The CFS office will be closed September 1st through the 8th. We'll be back in the office on September 9th.

This Friday, September 29th, is Natalie's last day. I want to thank her very much for the four years she has worked with me. She has been a great blessing to me and our clients. Natalie, God bless you in your future endeavors.
____________________________________

Douglas Christiansen is Vanderbilt University's associate provost for enrollment and dean of admissions. He's spent the last 20 years in admissions leadership roles in both public and private universities. Now he's using his expertise to give students practical advice on what they can do to get into the right college, in hopes of clearing some of the mystery and misconceptions surrounding the admissions process.

In a series of short and direct video clips, Christiansen tackles questions such as, "How should I prepare for my college essay—what if I'm not the greatest writer?" "My parents have decent jobs, but we haven't saved much for college. What are my chances of getting financial aid?" "As an admissions insider, what tips can you give to help me sound my best in my application?"

Christiansen also talks about when extracurricular activities can actually hurt an applicant and how to ease the stress surrounding the admissions process.

Scott Anderson

It's coming up on college admission time. So you need to start thinking about having your students fill out their admission applications. This is a great time to revisit the pitfalls of the "early decision" and "early action" processes.

Early decision and early action are two very misunderstood policies used by colleges to boost their enrollments as early as possible.

These policies make good business sense for the colleges, but do they make sense for you? Unequivocally, NO... and maybe.

Early decision is a legally binding agreement between a college and the student. The student can apply to as many colleges as he or she desires, but they can only apply to one college under the early decision criteria. Students apply under early decision hoping to have an admission decision from the college of their choice as early as possible. If the student is not admitted to the college under the early decision criteria, that students application most often is not reconsidered during the regular admission process. However, if the student is admitted to the college under the early decision criteria, then you have got a really big problem.

Any student that is admitted to a college under the early decision rules, must go to that college no matter what kind of offer they receive from any other college. In fact, most colleges utilizing early decision require students to immediately withdrawal their applications to all other colleges if they are admitted. This is well before you have seen any kind of financial package from any school. Under early decision, you are required to commit to one and only one college before you have any idea what it will cost you to go to school there. Used car salesmen can only dream of a sales tactic that is so underhanded.

Never under any circumstances agree to early decision. If you do, you will lose all hope of negotiating; and you will lose any flexibility of accepting a better offer from another college, even if it was thousands of dollars more.

Early action is a horse of a different color. Early action operates on essentially the same timetable as early decision, but it does not have the negative effects. There is no legally binding agreement between the student and school under early action criteria. However, you need to review the individual school's early action criteria because some schools may withdrawal their offers for admission if action is not taken. Early action notifies students early in the admissions process whether they have been accepted or not. If they are not accepted under early action, sometimes their applications are moved to the normal admissions process.

In many cases, early action does not have negative impacts, but you should always read the fine print.

The bottom line is never put yourself in a position that you have to make a decision to attend a college before you know what it will cost. Otherwise, you are truly buying the proverbial “pig in a poke”. Always wait for the financial award offers before committing to any college.

Scott Anderson

In April of this year, I had a mother come to me who was way behind the eight-ball. She was going through a divorce and had not filed any of the financial paperwork for her son. No FAFSA. No Profile. No nothing. Worse yet, her son was a worse case scenario. He wanted to go to Tufts University and Tufts alone. This really gives us no wiggle room to work with.

I made sure she understood that she was in a tough position, but we would do our best to see what we could make of it. She was elated just to find someone who would take the paperwork headache of her shoulders. So we went about getting the FAFSA, the Profile, and the other ancillary forms filed. And Tufts came back expecting her and her son to come up with... over $50,000 each year. Ouch.

I told her we still had the negotiations phase to go through. Now anyone in my position will tell you that negotiating this late in the year is difficult at best. It is normal to get minimal results. Well let me tell you what happened yesterday.

Joan (we'll call her Joan) received the new financial aid award on June 30th. She was in my office on July 1st. As we sat down and looked over the new award summary, it hit me. We had just blown away our previous average improvement for negotiations. For years, I've been proud of our $2,000 average annual improvement during the negotiations phase. Just that phase alone is more than double of our highest service level price. That always assured me that we provide a service that has substantial value. Well, that average is no longer accurate. Sitting with Joan yesterday, we were looking over an annual improvement of... now get this... over $35,000!

$35,000!!! Holy cow!

Folks it just goes to show you; there is no situation that is hopeless. There is no one that we should not at least try to help.

$35,000! That's good.

Click on the image below to check out the invitation to our next Quad City workshops...

Scott Anderson

We have moved to our new offices at 3011 North Harrison Street in Davenport. It took us a while to get the building ready, but we're very pleased with the work that has been done. We'll be hosting an open-house in the near future, but in the mean time, schedule an appointment and stop by to see us.




View Larger Map

The following are two critiques of the US News and World Report college rankings that come out every year. In a nutshell, beware of beauty contests.





You can also check out a CBS News story on the ranking system here at this link.

Scott Anderson

With the Democratic nomination coming down to the wire, many people are turning their attention to Pennsylvania. So let's look at two schools from the cradle of our democracy.
_______________________

University of Pittsburgh
Pittsburgh, PA
http://www.pitt.edu/

Scott Anderson

Now as many of you know, I am not a fan of the "Best" school lists. I think they put way too much emphasis on marketing, and no emphasis on what is the best school for your student. That said, I'm going to discuss a recent article from Business Week magazine. There is something very peculiar about it.

In the February 28th issue of Business Week, the magazine ran an article on the top 50 schools to get a Bachelors degree in Business. The article starts with Rutgers University and finishes with the Wharton School of Business at the University of Pennsylvania. But there are some glaring omissions from this list that everyone would assume would be in the top ten. No where in this list will you find the names of Harvard, Princeton, Yale, or many other excellent schools. Harvard, home of the Harvard Business Review, the gold standard of business case study education did not even make the list?

Does this mean that Harvard, Princeton, and the like have not been putting enough resources into their business schools to compete with schools like the University of Illinois, the University of Texas, or Brigham Young? No, obviously that is not the case. What this article does show is there is no practical standard that anyone can use to come up with a list of the 50 "Best" schools of anything. I will say it once again, the "Best" school lists are not much more than beauty pageants that do little to nothing to help your student find the best school for them. Avoid them.

Scott Anderson

Weather like what we've been having here in the Midwest makes me think of warmer places. So I'm profiling two schools in Hawaii: The University of Hawaii at Manoa and Hawaii Pacific University.
_________________________

University of Hawaii at Manoa
Honolulu, Hawaii
www.manoa.hawaii.edu

Out of state COA: $24,782
In state COA: $15,518

Family Need Met: 68%
Avg Free Money: 39%
Avg Self Help: 61%

Founded in 1907, the University of Hawai`i at Manoa is the flagship campus for the University of Hawai`i System. A land-grant, sea-grant, and space-grant institution, it is the only public university in Hawai`i. UH Manoa is a diverse and doctorate-level university that emphasizes academic quality; research in Hawaiian, Pacific, and Asian studies; and community services.

• Founded: 1907
• Location: Honolulu, Hawai`i; in the Manoa valley on the island of O`ahu
• Campus size: 320 acres
• Colleges: 11
• Schools: nine
• Degrees: bachelor’s degrees in 87 fields; master’s degrees in 87 fields; doctoral degrees in 51 fields
• Average class size: 31 (freshman and sophomore)/20 (junior and senior)
• Student-faculty ratio: 16:1
• Percentage of faculty with doctoral degrees: 80
• Accreditation: Accrediting Commission for Senior Colleges and Universities of the Western Association of Schools and Colleges

________________________

Hawaii Pacific University
Honolulu, Hawaii
www.hpu.edu

COA: $26,740

Family Need Met: 79%
Avg Free Money: 40%
Avg Self Help: 60%

Hawai'i Pacific University is more than an excellent university with outstanding and rigorous academic programs, an ideal location, faculty who are well-respected in their fields, students from all over the world who come to learn in a multicultural environment, and a service orientation emphasizing individualized attention to each student. It is also a comprehensive university offering a number of unique experiences, events, and traditions for its students, faculty, and staff as well as the community.



_______________________

A recent issue of US News and World Report contained an enlightening article on the college financial aid system. Two Harvard University economists have completed a thorough study of the FAFSA process. Not surprisingly, they concluded that the FAFSA on average takes ten times longer to complete than what the schools and Department of Education claim.

Scott Anderson

Because of weather, the January 29th workshop at the Moline Public Library in Moline, IL has been rescheduled twice. We will be having the workshop on Tuesday February, 12th at 7pm. It is still at the Moline Public Library. Thank you to the staff over there for being so flexible.

In this months issue:

• What to consider when you are thinking about borrowing money from your 401k to pay for your student's college education. 401k loans are very different animals when compared to your home loans, credit cards, auto loans, and education loans.
• Webinars will soon be provided by College Financial Strategies.
• Just for grins... my favorite picks of the SuperBowl commercials.

Does it make sense to borrow from your 401k to pay for college?

This is a common question I receive. My standard answer is "no". Here's why...

Your student has much more time to prepare for their retirement, than you have to prepare for your's. I know we all want to provide our students with the best possible opportunities, but bankrupting your retirement is not the way to do it. Don't worry, your student will have over 40 years of time to pay off their education and save for their retirement. How much time do you have as their parent? 20 years? Maybe?

The costs of borrowing out of your 401k are much greater than the interest rates. You also have the opportunity costs of your missing returns.

Depending upon what the interest rates and administrative costs are on your 401k loan, you could be looking at some very substantial losses when borrowing. The cumulative impact is much more than what you would have with more traditional types of financing such as home equity or education loans.

Webinars Coming Soon!

Keep watching CFStrategies.com. We will be announcing soon about our new Webinar schedule. This will allow us to better serve people all across the country. Our first webinars will be our Money and College presentation, and the new Student's Goal & Passions Workshop.

Just for Grins...

Ok, just for the heck of it. Last Sunday was the Superbowl. It was one heck of a game. This was one of the few years I had just as much fun watching the football as I did the commercials. That said, here are my favorite commercials.

Diet Pepsi Max...


Bridgestone tires...


SOBE...


And Audi pays homage to The Godfather...


I just get a kick out of those.

We're splitting up the newsletter. Look for the College Profiles mid-month.

Scott Anderson

Upcoming Workshops in the Quad Cities and Rockford

CFS will be holding free workshops in Moline and Bettendorf at the end of the month.

Tuesday, January 29^th, 7pm
Moline Public Library, 3210 41^st St, Moline, IL

Thursday, January 31^st, 7pm
Bettendorf Public Library, 2950 Learning Campus Dr, Bettendorf, IA

Scott Anderson will also be teaching at Rock Valley College in Rockford, IL on Saturday, January 26^th at 10am. Contact Rock Valley College and ask about the Maximizing Money for College class.

What can you do with Custodial Accounts?

Custodial accounts (UGMA & UTMA) have been common methods for saving money for college. UGMA stands for Uniform Gift to Minors Act and was implemented in the 1950’s. UTMA stands for Uniform Transfer to Minors Act, was implemented in 1986, and supercedes the UGMA rules in all states except South Carolina and Vermont. UGMA & UTMA accounts are students’ monies and cannot be transferred to parents or other siblings. These accounts are common, but they can be sources of a lot of confusion. Worse yet, these accounts are penalized at the highest level in the financial aid process.

To maximize your opportunities for various monies from the colleges and government, it is important to get as much money as possible out of your student’s custodial accounts. So what can you do with them?

The first thing you can do with them is spend the money. UGMA & UTMA monies must be spent on behalf of the student, but cannot be spent on items considered “parental obligations”, or those items which are normal to the raising of any child. This means you cannot spend the money on a student’s clothes, food, shelter, health care, etc.

You can spend the money on those items for the child which are not considered normal, everyday expenses associated with raising any child. These items can include cars, computers, college tuition, summer camp, musical instruments, special school expenses, private school tuition, paying taxes on the UGMA or UTMA account, etc.

Parents often ask if they can be reimbursed for previous expenses out of their child’s UGMA or UTMA account. This is kind of a grey area. The expense at the time may have been for the benefit of the child. But is the reimbursement after the fact for the benefit of the child or the parent. Timeliness is probably the key in this instance. How timely is the reimbursement to the expense. If the parent wants a reimbursement for their child’s summer camp expense five years ago, that’s probably not going to be kosher. If the parent is taking a reimbursement in the fall for a car purchased over the summer, that would probably be ok.

No matter what , always make sure you have a written permanent record of the expenses paid out of the custodial account. If you don’t have a written permanent record, woe unto you if you ever have a run-in with the IRS.

The second thing you can do with the money in UGMA & UTMA accounts is shelter it. In sheltering, you keep the money in the student’s name, but you move the money to assets which are not penalized in the financial aid process. It is recommended that you shelter monies when you still need the student’s money while in college, or you want to keep the money around after the student graduates.

Sheltering can be fairly complex. Please contact us for further information.

Michigan State University
East Lansing, MI www.msu.edu
Next stop on the campaign trail…

Known internationally as a major U.S. public university with global reach, Michigan State University has been advancing knowledge and transforming lives through innovative teaching, research, and outreach for over 150 years. MSU is a member of the Association of American Universities, the National Association of State Universities and Land-Grant Colleges, and the Big Ten athletic conference.

Michigan State University holds a unique position in the state's educational system. As a respected research and teaching university, it is committed to intellectual leadership and to excellence in both developing new knowledge and conveying that knowledge to its students and to the public. And as a pioneer land-grant institution, Michigan State University strives to discover practical uses for theoretical knowledge, and to speed the diffusion of information to residents of the state, the nation, and the world. In fostering both research and its application, this university will continue to be a catalyst for positive intellectual, social, and technological change.

St. Anselm College
Manchester, NH www.anselm.edu
Last stop on the campaign trail…

Saint Anselm is located on a hilltop overlooking Manchester, N.H., within an hour of the seacoast, Boston, the White Mountains, and New Hampshire's Lakes Region.

Founded in 1889 by the world's oldest religious order, the Benedictines—a Catholic order that has endured and thrived for more than 1,500 years—we have spent 118 years shaping an academic community designed to meet your expectations.

Whether you want to be a doctor, teacher, nurse, or lawyer; start your own business or make films—or you simply know you want to make a difference and you want to figure out the best way to do it, Saint Anselm will give you the options, experience, and mentors to connect, solve, to serve, lead and especially to do the right thing.

Named one of the country's "Colleges with a Conscience" by The Princeton Review, Saint Anselm shapes the kind of leader the world is hungry for; not only smart, but good. We invite you to be one of them.

Scott Anderson

CFS will be closed for Christmas and New Years from Monday, December 24th through Wednesday, January 2nd. The office will reopen on Thursday, January 3rd.

You can still contact us, our email and voice-mail will be checked regularly. If you need to contact Scott Anderson during this time, the best method will be email at scott@cfstrategies.com.

Scott Anderson