Trans World Assurance Blog

Go Further On A Tank Of Gas! (Updated) - Part 3 by Jeff Burch

Posted on Wed, Jan 25, 2012

PART 2 - Tips 5 thru 7

8. Maintenance and tune-ups: Regular maintenance as prescribed by the vehicle owner's manual will help your vehicle achieve its best fuel economy and improve mileage by up to 4%. Some overlooked Maintenance tips:

  • Use the correct oil: You can stretch your gas mileage by 1%-2% by using the thinnest viscosity grade of motor oil recommended by the car manufacturer. Example: Dumping 10W-30 motor oil in an engine that is designed to use 5W-30 can lessen your gas mileage by 1%-2%. In addition, use "Energy Conserving” motor oil containing friction-reducing additives.
  • Keep tires inflated and aligned: It's estimated that properly inflated tires can save the average car owner 3.3% with each tank of gas. Under-inflated tires can lower gas mileage by 0.3% for every 1 PSI drop in pressure of all four tires and wear out faster. When replacing your tires, replace them with the same make and model as the tires that were on your vehicle when it was new. In addition, poor alignment can cause tires to wear out quickly and force your engine to work harder. Align your tires, and save up to 10% or 20 cents per gallon.
  • Check spark plugs: Two worn-out spark plugs can cost 20% or more of your fuel economy
  • Check the oxygen filter: If your car has a faulty oxygen sensor it can cause you to lose up to 40% of fuel efficiency.
  • Check Air filter: Tests show replacing a clogged air filter on cars with fuel-injected, computer-controlled gasoline engines (cars made from early 1980s and upward) does not improve fuel economy, but it can improve acceleration time by around 6% to 11%. However, tests suggest that replacing a clogged air filter on older model cars with carbureted engines may improve fuel economy 2% to 6% under normal replacement conditions.
  • Change fuel filter: Clean fuel is essential for a long engine life. So replace your fuel filter once a year or no more than 30,000 miles. If the filter plugs up it can starve an engine of fuel and if it fails it can release debris into injectors, causing expensive repairs. Also, a restricted filter will stress the electric fuel pump, leading to early failure.
  • Check brakes: Gas mileage can be affected by brake drag. Brake drag occurs when the lining is in constant contact with the rotor or drum and gas mileage suffers (metal to metal). Repair ASAP, not to get the best gas mileage, but for your own safety.

9. Fill it up and other gas filling tips:

  • Don't top off: Over-filling the gas tank causes charcoal evaporation emissions canister to saturate. This part can cost $100 to replace. Stop fueling at first click of pump nozzle.
  • Fill up your gas tank in the morning on weekdays:

A. Gas stations tend to change their prices between 10 a.m. and noon, so head to the pump early in the morning if gas prices are on the rise. However, if prices are falling, go later in the day.

B. In addition, weekends and holidays often see slightly higher fuel prices, so if you can fill up mid-week, you may save more.

C. Since gas expands when heated and contracts when cooled fill up your tank before heat expands it (especially during the summer). Currently, there are several theories as to why filling up in the morning does or doesn't work. As for my own experience, when I fill up in the morning I get 25 extra (freeway) miles or more out of my tank. Will it work for you?  To find out, keep track of your mileage with a gas log book.

 Example: 

June 13 / Time filled: 7 am / 18 gal. / Miles: 368
June 23 / Time filled: 5 pm / 18 gal. / Miles: 326

  • Tighten the gas cap: To tighten, twist gas cap until it clicks three times. However, if you constantly smell gas in the vicinity  of the gas tank, you may need a new gas cap. If the cap is loose or defective, gas vapor will constantly leak out and you'll waste gas. Also, if the cap is faulty it can cause your oxygen sensor to read incorrectly and tell the engine management computer to adjust the fuel-air mix and you'll end up burning more gas than needed.
  • Fuel injected cars: Keep the gas tank at least full enough to supply fuel for the electric pump, which depends on a steady supply of fuel to lubricate its inner parts. Running your car low on fuel causes the pump to wear out, especially when cornering.
  • Stop fuel lines from freezing: Keep the gas tank 1/4 full and add isopropyl alcohol (commercial additive) to the gas tank when filling up before and during especially cold weather.
  • Car storage: Keep the gas tank full to limit the amount of water condensation in the gas tank when storing a vehicle. If car will be stored for more than a month, add a gas preservative.

10. Save gas while driving:

  • Avoid idling: A cold engine on today's modern cars should be warmed up by idling no more than 30-35 seconds. An idling engine eats up to 1/2 gallon of gas per hour and gets 0 mpg.
  • Drive 55 mph: All vehicles gas mileage decreases rapidly at speeds above 55 mph. Driving 65 instead of 75 mph reduces fuel cost 13%. Driving 55 would save 25%.
  • Drive efficiently and take your time getting there: Save up to 20% by driving the speed limit. Avoid aggressive driving, rapid acceleration, speeding and braking that can lower gas mileage by 33% on highway and by 5% driving in town. Other tips:

A. Listen to radio reports to use alternative routes to bypass traffic congestion
B. Drive in the highest gear possible without lugging the engine
C. Try to keep your speed constant. Use cruise control when on long stretches of road

  • When is the best time to use your AC? City driving uses up to 3 miles per gallon when using AC, but if you drive at a constant speed on a highway, AC use doesn’t matter.
  • Lighten your load: Don’t carry needless gear and luggage in your car. Gasoline mpg decreases 1%-2% for every extra 100 lbs of weight or conversely, save 3 cents per 100 lbs removed.
  • Don't be a drag! Keep car aerodynamic: Remove accessories, spoilers, etc., or repair body damage, crunched front fender, etc., that can alter a car's aerodynamics and reduce gas mileage by up to 8% (ask any race driver). In addition, refrain from driving with an open sunroof or windows at high speeds. Also, using a loaded roof rack creates wind resistance and can increase fuel consumption by up to 5% (better to pack items inside the car).

11. Other gas saving tips and ideas:

  • Use other forms of transportation: If you share a ride to work with a friend or co-worker(s), you will cost-effectively double your fuel economy. Check with your city or state to see if it has a "Rideshare" program. Other transportation options: Instead of driving use bus transits, bicycle, walk or catch a ride from friends, etc., to get to your destination of choice.
  • Fuel Economy for Cars: Fuel economy information for 2010 and 2011 cars, trucks, SUVs and vans is available to assist consumers in purchasing fuel efficient new vehicles. When purchasing, consider the most fuel efficient vehicle and save up to 50%. For more information, visit: www.fueleconomy.gov/feg/FEG2000.htm
  • Gas Mileage Impact Calculator: This calculator offers information correlating to gas consumption, fuel cost and emission of major pollutants. For more information, visit: www.hybridcars.com/calculator
  • Gasoline-Saving Devices: The U.S. EPA and FTC have both stated that there are no devices, currently on the market, that helps boost gas mileage any appreciable amount. Buyer beware!


Sources: Department of Energy, California Consumer Energy Center, Consumer Federation of America, Nerd Wallet, ALLDATA, EPA and Oakridge National Laboratory

Be sure to check out other articles from Jeff Burch on the Trans World Assurance Blog.

Tags: Trans World Assurance, Money Book, Jeff Burch, money saving tips, better gas mileage

Go Further On A Tank Of Gas! (Updated) - Part 2 by Jeff Burch

Posted on Tue, Jan 24, 2012


PART 1 - Tips 1 thru 4

5. Shop with grocers that use Fuelperks: Through Fuelperks you can earn 5¢ off per gallon of gas and up to 20 gallons for every $50 of food or goods you'd normally purchase through retailers. There's no cap on savings and you can earn a free tank of gas (3 month expiration date if not used). Furthermore, most retailers run extra promotions on select items that earn more fuelperks.

How it works:

A. Fill out an application and receive a loyalty card from one of these grocers in your area: Winn Dixie (FL, AL, LA, GA, MS), BI-LO (NC, SC, GA, TN), Martin's or Giant (MD, PA, VA, WV), Giant Eagle (OH, WV, MD, PA), Roundy's (WI, MN) or Rainbow Foods (MN)

B. Once you have your loyalty card, then go to www.fuelperks.com and register your loyalty card online.

C. Start shopping to save gasoline

  • Gas saving tip 1: From the comfort of your home, earn points by purchasing goods through their website.
  • Gas saving tip 2: Purchase gas gift cards from retailer(s), and at the same time earn points.
  • For more information, visit: www.fuelperks.com

Jeff Burch Save Gas

6. Save gas through your grocer:

A. KROGER: Gas discounts can be found through Kroger, the largest grocery chain in the country. States excluded from the program: AL, CA, LA, MO, OR, WA. The basics:

  • Earn 1 point for every dollar you spend on groceries (before coupons).
  • Earn 50 points for each prescription filled (excludes all government funded programs).
  • Receive 100 points for every $50 spent in gift cards (doesn’t include Kroger store gift cards).
  • For every 100 points redeemed at the pump, 10 cents per gallon is rewarded up to $1.00 per gal up to 35 gal per purchase.
  • Fuel points must be used during the month (“all or nothing”). Customers cannot use partial points for separate fill-ups:

Example:
100 points =      10 cent discount
200 points =      20 cent discount
500 points =      50 cent discount
1,000 points =   $1.00 discount  

  • Customers who use a Kroger 1-2-3 MasterCard can receive an additional 5¢ gas discount.
  • If your local Kroger store has teamed up with Shell or other outside gas stations, then buy $50 gas gift cards at Kroger, so you earn rewards points and save even more on gas!
  • Kroger pharmacies will match any local pharmacy's price for prescriptions, which means you get the best possible price on pharmaceuticals and earn points to save gas.
  • For more information, visit: www.kroger.com/in_store/fuel/Pages/default.aspx

B. FOOD CITY: Receive gas discounts from Food City (KY, TN, VA) through their Fuel Bucks program. The basics:

  • No limit on number of points you can redeem.
  • Earn 1 point for each $1.00 purchased in grocery items.
  • Receive 10 bonus points for every $10 of Food City brands purchased.
  • Earn 50 bonus points with qualifying prescriptions.
  • 150 points earns you 15¢ off per gallon on a single fill-up (Up to a maximum of 20 gallons per fill-up).
  • Points earned in one month, will expire at the end of the following month.

Example:
Points earned in Dec 2011 will expire Jan 31, 2012.

  • Earn 50 additional points for qualifying Pharmacy prescriptions. Applies to all new, transferred, or refilled prescriptions. Excludes federally funded prescriptions and $4 generic prescription plan.
  • For more information, visit: www.foodcity.com/save/fuel-bucks

C. WALMART: Get a Walmart gift card and use it at participating gas stations and you'll save 10 cents per gallon, with no other restrictions or requirements. For more information, visit: www.walmart.com/cp/Gift-Cards/96894 (see "Important Deals and Limitations" near bottom of the page).

D. PUBLIX: Keep an eye out for gas saving promotions through Publix (AL, FL, SC, TN). This promotion was recently released:

"$10 Off the Purchase of One $50 Gas Card.  With a grocery purchase of $25 or more. Coupon required for each deal. Only one deal and coupon accepted for every $25 grocery purchase."

WOW! This means you get $10 in free gas, and even if the gas cards sell out, you can get a rain check and receive the offer when they replenish their stock. Furthermore, the rain checks don't expire. Publix run these type of promotions every couple of months, so stock up when you see them.

  • If you live in area that has both Publix and a Fuelperks provider, buy gift cards to use at those stations. Save on the gift card and then save further on gas with your fuelperks!

  • Final grocer gas saving tip: Since you can purchase gas up to 20-35 gallons through these gas saving programs, and the average gas tank only holds 16 gallons, then bring your other car or gas cans to the pump, so you won't waste the discount.

NOTE: If the grocers mentioned are not within a reasonable distance or in your state, then check around with your local grocer(s) for gas saving promotions or special discounts.

Example: Safeway: www.safeway.com/ifl/grocery/club-card

For more information, visit: www.publix.com

7. Club memberships and gas cards:

  • Club memberships: Take the time to research club memberships, wholesale clubs, automobile clubs, and other organizations that offer gas discounts to members. Below, are just a few clubs to assist you in your research.

A. Costco ($50 to $100 membership): www.costco.com
B. Sam's Club ($40 to $100 membership): www.samsclub.com
C. AAA Club ($59-$159 membership): www.aaa.com
D. BJ's Wholesale ($50-$90 membership): www.bjs.com

  • Pay with gas card: Think about getting a gasoline credit card that offers 5% to 10% rebate on every gas purchase.

 

Go Further On A Tank Of Gas! (Updated) by Jeff Burch will continue tomorrow on the Trans World Assurance Blog with PART 3 - Tips 8 thru 11 .

Tags: Trans World Assurance, Money Book, Jeff Burch, money saving tips, better gas mileage

Go Further On A Tank Of Gas! (Updated) - Part 1 by Jeff Burch

Posted on Mon, Jan 23, 2012

Worried and feeling helpless because your budget's been blown out of proportion due to the skyrocketing prices of gasoline? Solution: Get into the habit of using the following gas saving tips and ideas that will help you go further on a tank of gas.
                         
1. Be smart and wise when purchasing gasoline: Regular grade fuel costs about 20-40 cents per gallon less than premium grade. However, using regular gas in a car intended to run on premium can quickly destroy an engine. Conversely, using premium gas in a car intended to run on regular wastes gas, money and causes car problems. Check your vehicle owner's manual to find out what type of gas is right for your car.

2. Check the Internet for cheapest gas prices: Find the lowest gas prices in your area by using the sites below:
www.motortrend.com/gas_prices
www.gasbuddy.com
www.gaspricewatch.com
www.fueleconomy.gov/feg/gasprices/states/index.shtml

3. Nationwide gas discount and rebate gas station finder:
To find the nearest gas station that gives gas discounts for paying in cash or rebates/rewards by utilizing certain credit cards, visit: www.nerdwallet.com/gas-prices

4. Credit and debit cards: Some credit and debit cards provide reward points, coupons or other benefits for purchasing gas. For a list of credit cards that offer gas discounts, rebates, etc., visit:
www.fatwallet.com/forums/finance/711457
www.indexcreditcards.com/gascreditcards.html
www.rewardscards.com/gas-rebate-cards-ranked.asp

 

(Updated) Go Further On A Tank Of Gas! by Jeff Burch will continue tomorrow on the Trans World Assurance Blog with PART 2 - Tips 5 thru 7 .

Tags: Trans World Assurance, Money Book, Jeff Burch, money saving tips, better gas mileage

The Military Spouse and Deployment

Posted on Wed, Nov 30, 2011

Military Spouse

Whatever your branch of service, and if you’ve experienced, are experiencing or are about to experience the distance caused by your spouse’s deployment, this blog article is for you. In the wake of your significant other’s long-term absence, a lot is going on - both in life and in the mind. Children, if applicable, are growing and changing. Important happenings are occurring that you would love to be able to share – in person. You’re happy, sad, lonely, excited and frustrated. You may have accepted there will be no more hugs or kisses. Intimacy is definitely out the window and a good face to face conversation will be, or is now, a thing of the past.

Don’t let the ebb and flow of a deployment drag your relationship under. There are ways to combat the negativity and keep your marriage on the right path when your spouse is gone.

COMMUNICATION: Whether it’s via email, phone or letters, you have to remember to communicate. If you’re having a hard day, or week, be open and honest about it. Don’t keep things bottled up inside. Let it out! Your spouse is your best friend right now and they need to hear these things almost as badly as you need to dispel them. Leave no pressing subject unrevealed. Even if they don’t ask, please, still tell. Resentment could build if this is not taken care of properly. Everyone will deal with the distance in their own way, but communicating your life and current needs is very important.

STAY POSITIVE: Even if you don’t feel positive, act like it. The above-mentioned communication is a must, but trying to remain positive is really the key. When you get to talk to your spouse, and if nothing terribly important needs to be addressed, tell them about your day; what you did or where you went. Recall funny instances with your children or pets. Talk about friends, family or someone new and interesting you met. Keep the brave face on. It is just as important for your significant other to know you’re having a bad day as it is for them to know you’re also okay. Mastering the technique of balancing positive communication and pressing issues will be hard, but it must be done.

CARE PACKAGES: With an array of care packages to choose from on the Internet, there should be no shortage in sending these. Put your own spin on one and have fun putting it all together. Pick a date each month you want to send one out and think of how excited your spouse will be to receive it.

PUT YOURSELF IN THEIR SHOES: How would you think or feel if you were the one who had to be completely separated from family and friends? Okay, so some days your significant other isn’t the best conversationalist; they only want to discuss work and they don’t even ask about your day. They seem distant or disconnected. Or perhaps they’re even a bit clingy. Either way, take a frustrated step back and try to imagine how you might be handling the distance from their perspective.

REMEMBER, YOU LOVE EACH OTHER: Don’t forget, there is a reason you both are doing this. There is a reason you both signed on. You knew your love had no bounds and that no amount of distance or time could ever truly separate you. Is this one of the hardest things you’ve ever done? Yes, it is. Does the distance and longevity test you mentally on a daily basis? Of course it does. But of all the things listed, this one is the most important. Because no matter how hard or vexing this has been, you must always remember you love each other.


Written by Sarah Shepherd
Sarah is a proud Navy wife and stay at home mom. She enjoys writing freelance articles in her spare time and composes writings on a variety of subjects.

Tags: Trans World Assurance, military move, military spouse, deployment

Every Military Member Should Assess Their Life Insurance Needs

Posted on Mon, Sep 26, 2011

When members join the military, they are automatically enrolled in the Servicemen's Group Life Insurance (SGLI) for the maximum amount of coverage and premiums are automatically deducted from their military pay. It is not uncommon for servicemembers to be told that all they need is SGLI, when frequently that would be poor advice. Servicemembers deserve the right to make responsible choices and decisions that their civilian counterparts make.

Every insurance decision should be made only after a thorough budget review, as well as a life insurance needs assessment. The Department of Veterans affairs provides a Life Insurance Needs Calculator on-line. This calculator helps military members to determine the amount of life insurance coverage needed.

To determine the amount of life insurance needed, the calculator takes into account current financial obligations, existing assets, and the income that would be needed to support a surviving family. It also takes into account how long the family needs to be sustained. The calculator is intended as a guide in the process and does not replace the services of a financial or insurance specialist who can fine tune your individual circumstances.


transworldassuranceTop 5 reasons military members should consider purchasing permanent cash value life insurance while still in the service

1) Servicemembers Group Life Insurance (SGLI) is not a permanent insurance solution. SGLI terminates 120 days after leaving the service. Many service members, in leaving the military, do not convert to Veterans Group Life Insurance (VGLI) because it can be very expensive and increases in cost over time. For more information, read the article "Beyond SGLI" at Military.com written by Captain Mike McHugh.

2) When purchased at a young age, permanent cash value life insurance premiums will remain low and fixed, and the return on many cash value products is outstanding in comparison to other financial choices.

3) The cash values accumulated from a permanent cash value life insurance policy can be used in helping the transition from military to civilian life.

4) Cash value life insurance provides death protection that will be there for a family if necessary.

5) Disability incurred during service could make purchasing standard insurance at normal rates impossible after leaving the service.

Tags: Trans World Assurance, military life insurance, military, life insurance needs assessment

The ABCs of Financial Aid (Part 4) by Trans World Assurance

Posted on Wed, Aug 17, 2011

 

transworld college clockFrequently Asked Questions

1. How much income is “too much” to qualify for Financial Aid?

Short of filling a FAFSA form, in a need-based situation, a wildly-generalized guideline for private colleges is that an annual income of less than $100,000 to $125,000 will frequently qualify for at least some financial aid (if no significant qualifying assets are involved).

2. Will my assets disqualify me for Financial Aid?

That depends upon the type of asset and the type of school – public (state) or private. Home Equity, Annuities, Retirement funds and Life Insurance are not counted toward the EFC at public schools — but might be, for need-based aid, at some private schools using Institutional Methodology.

3. Why bother saving – it only counts against me?

Families with that mind-set can “spend it” and have to borrow to pay for college – or they can save and “lose” 5.6% of parental assets per year. Spend $20,000 and have to borrow the $20,000, plus thousands more in interest. Or, save $20,000 and have $18,880 available for college?

4. How can I calculate my EFC?

A quick, fairly accurate version is at www.FAFSA.ed.gov

5. Should we only consider colleges that we can “afford”?

No! Colleges have huge variations in the amount of Financial Aid they’re willing to give – and how they “Package” it.

It’s urgent to start saving now. The clock is ticking.

(Photo courtesy of Campbellsville University.)


 Disclaimer

Trans World Assurance makes available the information and services contained herein in furtherance of Trans World Assurance's goal to inform and educate. While Trans World Assurance makes every effort to present accurate and reliable information on this site, Trans World Assurance does not endorse, approve or certify such information, nor does Trans World Assurance guarantee the accuracy, completeness, efficacy, or timeliness of such information. Trans World Assurance assumes no responsibility for consequences resulting from use of the information contained herein, or from use of the information obtained at linked sites, or in any respect for the content of such information.

Tags: Trans World Assurance, college planning, college funding, save for college, financial aid

The ABCs of Financial Aid (Part 3) by Trans World Assurance

Posted on Tue, Aug 16, 2011

 

FAFSA vs. Institutional Methodology:
Subject to minimum allowances, FAFSA requires 5.6% of certain parental assets be used for college costs and count toward the family’s EFC. However, FAFSA exempts some assets, specifically:

• Home Equity
• Retirement Funds
• Life Insurance, including Annuities

Many private colleges and universities require information beyond the basic FAFSA to calculate the EFC. This is called “Institutional Methodology.” Frequently, these colleges look at home equity, believing that families should be willing to use a portion of their home equity to pay for college. Some schools will also pay particular attention to sudden increases in various retirement funding vehicles or cash-value insurance.

Both FAFSA and Institutional Methodologies more heavily weigh student assets than parental assets. Student assets traditionally have been calculated at 20% (annually) to be used for college costs, compared to 5.6% for family assets above an excluded amount (that rises as parents get closer to retirement age).

Grandparent Assets:
Transworld college grandparentsAssets of grandparents, aunts and uncles (unless they are guardians for the student) do not count toward the family’s EFC. Income and assets of step-parents, divorced parents and remarried, non-adopting partners are treated in a variety of ways, depending upon the college. Accordingly, the “off balance sheet” income or assets of such alliances are what typically pay for, at a minimum, the extras of fraternities or sororities, or more often, even books!

What About Loans?
Loans are future income used to pay for today’s expenses. Various subsidized and unsubsidized loans, sponsored by federal, state and private sources, are available to parents and student. Remember that borrowing is less efficient than saving and should be a “last dollar” strategy. Borrowing satisfies today’s cravings at the expense of tomorrow’s standard of living.

Borrow or Save? The penalty for “instant gratification” is severe. Consider the following table:

--------------------------------------
Assumptions:
Total Amount Needed: $50,000
Years to Borrow or Save: 10
Interest rate (borrowing or saving): 4%

                               Save        Borrow     Difference
Monthly Amount:    $330.56    $506.23    $175.67
10-Year Total:         $39,667    $60,747    $21,080
--------------------------------------

Few families realize the penalty they face by not adopting a disciplined, regular savings plan. The above table, using extremely modest assumptions, shows just how deleterious procrastination can be.

More realistically: How about a 4% interest rate on saving and a 7% interest rate on borrowing? The 10-year difference between the cost of saving $50,000 and the cost of borrowing $50,000 becomes nearly $37,000!

Beware of Scams:
Some financial advisors may claim that they can:

(a) Find “hidden” scholarships and/or

(b) Guarantee that your child will receive more financial aid than he or she otherwise would qualify for.

Beware:

• Never pay for scholarship searches. Any student or high school guidance counselor can do a free scholarship search on the Internet.

• It is true that, while the uniform methodology EFC formula does not consider certain assets in calculating the Expected Family Contribution for a student’s college education, some of the more common “tricks” – such as hiding parents’ assets by putting them in the child’s name or making advance payments on a home mortgage and so on – can backfire.


Disclaimer

Trans World Assurance makes available the information and services contained herein in furtherance of Trans World Assurance's goal to inform and educate. While Trans World Assurance makes every effort to present accurate and reliable information on this site, Trans World Assurance does not endorse, approve or certify such information, nor does Trans World Assurance guarantee the accuracy, completeness, efficacy, or timeliness of such information. Trans World Assurance assumes no responsibility for consequences resulting from use of the information contained herein, or from use of the information obtained at linked sites, or in any respect for the content of such information.

Tags: Trans World Assurance, college planning, college funding, save for college, financial aid, scams

The ABCs of Financial Aid (Part 2) by Trans World Assurance

Posted on Wed, Aug 10, 2011

 

Need vs. Non-Need Aid: 

transworld college moneyUsing federally-approved formulas that place more emphasis on income than assets, a figure called the Expected Family Contribution, or “EFC,” is generated. The EFC, as the name implies, is the dollar amount that the family is expected to contribute annually to the student’s total college costs (tuition, room and board, books, travel, incidentals, etc.). The EFC figure is a constant – that is, it does not change depending upon the cost of college.

For example, a family with an EFC of $18,000 would receive no need-based aid at a college where total annual costs were $15,000/year – but would, theoretically, receive up to $20,000 at a college where total annual costs were $38,000/year.

In other words, at a college costing $15,000/year, the family (including the student) would be expected to pay $15,000, out of pocket – but, at a college costing $38,000/year, the family would pay just $3,000 more ($18,000 total)!

Scholarship? Loan? Or Work Study?

The big question: At the more expensive college, of the $20,000 of need-based financial aid ($38,000 minus an $18,000 EFC), how much is Scholarship? Loans? Work-Study?

Governmental sources of Financial Aid must be need-based. In general, this means public (taxpayer or state-supported) colleges and universities only give need-based aid. (Athletic scholarships at NCAA Division I and II schools are a different story.)

Some Colleges Also Give Non-Need Aid:

Of the approximately 1,540 private colleges and universities, however, all but perhaps 50 also give non-need based financial aid — usually called “grants” or “scholarships”. In other words, most private colleges may give aid beyond what the EFC indicates “need” to be! It is this non-need aid that generally is used to help achieve institutional, not individual or family, objectives.

Non-need aid, other than certain loans, can come from private sources, from funded college sources (endowment) and/or from non-funded college sources (simply a price discount). Non-need aid does not come from the government.

‘Blending’ vs. ‘Stacking’:

When students receive scholarships from non-college sources (Rotary Club Scholarships, local newspaper essay winner, etc.), most colleges calculate at least a portion of the award to reduce the amount of scholarship provided by the college from the college’s own resources. Some colleges actually use written formulas.

Thus, a student receiving a $1,000 scholarship from his/her local newspaper or church may find that the college simply reduces its non-endowment funded award by $1,000! This practice is known as “Blending”; external funds reduce what the college might be willing to offer.

The portion, if any, which reduces the family’s EFC is called “Stacking.” In other words, if a student was previously to receive $20,000 in aid and now, including the $1,000 outside award, receives $21,000 – that award was “Stacked,” not “Blended.”

High School Guidance Counselors recognize that many awards are simply “Blended” and are frequently less than anxious to provide recommendations, transcripts, etc. for a $500 award – knowing that it might not actually change the family’s expected contribution.

‘Gapping’:

Many colleges and universities simply do not have enough government, institutional, or other sources of funding to totally meet individual student need – the difference between the EFC and the total cost of education. This difference, if it occurs, is called “Gapping” – providing less financial aid than the student needs to attend college.

Disclaimer

Trans World Assurance makes available the information and services contained herein in furtherance of Trans World Assurance's goal to inform and educate. While Trans World Assurance makes every effort to present accurate and reliable information on this site, Trans World Assurance does not endorse, approve or certify such information, nor does Trans World Assurance guarantee the accuracy, completeness, efficacy, or timeliness of such information. Trans World Assurance assumes no responsibility for consequences resulting from use of the information contained herein, or from use of the information obtained at linked sites, or in any respect for the content of such information.

Tags: Trans World Assurance, college planning, college funding, save for college, financial aid

The ABCs of Financial Aid (Part 1) by Trans World Assurance

Posted on Tue, Aug 09, 2011

transworld college girl


There are only two ways to pay for college – with your money (including help from other family members) and with other people’s money.

Your money can only come from three sources:

1. Past income (assets)
2. Future income (loans)
3. Present income (available cash)

Other people’s money is what colleges refer to as Financial Aid.

Financial Aid Components:

Colleges recognize three components of Financial Aid:

1. Scholarships
2. Loans (which are actually your future income)
3. Work-study

Scholarships are obviously the most desirable of the three. Loans simply defer paying for college until later, and work-study is usually low-paying campus employment. Cafeteria and bookstore jobs are two classic examples of work-study opportunities.

Intent:

The original intent of Financial Aid was to help students attend college who otherwise could not afford to do so. In other words, its purpose was to help students and their families achieve their personal objectives.

In addition to that worthwhile purpose, Financial Aid is now often used to help colleges achieve their institutional objectives. In particular, colleges often use Financial Aid to: (a) Enroll students who otherwise wouldn’t be considering the school, and/or (b) Increase the “profile” (average SATs, class diversity, etc.) of the incoming first-year class.

‘Packaging’:

Colleges mix, or “package”, the three abovementioned components according to their resources and institutional objectives. As a result, two students receiving the same TOTAL amount of Financial Aid may have very different combinations of the three components. Obviously, from the family’s perspective, the most desirable Financial Aid “package” has the highest percentage of scholarship (also called “merit aid” or grants — terms that mean discounts off the “list price” of tuition).

Each student considered for Financial Aid is first determined to have, or not to have, financial “need.” Need is determined as follows: The family – defined in different ways, depending upon the college – completes a standard form, FAFSA (Free Application for Federal Student Aid), that requires a declaration of both student and parental income, assets, and, to a lesser extent, obligations.

 

Disclaimer

Trans World Assurance makes available the information and services contained herein in furtherance of Trans World Assurance's goal to inform and educate. While Trans World Assurance makes every effort to present accurate and reliable information on this site, Trans World Assurance does not endorse, approve or certify such information, nor does Trans World Assurance guarantee the accuracy, completeness, efficacy, or timeliness of such information. Trans World Assurance assumes no responsibility for consequences resulting from use of the information contained herein, or from use of the information obtained at linked sites, or in any respect for the content of such information.

Tags: Trans World Assurance, college funding, financial aid

Trans World Assurance Higher Education Series: Private College

Posted on Sat, Jul 30, 2011

Trans World Assurance Higher Education Series: Private College

transworld assurance college 6Myth: “Private or Public – what’s the difference? A degree is a degree.”

Fact: It’s true that both private and public colleges give accredited, four-year undergraduate degrees – but there are important differences. Specifically:

Values. A major study recently showed that private colleges graduates seem to believe their institutions do a better job in developing, encouraging, and nurturing, the exact kind of personal values that many families want their children and grandchildren to possess.

Graduation Rate. Students will, on average, graduate at least a year sooner from a private college.

Cost. It often costs less to complete a private undergraduate degree.

 

Myth: “Private College is only for rich people.”

Fact: According to the National Association of Independent Colleges and Universities (NAICU), the average family income of students attending private colleges and universities is lower than the average at public flagship universities.

 

Myth: “My child or grandchild won’t qualify for financial aid.”

Fact: Most private colleges and universities have both “need” and “non-need” based financial aid. Approximately 85 percent of full-time undergraduates at private institutions receive some form of financial aid. 

 

NAMES ARE DECEIVING
It would seem to be easy to identify an institution as being public or private by its name – but that’s not the case. Try these:

1. University of Pennsylvania
2. New York University
3. University of Miami (Florida)
4. Miami University (Ohio)
5. College of William and Mary
6. University of San Diego
7. San Diego State University
8. University of California, San Diego

Private: 1,2,3,6
Public: 4,5,7,8

Tags: Trans World Assurance, college planning, college funding, save for college