Nurturing Financial Capability

Financial capability is defined as the capacity—based on knowledge, skills, and access—to manage financial resources effectively.

All parents, of course, hope their children will grow up to be financially responsible, savvy, and confident adults.  However, because financial education has rarely been taught at home or in schools, most parents themselves feel ill-equipped to train and guide their children in matters of money.

To respond to this need, the President’s Advisory Council on Financial Capability (PACFC) recommended the development of a program and resources designed to support families and promote financial literacy among our youth. (more…)

Massive Open Online Courses – MOOCs

Huh? “What the heck is MOOCs?” you are asking, I’m sure. Good question.

“A massive open online course (MOOC) is an online course aimed at large-scale interactive participation and open access via the web. In addition to traditional course materials such as videos, readings, and problem sets, MOOCs provide interactive user forums that help build a community for the students, professors, and teaching assistants (TAs). MOOCs are a recent development in distance education.” ~ From Wikipedia. (more…)

Kids Need Money Mentors

Money MentorWith the level of consumer debt skyrocketing and the cost of housing, education, and health care increasing at double digit rates, younger generations are facing unprecedented challenges to achieving economic security and financial independence.  Therefore, helping our youth to learn effective money management skills, and to adopt good financial habits and attitudes, is more important than ever.

So what can you do if you are worried about the financial future of your children, grandchildren, nieces, and nephews?  The place to start is by considering the positive influence you can have in shaping their financial well-being.  Next, think about and choose specific ways that you can be a proactive Money Mentor in their lives.  Here are suggestions and resources to get you started: (more…)

Good News for College Saving Post-Fiscal Cliff

The American Taxpayer Relief Act of 2012 created some good news for families paying for, or saving for, college.

Congress and the White House agreed that higher education should remain a priority for American families and have decided to leave in place the tax benefits that have eased the pain of college spending for students and their families over the past several years. To make sure you are taking maximum advantage of the tax benefits available for funding a college education, you may wish to consult with a Certified Financial Planner to ensure that you receive every possible benefit from the recent agreement to extend these benefits to American families.

Education tax breaks extended or made permanent

  • The American Opportunity Tax Credit, which helps defray undergraduate college education expenses by allowing borrowers to deduct up to $2,500 was scheduled to expire last year, but has been extended for five years, through the end of 2017.
  • The Tuition and Fees Deduction, which allows taxpayers to claim up to $4,000 in tuition expenses, has also been extended. The deduction, which expired at the end of 2011, was retroactively revived for 2012 and will continue through the end of 2013.
  • Some changes to the Coverdell Education Savings Accounts have been made permanent. The annual contribution limit continues to be $2,000 and that the account may be used for elementary and secondary school expenses. Higher income phase-outs have also been made permanent.
  • The deal permanently repeals a five-year limit for deducting up to $2,500 via the Student Loan Interest Deduction.
  • Tax-advantaged education savings accounts – Coverdell Education Savings Accounts and 529 College Savings Plans – have now become even more attractive with higher income tax rates, deduction phase-outs, and the new Medicare tax on investment earnings.

While this news is relatively good however, it wouldn’t be DC if the news was all good. Higher income earners will not benefit from some of these programs, so financial planning for college should remain a priority in 2013 – along with tax planning strategies to shift income and tax benefits to your college student (when parent income is too high). In addition, a decision on funding levels for federal financial aid has been pushed out to March 1, 2013 so we could see reductions in some aid programs.

As part of your comprehensive financial planning, with a certified finance planner, you financial planning for college can be greatly simplified. Tamarind Financial Planning is here for you, with individual financial planning strategies and personal investment management techniques to help you set, meet, and exceed your financial – and life – goals.

College Financial Aid: 7 Things You Need to Know

Financial aid is money that can help you pay for college. Some aid needs to be paid back or earned, and some aid is a gift. This money is available to all kinds of people. Here are seven important things you should know about financial aid.

1. Financial aid can help you go to college. Getting financial aid can make it possible for you to go to college. Or it might enable you to attend a college you thought you couldn’t afford.

2. More than $207 billion in aid is available. There are four main sources:

  • Federal government (the largest source)
  • State governments
  • Colleges and universities
  • Private organizations

3. You have to apply for aid. One thing is for sure: If you don’t fill out financial aid forms, you won’t get any aid. Even if you think you may not qualify, you should still submit the forms.

4. The FAFSA is the place to start — and it’s free. To qualify for many types of aid, you’ll need to complete the Free Application for Federal Student Aid (FAFSA). This application gives you access to these types of aid:

  • Scholarships and grants: money you don’t have to pay back
  • Work-study jobs: paid, part-time work that’s generally on campus
  • Loans: money you need to pay back, usually after you graduate

5. The FAFSA isn’t only for federal aid. The FAFSA qualifies you for federal aid, but many state governments and colleges also use this application to award their own aid.

6. Completing the FAFSA is convenient. Complete the form online at or download paper forms there. You can even import your family’s tax information directly from the IRS website.

7. More aid is out there. Once you have completed the FAFSA, you should apply for these types of aid:

  • Financial aid at the colleges you are applying to;
  • Private scholarships you are eligible for.

Jodi Okun

Jodi Okun
President and CEO
College Financial Aid Advisors

7 Strategies to Lower Private College Costs

Financial Planning for CollegeIf given the choice, many students would love to have the opportunity to attend one of the nation’s reputable private schools. In general they offer smaller student to teacher ratios, a more intimate learning experience and the ability to graduate within four years, as opposed to the average of five or six years at a public college.

Private colleges continue to provide considerable institutional aid for good students. Since private colleges receive little or no support from state tax dollars, many private colleges must offer institutional aid to stay competitive with the lower priced state colleges.

Institutional Aid

Institutional aid comes from the private colleges’ own institutional funds (endowment funds or tuition discounts) and is given to students in the form of merit grants and scholarships. A private college will also provide good students with considerable institutional aid to help attract them to its institution regardless of the family’s income or asset level. Institutional aid allows private colleges to compete for the best students and can often lower private college tuition costs into the same price range as a public university.

It is important for you and your student to ask for information from each private college about the various merit grants, scholarships and other incentives available, as they differ from college to college. What you need to remember is that your student does not necessarily need to have exceptional grades and test scores to qualify for institutional aid.

With the exception of the most highly selective schools, there are private colleges looking for strong “B” students with something to offer to the diversity of the freshman class they are trying to assemble. Talents, majors, and extracurricular activities can also contribute to qualifying for an institutional offer.

Positioning Your Child for Institutional Aid

Most Institutional aid is not guaranteed. Students who wish to be considered for institutional aid must position themselves correctly to be recruited by private colleges. Proper positioning should begin early in high school and involves the following seven factors:

1. Good Grades
Good grades are self-explanatory. The presumption is that good grades in high school will mean good grades in college and ultimately graduating from college and becoming an alumnus. Your student should have a minimum of a 3.0 GPA in high school to be in the running for a tuition discount.

2. SAT/ACT Test Scores
The SAT/ACT college prep test scores are merely qualifiers, but colleges have no other way to compare the academic abilities of a student from New York with a student from California. Your student should shoot for a minimum score of 24 on the ACT test, or a 1600 on the SAT test to be in the running for institutional aid.

3. Solid Resume of Achievement
Throughout the high school year, your student should build a solid resume of achievement and list any civic groups or community service projects that he or she was involved in. This will demonstrate to the colleges that your student is well rounded and is active in student activities outside of academic studies. Treat this exactly the same as preparing a resume for a job! Send a resume with the admissions application to each school.

4. Apply Early in the Academic Year
Your student should apply to colleges early in the senior year of high school (September-December). The rule of thumb here is: the earlier the better! Remember, once a particular school begins to fill the upcoming year’s freshman class, the need for a private college to offer institutional aid diminishes.

5. Apply to Schools that Recruit the Same Students
Private colleges who compete with each other for the same students are more likely to give significant institutional aid if they know the student is also applying to a school that is their competition.

6. Apply to Schools that Have a Low Yield Factor
Yield = Number of students actually enrolled / Number of Students admitted

Your student should apply to colleges that have a high admission rate, yet also have a low number of students who actually enroll. Enrollment is key to a college’s survival. Many colleges select students for admission to their school only to have them enroll at and attend another. Private colleges have a constant battle to fill seats every year.

The second tier private colleges are even more challenged, because they must compete with the low cost of public universities and the popularity of the elite private (Ivy League) schools. As a result, your student has a higher probability of receiving institutional aid from private colleges with a low enrollment yield percentage.

7. Apply to 6-8 Colleges
Your student should apply to a minimum of 6-8 colleges. At least four colleges should represent private schools that compete with the student’s primary college choice. Applying to several colleges gives your student the opportunity to receive institutional aid from one college and use that award to ask for a similar, or better, award from a college the student would prefer to attend.

Private colleges compete with each other for the same students and are more likely to give significant institutional aid if they know the student is also applying to a competitive school.

Tamarind Financial Planning is here for you, with individual financial planning strategies and personal investment management techniques to help you set, meet, and exceed your financial – and life – goals.