A new law will help a lot of struggling students and parents -- but others will be very disappointed. The Good, Bad and Ugly of the New Student Loan rules.

The Good: undergraduates that are eligible for subsidized loans will note the rates will be a lot lower. Congress passed a law cutting them in half, from 6.8% to 3.4%. Don’t expect your rate to go down tomorrow; these rates will adjust over the next 5 years. The lower rate affects Stafford loans for students who qualify for federal subsidies, meaning Uncle Sam pays the interest on the loans while you're still in school. Plus limits on Pell Grants for low-income students will gradually rise from $4,800 in 2008 to $5,400 in 2012. (Pell grant recipients family AGI’s are typically 60-50k or less.)

The Bad: news is many other students won't get help and may even end up paying more. That includes undergraduates with unsubsidized federally backed loans, graduate students and graduates who may want to refinance their loans. Unsubsidized undergrad rates as well as all graduate school rates will remain at 6.8%, while loans taken out by parents under the federal PLUS program will hold at 8.5%.

Students seeking to consolidate all their federal loans into one loan under a fixed rate will see plenty of perks vanish. Why? Congress also is eliminating $21 billion in federal subsidies to student lenders. And that is going to cut deep into lenders' bottom lines, meaning lenders will need to scale back incentives they use to lure business away from their rivals.

The Ugly: while the Federal Government looks to bully its way into the student loan arena many are disappointed that the long overdue changes are not enough and do not do enough to help parents and students capitalize on the over $100 billion dollars of financial aid. It would seem that the Federal Government is looking out for its best interest by capturing this fragile market with empty promises.

Some are so bold as saying that the Federal Government is strong arming its way into the student loan arena with it eye on the prize. This prize is a long term goal to capture interest payments from student loans as another revenue source for the fat cats on Capitol Hill.

The Solution: AZ College Consulting, LLC Arizona’s premier college planning firm says to quickly learn the 156 strategies to lower your college costs. By understating the “rules of the game” your child will graduate with less student loans and you can pay your lowered adjusted share of college in a comfortable manor, pay off your house in a shorter period and build up a respectable retirement nest egg using AZ College Consulting’s proprietary college planning formula custom designed for your family.

The House passes a bill to expand college aid for students, is this a good thing or a ploy to enslave college graduates with billions of dollars of debt?

A bill passed by the House of Representatives will increase the maximum Pell Grant by hundreds of dollars but will change Federal Perkins Loans so that loans will begin accruing interest while students are still in school.

The measure, passed Sept. 17 and known as the Student Aid and Fiscal Responsibility Act, will oust private lenders from the federal college loan business and require all schools to switch to the federal Direct Loan Program by July 1, 2010.

Direct Loans are low-interest federal loans for students and parents that help pay for the cost of a student’s education. The lender is the U.S. Department of Education — rather than a bank or other financial institution.

The bill will now move to the Senate where it is expected to pass.

Larry Chambers, director of student financial services, said he is not convinced the removal of private lenders will result in substantial benefits for students.

“Having both direct lending and the Stafford Loan programs has fostered competition, enhanced services and provided students with choice,” Chambers said. “With only one lender — the federal government — students will no longer have a choice of a lender.”

Chambers said new changes being made to the Federal Perkins Loan will leave college students with more loans that begin accruing interest immediately.

Freshman Adam Melnick said loans that immediately start building interest, often known as unsubsidized loans, make life harder for students.

“We’re not making real money as undergraduates, so it’s hard to chip away at what we owe,” Melnick said. “Then when we graduate, the interest has already blown our debt through the roof.”

Proponents of the bill, however, point to the introduction of variable interest rates as proposed by the SAFRA. After college, the lenders’ interest rates will vary depending on their financial standing. Individuals with a low-income will not be subjected to higher interest rates.

Chambers said the bill would increase the current maximum Pell Grant from $5,350 to $5,550 during the 2010-11 school year, and by 2019, the Pell Grant scholarship should grow to $6,900. Pell grant eligibility is for families that make $50,000 or less annually.

While all this talk of reform is good and long overdue, let’s not lose sight of the bigger picture which is first getting our child into the best college they can get into and minimize the financial burden. This includes maximizing the amount of financial aid that our student can qualify for as well as limiting the amount of student loans upon which they graduate.

There are specific strategies that can be employed that can A. give our student the most financial aid possible, B. minimize the amount of student loans and C. help our child select a career that is best fit for him/her and find colleges that are typically generous with deep pockets. If you would like to discuss these strategies call our office at 1-888-237-2087 ext. 2 or if you have not attended a workshop come on out.

Is Big Brother (on campus) watching you?

Though some universities, such as Hofstra University in New York, created admissions-specific social networking accounts, new media specialist Amy Peterson said she manages TCU's Facebook and Twitter sites differently.

"We use Facebook as a way to have a conversation with current students," she said.

Peterson said she relays questions from Facebook that she is unable to answer to the admissions office, but the admissions counselors have no direct contact with the students who asked these questions.

Prospective students sent more questions regarding deadlines, financial aid and general admissions questions to the university's Twitter account, Peterson said.

"(Twitter) gets used a lot as a help place, like a help desk," Peterson said.

Rainwater said the university's Facebook fan base spanned wider than prospective students. Most of the fans on the university's Facebook site are college students or alumni.

However, admissions counselors do promote the university's social networking sites, Rainwater said.

"As part of our marketing process we send an e-mail out to all of our prospective students that we have e-mail for...and we provide them with direct links to the Facebook fan page, the Twitter page and the Flickr page, which we actually use really frequently," Rainwater said.

Rainwater said that the addition of an admissions-specific Web site would make finding information confusing.

"We really feel like, in terms of communicating students, the official university Facebook page that Amy Peterson manages is just a central location for all information," Rainwater said.

J.D. says: “Warning! College admissions offices are using all resources available to find out about your student. Keep your Facebook, Myspace, Youtube videos and other pictures, videos or other internet posts kosher and clean. A posted picture of an under aged minor at a party with empty beer bottles all around could be enough to keep you out of your top choice college even if you did not partake in any alcoholic consumption. Also be careful that if you select a fan page for a particular college, that it really is the college’s fan page. Some spammers and marketing companies are creating bogus fan pages to collect names and email address simply to sell them something."

The Obama administration pushes forward with its “Change” agenda which impacts the FAFSA (Free Application For Federal Student Aid).

High income earners tend to not fill out this form based on the Myth that they believe they make to much money to qualify for aid. While it is true that some of these families won’t qualify for federal grants which are reserved for the lowest income students and families. These high income families are leaving money on the table. Filling out this form accurately with understanding of all the nuances could result in a surprising financial aid award letter.

The Obama administration hopes that soon it will become simpler to provide tax return information that is requested on financial aid applications.

The IRS plans to set up a new system where you will be able to visit a secure web page, verify your identity and then retrieve the essential info needed—such as your adjusted gross income (AGI) for the prior year—in order to complete college loan applications, scholarship forms and other types of financial arrangements. The IRS hopes to have the system up and running next year.

Because of these new planed changes it is more important than ever to properly plan and have adequate time to implement these strategies so that you can qualify for as much aid as possible.

ASU's video on financial aid

Learn the stratagies that can get you the most financail aid you can qualify for at one of our local workshops.

Click the Free Workshop RSVP for dates and locations.

Are the new rules for Private Student Loans going to cause more confusion, frustration and chaos? As the Obama administration pushes forward on the “Change” agenda, some are wondering if it will be a positive or negative change.

New rules put in place last week for private student loans stem from the Higher Education Act. They have been hailed as good for student borrowers and were largely uncontroversial among lenders. Financial Aid officers and some higher education experts say the changes do not go far enough.

The disclosure rules require lenders to provide information about interest rates, fees, and terms, including the total cost of the loan at the maximum interest rate, when potential borrowers apply.

Lenders must tell applicants about repayment options and the total cost of each scenario. A sample form put together by the Federal Reserve shows that someone who is considering borrowing $10,000 at a maximum initial interest rate of 17.375 percent, for example, would be told that his or her loan would cost a total of $81,084 if payments are deferred while the person is enrolled, $50,707 if the borrower pays interest while enrolled, and $38,180 if the borrower makes payments on both principal and interest while enrolled. * This is why it is so important to understand and maximize all potential financial aid strategies so that your child is not burdened with an exorbitant amount of debt upon graduation.

Lenders also must inform applicants about federal student-loan options, which are often cheaper than private loans, and must refer them to the Department of Education’s web site for more information.

Upon applicant approval of a private loan, the lender must provide information on rates and fees, including estimates of the total repayment amount at the current and maximum interest rates, as well as the monthly payment at the maximum interest rate.

Private student loans carry risks and costs that fixed-rate federal student loans do not. Interest on private student loans can be variable, sometimes reaching 20 percent. The borrowing limits on private loans are also much higher than those on Stafford (Federal student loans). Due to Stafford loans not covering all the expenses college students require, students and parents have turned to private funding to cover the difference.

As college has grown more expensive, more students have turned to private lenders. Almost two-thirds of students who took out private loans had not exhausted cheaper federal financial-aid options. The new rules seek to reduce that proportion by requiring applicants for private loans to fill out a form indicating their knowledge of their college’s cost and other available forms of federal student aid.

Students and their families forgo available federal loans for various reasons. Some people do not fill out the Free Application for Federal Student Aid, a form required for eligibility to receive federal grants or loans. Some students and their parents may wrongly assume they would not qualify for federal aid. Others may be intimidated by the form, which has been criticized for its complexity and length, drawbacks that federal officials have been working to improve.

J.D. says: “Despite what changes the new regime makes, knowing all the numbers for your child’s college education is critical so that parents aren’t guessing and have an understanding of the process so that they can make an intelligent, educated decision. These are the things that parents and students learn in our free workshops.”

At college campuses around the country, a fall ritual as familiar as the football tailgate party is about to disappear. The on-campus credit card marketing, characterized by free pizzas and T-shirts for every completed application, is enjoying its last hurrah before a new federal law kicks in next year.

Credit card issuers in recent years routinely awarded cards to students with no income and no co-signer. Many colleges and universities joined the credit card game, allowing school mascots to be emblazoned across cards marketed to students and alumni.

Some colleges provide credit card companies with names and addresses of students and alumni. In exchange they can earn lucrative royalties based on the number of sign-ups and the volume of charges.

Consumer advocates say the reining in of student credit card sales can't come soon enough. In a study by Sallie Mae, the student loan organization, college students who had applied for student loans had an average of 4.6 credit cards in the spring of 2008, with the average senior graduating with $4,100 in credit card debt.

College students have been a key target of the credit card industry.

In February, a host of changes will hit campus. The law will:

Allow consumers under 21 to get credit cards only if a parent or other adult co-signs or if they prove they have the independent means to repay credit card debt.

Require disclosure of agreements that authorize collegiate affinity cards, including the details on royalty payments and mailing lists. Prohibit card issuers from offering freebies like food or trinkets when marketing on campus.

Stop prescreened credit card offers for consumers under 21 and ban credit limit increases without permission of a parent or other co-signer.

While many credit card companies have already scaled back aggressive on-campus marketing, consumer advocates say they will be monitoring colleges this fall.

The new reforms are aimed at keeping students from accumulating more credit card debt than they can handle. The changes are likely to make it more difficult for consumers under 21 to get credit cards.

J.D. says "Beware! Credit Card companies will find new ways to get their bloody talons into the pocket books of these young and innocent college students."

You asked, here it is...

Proper training, preparation and common sense are all paramount for a successful test day and a successful test score.  That aside, here are few good tips to take with you on your test day.

     ·Bring the proper supplies. Bring a bottle of water, a pencil sharpener or extra lead for mechanical pencils and bring an approved calculator. Be sure to shop or find these items early on and have them ready the night before the test day.
     ·Know all of the instructions before stepping foot into the test room. Don’t waste valuable time by reading these instructions on the test day. Your best bet is to familiarize yourself with them very well so that you area ready to go once the clock starts.
     ·Use your test booklet as scratch paper. There is no need to keep this booklet neat and clean as no one will read it afterwards anyway. Use the booklet to help work through a problem or to mark a particular question for review later on.
     ·Be very careful when bubbling in your answers. The answer sheet can do a number on your eyes after a while and it can be easy to bubble in a “D” for number 11 when it was meant for number 12. Be sure you bubble in the correct answer for the given questions. Otherwise one misstep can throw off your whole test.
     ·Be mindful of each question. It’s easy to go too quickly and make careless mistakes. Don’t overlook the heart of a question, or not take in each answer possibility. You must move through the test quickly, but the key is finding a balance between a quick pace and recklessness.
     ·Answer the easier questions first. If you come across a hard one, skip it and come back to it later. Time is of the essence, so be sure to tackle questions you know you can get right first. If you find yourself working on a question for more than 90 seconds, move on to the next. Come back to it at the end.
     ·Don’t rush, but don’t waste time. Though you know that you can’t afford to waste time you also want to be accurate on the SAT. Be sure to focus and read each question thoroughly before attempting to answer. After reading the question, review the multiple-choice questions if applicable, and then make your choice. If you can’t decide what to do on a question, mark it as something to come back to. It’s best to keep moving, you can always return to that question later. If you find yourself skimming through the questions to fast, take a step back and refocus.
     ·Have confidence! Don’t assume a question may be too difficult to answer. Be sure to read each question and think about the answer before determining that you need to guess or skip that question.  Have a “CEO’s” mentality; leave your emotions at the classroom door and go in with focused confidence.
     ·Know when to guess. On more difficult questions, try to eliminate as many wrong answers as possible before making a guess. Remember that you are penalized only ¼ point for an incorrect question. You receive 1 point for a correct answer, and 0 for a skipped answer.
     ·Breathe. Bring a sense of perspective to this test. Yes, the SAT is an important test, and you should concentrate to do well, but keep in mind that this is only a test. Remembering this throughout your test day may even help you to relax, in turn help you do better over all.

Important:

In researching colleges (well in advance of test day) your student should know both the minimum and maximum test scores on your child’s list of colleges. For example the test scores that San Diego State likes, are they higher or lower than the test scores at ASU?

Researching a college and knowing what kinds of demographics each college desires could be the tipping point that could get your student admitted and a whole ton of scholarships and or grants.

• This link is AZCollegePlanning's recommended test prep books & stuff SAT & ACT Prep Recommended AZCollegePlanning

Most colleges today accept both or either of the standardized tests; the SAT and ACT and state that they don't have a preference. It's not unusual for a student to score significantly higher on one test vs. the other. Many students are asking: "Well, which test should I take?"

First, check to see if the schools you are considering have a test preference or requirement. If not, consider your options. (*Note some more elite college require the SAT Subjects test in addition to the SAT or ACT. Check the college admission requirements.)

Keep in mind the differences in structure and content of the two exams. The tests have distinct qualities - the ACT is curriculum-based (English, math, reading, science and an optional writing section), while the SAT is more of an aptitude test focused on vocabulary, reading comprehension, general reasoning and problem-solving skills.

If you have a hard time staying focused for long periods, the ACT may be the test for you. It's shorter, generally more straightforward and there are more knowledge-based questions. English and math are a part of both tests, but the content and orientation is different.

The SAT focuses more on vocabulary and the ACT concentrates on grammar, punctuation and syntax. The ACT includes science and trigonometry, neither of which is found on the SAT.

Some counselors will tell you that intelligent underachievers will do better on the SAT and diligent overachievers will score better on the ACT. And others say that Athletes do better on the ACT verses the SAT. That may not be true information.

Many experts recommend that you take both tests, as well as both pre-tests (the PSAT and the PLAN) if they are offered in your area.

If you wish to make an educated choice, check out some of the free full-length practice tests for the ACT and SAT online (at The College Board, ACT, Princetonreview.com, Petersons.com), familiarize yourself with the format, content and structure and decide what's best for you.

Here are the official links to sample test:
Free SAT sample tests
Free ACT sample tests

If you don't have a clear preference, many students looking for any edge to improve their chances of admission, are taking both tests and submitting the higher score or both scores.

If you are a high school senior register for the test(s) now.
SAT test date October 10, 2009 registration deadline September 9
Register here for the SAT 
ACT test date October 24, 2009 registration deadline September 18
Register here for the ACT

If you are a high school junior take the test in the late spring
SAT test date March 13, 2010 registration deadline February 4, 2010
ACT test date April 10, 2010 registration deadline March 5, 2010

If you are a more hands on electronic techno-savvy kind of person, there are electronic handheld game type test prep devices. Pocket Prep Interactive Handheld Tutor for the SAT and ACT

The current state of the economy for Arizona is a determining factor if (and it is a big if) if the AIMS (Arizona's Instrument to Measure Standards) [A.K.A. Regents High Honors Endorsement Scholarship] scholarship will be available to bright students in the very near future.

Here is the latest news regarding the AIMS scholarship.

The official statement is:

The Arizona Board of Regents has decided to retain the "AIMS Scholarship" or "Regents High Honors Tuition" scholarship with the existing eligibility criteria for the graduating classes of 2009 and 2010. All college students currently receiving this scholarship will continue to do so if they meet the renewal criteria set by the universities. The impact on the class of 2011 and subsequent class has yet to be determined. The Arizona Department of Education will keep our website updated (www.ade.az.gov/asd/tuitionwaiver) on any Arizona Board of Regents decisions regarding this scholarship.

So here are a couple AIMS facts

This scholarship applies only to the three Arizona State Universities (ASU, U of A, and NAU). Community colleges have scholarships/grants available to students who graduate in the top 15% of their graduating class or are severely in need.

This link http://www.maricopa.edu/foundation/apply has several community college scholarships for Maricopa county community colleges.

This is an university academic merit-based scholarship; therefore, students do not need to demonstrate financial need in order to qualify. However, all students are encouraged to file the Free Application for Federal Student Aid (FAFSA) regardless of their financial situation. Students who are offered other scholarships from the university may not receive this ABOR scholarship. Students automatically receive the higher scholarship offered from the university, but not both.

This scholarship is only good at the three Arizona state universities and cannot be used at private colleges or colleges outside of Arizona state boundaries.

The PEG grant can be used at Private colleges or universities in Arizona.

However, there are other merit-based scholarships that can be used at colleges in other states and these vary by state and by college.

Remember AZCollegePlanning.com is Arizona's exclusive and premier college financial planning firm.