Evaluating a Financial Aid Offer

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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!



6 Conventional Ways to Pay for School

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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.

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

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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

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

The correct response is…


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

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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

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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.

Odds of a Full Ride: Parental Reality check

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As college admissions inch closer with the speed of an incoming ballistic missile, parents dream of the full-ride scholarships for their gifted student, whether the gifts be academic, athletic, or both.

I’ve heard it from parent after parent – “I don’t need to save.” Their student’s gifts will pay off, there’ll be large sums of money handed out. After all, they’ve spent a ton of money of travel/club sports, lessons, hotels, food, training, etc. And, if it’s not athletic money, there’ll be academic awards galore…

Mom and Dad…

Get ready…

You’ll soon be shocked back to reality…

And, perhaps, quite a bit of debt.

Based on the 2015-16 National Postsecondary Student Aid study (NPSAS), the most recent data available (to my knowledge), only 0.2% of students received $25,000 or more in scholarships per year.

While $6.1 billion in scholarships were awarded, there were 1.58 million recipients (8.1% of the college student population). The average award per recipient – $3,852.

Guess what?

The odds are NOT in your child’s favor. You can’t afford not to save!

Don’t make the all-to-common mistake of over-estimating eligibility for aid, whether it be need-based or merit-based (academic or athletic). There are over 80,000 valedictorians and salutatorians each year. Couple that with rampant grade inflation and you’ll find a sea of qualified candidates.

A deeper dive into the data shows that:

• 1.5% of students in bachelor’s degree programs got enough scholarships and grants to cover 100% of the cost of attendance.

• 2.7% got enough to cover 90% of the cost of attendance.

• 5.9% got enough to cover 75% of the cost of attendance.

• 18.8% received enough to cover 50% of the cost of attendance.

Still counting on an athletic scholarship for your child?

Only 2.3% of students in 4-year programs received athletic scholarships at an average $11,914 per athlete. Sure, some will get more, some less.

What does that mean?

An athletically-gifted student is not guaranteed a full-ride. In fact, they’re not guaranteed any money. Roughly 4% of high school athletes will participate in a sport at the college level. And, not every athlete that participates has been awarded athletic money.

When it comes to athletic and/or academic scholarships and awards, aim high. But, have Plan B in place in the event the award is much lower than expected and much lower than the amount you need to cover the cost of the education.

We can help you plan accordingly and we are waiting to hear from you.


Getting Real about College Funding

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Anywhere you look, you can find advice about saving for college.

And, if you’re trying to save for the full sticker price, not only is that advice depressing as hell, it also may be entirely inaccurate for your situation. This – by far – is not the proper strategy.

You’ll see a ton of information about 529s and how wonderful they are – and they can be in the absolute perfect circumstances. The fact most overlooked is that 529s are not savings vehicles; rather, they are investment vehicles. You could end up with less than the amount you actually contributed to the plan. Now, what kind of savings plan is that?!?

So, let’s get real…

• Conventional wisdom may be wholly inappropriate for your particular family situation;
• Actions taken should not favor eligibility for financial aid over the need to save; and,
• If you’re like most parents, you have absolutely no idea what you’re doing when it comes to a college planning campaign!

Where does that leave you?

It leaves you with the following points to consider and, most likely (and, yes, self-serving), with a dire need to engage the services of a professional college planner!

1. Schools expect a family to “pony up” much more than they can truly afford.

Now, who would have figured that one out?!?

The government and most schools base financial aid awards on the Free Application for Federal Student Aid (FAFSA), with which an Expected Family Contribution (EFC) is calculated. While the EFC may depend on a number of factors, the most prevalent factor is family income, closely followed by family assets.

The EFC expects a large chunk of income (22%-47%) to be used for college expenses. Family assets are assessed at just under 6%.

Maximizing financial aid is a horrible excuse for not saving, especially when you can do both at the same time. You just need to know how to do it.

< HINT – engage a professional college planner!!! >

2. Even if you qualify for a boatload of aid, schools may not be able to give it.

Less than 10% of schools meet 100% of financial need, while nearly half meet 60%-80%. Even those that meet your financial need may not meet it in ways you expect, as aid can vary widely from student to student.

3. Guess what? “Financial need met” DOES INCLUDE loans.

Depending on the school, loans (both student and parent) can be a significant part of the package. Even if a school meets your need, you could end up paying more than your EFC might suggest.

Don’t make the mistake of assuming that saving more will reduce financial aid and that you’ll pay more for school. That may not be the case.

< HINT – engage a professional college planner!!! >

4. Academic or athletic scholarships may not be part of the package.

A large number and variety of scholarships exist in the financial aid universe.

Every one of them may help, but most are relatively small.

And most scholarships, both merit and athletic, are NOT full rides. It doesn’t matter how talented your child may be, there will always be someone with equal or more talent.

As the saying goes, “don’t put all your eggs in one basket.” Have a Plan B in place.

5. Rely on realistic numbers, not hypothetical amounts.

< HINT – engage a professional college planner!!! >

We are waiting to hear from you!

College Funding & Life Insurance

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With the current bull market roaring ahead, it’s vitally important to protect yourself from loss while your assets continue to grow. Seems intuitive, but difficult to implement without the proper financial tool.

According to the Allianz Life Insurance Company of North America, more than half of the respondents to their 2018 Life Insurance Needs Survey (Needs Survey) were unsure or didn’t believe that cash value from permanent life insurance can be used to assist with other financial needs.

That’s likely the biggest secret out there! Very few people are aware of the benefits to be had from a properly designed permanent life policy.

In fact, college funding can be one of those benefits.

It’s both amusing and quite sad that almost 70% of the respondents to the Needs Survey stated the belief that the ability to use funds to pay for college is a valuable feature to consider when purchasing a financial product.

Yet, those people and more “turn their noses up” at the very mention of life insurance, even when they know they are underinsured.

So, let’s answer some questions you may have (or, perhaps, never even considered)…

1. How can cash value (CV) life insurance be used to help fund college expenses?

While the main purpose of life insurance is to provide a death benefit (DB) to loved ones, the DB under a permanent life insurance policy properly designed to build the greatest cash balance possible is the minimum required by the IRS to ensure everything remains non-taxable.

Growth of the cash value is the primary benefit, the DB merely is an added benefit. The cash value can be accessed for any reason, such as college funding.

2. What are the benefits to using loans from CV life insurance for college funding?

Loans from CV are tax-free. Moreover, they are not considered income and, therefore, typically will not affect a family’s eligibility for financial aid.

3. I have 529 Plans. Why would I need CV life insurance?

The foremost advantage to using CV life insurance is that the government and the schools don’t see it as an available asset. It is not considered when calculating eligibility for financial aid.

529 Plan assets do count as an available asset and will affect eligibility for financial aid.

4. What if my child does not attend college?

Funds from a 529 plan must be used for qualified education expenses. Otherwise, if utilized for other expenses, the earnings portion will be considered part of the beneficiary’s income and will be subject to a 10% penalty.

Conversely, the CV life insurance can be used for any financial need, including debt elimination.

5. Can grandparents help?

Absolutely! There are many advantages to using CV life insurance to help fund a college education – no complex eligibility requirements, no qualified education costs, and no income limits. Furthermore, money received from a policy loan generally won’t impact eligibility for financial aid.

Now, bear in mind, life insurance does require health and financial underwriting. However, that’s a small price to pay for a financial vehicle that:

• Will be an important part of any properly designed and implemented college funding campaign;

• Can be used to eliminate all household debt much quicker than ever imagined; and,

• Can improve the retirement horizon for parents of college-bound children.

Contact us to learn how a properly designed cash value building, permanent life insurance policy can be the bulwark of your college planning campaign, while being used to eliminate household debt and improve one’s potential retirement scenario.