K – 12 School – Overview
Financial Aid for K-12 School
K-12 school in this section refers to any k-12 school for which you must pay for your child to attend, particularly independent school, boarding school and parochial school. To keep the terms straight, when we refer to school this is the type of school we are referring to. Moreover, school is school and college is college.
The National Association of Independent Schools (NAIS) has a membership of over 1,400 independent schools and is the primary source of services and support for independent schools in the United States.
Most NAIS-member schools and several non-member schools use the NAIS School and Student Service for Financial Aid (SSS) to determine your expected contribution toward the cost of the school when you complete and submit the Parents’ Financial Statement (PFS). For more information on the PFS and SSS, please visit the NAIS website at www.nais.org. Read more
Saving for College – Saving for School and College Costs
A Brief Word on Saving for Education Costs
This section offers detailed information on 529 college savings and 529 college prepaid plans, Coverdell Education Savings Accounts (ESAs) and other savings options, but there are some basic guidelines to follow with regard to saving for education costs that should be mentioned briefly. Read more
Paying for College – Description and Comparison of Loans
Sometimes taking loans is necessary in order to pay for private school and college. The following is an overview of the common types of loans associated with education funding, followed by a bit of guidance to help you understand which loan(s) might be best for you and your child. Read more
Paying for College – Making the Most of Your Personal Resources
Controlling and Reducing Household Expenses
Budgeting
A budget is really just a way to organize and determine how much you plan to spend, and actually spend, on your household expenses each month. Most budgets are organized by categories such as transportation, housing, groceries, utilities, clothing, recreation, etc. The goals of a budget are to keep your finances organized, keep track of where you are spending your money and help you to save as much as possible while maintaining your lifestyle. Read more
Paying for College – Tax Saving Tactics
This section provides an overview of earned and unearned income, how those types of income are taxed and how the various tax deductions, exemptions and education tax credits can be used to reduce federal income tax. Read more
Paying for College – Taxes and Education Tax Benefits
The Two Types of Income
After you have done everything possible to reduce your out-of-pocket costs for education, you then need to determine if there are any ways to reduce the impact of taxes as you go about paying for those costs.
To reduce income taxes it is helpful to start with the types of income first. For all practical purposes there are two types of income that you must be concerned with from the standpoint of taxation: Earned and unearned.
Earned income is the income that you earn from work and includes wages, tips, self-employment, net income and payments for services performed. This income is taxed at ordinary tax rates based on the tax bracket that you fall in as a result of your net taxable income (after deductions, exemptions and credits).
Unearned income consists of capital gains, dividends and interest. Long-term capital gains and qualifying dividends are taxed at special tax rates, while short-term capital gains and interest are taxed at ordinary tax rates. Read more
Paying for College – Financial Aid
Expected Family Contribution (EFC) Toward College Costs
The Expected Family Contribution (EFC) is the minimum amount that a family is expected to contribute toward the cost of attendance (COA). Calculating expected family contribution is necessary in determining a family’s need for financial aid. Essentially, a family’s EFC is subtracted from the cost of attendance of a college and if the EFC is less than the COA, then the family qualifies for need-based aid because they have a demonstrated need for it. When a family’s EFC is greater than the COA of a school, they won’t qualify for need-based financial aid.
The EFC formula is updated for inflation each year and is administered by the Department of Education based on the guidelines of the Higher Education Act. The Higher Education Act is reauthorized on a regular basis by Congress. Thus the formula is often called the Congressional or Federal Methodology and is required to be used if a school wants to participate in Title IV financial aid programs such as Pell grants, Stafford loans, etc. Read more
Paying for College – The Price of Choice
Is the Price Right?
Before you go shopping for colleges, you should have some idea of whether you want a Chevy, an Audi or a Ferrari. If you want to reduce the cost of education, it helps to start in your price range to begin with. That said, you might not know what your price range is until you get some idea of what a few private schools and colleges are willing to offer in the way of financial aid. Sticker price is different than your net out-of-pocket expenses after all aid is considered. Read more
College Admissions – Terms
College Admissions can be a complicated process with many new terms. Here are the definitions for some common admissions terms.
College Admissions – Applying for College
There is an adage associated with admissions which states, “The thicker the folder, the thinner the applicant.” Put another way, for those people who read reams and reams of applications (or even for those who read simply a relative few), there is nothing more off-putting than receiving letter after letter about an obviously mediocre candidate describing him or her in terms worthy of a Nobel laureate. And, to compound the ignominy, to have these letters solicited from people who barely know the candidate’s name let alone anything more personal about them. Read more
