Guest Post and Giveaway: Affordable Strategies for College-Day 5

This week we’ve received a wealth of education from America’s Financial Expert, Ellie Kay!  We’re finishing off the week with a Q and A session with Ellie Kay. These questions were taken from her regular appearances on ABC NEWS “Good Money” show.

You can comment on any of this week’s posts to enter into the drawing to win one of six books we’re giving away on Monday!  (If you’re reading this in email, you can post a comment here!)

Q and A With Ellie Kay

Q:  We have a child graduating from high school this year and want him to start out right with good credit scores.  How does a teenager go about starting to build good credit?                          

 Pam from San Franciso, CA

A:  I’ve launched two high school graduates in the past two years and I know how important it is for them to have good credit.  A good credit score will not only impact the interest rates they pay for a new car, but a the scores also determine whether they pay a utility deposit, if they’ll get a good job and how much they may pay for their auto insurance.

            First, they need to open their own checking and savings account near their college.  Second, they should apply for a credit card with a low credit limit ($500 to $1000).  They can either apply for this at their bank or find a credit card provider at www.bankrate.com .  Do not ever cosign for a credit card for your child and make sure they have accountability for the use of their card so that they do not get into credit card debt.  They should pay off their card each month or they should make a commitment to cut up the card if they cannot pay it monthly. Our oldest son, Daniel, started this way and has already built good enough credit scores to pre-qualify for a modest homeowners loan.  By starting small and paying consistently, they can begin to build good credit scores. 

Q:   I’m going to start college in the fall and my parents require that I pay for my own books.  Do you have any tips to save money in this area?                  

                                                                          Brittney from Crowley, Texas

A:    Save Big on Books by Renting  – Textbooks can be one of the most expensive items a college student needs to purchase when heading back to school this year, but they don’t have to be.  The average student pays more than $600 for course materials – the largest expense after tuition and room and board. By renting textbooks through Follett’s Rent-A-Text program, students can cut costs by 50 percent or more. CafeScribe’s digital textbooks are another great way to save, and both options are available to purchase in-store and online through efollett.com.

       Last year, Rent-A-Text saved students more than $130 million. And this year, Follett is doubling the number of titles in the program, which means students will have even more opportunities to save. I’m all about the ‘more bang for the buck’ when it comes to maximizing savings. We didn’t even know rental was an option until recently… we really wish it had been around when our first kids went to college.

  • While there are many options for textbook rental out there, make sure your rental program accepts payment options like financial aid or campus cards to ensure you make the most of your available funds.
  • A good rental program also saves you money by eliminating shipping costs, and allowing you to pick up materials at your campus store.
  • And, keep in mind there are a variety of affordable choices at the campus store from new, used, rental and digital.

Q:  Our twins are in their second year of college and we’ve been paying tuition for over a year.  Is there anything we might be overlooking in trying to find some ways to help pay for college? It’s really difficult financially with two in college at once!                                         Marie from Quartz Hills, CA

A:    It pays to keep looking for savings options even when you think you’ve exhausted all that is available to you.  For example, you and your student should regularly visit the university’s financial aid office, which is oftentimes a clearinghouse of information.  They not only help students determine what loans they qualify for, but they will steer them to participating lenders who are offering the best terms and service.  Parents can do their own assessment at www.collegeboard.com with their “Paying for College” web page calculator.

The FASFA (Free Application for Student Financial Aid form) is the first step in applying for aid that includes:  1) need-based guaranteed loans (Staffordloans are variable and currently at 3.42% while Perkins loans are at a fixed 5%.)  2) Grants—the Pell grant and the federal Supplemental Education Opportunity Grant each provide a gift of up to $4,050 per student per student year.  3) Work-study.  Students can receive up to $2,000 per year, 25% of it matched by the participating institution, from the federal work-study program.  If a family is divorced, both parents still need to fill out the FAFSA. In fact, the only way a child can avoid having both parents fill out a FAFSA is if the child is declared emancipated or if the other parent doesn’t know about it (one is legal, the other is not). So, as much as it depends on you, be sure that BOTH parents are given the opportunity to fill out this form.

There are state loans and grants available and the financial aid office should be able to quickly asses the student’s eligibility.  Plus, this office will also direct them to scholarship applications and programs for both new and current students.

Q:    My husband and I want to help with our son’s college expenses (he graduates in two years) and we don’t want him to be straddled with huge student loans.  Several of our friends and other family members have said, “Just take out a second mortgage or use the equity in your home to pay for college.”  What do you think about that?             Marty from Topeka, Kansas

A:  I believe that you should never borrow on your own future to pay for your child’s future.  In any discussion of college costs, it’s important to keep priorities straight. Your kid’s education shouldn’t cost you your retirement. This means it’s not a wise idea to take out a home equity loan, an equity line of credit or refinance your mortgage in order to pay for school. This would reduce the amount of equity in your home, increase the risk of possible foreclosure and incur costs in interest charges that may cost more if the term on the new mortgage is greater than the remaining term on the existing mortgage.

Ellie Kay is a mother of seven (five by birth, two by marriage, all by love), a national radio commentator, frequent media guest, popular international speaker, and the best-selling author of ten books. Her newest release is The Sixty Minute Money Workout (Waterbrook/Random House Publishers,  2011)  To subscribe to Ellie’s free newsletter, go to www.elliekay.com.

Want to enter the book giveaways. Just answer one of these questions: What has been the most helpful advice you’ve read this week? If you’re married, have you shared the info with your husband?  

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14 Responses to Guest Post and Giveaway: Affordable Strategies for College-Day 5

  1. Pingback: Guest Post and Giveaway: Affordable Strategies for College-Day 5 … | Starting College

  2. amanda rempe says:

    Thanks for all the information this week. My 2 are only 3 1/2 and 2 so I still have lots of time to think about these things. But it is never too early to start.

  3. Vicki says:

    Regarding the 2nd mortgage/home equity loan, that makes perfect sense not to mortgage your retirement future to put a child through college. The child has many years of earning potential in front of them and hence a longer period of time in which they have the ability to pay back student loans; the parents have dwindling working years and need to save as much as they can for when they are unable to work any longer. Thanks for a very informative series!

  4. c says:

    Great info – thanks for sharing. Renting text books?! Great idea, I never heard of – I am nitely making a note of that. Thank you for all of the wonderful information you have shared.

  5. Susan says:

    What’s the most helpful advice I’ve received this week? Boy, that’s a hard one. The series has been excellent and I’ve learned alot. I have printed off the newsletter each day to keep and reread. I haven’t shared it with my husband or two teens yet – but I will in time. Probably the best advice is discovering Ellie Kay. I had never heard of her and anyone who gets Jill’s seal of approval is good with me. I’m going to check our public library and see if they have any of her books. If they don’t, I’m going to request they get some. 🙂

  6. Katie says:

    Wow, narrowing it down to the one most helpful piece of advice is hard. So much good stuff! I had no idea you could rent textbooks. Wish that was available when I was in college! That was very helpful, and I also agree with Ellie on not taking out a home equity loan to finance your child’s education.

  7. Lisa M says:

    Upromise, links for scholarship info, and credit info are the most helpful, tho I learned much more than that. Thank you for this great series!
    Have not shared w hubby yet, as he is away this week.

  8. Connie says:

    Thanks for all the information this week. The college I attended had text book rental. It was very nice. I was not aware that you could rent them no matter where you went though. I will definitely remember that when my 3 go to college.

  9. Robin Still says:

    Trying to pinpoint the most helpful advice I have received this past week…ooh hard! Since I currently have a senior in high school…can i say that ALL of it was helpful! I so needed all this info. I truly believe that this series should be run every year before school starts back…so many helpful tips…

    May you have a blessed day!

    Smiles & BLessings,
    Robin 🙂

  10. Barb says:

    What a wealth of information this week! Our children are all 6 1/2 and under, so you have helped us to get on the right track at just the right time:) I do have one question – I have been hearing about online colleges lately. Do you have any information, good or bad, about them and any suggestions regarding them?
    Thanks!
    Barb

  11. Beth says:

    I am excited to talk more with my husband about these ideas. We have 3 young children and realize we need to improve our saving stategy for our kid’s tuition. Thanks for these awesome ideas.

  12. Lisa S. says:

    My children are younger, but I will definitely be sharing this information with my husband as we plan for their (and our!) futures. Thanks for the great ideas and the book giveaway!

  13. Lisa White says:

    The advice has been great! I would only add to know your child; not everyone needs to go the college route. There is a dearth of people available to take over skilled-trade careers; you can find apprenticeships if you look around. Sometimes an Associates degree is enough to get a person earning until he/she can afford that advanced degree. Know your child’s heart’s desire – God’s plan for that child may not include college!