to my next point—how to save money by spending money.

Most people, know about Upromise from signing up for their buying program. I’ve been participating for years by going to Upromise.com and then purchasing through participating online retailers. These are stores where I would shop anyway and I get anywhere from 1% to 25% back for the purchases I make. And our family isn’t the only one doing this. Last year, during the holiday season Upromise members received $12 million in college savings rewards from eligible holiday spending. Because membership is free and members have collectively earned $575 million in college savings from purchasing items online or even by buying gas or groceries. I book a lot of travel for my business and often find myself eating out—all these are also included toward my children’s 529 plans.

So consider giving the gift of education to a child you love—either by saving or spending, and the world will be a much smarter place!

Happy Holidays!

Ellie Kay
America’s Family Financial Expert ®
www.elliekay.com

College Debt - Ellie Answers Your Questions!

One of Yahoo's most popular videos was yours truly on ABC NEWS NOW earlier this month answering your questions about college grads as well as debt!

Here's the scoop:

Q. Our daughter just graduated from UCLA and we’re very proud of her. But even though she has a prestigious degree, she still hasn’t been able to locate work. Should we allow her to move in with us until she finds employment?

Bill and Carol from Quartz Hills, CA via facebook

Ellie: This is a tough one! As a mom of kids in this age group, I know it’s a fine line between enabling and empowering and it’s definitely one of those individual decisions. What may be right for a particular child may not be right for another one. I think you ought to support her emotionally and psychologically, letting her know you believe in her. You can also offer to help with resumes or job research. But I would make the offer to have her move in with you as a last resort only. Furthermore, if she does move in with you, it’s important to sit down ahead of time, come up with a responsibility/income agreement and have both parties subscribe to the guidelines.

Q. My husband and I have a son who graduated last year and could not find work, so he moved in with us until he could find employment. He found a modest job, and is not making very much money. He decided that continuing to live with us would be a better financial option than paying rent on a limited income. I love my son, and he’s only 23 right now, but I’m afraid of a “Failure to Launch” syndrome and I need to know what you would advise me to do.

Allana from Lancaster, PA via online contact form

ELLIE: OK, the Failure to Launch syndrome, it’s every parent’s nightmare. We finally have an empty nest, then boomerang children come back to inhabit a place where they no longer naturally fit. I think, Allana, that it is imperative that you and your husband develop an comprehensive exit strategy for junior. Make sure this plan requires that he pays room and board with you, that he develop a clear budget and make himself accountable to you (while he’s living at home) and then be clear about D-day. The day he will depart. Be loving but firm. Remember that the decisions you are implementing with him today will be the precedence you set for tomorrow. You and you alone, enable the boomerang effect, yet you also have the power to put a stop to that boomerang before it’s ever launched. Then you won’t have a “Failure to Launch.”

Q: I am a 26 year old single girl with a bachelor's degree but not yet a Master's. I am working with children in a library setting currently and am considering various Master's programs. (Library Science included). I would have to take out loans for the program though, and I am not sure that taking on that debt would be a wise thing, even though it would lead to a professional job. What is your advice for women around my age who eventually want to marry and have a family and do not want the burden of school debt? I have read some of your books and very much appreciate your insights and time.

Jen Crouse submitted via Online Contact Form

Ellie: It's admirable that you desire to go back to college for a master's while you are still in your twenties and your work with children sounds very gratifying. Ellie usually recommends no more than 10K in student loan debt for any program (bachelors or masters). Instead, you could look into some of the following:

Step 1
Apply for a scholarship. There are merit based graduate school scholarships out there so go to www.salliemae.com which lists almost 2 million scholarships. Talk to the admissions office at the college or university at which you'd like to apply. They can give you advice on applying for their own scholarships (if they have them) or point you to the appropriate federal and/or state scholarship programs.

Step 2
Look into a fellowship or assistantship. Many colleges and universities offer programs that enable you to get a master's degree while doing research or assisting professors in the department in which you wish to study. This is a viable option that also enhances your hands-on experience in your chosen field.

Step 3
Talk to your employer. Many employers are willing to foot the bill for a master's degree, especially an MBA (Master of Business Administration). Talk to someone in your company's Human Resources department to get more information. Or another option is to talk to a military recruiter to join the guard or reserves. The Army, Air Force and Navy will pay up to $65,000 in student loan debts if you qualify for the program.


Q. My husband and I want to help with our son’s college expenses (he graduates in two years) and we don’t want him to be straddled with huge student loans. Several of our friends and other family members have said, “Just take out a second mortgage or use the equity in your home to pay for college.” What do you think about that?

McKenzie Thomas from Stanford, CA

Ellie: I believe that you should never borrow on your own future to pay for your child’s future. In any discussion of college costs, it’s important to keep priorities straight. Your kid’s education shouldn’t cost you your retirement. This means it’s not a wise idea to take out a home equity loan, an equity line of credit or refinance your mortgage in order to pay for school. This would reduce the amount of equity in your home, increase the risk of possible foreclosure and incur costs in interest charges that may cost more if the term on the new mortgage is greater than the remaining term on the existing mortgage.

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Q. My son-in-law just graduated with his Masters Degree in Education. They have had a hard time while he’s been in school and don’t have the best credit scores. They’ve asked us to co-sign on a new automobile loan and we are reluctant. What do you think about co-signing for loans?

Amanda from Wichita, KS via Ellie Kay’s blog

Ellie: Since you son-in-law needs a co-signer, it means their credit is so risky that no lender will give him money on his own credit history. The question is: why should you? Even though it may come across as “helping a family member out” it’s still a business transaction and when you set the precedence of co-signing on a loan—be prepared to do it again and again. If not for the same person, then for another friend who may say, “well, you did it for Daniel, why not me?” You have to assume you will be the one repaying the loan & you won’t have the associated asset, so it can’t possibly be a good business move.

Ellie Kay

America's Family Financial Expert (R)

www.elliekay.com

College Grads Avoid Debt Trap

Son, Daniel graduates from college in this happy snap and it's that time of year when proud parents of the class of 2010 gather to watch their children graduate from college. I was recently talking about this topic on ABC NEWS, Good Money where you can watch the clip.

After the hats are tossed, tears are wiped away and the celebratory cake is gone—the graduates will begin their new lives in the real world. But this year’s graduating class faces a wretched job market where there may be as many as five candidates for every job. Consequently, one of the most daunting tasks becomes the challenge of not falling behind on student loans. While challenging times can build moral fiber, you don’t want to build character by getting involved in the debt trap.

Q. First of all, what are some of the consequences that graduates face by getting behind on student loans?

Ellie: As a mom of kids in college as well as a recent graduate, I know personally, how difficult the job market is and what a challenge these graduates face. First of all there will be interest charged for late payments as well as fees that will inflate the amount they owe---and chances are good that they owe too much as it is! If you default, the government could garnish your wages and withhold your tax refund. Not to mention a huge hit on your FICO score, when you’re just starting out and trying to build a good score that will help get lower interest rates on a car or a house. This isn’t a good way to start your post-graduate life!

Q. But you say there is good news and that these dire consequences are avoidable, as least as far as federal student loans are concerned. The key is to understand your options and take action before you fall behind on payments. The first tip you list is to understand your grace period, when do students have to start paying back these loans and how do grace periods vary?

ELLIE: Borrowers typically have a few months after graduation before they are required to start repaying their federal student loans. For most federal student loans, the grace period is only six months. Most loans have up to ten years to repay. It’s important that you contact your loan provider and find out when the statements begin—especially if you haven’t received notification yet.

Q. What if the graduate has trouble finding work or they find an entry level job that typically doesn’t offer much in the way of compensation? Is there recourse for the amount they are required to pay for their loans?

ELLIE: That’s an excellent point and it brings us to our second tip, they need to find out whether they qualify for the income-based repayment program. Under this program, your loan payment could be reduced, based on the amount of discretionary income you have available. In most cases your loan payments won’t exceed 10% of your total income. After 25 years, anything you still owe on the loan will be forgiven.

Q. Is this income based repayment program an automatic enrollment or does the graduate need to apply for it?

ELLIE: You definitely need to apply for it by contacting the company that is servicing your student loan. If you’ve moved a time or two and your loan papers have not been forwarded to you and you are not sure who services your student loan, then you can go to the database of the National Student Loan Data System.


Q. Is there some paperwork you need to compile before you apply for the income based repayment program?

ELLIE: Yes, it’s important to have this paperwork on hand in order to streamline the process because you do want to get this filed as soon as possible—especially if you’re in danger of being late on loans and you have a genuine financial hardship due to your current income levels. You’ll need to authorize the IRS to provide last year’s tax return to the Department of Education. If you feel that your tax return doesn’t reflect your current situation, there’s a form you can use to show how your situation has changed. Get info on these forms and criteria, as well as links to major student loan servicers at the Project on Student Debt.

Q. We’ve looked at income based repayment, but what about those who need a quick, temporary fix? Maybe they have to take an unpaid internment at first or they may have a job that will become available in six months. Are there options such as deferment or forbearance available to this class of graduates?

ELLIE: If you are unemployed, still in school or experiencing economic hardship, you can apply to have payments on your federal student loans deferred for up to three years. If you have subsidized Stafford loans, which are provided to students who demonstrate financial need, the government will pay the interest on the loans during deferment. Interest on unsubsidized Stafford loans will accrue during deferment. If you don’t qualify for deferment, then you still might be eligible for forbearance, which allows you to put off payments for up to three years. It’s harder to qualify for deferment than it is for forbearance because in forbearance you will still have to pay interest that accrues.

Q. Does it take a long time for the paperwork to go through for these kinds of programs we’ve discussed: income based repayment, deferment and forbearance? Couldn’t a graduate find themselves in default by the time the paperwork is processed?

ELLIE: It’s important that you continue to make full payments until you’re notified otherwise. It takes longer for income based repayments and doesn’t take as long for deferment and forbearance because the latter two are temporary relief from loan payments. Whereas income based repayments could be longer term, depending upon how long you are in that job, making that salary. It’s important to look at forbearance and deferment as short term fixes and not long term—that’s why it’s really important to file for these right away, while you’re looking for a job. But if it looks like your payment problems will last longer than a few months, you definitely need to look at income-based repayment.

Q. Some graduates have huge student loans, in some cases, they have more than $30,000 in principal and interest. It is especially difficult for these grads to face this mountain of student loan debt. Can they extend the payment term in order to get through the first few years?

ELLIE: If you are a borrower who owes more than 30K , most lenders will allow you to extend the term beyond the standard 10 years, thus reducing monthly payments. The amount of interest you pay will increase, though, particularly if you extend payment over the maximum term of 25 years. And who wants to spend the next 30 years paying off a student loan? So I would only recommend this option as a last resort. Try to pay it within the standard 10 year term so that you can avoid thousands of more dollars in interest.

Q. Finally, we’ve discussed federal student loans, but a lot of viewers may hold private student loans that they have to repay. What are their options?

ELLIE: Well, the outlook is not as sunny for those who have private loans. They have fewer options. Private education lenders don’t participate in the income-based repayment program and they’re not required to allow you to defer payments, even if you’re out of work. If you’re having trouble with your private loans, read your loan agreement. It may require that the lender grant you forbearance under certain conditions. Even if your contract doesn’t include an economic hardship provision, your lender may be willing to provide relief. Some lenders have become more flexible in this post-great recession environment. You could ask for interest only payments or even to change the terms of the loan. For more information, go to Student Loan Borrower Assistance

Ellie Kay
America's Family Financial Expert (R)
http://www.elliekay.com/

ABC NEWS - I'm Answering YOUR Questions

Here are some of your questions that I answered recently on ABC NEWS "Good Money" regarding the blog I wrote called "The Road to Financial Heckie Fire."


Q. I’m in my mid thirties and I haven’t had the problem of friends and family asking me to co-sign on a loan before. But in the last year, I’ve had three requests for this. What’s your advice on co-signing a loan?
Jill, from Bradenton, FL via facebook

Ellie: If you have a friend or relative who needs a co-signer, then that means their credit is so risky that no lender will give him money on his own credit history. The question is: why should you? The answer is that you should not! Even though it may come across as “helping a family member out” it’s still a business transaction and when you set the precedence of co-signing on a loan—be prepared to do it again and again. If not for the same person, then for another friend who may say, “well, you did it for Jennifer, why not me?” You have to assume you will be the one repaying the loan & you won’t have the associated asset, so it can’t possibly be a good business move.

Q. We are boomers in our early sixties and we were thinking of getting a reverse mortgage. Is this a good move for people our age?
Allison from Granbury, TX via online contact form

Ellie: Recently, you’ll see older actors on commercials offering these kinds of mortgages to seniors who are house rich and cash poor. They are portrayed as a viable means of getting a steady stream of income that is easy to obtain. But the fees and other costs associated with reverse mortgages can sometimes be considerably higher than on other loans. This is a bad money move unless you have no other income than social security and because of the high cost fees, it should be a last resort not a first resort. The better option would be a home equity loan. You could sell your home and move into a smaller, less expensive house. Or, you could sell the home to your kids and have a multigenerational family under one roof—this is a recent trend I’ve seen emerging. Your kids can use the inheritance to pay down the mortgage.


Q. I have $10,000 in Stafford Student Loans, an $8800 car loan at 9.99% and two consumer loans at $3500 and $3700, both at 12%. All my loans are current and I have $1000 to put toward one of these loans—which one should I choose?
Viviene via Ellie Kay’s blog

Ellie: It’s great that you are current with your payments and even better that you have an extra $1000 to put toward your debts. I recommend that you put the $1000 toward the $3700 loan at 12% in order to retire the loan. Then once you’ve paid off that debt, double up the payments on the $3500 loan. You will feel motivated by the fact that you’re paying off debts and you will also experience the “snowball effect” where you gain momentum in paying these debts and as you pay off one bill, you can put those monies toward the next bill. Before you know it, you’ll have all your debt retired!

Q. Last year, my teenage daughter couldn’t find a summer job and ended up kind of wasting those months. She tried hard, but there just isn’t much work where we live. Do you have some ideas that maybe we haven’t thought of in terms of summers for this age group?
Stephanie Corlew from Branson, Missouri

Ellie: Summer camps are a great place for kids like your daughter to plug into a summer job. My daughter, Bethany, found a job through the American Camping Association by going to www.acacamps.org/jobs (or just google “American Camping Association” and “jobs.”) She’s making enough for her college spending money and gaining the opportunity to impact the lives of young campers as well.
Another way to broaden a resume for this age group is to go to the local, state or federal political representative from your district and offer to intern in the office. My son, Jonathan, did this last summer as a high school sophomore and this summer as a junior as well. He only volunteered a few hours a week at Congressman Buck McKeon’s office (California) and it made such an impression on his resume that it helped him get into an exclusive summer leadership seminar at USAFA (United States Air Force Academy). His summer internship contributed to the community and it also has contributed to his future as he applies for college scholarships.

Q. My grandchildren are teenagers and are coming to live with me for the summer. I wanted to know if you know of some jobs they can do where they could make some extra money, but still have time for fun, too.
Connie Green from Tehachapi, CA

Ellie: Connie, if you email assistant@elliekay.com, we can send you a file that includes 30 different jobs your grandchildren can do locally and make good money as well. Just ask for the “Kids Jobs” file. There’s also a list of safety items you should check out before they work for someone they do not know. For example, there’s job’s like Rent-A-Kid where there may be people in your church or neighborhood who need odd jobs done. There are also jobs like window washing, Garage Cleaning Service, Babysitting Services for summer groups that meet, Mail Checkers (for those who travel out of town), and even Pet Minders.

Q. Ever since I was a teenager, it’s been a dream of mine to go visit Israel
Is going on a tour with a large group the least expensive way to go to big tourist destinations? How can I save money on this trip?
Pamela from Acton, CA


Ellie: Tour groups with your church or community may not be the cheapest route to go since someone usually gets a free trip or two by booking a large group. In some cases, you actually pay more money to go to Israel with a reknown author or professor than you would if you go on your own. To help save money, go to the website GoIsrael.com and do as much planning as possible. Stay in a hostel, guest house, or a kibbutz, which comes with a free breakfast. Buy a pass for all national parks in order to save as much as 35% on the most popular attractions.

Q: Our company downsized and I laid off work. I’m thinking of launching my own homebased business, but there’s so much out there, I’m not sure what I should do. How do you know it’s a good business to get into and what should I keep in mind as I make my decision?
Nicole, Albany, NY

Ellie: One area of our economy that is thriving is direct sales companies (DSC) as people explore new ways to make money. As you are searching for the best fit for you in your homebased business start with following your passion. Do you love to cook? Then Pampered Chef may be a good option. Do you enjoy wearing the latest styles in jewelry, then try Premier Designs. If you follow your passion you are far more likely to succeed. But all DSCs are not created equal. Before you decide, find out what kind of inventory you have to stock. I know far too many people who went into debt to buy their inventory and then quit the business within a year—but kept the debt! Also find out the percentage you make on sales as well as the hostess plan that the company offers. Does the company take care of filing sales tax for you or do you have that job, too? For more information, email assistant@elliekay.com and ask for the “Homemade Business” file. Have fun pursuing your passion!

Please ask me YOUR questions!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

College Credit Card Debt -- Ellie answers on ABC NEWS NOW

As a mom of many (with three in college in 2009) and as "America's Family Financial Expert," I know a bit about college kids and credit card debt. Recent studies indicate that the average college student will graduate with $3,000 in consumer debt (in addition to $20K in student loans). This translates into BIG trouble for those starting out in life.

For example, our son, Daniel, recently graduated from college and then got married right away. Because he did things right and worked very hard, he has no car loans, no consumer debt, no student loan debt and a GREAT degree from the University of Texas. But then he lost his part time job--the one he was hoping would turn into full time work even as he was applying elsewhere (hint: it's not a great time to be a print journalist looking for work). But because he was debt free, he and his new wifey weathered the storm. Within three days, he had in 16 applications and within three weeks he was employed again--this time full time. If he had consumer debt, he would be in trouble.

So how do you navigate your kids toward financial literacy while in college? And how does the new Credit Card ACT impact your student? Click onto the link to hear the answers I gave on ABC NEWS NOW, "Good Money" to these questions and YOUR questions:

My question is why would you want to pay off a credit card while you're in college, making very little if any income? Why not pay the small minimum payment due each month, and pay off the balance after graduation? You would have a much higher paying job with a new college degree, and could pay off the balance (hopefully) within the first six months to a year of employment.
Teresa, Boise, ID

Our oldest daughter is entering her junior year of college, and has so far avoided any credit card debt by very purposefully not having a credit card. She has said that she knows the temptation for impulsive spending would be too great, so she would rather not open that door. While I admire her self-awareness, I am concerned that she is not establishing a "good credit" rating for herself. Is my concern valid? If so, do you have any advice for helping her manage a credit card responsibly?
Debra Devens, MA

Our daughter is a freshman this year. She is carrying 19 units so having a job is very difficult. She is on the waiting list for a job on campus and no one seems interested in hiring only for the weekends. It’s hard for her to get and pay off a credit card with no job. Do you have any suggestions?
Crystal Rough - Lancaster, CA

Is it a good idea to set up a debit card for college students so they can only spend what’s in the check acct? Wouldn’t that limit the % on a regular charge card if over extended?
Mitchell, West Bend, WI

Should parents help their student get a card, give them a set dollar amount, then let the student use the card to buy things, with the parents paying the bill, to build up the student's credit rating? Cherie Cheramie from Norton, OH

When you are a college student and keeping a budget, trying to pay credit card debt, what should you do if you don't have a stable income? Kelly, St. Louis Park, MN

All these readers got FREE copies of "The Little Book of Big Savings" and "Money Doesn't Grow on Trees." CONGRATULATIONS!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

Win My New Book - Questions on College Credit Cards

Once again, it's time to give you a chance to win a copy of my new book, The Little Book of Big Savings . In case you missed the discussion about paying for college, then take a peek at ABC News Now for last week's media appearance. It answers questions as to how we are putting all of our kids through school debt free.

You'll see from previous blogs that others have already won their free book and this week, I'm throwing in one of my other titles as well: Money Doesn't Grow on Trees.

I'll be guesting on a national show on August 28th talking about: Credit card debt for college students: How to avoid getting buried in debt and finding ways to consistently pay if off even though they don’t have a steady income.

Get creative and ask me your questions on this blog or by emailing them to assistant@elliekay.com . If the producer selects your question to have me answer on the air, I'll send you both of my books as a way of saying "thank you." We need to have your questions posted or submitted no later than Tues, Aug 25th at 6:00 PM (PST).

Happy Savings,

Ellie Kay
America's Family Financial Expert (R)
http://www.elliekay.com/

Back To School, Baby! - ABC News "Good Money" Show

It's the most wonderful time of the year! Summers are great and kids run free, but by the end of the break, a lot of parents are more than ready to start that back-to-school shopping. Truth be told, I think my "babies" are as ready to get back in the academic groove as I am ready to send them back! (BTW, I still call my 6'5" sons baby and get away with it). But getting ready can be hard on the old bank account if you are not strategic in how you shop. Here are some ideas that I shared on a new ABC News Now show called "Good Money"
1. Layer the Savings –When shopping online, look for sale items where you can also use a coupon or code to save even more on the price, shipping, or by getting free products. With the economy forcing parents to make hard decisions about what's really a necessity, putting a little research into finding extra discounts can add up to big savings.

2. “Double Dipping” – To maximize limited back-to-school shopping dollars, look for items that have good value, but also look to shop at locations where you can have a percentage of that purchase deposited into your child’s college savings account. Sign up for www.upromise.com so that a percentage of your purchases will go into your child's 529 plan.

3. Logistical Savings – If your college-bound baby is attending a school out of state, shop at online retailers that also have physical stores in the town where she/he is going to school. Often times, these retailers have online-to-store options where they will send the products to one of their local stores without charging a shipping fee. This option will allow parents and students to shop at their leisure online, take advantage of all the savings options, and have the convenience of going to a local store to pick up the items they ordered.

4. Link-in Friends and Family – Oftentimes, family and friends want to help contribute to a child’s education, but they don’t know how to help – especially in a recession. Grandparents or others can sign up for Upromise as well, for free to have a percentage of their purchases from hundreds of participating merchants deposited in a college savings account.

5. Family Spending Plan – Distinguish between “needs” and “wants” by making financial savings a family affair. Give children a spending plan that shows them how much money they can spend on back-to-school items. Inform children that what they do not spend, they can keep. This added motivation of learning ways to spend less and save more not only saves the family money, but trains children in money matters, making them more adept as young adults.

Wonderfully Yours!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

College Funding Crisis

Bethany went back to school this semester but about 15% of her classmates did not. It's the new phenomenon in my kids colleges (did I mention I have THREE in college at once?) Students are coming back home because parents cannot afford to keep them there. Many parents who relied on refinancing of their home mortgages or HELOCs (Home Equity Lines of Credit) are finding that they are upsidedown in their mortgages and there's no room to spare. Here are some ideas that will help you send those kids to college:

• Teach children a strong work ethic early. The discipline will help prepare them for competitive college admission and scholarships.
• Double dip. Encourage high school students to take classes that count as college credit, such as Advanced Placement – or investigate Dual Enrollment classes.
• Open a 529 plan. Parents can start saving now through a 529 education plan and reap tax benefits.
• Earn free money. Find organizations like Upromise that reward you with money for college each time you buy products and services from participating companies. Membership is free at Upromise.com and you can receive money into a college savings account on nearly everything you buy, so be sure to check their website before making purchases. Also find free contests to enter like Tuition Tales that offer money for higher education expenses.
• Buy a prepaid tuition plan. Many states or educational institutions allow parents to pay tomorrow’s tuition expenses at today’s prices.
• Start higher education at a community college first. Community colleges can save you thousands of dollars. Students can attend two years and transfer to a university to complete their education.
• Check employer benefits. A Society for Human Resource Management study estimates that 67 percent of employers offer financial assistance to employees seeking an undergraduate degree.
• Check college’s Financial Aid Office. They offer information on available loans and grants.
• Apply for scholarships. Millions of scholarship dollars go unclaimed every year. SallieMae has over 1.9 million scholarships totally 16 billion dollars! Have students apply for local scholarships, too. See your high school counselor for help.
• Minimize student loans. Adopt the philosophy that you’ll send your child to the best school they can get accepted into that you can afford.

For more detailed information, write to assistant@elliekay.com and put "College Crunches" in the subject line, we'll send you a file that could help make the difference between 30 years of student loan debt or a debt free college experience!

Ellie Kay

http://www.elliekay.com/

America's Family Financial Expert (R)

College Crunches - The Four Disciplines of Debt Free Education

When people ask me how we are putting our kids through college debt free, the answer is multi-fold. First, we train our children from a young age that going to school, doing your homework and getting good grades is their primary “job.” By teaching them a good work ethic, we are laying the groundwork for scholarships and more. Secondly, we send them to schools that we can afford or where they get the best scholarship offers to cover the most expenses. Thirdly, we have saved a modest amount of college money to help them pay their room and board and partial tuition in some cases. Lastly, but certainly not least, we require that they work part time in the summers or during the school year (through a work/study program or a regular job) in order to do their part in paying for college. By implementing these four disciplines, each of our children are set to graduate debt free. Of the three that are going to college now, we have over ½ million in scholarships and if the last two stay true to their goals, our kids would have garnered over a million dollars in scholarships by the time they are through with school.

Priorities
In any discussion of college costs, it’s important to keep priorities straight:
Parents need to leave yourself some fun money for retirement. How else can you afford that mechanical bull riding lesson and those parasailing flights (been there, done that, LOVE it)?
I really believe that you, as a parent, should try to avoid borrowing on your future in order to pay for your child’s future. After all that information we had earlier in this chapter about investments for retirement, why would you want to take one of your greatest investments and leverage it for college expenses? Yet millions of parents make that devastating financial choice every year. I’m talking about avoiding any college funding plan that includes a home equity loan, a HELOC (home equity line of credit) or refinancing of an existing home mortgage. These options reduce the amount of equity in your home, increasing the risk of possible foreclosure and you incur costs in interest charges that may cost you more if the term on the new mortgage is greater than the remaining term on the existing mortgage. For example, if there is ten years left on the mortgage and parents get a new 30 year loan. Furthermore, if parents choose to pull out enough money in equity for the first year of for four years of college all at once, then parents paying interest on money that won’t be needed until the upcoming sophomore, junior and senior years. Instead, look at the following options to pay for college.

The College Mantra
When I began a young adult, got married and began having kids (in that order) I was first exposed to the whole idea of “the college my child gets accepted to.” As a mom of many who has already launched a few college bound kiddos, I’m still hearing, “What college did they get accepted into?” The part of that question that amazes me is that the answer that is most impressive are also the most expensive (Columbia, Harvard, Stanford, Yale, etc). These schools have averages four year costs of $188,000 (Columbia); $240,000 (Harvard); $186,000 (Stanford) $193,000 (Yale). While an average of 40% of the students who attend either get financial aid, grants or scholarships, they only average out to assistance of $9600 per year. This leaves a boatload that the student and mom/dad owe for college. Most of this is usually in loans of some kind. So then the average student graduating from some of the most prestigious colleges have student loans upwards to $100,000.
So why is the question: What college did they get accepted into?
The question should be: What college did they get accepted into that they can afford?
Why do you want to leverage your future (through HELOCS or loans) or leverage their future (through massive consumer debt) when it will take many years of earning power, for them to pay back those loans? One of the most common problems I hear of have to do with the burden of dual student loans in a marriage.
http://www.myplan.com/education/db/ug/ug_4.php?id=186131

I'm doing what I can to help families minimize student loan debt so that both the parents and the graduates can have a better quality of life with more flexibility once they start those new careers. For more practical aspects of very specific ways you can pay for college. Please email assistant@elliekay.com and put "College Crunches" in the subject line. Our offices will send you a wonderful resource file that I wrote to help you fund a quality education for a fraction of the debt.

Ellie Kay

"America's Family Financial Expert" (R)

www.elliekay.com