Error: The handouts and slides listed the
Robert C. Byrd Honors Scholarship Program and the AmeriCorps Program
as the two main federal scholarship programs.
The Byrd Honors Scholarship Program is defunct. Congress ended
funding for the Byrd Honors Scholarship Program on April 15, 2011, in
section 1842 of the Department of Defense and Full-Year Continuing
Appropriations Act, 2011 (P.L. 112-10). There will be no scholarships
in 2011-12 or subsequent years, affecting both current and new
recipients. (A handful of states have continued funding for current
recipients for a year. The program is not open to new applicants in
these states.) Senator Byrd died in June 2010 and was no longer around
to defend the scholarship program from funding cuts.
The AmeriCorps program is a national service program, not a
scholarship program. Students who volunteer can earn an education
award equal to the maximum Pell Grant (currently $5,550) for
completing a term of full-time service.
Error: Contributions to a Coverdell Education Savings Account are
deductible on your federal income tax returns. It is a $2,000 deduction.
While earnings in a Coverdell ESA accumulate on a tax-deferred basis
and distributions for qualified higher education expenses are
tax-free, contributions to a Coverdell ESA are made with after-tax
dollars and are not deductible on federal and state income tax
returns. Contributions to a Coverdell ESA are currently limited to
$2,000 per year per beneficiary. This will drop to $500 per year per
beneficiary after 2012 if not extended by Congress.
The Coverdell ESA was established by section 530 of the Internal
Revenue Code of 1986. Nowhere in the authorizing legislation or
subsequent amendments to this legislation does it suggest that the
contributions are tax deductible. Moreover,
Tax Tip 2008-59
states "Contributions to a Coverdell ESA are not
deductible, but amounts deposited in the account grow tax free until
Error: Annual tuition inflation is the sum of an 8% increase in tuition
plus 3.5% CPI, so investments need to increase by 11.5%.
Tuition inflation is the rate at which tuition increases in cost. It
is calculated based on the ratio of an index of tuition costs in two
specified time periods. There is no need to add CPI to the result, as
the tuition inflation figure already includes the decline in the value
of the dollar due to general inflation.
Error: Self-help is government vernacular for the Federal
Self-help is a term used by college financial aid administrators to
refer to the sum of student employment and student loans, not just
Federal Work-Study. It is in contrast with gift aid, such as grants,
which does not need to be repaid. A typical financial aid packaging
philosophy is to require a fixed self-help level of all students
receiving need-based financial aid. Only when a student's financial
need exceeds the self-help level does the student receive grants from