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Archive | January, 2010

The 1098T’s Are Coming, The 1098T’s Are Coming!

The 1098T’s Are Coming, The 1098T’s Are Coming!

If you say the title of this article in the same manner as Paul Revere did when he alerted the colonists that “the British are coming” it is somewhat humorous. Other than that it is just my best attempt to bring light to yet another tax form that you should be expecting to see in your mail if you paid for tuition in the last tax year. In addition, there should only be one lantern in the Old North Church to let you know that the form is coming by land and not by sea. 😉

tax

For those that are not familiar with a 1098-T, I will be happy to give you a brief description. It is a form provided to you by any college that you attended and paid tuition in the last tax year. In box 2 it will reflect the qualified expenses that you incurred and in box 5 it will show all the scholarships and grants that you received. Using this information, you will complete form 8863 to attach to your 1040 and if you encounter any questions you can always refer to Publication 970. Sounds simple enough right?

This year marks a change in the education tax credits in that they allow you to claim more funds than ever before under the Hope Scholarship Credit plan. They are referring to this new plan as the American Opportunity Tax Credit. Basically, it allows you to receive an annual credit for up to $2500 for the first four years of Post-secondary education. (In the past, it was only available for the first 2 years and the Lifetime Learning Credit kicked in after that). This new approach to the education tax credit is only being offered for the 2009 and 2010 tax years but I have high hopes that it will be renewed for subsequent years.

Another feature that the IRS provided clarification on is that they are now allowing books and course materials to be claimed under the new American Opportunity Tax Credit. Since this information will more than likely not be reported on your 1098-T (T stands for tuition), you will want to keep you bookstore receipts to provide proof of your additional expenses over and above tuition.

The Lifetime Learning Credit is still available for undergraduates in their 5th or (gasp…) 6th year and also for graduate students. This tax credit is not as generous as the Hope Credit but it does provide for a credit of up to $2000.

Don’t miss out on these extra dollars. Every penny counts when it comes to paying for education, so you want to make sure you take full advantage of the education tax credits.

If you would like additional information, please feel free to check out the following links:

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Great News for Late FAFSA Filers!

Great News for Late FAFSA Filers!

FAFSA_iconBeginning January 28th (today!), the Federal Student Aid Office is pleased to announce that they will begin allowing electronic FAFSA filers to pull down specific tax return data directly from the Internal Revenue Service (IRS) for the 2009-2010 academic year (remember this is only for families filing for the current academic year and not the upcoming one…).

The process is supposed to help streamline the FAFSA application process and make it easier for students to gain access to federal aid dollars. The Department of Education will be monitoring the IRS Data Retrieval Functionality during this test pilot and will make necessary adjustments prior to full implementation in the summer of 2010 for the 2010-2011 academic year.

If you are thinking about giving the new functionality a whirl, the following guidelines should be helpful to see if you qualify:

Who Is Eligible To Use the IRS Data Retrieval Process?

The IRS Data Retrieval process can be used by dependent and independent 2009-2010 FAFSA on the Web student applicants, and the parents of dependent applicants, who meet all of the following criteria:

  • Must be filing an initial or renewal 2009-2010 FAFSA (IRS Data Retrieval will not be available for corrections entry for 2009-2010)
  • Must have a PIN (this is required to access tax information on the IRS database, as well as to sign and submit the FAFSA online); if the student or parent does not have a PIN, they will be provided with the opportunity to apply for a PIN and use it immediately to transfer IRS data to the FAFSA and submit the FAFSA
  • Must have a valid Social Security Number (SSN)
  • Must have filed a 2008 federal tax return
  • Marital status has not changed since December 31, 2008

Who Cannot Use the IRS Data Retrieval Process?

Some students and parents may not use the IRS Data Retrieval process, either because there is no information for them in the IRS’ database or the information is not what should be reported on the FAFSA. Therefore, students or parents who meet any of the following criteria will not be able to use the IRS Data Retrieval process when completing their 2009-2010 FAFSA on the Web application:

  • Parents with all zeroes for SSN
  • Students using an 888 identifier in place of an SSN (i.e., students from the Pacific Islands)
  • Any student or parent with a marital status date of January 1, 2009 or later
  • Any student or parent who indicates they have not already filed a tax return or will not file a tax return in response to the “For 2008, have [you, your parent] completed [your, their] IRS income tax return or another tax return?” FAFSA question

Who Should Not Use the IRS Data Retrieval Process?

Some students and parents should not use the IRS Data Retrieval process, but we cannot determine that from the information they provide on the FAFSA. Therefore, we advise students and parents who meet any of the following conditions not to use the IRS Data Retrieval process:

  • Students or parents who filed an amended federal tax return for 2008 (the IRS database used for this process contains only original IRS information, not information from amended returns)
  • Students or parents whose 2008 federal tax filing status was “married filing separately”
  • Students or parents who filed a foreign (or Puerto Rican) tax return

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Scholarship Opportunity for Hispanic Students

Scholarship Opportunity for Hispanic Students

alliancelogoThe National Alliance for Hispanic Health (more commonly referred to as the Alliance) has partnered with the Merck Foundation to enable Hispanic students easier access to education in the fields of Science, Technology, Engineering and Math. The Merck Foundation is committing $4 million dollars in support of the Alliance/MerckCiencia (Science) Hispanic Scholars Program. To date, this is the largest single contribution to Hispanic higher education that has been provided by the Merck Foundation. They should definitely be congratulated for their support.

The program is offering two types of scholarships (information below). The application deadline is February 15th.

Alliance/Merck Ciencia Scholars -High School Seniors Up to $20,000 in scholarship ($5,000 each of four years of college) and up to $22,500 in summer internship stipends ($7,500 each of three summers) for students who meet the following eligibility criteria:

  • A student of Hispanic heritage.
  • A senior attending a high school in Brownsville, TX; Elizabeth, NJ; or Los Angeles, CA.
  • Have a minimum cumulative grade point average (GPA) of 2.75 on a 4.0 scale (or the equivalent).
  • In good academic standing in high school.
  • Have applied or intend to apply for full-time study at an accredited college/university that grants a bachelor’s degree in a STEM field (proof of enrollment will be required before disbursement of scholarship funds).
  • Committed to major in a STEM field in college.


Ciencia National Scholarships – College STEM Majors

A $2,000 one-time scholarship for students from all 50 states, the District of Columbia, U.S. territories and Puerto Rico who meet the following eligibility criteria:

  • A student of Hispanic heritage.
  • In good academic standing and enrolled full-time in an accredited college/university.
  • Have a minimum cumulative grade point average (GPA) of 2.75 on a 4.0 scale (or the equivalent).
  • Are a declared major in a STEM discipline and pursuing a Bachelor’s degree in a STEM field including Bachelor’s degrees offered in partnerships between community colleges and four-year institutions.

Additional information and the online application can be found here.

If you know of any students that qualify for this scholarship funding, please be sure to use the share tab below to pass this information onto them.

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Is a Liberal Arts Education Affordable?

Is a Liberal Arts Education Affordable?

IvyLeagueCampusI came across an article by Lynn O’Shaugnessy, author of the College Solution blog,and she talks about the advantages of getting a liberal arts education. The following are the reasons Lynn provides for attending a liberal arts college or university. For the purpose of CheapScholar.org, I would like you to focus on the last reason!

1. Student focused. Liberal arts colleges exist to teach undergraduates and only undergrads. That’s far different from universities that are designed to focus chiefly on faculty research and graduate students. Star professors at many universities, including the Ivies, never go near undergrads.

2. Small classes. At liberal art college, students can’t hide in the back of a large lecture hall because there aren’t any. Some introductory courses might have 40 or 50 students, but most are going to be far smaller. Especially for introductory classes, universities tend to herd hundreds of undergrads into lecture halls and often let the teaching assistants deal with these students in smaller settings.

3. Great grad school preparation. It’s a fallacy that you have to attend a state flagship or Ivy to enjoy a good shot at grad school. Liberal arts schools dominate the list of the top 10 institutions that produce the most students who ultimately earn doctorates. Per capita, liberal arts colleges produce twice as many student who earn a PhD in science than other institutions. This shouldn’t be a surprise.  Liberal arts college provide the sort of research experiences that universities often reserve for grad students.

4. Employers value liberal arts. One of the missions of liberal arts colleges is to teach kids how to think, talk and write. Don’t all schools do that? Not necessarily. You can graduate from plenty of universities without writing essays or research papers. Who, after all, is going to grade 500 essays? In small class settings, liberal art students are more likely to be required to write papers, give class presentations and collaborate with their classmates and professors.

A new employer survey that the National Association of Colleges and Employers released yesterday indicates that workplaces most value these three skills that a liberal arts eduction can impart:

  • Communication skills.
  • Analytic skills.
  • Teamwork skills.

5. Price discounts. If you need financial aid, private liberal arts colleges are often more generous than state institutions, which have been spending the majority of their discretionary cash on affluent students. Rich students, however, also routinely receive a price break from most liberal arts colleges.

Based upon Lynn’s list above, you wonder how you can afford NOT to go to a liberal arts institution. A liberal arts education is well-rounded and will provide you with an investment that will last a lifetime. If it is within your budget(or even a a little bit of a stretch..), I encourage you to take a look at a liberal arts institution. Hopefully you will be pleasantly surprised on the cost (after factoring in financial aid) and the educational quality of the institution.

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The Importance of College Goal Sunday

The Importance of College Goal Sunday

CollegeGoalSundayAs you may have already surmised by now, the FAFSA is the gateway to all things good when it comes to making college affordable. The downside is that the FAFSA is feared by many, especially those that have never completed it before. It is this uncomfortable unknown factor that keeps people from giving it a try and finding out what treasures it will unlock to enable them to obtain their educational goals.

In order to combat the ambiguity associated with the FAFSA, you will find great resources in books, on the web (like CheapScholar.org) and through various other sources. However, nothing compares with direct one-on-one advice and counseling and that is where College Goal Sunday helps to fill a void and provide assistance with completing the FAFSA.

College Goal Sunday is a program that was founded in 2001 in Indiana with support from the Lilly foundation and now has a presence across the nation in 44 states. The main mission for this program is to help college bound students and their families to meet up with various financial aid professionals from their respective states and complete the all so important FAFSA. Given the name of the program, you can probably guess right away which day of the week these helpful sessions are offered.

If you would like to learn more about College Goal Sunday you can visit their website here. If you are financial aid professional, they can surely make use of your knowledge. If you are a student or family member in need of help with the FAFSA, this is great resource for some personal one-on-one assistance.

You can click here to find out when and where the next College Goal Sunday event is taking place in your area!

If you plan on going to College Goal Sunday to receive help with your FAFSA, please plan on bringing the following items to help speed up the process and ensure proper completion of your FAFSA application.

  • Social Security Number (can be found on Social Security card)
  • Driver’s license (if any)
  • W-2 Forms for the previous year and other records of money earned
  • Your (and your spouse’s, if you are married) most recent Federal Income Tax Return:
    • IRS Form 1040,
    • 1040A,
    • 1040EZ,
    • 1040Telefile,
    • foreign tax return, or
    • tax return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federated States of Micronesia.
  • Parent’s Federal Income Tax Return for the previous year (if you are a dependent student as defined by federal criteria)
  • Untaxed income records for the previous year:
    • Social Security,
    • Temporary Assistance to Needy Families,
    • welfare, or
    • veterans benefits.
  • Current bank statements
  • Current business and investment mortgage information, business and farm records, stock, bond, and other investment records
  • Documentation that you are a U.S. permanent resident or other eligible non-citizen.

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When Should I Complete the FAFSA?

When Should I Complete the FAFSA?

helpareaderseriesThis is a common question that I encounter on a regular basis. Based upon it’s continued recurrence, I believe that CheapScholar.org is a great forum to provide an appropriate response.

My quick answer is always “YESTERDAY”. While my response is meant to reflect the urgency of completing the FAFSA, there is a much more logical answer that I immediately follow-up with.

Families can start completing the FAFSA on January 1st. The most efficient manner to do this is electronically at FAFSA.ED.GOV. However, I am guessing that very few families actually submit a FAFSA on January 1st since most of the data requested is driven by your tax return. The long answer to when you should complete your FAFSA can be spelled out via a couple methods.

Method 1
If you are a student that is applying to multiple colleges, you will need to research the deadlines imposed by each institution and then pick the earliest one as your target date for completing the FAFSA. If you don’t have your taxes done, don’t worry, you can always estimate your income on the FAFSA and come back and update the figures later (after you have finished filing your taxes).

Method 2
Each state provides a deadline for filing the FAFSA in order to be eligible to receive their funds. A chart with these various deadlines is provided below.

You can utilize Method 1 or 2 when setting a target date to have your FAFSA completed. The important thing to remember is that many Universities and Colleges provide financial aid on a first come first serve basis. This is not to say that you won’t receive any funding for filing your FAFSA late in the game, you just may not receive as much as someone that processed their FAFSA by the appropriate deadlines.

Hope this information is helpful to our readers as you are traversing the world of financial aid.

Alabama Check with your financial aid administrator
Alaska April 15, 2010 @
American Samoa Check with your financial aid administrator*
Arizona Check with your financial aid administrator
Arkansas For Academic Challenge – June 1, 2010 @
For Workforce Grant – check with your financial aid administrator
For Higher Education Opportunity Grant – June 1, 2010 (fall term) @; November 1, 2010 (spring term) @
California For initial awards – March 2, 2010 +*
For additional community college awards – September 2, 2010 – date postmarked +*
Colorado Check with your financial aid administrator
Connecticut February 15, 2010 #*
Delaware April 15, 2010 @
District of Columbia June 30, 2010 @#*
Federated States of Micronesia Check with your financial aid administrator*
Florida May 15, 2010 – date processed
Georgia Check with your financial aid administrator
Guam Check with your financial aid administrator*
Hawaii Check with you financial aid administrator*
Idaho Opportunity Grant – March 1, 2010 @#*
Illinois As soon as possible after January 1, 2010. Awards made until funds are depleted.
Indiana March 10, 2010 &
Iowa July 1, 2010 @
Kansas April 1, 2010 @#*
Kentucky March 15, 2010 &#
Louisiana July 1, 2010 @
Maine May 1, 2010 @
Marshall Islands Check with your financial aid administrator*
Maryland March 1, 2010 &
Massachusetts May 1, 2010 @#
Michigan March 1, 2010 &
Minnesota 30 days after term starts @
Mississippi MTAG and MESG Grants – September 15, 2010 @#
HELP Scholarship – March 31, 2010 @#
Missouri April 1, 2010 @#
Montana March 1, 2010 #&
Nebraska Check with your financial aid administrator*
Nevada Check with your financial aid administrator*
New Hampshire May 1, 2010 @
New Jersey 2009-2010 Tuition Aid Grant recipients – June 1, 2010 @
All other applications – October 1, 2010, for fall and spring terms @;
March 1, 2011, for spring term only @
New Mexico Check with your financial aid administrator*
New York May 1, 2011 @+*
North Carolina Check with your finanacial aid administrator
North Dakota March 15, 2010 &
Northern Mariana Islands Check with your financial aid administrator*
Ohio October 1, 2010 @
Oklahoma April 15, 2010 @#
Oregon OSAC scholarship – March 1, 2010
Oregon Opportunity Grant – check with your financial aid adminstrator
Palau Check with your financial aid administrator*
Pennsylvania All 2009-2010 State Grant recipients and all non-2009-2010 State Grant recipients in degree programs – May 1, 2010 @*
All other applicants – August 1, 2010 @*
Puerto Rico Check with your financial aid administrator
Rhode Island March 1, 2010 &#
South Carolina Tuition Grants – June 30, 2010 @
SC Commission on Higher Education – no deadline
South Dakota Check with your financial aid administrator*
Tennessee For State Grant – February 15, 2010 @#
For State Lottery – September 1, 2010 @#
Texas Check with your financial aid administrator*
U.S. Virgin Islands Check with your financial aid administrator*
Utah Check with your financial aid administrator
Vermont Check with your financial aid administrator*
Virginia Check with your financial aid administrator*
Washington Check with your financial aid administrator
West Virginia April 15, 2010 @#*
Wisconsin Check with your financial aid administrator
Wyoming Check with your financial aid administrator*

* Additional form may be required. Contact your financial aid administrator or your state agency.
^ Applicants encouraged to obtain proof of mailing.
# For priority consideration, submit application by date specified.
@ Deadline by midnight, Central Daylight Time.
& Deadline by midnight, Central Standard Time.

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CBS Reports – Paying For College

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Best Value Colleges (Public and Private) for 2010

Best Value Colleges (Public and Private) for 2010

collegemoneyRankings for Colleges and Universities has been in existence probably since the founding of the first three educational institutions in the early American colonial era. If you are curious about which three were first, it all started with New College (known know as Harvard) in 1636, College of William and Mary in 1693, and Collegiate School (Yale) in 1701. If you want to see about others, Wikepedia has a nice chart for your perusal.

Ok.. enough of the history lesson..

Following tradition of ranking educational institutions, the Princeton Review has released the top 20 value picks for Colleges and Universities for 2010. You may be in disbelief about some of the names below but keep in mind that these are the Best Value schools and not necessarily the Cheapest.

Enjoy!

PUBLIC

1. University of Virginia (Charlottesville)
2. City University of New YorkHunter College (New York, N.Y.)
3. New College of Florida (Sarasota)
4. Florida State University (Tallahassee)
5. University of Colorado-Boulder
6. State University of New York-Binghamton
7. University of Georgia (Athens)
8. Virginia Polytechnic Institute and State University (Blacksburg)
9. Texas A&M University (College Station)
10. University of Oklahoma (Norman)

PRIVATE

1. Swarthmore College (Swarthmore, Pa.)
2. Harvard College (Cambridge, Mass.)
3. Wesleyan College (Macon, Ga.)
4. Princeton University (Princeton, N.J.)
5. Yale University (New Haven, Conn.)
6. Williams College (Williamstown, Mass.)
7. Rice University (Houston, Texas)
8. Massachusetts Institute of Technology (Cambridge, Mass.)
9. Amherst College (Amherst, Mass.)
10. Wellesley College (Wellesley, Mass.)

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