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Kal Chany, “Paying for College Without Going Broke” author and Campus Consultants president, on how the fiscal cliff will impact college students,...
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Yes.
As the country -- toward the fiscal cliff that as surprising group of people who are going to be -- college students.
The automatic spending cuts and tax increases pose even greater challenges -- folks struggling to pay for college.
Many wonder if it's even worth it.
Joining me now count Cheney the president campus consultants and the author of paying for college without going broke -- welcome back to the show it's always good do you.
You say first of all and and we talk about the -- the time the sticker price people face with a college educations they don't worry about it why.
That's because only about a third of students -- -- -- Paid the full sticker price higher education is that this -- industry so about two thirds of the students receiving some form of financial aid.
Or they're receiving some tax breaks by the federal or state government.
Sorry I want to talk about how the fiscal cliff.
Is impacting federal aid and there are some pricing things here but I don't think have gotten a lot of attention first of all the student loan interest deduction.
It's not going away but it's certainly being downsized can you tell us about them.
Right a lot of the provisions.
Are set to expire so they can go back to the old tax law for many years ago.
That means for the student loan interest deduction which parents could also claimed.
The income thresholds are gonna be less it used to be -- a limited number much -- it now it's limited to the first six months are repayments so that.
Eyes and -- were talking about and then it goes away.
Then it goes way yes so look people roll that debt over a lot and I know people have had that debt for 10152030.
Years.
Now I didn't try to need to pay off in five years or -- lose your deduction.
You know -- to deduction but some people may also lose the deduction they used to have even within that -- the appeared because the income thresholds.
To be able claim that deduction are going to go back to the old levels which were about half the current levels to be able claim that deduction.
-- -- -- about the American opportunity tax credit.
That's also getting downsized -- when he 500 dollars for the first four years after 2000 applies to the first two years tell us about that.
Okay the American opportunity credit rather generous and it's even a refundable credit myself get no tax liability you -- get some that.
Is scheduled to expire at the end of 2012.
That means that go back to the hope credit which is the first two years that's about 18100 dollars but more important similar to the interest deduction.
The income thresholds to be able to qualify for that credit are going to go down -- much higher.
For the American opportunity credit up 280000.
For married filing.
Jointly they're going to go down quite a bit.
-- -- that's great information to have a lot of people out there don't realize what's going on.
So if you're one of those parents out there you know you get from the college what they're willing to give -- is at the end of the conversation.
No with possible to -- a package in your success with that of course is gonna be understanding.
How you're eligible for assistance is determined most people don't understand that in the book we go into detail about that.
The formulas that influence the -- because how you position your income your assets your debt your retirement division.
Can affect.
Your eligibility for assistance so therefore it's important.
To not just fill out the forms of hope for the best you need to be savvy about applying for the assistance they savvy about applying and then apply for all the free money you can find everywhere what's the best way to do that.
OK well.
The best source of money is not from trying to locate.
Private scholarships from a little old lady -- -- highway who's giving money to children were red headed that can play the piccolo.
Those types of scholarships are very small about 5% of the -- the major free money.
Comes from the federal government the pell grant which actually -- not being affected at least for this upcoming year with the fiscal cliff.
-- their state grants and there are also grants from the colleges themselves that that's where the bulk of the financial -- is coming from.
Excellent -- great job thanks for coming on tonight -- partially.
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