Press Your Luck

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If you’re around my age, you likely remember the 80s game show called “Press Your Luck.” One of my favorites, the contestants often shouted “No Whammies! No Whammies!”

Unfortunately, many parents today face a triple whammy…paying for (or helping their children pay for) a college education, preparing financially for their own retirement, and taking care of aging parents.

Unlike the cost of education “in the old days,” school debt has become the norm.

And more than 57% of parents state they will raid their retirement plans if it means their children will not have to face a staggering educational debt burden.

According to the financial experts, offering such help should not come at the expense of their comfortable, affordable retirement.

Be sure to have the college funding discussion early. Make sure your kids know what they need to know.

The real question is – Do You Know What You Need to Know?

Certainly, while your current family situation will affect college planning, “sticker price” should not dictate what schools and what education is available to your child.

  • Do you know how to determine what your true cost might be?
  • Do you know how to improve your family’s eligibility for financial aid?
  • Do you know how to pick the schools that will provide the greatest amount of financial aid?
  • Do you know where and how to save properly for the expenses you face?
  • Do you truly understand the options you have for financing a college education?

If you can’t respond with a confident “Yes!” to each of the above questions, we are waiting to hear from you.

Without question, you need us.

 

Planning on Helping Pay for Your Grandchild’s College Education?

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Doing so may not be the best way to help.

There are some things you should know…

First, are you financially able to help?

Parents and grandparents want the best for their children and grandchildren, yet find themselves facing a financial struggle. Even if not struggling now, if private student loans are part of the equation, might you be struggling later?

The number of older student loan borrowers has quadrupled since 2005, according to a 2017 report from the Consumer Financial Protection Bureau (CFPB). Most of the older borrowers aren’t taking on debt for themselves.

Second, how will helping impact available financial aid?

Cash can and usually does reduce the amount of aid offered.

While the gift (up to $15,000 in 2018) won’t be taxable to the grandchild, the school may count those funds as untaxed income and use it to reduce the aid offered.

Even a 529 has its drawbacks. Once the student withdraws funds from a grandparent-owned 529 to pay tuition, the money is treated as income on the FAFSA form for two years.

Frankly, there is a better way, though the way be unconventional.

Why not learn more about this unconventional method. After all, the conventional method no longer seems to work for most families.

We look forward to hearing from you!

 

Student Debt is Leveling Off??

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With millions in default and graduates facing debt repayment that will limit home purchases and delay the start of families, the data suggest the average student’s debt is plateauing…

While that may be true for the average student, it’s not true for many parents.

As most students have borrowed as much permitted under the federal programs, the burden to over the remaining cost has fallen upon the parents.

For the 2015-16 academic year, almost two-thirds of PLUS loan borrowers were obtaining loans to help their children cover the annual cost-of-attendance.

Those parents may end up servicing that debt well into their retirement years.

The comfortable, affordable retirement years suddenly become quite a bit less so.

Interested in a better way to help your children cover the cost of an education?

We look forward to hearing from you!

 

The Ever-Increasing School Debt Burden

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The amount owed on school debt by more than 44 million American borrowers recently exceeded $1.5 trillion.

And, with most universities raising the annual cost of an education by 3%-8% for the upcoming academic year, students and families will be borrowing an even greater amount to cover that cost.

Added to the mix is a decade of little to no increase in the average wage and we have what some economists believe to be the next economic bomb!

Graduates with debt are delaying marriage and the purchase of a home because they find their school debt almost unaffordable.

Graduates with debt may be paying it off for 10, 20, 30, and possibly even 40 years.

They sit there wondering if there might have been a better way…

Frankly, there is a better way.

It’s unconventional and non-traditional and sometimes dismissed outright by those tied to the traditional and conventional methods.

But…

It works and it’s gaining traction precisely because it works.

Find out how it will work for you and your family by contacting us to schedule the first meeting in your family’s college planning campaign.

We look forward to hearing from you!

 

School Debt and the AARP

The AARP has taken an interest in student loan issues over the past few years.

Why would an organization focused on retirement be worried about the student loan crisis?

Well…

Over $18.2 Billion in school debt is held by individuals aged 60 and up and roughly 200,000 seniors have had or are having their Social Security benefits garnished in debt collection.

Although responsible for a small portion of the total school debt held by Americans, they are more likely to be behind on payments.

It’s not their debt they are paying off. Typically, it’s debt they took on to help finance the education of their children or grandchildren.

The concern is how school debt, whether for themselves, their children, or their grandchildren, can deter home ownership and muck up retirement plans.

It can be lifelong debt. 20-30 years for their own debt, 20-30 years for their children’s debt, and who knows how many for their grandchildren…

So…

How do we combat this growing issue?

We have our dollar do two jobs for us at the same time. By doing so, the typical individual or family can be debt-free in 9 years or less, without spending any more than they already spend.

How do we do that?

There is no “cookie-cutter” solution. As each individual’s or family’s circumstances are unique, a solution for those circumstances must be designed and implemented.

Contact us to discover what we can help you do for yourself and your family.

 

How Much Will Higher Education Cost Your Family?

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As long as the annual cost-of-attendance governs the college choices of students and their families, families will rely on the award letter indicating the financial aid available to them.

Families need clarity in the financial aid award letters they receive. Unfortunately, whether intentionally or unintentionally, those letters can be rather murky indeed.

Financial aid can have many different meanings under differing circumstances. A college education often means a huge financial burden; any ambiguity in the means to pay for it can be devastating to students and their families.

Some schools are better at explaining their offer of aid; others are horrible. The worse the explanation, the more likely that a family makes a bad financial decision.

It’s clear that most letters are not drafted to speak to the student. In fact, most aren’t drafted to speak to the parent. They are best understood by the financial aid officer that prepared the letter.

The federal government has not established universal guidelines or requirements in drafting these letters. Sure, the letters could be standardized and Congress could get involved.

Even then, it doesn’t mean they’ll be understood by the student or the family.

For help in understanding your financial aid award letters and/or assistance with increasing eligibility for financial aid, please contact our professional college planners.