TIME Education

One Expert’s Secrets to Staying Sane While Applying to College

Don't get so caught up in SAT scores and grades

In an era of rising tuition and worries about “paper classes,” it’s easy for students (and parents) to get overwhelmed about making the right decisions during the college admissions process.

Admissions expert Pamela Donnelly, author of the recently published 4 Keys to College Admissions Success, offers several tips for families looking for a way to stay sane.

The process “is a blip on the chart of a much larger movie called life,” Donnelly says, encouraging students to not get so caught up on SAT scores and grades that it becomes overwhelming. Once applications are in, Donnelly wants students to “let it go” and celebrate the completion of the process rather than stressing about where they may get in.

Catch more of her tips in the video above.

TIME Education

West Virginia University Suspends All Frats, Sororities After Incident

West Virginia Mountaineers Campus
General view of the Woodburn Hall on the campus of the West Virginia University Mountaineers circa 2011 in Morgantown, West Virginia. West Virginia/Collegiate Images/Getty Images

After 18-year-old was found unconscious in frat house

All fraternities and sororities at West Virginia University were suspended Thursday after an 18-year-old freshman was found unconscious and not breathing inside a fraternity house, just a week after a different fraternity was suspended after 19 pledges got into a street brawl, university officials and police said.

Nolan Michael Burch, 18, of Buffalo, New York, was in critical condition in intensive care Thursday at Ruby Memorial Hospital in Morgantown, police and a hospital spokesman said. Morgantown police said they were called to the Kappa Sigma house about midnight Wednesday and found a man performing cardiopulmonary resuscitation on Burch, who was lying on…

Read the rest of the story from our partners at NBC News

 

MONEY College

Average College Grad Now Leaves School With $28,400 in Debt

man overboard waving arms in the air for help
Gary John Norman—Getty Images

A new report from the Project on Student Debt shows that many recent grads are drowning in student loans, but also offers advice for avoiding this destiny.

Student debt has hit another record—with the typical 2013 college grad who borrowed commencing post-collegiate life with loan bills totaling $28,400, according to a Project on Student Debt report released Thursday.

That number is up 2% over the class of 2012, who owed $27,850.

Not all the news was so grim: a new College Board study of financial aid also released Thursday indicated that the total amount of undergraduate federal student loans fell by about 7% in 2014, while enrollment only fell about 1%.

But several debt experts warned against celebrating this as a herald to the end to the student debt crisis.

The recent decline in federal borrowing may simply reflect parents’ shift to other kinds of borrowing, like home equity loans, noted Lauren Asher, president of The Institute for College Access and Success, which runs the Project on Student Debt.

Also, nearly one-fifth of new graduates’ debt load is made up of private student loans, which charge much higher rates than federal loans and have much less flexible repayment plans, she added.

Mark Kantrowitz, publisher of Edvisors.com, attributes the recent dip in borrowing to the economic rebound. But since states continue to stint on funding for public colleges, and since college prices are rising faster than financial aid budgets and incomes, borrowing will likely soon bounce back up, he predicts.

State budget cuts “will continue to shift the burden of paying for college from the government to students and their families. Family income and savings do not increase enough to cover the added cost. This forces students to shift their enrollment to lower-cost colleges and to increase their debt at graduation,” Kantrowitz warns in his own recent analysis of student debt numbers.

The key takeaway for students, says Asher is that students should continue to pursue degrees—for the great advantage they provide in the job market—but should also be making sure to limit their debt loads.

Perhaps the single most important step: choosing a college with a net price you can afford using your family’s savings, earnings, your scholarships and no more than the maximum standard federal student loans: $5,500 a year for freshmen, $7,500 a year for upperclassmen. (Here’s more advice on how to avoid crushing student debt.)

The Project on Student Debt also noted that there were many low-debt schools students could choose from. These tend to have some combination of low tuition and/or generous financial aid. They range from private schools such as Princeton University and Berea, to the public campuses of the City Universities of New York and the California State Universities.

On the other hand, colleges that load students up with debt tend to have high tuition and small financial aid budgets. That list includes public schools such as the University of New Hampshire and private schools like the Ringling College of Art and Design.

You can also search for low-debt colleges using MONEY’s list of the 100 colleges with the lightest debt loads.

This story was updated on Nov. 14 to delete an incorrect description of the rate of borrowing by 2012 college graduates.

MONEY College

Why College Costs Keep Eating Up More Of Your Paycheck

141113_FF_College
Aydin Buyuktas / Alamy

Tuition is rising faster than incomes. But a new private college price war and the improved economy have meant lower prices for many students.

College became a little less affordable again for most students in 2014, as the typical school raised prices faster than financial aid—and faster than average income growth.

In its annual analysis of the state of college prices, the College Board found that most higher education charges continued to outpace the 1.5% average growth in incomes. The cost of attending the typical public university–including dorms, dining hall privileges, textbooks, and miscellaneous expenses—reached $23,410, up 2.6% from last year. Private college costs hit $46,272, up 3.4%.

Even after subtracting scholarships and grants, the average cost of a public education rose by 3.5%. The average net cost of attending a private college was up 4.1%.

A Few Bright Spots

With college costs continuing to eat up a higher percentage of most families’ incomes, “you can see why there is a lot of stress for people” says Sandy Baum, a co-author of the College Board report.

But, she added, “things are looking a little bit better” for some students. The lowest-cost option—attending a local community colleges while living at home—remained comparatively affordable. The total for tuition, fees, textbooks, and commuting to campus averaged $6,410 this year, a 3.1% increase over 2013. But since most of those students received grants or were able to take advantage of at least some of the $2,500 American Opportunity Tax Credit, the net cost of attending a community college averaged $1,320.

And the College Board noted that in real terms—in other words, after adjusting for inflation—private colleges are about 4% less expensive than they were in 2008. The reason: A decline in the number of 18-year-olds has sparked a scramble to fill seats at many small and non-prestigious private colleges, says Susan Fitzgerald, who analyzes college finances for Moody’s Investors Services.

Elite colleges are in such high demand that they can charge whatever they want. But schools without national reputations, Fitzgerald says, “are facing a very competitive environment, and one of the ways they are competing is on price.” So while such colleges typically hike published tuition prices, they are also raising the amount of financial aid they offer. As a result, the net prices charged to new freshmen have remained fairly flat.

A Pause at the Publics

In 18 states, the average cost of public college tuition rose by less than the 2% inflation rate, the College Board found. For example, after many years of dramatic tuition increases, the University of California, Berkeley charged tuition and fees of $12,972 this year. While that’s an 80% increase over 2007, it’s a rise of only 1% from last year. At the other end of the country, tuition and fees at the University of Maine averaged $10,606 this year, up only $6 from 2013, and $24 from the fall of 2011.

Many public universities have been able to moderate tuition inflation because the economic rebound has increased state tax coffers. And states have used some of those gains to at least partially alleviate the severe higher education budget cuts of the past few years, Baum says.

But, she notes, on average states are providing about 20% less funding per student to public colleges than they were prior to 2007.

A recovery in state budgets has put tuition inflation on pause in many states, she says. Unfortunately, there’s no guarantee that tuition hyperinflation won’t return. “We will again at some point experience tighter state budgets,” Baum warns.

In fact, in an ominous sign, some college leaders are already pushing for tuition hikes in 2015. Janet Napolitano, president of the University of California system, last week requested permission to raise tuition by 5% a year for the next five years.

Public universities: Sticker price Public universities: est. average net cost (after grants and tax aid) Private colleges: Sticker price Private colleges: est. average net cost (after grants and tax aid)
2013-14 $22,826 $16,717 $44,750 $33,710
2014-15 $23,410 $17,300 $46,272 $35,082
1-year $ increase $584 $584 $1,522 $1,372
1-year % increase 2.6% 3.5% 3.4% 4.1%

Source: The College Board

More on saving for college from Money 101:

MONEY College

How to Give the Gift of College This Holiday Season

stacks of money wrapped with a gold bow
Deborah Albers—Getty Images

The kids in your family could probably use cash towards school more than a new toy (or at least parents might prefer that). Here's how to make it happen.

Saving for college can be tough, but many families do not tap a potentially generous resource: relatives and friends.

Various companies are trying to change that by making it easier for parents to ask for, and receive, contributions to college savings plans. As the holidays approach, these providers are stepping up their efforts to publicize these options and convince families to try them.

“I think people can feel comfortable going out and saying they prefer gifts that are more meaningful,” says Erin Condon, vice president of Upromise, a college savings and cash rewards program, run by Sallie Mae.

“They can say, ‘Instead of giving our son a truck, how about helping us save for college? Or giving him a smaller truck and putting $20 into his college savings plan?'”

Named after Section 529 of the Internal Revenue Code, 529 college savings plans allow contributors to invest money that can grow tax-free to pay for qualified higher education costs.

Although typically sponsored by states, the plans are run by investment companies and account balances can be spent at any accredited college or vocational school nationwide.

Upromise released a survey last week that found seven out of 10 parents would prefer their children received money for college rather than physical gifts. Upromise offers a way to let others do just that: it is called Ugift, a free online service that families can use to solicit their social networks for college contributions.

Friends and family are emailed bar-coded coupons they can print out and send in with a paper check. The service is available to customers of the 29 Upromise-affiliated 529 plans, which include two of the country’s largest: New York’s 529 College Savings Program and Vanguard 529 College Savings Plan in Nevada.

Upromise has found that customers who enlist others to help them save via the site’s rewards program and shopping portal typically accumulate three times as much as customers who do not, Condon says.

The 529 plans run by Fidelity Investments also offer a free service that allows parents to set up a personalized contribution page and share links via email or social media that allow direct contributions to a child’s college savings account via electronic check.

Fidelity released its own poll recently, which found 9 out of 10 grandparents surveyed said they would be likely—if asked—to contribute to a college savings fund in lieu of other gifts for a holiday, birthday or special occasion. Fidelity manages 529 plans for Arizona, Delaware, Massachusetts, and New Hampshire.

These programs tap into the crowd-funding zeitgeist that has seen people appealing to their social networks to help pay for creative projects, charitable causes as well as personal costs such as medical expenses, travel and weddings.

As college costs rise, more people see the need for such help, according to Joe Hurley, founder of the 529 information site SavingForCollege.com.

“It’s a reaction to material gifts, and also the rising cost of college that’s creating so much anxiety for parents,” says Hurley.

Create a College Registry

A few sites facilitate contributions to any 529 plan. GradSave, for example, lets parents set up a free college savings registry that accepts contributions from friends and family. The money is held in an FDIC-insured account until the parents transfer it to their 529 accounts.

Leaf College Savings, meanwhile, offers an education gift card that anyone can use to make a 529 contribution for someone else. The giver loads an amount between $25 and $1,000 onto the card and gives it to the parent, who can then redeem it at the Leaf site and transfer the funds to his or her 529 plan. If the parents do not have a plan, the site helps them set one up.

The gift card, however, comes with an “activation fee” of at least $2.95 plus another $2.95 to get a physical card rather than one sent by email or Facebook or printed out on your computer.

But givers do not need an intermediary to contribute to a college savings plan, says Hurley, since virtually every 529 plan accepts third-party gifts. Those who want to contribute directly to a child’s account typically will need to include the account number and perhaps the child’s Social Security number, but Hurley notes there is a way to bypass that requirement.

“Just make the check out to the 529 plan, hand it to the parents and say, ‘Here, put it into the plan,'” he says. “That’s pretty easy.”

One thing that may not be easy is figuring out who gets the tax break for the gift. Most states offer tax deductions for 529 contributions when the contributor is a parent. Some offer the break to any contributor. And some do not offer any tax break at all.

The solution? Talk to your tax professional.

Related: More on college savings plans

MONEY advice

Help! Should I Tell My Son How Much I’m Saving for My Grandchild?

students with backpacks
iStock

Here's your chance to give advice in the pages of MONEY magazine.

In MONEY’s “Readers to the Rescue” department, we publish questions from readers seeking help with sticky financial situations, along with advice from other readers on how to solve those problems. Here’s our latest reader question:

My wife and I contribute to a 529 plan for our grandson. My son and his wife know we are doing this, but don’t know how much we’ve saved so far. Should we tell them?

What advice would you give? Fill out the form below and tell us about it. We’ll publish selected reader advice in an upcoming issue. (Your answer may be edited for length and clarity.)

Please include your contact information so we can get in touch; if we use your advice in the magazine, we’d like to check with you first, and possibly run your picture as well.

Thank you!

To submit your own question for “Readers to the Rescue,” send an email to social@moneymail.com.

To be notified of future “Readers to the Rescue” questions and answers, find MONEY on Facebook or follow MONEY on Twitter.

TIME Innovation

Five Best Ideas of the Day: November 6

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. How do you frighten political strongmen? Teach journalism.

By Thomas Fiedler in the Conversation

2. Far from policing free will, taxes on sugary drinks make sense in the context of subsidies for corn syrup and the Medicaid and Medicare expense of 29 million Americans with diabetes.

By Kenneth Davis and Ronald Tamler in the Huffington Post

3. Palm oil production has a devastating impact on the environment, but smart science and better farming could reduce the harm.

By Michael Kodas in Ensia

4. We shouldn’t let Ebola panic squelch civil liberties.

By Erwin Chemerinsky in the Orange County Register

5. What we learn from video games: Giving military robots controls like “Call of Duty” could save lives on the (real) battlefield.

By Patrick Tucker in Defense One

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY College

One Type of College Education That Almost Never Pays Off

Hand holding out mortarboard begging for money
Paul Hudson—Getty Images

Short-term college certificate programs seem like a good way to boost your earning power -- but new research suggests they don't produce results.

Short-term college certificate programs sound like a no-brainer. These community college programs, which are intended to take less than a year to complete, promise a meaningful credential with a fraction of the workload and price tag of a more conventional college degree.

But according to new research, published in the journal of Educational Evaluation and Policy Analysis, these short-term certificates don’t actually make graduates more employable, or lead to a significant increase in earnings.

“While we find that earning associate degrees or long-term certificates is associated with increased wages, an increased likelihood of being employed, and increased hours worked, we find minimal or no positive effects for short-term certifications,” wrote Mina Dadgar and Madeline Trimble, who jointly authored the study. Long-term certificates are designed to be completed in at least one year.

Using a dataset containing information on students attending 34 Washington State technical and community colleges during the 2001-2002 academic year, the researchers found short-term certificates, on average, gave students lower returns than longer-term degrees, and even when returns are positive, the gains are minimal. Short-term degrees that did produce positive results generated an average earnings bump of just $300 per quarter, or $1,200 a year.

While short-term certificates didn’t yield worthwhile results, the authors say associate degrees and long-term certificates generally do give graduates a significant leg up in the labor market. A long-term certificate increased the chance of a woman being employed by 9%, and of men being employed by 11%. Associates degrees increased employment likelihood by 11% and 9% among women and men respectively. Women especially were found to receive significantly higher wages after completing a full-year program.

However, the authors caution, the value of a long-term or associates degree is heavily dependent on industry. An associate degree in nursing was found to boost the average woman’s wages by 37.7%, but an associate degree in humanities, social sciences, information science, communication, or design did not correlate with significantly higher wages.

The study’s findings are especially important because of the growing popularity of short-term certificate programs. Between 2000 and 2010, the number of students receiving these degrees increased by 151% nationwide. The study’s authors suggested state lawmakers should examine short-term certificates further, and called their skyrocketing popularity a matter of concern.

TIME Innovation

Five Best Ideas of the Day: November 4

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Peer-to-peer sharing of experiences could transform health care.

By Susannah Fox in Iodine

2. A technological and analytical arms race is producing the best athletes in history. Can those advances be applied to education?

By James Surowiecki in the New Yorker

3. In South Bronx, startups are ‘onshoring’ technology jobs and trying to spark a revolution.

By Issie Lapowsky in Wired

4. ‘Sister City’ relationships foster cross-border collaboration and spur economic development.

By Nehemiah Rolle in Next City

5. Colleges and universities should focus on student success beyond graduation.

By Karen Gross and Ivan Figueroa at Inside Higher Ed

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY college savings

One Foolproof Way to Earn More on Your College Savings

handing money over
PM Images—Getty Images

Tax breaks, matching grants, and scholarships can effectively boost your investment by an average of 6%.

Savers in many states don’t have to rely solely on the markets to build up a college fund. Grants or tax benefits can effectively boost the value of your investment in a 529 college savings plan by 10%, 20% or even 30%, according to a newly released analysis by Morningstar.

In the 32 states (plus the District of Columbia) that offer subsidies to college savers who contribute to their home state’s 529 plan, the average benefit is a one-time boost worth about 6%.

In New Jersey, parents who seed a NJ BEST 529 account with $1,200 when their kid is about six and kick in at least $300 a year after that will qualify the student for a one-time $1,500 freshman scholarship to an in-state public university. That’s a return of 31.5% on a total investment of $4,800.

Most states simply give parents a tax credit or deduction for a 529 contribution, which translate into a lower state tax bill and thus more money in your checking account. That’s money you can use for anything—including adding to your 529 or offseting the cost of saving for any college.

Residents of Indiana, for example, qualify for a state tax credit worth up to 20% of what they invest in the state’s 529 plan, which can reduce a typical family’s state tax bill by $480. Vermonters get tax breaks typically worth 10% of their investments in their local 529 plan.

Five states offer tax breaks for an investment in any 529, allowing residents to shop for the best plan anywhere. Two of those five states reward both choices: Maine offers a 1.7% tax benefit for any 529 investment, but also provides matching grants for saving in the state’s 529. Pennsylvania’s has tax breaks worth about 3% for any college savings, but it also offers scholarships to hundreds of mostly private colleges across the country for those who invest in-state.

Fifteen states either have no income tax or don’t offer any subsidy to college savers. Check out this 50-state map to see whether to invest in your state, or out of state.

Beware of the Gotchas

The author of the Morningstar report, Kathryn Spica, says you should watch for two big potholes when trying to maximize these freebies.

1. High fees: Some states charge such high fees in their 529 plans that any parent with a child younger than, say, 13 should probably forgo the tax benefit and choose a low-cost, highly-rated direct-sold plan. But for parents of teens close to college, the immediate tax benefits can outweigh only a few years of higher fees.

For example, D.C. offers tax breaks that amount to a one-time 8.5% effective boost to your college savings. But D.C.’s plan charges a high annual fee of 1.35% of assets. Utah’s plan, which gets the highest rating by Morningstar, charges only 0.2%. Within eight years, D.C.’s higher fees would likely eat up your tax benefit.

2. Changing rules: North Carolina cancelled its tax break for 529 savings last year. And Rhode Island has stopped enrolling new parents in its savings match program, Spica says. Parents in states that end or slash tax benefits should take a few minutes to run the numbers and see which investment option best meets their needs.

The Value of the Tax Breaks

The chart below lists the states that offer benefits for investing in the home state 529 as of fall 2014. Morningstar’s estimated value of the subsidy is based on a family earning $50,000 a year and saving $2,400 a year for college. The fees are those charged for an age-based fund for a 7- to 12-year-old that employs a moderate (as opposed to conservative or aggressive) investment strategy.

The final column is Money’s recommendation on whether parents of kids younger than 13 should stick with their state’s best 529 option, or risk giving up the state’s benefit and shop for the best plan nationally.

If your state is not listed here, you won’t be giving up anything if you simply pick the best plan available. Here are Money’s recommendations for the best 529s nationally, based on a combination of the fund’s fees, the state’s tax benefits, and the ratings given the plans by Morningstar and Savingforcollege.com.

State Est. value of state tax benefit on savings of $2,400 a year Effective yield on $2,400 investment Average fee for moderate equity plan for 7- to 12-year-old Should parents of kids under the age of 13 invest in-state or shop?
Indiana $480 20% 0.57% In-state
Vermont $240 10% 0.45% In-state
Oregon $216 9.0% 0.38% In-state
District of Columbia $204 8.5% 1.35% Shop
Idaho $178 7.4% 0.75% In-state
Arkansas $168 7.0% 0.60% In-state
South Carolina $168 7.0% 0.12% In-state
Montana $166 6.9% 0.88% Shop
Iowa $156 6.5% 0.26% In-state
New York $155 6.5% 0.17% In-state
Wisconsin $150 6.3% 0.23% In-state
Georgia $144 6.0% 0.33% In-state
West Virginia $144 6.0% 0.32% In-state
Maine $140 5.8% 0.30% In-state
Virginia $138 5.8% 0.61% In-state
Oklahoma $126 5.3% 0.51% In-state
Alabama $120 5.0% 0.32% In-state
Connecticut $120 5.0% 0.40% In-state
Illinois $120 5.0% 0.19% In-state
Mississippi $120 5.0% 0.65% Shop
Nebraska $120 5.0% 0.48% In-state
Utah $120 5.0% 0.22% In-state
New Mexico $118 4.9% 0.36% In-state
Maryland $114 4.8% 0.88% In-state
Colorado $111 4.6% 0.39% In-state
Michigan $102 4.3% 0.28% In-state
Louisiana $96 4.0% NA In-state
Ohio $90 3.8% 0.23% In-state
North Dakota $68 2.8% 0.85% Shop
Rhode Island $38 1.6% 0.20% In-state
Pennsylvania Variable N.A. 0.38% In-state
New Jersey Up to $1,500 N.A. 0.77% In-state can pay if student definitely will attend a participating college

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