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Four Things to Do in the Four Years Before College

Spiraling student debt

According to the New York Federal Reserve Bank, total outstanding student loan debt (from both federal and private sources) surpassed total outstanding credit card debt last year, and is on pace to surpass a trillion dollars this year. Unlike credit card debt, student loan debt generally cannot be discharged in bankruptcy.

​1. Take stock of your savings

For your child, high school means football games, a driver’s license, SATs, and the prom. For you, it means college is right around the corner. Before your child starts touring college campuses, here are four things you can do to get ready.

A few years before you need to start paying tuition bills is a good time to take stock of your college savings. How much have you saved? Are you making monthly contributions, and is there any room to increase them? Now is the time to make sure your investments aren’t weighed too heavily towards equities, because any losses suffered at this point could be difficult to make up. Consider shifting your investments to less risky ones as college approaches. In addition, estimate how much savings you’ll have--factoring in your current balance, monthly contributions, and estimated rate of return--when your child graduates from high school. Finally, you might ask grandparents if they plan to help with costs.

2. Get familiar with financial aid

For your child to be eligible for federal student loans, grants, and/or work-study, you must complete the federal government’s aid application, the FAFSA. The FAFSA looks at your family’s income, assets, and other information (e.g., the number of college-age children in the family, the age of the older parent when the child starts college) to arrive at a figure called the expected family contribution (EFC). This is the amount the government deems you can afford to pay each year. This figure stays the same no matter what college your child applies to. The difference between the cost of attendance at a certain college (a variable) and your EFC (a constant) equals your child’s financial need.

To get an estimate of your EFC ahead of time, try filling out the government’s FAFSA4caster tool at www.fafsa.ed.gov. Though you’ll still have to fill out the real FAFSA later, the FAFSA4caster will give you a ballpark EFC figure and an idea of what family financial data is required in the financial aid process. Plus, the FAFSA4caster will automatically import your data into the FAFSA later on.

The two main federal education loans are the student Stafford Loan and the parent PLUS Loan. There are two types of Stafford Loans: subsidized, for which the government pays (subsidizes) the interest while your child is in school and six months after school (the grace period), and unsubsidized, for which the government does not pay the interest during these periods. The maximum borrowing limits for Stafford Loans are currently: 1st year, $5,500 ($3,500 subsidized); 2nd year, $6,500 ($4,500 subsidized); 3rd-5th years, $7,500 ($5,500). The current interest rate is 6.8% fixed for unsubsidized loans and 3.4% fixed for subsidized loans disbursed between July 1, 2011, and July 1, 2012 (this rate is scheduled to increase to 6.8% after July 1, 2012).

A PLUS Loan is available to parents with good credit histories; parents can borrow up to the full cost of their child’s education. Currently, the PLUS Loan has a fixed interest rate of 7.9%. The unsubsidized Stafford and PLUS Loans are available without regard to financial need.

In addition to loans, your child should spend time in high school researching scholarships. There are several free scholarship websites that let your child tailor his or her search by interests and abilities. Obviously, scholarships are the preferred method of college funding because they don’t need to be repaid. ​

3. Talk to your child about college costs

At some point during junior or senior year, it’s important to have a frank conversation with your child about college costs. Tell your child how much you expect to have saved, and how much you will be able to contribute each year during college. If costs exceed what you can pay, explain that the rest will need to be borrowed by either you or your child, or covered by a scholarship, grant, or work-study job.

When talking about loans, show your child exactly how much a certain amount will cost to repay each month over a 10-year period. For example, a $27,000 loan (the current max in federal Stafford Loans that can be borrowed over four years) at 6.8% interest will cost $311 each month. The idea is to take an abstract loan amount and break it down into a figure--and monthly obligation--your child can understand. Ultimately, as the parent, it’s up to you to make sure your child does not go into too much debt to pay for college.

4. Research colleges wisely 

In addition to thinking about the qualities of his or her ideal college (e.g., geographic region, setting, size), your child should develop a list of colleges that are a good match for his or her academic abilities, interests, and talents. To maximize the chances of receiving a favorable aid package, consider your child’s academic profile--by looking at GPA, class rank, and SAT/ACT scores- -and encourage your child to apply to at least a few colleges where his or her academic credentials are better than those of the average admitted student. ​

Broadridge Investor Communication Solutions, Inc. does not provide legal, taxation, or investment advice. All the content provided by Broadridge Investor Communication Solutions is protected by copyright. Broadridge claims no liability for any modifications to its content and/or information provided by other sources.

Copyright 2011 by Broadridge Investor Communication Solutions Inc.
All Rights Reserved.

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The Divisions of New York Community Bank

Queens County Savings Bank​

Established on April 14, 1859 in the village of Flushing, Queens County Savings Bank was the first savings bank chartered by the State of New York in the New York City borough of Queens. Until then, local residents would need to travel to Manhattan to do their banking; the opening of the borough’s first local bank was accordingly met with elation and relief.

While the bank expanded here and there over the course of the next 14 decades, its greatest growth occurred in just the last 15 years. In anticipation of expanding its franchise through the first of several mergers, the Bank changed its name to New York Community Bank on November 21, 2000. By the end of that year, NYCB had grown from 14 to 86 branches; today, it has more than 220 branches in five states.

In deference to its heritage as a Queens-based institution, the Community Bank operates each of its 38 branches in the county under its original name, Queens County Savings Bank.

Roslyn Savings Bank

Established in 1875, The Roslyn Savings Bank was the first financial institution headquartered in Nassau County, one of two counties--with Suffolk--that constitute Long Island, New York. Its founders wanted to build a bank that would provide the Island’s residents with a safe place for their savings, as well as the financial assistance they’d need to build or purchase homes.

A member of the NYCB Family of Bank since October 31, 2003, Roslyn Savings Bank today serves the Island’s businesses and consumers through 42 conveniently placed branch offices.

Richmond County Savings Bank

A member of the NYCB Family of Banks since July 31, 2001, Richmond County Savings Bank is the third oldest of our divisions, with roots that go back to October 30, 1886. It was then that the bank was established to serve those who lived and worked on Staten Island, and it was less than one year later that it made its first mortgage loan.

Today, nearly every street on the Island has at least one home that was financed by Richmond County Savings Bank.

Originally located in the Odd Fellows Building at the corner of Richmond Terrace and Broadway, the Bank today has 20 convenient banking locations in all.

Roosevelt Savings Bank

Roosevelt Savings Bank was established in 1895 on the corner of Gates Avenue and Broadway in Brooklyn under the name “Eastern District Savings Bank.” In 1920, the bank changed its name to honor the memory of the nation’s 26th president, Theodore Roosevelt.

In February 1999, Roosevelt Savings Bank merged with and into Roslyn Bancorp, which merged with and into New York Community Bancorp, Inc. in October 2003.  Today, Roosevelt Savings Bank serves its customers through seven branches in Brooklyn as a member of the NYCB Family of Banks.

Garden State Community Bank

Garden State Community Bank has been a member of the NYCB Family of Banks since March 2008, when we combined all the branches of four smaller New Jersey-based divisions--First Savings Bank of New Jersey, Ironbound Bank, Penn Federal Savings Bank, and Synergy Bank—into a single division with a highly relatable name.

While Penn Federal Savings Bank and Synergy Bank were directly acquired in 2007, First Savings Bank of New Jersey and Ironbound Bank were acquired in 1999 by Richmond County Financial Corp., which subsequently merged with NYCB.

By combining the strengths of these four local banks with the strengths of our institution, we established a Garden State community bank that offers more products and services, and more convenient locations, than any one of these banks provided on its own.

Today, we serve our customers through 45 branches in Essex, Hudson, Mercer, Middlesex, Monmouth, Ocean, and Union Counties, most of which first opened their doors nearly 14 decades ago.

AmTrust Bank

AmTrust Bank is one of the more recent additions to a respected banking family that has been serving customers and communities for more than 156 years.

The first branch of AmTrust Bank opened its doors in the late 1980s, when Ohio Savings Bank opened the first of its branches in south coastal Florida under the “AmTrust Bank” name. Eleven years later, it expanded again--this time to Arizona--and on December 4, 2009, it joined the NYCB Family of Banks. With our acquisition of Desert Hills Bank less than four months later, we further expanded our franchise in the Grand Canyon State.

Currently in its seventh year as an NYCB division, AmTrust Bank serves its customers through 41 convenient branches: 14 in central Arizona and 27 in Florida.

Ohio Savings Bank

Ohio Savings Bank is one of the more recent additions to a respected banking family that has been serving customers and communities for more than 156 years.

Established in 1889 as the Ohio Savings Home Loan and Building Co., the bank’s initial expansion was limited to Ohio until it opened its first Florida branch in 1989. Eleven years later, it expanded again, this time to Arizona. And seven years later, it changed its name to AmTrust Bank.

On December 4, 2009, AmTrust Bank became the newest member of our banking family, the first of our divisions to serve customers in non-contiguous states. Four months later, we elected to pay tribute to its forebear, by operating our 28 branches in Ohio under a more suitable name: Ohio Savings Bank.

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