August/September 2007
Bimonthly newsletter of College Assistance Plus

Is Wal-Mart Putting You in Debt?

Retailers used to target parents of K-12th graders at the end of the summer. Stores would be chock full of notebooks, pens, folders, and filler paper. Now, however, grade school and high school students are out, and college students are in. College students are quickly making back-to-school shopping the second biggest shopping season, only behind the Christmas extravaganza. The National Retail Federation estimates that college students will spend $36.6 billion on furniture, school supplies, and books this year. This number is double the amount that parents of students in K-12 will spend. They estimate that freshmen will spend an average of $1,152 each on back-to-school "necessities."

Stores like Bed Bath and Beyond, Target, JC Penney, Linens 'n Things, and Wal-Mart are taking advantage of the shopping frenzy to pull in as much business as possible by sending catalogs to parents, setting up gift registries, giving students discounts, and even setting up booths directly on the college campuses. Every store has catchy displays of necessary dorm supplies, and many websites have back-to-school purchasing guides that students can print out. In some cases, the students can even view a photo of a sample dorm room and click on a link to buy everything in the room.

Many Baby Boomer parents went off to college with bed sheets and pillows from their attics, while students today are bombarded with advertisements telling them that they need everything to be brand new. These retailers not only capitalize on the students' desires to have cool stuff, but they also target the parents' fragile emotional state by claiming that buying things for their child will make her more comfortable and the transition to college easier.

Don't let them fool you! Spending a lot of money on school supplies, flat-screen TVs, and sheets to match the bathroom accessories won't make the students happier in the long run. Make a budget for back-to-school spending and stick to it. Consider only using cash for your purchases so you won't be tempted to put things on your credit card that you just can't afford.

Retailers are telling our students that they need everything, and America is listening.

Top

Interview with a Graduate - Emily Schwartz

Emily Schwartz
Editor's Note: Emily Schwartz is a Physician Assistant at an internal medicine unit of a hospital. She received her bachelor's degree in biology and went on for her master's degree at Philadelphia University.

CAPlus: How much money do you have in loans right now?

ES: I borrowed $75,000 for my master's degree, but that doesn't include any interest.

CAPlus: Do you have a goal of how long you'd like to take to pay them off?

ES: My goal is 6 years. If I put as much money as I possibly could into it (other than what I need to live on), I figured out that I could pay them off in 6 years. I don't want to be tied to this for the rest of my life. In 30 years, I'll be 56. I don't want to be just paying off my loans then.

CAPlus: Do your loans affect your everyday life?

ES: Yeah. I'd like to get a car that I'm not afraid to drive...I'd like to get a house so I don't have to be paying rent...but those are more things that I'd be in debt to, and it seems silly to take out more loans. I'd love to go live in Africa and do medical missions, but I have to pay off my loans. I'd like to go out to eat or go to a movie, but I shouldn't. I have to save my money to go for my loans.

CAPlus: If you had to do it all over again, would you do anything differently?

ES: When I was in school, I figured out how much I needed on a semester-to-semester basis. I'd figure out how much I needed for that semester and take out that much. If I came up short and needed more, I'd just get another loan. I think it would be better to have a budget the whole time. Keep the same budget. Don't keep expanding it because you want more stuff. When I was bored, I'd go shopping. All my friends had money, and we would go shopping and go out to eat. I spent a lot of money that I didn't need to spend.

CAPlus: Would it have been hard to keep to a budget?

ES: I don't think so, if you have to. If you know the consequences of not doing it. I mean, you have to take out loans. I would still do it. But we get sucked into a mindset that you can take out however much you want. I talk to some of my colleagues and they're STILL paying off college loans, and they've been working for 20 years.

Read more about graduates in debt here in the Rochester Democrat & Chronicle.

Top

High school freshmen & sophomores

• Students should get involved in extracurricular activities at school. Be an active participant, not just a member! You will then get the opportunity to be active in leadership in later years, which will provide more leverage when negotiating with college admissions offices.

Student athletes

• Get involved in community service activities! This can help complement other achievements in sports, academics, or other areas and make you more eligible for scholarships and other financial aid.

• Parents should make a budget to figure out how much you can afford to spend for the student's college education. Don't let your student waste time looking at schools you can't afford! When (s)he falls in love with one, you'll feel obligated to pay to send them there!

• Begin preparing for the PSAT and SAT exams. Good SAT/ACT scores mean better financial aid packages in many cases, so spend an hour a week studying.

Top

High school juniors

• If you were involved in clubs and organizations at school before, try to get into leadership roles this year. College admissions offices love student leaders, which will give you leverage in negotiating financial aid.

Study hard!

• Make and refine lists of potential colleges or careers/majors that you might be interested in. Talk to your parents or CAPlus representative to help narrow down the list.

• Begin preparing for the ACT and SAT exams. The next ACT test date is September 15; registration is due by August 10. The next SAT test is October 6; regular registration is due by September 10 and late registration is due September 17. Visit www.actstudent.org and www.collegeboard.com for more information and to find testing sites. There is also an SAT prep center at the website. Better scores can mean better financial aid!

• Meet with your high school guidance counselor after school begins. Discuss career plans/thoughts you have and find out when the PSAT will be. If you do well on the PSAT, you could be eligible for the National Merit Scholarship Corporation scholarship programs.

• Parents should move qualified assets into non-qualified accounts. (Qualified assets are assets that qualify for the FAFSA, while non-qualified assets do not.) If your assets are exposed to either the federal or institutional methodology, you can reduce the amount you have to pay by altering the title or moving those assets into non-qualified accounts. See your financial advisor for help with this process.

Top

High school seniors

• Begin preparing for the college application process by collecting writing samples and assembling portfolios or audition tapes. Athletes who play fall/winter sports should collect video and newspaper clips to send to college coaches.

Study for the SAT & ACT!

• Athletes who plan on playing in college should contact the coaches at the colleges and ask about intercollegiate and intramural sports programs and athletic scholarships. Also complete the NCAA Initial Eligibility Clearinghouse form if you hope to play Division I or II sports. (This form can't be mailed until the student finishes his or her sixth semester of high school.)

• Consider re-taking the ACT or SAT exams. Your highest combination of scores is used, so taking the tests again will never hurt. The next ACT test date is September 15; registration is due by August 10. The next SAT test is October 6; regular registration is due by September 10 and late registration is due September 17. Visit www.actstudent.org and www.collegeboard.com for more information and to find testing sites. There is also an SAT prep center at the website. Better scores can mean better financial aid!

• Check on application and financial aid deadlines for the colleges you are interested in. Deadlines may vary from school to school, and it is essential to meet all deadlines!

• Plan visits and interviews at colleges if you didn't go during the summer. Check with your CAPlus advisor before you go and pick up a copy of our College Visit Guide packet!

• Take Advanced Placement (AP) courses if they are offered. This will show a college that you are willing to put extra effort into your academics, and they might offer you more money as a result.

• Parents should move qualified assets into non-qualified accounts. (Qualified assets are assets that qualify for the FAFSA, while non-qualified assets do not.) If your assets are exposed to either the federal or institutional methodology, you can reduce the amount you have to pay by altering the title or moving those assets into non-qualified accounts. See your financial advisor for help with this process.

Top

College freshmen

• Be aware of how much money you are spending while shopping for college! Make yourself a budget and stick to it. If you don't, you'll end up spending more than you realize.

Beware of credit card offers!

• Parents should set expectations for the student's first year. Set them high! Good grades mean higher incentive for the college to give scholarships for the following year. Don't make the mistake of sending your student to college saying, "Just do your best!" The students need to know what is expected of them and why.

• When you get to school, open a bank account on or near campus.

• Beware of credit card companies! You'll receive dozens of credit card offers in your college mailbox, some of which will offer you free t-shirts, iPods, and other gadgets. Don't sign up for a card unless you are going to pay it off each month. Credit cards do not give you "free money" that you can spend whenever you want.

• Consider having a job on or near your campus. Students who work or are involved in other activities are pushed to prioritize their time and often get better grades than students who are not involved in anything.

• Work hard when school starts. Good grades will give you a better chance of getting more financial aid next year. Also, 30% of students transfer after their first or second year of college, and higher grades will give you the ability to negotiate a better deal at the college to which you are transferring.

Top

College sophomores & juniors

• Analyze your use of the college's meal plan. If you didn't use all of the meals, switch to a plan with fewer meals and a lower cost. It is almost always cheaper to buy food and make your meals yourself.

Buy used textbooks

• Don't buy new books from your campus bookstore before school starts! You can buy used or new books online for a fraction of the cost. We recommend several sites on our website.

• Continue looking for scholarships, even though you are beginning your second or third year of college. There are always new opportunities!

• If you had a work-study job last year, call your boss and make sure that you still have the job during the coming year. If you did not have a job but would like one, start making phone calls or emails to potential employers. Having a job or other collegiate activities will help you learn to set priorities and balance your time.

Top

College seniors

• Don't buy new books from your campus bookstore before school starts! You can buy used or new books online for a fraction of the cost. We recommend several sites on our website.

Looking for a job

• If you have any special family circumstances, such as the recent discovery of an immediate family member with a serious illness or a sudden death in the family that is causing extreme hardship, write a letter to the college asking for a one-time gift in some form. Colleges will often honor these kinds of requests if they have the funds to do so.

• Start looking for a job now! Finding a job by graduation depends on strategizing and marketing yourself well. Begin talking to friends and family before you leave for school; networking is the best way to land your first job!

Top