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Getting a College Education for Free — Really!

Filed under: College Life - BookRenter Team
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By Lynn O’Shaughnessy
A nationally recognized higher-ed expert and speaker, who is the author of The College Solution, a bestseller, and the creator of The College Solution blog. The 2nd edition of her book — The College Solution — will be released on Amazon on May 24, 2012.

Originally posted on January 30, 2012 here

I wrote a post for my CBS MoneyWatch college blog on Friday that blew out Antioch College’s server.

How did I do that? Actually, it wasn’t me. I was just the messenger for the liberal arts college that had a dramatic announcement to make.

For the next three years, Antioch College in Yellow Springs, OH, is offering all its incoming students full-ride tuition scholarships. With this year’s tuition valued at $26,500, each four-year scholarship is worth at least $106,000. It doesn’t matter what your family’s income is, every accepted student will get the same deal.

The offer will be even better for some students, who file for financial aid and can’t afford the room and board, which is currently $8,628.


Obviously, when you write that a college is handing out six-figure scholarships to all its students, it attracts a lot of attention. So what is the catch?

As I mention in my CBSMoneyWatch post, Antioch, which was founded by abolitionists in 1850, is crawling out of the grave.

Thanks to horrifically poor management, the liberal arts college shuttered its doors in 2008. Loyal alumni went ballistic and their donations helped to bring the school back to life. The reborn school’s first class (35 students) showed up last fall and Antioch is in the process of taking applications for the next crop of freshmen. Antioch is aiming for 65 to 75 new students in the fall and hopes to have about 300 enrolled students by 2015.

Don’t Believe Everything You Read

Photo from The College Solution blog

Antioch College is one of the 40 colleges that the late Loren Pope, a former New York Times education editor and college counselor, wrote about in his classic book, Colleges That Change Lives: 40 Schools That Will Change The Way You Think About Colleges. Pope wrote the book, which has been incredibly popular for many years, after becoming an unabashed and tireless champion of liberal arts colleges.

The last edition of Colleges That Change Lives is outdated — the most recent version came out in 2006. I thought it was unfortunate and embarrassing that the book was praising Antioch after its (temporary) demise. Pope should have known before updating his book that Antioch had been in what one alumni called a “slow-motion decline” for many years. Here is one graduate’s harrowing account of Antioch College’s demise.

In my own book, The College Solution (the second edition will be coming out this spring!), I used Antioch’s press coverage to illustrate that you can’t believe everything you read about a college. (That advice applies to college rankings too!) For instance, months before Antioch folded, US News  & World Report‘s Best Colleges guide singled out Antioch for its small class sizes (the school had very few students left!) and its “outstanding” internship program.

Colleges That Change Lives

While Colleges that Change Lives is outdated, I do think that it is a wonderful book to get a sense of what liberal arts colleges are all about. Coincidentally, my two children happened to attend schools that are featured in the book — Beloit College and Juniata College. The 40 colleges profiled in the book formed an organization, Colleges That Change Lives, and you can find information on all these school on its website.

As a group, the CTCL colleges make appearances throughout the year; here is the link to where the schools will be holding events in 2012. I counted appearances in 22 cities.

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Will Your Savings Hurt Your Financial Aid Chances?

Filed under: College Life - BookRenter Team
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By Lynn O’Shaughnessy
A nationally recognized higher-ed expert and speaker, who is  the author of The Collor Solution, a bestseller, and the creator of The College Solution blog. The 2nd edition of her book — The College Solution — will be released on Amazon on May 24, 2012.

Many families worry that their college savings accounts will kill their chances for financial aid.

It’s been my experience that it’s usually dads who get stressed out about how colleges will treat their college accounts for financial aid purposes. Some fathers whom I’ve talked are down right bitter. They are especially incensed at the possibility that families that didn’t set aside money for college will hog all the aid.

If that’s what you’re worried about, here’s my advice: Relax!

Families who save for college are rarely ever hurt in student financial aid considerations. In fact, it’s been estimated that fewer than 4% of families who fill out financial aid applications are penalized for their savings.

Why Your Savings Won’t Hurt Financial Aid Chances

Here are the two biggest reasons why saving money shouldn’t hurt your financial aid chances:

1. Colleges don’t care how much you saved for retirement.

The Free Application for Federal Student Aid (FAFSA), which anyone applying for financial aid will complete, doesn’t even inquire about retirement accounts. Private colleges that use the CSS/Financial Aid PROFILE, will inquire about a family’s retirement accounts, but schools that use the PROFILE very rarely penalize parents for these assets.

2. Parents can also shelter plenty of money outside of retirement accounts.

It might not seem like it, but colleges don’t want to strip you of all of your available cash. The financial aid formulas will also let you shield a big chunk of your non-retirement money through an asset protection allowance.

As you can see from the federal chart below, how much you can shield from the FAFSA formula depends on the age of the oldest parent. The closer the parent is to retirement age, the greater the amount he/she can shield from the financial aid formula.

Let’s say the oldest parent is 52. The family would be able to shield $49,200 in 529 savings plan money, as well as any other cash laying around in taxable accounts such as savings, checking and brokerage accounts. In a two-parent household, a 60-year-old parent could shelter $61,400 from financial aid calculations.

The amount a mom or dad could shelter in a one-parent household is significantly less. A 52-year-old single parent, for instance, could shelter $16,700.

Asset Allowance Illustration

Using an example should make it easier to see how this allowance would work. Let’s assume that a family has $100,000 in non-retirement assets, including $25,000 in a 529 savings plan, and the oldest parent is 55.

The family would get to shield $53,400 from the FAFSA formula, which would leave $46,600 unprotected. In calculating the family’s financial need, the FAFSA methodology wouldn’t expect the parents to sink all of that money into college. Consequently, the $46,600 in assets would be assessed at a parental rate of 5.46%. When you do the math, the child’s eligibility for need-based aid would only drop by $2,628 even though the family had $100,000 in the bank.

Knowing this, would you rather be a family who saved nothing for college or the family who has $100,000 in the bank? Obviously, it’s always better to save money, whether it’s for college or retirement. Do so and you’ll enjoy more options.

For parents who do have money to shelter from the federal aid formulas, 2012 did usher in some bad news. The amount of money that parents can protect has dropped. Last year, for instance, you could shelter $60,200, but the figure dropped to $53,400 this year. You can find the EFC Formula by Googling EFC Formula and 2012. You’ll find the right chart on page 19.


When I have written about this before, some parents have believed that they subtract their asset protection allowance themselves before reporting their taxable assets on the FAFSA. Do not do this! The federal processing software automatically does this when determining what you EFC is.

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