College Planning & High School Parents

,

The recent college admissions scandal served to highlight the confusion and worry faced by millions of parents as they confront the college planning process.

Confused and worried they are; confused and worried they should be. Most parents have delayed planning for a multitude of reasons, many of them believing they had time to plan.

The reality is they need to begin planning earlier than ever before, long before second semester junior year or the beginning of senior year in high school. Planning should begin somewhere between 7th-10th grade. The earlier, the better!

Where should parents initially place their focus?

First, remember the college planning campaign (it is a campaign) is about your child. It’s not about you. There are well over 3,500 four-year schools, many of which will be perfectly suited to your child.

It needn’t be an Ivy or other select private institution. It should be a school at which your child will flourish. A broad search is required to find the right school at the right price.

Second, remember that your money matters. While we want to offer our children the best opportunity, the education should not be one you can’t afford.

How do you know what you can afford? Have you had a professional college planner review your family’s financial situation? Do you know how to find the schools that will offer your child an excellent education and the most “free money?” Do you know that “sticker price” is rarely what a family pays?

As the financial aid forms aren’t completed until fall of senior year in high school, you should search out a professional college planner sometime during your child’s 7th-10th grade years. During that time, there are a variety of options to pursue regarding all financial obligations, not just college funding.

Third, remember college is not just about career planning. While a college education should focus on the probability of employment following graduation, the education is about much more than that. It’s about gaining life experience (independence, responsibility, exposure to those different from you, etc.), value that may not directly impact the bottom line.

Finally, remember your child’s entire high school career matters. It’s not just about academics; it’s also about extracurriculars. Your child should explore a variety of interests early on, then focus on those interests that matter most to them.

Be sure to have a plan for the high school years, not just about funding sources, but about the aspects that will most affect school admissions. And, as it is a college planning campaign, seriously consider engaging the services of a professional college planner.

We look forward to hearing from you!

 

Evaluating a Financial Aid Offer

, , ,

Though most families don’t realize it, especially those whose first or only child is now beginning the undergraduate journey, the Financial Aid Award Letter can be highly misleading.

The award letter is merely an offer; not all aid listed will be awarded. Rather, the letter lists the aid for which you qualify. It’s up to you to review the offer and to accept or reject the aid listed.

Why can the award letter be confusing?

Schools use their own form letters and their own terminology. Understanding the offer as presented can be a pivotal point impacting your financial future not just for the next few years, but potentially for decades to come.

Before making a decision on which school’s offer to accept, as well as what aspects of the offer to accept, be sure you understand the following:

1. What will be the actual total cost, not just for the first year, but projected for the next four years? Look at the school’s project cost of attendance for the first year, then increase it by at least six percent for each subsequent year.

2. Is there free money and how much? Grants and scholarships are awards that need not be repaid. Each may have specific requirements that need be met in order to retain eligibility for the grant or award in future years.

3. What is your net out-of-pocket expense? This is the amount you will have to pay, whether from savings, retirement plans, or loans.

4. Is work-study included in the offer? While this may be included in the offer, it is not available to reduce expenses due at the beginning of an academic period. Rather, it will be paid to the student as earned, provided they can find campus employment, and usually serves as spending money.

5. Does the award include loans? Usually a letter includes a variety of loans. Loans must be repaid with interest. Some require that repayment begin immediately.

Understanding the award letter remains vital to your future, whether student or parent. Like it or not, loans have a place in funding the expense of an education. If managed properly, they are a worthwhile source of funding.

Contact us to learn more about loans as a source of funding, to learn how to manage them, and to learn how to pay them off at a much faster rate than expected (without sacrificing your standard of living).

We look forward to hearing from you!

 

 

College Savings and the Market

,

Just a short time ago, tuition bills arrived hand-in-hand with nightmare producing, stomach-churning market volatility.

For those with college funds in financial vehicles subject to market ups-and-downs, it may be too late to act, especially if you need to pay the bill. If payment is not yet due, then it’s a sit and hope scenario.

Sit and hope the market shoots back up and you can “recapture” the money that has been lost. Make no mistake, if your money is subject to the market, you can’t recapture what has been lost; you can only return to and exceed the value once held.

So, what can you do?

First of all, stop “saving” money in financial vehicles that are subject to market forces. That’s not savings; it’s investing. It’s gambling.

Don’t gamble with money you can’t afford to lose!

Place your money where it won’t be lost when the market shoots downward, where it will earn a guaranteed return compounded annually, where you have access to it if and when you need it, where it won’t count against you in financial aid calculations, and where you can use it for something other than college-related expenses if it’s not needed for those expenses.

Be willing to sacrifice potential gains in order to avoid horrendous losses!

If your money is invested, there exists no foolproof way to prevent that money from loss when markets are volatile and the trend is downward. However, you can plan ahead and save.

Don’t invest and hope the money is there when you need it.

Contact us to learn how to properly save for the expense of a college education.

 

6 Conventional Ways to Pay for School

, ,

Whether you’re a high school senior beginning the “freak-out, how to pay” phase of your college planning campaign, a high school student on whom the upcoming, unbelievable expense is beginning to dawn, or the parent of a college-bound student of any age facing yet another addition to the ungodly amount of debt you currently manage, there are a number of conventional ways to cover the expense when you’re short on cash.

Option #1 – The current flavor of the day, month, or year (your choice!) – the 529 Plan. Although it’s called a “savings account,” it truly is an investment account. Sure, you might get a tax break. And, yes, the earnings grow tax-free. So, it might be right for you. However, the money you place in a 529 Plan is subject to market loss and you could end up with less than you’ve actually contributed. Moreover, the plan comes with government restrictions on when and how you can use the funds.

Option #2 – You could attend a cheaper school. While it may look cheaper on paper, it could actually cost you more. Rather than focus on “sticker price,” a price that families with a properly designed college planning campaign will not pay, focus on finding the right school at the right price. A school that may cost more on paper, but may actually be less expensive in the long run.

Option #3 – Apply for scholarships and grants. While these represent only about 3% of all available financial aid and thousands of students apply, it’s possible you could win one, perhaps a few. But, you are legally obligated to report those “winnings” to the schools who can then reduce the financial aid award. Certainly, apply for those you could win; just don’t rely on this strategy.

Option #4 – Borrow money from the government. No matter who you are, if these are available, take them. They have lower, fixed interest rates set by Congress and flexible repayment terms. With a properly designed college planning campaign, such loans shouldn’t be as fearsome as the media portrays.

Option #5 – Private student loans. While it means more debt, these loans are in the student’s name (with a co-signer), typically at lower interest rates than PLUS loans, and somewhat flexible repayment terms. With a properly designed college planning campaign, such loans shouldn’t be as fearsome as the media portrays.

Option #6 – Find a job. Whether on-campus (typically through work-study programs) or off, the money earned can offset the cost you may need to cover through loans.

Then, there’s the unconventional way, a way that shelters savings from financial aid calculations, that does not restrict how and when you can use those funds, that does not subject your savings to market correction (i.e., loss), and that is guaranteed to increase in value year-in and year-out.

Contact us for more information.

Overwhelmed?!?

,

Most families of college-bound students, regardless of when they address the topic of a college education, find the prospect of paying for the education both confusing and daunting.

Especially so when the family doesn’t realize there are services such as ours ready and able to assist and provide peace of mind.

For most families, confronting the issues of admission, financing, and graduation must be addressed in conjunction with affordability.

That’s why we exist.

We’re here to assist families in designing their college planning campaign, helping not just with the proper funding aspects of a campaign, but in identifying the right schools for the right price based on academics, location, culture, and any other aspect of import to the family.

We are waiting to hear from you…

 

How Today’s Typical Family Pays for College

,

The way families pay for school truly indicates the depth of their planning…

Ironically, according to a Sallie Mae study, while families feel confident in their planning, nearly 40 percent have no plan in place.

Talk about rainbows and unicorns!!

According to Sallie Mae and Ipsos, an independent global market research company, the cost is covered, as follows:

• 47% is funded through family income and savings (even as they family services a load of other debt);
• 28% is funded through scholarships and grants;
• 2% is funded by extended family and friends; and,
• 24% is funded through parent and student school loans.

Basically, 70% of the cost of an education is funded through current or future income.

53% of the families surveyed borrowed money, with two-thirds having expected to borrow. Bring up repayment and almost 40 percent of families haven’t considered repayment.

Experts say that, with the right tools and knowledge, families can develop a smart strategy for paying for college.

We are here to assist your family with designing and implementing its college funding campaign, not with just the savings aspect, but also with the loan repayment aspect.

We are waiting to hear from you…

 

Senior Citizens, School Debt, and Retirement

, ,

More seniors than ever before enter retirement with school debt.

The cost of an education can last a lifetime.

More than 2.8 million Americans over age 60 service some amount of school debt. In 2018, in just fourteen years, school debt held by Americans over age 50 increased from $36 billion to more than $260 billion (Federal Reserve statistic).

Much of this school debt is not debt incurred for their own education. Rather, it has been incurred on behalf of their child or grandchild.

School loan debt is the only debt in the country that cannot be discharged through bankruptcy. Bankruptcy is not an option.

What can be done?

We have a program that, when properly designed, can get the typical American or American family completely out of debt, including school loans and mortgages, in nine years or less.

There’s a good chance we can help you and/or your family too. We’re just waiting to hear from you.

Start Saving for College Today

, ,

So…

When’s the best time to start saving for the cost of your child’s college education?

The correct response is…

NOW!!!

Anecdotally, we like to say at conception (perhaps, even prior to that).

Absent a properly designed college funding campaign, a family can be rudely shocked at what awaits.

As the cost rises, students (and parents) plunge into debt that may take decades to repay. And, when factoring in inflation, education can cost two or more times the current price when a preschooler graduates from high school.

Avert the financial crisis – start saving now!

When considering the cost your family faces, it’s never too early to start. In fact, the earlier, the better.

But, don’t just throw your money in a savings account, money market account, or a CD. The rate of return won’t get you to your goal.

Don’t set up a 529 Plan. Sure, it’s the flavor of the month, even the year, yet even the marketing materials tell you it’s an investment.

What about equity funds, bond funds, fixed income funds, etc.? They’re all investments. And, investments can be lost.

In the end, when developing a college funding campaign, it’s about creating a long-term, practical strategy. It’s about clear goals and guarantees.

We’re here to assist your family in designing and implementing its college funding campaign.

We’re waiting for your call…

 

Facing Retirement with Student Loans

, ,

More than $18.2 billion in student loan debt is held by Americans aged 65 and older. As baby boomers continue to retire by the thousands, that number will continue to rise.

Those in retirement with school debt and those approaching retirement with school debt likely did not borrow the money for their own education. Rather, they took out or co-signed loans for a child or grandchild.

Quite often, people don’t realize that co-signing places repayment responsibility on them when the person for whom the loan was taken fails to pay.

And it’s awkward pressuring a family member, especially if they don’t have the resources to make payments.

Unfortunately, school debt usually survives bankruptcy, placing seniors at great financial risk and a host of negative consequences. Those negative consequences include, but are not limited to, the following:

• Seniors with school debt may be forced to work longer before retirement, perhaps even part-time in retirement in order to meet everyday expenses.

• Seniors with school debt may have stopped saving for retirement in order to make debt payments. They even may have borrowed from their current retirement plan to pay down debt.

• Seniors with school debt may refrain from seeking needed health care for lack of funds.

• Seniors with school debt may be unable to obtain loans to make needed repairs, purchase a vehicle, or deal with other expenses.

• Seniors with school debt maybe unable to help other family members in need, even though that school debt arose from helping a child or grandchild further an education.

In fact, approximately 200,000 retirees currently have their Social Security income garnished in order to satisfy defaults on school debt.

There are steps you can take to address when school debt is part of the financial picture, as well as long before it becomes part of the picture.

Contact us for more information on what you can do to address the above long before any of it occurs.

We are waiting to hear from you…

 

Start Saving before the Birth of Your Child

, ,

Back in the day, the purchase of a home was the largest expense parents faced. If you have one child, that may still be the case. More than one? Not so much.

Since it’s likely the expense of an undergraduate education will be the single greatest expense borne by parents, when should they begin to save?

For humor’s sake, we often say savings should begin at conception! In reality, we’re not far off.

Savings should begin before birth. Starting to save then allows time for savings to grow and earnings to compound.

So, where should a parent save?

The flavor of the day is the 529 Plan.

For specific family financial situations, it may be the correct choice, as funds can grow tax-free and, if used for qualified educational expenses, earnings typically are not taxed when used. However, a 529 Plan is not a savings vehicle. Rather, it is an investment vehicle.

Our rule of thumb – if money is subject to market fluctuation and can be lost, it’s not truly being saved. Even the materials provided by custodians about their 529 Plans discuss investment options.

If you’re interested in truly saving your money, having it earn compound interest, protecting it against loss, and being able to access it for educational expenses or any other expense you may have without penalty, we can help.

We are waiting to hear from you.