Applying for College Is Easier Than Ever

Posted on December 23, 2010 | Filed Under Articles

By Karen E. Spaeder

There was a time when applying for college meant filling out several different hard-copy applications, stuffing them in envelopes, and mailing them off to various colleges and universities. Nowadays, applying for college is as simple as getting online and, with a few mouse clicks, submitting your application to dozens of different educational institutions.

Online services have proliferated to the point where you have countless options for applying to your colleges of choice. Below, you’ll find links to some of the services we believe to be the most useful in managing and executing your college applications as well as planning for college and financial aid. Your choice on which service you use will depend largely on whether the service is partnered with the college(s) to which you want to apply.

The Common Application: www.commonapp.org
The Common Application is a not-for-profit organization that provides an online or print admission application that students may submit to any of its 415 participating members. The service also allows teachers and counselors to complete and submit various forms online that are required as part of your application, rather than printing and mailing the forms to the colleges. There is no cost to you or high schools, and using the online system is completely optional for your teachers and counselor.

Common Black Common Application: www.eduinconline.com
With this service from EDU, Inc., you can apply to 35 black colleges at once and pay only $35. EDU, Inc., recruiters visit more than 3,000 high schools annually and participate in more than 50 college fairs nationwide. Check with your high school’s guidance counselor to learn whether an EDU, Inc., recruiter is planning a visit to your school.

Embark: www.embark.com
This service lets you research and apply to your choice of more than 600 colleges online as well as utilize college planning tools and application timelines. Some of the helpful site features include user-friendly search functions right on the home page that let you search by state and by average high school grade point average and SAT scores. You also can register your email address to receive information from schools that match your profile. For Facebook fans, Embark offers a Facebook app to interact with other students who are considering the same schools you are.

Superapp, powered by ConnectEDU: http://superapp.connectedu.net/application
This site offers electronic applications for more than 1,500 colleges. The simple, clean design of this site makes it easy to get all your applications done in one place—as well as organize letters of recommendation, official transcripts and other important information.

Universal College Application: www.universalcollegeapp.com
With 80 member colleges, the Universal College Application offers fewer application choices than some of the other services. However, the site offers a unique tool that lets you add links to videos, portfolios and other online content to supplement your application. Showcase your sports talent, artwork, writing, personal collections and more, and set yourself apart from other applicants.

Xap: www.nationalappcenter.com
This site encourages a three-step process for applying to college:
1) Plan. The site offers tools such as a college planning timeline, free test prep, a self-assessment for career exploration and more.
2) Explore. Search for colleges, attend a virtual college fair, and take advantage of the college-matching wizard to find colleges that match your preferences.
3) Apply. Submit your application online to your choice of more than 800 member colleges, and research, calculate and apply for financial aid.

With all of the available means through which to apply for college, your only challenge in applying might be narrowing down which service to use. Log on to each site to explore the features and functions and to determine which service will connect you with the colleges that interest you. Additionally, remember to take advantage of the guidance counseling services available through your high school or other local educational institution. There are many experts available to help you navigate the application process, whether in print or online, and achieve your higher education goals.

Offsetting the Costs of Higher Education

Posted on December 21, 2010 | Filed Under Articles

By Karen E. Spaeder

When it comes to paying for higher education, there are a variety of ways to foot the bill, ranging from grants and scholarships to federally funded student loans. However, for working students pursuing a degree, often the choices are limited in terms of the available college funding. Federal grants are needs-based, and working students often earn too much to qualify for them. And scholarships generally require an investment of time to apply, which may prove unrealistic for those who need money right away to pay for higher education costs. Increasingly, working adults are turning to student loans, but there are other options you may want to consider first.

As an alternative or a supplement to grants and scholarships, consider the many tax provisions that can help you offset the costs of higher education. While you won’t see money in your pocket immediately, a tax credit, deduction or other government assistance can make your higher education goals a reality—if you know what’s available to you as a taxpayer. Consider the following options, and consult your tax adviser for help in determining which ones make the most sense for you.

Tax Credits

The following new tax credits, available for 2009 and 2010, are available to help offset the costs of higher education by directly reducing the amount of your total income tax you may have to pay. Be aware that you can elect only one of the credits for each student in any year. Certain income, filing status and other restrictions also apply. Ask your tax adviser which credit will be most beneficial to you, and talk with your school’s financial aid office for help in determining whether your school qualifies as an eligible institution.

American Opportunity Tax Credit

This credit offers a maximum credit of $2,500 for the first four years of postsecondary education. Forty percent of the credit may be refundable—meaning if the refundable portion of your credit is greater than your tax, the excess will be refunded to you. Qualified expenses include tuition and certain related expenses required for enrollment or attendance at an eligible educational institution—that is, any college, university, vocational school or other postsecondary educational institution eligible to participate in a U.S. Department of Education student aid program.

Hope Credit

While the American Opportunity Tax Credit offers a larger credit for most taxpayers—the Hope Credit offers up to $1,800 for qualified education expenses, versus the American Opportunity’s $2,500—the Hope Credit offers greater relief for students who meet the special rules of the Midwestern disaster areas. Students enrolled in an eligible educational institution in a Midwestern disaster area may be able to claim a Hope Credit up to $3,600. The Hope Credit is nonrefundable, so if the credit is more than your tax, the excess will not be refunded to you. Additionally, the credit is available only for the first two years of postsecondary education.

Lifetime Learning Credit

This credit allows you to claim up to $2,000 for qualified education expenses, or $4,000 for students in Midwestern disaster areas. Unlike the American Opportunity and Hope credits, there is no limit on the number of years you may claim the Lifetime Learning Credit for each student. As with the Hope Credit, the Lifetime Learning Credit is nonrefundable.

Deductions and Other Assistance

Student Loan Interest Deduction

If your modified adjusted gross income is less than $75,000 ($150,000 if filing jointly), you can take advantage of a special deduction allowed for paying interest on a qualified student loan used for higher education. This deduction can reduce your taxable income by up to $2,500. Because the student loan interest deduction is taken as an adjustment to income, you can claim this deduction even if you don’t itemize.

Student Loan Cancellation and Repayment Assistance

If a loan is canceled (forgiven), generally you must include the forgiven amount in your gross income. However, under certain circumstances, your loan may qualify for tax-free treatment. To qualify, your loan must contain a provision that all or part of the debt will be canceled if you work for a certain period of time in certain professions and for a certain class of employers. To qualify for repayment assistance, you must work in public service occupations or in areas with unmet needs, such as health care providers in underserved areas, certain types of attorneys and classroom teachers in subject areas with shortages.

With this deduction—taken as an adjustment to income, as with the Student Loan Interest Deduction—you can reduce your taxable income by up to $4,000. Qualified expenses may include tuition and certain related expenses such as student activity fees, course-related books, supplies and equipment. Consider this deduction if you do not qualify for the American Opportunity, Hope or Lifetime Learning credits and your modified adjusted gross income is less than $80,000.

Employer Education Assistance

If your employer provides educational assistance, your employer should exclude those benefits from your wages, tips and other compensation shown in Box 1 of your Form W-2. You also do not need to include these benefits on your income tax return. You may exclude up to $5,250 of benefits under this provision. Check with your employer to determine whether your company offers a qualified educational assistance program.

With careful research and planning, you can significantly reduce your higher education costs simply by taking advantage of these available tax provisions. Because you will not see the money until you file your tax return, a tax credit may not work on its own for individuals who need money right away to pay for tuition, fees and other costs. However, if you combine the credits with other forms of educational financing, such as grants, scholarships and financial aid, then tax credits will be worth the delayed return.

Grants: Free Money for Higher Education

Posted on December 20, 2010 | Filed Under Articles

By Karen E. Spaeder

The U.S. government gives away billions of dollars in free grants every year, including dollars for higher education. In 2009-2010, undergraduate students received an average of $6,041 per full-time equivalent student, and for graduate students, an average of $6,371. Unlike loans, this money never has to be repaid. Below, you’ll find some of the most common federally funded grants and their eligibility requirements.

Federal Pell Grant
Pell Grants aided 7.7 million students in 2009-2010, compared with 6.2 million in the preceding year—and more than twice the 3.8 million recipients in 1999-2000. These grants are awarded typically only to undergraduates without a bachelor’s or a professional degree, but some students enrolled in a post-baccalaureate teacher certification program may qualify. In 2009-2010, the average award was $3,646. However, you may receive up to two consecutive Pell Grants in a given award year to accelerate your time toward a degree. You can combine Pell Grant money with other forms of federal and nonfederal financial aid to cover your higher education costs.

Federal Supplemental Educational Opportunity Grant (FSEOG)
The FSEOG is designed for undergraduates with exceptional financial need and includes institutional matching funds in addition to federal dollars. In 2009-2010, the FSEOG aided 1.3 million students, up from 1.2 million in 1999-2000, with the average grant decreasing from $684 (in 2009 dollars) to $581 over the decade. While you can receive between $100 and $4,000 annually, your award amount will depend on your financial need and the policies and funding provided at your educational institution.

SMART Grant
The National Science and Mathematics Access to Retain Talent (SMART) Grant provides up to $4,000 to students majoring in physical, life or computer sciences; mathematics; technology; engineering; or a critical foreign language, or for nonmajor single liberal arts programs. Those students attending school at least half-time and who maintain a cumulative grade point average of at least 3.0 in required coursework qualify for the SMART grant, which is awarded in addition to the student’s Pell Grant. However, the combined amount of the SMART Grant and Pell Grant cannot exceed the student’s cost of attendance.

Academic Competitiveness Grant
The Academic Competitiveness Grant is available for first-year college students who graduated from high school after Jan. 1, 2006, and for second-year college students who graduated from high school after Jan. 1, 2005. Students are awarded $750 for the first year of study and $1,300 for the second year. As with the SMART Grant, the Academic Competitiveness Grant is awarded in conjunction with the Pell Grant, and the combined award cannot exceed the student’s cost of attendance. To be eligible, students must be enrolled at least half-time in a degree program and maintain at least a 3.0 grade point average. Additionally, students must have completed a rigorous secondary course of study as defined in the grant’s eligibility guidelines.

TEACH Grant
Future teachers can take advantage of the Teacher Education Assistance for College and Higher Education (TEACH) Grant, which awards up to $4,000 per year to students who agree to teach full time in a public or private elementary or secondary school that serves students from low-income families. You must teach for at least four academic years within eight calendar years of completing the program of study for which you received the TEACH Grant. If you fail to do so, all TEACH funding that you received will be converted to a Federal Direct Unsubsidized Stafford Loan, and you must repay this loan, with interest, to the U.S. Department of Education.

Institutional Grants
Various institutional grants are available directly from certain public and private colleges and universities, including athletic grants, tuition waivers and grants that meet or exceed need. Grants that meet financial need at public four-year schools increased from 28 percent of total institutional discounts in 1999-2000 to 42 percent in 2009-2010. Meanwhile, more than two-thirds of institutional grant aid at private four-year institutions helps to meet the financial need of students who otherwise could not afford to attend.

With all of the available grants, it behooves you to contact your educational institution’s financial aid office for help exploring the best grant options for you. By combining grant monies with loans, scholarships and various tax deductions or credits, you can considerably offset the costs of higher education.

Grants: Free Money for Higher Education

Posted on December 6, 2010 | Filed Under Articles

By Karen E. Spaeder

The U.S. government gives away billions of dollars in free grants every year, including dollars for higher education. In 2009-2010, undergraduate students received an average of $6,041 per full-time equivalent student, and for graduate students, an average of $6,371. Unlike loans, this money never has to be repaid. Below, you’ll find some of the most common federally funded grants and their eligibility requirements.

Federal Pell Grant
Pell Grants aided 7.7 million students in 2009-2010, compared with 6.2 million in the preceding year—and more than twice the 3.8 million recipients in 1999-2000. These grants are awarded typically only to undergraduates without a bachelor’s or a professional degree, but some students enrolled in a post-baccalaureate teacher certification program may qualify. In 2009-2010, the average award was $3,646. However, you may receive up to two consecutive Pell Grants in a given award year to accelerate your time toward a degree. You can combine Pell Grant money with other forms of federal and nonfederal financial aid to cover your higher education costs.

Federal Supplemental Educational Opportunity Grant (FSEOG)
The FSEOG is designed for undergraduates with exceptional financial need and includes institutional matching funds in addition to federal dollars. In 2009-2010, the FSEOG aided 1.3 million students, up from 1.2 million in 1999-2000, with the average grant decreasing from $684 (in 2009 dollars) to $581 over the decade. While you can receive between $100 and $4,000 annually, your award amount will depend on your financial need and the policies and funding provided at your educational institution.

SMART Grant
The National Science and Mathematics Access to Retain Talent (SMART) Grant provides up to $4,000 to students majoring in physical, life or computer sciences; mathematics; technology; engineering; or a critical foreign language, or for nonmajor single liberal arts programs. Those students attending school at least half-time and who maintain a cumulative grade point average of at least 3.0 in required coursework qualify for the SMART grant, which is awarded in addition to the student’s Pell Grant. However, the combined amount of the SMART Grant and Pell Grant cannot exceed the student’s cost of attendance.

Academic Competitiveness Grant
The Academic Competitiveness Grant is available for first-year college students who graduated from high school after Jan. 1, 2006, and for second-year college students who graduated from high school after Jan. 1, 2005. Students are awarded $750 for the first year of study and $1,300 for the second year. As with the SMART Grant, the Academic Competitiveness Grant is awarded in conjunction with the Pell Grant, and the combined award cannot exceed the student’s cost of attendance. To be eligible, students must be enrolled at least half-time in a degree program and maintain at least a 3.0 grade point average. Additionally, students must have completed a rigorous secondary course of study as defined in the grant’s eligibility guidelines.

TEACH Grant
Future teachers can take advantage of the Teacher Education Assistance for College and Higher Education (TEACH) Grant, which awards up to $4,000 per year to students who agree to teach full time in a public or private elementary or secondary school that serves students from low-income families. You must teach for at least four academic years within eight calendar years of completing the program of study for which you received the TEACH Grant. If you fail to do so, all TEACH funding that you received will be converted to a Federal Direct Unsubsidized Stafford Loan, and you must repay this loan, with interest, to the U.S. Department of Education.

Institutional Grants
Various institutional grants are available directly from certain public and private colleges and universities, including athletic grants, tuition waivers and grants that meet or exceed need. Grants that meet financial need at public four-year schools increased from 28 percent of total institutional discounts in 1999-2000 to 42 percent in 2009-2010. Meanwhile, more than two-thirds of institutional grant aid at private four-year institutions helps to meet the financial need of students who otherwise could not afford to attend.

With all of the available grants, it behooves you to contact your educational institution’s financial aid office for help exploring the best grant options for you. By combining grant monies with loans, scholarships and various tax deductions or credits, you can considerably offset the costs of higher education.

Taking the American Opportunity Tax Credit

Posted on December 3, 2010 | Filed Under Articles

By Karen E. Spaeder

The American Recovery and Reinvestment Act of 2009 gave rise to a number of provisions designed to help get a struggling America back on track, among them the American Opportunity Tax Credit. Designed as a modification of the existing Hope Credit and with an estimated cost of $13.9 billion over 10 years, the American Opportunity Credit allows for a maximum credit of $2,500 per student for the first four years of postsecondary education, compared with the Hope Credit’s two years and $1,800. This credit may be claimed in 2009 and 2010 for tuition and certain fees and other expenses, including required course materials, paid for higher education.

You qualify for the credit if your modified adjusted gross income is $80,000 or less ($160,000 for married couples filing jointly)—offering higher income limits than what’s available under the Hope and Lifetime Learning credits. The amount of the American Opportunity Credit is gradually reduced for taxpayers whose incomes exceed these levels, up to $90,000 for individual taxpayers or $180,000 for those who file a joint return. Additional eligibility requirements include:

· You must be enrolled at least half-time in a program that leads to a degree, certificate or other recognized educational credential for one academic period.
· The eligible student for whom you pay qualified education expenses must be you, your spouse or a dependent you claim on your tax return.
· Your filing status must be anything but married filing separately.
· You must choose not to claim the Hope Credit for any student.

To put the American Opportunity Credit in perspective as it relates to your tax return, consider that you will be able to reduce your tax liability by $1 for each dollar of credit for which you are eligible. Forty percent of the credit may be refundable—meaning if the refundable portion of your credit is greater than your tax, the excess will be refunded to you.

Keep in mind that this credit is one of many available credits and deductions. Generally, you will not be able to claim additional credits or tuition and fees tax deductions in the same year that you claim the American Opportunity Credit. Although the tuition and fees deduction may allow you to claim up to $4,000 in qualified tuition and fees paid, the credit will typically result in greater tax savings. Your tax adviser or a tax software program can help you determine which one is best for you.

You may be able to claim the American Opportunity Credit in the same year in which you receive a distribution from a Coverdell Education Savings Account or a Qualified Tuition Program. You cannot use expenses paid with such a distribution as the basis for claiming the American Opportunity Credit, however.

To claim the credit on your tax return, complete parts I, IV and V of Form 8863 and submit the form with your Form 1040 or 1040A. Enter the nonrefundable part of the credit on line 49 of Form 1040 or line 31 of Form 1040A, and the refundable part on line 66 of Form 1040 or line 43 of Form 1040A.

Because you’ll claim the credit on your tax return the following year, you’ll only benefit from the credit when you file your return. Therefore, the delayed receipt of the credit could prove prohibitive for low-income students needing immediate assistance upon enrollment. Consider your options carefully as you budget for your higher education, and consult your school’s financial aid office and/or your tax adviser for help in choosing the best options for you.

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