Personal Finance
Key money moves ahead of College Decision Day on May 1
Picking a college is a major decision, but figuring out how to pay for it is an even bigger commitment.
And with just a few days before National College Decision Day on May 1, many families are struggling to come to terms with both finding the “right-fit” school as well as wrestling with the sky-high cost and looming student debt balances. And all this while opportunities for federal loan forgiveness are dwindling.
“Choosing a school is a personal and individual decision,” said Chris Ebeling, head of student lending at Citizens Financial Group.
Academics, extracurriculars, campus culture and career services are key considerations, he said, but “it’s not just about the dream school and the academics and setting you up for the right career trajectory, it’s also about the cost — that is a real issue.”
To that end, experts share their best advice on how to frame your decision before choosing a school, including coming up with a plan for how to pay for it and factoring in financial aid.
Determine the net price of college
For starters, “no one should be committing to a school until they know that net price,” Ebeling said.
The net price is the total cost of attendance, including tuition and fees, minus grants, scholarships and education tax benefits, according to the College Board.
Even though the price tag for a college education has never been higher, nearly 75% of all undergraduates receive some type of financial aid, according to the National Center for Education Statistics, which can bring the cost significantly down.
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Most colleges have a net price calculator on their websites to help students determine their out-of-pocket expenses. However, “some are better than others,” Ebeling said.
He recommends other online resources to get an even more accurate picture, such as MyinTuition or the College Board’s net price calculator.
“A good net price calculator would be within a few thousand dollars,” Ebeling said.
The net price can also vary greatly between schools.
“At Harvard, for example, the sticker price is very high, but the net price is very low,” Ebeling said.
Or, Ebeling added that “you could look at a state school where the sticker price is lower but they provide less assistance and the net price is higher.”
In fact, when it comes to offering financial assistance, private schools typically have more money to spend, other experts also say, and some are increasingly boosting their financial aid awards.
Factor in financial aid
For a majority of students and their families, financial aid is the most important factor in their decisions about choosing where to attend and how to pay the tab. But not all financial aid is equal either.
The amount of aid offered matters, as does the breakdown between grants, scholarships, work-study and student loans.
Once students fill out the Free Application for Federal Student Aid, which serves as the gateway to all federal money, they will receive their award letters.
In most packages, there are several financial aid options. The goal is to maximize gift aid — money that doesn’t need to be paid back, such as scholarships, fellowships and grants — and minimize loans that will need to be repaid with interest.
“There is a hierarchy of sources of funding,” Ebeling said. “The first, and most obvious, is the free money.”
But even with gift aid, it’s important to read the fine print, such as whether a grant is renewable for all four years or whether a minimum grade point average must be maintained. It’s worth noting that if a student fails to meet the terms, such as a grade point average requirement, they may have to repay some or all of a grant or scholarship.
Look for additional scholarship dollars
Beyond the college aid offer, there are still alternative sources for merit-based aid out there, according to Matt Lattman, a senior vice president at Discover.
“There are many different scholarships that can be based on talents and interests, membership in professional or social organizations, or even luck of the draw,” Lattman said. Some scholarships are annual, others per semester, and some even provide a monthly opportunity to earn money towards your education, he added.
Students can ask their high school counselor about opportunities or search websites such as Scholarships.com or the College Board.
Make a financial plan for all four years
Ebeling recommends coming up with a proactive plan to cover the entire four years of college from the outset. “You have to think about this in aggregate,” he said.
Considering that tuition adjustments average roughly 5% a year, if you know you are going to need to borrow, start with federal direct subsidized and unsubsidized loans, he said. “Generally those are the best loans out there.”
Still, it’s also never too late to fund a 529 college savings plan, which comes with added tax benefits and increased flexibility.
Plus, anyone can contribute — and for grandparents, there is also a new “loophole,” which allows them to pad a grandchild’s college fund without impacting their financial aid eligibility.
Most importantly, “every dollar saved is a dollar less you have to borrow later,” said Smitha Walling, head of Vanguard’s education savings group.
Concerns about the future of the Social Security Administration may tempt some workers to claim retirement benefits early.
Yet experts warn that may not be the best decision.
It’s no secret that Social Security is running low on funding. Fears that the program might not be able to pay benefits in the future — or that benefits might be cut — have prompted people to take their money earlier, even if it means receiving a smaller monthly payment for the rest of their lives.
In 2024, the trustees projected the trust fund used to help pay retirement benefits may be depleted in 2033, when 79% of benefits will be payable. Social Security’s trustees have not yet released new trust fund depletion projections in 2025.
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Changes at the Social Security Administration — including staff cuts and long wait times for service — do not encourage more confidence in the program, noted Kelly LaVigne vice president of consumer insights at Allianz Life Insurance Company.
A recent survey from Allianz found that 64% of Americans are more worried about running out money than they are about dying. Meanwhile, Social Security not providing enough money was the second reason cited for those worries behind inflation, the survey found.
On average, Social Security benefits replace about 40% of a worker’s pre-retirement income, according to the SSA. As Congress eventually seeks a fix to the program’s funding woes, that may require Americans to pay more taxes and/or receive less benefits.
“If you cut that, or there’s a threat of cutting that, that does make the fear of running out of money even greater,” LaVigne said of Social Security benefits.
Why it’s generally best to wait to claim
Many people may be tempted to claim Social Security benefits now to get the money while they can.
“There are people who make the comment, ‘I want to start taking from it now, before it’s taken away from me,'” said Andrew Herzog, a certified financial planner and associate wealth manager at The Watchman Group in Plano, Texas.
In those cases, Herzog said he typically reassures clients that scenario is “very unlikely,” particularly for older generations who are already in or near retirement. Lawmakers including President Donald Trump have promised not to cut the Social Security benefits retirees are already receiving. For future retirees, it is possible benefits may be reduced, though it is unlikely the program will entirely run out of money.
Individuals who want to take their retirement benefits at age 62 — otherwise known as the early eligibility age — need to understand their benefits will be reduced, Herzog said. By waiting until full retirement age — generally age 66 to 67, depending on date of birth — beneficiaries may receive 100% of the benefits they earned.
For workers whose full retirement age is 66, claiming early at 62 will result in a 25% reduction in monthly benefits. For workers whose full retirement age is 67, claiming at 62 prompts a 30% cut to monthly benefits. Yet most people claim before full retirement age, according to the Congressional Research Service.
Workers who wait even longer to claim retirement benefits — up to age 70 — stand to receive the biggest monthly checks. For every year individuals wait past full retirement age, they stand to receive an 8% increase to their benefits. For workers whose full retirement age is 66, that represents a 32% boost to monthly benefits. For workers with a full retirement age of 67, that’s a 24% boost.
“For those who expect to have a normal life expectancy of 80 years plus, then it can make sense to wait to age 70 to get the maximum benefit,” Herzog said.
To be sure, the decision comes down to many factors, including how long someone is able to work, whether they can draw from other investment income and the choice that will help them best sleep at night, Herzog said.
Notably, delaying even just one month can help increase monthly benefit checks.
When to claim Social Security benefits early
Most workers who expect to live long lives will want to prioritize the risk they could outlive their money, and therefore delay claiming benefits, according to Vanguard research.
But for those who do not expect to live as long, the prospect of break-even risk — or the risk of receiving a smaller total sum by delaying — should be prioritized instead, according to Vanguard.
Claiming early can provide other perks, such as making it possible to spread the tax burden of that income over more years, Vanguard’s research notes. Plus, with lower monthly checks, less of that Social Security income may be taxed and it may be possible to keep Medicare income-related monthly adjusted amounts, or IRMAA, low, according to the research.
Yet for many individuals, there are other reasons to wait to claim that are compelling, particularly if their spouses may need to live on their benefits once they die. Moreover, having higher monthly benefits means they may be better prepared to withstand unexpected financial shocks, according to Vanguard.
A trader works on the floor at the New York Stock Exchange in New York City, U.S., April 28, 2025.
Brendan McDermid | Reuters
Periods of extreme volatility in the stock market may feel painful for investors — but such periods are generally followed by strong stock returns, if history is a guide, according to market analysts.
In that sense, many investors would be wise not to sell stocks — and should perhaps even buy more, analysts said.
The VIX index, also known at the Wall Street fear gauge, measures the market’s estimate of expected volatility in the S&P 500 stock index.
When the VIX has spiked to a level above 40 — indicating “significant” volatility — the S&P 500 has been up 30% a year later, on average, according to a Wells Fargo Investment Institute analysis of the market from January 1990 to April 16, 2025.
The odds of stock returns being positive 12 months later were also above 90% during these periods, the analysis found.
In other words, volatility creates a “potential opportunity,” Edward Lee, a Wells Fargo investment strategy analyst, wrote in the analysis on Monday.
“Concern is normal, but history has taught us that periods of higher volatility have historically led to higher returns,” Lee wrote.
So, why is there a greater probability of positive and higher stock returns relative to periods of lower volatility?
Volatility “tends to coincide with times of high drawdowns and investor panic, both of which lead to higher probabilities of investing success of the next 12 months,” Lee wrote in an e-mail.
Stock volatility spikes on Trump tariff news
Stock volatility spiked in early April after President Donald Trump announced unexpectedly high country-specific tariffs, and the S&P 500 sold off almost 11% in two days.
The VIX reached about 53, among the top 1% closes for that index in history, Callie Cox, chief market strategist at Ritholtz Wealth Management, wrote last week.
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But low expectations often lead to “relief rallies,” when people pile back into stocks because the initial news isn’t quite as bad as they thought, Cox wrote.
For example, since 1990, about half of the S&P 500’s 14 selloffs of 10% or more ended within a week of the VIX’s highest close, and three ended on the day of its highest close, Cox wrote.
Such selloffs are usually “V-shaped,” meaning there’s a sharp downturn and then a quick rebound, she said in an interview with CNBC.
However, things could be different this time around, she said.
“We’re [still] trying to figure out where the new center of gravity is” with trade policy, Cox said.
“The unexpected news part of the sell-off is probably past us, and if you are a long-term investor, now is probably the time to start buying,” Cox said. “But you can’t expect this to be the bottom of the sell-off. And history isn’t always gospel.”
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