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April Newsletter: 12 Top-Paid CEO Colleges | Award Letters | $10,000 Scholarship

18 April 2014 2,908 views No Comment

Does Ivy Get You More Green?

Think an Ivy League education is a requirement for reaching the top pay echelon in the business world?

On April 13, 2014, CNNMoney released their 12 Top-Paid CEOs list for 2013. We added an extra column to the list — the colleges the business leaders attended as undergrads.

When you look at the colleges, you’ll realize that you don’t necessarily need to attend the most prestigious or expensive school to get a good education and be successful.

12 Top-Paid CEOs Colleges

 

Ask the Edvisor: Your Questions, Answered

April is National Financial Literacy Month, so we decided to answer a question that will help you become more knowledgeable about financial aid:

Q: What are some tips for how to best evaluate an award letter?

A: Financial aid award letters can be confusing and difficult to compare.

The best approach involves calculating the net price for each award letter. The net price is the difference between total college costs and just the grants, scholarships and other gift aid (money that does not need to be repaid). This is the amount of money the family will have to pay from savings, income and loans to cover the college costs. Think about it as a discounted sticker price.

The net price is not the same as the net cost. The award letter might present a net cost figure, which subtracts the full financial aid package from the cost of attendance. But the financial aid package may include student employment and loans, which do not cut college costs. Loans have to be repaid, usually with interest.

Before calculating a net price, the family will have to gain some clarity on what’s what on the award letter. First, determine the full cost of attendance at the school. This includes tuition and fees, room and board, books, supplies and equipment, transportation and miscellaneous/personal expenses. Some colleges do not list the full cost of attendance on the award letter and some list only the direct costs, such as tuition and fees that are paid to the school. Others may list the full cost of attendance, but underestimate the allowances for textbooks and transportation. Next, figure out what’s a loan and what’s a grant. Some award letters jumble them all together, without clearly identifying loans as loans. The most common types of education loans include the subsidized and unsubsidized Federal Stafford loans, Federal Perkins loan and Federal PLUS loan.  Then, subtract the total grants, scholarships and gift aid from the total college costs. This is the net price.

If two colleges have a net price that differs by less than $1,000, most families will choose the college that is a better match according to other criteria, such as a better reputation, a better academic fit and/or a better extracurricular/social fit. If the net price differs by more than $5,000, most families will choose the less expensive college. In between, families agonize over the decision. Net price tends to correlate well with debt at graduation, so a student will likely graduate with less debt if he or she enrolls at the college with the lower net price.

There are, however, two caveats about the net price. First, the net price is just for one year. The net price can differ in subsequent years. About half of all colleges practice front-loading of grants, which gives the student a better mix of grants during the freshman year than during the sophomore, junior or senior years. This means the net price will be lower during the first year than during subsequent years, a form of bait and switch. Families can ask the school whether it practices front-loading of grants. If they don’t get a straight answer, they can look at the average grants for freshmen and for all undergraduate students using CollegeNavigator.gov. If there is a significant difference, the college practices front-loading of grants. Second, when a student wins a private scholarship, the college will reduce the need-based aid package. But, colleges have flexibility in how they reduce the financial aid package. If the college replaces loans and/or student employment with the scholarship, the student’s net price will decrease. If the college reduces its grants first, the net price will remain unchanged.

Our goal here at Edvisors is to help you make the best decisions about your college or university education. Part of that is answering your questions about student financial aid. We’ve added a section to our web site that will feature your financial aid questions and Mark’s helpful advice. Submit your question to be included in Ask the Edvisor.

Celebrate Our New Web Site With a $10,000 Scholarship!

Ready to join the Launch Party? Help us celebrate the cool new look of ScholarshipPoints.com by entering the $10,000 Launch Party Scholarship drawing. Spend as many points as you want on this scholarship before midnight Pacific on May 25, 2014. The more points you spend, the more chances you’ll have to win — thanks to your ScholarshipPoints.com membership. The winner will be announced on May 26, 2014.

Log in to ScholarshipPoints.com to enter the $10,000 Launch Party Scholarship drawing.

Decoding Financial Aid Letters from NPR’s Morning Edition

National Public Radio broadcast a special series on paying for college. Edvisors’ Mark Kantrowitz was invited on the program to discuss financial aid award letters.

Listen to the radio broadcast from NPR’s Morning Edition or read the transcript.

The Seven Scholarships

This monthly section of the Financial Aid Newsletter features an intriguing list of seven scholarships that share a common characteristic. We hope this section will make you smile and inspire you to apply for more scholarships.

Seven “Green” Scholarships

  1. Brower Youth Awards
  2. Catherine H. Beattie Fellowship for Conservation Horticulture
  3. Garden Club of America Award in Desert Studies
  4. National Environmental Health Association and the American Academy of Sanitarians Scholarship Program
  5. National Oceanic and Atmospheric Administration (NOAA) Educational Partners Program
  6. Sara Shallenberger Brown GCA National Parks Conservation Scholarship
  7. Switzer Environmental Fellowship Program

Featured Scholarships

This month we are highlighting scholarships from the ScholarshipPoints program. To enter, simply log in to your account and spend your points on these drawings before midnight Pacific on the date indicated:

Watch for our notification emails to see if you are a winner!

Stat Snapshot

What percentage of U.S. adults give themselves a grade of C, D or F on their knowledge of personal finance?

41%

Source: The 2014 Consumer Financial Literacy Survey

Helpful Financial Literacy Links

Your Opinion Matters

Is there a particular topic or interest you would like the Financial Aid News to cover? Leave a comment on our suggestions page.


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