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Archive | September, 2010

Fidelity Offers 529 College Savings Alternative

Fidelity Offers 529 College Savings Alternative

Tuesday of this week, Fidelity Investments said that it is going to celebrate National College Savings Month by providing something different, something new to all of their clients that are looking for conservative college savings options. Actually, they made no mention of National College Savings Month, but I give them credit for coming up with a new college savings idea that coincides with this month! 😉

As someone that talks with families on a regular basis, I have heard time and time again about how poorly their 529 college savings plans have been performing in the past couple of years. Since most of these funds are invested in stocks and bonds, they are subject to the same volatility that is experienced by the rest of us that have dabbled in the stock market over the years. Some days and months are good and others… not so much.

Since families have been experiencing more of the “not so much”, they are trying to find options that provide guaranteed returns and some sort of protection from the financial ups and downs of the investment market.  Fidelity Investments has heard the call of these families and is happy to oblige.

They are rolling out a 529 savings plan that is an interest bearing bank deposit savings account with FDIC protection. You basically get the best of both worlds. You get the tax advantages of having a 529 college savings plan AND you get the safety net of having your funds be FDIC insured.

The interest rate of return is indexed to the federal funds rate (which is hovering around zero) but one can only hope that is has no where to go but up… if they are investing in Fidelity’s new 529 option.

If you would like to learn more about the college savings options provided by Fidelity, you can check out their website here for more information.

Today marks the last day of National College Savings Month, but I certainly hope you know that you don’t have to wait for September of each year to start a college savings fund. If you are busy today and have to open a college savings account tomorrow, trust me… no one will harass you because it is October and not September! 😉

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FAFSA – IRS Linking Now in Full Effect

FAFSA – IRS Linking Now in Full Effect

The Department of Education has been making a concerted effort to streamline the FAFSA process for families. This last year they introduced a “skip-logic” technology that eliminated a series of redundant questions from the online application process. In addition, they rolled out a test trial of the IRS data retrieval tool for late FAFSA filers.  And now, earlier this week, the Department of Education stated that this new IRS/FAFSA linking feature will be available for all initial and renewal FAFSA applications being submitted for the 2010-2011 academic year.

It is anticipated that the FAFSA application for the 2011-2012 academic year, which is available online on January 1st 2011, will also have the IRS Linking service capability toward the end of January.

Based upon conversations I have had with some families, this new linking capability is a little much for them to stomach. They made comments along the lines of “big brother watching” and the “government being too involved in too much”. However, after further discussion, they seem open to anything that is going to simplify the FAFSA process for their family each year.

As you can imagine, there are some criteria that must be met in order for a family to be eligible to use the IRS-FAFSA linking feature. The following represents some of the more common rules:

  • Must be filing an initial or renewal 2010-2011 FAFSA (IRS Data Retrieval will not be available for corrections entry for 2010-2011)
  • 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 2009 federal tax return
  • Marital status has not changed since December 31, 2009

The following list represents who can not or should not try using the IRS-FAFSA linking option because the data will be incomplete:

  • 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, 2010 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 2009, have [you, your parent] completed [your, their] IRS income tax return or another tax return?” FAFSA question
  • Students or parents who filed an amended federal tax return for 2009 (the IRS database used for this process contains only original IRS information, not information from amended returns)
  • Students or parents whose 2009 federal tax filing status was “married filing separately”
  • Students or parents who filed a foreign (or Puerto Rican) tax return

This whole IRS-FAFSA data linking process appears to be pretty slick but if you are one of those parents that feels uncomfortable with making the connection between your FAFSA and the IRS, you do have the ability to opt out of the linking application and manually input all your data. However, doing this may increase your odds of being selected for verification.

Hope you found this article helpful. If you know of anyone going through the online FAFSA process anytime in the near future, please feel free to use the “share tab” below to pass this information onto them.

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Like Science? Full Ride STEM Scholarships Available Here

Like Science? Full Ride STEM Scholarships Available Here

The U.S. Department of Defense is looking for 300 of the best and brightest students in the nation that have an interest in Science, Technology, Engineering, or Mathematics (STEM). These students will have an opportunity to receive scholarship dollars, ranging between $25,000 and $41,000, to cover tuition and fees at the university or college of their choice (does not cover housing and food). The sum of these scholarships will be $45 million dollars over a four year period. This program is being referred to as the SMART Scholarship (Science Math And Research for Transformation).

Students pursuing degrees in the following are encouraged to apply:

• Aeronautical and Astronautical Engineering

• Biosciences

• Chemical Engineering

• Chemistry

• Civil Engineering

• Cognitive, Neural, and Behavioral Sciences

• Computer and Computational Sciences

• Electrical Engineering

• Geosciences

• Industrial and Systems Engineering

(technical tracks only)

• Information Sciences

• Materials Science and Engineering

• Mathematics

• Mechanical Engineering

• Naval Architecture and Ocean Engineering

• Nuclear Engineering

• Oceanography

• Operations Research

(technical tracks only)

• Physics

“The SMART Scholarship Program is one of the nation’s most generous scholarship programs funded by the Department of Defense to help support education and job placement for America’s next generation of scientists and engineers,” said Smart Program Manager Deborah Shifflett.

Not only does this program pay for college but it will also provide paid internship opportunities during the summer with the Department of Defense in addition to a job offer after graduation from DoD in one of their research facilities.

The following are the eligibility requirements:

  • a U.S. citizen,
  • 18 years of age or older as of August 1, 2011,
  • able to participate in summer internships at DoD laboratories,
  • willing to accept post-graduate employment with the DoD,
  • a student in good standing with a minimum cumulative GPA of 3.0 on a 4.0 scale (as calculated by the SMART application) and,
  • pursuing an undergraduate or graduate degree in one of the disciplines listed above.

If you would like to apply for these scholarship dollars, you can start the application process here. Deadline for Application is December 1st, 2010.

If you know of a student that is interested in this area of study and looking for additional funding for college, please use the “share tab” below to pass this information onto them.

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Need Cash For College? – Play The Lottery

Need Cash For College? – Play The Lottery

Playing the lottery just got more interesting in the great state of Illinois. The Illinois Lottery System is rolling out a new type of scratch and win ticket called the “Cash 4 College“.  Officials state that the tickets cost $2 and that they will offer 5 winners the opportunity to cover 4 years of college tuition and mandatory fees. If the winner can’t use the tuition benefit, they have the option of accepting a $20,000 cash prize.  I just did some quick math in my head and I can’t imagine anyone taking the cash payout option over the tuition benefit. Chances are that 4 years of tuition, even at the cheapest public university, is going to be more than $20,000.

The following are some quick facts about the tuition lottery:

Can I give the prize to someone else?
Absolutely!  Players may award the contract to a friend, relative or anyone else that may otherwise qualify for the same purchased college tuition contract.  Any resident of Illinois can be designated as a beneficiary from the moment of birth. No maximum age limits apply. Non-residents can be designated as beneficiaries, provided that purchaser has resided in Illinois for at least 12 months immediately prior to purchase.

What is covered in the full-tuition ticket? The College Illinois! 529 Prepaid Tuition Program covers in-state or in-district tuition and mandatory fees for the number of semesters purchased. Each semester is equal to 15 credit hours. Mandatory fees are those fees required as a condition of enrollment for all students.

Can I use the tuition prize for private or out-of-state colleges? In general, the College Illinois! 529 Prepaid Tuition Program benefits can be used at any non-profit, accredited institution eligible to receive federal financial aid. This includes any Illinois public university or community college and most any public or private college throughout the country.

So.. if you live in Illinois, or happen to be passing through, you may want to pick up one of these scratch and win tickets. Scoring free tuition would be great but I wouldn’t recommend tapping the college savings fund to purchase these tickets. At the very least, they may make for a great stocking stuffer for family members or friends that are entering into the college search process.

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School House Rock – Constitution (Video)

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Today is Constitution Day – Large Impact On Colleges

Today is Constitution Day – Large Impact On Colleges

A legislative spending bill that was passed in 2004 will forever make Constitution Day a hallmark of all college campuses across the nation. Why…you ask? In that bill a provision was authored by the late Sen. Robert Byrd that required all colleges and universities to incorporate Constitution Day into their curriculum or campus activities on September 17th if they want to remain eligible to receive Title IV monies (financial aid) from the federal government.

Here is the excerpt from the legislative bill referencing Constitution Day:

This notice informs educational institutions receiving Federal funds from the U.S. Department of Education (Department) of a new statutory requirement for implementation of an educational program pertaining to the United States Constitution, on a date designated by statute as Constitution Day and Citizenship Day (“Constitution Day”). This Congressional initiative is authorized by Section 111 of Division J of Pub. L. 108-447, the “Consolidated Appropriations Act, 2005,” Dec. 8, 2004; 118 Stat. 2809, 3344-45 (Section 111). The Assistant Deputy Secretary for Innovation and Improvement (Assistant Deputy Secretary) takes this action in order to implement this provision as it applies to educational institutions receiving Federal funding from the Department. Section 111(b) states “[e]ach educational institution that receives Federal funds for a fiscal year shall hold an educational program on the United States Constitution on September 17 of such year for the students served by the educational institution.” For purposes of the Department’s implementation of this requirement, “educational institutions” includes but is not limited to “local educational agencies” and “institutions of higher education” receiving Federal funding from the Department. Section 111 applies to all educational institutions receiving Federal funding, not only those receiving Federal funding from the Department. However, the Department’s authority only extends to those educational institutions receiving funding from the Department, and consequently the Department can only regulate with regard to those institutions. Section 111 requires that Constitution Day be held on September 17 of each year, commemorating the September 17, 1787 signing of the Constitution. However, when September 17 falls on a Saturday, Sunday, or holiday, Constitution Day shall be held during the preceding or following week. Section 111 does not authorize funds to carry out this requirement, and Section 111(d) indicates that this section shall apply “without fiscal year limitation.” Accordingly, the Assistant Deputy Secretary intends that this notice pertain to this fiscal year and all subsequent years.

While some schools believe the provision to be unconstitutional (how ironic?), you will probably see a lot of your campuses doing a number of things to help get the word out about the Constitution. And yes, a mass email to the student body from the Dean’s Office, as boring of an approach as it may be, probably qualifies under the provision above. 😉

If you would like to see the actual Constitution in real electronically scanned life, you can click on this link to visit the National Archives.

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Sallie Mae Sells Final Round of Student Loans (ECASLA)

Sallie Mae Sells Final Round of Student Loans (ECASLA)

In 2003 the Ensuring Continued Access to Student Loans Act (ECASLA) was put into place as a method to stabilize the student loan industry and insure lender participation from year to year. Basically, ECASLA was a piece of legislation that allowed education lenders the opportunity to sell off their loan portfolios each year to the Department of Education.  The money garnered from the transaction was then put back into the financial institution’s lending pool and doled out to students again in the form of education loans. This process kept lenders in business and students with access to federally backed education loans….until now.

Starting this year, banks and financial institutions are no longer part of the federal student loan process and all loans come directly from the Department of Education via Great debates and discussions have challenged the pros and cons of taking the “middle man” out of the federal student loan process but the end result is that they are now missing from the equation.

Based upon this, Sallie Mae recently announced that they will be selling off their final round of qualifying loans to the Department of Education on October 12th under the soon to expire ECASLA. This is certainly a monumental moment in the world of financial aid and student lending as this final transaction marks the end of an era in which banking institutions profited off of the federal student loan program.

The following is the eligibility criteria put into place by the Department of Education that depicts which loans they will purchase (and which ones they will not):

  • Were first disbursed between May 1, 2009, and June 30, 2010.
  • Have a loan period that includes or begins on or after July 1, 2009.
  • Are fully disbursed by September 30, 2010.
  • Have no borrower benefits other than a 0.25 percentage point interest rate reduction for auto-debit.

Sallie Mae will be contacting all affected borrowers prior to the sale and informing them of the change in where their loan will be housed. If borrowers don’t meet the loan criteria above, they will continue to make their payments directly to Sallie Mae.

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College In America – Statistics and Figures

College In America – Statistics and Figures

I don’t know about you but I really enjoy checking out statistics on a number of topics but I tend to gravitate toward higher education facts and figures just because it is an area in which I can relate on multiple levels.

I recently came across a compilation of college statistics that were put together by and I thought it would be worth sharing with you. Some of the stats are humbling but others are pleasantly enlightening. Staying on topic with’s mission, check out the facts and figures below related to college costs.

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