When to Start The College Planning Process

 In College Costs, EFC, FInancial Aid

How and When to Start the College Planning Process

Applying to college can be complex, especially when we consider how much the college planning process has changed since we were in school.

With college costs having increased by over 510% in the last 10 years, it is clear the game has changed.  But not every parent knows this; I have witnessed families going through the process blind because they believe things are still the same.

When we were in school, the college planning process was like playing the game of checkers: simple rules, one type of game piece, only a few rules to master, and you learned the game very quickly.  Anyone could win the game.

Today, even though the gameboard looks the same (application, essays, visits), things are totally different. It is like playing chess: there are multiple game pieces, advanced strategies to learn, and it takes a long time to master. If you ever played chess, you remember the frustration of a lot of losses before your first win.  For those of you now in the trenches with college planning, you only get one or two chances to do it right. Unless you have a lot of time to invest in understanding how the system works, this is not the time to be learning.

Couple this with average costs for public schools at $28,000, private schools at $54,345, and elite schools trending over $70,000 and it is no wonder a lot of students miss out on finding their dream college. Sadly, parents and students will never know and, in this case, ignorance is not bliss.

With 4,000 schools to choose from, wining at the college admissions game is possible and it can be easy.  All you need is the right guide – whether a person, book, or system.  To win, you also have to know how and when to start the college planning process.

So to answer the million dollar question of when to start – it is a simple answer – NOW.

Yes, NOW no matter the age of your student.

Here is a sample timeline for some of the big items in the process:

Pre-High School

Admissions Timeline

Research points out that families that help students develop good study habits set them up for success when they hit high school. Focus on routine and building self-confidence so your student will be less influenced by peer pressure.  Emotions drive actions that create results and by repeating this pattern, you can build those cornerstone habits.

Financial Timeline

If you already have a great plan or need to start one, always develop a multi-pronged funding strategy.  Having all your eggs in one basket can result in missed opportunities (usually scholarships).

After almost 20 years in financial services, I have found most traditional college funding strategies to be flawed. A lot of 529 plans are advisor fee-based plans that are not the best fit for the client’s needs and often lead to missing potential state tax credits. We favor using a no fee Utah plan after fully funding the GA plan up to $4,000 so you maximize the state tax credit.

High School Years

Freshman Year

Admissions Timeline

Have a serious conversation with your 9th grader on the importance of grades. Parents would also be wise to start conversations around a student’s long-term interests.

Financial Timeline

Start a funding plan. If you have an advisor, ask them about their college financial planning strategies (a 529 is not a strategy – it is a financial product). If “contribute to a 529” is their answer,  you might want to look for an advisor who knows about college planning, because you will probably be missing out or paying more.

Also start having a family conversation around the cost of college.

Sophomore Year:

Admissions Timeline

Start college visits the right way so not to set unrealistic expectations. Start with local options like GA State/GA Tech, UGA and Berry College since they represent all campus types – urban environment, college town atmosphere, and suburban remote campus.

Financial Timeline

This can be a critical year because of the information schools require on the family’s income.

Business owners, if you haven’t uncovered the 10-15 college tax planning strategies, you are probably losing out on $15,000 to $20,000 worth of savings.

High income earners ($225K to 1M+), don’t overpay on college!

Most families in this category assume they can’t save on the cost, but they actually can by using advanced college funding strategies rarely outlined by financial advisors. Merit aid strategies, college cash flow planning, advanced tax planning, home equity utilization, and sound financial planning opportunities provide several great ideas.

Families who make between $45,000 and $220,000 of AGI (line 37 on tax return).

Start by understanding your EFC (expected family contribution) and see how colleges will view your financial profile. See if you can reduce your number so you can get more free money from colleges that might award your student aid.

Usually, the strategies to reduce your EFC need to be done this school year. A lot of other great opportunities exist for families that fall into this category.

Families under $45,000

How you file your tax return now and in the future years could make college free or very affordable.   In many cases, families that file a 1040a or 1040EZ will be eligible for a ZERO EFC providing them the opportunity to get a lot of free money from a lot of colleges. If you filed a regular 1040, this is the time to review if you should rearrange your tax preparation filing.

Junior Year:

Admissions Timeline

Start the process by finding and researching the best fit schools (see next week’s blog for more information). The best fit is both a social and academic fit for the student and a financial fit for the family.

Financial Timeline

In the college savings world, families fit into one of four categories based on their EFC. Knowing which category will help you select and save on college.

It is also a great time to build a Know Before You Go College ListÔ.  Every year so many families pick schools without understanding their net costs.  Some families miss the opportunity to go to expensive schools they never thought they could attend and sadly, many others get admitted to their dream school but realize too late they can’t afford it. Most families with high achieving students fall into this situation, not realizing that 83 schools in the country do not award merit aid.

Rising Seniors (Summer- August):

Admissions Timeline

Build a balanced college list and visit schools properly.  With 33% of students transferring schools and another 40% not graduating in four years, you want to do build the best list for your student. If you get it wrong, that fifth year might cost you $74,857 (tuition + foregone first year’s salary).

Financial Timeline

Finalize your Know Before You Go College List and couple it with a four-year funding blueprint that outlines the costs down to the last dollar.

Also, continue to develop strategies that put you in a better financial position, especially if you are using loans to fund any portion of the college bill. With college loan debt now at over 1.5 trillion dollars, your loan repayment plan can be just as important as your funding plan.

Final Thoughts

There’s a lot to consider in this process and remember the college admissions game has changed (play chess not checkers).

Want to learn more?

Attend a summer workshop if you need a refresher or are just getting started (click here to register for an event) or schedule a free 30 minute call to discuss your situation and get some free no obligation, no sales pitch advice (we promise).

Stuart Canzeri
Stuart is known as one on the industry experts in college funding and college financial planning. He serves as a registered fiduciary for his clients and has been in the financial and college planning arena for a combined 18 years. Stuart received a Bachelor of Arts in Communications from Tulane University, a MBA from Mercer University and completed his Certified Financial Planner certification from the University of Georgia’s Terry School of Business. He is Co-founder of Peachtree Financial Group, a boutique registered investment advisory firm and Managing Partner of Peachtree College Planning. He was appointed twice as a Commissioner at the Fulton County Housing Authority and still serves today.
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