Excerpts from The Key To Paying For College
From Chapter 3: Pre-Planning Analysis
The two features of my service that help families the most are the guidance in picking affordable colleges and guidance in planning how to pay for college. Now that we’ve discussed how to pick colleges, let’s start talking about paying for college.
Most of my clients are middle-class families who believe that they earn too much to qualify for financial aid. They are often surprised by the amount of money they save by reallocating funds and maximizing financial aid. The combination of pre-planning and choosing the correct college can have dramatic financial benefits.
Many families come to me looking for means other than financial aid to finance college. They often have pre-conceived ideas of how they are going to pay. Some are planning to use their home equity; others are planning to rely on student loans. Depending on the family’s situation, these might not be the best options. My job is to help families consider all of their options and help them see the impact of each option on their financial goals.
So, what do you need to do to maximize your financial aid? The answer depends on your family’s financial situation. I help each family arrive at a plan through what I call the Pre-planning Analysis. During this analysis, I collect the financial information that the family will be submitting to colleges. Then I calculate the amount of money that colleges would expect the family to pay each year if the family did not do any further planning. That’s why I call this the Pre-planning Analysis. Before doing any financial planning, I determine how much money colleges would expect the family to pay. Once we have completed the Pre-Planning Analysis, I provide the family with options that they can follow to maximize their eligibility for financial aid. I always present these as financial options because, in the end, the family needs to decide if the options will help them reach their financial goals.
Pre-planning is designed to answer these questions:
- What is the family’s current financial situation?
- What are the family’s financial goals?
- To what extent does a family currently qualify for college financial aid?
- What can the family do to maximize eligibility for financial aid?
By the end of the pre-planning process, the family should have a clear plan for allocating money for college and other major goals, such as retirement.
From Chapter 7: False Information From Surprising Sources
POINTS TO REMEMBER:
- College night presentations often come too late for parents to reallocate assets in preparation for filling in the FAFSA and CSS Profile. Ideally, any assets should be reallocated by the end of the student’s sophomore year. The financial information from the junior year will be reported on the FAFSA in the student’s senior year.
- Parents might expect college night to offer a broad overview of college admissions and financial aid. However, the presenter usually provides more information about public colleges or private colleges, depending on the type of college where the speaker works.
- Speakers at college night are often poorly informed about the details of FAFSA. At each college night that I have attended, the speaker has provided incorrect information.
- High schools often invite a college financial aid officer to speak at college night. College financial aid officers can help the family understand the college’s financial aid application policies and procedures, and inform you of scholarship opportunities. However, you should not rely on a college financial aid officer to give you advice about college choices, help you reallocate assets to reduce the Expected Family Contribution, or make plans to pay for college in the most tax-advantaged way.
- An experienced college financial aid consultant can help you to:
- Choose colleges that fit your needs and budget
- Do a pre-planning analysis of your family’s goals and financial situation and allocate your assets to maximize financial aid
- Fill in all financial aid forms consistently and correctly
- Negotiate for a better financial aid package when it’s appropriate
- Make a personal how-to-pay plan that covers college costs in the most tax-favored way