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Color of Money Book Club

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Michelle Singletary
Washington Post Columnist
Thursday, February 1, 2007; 12:00 PM

Michelle Singletary will host author Ben Kaplan for a discussion on Thursday, Feb. 1 at Noon ET about January's Color of Money Book Club selection, How to Go to College Almost for Free (Harper Collins, $22).

Kaplan's book is based on his experience of gradutaing from Harvard in 1999 debt-free thanks to $90,000 in scholarships he was able to obtain.

Read more about the book in Michelle's column: Through College Avoiding Debt (Jan. 7).

A transcript follows.

Read Michelle's past Color of Money columns.

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Michelle Singletary: Good day to all. It's cold where I am. But money talks always warm me up. There's lots of questions so let's get started.

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Washington, D.C.: My fiance and I anticipate a really, really nice tax refund (thanks DC Homebuyer's tax credit). We plan to pay down our high-interest CC debt. However, is there any reason we should consider putting a little bit of that money away into, say, an emergency savings account or retirement plan (at the cost of not completely removing all our CC debt)? I've heard advice suggest putting money towards both because people are naturally poor savers. But I'm inclined to put it all towards CC debt. What are your thoughts?

Michelle Singletary: While I'm waiting for Ben to answer his first question thought I take one off-topic.

I think it's vital you have an emergency fund. Perhaps to start it doesn't have to be the three to six months of liviing expenses but you do need something for an emergency otherwise you'll have to put it on the already crowded credit card. So hold back some and use the rest to pay off or considerably pay down the CC debt.

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Columbia, Md.: I want to add that I always hear people say they don't qualify b/c they make too much money or don't fit into a target group or minority. That means nothing! I've gone to college, twice, with scholarships. My parents made middle class wage and my husband and I now make upper middle class salaries.

I applied for every scholarship I could. In fact, I even earned ones that I had forgotten about! Some were substantial, thousands of dollars. On the other hand, a small $200 award covers one or two books, but at least it doesn't come out of my paycheck. Figuring out your financial future with college, while trying to find the right fit for you, is just the first step towards a solid adult life.

Michelle Singletary: Amen. Love your points.

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Woodbridge, Va.: If a scholarship claims not to be need-based, but they ask for a copy of the W-2 and parents' income (e.g., McDonald's scholarship program), should you provide it anyway or risk not being considered at all?

Maria

Ben Kaplan: Yes, I'd always follow the instructions of the scholarship provider. However, you might want to e-mail or call them and ask why they need that information.

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Washington, DC: Are there scholarships or funding for older persons who want to return to school but don't have the resources?

Ben Kaplan: Great question. Yes, there are scholarships for students of any age. For adult non-traditional students, there are scholarships specifically aimed at such students. For instance, Talbot's (the women's clothing store) has scholarships for women who have been out of school at least ten years who want to go back.

Also, there are no age requirements for most scholarships for students already in college. So you can apply for a lot of the same scholarships as 20-year-old undergraduates.

By the way, one of my CD-ROM resources is called 'Adult & Non-Traditional Scholarships That Totally Rock!' You can find out more information here:

http://www.scholarshipcoach.com/publish/root_category/nav/products/cd-roms/1_adultscholarrock_cdr.php

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Arlington, Va.: With the increasing number of students going to college each year, do you think that students will still be able to go to college "for free" with mainly scholarship and grant funds?

Ben Kaplan: Here's the good news: At the same time that college has gotten more expensive, the amount of scholarships and grants available have increased every year. So the pie is getting bigger. Not every student will go to college for free -- I was very blessed to achieve that result -- but I do believe that every student can win scholarships to reduce debt, make college much more affordable, and ultimately realize their educational dreams!

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Beltsville, Md.: Is there a valid Web site to apply for grants and/or scholarships?

Ben Kaplan: You can start by checking out my website:

www.ScholarshipCoach.com

There's lots of articles and tools to check out!

Michelle Singletary: You might also try www.fastweb.com, www.fastaid.com , www.collegeboard.com

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Washington, D.C.: I went to Howard on a scholarship. I was taunted because I won a federal scholarship. In every college, there are the class differences with the snobby and rich kids telling you about your free ride.

Ben Kaplan: Congratulations on your scholarship! And be proud of it!

Michelle Singletary: Why would you care what people think about your free money?

Free money is free money.

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Laurel: Harvard has, of course, been around a long time and has many wealthy alumni. Hence, there's a lot of endowment money available to provide scholarships. If one can GET INTO Harvard, it isn't hard to pay for it. For those of us whose children aren't likely to reach that level, how much more difficult is it to be one of thousands applying for the same limited pool at Great State U?

Ben Kaplan: There's several different types of scholarships for college. Yes, there are scholarships offered by individual schools, but there are also scholarships awarded by corporations, foundations, community groups, associations, fraternal lodges, and state governments. So even if an individual school doesn't offer a lot of aid, there are many other places to go!

Michelle Singletary: Harvard isn't hard to pay for? Are you a vistor from another planet?

I could show you all the e-mail I get from all the folks who went to brand-name schools and now are trying to pay back debt that will be with them for three decades.

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college loans: Michelle and Ben,

Hi. Great article on the college loans, etc. I find it funny (not) that parents are shocked to find how much college costs and that there is no money to give the child for college.

These parents had 17-18 YEARS to plan and budget for these college years. My wife and I planned college for our son by using the Prepaid college tuition. Yes, we gave up eating out so often and we gave up elaborant vacations and we gave up the McMansions and we gave up the BMWs BUT we still did eat out some and took cheaper vacations and we have a modest house and we have a compact car.

Now our son can graduate without a huge debt. Some might call us lucky but there was no luck to it. It was 18 years of planning and budgeting.

Sorry to be long winded but it gripes me when I see families commit the son/daughters to huge debt. And I know some families just can't help out and that is when a loan is needed.

So for folks just having a child, BUDGET NOW FOR THE FUTURE!!

Michelle Singletary: Oh my, don't yell. I agree but don't yell :)

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Miami, Fla.: Michelle, Thanks so much for the inspiration to get rid of my credit card debt. I have one question though- I am about to pay off my 2 credit cards, but one i have had for a long time - but it has a rather large annual fee. What- if any- are the affects on my credit score if i cancel this card? Should I keep it for the sake of the credit score? Thanks and keep up the great work

Ben Kaplan: For anyone with credit card debt, here's some extra incentive to pay it off: The way the need-based financial aid system works, the formulas don't take into account your debt. Thus, if two families have the same income and assets, but one has $20,000 in credit card debt, they look identical in the eyes of the financial aid office. So use your bank account to pay down the debt (your bank account is considered in the formulas) and this will increase the amount of financial aid you can get!

Michelle Singletary: Don't keep it just for the sake of the credit score. Yes, your score may go down a bit but if you continue to pay your bills on time you should be fine. A large annual fee isn't worth the extra points on your credit score. And remember credit scores only matter if you are applying for more DEBT.

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Harrisburg, Pa.: Is your book primarily limited to undergraduate costs? What do you recommend to keep graduate school costs down?

Ben Kaplan: The book focuses on scholarships for students of any age, including high school students, college students, graduate school students, and adult returning to school.

In terms of graduate school, there are a lot of scholarships available. For instance, the Jacob Javits Fellowship Program is for graduate students (and undergraduate seniors) working toward a doctorate or MFA in the social sciences, arts, or humanities.

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Atlanta, Ga.: Ben, I have enjoyed both of your books, since I have a high school junior and we will surely be looking for merit scholarships. I am registered with fstweb and a couple of other sites, and I check the web pages of colleges he is interested in carefully for scholarship info. How do you asses major school scolarships like the Jefferson at UVA or the Moorehead/Ramsey at UNC/Duke as compared to the private scholarships which you wrote about extensively? Is there anything new on the merit front since you wrote them?

Ben Kaplan: Thanks for the nice comment! I'm glad the books have been helpful.

Yes, I love scholarships offered by specific schools. The vast majority of schools in the U.S. offer some type of merit scholarship program. In addition to the ones you mentioned, some other great ones include the University of Chicago College Honor Scholarships, the Emory University Scholars program, and the Hodson Scholarships from John Hopkins University.

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Arlington, Va.: Of those students who search for scholarships, would you speak to which percentage of the final received package was from local competitions and which percentage was from national, on average?

Ben Kaplan: I've haven't seen any specific statistics on this, but here's one important piece of advice: Don't neglect the small, local scholarship. Sometimes a scholarship is worth 'only' a couple of hundred dollars and only a handful of people apply. I LOVED applying for those ones... my odds of winning were really high.

Plus, there's a snowball effect. Once you start winning the smaller ones, they are a credential you can use to win the bigger ones. That's one element of how I was able to win two dozen different scholarships worth $90,000.

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Washington, D.C.: I just wanted to add one thing to your answer when you said that "credit only matters when you are applying for more debt"--thats not quite true anymore. More and more employers are looking at credit scores of potential employees. Also,bad credit is the number one reason for being denied security clearance which is critical for a job in this area with all the goverment contractors. It may not be fair but its the wave of the future it seems like

Michelle Singletary: You are right but given what this person was worried about I would cancel the card with the high annual fee.

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Washington, D.C.: I agree with College Loans. It's a complete shame that our national Savings Rate is in negative territory.

However, it's also a shame that the last congress RAISED the rates on college loans, and preferred to spend $400 billion on WAR ($2 Trillion in the long view), rather than spend it our youth, by making education a right and a guarantee.

Looks like our government spends like the people -- more BMWs and frivolous wants, and fewer wise investments.

Where indeed are we headed?!

Michelle Singletary: Into more debt as a nation. And that is a shame.

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Sacramento, Calif.: To your knowledge, are there certain things in a scholarship application that are looked for or weighed more heavily when selecting a recipient?

Ben Kaplan: Scholarships always look for what I call "the universal judging criteria." These are the values we share as a society -- qualities like individual initiative, perseverance, civic duty, teamwork, enthusiasm, etc.

In your application, don't just focus on WHAT you've done--like being the member of a certain school club. Instead, focus on the positive character qualities you've demonstrated.

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Washington, D.C.: Hello,

I've always been told that there are no stupid questions, so here goes: I have about $175,000 in law school debt. Are there any "scholarships" that can help a grad pay down debt?

Thanks.

Ben Kaplan: There actually are what are called "Loan Forgiveness Programs." Usually, they involve a few years of service in a particular geographic area that is rural or underprivileged. Remember the TV show "Northern Exposure" (in which a doctor was working in rural Alaska)? It's kind of like that.

Great fields to find loan forgiveness programs include law, medicine, nursing, and social work.

As for law, check out my "Law School Scholarships That Totally Rock!" CD-ROM. More info at the following link:

http://www.scholarshipcoach.com/publish/root_category/nav/products/cd-roms/1_lawscholrock_cdr.php

Michelle Singletary: Also check government websites and the ABA for loan forgiveness programs.

http://www.abanet.org/legalservices/sclaid/lrap/home.html

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Woodbridge, Va.: Do you see a recent increase in the interest in and number of appplicants for scholarships due to rising costs.

Ben Kaplan: Yes, there has been an increase in applicants, but there has also been a consistent increase in the amount of scholarship money available.

Another big piece of advice: Don't let the number of applicants to the most popular scholarship prevent you from applying. For instance, I served on a scholarship judging panel in which 3,000 kids were going for 10 scholarships. The odds, you might think, don't sound good.

However, I would say that half the applicants put hardly any effort into their applications. Of the ones who did, only half of those really thought about what the scholarship was about. Out of the remaining, only about 30 applicants took the time two "paint a portrait of who they are, not just what they've done." (That's advice from my book.) So in the end, even though the "raw" odds were daunting, if you were serious about the application, your odds of winning were 1 in 3. I'll take those odds!

Michelle Singletary: Can I just say that I nearly took myself out of the running for a full academic scholarship. I too thought there would be a ton of people applying so why bother. I didn't believe they would award this great scholarship (four years, room and board and books and a summer job for four years) to a homey Baltimore girl who was raised by a grandmother who only got thu high school. But thank God my high school counselor (Carol Carter from Western HS) hounded me and hounded me. She said, "What do you have to lose. You have nothing now so if you don't get the scholarship you won't be any worse off." She made me believe in myself. I reluctantly applied and well here I am at the Washington Post having gotten that full scholarship and training in journalism. The odds were against me but I tried anyway. I'll never forget Ms. Carter or that life lesson.

Ben is right. Make sure your child writes from the heart. Writes well enough that the people picking the winners can see who she or he is.

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Atlanta, Ga.: I get the feeling a kid would have to walk on water to get a scholarship like the Jefferson or Moorehead. Are private scholarships like the Discover Card or Coco-Cola as competitive, or somewhat less so?

Ben Kaplan: I know, I know. It can be intimidating. I felt that way, too. I felt as if there was probably some kid out there who mastered calculus at age 5, won an Olympic gold medal at nine, and expands to five times his normal size when placed in water!!!

But no, regular kids win all the time. In my book, I actually feature a scholarship winner (and his essay) who won a really prestigious scholarship from prison! He discussed the steps he was taking to turn his life around and beat out students with perfect GPAs and SAT scores.

Michelle Singletary: Hey, if you could see me my hand is up.

Regular kid here.

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Beltsville, Md.: My daughter will be starting college in the fall, where is there to go to apply for scholarships, grants, or any other monies available?

Ben Kaplan: Now is a great time to be pursuing a scholarship quest. Start by checking out the resources at your school -- things like bulletin boards with scholarship deadlines, web pages that list scholarships, etc. Then expand your search to other schools in your area... you can visit their guidance office web pages or even visit in person. Then try online scholarship databases... I have a tool to do this at the following link:

http://www.scholarshipcoach.com/websurf.php

Also, I should mention that I have a new resource out called "How to Go to College Almost for Free: 10 Days to Scholarship Success." It's a two-CD set that goes far beyond what's in my book. It includes more than three dozen ready-to-go forms, worksheets, and templates, so that all you have to do is follow the steps. In as little as 10 days you can launch a major scholarship quest. Here's the link for more information:

http://www.scholarshipcoach.com/tendays

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College Park, Md.: I have a question unrelated to college funding. I have had a credit card for about 4 years now, and my credit limit is still rather low. I have been thinking about applying for a card that gives me some form of cash back or rewards (without any annual fees of course). The way I see it, these cards exist, so I should take advantage of them. However, looking at the definition of what Capital One considers to be good or excellent credit depends at least partially on your current credit limit. My question is this: should I apply for a new card anyway and hope that it is accepted or just try to get my current credit limit raised. Will it hurt my credit score to apply for the new card? Also, will it look bad to the credit card company if I ask for an increase. I don't have a particular need for it, but I would like to increase my credit for when I get out of school and need to start purchasing large ticket items like cars, etc.

Michelle Singletary: STOP. Think about what you just wrote. I don't really need credit but well, maybe the rewards cards are worth it. Then you say, I'll "need" credit for large purchases. I hope you aren't going to buy a car with a credit card?

I know that's not what you meant but if you manage the one card you have with a low limit you will be in the exact if not better position of someone with a HUGE credit limit.

Stay debt free. You don't need another card. Forget the rewards. They aren't worth it. Studies show when you use credit you spend more -- even if you pay your bill off every month. So the extra you spend cancels out the rewards almost all the time.

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Ben Kaplan: Since we're running out of time, I wanted to make sure I mentioned one thing:

Embarking on your own scholarship quest may sound like a lot of work, but it doesn't have to be overwhelming. If someone would have told me ten years ago that I would apply for over three dozen merit scholarships and that I would win about two dozen of them, I would have thought they were crazy.

But instead, I found that the key to finding scholarship success (while still keeping your sanity!) is this: Take small, manageable action steps. You'll find that those small steps-even if it's just devoting half an hour a day to your scholarship search-add up dramatically over time.

Michelle Singletary: What great advice to end on. I know we didn't get to many of your questions, including the non college ones. I'll try to answer more in my print column or e-letter, which you need to subscribe to.

Thanks so much for joining me today. If you have a chance go thu the Color of Money Book Club archive. The last few months I'm recommended a number of books to help you figure out to pay for college. Most important plan. Save as much as you can and for goodness sake do what you can afford, even if that means in-state or your kid's second choice.

College debt is such a burden to so many people. I know cuz I hear from the ALL THE TIME!

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