Ed Bove-Beacon Blog

Don't Miss The Financial Aid Deadline!

February 1st is the priority deadline for financial aid forms to be submitted to many colleges and universities across the country.  And even though some schools may state they have later deadlines, my feeling is that it's always better to be first in line than last.  If someone is carving up a tasty financial aid pie, I want a big piece, not the leftover crumbs.

The two main financial aid forms, the FAFSA and the CSS Profile, ask for a lot of income tax information that you may not have at this point.  But the good news is, that you are allowed to estimate based on your W-2s, current financial statements and your 2008 tax returns. 

But make no mistake:  This can be a treacherous process and the last thing you want to do is make a mistake that could potentially cost you thousands of dollars in need-based aid.  So make sure to be careful and thorough.  And if you need to, you can always call upon us for guidance.  That's what we're here for.

So, if you haven't already, you'd better get busy with those forms and get them submitted by midnight on the 1st.

Education Credits Expanded This Year

As tax season approaches, you should be aware of some significant changes that have been made to Edication Credits as a result of the American Recovery and Reinvestment Act of 2009.  Here's a quick overview:

·         American Opportunity Credit (AOC) – This credit modifies the existing Hope Credit for tax years 2009 and 2010, making the Hope Credit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. Taxpayers may be able to take a credit of up to $2,500 for qualified education expenses paid for each student who qualifies for the American opportunity credit.  Additionally, up to 40% of this credit may be refundable.

·         Hope Credit – The Hope Credit is for the payment of the first two years of tuition and related expenses for an eligible student. This credit may be more advantageous only if at least one student attended an educational institution located in the Midwestern disaster area.  For qualifying education institutions located in a Midwestern disaster area there is an expanded definition of qualifying expense and a credit of up to $3,600.  However, both the American Opportunity Credit and Hope Credit cannot be claimed on the same tax return.  If claiming the Hope credit for one student that attended an educational institution in a Midwestern disaster area, the Hope Credit must be claimed for all students that qualify.   

·         Lifetime Learning Credit – For the tax year, taxpayers may be able to claim a lifetime learning credit of up to $2,000 ($4,000 for students in Midwestern disaster areas) for qualified education expenses paid for all students enrolled in eligible educational institutions. There is no limit on the number of years the lifetime learning credit can be claimed for each student. However, a taxpayer cannot claim the Hope, American Opportunity and the Lifetime Learning credit for the same student in one year.

Illegal Immigrants May Get to Pay Lower Tuition in NJ

This is a story from the Associated Press in today's Star-Ledger I thought was interesting:

TRENTON — Illegal immigrants in New Jersey might get to pay lower in-state tuition at the state's colleges and universities.

The state Senate is scheduled to vote on the issue today.

Outgoing Gov. Jon Corzine supports the measure, which would apply to illegal immigrants who meet certain criteria. Gov.-elect Chris Christie opposes it.

Supporters say the measure would benefit young immigrants, many of whom were brought to New Jersey as children and educated in the public school system.

Opponents say the measure awards lawbreakers and burdens the educational system.

Of the six states that take in the most immigrants, New Jersey and Florida are the only two that do not have some form of the in-state tuition legislation.

On My Way Home...I Hope

As I write this, I'm sitting at San Diego International Airport waiting to board my red-eye flight home.  So I'm just killing some time surfing the web in the meantime and come across an interesting headline:  "The World's Most Dangerous Airports."

I knew I shouldn't click on the link to the story, but I couldn't resist.  The story listed the nine most dangerous airports in the world based on various media reports and other factors.  And guess what?  Newark Liberty was among the nine.  How did I know that would be the case?

So if  I make it home in one piece, I'll be back in action soon.  The college planning conference was great and I can't wait to share everything with everyone...assuming I'm still around to do it.

Wish me luck.

In case you think I was kidding...

...about the rotten weather in San Diego on Monday.  Here's some visual proof.  This is the view from my hotel room window.  Now I'm kind of happy about being inside in meetings all day.

Finally Made It!

Do any of you remember the old Jack Lemmon film "The Out of Towners"?  (They've since done a remake, but I'm a purist and I like the original.)  It was a hilarious movie from 1970 about a small town couple traveling to New York City and everything that could possibly go wrong with their journey did.

Well, I had a similar experience tonight in reverse.  I was heading out of Newark to San Diego to attend my upcoming college planning conference.  And it was a real Murphy's Law kind of flight.  Delays...unscheduled stops...inedible dinner...car rental snafus...you name it.  So I'm just getting into my hotel room now at a time that is the equivalent of 4:45 a.m. back home in NJ.

Needless to say, I'm completely exhausted.  But at the same time, I'm very wound up.  So I figured I'd post a quick message here before I hit the sack.

I'm really excited to be here to spend the next three days masterminding with my peers and getting invaluable insights from my mentor Ron Caruthers.  I'll post more as the meetings continue, but for now, I'm going to get some much needed sleep.

Stay tuned!

Number of Colleges Costing $50,000 Or More Increases Tenfold

The number of private colleges with costs of attendance of $50,000 or higher has jumped to 58 this year, according to The Chronicle of Higher Education.  Last year only five schools charged that much.  If that's not alarming, I don't know what is!

College costs in general have risen much more rapidly than the costs of other goods and services, according to a related article in the New York Times.  Costs are up 4.3 percent this year at private colleges and 5.9 percent for in-state students at public schools, according to the article.

If this isn't a wake up call to families of college-bound students, I don't know what is!  People had better start planning on how to deal with these spiraling costs!  Planning on positioning themselves to be eligible for the most possible aid.  Planning on how to best pay for their share of this enormous tab without putting themselves in the poor house.  Planning on finding the best schools that offer the most generous aid packages, and so much more.

People spend more time planning a $2,000 vacation than they do planning for how to handle a potential $200,000 price tag for a college education.  Time to wake up America!

Revamped Tax Credit Helps People Who Are Paying For College

Many people will be able to offset their college expenses over the next two years under the new American Opportunity Tax Credit. This tax credit is part of the American Recovery and Reinvestment Act of 2009.

Here are six important facts to know about the new American Opportunity Tax Credit:

1. This credit, which expands and renames the existing Hope Credit, can be claimed for qualified tuition and related expenses that you pay for higher education in 2009 and 2010. Qualified tuition and related expenses include tuition, related fees, books and other required course Materials.
2. The credit is equal to 100% of the first $2,000 spent and 25% of the next $2,000 per student each year. Therefore, the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualifying expenses for an eligible student.
3. The full credit is generally available to eligible taxpayers who make less than $80,000 or $160,000 for married couples filing a joint return. The credit is gradually reduced, however, for taxpayers with incomes above these levels.
4. 40% of the credit is refundable, so even those who owe no tax can get up to $1,000 of the credit for each eligible student as cash back.
5. The credit can be claimed for qualified expenses paid for any of the first four years of post-secondary education.
6. You cannot claim the tuition and fees tax deduction in the same year that you claim the American Opportunity Tax Credit or the Lifetime Learning Credit. You must choose to either take the credit or the deduction, which ever is more beneficial for you.

Education Credit Expansion Will Help At Tax Time

I think my brain is ready to burst after having a ton of tax info crammed into it at today's IRS Nationwide Tax Forum in New York City.  And there's more to come tomorrow.

A multitude of tax law changes take effect that will benefit many taxpayers this year.  I'll be posting much more about all that on my tax blog in the coming days.

But before I rest my aching head for the night, I wanted to at least give a quick mention to one specific tax law change that should be of great interest to all of you reading this college planning blog.

There has been a major revamp and expansion of the Education Credit, which will result in many more taxpayers with children in college qualifying for bigger tax credits this coming tax season.

I have to get to be because I have to get up bright and early to head back to the city for Day 2 of the IRS Forum.

But keep checking back here over the next few days and I'll give you all the details on the expanded program.

This will be very welcome news for many of you!

Cash for Clunkers Program Ends Tonight

If you want to get a rebate for trading in your old gas guzzler for a new fuel efficient vehicle, you have until 8 o'clock tonight to do it.

That's when the federal Car Allowance Rebate System (CARS), as it is officially known, comes to an end.  As of last Thursday, the CARS program has recorded more than 457,000 dealer transactions worth $1.9 billion in rebates, according to the Department of Transportation.

Now you may be wondering:  What does this have to do with college planning?  Well, if you're thinking of getting a new car anyway, this program will save you up to $4,500 in rebates.  Would an extra $4,500 help put a dent in some of those college costs?  I'd say so.

Sometimes you have to think outside the box when it comes to planning for college.  It's more than just looking for financial aid or getting student loans.  Sometimes it's a matter of finding ways to free up money you might otherwise be spending to use toward your college costs.  It's all about cash flow folks.

The program provides rebates of up to people who turn in their clunkers for fuel-efficient vehicles. Most consumers have turned in trucks and SUV’s in exchange for passenger cars, according to the DOT.

Transportation Secretary Ray LaHood said that the Monday night deadline will allow car dealers and buyers plenty of time to finalize purchases and submit applications for rebate from the remainder of the $3 billion provided by Congress.

Applications for rebates will not be accepted after 8 p.m. EDT Monday.  So if you've been thinking about taking advantage of this rebate program, today's the day!  You've got no more time to waste.

For more information, visit the program's official website at www.CARS.gov.

If you want to get a rebate for trading in your old gas guzzler for a new fuel efficient vehicle, you have until 8 o'clock tonight to do it.

That's when the federal Car Allowance Rebate System (CARS), as it is officially known, comes to an end.  As of last Thursday, the CARS program has recorded more than 457,000 dealer transactions worth $1.9 billion in rebates, according to the Department of Transportation.

Now you may be wondering:  What does this have to do with college planning?  Well, if you're thinking of getting a new car anyway, this program will save you up to $4,500 in rebates.  Would an extra $4,500 help put a dent in some of those college costs?  I'd say so.

Sometimes you have to think outside the box when it comes to planning for college.  It's more than just looking for financial aid or getting student loans.  Sometimes it's a matter of finding ways to free up money you might otherwise be spending to use toward your college costs.  It's all about cash flow folks.

The program provides rebates of up to people who turn in their clunkers for fuel-efficient vehicles. Most consumers have turned in trucks and SUV’s in exchange for passenger cars, according to the DOT.

Transportation Secretary Ray LaHood said that the Monday night deadline will allow car dealers and buyers plenty of time to finalize purchases and submit applications for rebate from the remainder of the $3 billion provided by Congress.

Applications for rebates will not be accepted after 8 p.m. EDT Monday.  So if you've been thinking about taking advantage of this rebate program, today's the day!  You've got no more time to waste.

For more information, visit the program's official website at www.CARS.gov.