Nearly 70% of Families Worry about Paying for College

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With nearly all Americans suffering some form of financial strain, families of college-bound students suffer even greater stress…

How will they now pay for school?

Due to consequences arising out of the Pandemic of 2020, almost 70% of families now worry about covering their portion of the cost-of-attendance.

According to a survey by Discover, 53% of those surveyed stated their child’s education plans changed.  Students are moving to schools closer to home (reduced cost), delaying enrollment (financial pressures), and choosing a “less expensive” school (sticker price).

More than half (55%) of parents stated concern that their children weren’t receiving enough financial aid (a 14% jump).  Likewise, more than half (54%) will use retirement savings to help pay for the education (an 18% jump).  And, nearly 40% of families tapped their education funds to cover everyday living expenses.

There is no better time than now to contact us to help you determine the best way to move your college planning campaign forward financially.  We are here to assist you.

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Financial Advisors Rarely Address College Savings

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Research by Morningstar earlier this year suggests that many financial advisors overlook saving for college for a variety of reasons.  The research further suggests, as a result of this failure to address saving for college, clients with school-aged children likely are making decisions with highly negative ramifications.

When queried, a sample of 379 clients of California financial advisors suggested that many clients aren’t working with their advisors on this subject.  Results showed that proper guidance is needed:

·         44% keep college savings in a taxable account, paying avoidable taxes.

·         39% plan on using retirement savings, thereby limiting potential for financial aid.

·         31% lose sleep, worrying about how to pay.

These same clients indicate their advisor is not helping them rise to the challenge:

·         70% say their advisor is not doing a great job on college savings.

·         76% aren’t counting on their advisor to help them reach their savings goals.

·         65% don’t consult with their advisor about college savings.

If you have a financial advisor and your circumstances square with those in the small California sample above, why haven’t you looked for guidance elsewhere?  Why haven’t you searched for a professional college planner?

The financial coaches at Vivensure with a focus on college planning can help you with finding the proper financial vehicle for college savings, a vehicle that shelters the funds from taxation, that does not reduce eligibility for financial aid, and that allows you to reduce/eliminate worry and catch up on the missed sleep.

Why are you hesitating?  Contact Vivensure now!

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10 Conventional Ways to Pay for College…

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What follows are ten conventional ideas about paying for school.

These ideas are propagated by Wall Street, financial advisors, and the media day-in-and-day-out until you are conditioned to believe they are your only options.

Following those ideas, I’ll mention the one that truly works, the one we use for the benefit of our client families.  We know it works because we embrace the idea ourselves.

The ten conventional ideas that don’t necessarily serve the family:

1.      Grants.  Free money available from the federal government, the state, even the schools themselves.  Often, you must meet eligibility requirements and apply.  The application is considered and you will be notified, if awarded.  The grant may not cover the full cost, as the awarding body may have evaluated your family’s financial circumstances.

2.      Ask the school for money.  Following your award letter, if it isn’t a fair offer, it may be possible to negotiate for a better award.  We utilize this strategy with our clients who have applied to our recommended 6-8 comparable schools and who may not have received a fair award. 

3.      Part-time employment.  An offer of work-study aid will be included in the award letter, if the family has the requisite financial need.  If not included, part-time employment off-campus is an option, as is starting a side business.  Of course, this may take valuable time away from studies. 

4.      Private Scholarships.  Companies, non-profit organizations, and community groups may offer these scholarships.  However, they may be highly competitive.  In fact, such scholarships are roughly 3.1% of available financial aid each year.  Placing a high percentage of your efforts in this arena could prove to be a waste of valuable time and energy. 

5.      Loans.  Loans likely will be part of every college planning campaign.  Conventional scenarios will result in a long, expensive repayment process.  Our non-conventional scenario, perhaps half or less of that repayment period.  It may be a good idea to contact our financial coaches for assistance. 

6.      Claim tax credits.  While not really an idea on how to pay for school, this should be done every year you have a child in an undergraduate institution.  Your accountant, or your tax software, should have covered this option automatically. 

7.      Live off-campus.  Perhaps as an upper-classman.  But, doing so as a freshman or sophomore can have a negative effect on developing the relationships that will benefit you long after you’ve graduated.  For our clients, the cost-benefit analysis favors on-campus living the first few years. 

8.      Enroll in community college.  Always an option due to lower fees and off-campus living arrangements (e.g., stay at home), it may be the best option for the family.  However, this also can have a negative effect on developing those beneficial relationships. 

9.      Complete the FAFSA.  This is a no-brainer for ALL families, regardless of assets and incomes, as most schools will not award money from their coffers until they know for certain a family will not qualify for federal or state aid.  This includes merit-based scholarships, grants, and awards. 

10.  Start a 529 plan.  Typically a long-term option, there are tax advantages to this account.  However, there are many more negative impacts of which a family should be aware.  While a 529 may be right for a certain family, it is not the right option for most families. 

While everyone should have the opportunity to obtain a college education, most people have no idea how to cover the cost of one.  While we may help families implement one or more of the above ideas, we favor the unconventional means of funding an education that guarantees a return on the savings, that guarantees against loss, that leaves the family in control of the funds, that provides immediate access to the funds, that has no restriction on how the funds may be used, and that has no negative impact of eligibility for financial aid.

Contact our professional college planner for a free analysis of your college planning campaign.

We await your call…

Unleash a Better Life!!!
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The Parent Portion of the College Education Expense

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The expense of a college education rivals, and often surpasses, that of a residential mortgage, especially if the cost involves more than one child.  Yes, costs are steep, and with 43% or more of the cost covered by the family (according to Sallie Mae), parents tend to be the principal source of college funds.

According to a February 11, 2019, article in Credible, the average annual: in-state cost-of-attendance on campus at a public university was $25,980; on campus at an out-of-state public university was $41,950; and, on campus at a private non-profit college was $52,500.  Thus, the average 4-year cost-of-attendance for one child, assuming no increases (yeah, right!), ranged from $103,920 to $210,000.

Conventional thinking suggests parents have several options available to them.  Technically, they do.  But, none of the options actually benefit the family.  Four conventional means of savings include the following:

1.       Start a savings account early. 

While it’s never too late to start a savings account, the earlier the better.  Suggested accounts include those at a bank or credit union, as they are insured and safe.  However, the return on your money is negligible.  Even were you to begin an account at conception, the likelihood of having the money needed to cover your portion of the expense is low.

Another suggested option is the 529 College “Savings” Plan.  The drawback that most parents and grandparents overlook is that these are investment accounts, not savings accounts.  Even though there may be some tax benefits, the money can be lost, it’s outside your control, and subject to access and use restrictions.  And, if used for non-qualified expenses, taxes and penalties are imposed.

2.       Complete the Free Application for Federal Student Aid (FAFSA). 

A critical step with respect to federal student aid, it provides access to “free” money (i.e., grants, scholarships, and awards) and qualifies the student for federal student loans.  Be sure to submit the FAFSA, as it may make available aid of which you were unaware.

3.       Take Out a Parent Loan.

Both Parent PLUS loans and private student loans typically are available to parents.  Parent PLUS loans come with one of the highest rates for federal loans, as well as an origination fee exceeding 4%.  Repayment begins within 60 days following distribution of the loan and, as you must apply for a new loan each academic year, you may have four or more loan payments for the better part of a decade.

4.       Take Out a Private Student Loan. 

Private student loans for parents are in the student’s name, but cosigned by a parent.  Typically, they have lower interest rates than the Parent PLUS loans and multiple repayment plans.  And, they can assist in establishing good credit for your child.

Do not withdraw retirement funds from your retirement savings account(s).  Likewise, do not take out a Home Equity Line of Credit or refinance your residence for the cash.  Doing either can have a variety of negative impacts, not only on your retirement plans, but on the amount of financial aid for which your child may qualify.

While many of our clients do utilize one or more of the above options, not one of those options address the financial vehicle we recommend for college savings purposes.  The vehicle we recommend: leaves you with access to and control of your money; is protected from market downturns; has a guaranteed return, compounded annually; and, will not have a negative impact of eligibility for financial aid.

If you’re interested in learning more about the vehicle we recommend, please contact us to schedule your no-obligation evaluation.  We are here to help!

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Billions in Unclaimed Financial Aid

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Due to the “Pandemic of 2020,” and the drastic market downturn, furloughed workers, and record numbers of unemployed Americans, a high percentage of families lack confidence in their ability to cover their portion of the annual cost-of-attendance at their schools of choice.

According to a NitroCollege.com poll of 6,500-plus high school seniors and their families, almost 70% of families say “…Covid-19 has impacted their ability to pay for school.”

According to another report by LendingTree, almost “…40% of families have tapped their child’s education fund to help cover expenses due to the economic fallout…”

A highly surprising statistic – – fewer families applied for financial aid.

Many family’s typically fail to file the Free Application for Federal Student Aid (FAFSA) because they feel they won’t qualify.  They already count themselves out of the running.  Failing to file can be a huge mistake.

Yet, costs continue to rise.  Across the country, the average annual cost at a four-year private institution was slightly less than $50,000, while the average at four-year in-state institutions was slightly less than $22,000.

Scholarships, grants, and awards tied to the FAFSA filing likely will be needed by a large number of families.  If you haven’t filed the FAFSA, do so immediately.  If you have already filed, but have experienced a financial shock, contact your desired school to discuss your circumstances and request more aid.

With schools contemplating offering online classes only, many students are reconsidering their options, especially accepting the offer of admission, but deferring enrollment until they can expect the true college experience. 

They may be desperate to hit enrollment numbers and may be very open to negotiations.

You may need assistance with a number of aspects of your college planning campaign.  Our professional college planners are here to help.

We await your call…

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The Parent Portion of the College Education Expense

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The expense of a college education rivals, and often surpasses, that of a residential mortgage, especially if the cost involves more than one child.  Yes, costs are steep, and with 43% or more of the cost covered by the family (according to Sallie Mae), parents tend to be the principal source of college funds.

According to a February 11, 2019, article in Credible, the average annual: in-state cost-of-attendance on campus at a public university was $25,980; on campus at an out-of-state public university was $41,950; and, on campus at a private non-profit college was $52,500.  Thus, the average 4-year cost-of-attendance for one child, assuming no increases (yeah, right!), ranged from $103,920 to $210,000.

Conventional thinking suggests parents have several options available to them.  Technically, they do.  But, none of the options actually benefit the family.  Four conventional means of savings include the following:

Start a savings account early. 

While it’s never too late to start a savings account, the earlier the better.  Suggested accounts include those at a bank or credit union, as they are insured and safe.  However, the return on your money is negligible.  Even were you to begin an account at conception, the likelihood of having the money needed to cover your portion of the expense is low.

Another suggested option is the 529 College “Savings” Plan.  The drawback that most parents and grandparents overlook is that these are investment accounts, not savings accounts.  Even though there may be some tax benefits, the money can be lost, it’s outside your control, and subject to access and use restrictions.  And, if used for non-qualified expenses, taxes and penalties are imposed.

Complete the Free Application for Federal Student Aid (FAFSA).

A critical step with respect to federal student aid, it provides access to “free” money (i.e., grants, scholarships, and awards) and qualifies the student for federal student loans.  Be sure to submit the FAFSA, as it may make available aid of which you were unaware.

Take Out a Parent Loan.

Both Parent PLUS loans and private student loans typically are available to parents.  Parent PLUS loans come with one of the highest rates for federal loans, as well as an origination fee exceeding 4%.  Repayment begins within 60 days following distribution of the loan and, as you must apply for a new loan each academic year, you may have four or more loan payment for the better part of a decade.

Take Out a Private Student Loan.

Private student loans for parents are in the student’s name, but cosigned by a parent.  Typically, they have lower interest rates than the Parent PLUS loans and multiple repayment plans.  And, they can assist in establishing good credit for your child.

Do not withdraw retirement funds from your retirement savings account(s).  Likewise, do not take out a Home Equity Line of Credit or refinance your residence for the cash.  Doing either can have a variety of negative impacts, not only on your retirement plans, but on the amount of financial aid for which your child may qualify.

While many of our clients do utilize one or more of the above options, not one of those options address the financial vehicle we recommend for college savings purposes.  The vehicle we recommend: leaves you with access to and control of your money; is protected from market downturns; has a guaranteed return, compounded annually; and, will not have a negative impact of eligibility for financial aid.

If you’re interested in learning more about the vehicle we recommend, please contact us to schedule your no-obligation evaluation.  We are here to help!

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Athletic Scholarships: Myths and Misconceptions

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Athletic scholarships are rare.  “Full Rides” even more so.

Regardless of beliefs/misconceptions held by parents, even by the students themselves, only 4%-5% of high school athletes will ever play a sport in college.  Of those that play for their school, only D1 athletes will receive a “full ride” and those rides are limited to 6 sports – basketball and football for men, basketball, gymnastics, tennis, and volleyball for women. 

Those rides are further limited by the number of scholarships a school is permitted to award, as well as the scholarships that may be available in any given year.  All other collegiate athletes receive either partial or no athletic scholarship money.

So, let’s avoid those myths and misconceptions…

Myth 1: Every athletic scholarship is a full ride. 

The average athletic scholarship is less than the annual cost-of-attendance ($18,000).  All sports other than those mentioned above are considered “equivalency” sports.  This means the coach can divide available money among players, without restriction on who can receive how much.  Further, while D1 schools may provide multi-year scholarships, the vast majority are year-to-year and may not be renewed.

Myth 2: Scholarships are available only for Football, Basketball, and Baseball.

Not true.  Partial scholarships are available for a multitude of sports.  Families should weigh partial athletic scholarships against other financial aid offers.  Families may receive more in need-based financial aid then through an athletic scholarship.  An athletic scholarship may not be in the best financial interests of the family.

Myth 3: Scholarships are only available at the D1 level.

Also untrue.  Athletic scholarships are available at the D2, NAIA, and Junior College levels.  Even D3 makes merit-based, not-athletic scholarships available to prospective athletes.

Myth 4:  Good grades aren’t needed.

Good high school grades are a must.  Students signing a Letter of Intent face many stipulations, including the need to maintain a minimum GPA and to exhibit good conduct.  Let’s face it, the school is paying the student to play, providing education, food, room, board, etc.  Coaches won’t recruit athletes they believe may not do well in college and high school grades can be a good measurement of future success. 

Myth 5: College coaches will contact players.

They may, but more than likely they will not.  Coaches face a number of restrictions on how, when, and how often they may contact a player.  There is no limitation on how often a student or his high school/club/travel coach can contact the college coach.  A failure to communicate can be tied to a number of reasons, from looking at the wrong school for you, it’s the wrong program, or the coach is prohibited from making contact.  The burden is on the player to market themselves.

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Do Rich Students Get More Financial Aid?

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While every school has its own financial aid formula and offers aid based on a family’s estimated financial need, schools now tend to dole out more aid based on accomplishment.  A recent report suggests that schools spend more to attract wealthier students.

According to a 2019 National Center for Education Statistics report, students in the highest 25% income range received a greater amount of non-federal aid on average compared with all other income levels. 

This isn’t new to us or to our clients.  Schools usually award the best aid packages to those in the top 25% of any given incoming class; they done so for years, decades even.

Nevertheless, it seems that schools award more aid to the wealthy.  Why does it appear that way?

Schools actively pursue children of “wealthy” families, wealth being determined via the admissions office and desired demographics for the incoming class.  Non-need based aid is used to attract high-performing students of wealth.

Decisions are rooted in the desire for prestige.  Schools tend to choose students that will boost their rankings, whether it be the desire to attract students whose admission they’ll deny, thereby creating a higher statistical ranking in “prestigious” school reviews, or the desire to attract better-prepared students who are more likely to graduate and donate to the school as alumni.

Rankings are partially based on performance metrics.  Students from wealthy families tend to be better prepared for academic success, both high school GPA and high standardized test scores.

Moreover, schools compete for students.  The more attractive the student, the greater the award. 

Yet, financial aid budgets are limited.  There’s only so much money available in any given year.  Schools must make choices regarding how much is offered in aid to whom. 

Schools have different aid formulas and different budgets.  Families must choose those schools that will award them the most “free” money in the offered financial aid package.

It’s a game of leverage.  Do you know how your family can qualify for the most need-based aid possible?  Do you know how your child can make themselves an attractive candidate to schools?  Do you have the resources needed to help your student qualify for the most merit-based aid possible?  Do you know how to find the schools that will compete with each other? 

Most importantly, do you have the time needed to devote to your family’s college planning campaign(s)?

If you’re concerned and confused, please contact us to schedule a free, no-obligation consultation.  We are waiting to hear from you!

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The Benefits of Borrowing for College

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With the media focused on an “alleged” student loan crisis, parents and students fear student loans.  This fear, however, may be somewhat misplaced.  The crisis typically affects those:

  • who have failed to obtain a degree,
  • who continue on into graduate or professional schools, and
  • who have taken on the burden for those who either have failed to graduate or have obtained a degree in a field with little to no hope of employment.

With the cost of an education ever-increasing, school loans, whether by parent, student, or both, will be part of the package.  Some parents will pay for the education entirely, others will leave the burden entirely on the shoulders of their children.

Loans will be part of the package, typically federal student loans and Parent PLUS loans.  Why not consider a third, perhaps better option for the parents?  Why not consider private student loans?

These loans typically require a cosigner.  Yes, parents who cosign can be left “out to dry.”  But, the benefits outweigh the possible cost.

  1. The loan can help build credit.  As the primary borrower, the balance can be found on their credit report.  It will be reflected on the parent’s credit report as well.  But, a positive payment history can help your student establish good credit, even if you are making the payments.
  • Parent PLUS Loans typically have higher interest rates.  Don’t rush to take a PLUS loan before reviewing the private loan options.  With good credit, you might obtain a better interest rate.  Even if the private loan results in a higher rate, it doesn’t make it less expensive.  PLUS loans have an origination fee.
  • PLUS loan repayment begins when the loan is disbursed.  With private loans, ou can choose the repayment option that works best for you.  Payment can be deferred until after graduation or payment can start while the student is in school, whether a full monthly payment or interest-only payment.
  • The private loan lender may offer a co-signer release.  After one to three years of on-time payment, your child can apply to have you removed from as cosigner, thereby eliminating your responsibility.  This helps your child cover costs without burdening you for decades.
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College Planning in a Pandemic???

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Now that we’re tucked into our houses, apartments, or places of abode, either through quarantine or “stay-in-place” orders, enjoying the benefits of social distancing and at-home children, college planning likely occupies a lower position on the “honey-do” list than it once did. 

Makes sense.   When considering the worldwide threat to our very existence and the massive blow to our personal wealth, why plan?

After all, you’ve likely experienced a 30% or more decline in your 401k balance.  That’s a loss that will never be recouped.  Sure, if you can stick it out long enough, what’s left might grow back into what once was.  But, you’ll never be back to where you were and could have been. 

If only you had worried about the return of your money, not the return on your money, you wouldn’t have lost a penny in the recent downturn.  Our grandparents and great-grandparents who followed the advice of Will Rogers (who quoted Mark Twain) had it right. 

Retirement, let alone raiding the retirement fund to help pay for the kids’ education, seems hopeless right now.  It’s not, though…

Now, let’s look at 529 plans.  These plans are the financial vehicles that Wall Street and our financial advisors tell us have the greatest “odds” of having the money for school when we need it most.  Yet, one of the very first questions asked of parents is where, of the options available under the plan, do they want to invest the funds?

That doesn’t sound like a savings plan to me.  If I have a chance of losing money, of having less when I need it, less than the amount I’ve actually contributed to it, I’m not saving, I’m gambling.

Since the investment options are tied to the market, I wonder how 529 plans have fared lately.  Perhaps the same as the 401k plans?

These are just the vehicles those in the “know” tell us to put our hard-earned money.  These are the vehicles that bend to unknown market forces, vehicles that restrict access to and use of your money, vehicles outside your control. 

And, these are the vehicles to which you entrust your money???

If you had access to a financial vehicle that has weathered depressions and recessions alike without loss, a vehicle with few restrictions on access to your money and no restrictions on use of your money, a vehicle that remains in your control, where would you have placed your money?  In 401k and 529 plans?  Or, in that vehicle, a vehicle that had, and will continue to have, a net positive gain year-in and year-out?

That vehicle will be of utmost importance to you moving forward through and out of the pandemic.  It’s where you’ll need to save your money, safely assured of the return of your money, unworried about the return on your money.

This vehicle is of even more importance because the colleges and universities likely will have even less financial aid available to award.  Why?  Because their endowment funds were invested in the market, just like your 401k and 529 plans.  Their losses were so much greater than ours, not in percent, but in amount.

College planning is now even more important than you may have otherwise believed.  Not only does your student need to be the most attractive to schools as possible, you need to save your money in a vehicle that won’t negatively impact the financial aid for which you qualify.

Do you know how to make them more attractive?  Do you know how to find the right school at the right price for your child, based on academics, size, location, and budget?  Do you know what steps to take when throughout your child’s high school career?  Do you know the entire process is so much more intense than it was when we were looking at schools? 

If you’re confused and worried, please contact us to schedule your next (or first) college planning campaign meeting.  We look forward to assisting you on your journey.

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