GPA: Playing the Numbers

A strong GPA is a critical number to a high school student. It is not unlike a credit score for an adult. Most financially sound parents know many ways to improve or maintain a high credit store, but how many are helping their children keep another important personal number as high as possible?

The first step in maximizing a GPA is to understand how it is calculated. Unfortunately, there is no single formula for this. Schools often vary in the way they compute GPAs so it is important to understand a GPA in context. Information regarding how a school calculates GPA can usually be found in a student handbook, school profile, or district progression plan. A guidance counselor should always be able to explain the formula as well. Whatever the case, it’s wise to get a good grasp on this calculation as soon as your child begins to earn high school credits and keep in mind that often happens in late middle school.

There are two key things to pay the most attention to here. The first is the relationship between grading terms and the awarding of credits. The most common of these in high school is when a 1st term and 2nd term are averaged together to produce a grade at the end of a high school semester. This semester average is usually converted to a letter grade, and the letter grade is then typically converted back to a number on a 4-point scale to calculate GPA.

Thus, the other key element to understand is what those letter grades are converted back to in order to produce a GPA. The biggest difference you’ll find here from school to school is that some use pluses and minuses while others treat a high or low average within a given letter grade range as equal.

In action, the process is probably much simpler than I have made it sound here, but the bottom line in most cases is that you’re probably going to be averaging some numbers together that will convert to some other scales that will, in the end, produce a GPA. Therefore, after you get your school’s GPA formula down pat, the most important thing you can do is learn to play the numbers that go into your GPA to your advantage.

Let’s say you’re at school where a 90 equals an A and a first quarter grade is averaged with a second quarter grade to produce a semester average and award a credit. We’ll also assume a school rounds to the student’s advantage (something else you’ll need to ascertain). If your child’s 1st quarter grade is an 88, there is a huge difference in your child earning a 91 instead of a 90 for the second quarter. The average of an 88 and 91 will round up to A, an 88 and 90 won't. If your child is not at a school that deals with pluses and minuses, the difference between earning a 91 and 100 in this example is moot, but the difference between a 91 and 90 is gigantic.

Parent and student need to understand scenarios like these and look for opportunities to get those little bumps in their GPA. Doing so can make a big difference in the end as to which colleges they are accepted to and which scholarships they are competitive for. Just as establishing good credit early on in life can pay huge benefits down the road, establishing good GPA awareness early on can mean good things at graduation.

How to (not) get in-state tuition

Inevitably, I end up talking to at least one family a year who believe they are the ones who have figured out how to pay in-state tuition at a school outside of the state they live in. They tell me, “we have grandparents who live in that state,” or, “we own property there,” as though they are the first people with grandparents or property in another state. They are not. Plus, the colleges have significantly more experience in this game anyway.

It’s important to realize that colleges have a financial interest in having you pay out-of-state tuition. It’s a lot more money for them for the exact same product they provide in-state students. In fact, they depend on a certain percentage of out-of-state students attending in order to balance their budget. The bottom line is that, like any business, colleges see a benefit when they charge you more. Thus, if you are going to pay the lower rate, you’re going to have to work for it.

So, what hoops are you going to have to jump through to prove you live in a given state? This can differ a little from one school to another but you’re going to be asked to produce things like driver’s licenses, vehicle registrations, voter ID cards, utility bills, warranty deeds, high school diplomas, proof of homestead exemptions, guardianship documents, tax returns, and others. You are going to have to provide more than one of those on most occasions too and if you suddenly acquired all those just a couple of months before you enrolled in a college, that’s going to raise a red flag that will trigger more intense questioning from the school.

Even if you do own property in another state you probably don’t have your life revolving around that property. I doubt your vehicles are registered there, and you probably don’t vote there, etc. So, it’s going to be hard to prove residency in that state. If Grandma and Grandpa are suddenly listed as the primary caregiver, but the student graduated high school in another state, has an out-of-state license, and/or Mom and Dad are the ones writing tuition checks, you’re going to hit a wall there.

The last strategy I hear a lot is, “We’ll have our child go to the out-of-state school for a year, pay the out-of-state tuition, he or she will get established in the other state during that year, then we’ll be able to pay in-state tuition for the rest of college.” Well, is your child going to be a financial independant after that year? Are they going to be wholly supporting themselves and are you going to quit claiming them on your taxes? Unless your child is going to be able to decisively demonstrate that they are out there on their own and you are ready to forego your child income tax credit, this one probably isn’t going to work either.

This all boils down to the fact that if your child is considering an out-of-state school, you should anticipate paying out-of-state tuition for the duration of their college career. It would be a costly mistake for you to “buy” the out-of-state product with the hopes that at some point you’ll be able to devise some strategy that allows you to pay in-state tuition. That is, in reality, quite unlikely. There are very special circumstances where a student’s residency does legitimately change and the colleges do have hearts. If you find yourself in one of those very special situations, it’s always a good idea to pick up the phone and call a school. Just be ready to defend your argument.  

Why does my teenager act like that?

Parents and their teenage children often do not get along. I can’t tell you how many eye rolls I’ve seen young people give their parents when I meet with them together and I can only imagine how many more of those happen on a regular basis at home. Being a parent of a teenager can be extraordinarily frustrating because of the argumentative and divisive behavior that they almost always possess, but I think it’s important to understand that this behavior is really a natural function of human biology and maturation.

A young child is entirely dependent on their parents. Those basics of Maslow’s hierarchy like food, shelter, safety, and love are provided  by the parents. Thus, the child is physically and emotionally dependent on the parent. A lack in those needs obviously works to cause flaws in normal development, but for my purposes here I’m assuming basic needs are more or less met for a child.

As a child matures and grows, they become more and more capable of meeting their own needs and begin to look to those outside of their parents to fulfill some of their emotional needs. By the time a young person reaches adolescence, they are at the precipice of adulthood and the biological onus to provide for oneself is palpable.

The problem is that teenagers are still tied to their parents. It is all they have known for their entire lives and they are still dependent on them in many ways. Their young bodies and minds know though that they must be ready to enter the world on their own. They must be prepared to separate themselves from their childhood, from their parents, and from what they are used to.

So, the strife begins. While no teenager thinks of it this way, that wretched behavior towards parents is quite intentional. It serves as a way to purposefully tear themselves loose from their parents so that they may be an independent adult. Everyone one of those eye rolls and door slams is another little push off to put distance between parent and child. That way, the inevitable leaving of the nest, usually after high school, is a little bit easier.

This is an important process for the parents too. I know that many parents can see an upside to not having their children at home anymore. That doesn’t mean a parent loves their child any less, it just means that they too are ready for the next chapter of their life. Adults have developmental stages also.

My point here is to say that parents need to understand that their teenager isn’t all bad. Their behavior can be extremely arduous to deal with, but it’s important to realize it actually serves a natural purpose. As a good parent, you still have to manage that behavior and keep your children in check, but know too that acting out is a natural part of growing up. That tear will begin to heal itself after adolescence and your relationship with your child will rebound, be patient. At some point though, that rift must happen.

The Ceiling

There is a point in every student’s academic career when they hit a ceiling. In other words, all students can coast by and rely on their sheer intellect to muscle through assignments up to a certain point. That point, or ceiling, is different for each student and can come at different grade levels, but high school is a common time for it.

When a student hits that ceiling, they have to re-evaluate things. They have to re-examine their study habits and their approach to learning. This usually happens in one particular class or when the demands of a group of classes exceed the workload a student is used to.

This is quite an alarming thing to happen to a young person and their parents, particularly when that young person is used to achieving at a high level. For many families, the knee-jerk reaction is to hit the panic button. “We have to drop this class, it’s too hard,” or “We just can’t understand this teacher’s style, we need a different one.” are typical responses.

I hear those often, but I shudder when I do. I believe those families are missing out on one of the most valuable experiences a student can have. That experience is the chance to learn how to overcome a mental challenge, how to think to solve a problem, how to manage one’s time, and how to break through the ceiling.

That ability to persevere mentally, when the going gets tough, is something that we will all need at some point in our lives and high school is the perfect time to learn that. Indeed, there might be a scenario in which a child earns B instead of an A or some other drop in accustomed grades. But, isn’t it far better to take those hits in high school than in college, career, or adult life?

There is more to high school, and adolescence, than learning about algebra and world history. Part of that time needs to be spent learning how to be an adult and an effective member of society. Learning how to navigate the tough times is essential to that and avoiding the problems by dropping classes or trying to change teachers doesn’t teach a young person anything. If a message is sent by avoiding problems it’s, “Don’t worry about solving your problems, just remove yourself from them.”  That approach won’t always work in life and if that is all a person knows they won’t be prepared to solve problems when doing so is the only option.

If your child finds a class or teacher that is harder than what they are used to, parent them. Talk to them about how you can work together as a family to make changes in habits that will get them through the challenge, even if that means they take a little hit in their grade. I’m quite certain that years from now that life experience will mean far more to your child than a few hundredths of a point in their high school GPA.

529 Plans

A 529 plan is a tax-deferred vehicle used to save for educational expenses. I like to think of them as Roth IRA’s for college. The plans have evolved over the past 20 years into their present form which was enacted in 2001. Today, they are the country’s predominant method used to save for college.

529 plans essentially come in two forms. One is referred to as a pre-paid plan, wherein you pay today’s tuition rates for tomorrow’s college student. Currently, 11 states offer pre-paid plans and each has their own options and services within those plans. In general, the older a child is once you purchase a pre-paid plan the more you’ll end up paying, so it is advantageous to start a pre-paid plan as close to birth as possible.

Pre-paid plans often have strict rules regarding exactly what they pay for and which institutions they may be used. They may not cover housing, particularly off campus, and may not cover the full cost of tuition or some fees. They also might be limited to public schools within the state where they are purchased. With all that being said, it is important to carefully consider and understand the rules of any given pre-paid plan.

The other form of 529 plans is traditional savings plans. In these, money is invested in stocks, mutual funds, bonds, or other investment vehicles. You’ll pay no tax on the earnings of those investments which is the advantage of these plans. 529 Savings plans typically have fewer rules than pre-paid plans and generally are more “universal” in that there are no restrictions on where the money can be used.

The main rule that is associated with saving plans is that the money must be used on what are considered qualified educational expenses. Typically, this includes tuition, books, fees, technology required by the school, and some room and board. If you withdraw money for purposes other than these, you’ll pay a hefty 10% penalty plus income tax on the earnings.

One caveat of 529 saving plans is that each state has their own plan. However, you may invest in any state’s plan whether or not you live there and whether or not you believe your children will ever attend school in that state. So, for example, I live in Florida but have chosen Utah’s plan for my own children.

Each state invests in different funds and has different fee structures; some have state income tax advantages and other perks. Thus, in the end it is best for 529 savings plan customers to compare their own state’s plan with those from other states in order to find the best fit for their family.

Usually, you’ll be able to set up automatic contributions to savings plans from your bank account and, as with pre-paid plans, the earlier in your child’s life you start saving, the less you’ll have to pay for college once your child graduates.

Savingforcollege.org is a private website but is widely considered to be the premiere resource for 529 plans. There, you can view the details of your state’s plans and comparison shop with other states.

A Child's Assets and FAFSA

     As parents prepare their children to be responsible adults after high school, many create savings account in their children’s name. Sometimes those accounts can accumulate large sums of money over time or are used as a vehicle for college savings. Having a child learn to save money at an early age and saving for college seems perfectly logical and indeed both concepts are. However, what most parents don’t understand is that significant savings in a child’s name is often actually a huge mistake when it comes to receiving financial aid.

    I should note that if you are absolutely certain your family will not qualify for financial aid there are some beneficial loopholes that can be exploited by putting money in a child’s name. Those can quickly be outweighed though if you do qualify for aid. The reason behind all this is due to the FAFSA. Remember, the FAFSA is the Free Application for Federal Student Aid and is essentially the clearinghouse for financial aid for all colleges and universities. In the FAFSA formula, a parent’s assets will be assessed up to 5.65%. A child’s, however, will be assessed at 20%.

So let’s say you are lucky enough to have squirreled away $25000 for your child’s college by the time they graduate from high school. If that money was in a parent’s name, you would be expected to contribute 5.65% or $1,412.50 towards the first year of college. However, if that same $25000 were in the child’s name, it would be expected that you contribute 20% or $5000 towards the first year. That difference could have been made up in grants, scholarships, or subsidized loans, if only the money were in the parent's name.

It should be said that when we are talking about assets here we might be talking about cash, bank accounts, CDs, savings bonds, stocks, mutual funds, trusts, even real estate. Any of these things, and some others, that are listed in the child’s name will need to be listed as an asset of the child on the FAFSA. It is also worth noting that money in a 529 plan or state-sponsored pre-paid college plan are treated as parent assets even if the child is listed as a beneficiary.

Therefore, both of those are probably better vehicles for saving for college than others, though both tie the money to college expenditures. Steep penalties can be imposed if funds are withdrawn for expenditures that are not approved by the established guidelines of those plans. Keeping savings in the parents’ name also keeps control over the money with the parent. If your child enters a dark period in their teenage years or after high school, you won’t have to worry about that money going to waste on purchases you would never approve of.

The financial aid process can be extraordinarily complicated and if you are serious about saving for college you should speak with a certified financial advisor who specializes in college savings. I am not a financial advisor but I do see a thin line between teaching your child about how to save and getting the most bang for your buck within your college savings. My personal opinion is that it is probably best not to put all your eggs in one basket and keep the money you do use in your child’s name to teach them how to save on the small side. It’s probably a good idea to make sure generous family members like grandparents understand this concept as well.

Finish High School Strong

Raising a child is kind of like a multi-stage race. Just as you are finishing one leg through graduation, you’ve got another to prepare for. So, as your senior wraps up high school, it’s important to make sure they finish strong. In my experience, I’ve found that many seniors begin mentally checking out 4-6 weeks before the end school and in some cases as soon as they are admitted to the college of their choice. That can have some dire consequences.

    Colleges require a final transcript after graduation. One thing you need to do upon graduation is request that your high school send that. It’s important that you do not assume the high school will automatically send that. You need to specifically request the final transcript be sent, after graduation. The college is going to take a close look at this. They want to be sure their incoming freshman maintained the same kind of academic diligence that got into the college in the first place. If they didn’t, colleges can and will send  letters of rescission.

That puts a student in an extremely uncomfortable position. As all their friends pack up and leave for an exciting new chapter of their lives, this student must explain that their college no longer wants them and they are forced to scramble for a backup plan. Parents are put in the same position and are going to be out all the housing deposits or any other payments they’ve already made to the college.

To be sure, if your student had a B in a given high school course and dropped down to a C during the second semester they are unlikely to receive such a letter, but even a small drop in grades can cause problems. If a student was accepted into an honors program, that program is likely to be less lenient with a sudden drop in second semester senior grades. Many scholarships are also often tied to GPAs. State scholarships, for example, usually have a GPA requirement and a final high school GPA that makes a tiny drop, like from a 3.55 to a 3.48, can cost a family thousands of dollars through the duration of college.

In addition to having that final transcript, there are a couple of other things you need to keep tabs on at graduation time or the summer following that. Depending on how your college does orientation and class registration, generally earlier is better. Freshman classes and dorms can fill up fast and you are more likely to get your choice if you are in the front of the line, so to speak. Colleges will also want up-to-date immunization records. Your high school likely has these, but you’d do better trying to get this before school closes up for the summer and are operating with a skeleton crew. You don’t want to be at orientation in July, three hours from home, trying to remotely coordinate efforts between your doctor and half-closed high school trying to get the right immunization records before you can register.

 Lastly, you need to make sure that AP Scores and dual enrollment transcripts are sent to colleges. Again, you are going to need to specifically request these from the appropriate sources and it’s something you have to stay on top of.

A student’s graduation is an exciting time. It might seem like an end, but in many ways it is a beginning. There is a lot a parent and young adult need to do to make sure the next pursuit in life sees a successful start. It’s easy to let all that get lost in the excitement of graduation itself, but it’s imperative that a student remains focused through the very end and that a family stays aware of steps that still need to be taken. Don’t trip at the finish line and make sure you get the next leg of the race off on the right foot.