Jay Mathews has been maintaining the Newsweek’s America’s Best High Schools list since 1998, until this year when he moved that list to The Washington Post. Newsweek editors have created their own list based on a different way of rating schools.
Here's old methodology
High Schools ranking from Washington Post
http://apps.washingtonpost.com/highschoolchallenge/schools/2011/list/new-york-schools/
"The Challenge Index list uses only one factor — the ratio of college level tests to graduating seniors — to rank schools."
High Schools from Rochester, New York
010 Brighton
015 Odyssey Academy
016 Pittsford Sutherland
018 Pittsford Mendon
031 Victor
065 Joseph C. Wilson Magnet
102 Penfield
112 East Rochester
The new methodology
High Schools ranking from Newsweek
http://www.newsweek.com/content/newsweek/feature/2011/americas-best-high-schools.html
"Our new criteria have six components: graduation rate (25%), college matriculation rate (25%), and AP tests taken per graduate (25%), plus average SAT/ACT scores (10%), average AP/IB scores (10%), and AP courses offered per graduate (5%)."
High Schools from Rochester, New York
073 Pittsford Sutherland
099 Pittsford Mendon
147 Brighton
175 Greece Odyssey Academy
245 Fairport
283 Penfield
349 Irondequoit
351 Victor
Both rankings listed 8 schools from Rochester and 5 schools appear on both listings.
Showing posts with label Education. Show all posts
Showing posts with label Education. Show all posts
Tuesday, June 21, 2011
Saturday, December 1, 2007
Ranking of America high schools shown few surprises
U.S. News and World Report released its first ever Best High Schools list in America Friday.
Nearly 1,600 high schools, out of 18,500 analyzed in 40 states, met U.S. News' criteria for great high schools, based on 2005-06 test data. The top 100 schools were awarded "gold medals," followed by 405 silver medals and 1,086 bronze medals.
The following 10 states and the District of Columbia did not have sufficient data available for analysis: Alabama, Alaska, Mississippi, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Utah, and Wyoming.
U.S. News editor Brian Kelly said his magazine evaluated college readiness, as measured by state reading and math test results, and factored in the performance of low-income students - who tend to score lower on tests.
U.S. News also looked at whether black, Latino and low-income students were scoring higher than the statewide average for similar students. Finally, the schools were rated on their AP test participation rate and how high students scored on AP tests.
The result is a more complete picture of education than the Newsweek list, Kelly maintained.
Paul Gazzerro, the lead analyst for the project, said the method requires schools to do more than Newsweek's to be recognized. The methodology was developed by School Evaluation Services, a K-12 education data research business run by Standard & Poor's.
Kelly said that it's important to measure schools based on how all students are doing, not just the high achievers.
"To be a very good school performing at a very good level is not enough," Kelly said. "We're looking at schools that are exceeding expectations."
Kelly stressed that it didn't mean a school is bad if it didn't receive an award from the magazine. But Gazzerro said it could show that a school's disadvantaged students are "falling through the cracks."
However, 20% of schools on the list are selective.
Nearly 1,600 high schools, out of 18,500 analyzed in 40 states, met U.S. News' criteria for great high schools, based on 2005-06 test data. The top 100 schools were awarded "gold medals," followed by 405 silver medals and 1,086 bronze medals.
The following 10 states and the District of Columbia did not have sufficient data available for analysis: Alabama, Alaska, Mississippi, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Utah, and Wyoming.
U.S. News editor Brian Kelly said his magazine evaluated college readiness, as measured by state reading and math test results, and factored in the performance of low-income students - who tend to score lower on tests.
U.S. News also looked at whether black, Latino and low-income students were scoring higher than the statewide average for similar students. Finally, the schools were rated on their AP test participation rate and how high students scored on AP tests.
The result is a more complete picture of education than the Newsweek list, Kelly maintained.
Paul Gazzerro, the lead analyst for the project, said the method requires schools to do more than Newsweek's to be recognized. The methodology was developed by School Evaluation Services, a K-12 education data research business run by Standard & Poor's.
Kelly said that it's important to measure schools based on how all students are doing, not just the high achievers.
"To be a very good school performing at a very good level is not enough," Kelly said. "We're looking at schools that are exceeding expectations."
Kelly stressed that it didn't mean a school is bad if it didn't receive an award from the magazine. But Gazzerro said it could show that a school's disadvantaged students are "falling through the cracks."
However, 20% of schools on the list are selective.
Tuesday, August 7, 2007
New method college
I studied at 新法書院 from F1 to F5 ...
How the school started
1953年，創校人王澤森博士在加路連山道買地擴建校舍，加路連山道分校遂於1956年落成。而太子道分校、大坑道分校、文褔道分校分別於1964、1966、1971年落成。當時該校連同英文專修日、夜校的學生 曾接近二萬。
How the school going to end
於一九四九年創校、至今已有五十七年歷史的老牌學校新法書院，突然宣布六年後 (2012) 停止辦學，該校將於明年 (2007) 九月起停止招收中一級新生，成為本港第三間停辦的直資中學。該校校長黃廣威解釋，辦學團體在檢討過現有校舍的空間及地理環境後，認為現有的校舍無法為學生提供足夠的配套及學習環境，他說︰「校舍只有三千平方米，根本沒辦法與其他擁有千禧校舍的學校相比，暫時未有在其他地方重新辦學的計劃。」
近年收生理想
位於何文田文福道的新法書院是本港其中一間老牌學校，四九年創校後經歷過「私校」及「買位」兩個階段，該校於九七年加入育統籌局推出的「直接資助計劃」，轉為「直資學校」，新法書院近年不斷透過電視廣告宣傳學校，又推出中一至中三免學費優惠，近年收生情況理想。
But
校方前天發出通告，指校方因為「未能再進一步為同學提供更佳之學習環境」所以決定停止辦學。黃廣威強調，停辦是以學校發展為大前提，與財政問題無關，現時學校一千二百名學生不會受到停止辦學影響，他說︰「學校會等所有學生畢業後才停辦，現有學生不會受影響……宣布停辦後，校方預計今年的中一收生情況會受到影響。」統局發言人指出，局方早前已得悉新法書院以「營辦上的考慮」為理由，將於0七年九月開始停止招收中一級新生。
I still remembered ... those 新法書院的校服
夏季時, 女生穿藍衣白裙的水手服, 男生純白襯衫和白褲。
How the school started
1953年，創校人王澤森博士在加路連山道買地擴建校舍，加路連山道分校遂於1956年落成。而太子道分校、大坑道分校、文褔道分校分別於1964、1966、1971年落成。當時該校連同英文專修日、夜校的學生 曾接近二萬。
How the school going to end
於一九四九年創校、至今已有五十七年歷史的老牌學校新法書院，突然宣布六年後 (2012) 停止辦學，該校將於明年 (2007) 九月起停止招收中一級新生，成為本港第三間停辦的直資中學。該校校長黃廣威解釋，辦學團體在檢討過現有校舍的空間及地理環境後，認為現有的校舍無法為學生提供足夠的配套及學習環境，他說︰「校舍只有三千平方米，根本沒辦法與其他擁有千禧校舍的學校相比，暫時未有在其他地方重新辦學的計劃。」
近年收生理想
位於何文田文福道的新法書院是本港其中一間老牌學校，四九年創校後經歷過「私校」及「買位」兩個階段，該校於九七年加入育統籌局推出的「直接資助計劃」，轉為「直資學校」，新法書院近年不斷透過電視廣告宣傳學校，又推出中一至中三免學費優惠，近年收生情況理想。
But
校方前天發出通告，指校方因為「未能再進一步為同學提供更佳之學習環境」所以決定停止辦學。黃廣威強調，停辦是以學校發展為大前提，與財政問題無關，現時學校一千二百名學生不會受到停止辦學影響，他說︰「學校會等所有學生畢業後才停辦，現有學生不會受影響……宣布停辦後，校方預計今年的中一收生情況會受到影響。」統局發言人指出，局方早前已得悉新法書院以「營辦上的考慮」為理由，將於0七年九月開始停止招收中一級新生。
I still remembered ... those 新法書院的校服
夏季時, 女生穿藍衣白裙的水手服, 男生純白襯衫和白褲。
Monday, July 9, 2007
7 myths about student loan
Source: ANNE MARIE CHAKER of wsj.com on July 9, 2007
My comments
Student loans have replaced grants and scholarships as the primary source of financial aid.
Changes to the Bankruptcy Code in 1998 made student loans non-dischargeable, regardless of the age of the loan; unless the borrower can establish substantial hardship. Law changes in 2005 made even private student loans non-dischargeable.
Although Anne Chaker titled her article as “7 myths about college finances”, these myths are really about the student loans.
This past school year (2006 – 2007), average total tuition and fees at private colleges rose to $22,218 - almost 6% more than the previous year. Add room and board, and the cost climbs to $30,367.
Myth No. 1: Financial aid comes only in the form of grants and scholarships
While scholarships and grants certainly are the best form of financial aid, aid can also come in the form of federal loans that carry favorable interest rates and that can be available regardless of need.
The most common student loan is the Stafford loan (subsidized and unsubsidized). The unsubsidized type doesn't require the student to demonstrate need. But they are available only to those who have filled out the Free Application for Federal Student Aid (FAFSA), which is something many middle- and upper-income families don't bother to do.
The interest rate on Stafford loans is currently set at a maximum of 6.8% (after 1 July 2006). By comparison, the rate on loans from private lenders isn't capped and currently averages around 10% at some of the biggest lenders. For a $20,000 loan, that's a difference of about $4,100 over the typical 10-year life of a loan.
Federal student loans also carry more-flexible repayment terms than loans from private lenders. For instance, a borrower who is unemployed or facing economic hardship can request a deferment, which allows the borrower to postpone repaying the loan.
For subsidized loan programs, the government pays the interest during the deferment.
There are even loan-forgiveness programs available for borrowers who take some teaching jobs or who enter public service. The federal teacher loan-forgiveness program allows certain math, science and special-education teachers in low-income schools to qualify for up to $17,500 toward the repayment of their student loans.
In addition, many states offer loan-forgiveness programs for their resident teachers. The American Federation of Teachers maintains a list of state-by-state offerings at aft.org/teachers/jft/loanforgiveness.htm. Certain public-service organizations offer their own loan-forgiveness programs, such as AmeriCorps, which will grant volunteers with at least one year of service as much as $4,725 toward loan repayments or future tuition.
One drawback of federal student loans is that there are limits on how much can be borrowed this way. But Congress recently moved to raise the cap for some students. Effective this month (July 2007), the annual limits on Stafford loans for dependent freshmen and sophomores are $3,500 and $4,500, respectively, up from $2,625 and $3,500. Juniors and seniors can borrow up to $5,500 a year.
If student loans aren't enough to cover expenses, parents of undergraduates are also entitled to federal loans: The PLUS loan has the benefit of not carrying any set borrowing limits -- though the total can't exceed the cost of attendance minus other forms of aid -- and the interest rate is set at a maximum of 8.5%. Just remember it's the parent, not the student, on the hook for repayment.
Myth No. 2: My retirement funds and my home will prevent me from getting need-based aid.
Under the federal calculus for distributing aid, retirement plans are completely excluded. (However, you’ll have to report current year contirbutions.) So is the home you live in. On top of that, the federal government shelters a certain amount of general parent savings, for retirement purposes. This "asset protection allowance" varies based on age, but for a typical parent of a college-age child, the figure is around $45,000 to $50,000.
Many private colleges use a separate form to determine how much of their own aid to distribute. It also excludes retirement assets, but it does ask for the net home equity of the family's primary residence, capping it at two to three times annual income.
Myth No. 3: I should choose a lender from the list of "preferred" lending companies recommended by my college financial-aid office.
The New York Attorney General's probe and investigations by members of Congress suggest that lenders haven't always been recommended by financial-aid officers based entirely on students' interests. So you may want to do at least some shopping for loans on your own.
Lenders compete with one another largely by offering "borrower benefits" that lower the costs of their loans. But borrowers should be skeptical of some of these discounts, which can be easy to lose if a student misses a payment.
Examples
Citibank offers a discount of one percentage point on the interest rate of a Stafford loan - but a student who misses a scheduled payment loses the discount and has to make 24 consecutive payments on time in order to regain it. Nelnet Inc. offers a 3.33% reduction on the original principal balance -- if the first 30 payments are made on time. Once the discount is lost, it cannot be regained.
Some deals are more forgiving. Northstar Education Finance Inc., of St. Paul, Minn., offers a month-by-month credit on its student loans that can amount to an annual rate reduction of up to 1.3 percentage points. Students lose the credit only if they fall 60 days past due on a payment. Once the borrower is caught up again on payments, the benefit resumes.
Because the discounting formulas vary markedly from one company to the next, it can be extremely difficult to calculate the best deal. Mark Kantrowitz, publisher of FinAid.org, a free guide to financial aid, has come up with a calculator on his Web site that allows consumers to punch in various criteria to compare discounts from the different companies.
Myth No. 4: I'm doomed: I'll have two kids in college at the same time.
The federal assessment of aid eligibility is based on an "expected family contribution" -- the amount of money that parents are expected to shell out, based on their financial picture. That expected outlay stays the same no matter how many kids you have in college at the same time. So if you have two or more kids attending college, your expected contribution is split among them.
The upshot: You are likely to qualify for more aid when you have multiple children in college at once.
Myth No. 5: The federal aid process is bound by a strict formula, and it's virtually impossible to have any special consideration out of college administrators.
While it's true that everyone applying for federal aid must answer the same questions on the FAFSA, there may be special circumstances worth alerting the college financial-aid office to.
The Higher Education Act, which authorizes federal aid programs, gives college aid officers the authority to make adjustments when they feel it's warranted. If you have a solid case, backed up by documentation, it's definitely worth requesting a "Professional Judgment Review" in a letter addressed to the financial-aid officer and supported by documentation.
For example, if your income looks artificially high in the year that's being evaluated, explain why (perhaps it was due to an atypical bonus) and provide previous tax returns to show what it's normally like. Other instances not covered by the FAFSA and worth alerting the financial-aid office to: high medical costs, a death, private-school tuition for kids not yet in college, divorce, job loss, a big decrease in family income.
Myth No. 6: Our brilliant/talented/athletic child will get plenty of privately funded scholarships, maybe even a free ride.
92% of financial-aid officers said that parents overestimated the amount of scholarship and grant money their students received.
That is not to say you shouldn't search. In fact, there are several scholarship search services available free online. Sites like FastWeb (fastweb.com11) or the College Board's scholarship search service (collegeboard.com12) match student profiles to scholarship opportunities.
Myth No. 7: The 529 college-savings plan offered by my state is bound to be the best for me.
Parents should shop around.
Some states offer their own tax breaks on these plans for state residents, so it is smart to take a good look at your own state plan.
But you should also take a hard look at the fees. Most experts say you should pay no more than 1.5% of assets in fees and other expenses. High-fee plans can easily cancel out any tax breaks that come with investing in your own state plan.
Morningstar Inc., the Chicago-based financial-information firm, rates the following state plans among the best because of their low fees and the performance of their investments:
My comments
Student loans have replaced grants and scholarships as the primary source of financial aid.
Changes to the Bankruptcy Code in 1998 made student loans non-dischargeable, regardless of the age of the loan; unless the borrower can establish substantial hardship. Law changes in 2005 made even private student loans non-dischargeable.
Although Anne Chaker titled her article as “7 myths about college finances”, these myths are really about the student loans.
This past school year (2006 – 2007), average total tuition and fees at private colleges rose to $22,218 - almost 6% more than the previous year. Add room and board, and the cost climbs to $30,367.
Myth No. 1: Financial aid comes only in the form of grants and scholarships
While scholarships and grants certainly are the best form of financial aid, aid can also come in the form of federal loans that carry favorable interest rates and that can be available regardless of need.
The most common student loan is the Stafford loan (subsidized and unsubsidized). The unsubsidized type doesn't require the student to demonstrate need. But they are available only to those who have filled out the Free Application for Federal Student Aid (FAFSA), which is something many middle- and upper-income families don't bother to do.
The interest rate on Stafford loans is currently set at a maximum of 6.8% (after 1 July 2006). By comparison, the rate on loans from private lenders isn't capped and currently averages around 10% at some of the biggest lenders. For a $20,000 loan, that's a difference of about $4,100 over the typical 10-year life of a loan.
Federal student loans also carry more-flexible repayment terms than loans from private lenders. For instance, a borrower who is unemployed or facing economic hardship can request a deferment, which allows the borrower to postpone repaying the loan.
For subsidized loan programs, the government pays the interest during the deferment.
There are even loan-forgiveness programs available for borrowers who take some teaching jobs or who enter public service. The federal teacher loan-forgiveness program allows certain math, science and special-education teachers in low-income schools to qualify for up to $17,500 toward the repayment of their student loans.
In addition, many states offer loan-forgiveness programs for their resident teachers. The American Federation of Teachers maintains a list of state-by-state offerings at aft.org/teachers/jft/loanforgiveness.htm. Certain public-service organizations offer their own loan-forgiveness programs, such as AmeriCorps, which will grant volunteers with at least one year of service as much as $4,725 toward loan repayments or future tuition.
One drawback of federal student loans is that there are limits on how much can be borrowed this way. But Congress recently moved to raise the cap for some students. Effective this month (July 2007), the annual limits on Stafford loans for dependent freshmen and sophomores are $3,500 and $4,500, respectively, up from $2,625 and $3,500. Juniors and seniors can borrow up to $5,500 a year.
If student loans aren't enough to cover expenses, parents of undergraduates are also entitled to federal loans: The PLUS loan has the benefit of not carrying any set borrowing limits -- though the total can't exceed the cost of attendance minus other forms of aid -- and the interest rate is set at a maximum of 8.5%. Just remember it's the parent, not the student, on the hook for repayment.
Myth No. 2: My retirement funds and my home will prevent me from getting need-based aid.
Under the federal calculus for distributing aid, retirement plans are completely excluded. (However, you’ll have to report current year contirbutions.) So is the home you live in. On top of that, the federal government shelters a certain amount of general parent savings, for retirement purposes. This "asset protection allowance" varies based on age, but for a typical parent of a college-age child, the figure is around $45,000 to $50,000.
Many private colleges use a separate form to determine how much of their own aid to distribute. It also excludes retirement assets, but it does ask for the net home equity of the family's primary residence, capping it at two to three times annual income.
Myth No. 3: I should choose a lender from the list of "preferred" lending companies recommended by my college financial-aid office.
The New York Attorney General's probe and investigations by members of Congress suggest that lenders haven't always been recommended by financial-aid officers based entirely on students' interests. So you may want to do at least some shopping for loans on your own.
Lenders compete with one another largely by offering "borrower benefits" that lower the costs of their loans. But borrowers should be skeptical of some of these discounts, which can be easy to lose if a student misses a payment.
Examples
Citibank offers a discount of one percentage point on the interest rate of a Stafford loan - but a student who misses a scheduled payment loses the discount and has to make 24 consecutive payments on time in order to regain it. Nelnet Inc. offers a 3.33% reduction on the original principal balance -- if the first 30 payments are made on time. Once the discount is lost, it cannot be regained.
Some deals are more forgiving. Northstar Education Finance Inc., of St. Paul, Minn., offers a month-by-month credit on its student loans that can amount to an annual rate reduction of up to 1.3 percentage points. Students lose the credit only if they fall 60 days past due on a payment. Once the borrower is caught up again on payments, the benefit resumes.
Because the discounting formulas vary markedly from one company to the next, it can be extremely difficult to calculate the best deal. Mark Kantrowitz, publisher of FinAid.org, a free guide to financial aid, has come up with a calculator on his Web site that allows consumers to punch in various criteria to compare discounts from the different companies.
Myth No. 4: I'm doomed: I'll have two kids in college at the same time.
The federal assessment of aid eligibility is based on an "expected family contribution" -- the amount of money that parents are expected to shell out, based on their financial picture. That expected outlay stays the same no matter how many kids you have in college at the same time. So if you have two or more kids attending college, your expected contribution is split among them.
The upshot: You are likely to qualify for more aid when you have multiple children in college at once.
Myth No. 5: The federal aid process is bound by a strict formula, and it's virtually impossible to have any special consideration out of college administrators.
While it's true that everyone applying for federal aid must answer the same questions on the FAFSA, there may be special circumstances worth alerting the college financial-aid office to.
The Higher Education Act, which authorizes federal aid programs, gives college aid officers the authority to make adjustments when they feel it's warranted. If you have a solid case, backed up by documentation, it's definitely worth requesting a "Professional Judgment Review" in a letter addressed to the financial-aid officer and supported by documentation.
For example, if your income looks artificially high in the year that's being evaluated, explain why (perhaps it was due to an atypical bonus) and provide previous tax returns to show what it's normally like. Other instances not covered by the FAFSA and worth alerting the financial-aid office to: high medical costs, a death, private-school tuition for kids not yet in college, divorce, job loss, a big decrease in family income.
Myth No. 6: Our brilliant/talented/athletic child will get plenty of privately funded scholarships, maybe even a free ride.
92% of financial-aid officers said that parents overestimated the amount of scholarship and grant money their students received.
That is not to say you shouldn't search. In fact, there are several scholarship search services available free online. Sites like FastWeb (fastweb.com11) or the College Board's scholarship search service (collegeboard.com12) match student profiles to scholarship opportunities.
Myth No. 7: The 529 college-savings plan offered by my state is bound to be the best for me.
Parents should shop around.
Some states offer their own tax breaks on these plans for state residents, so it is smart to take a good look at your own state plan.
But you should also take a hard look at the fees. Most experts say you should pay no more than 1.5% of assets in fees and other expenses. High-fee plans can easily cancel out any tax breaks that come with investing in your own state plan.
Morningstar Inc., the Chicago-based financial-information firm, rates the following state plans among the best because of their low fees and the performance of their investments:
- the Utah Educational Savings Plan,
- the Maryland College Investment Plan and
- the College Savings Plan of Nebraska.
Tuesday, July 3, 2007
How to borrow for higher education
Source: Liz Pulliam Weston
Don't borrow more in total than you expect to make your first year on the job.
This advice should keeps the cost of your debt to something you can actually afford to repay.
If you're not sure what your future career might pay, you can visit the U.S. Bureau of Labor Statistics for estimates.
Don't borrow unless you're sure you'll graduate with a degree.
A degree won't pay off if you never actually get it. If you don't have a clear sense of what you want to study, consider a few semesters at a community college to narrow your major while keeping costs down.
Exhaust federal student loans first.
You won't find cheaper or more flexible educational debt than federal loans.
You also should submit a Free Application for Federal Student Aid (FAFSA) each year to see if you qualify for any grants, scholarships or other help.
Next, consider federal PLUS loans.
This federal loan program is designed for parents who want to help their kids pay for school, hence the name: Parent Loan for Undergraduate Students.
This debt is typically somewhat more expensive than federal student loans, but still cheaper than most private loans.
Lastly, apply for private loans with caution.
You'll get the best rates if you or a co-signer has good credit scores. Pay attention to any fees, since they can significantly increase the cost of a loan.
Check out the information and rate chart at FinAid.org for details on popular loan programs.
Don't borrow more in total than you expect to make your first year on the job.
This advice should keeps the cost of your debt to something you can actually afford to repay.
If you're not sure what your future career might pay, you can visit the U.S. Bureau of Labor Statistics for estimates.
Don't borrow unless you're sure you'll graduate with a degree.
A degree won't pay off if you never actually get it. If you don't have a clear sense of what you want to study, consider a few semesters at a community college to narrow your major while keeping costs down.
Exhaust federal student loans first.
You won't find cheaper or more flexible educational debt than federal loans.
You also should submit a Free Application for Federal Student Aid (FAFSA) each year to see if you qualify for any grants, scholarships or other help.
Next, consider federal PLUS loans.
This federal loan program is designed for parents who want to help their kids pay for school, hence the name: Parent Loan for Undergraduate Students.
This debt is typically somewhat more expensive than federal student loans, but still cheaper than most private loans.
Lastly, apply for private loans with caution.
You'll get the best rates if you or a co-signer has good credit scores. Pay attention to any fees, since they can significantly increase the cost of a loan.
Check out the information and rate chart at FinAid.org for details on popular loan programs.
Wednesday, June 13, 2007
How much student loan debt is reasonable
By Liz Pulliam Weston
If you're a student, you should generally limit your debt so that your loan payments after you graduate don't eat up more than 10% of your expected monthly income.
If you're a parent, try to keep all your loan payments -- for mortgages, cars, credit cards and education -- to 35% or less of your gross monthly income.
By Janet Bodnar
To get an idea of how much debt is reasonable, start with the Student Loan Advisor calculator at http://www.finaid.com/.
You plug in their field of study, expected graduation date and loan interest rate.
The calculator gives them the maximum loan amount they can safely handle, assuming they want to limit their monthly payments to between 10% and 15% of their income.
Examples
Say your future brother-in-law plans to major in education. As a teacher, he can anticipate a starting salary of $35,100, according to the calculator. To limit his payment to 10% of his income, he could borrow about $25,500 at a 6.8% interest rate (the rate on new government-sponsored Stafford loans) with a ten-year repayment schedule.
If he's planning to be a chemical engineer, with a projected starting salary of $60,300, he can borrow $43,700, given the same assumptions
If you're a student, you should generally limit your debt so that your loan payments after you graduate don't eat up more than 10% of your expected monthly income.
If you're a parent, try to keep all your loan payments -- for mortgages, cars, credit cards and education -- to 35% or less of your gross monthly income.
By Janet Bodnar
To get an idea of how much debt is reasonable, start with the Student Loan Advisor calculator at http://www.finaid.com/.
You plug in their field of study, expected graduation date and loan interest rate.
The calculator gives them the maximum loan amount they can safely handle, assuming they want to limit their monthly payments to between 10% and 15% of their income.
Examples
Say your future brother-in-law plans to major in education. As a teacher, he can anticipate a starting salary of $35,100, according to the calculator. To limit his payment to 10% of his income, he could borrow about $25,500 at a 6.8% interest rate (the rate on new government-sponsored Stafford loans) with a ten-year repayment schedule.
If he's planning to be a chemical engineer, with a projected starting salary of $60,300, he can borrow $43,700, given the same assumptions
Sunday, June 10, 2007
How to borrow for college
Sources: Liz Pulliam Weston and Sandra Block
Unlike most other unsecured debt, you can't erase your student loans (federal or private) in bankruptcy court!
Private collection agencies pursue student borrowers hard with special debt-collection weapons (that are not available to collection agencies of other kind of debts) .
There is no statute of limitations on unpaid student-loan debt, and collectors have become increasingly skilled at tracking down defaulters even decades later.
Borrowing tips
1. Don't take on too much debt.
2. When borrowing for college, opt for government-guaranteed student loans before you turn to private loans.
Because private loans aren't guaranteed by the government, interest rates and fees are usually higher than for federal Stafford loans. The maximum that dependent undergraduates can borrow under the federal program is $23,000. So some students with high college costs have to use private loans. But others are taking out private loans before they've taken full advantage of the federal program.
3. If you've already graduated, consolidate your loans before 1 July 2007.
If you're already starting to pay off your loans, you can lock in a 5.375% rate for the life of the loan. Graduates who consolidate during their grace period — the six months before you have to start making monthly payments — can lock in a rate as low as 4.75%.
The 6.8% fixed rate that takes effect July 1 applies to new loans. Loans taken out before then will still have a variable rate that's adjusted every July 1. That variable rate is expected to top 6% on 1 July 2007. Consolidating your loans will let you avoid that increase.
If you're still in school and have loans outstanding, talk to your lender about "in-school" consolidation. That would let you lock in a rate on money you've already borrowed. However, you must consolidate before 1 July 2007. The new law will bar in-school consolidation after that date.
4. Don't compound your problems by running up credit card debt.
The average undergraduate has a credit card balance of $2,169. Only 21% of students paid off their balances each month. Many students use credit cards to pay for books, supplies and class fees. But keep in mind: The average interest rate for a standard, variable-rate card is 13.7%. And overdue payments can cause those rates to soar.
Unlike most other unsecured debt, you can't erase your student loans (federal or private) in bankruptcy court!
Private collection agencies pursue student borrowers hard with special debt-collection weapons (that are not available to collection agencies of other kind of debts) .
There is no statute of limitations on unpaid student-loan debt, and collectors have become increasingly skilled at tracking down defaulters even decades later.
Borrowing tips
1. Don't take on too much debt.
2. When borrowing for college, opt for government-guaranteed student loans before you turn to private loans.
Because private loans aren't guaranteed by the government, interest rates and fees are usually higher than for federal Stafford loans. The maximum that dependent undergraduates can borrow under the federal program is $23,000. So some students with high college costs have to use private loans. But others are taking out private loans before they've taken full advantage of the federal program.
3. If you've already graduated, consolidate your loans before 1 July 2007.
If you're already starting to pay off your loans, you can lock in a 5.375% rate for the life of the loan. Graduates who consolidate during their grace period — the six months before you have to start making monthly payments — can lock in a rate as low as 4.75%.
The 6.8% fixed rate that takes effect July 1 applies to new loans. Loans taken out before then will still have a variable rate that's adjusted every July 1. That variable rate is expected to top 6% on 1 July 2007. Consolidating your loans will let you avoid that increase.
If you're still in school and have loans outstanding, talk to your lender about "in-school" consolidation. That would let you lock in a rate on money you've already borrowed. However, you must consolidate before 1 July 2007. The new law will bar in-school consolidation after that date.
4. Don't compound your problems by running up credit card debt.
The average undergraduate has a credit card balance of $2,169. Only 21% of students paid off their balances each month. Many students use credit cards to pay for books, supplies and class fees. But keep in mind: The average interest rate for a standard, variable-rate card is 13.7%. And overdue payments can cause those rates to soar.
Monday, June 4, 2007
529 loophole
Source: Understanding the new financial aid treatment of 529 plans by Joe Hurley, founder, Savingforcollege.com
529 plans let the parents to put money aside for educational expenses of their and their dependents. In general, they can withdraw the money (contirbution and gains) tax-free to pay for educational expenses.
529 loophole
A new law passed back in February 2006 had removed student-owned 529 plans and Coverdell education savings accounts from the expected family contribution (EFC) in the federal financial aid formula.
We now have the interpretation from US Department of Education.
A 529 account or Coverdell ESA is considered an asset of the account owner; however, 529 accounts or Coverdell ESAs owned by a dependent student are excluded from the FAFSA. Most undergraduates are dependents for FAFSA purpose.
This is exceptional treatment, as student assets are generally assessed at a 20% rate (2007-08 school year) in determining the EFC.
Example:
John and Jill have been saving for their son Billy's future college expenses by purchasing mutual funds in Billy's name under the Uniform Transfers to Minors Act (UTMA). They've saved some income taxes by having the investment earnings reported on Billy's tax returns through the years.
But Billy will be enrolling in college this fall 2007 and those investments are now going to be assessed at a 20% rate in determining Billy's eligibility for federal aids.
Under the new law, John and Jill can dramatically improve Billy's aid eligibility by liquidating his current investments and moving the money into a 529 plan with Billy as both owner and beneficiary.
Provided the assets are moved to the 529 prior to filing the FAFSA, they will be removed completely from consideration.
Here is where things currently stand:
--The financial-aid changes were effective starting the 2006-07 school year.
--The law as written permits dependent students owning 529 plans and ESAs to exclude those assets from the FAFSA.
--Starting the 2007-08 school year, the asset inclusion factor for student-owned assets is lower to 20% (from 35%).
--Moving money from a student-owned or UGMA/UTMA investment into a 529 plan requires that the investment first be liquidated. Capital gains may be triggered causing income tax and a possible decrease in financial aid due to the income inclusion factor. Careful planning is necessary.
--Don't be too quick to shift your parent-owned investment assets, including your own 529 accounts, to a 529 account under your child's ownership. (If the student is a minor, most 529 plans will require an adult custodian on the account - UTMA 529 account.) The potential financial aid benefit is small, as parent assets are assessed on a sliding scale that tops out at only 5.64% and the transfer is irrevocable. If Congress decides to re-work the laws, it will be too late to take your money back from your child.
--There's been no change with respect to grandparent-owned 529s naming the student as beneficiary; they are not reportable on the FAFSA. However, the U.S. Department of Education has yet to clarify whether a distribution from a grandparent-owned 529 plan to pay for the student's college expenses is reportable as student income.
--Schools may distribute their own scholarships and grants under non-federal formulas. The changes described above will not necessarily affect school-based grants. In fact, an increase in a student's federal aid may cause some schools to offer less school-based aid.
Tuesday, May 8, 2007
How much student loan debt is too much?
Source: ON THE MONEY by Gail MarksJarvis on April 29, 2007
According to the College Board, borrowing to pay for college generally makes sense because education builds earning potential.
The typical college graduate earns about 73% more than the typical high school graduate, and the higher pay covers the cost of four years of tuition and fees by the time the graduate is 33 years old.
The higher cost of private colleges adds an extra burden. But by age 40 students typically have covered those costs too.
However, debt levels might be too high if students are not likely to complete college or if they plan a career in a low-paying profession.
According to the College Board, borrowing to pay for college generally makes sense because education builds earning potential.
The typical college graduate earns about 73% more than the typical high school graduate, and the higher pay covers the cost of four years of tuition and fees by the time the graduate is 33 years old.
The higher cost of private colleges adds an extra burden. But by age 40 students typically have covered those costs too.
However, debt levels might be too high if students are not likely to complete college or if they plan a career in a low-paying profession.
| If you make this much per year | Then you can handle this much debt* | Annual payment | Portion of income |
| $10,000 | $0 | - | - |
| $20,000 | $7,680 | $1,060 | 5% |
| $30,000 | $22,160 | $3,060 | 10% |
| $40,000 | $36,640 | $5,060 | 13% |
| $50,000 | $51,120 | $7,060 | 14% |
| $75,000 | $87,330 | $12,060 | 16% |
| $100,000 | $123,540 | $17,060 | 17% |
| $150,000 | $195,950 | $27,060 | 18% |
| *Interest rate at 6.8% |
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