When to Start The College Planning Process

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).


9 College Planning Mistakes You Should Avoid

9 College Planning Mistakes You Must Avoid

Do money worries or the admission process keep you up at night?  Avoid these common college planning mistakes to eliminate your fears.

Paying for college and getting accepted can be scary stuff. During the college planning process, we are dealing with two of the most emotional things in our lives: KIDS and MONEY!

These fears can drive our negative emotions which traditionally leads to poor decision making. A poor decision at this life juncture can be very expensive and compromise your retirement.

At Peachtree, our hope is to provide you up to date, relevant, and educational information to help you make informed, rational decisions.

By not falling victim to these nine big college planning mistakes, you can turn your fears and frustration into success.

Mistake 1: Not having the college money talk before searching for colleges

We can’t all afford an estate on West Paces Ferry, right?

So why go out and visit that estate with your wife and kids if you are going to have your heart broken when you can’t afford it? Here is what always happens if you do visit: your spouse loves it, your kids are already picking out rooms and you are emotionally crushed since you now want this for your family. This college planning mistake could have been avoided by visiting a house that was right for your budget.

In 1999, I started learning about financial strategies working for a mortgage firm. I always thought it was wise that families got pre-approved for a house. Almost 20 years later, I still can’t believe parents do not get “pre-approved” for a college purchase. You should know your financial fit by understanding how much a college will cost you after you evaluate available merit/financial aid, your college resources, and the smartest strategies to pay the four-year bills.

Hopefully, by following this step, you will not be like the families that come to us late in the senior year and ask to make the impossible ($300,000 for college) possible.

Sit down with your student before visiting colleges to talk about a college budget, the potential use of loans, your loan comfort level, and how you want to approach the search in a smart financial way

Being on the same page financially avoids heartbreaks!

Mistake 2: Not knowing your Expected Family Contribution and (most importantly) what it really means

Part of the college funding analysis is knowing your Expected Family Contribution (EFC) and understanding it is much more than a number. So many people stop early in the process because their EFC is either too high or really low. They assume they will get nothing or everything. This is far from the truth and a fatal college planning mistake families make every year.

The EFC is the amount the government expects a family to be responsible to pay towards college. This number may be a ridiculously high figure, but you can still achieve your student’s dream college without overpaying for it. All you need to do is understand the EFC’s relationship to your student’s academic profile and the best strategies available to you.

Your college search should start with an EFC analysis and a merit aid eligibility profile. To see an example of an accurate report, click here.

Mistake 3: Not filing for financial aid (completing the FAFSA)

Every year, families leave money on the table…billions of potential college grant dollars go unclaimed every year because people do not file the FAFSA.

Even if you do not think you’ll be eligible for need-based financial aid (because you followed step 2), fill out the FAFSA anyway.

Having a FAFSA on file is helpful and in some cases required for scholarships.

In other cases, it can be helpful if something changes in your financial situation, such as illness, death or unemployment.

Another great reason is to gain access to the only loan available in your student’s name:  The Stafford (Direct Federal Loan).  Regardless of the family’s financial situation, many are routinely realizing the benefits of using this loan.

Mistake 4: Students earning too much money or having too much savings

What’s wrong with students earning and/or saving money towards college? It contributes to increasing a family’s EFC and it has a higher weight towards the number.

Colleges expect dependent students to pay 20% of their savings towards their college costs, where parental assets are assessed at 5 to 5.625%…a big difference.

Many need based families make this mistake. If your student is a borderline need-based financial aid candidate, earning too much money could push him/her out of eligibility for funds they might otherwise have qualified for.

Mistake 5: Not understanding the impact or importance of applying early decision and early action

College application can be a frenzied process. Parents are worried about their student’s future. Students are worried about hearing back from that dream school. Those of you with a student who is already set on a particular school may have come across the terms ‘early action’ or ‘early decision’. These terms are deceivingly similar, but there is a huge difference between them. It is very important that families know what kind of contract they are signing when considering these application tactics.

This could literally define your student’s future. To compound the problem, schools have adopted more confusing versions like EDII, restricted early action, and single restricted early action.

Not understanding the impact or importance can limit your options. We unpack a little more information in our blog the top 5 considerations with early decision and early action.

Mistake 6: Being unfamiliar with your scholarship terms, dates, and conditions

If you have an academically talented student (even students with a 2.5 GPA) and you completed your selection process correctly, your student may be offered great scholarships. This is awesome news, but sometimes students do not investigate the terms and conditions of their scholarships for future years.

Most colleges require scholarship recipients to maintain a certain GPA and minimum number of credit hours. If a student doesn’t meet the terms and loses the scholarship, they may make it unaffordable to continue their education at that university.

Additionally, many scholarships are only offered for a 4-year period. So, if your student isn’t on the four year path, you may very well have an expensive 5th and 6th years.

Mistake 7: Changing majors or not thinking about a career pathway before applying

Stephen Covey nailed it in habit 2 from his best-selling book, 7 Habits of Highly Effective People: Begin with the End in Mind. Many families set the goal of getting into college, but it should really be about picking a major and finding a pathway for your student to thrive when he/she graduates. Many students pick a college without a focus on a field of study and flounder around without graduating in four years.

Changing majors is possibly the biggest nightmare a parent has about their student’s education and continues to be the primary reason many students do not graduate on time. You probably heard stories about a friend’s student who is changing their major and taking an extra year to finish.

Did you know the national 6-year graduation rate is only 59%? Yes, 6-years! Although not the only reason, changing majors is a big contributor to this problem. Of course, more years equals more costs for parents.

Students need to be exploring their interests while in high school, thinking about what they like, and are good at. Most families can get direction with a good profile tool so don’t think this is as hard as your student would make you believe.

If you have built a profile and had an engaged conversation about major selection and still haven’t found a direction, you still have great opportunities attending a liberal arts college.

Mistake 8: Taking out parent loans or private loans when federal loans are the better option

We strongly discourage parents from taking out certain loans, especially the Parent Plus loan. Loans in the student’s name are the best option and provide more opportunity than just covering a funding shortage. But with student loan debt at $1.3 trillion, you should understand the costs before you apply.

Mistake 9: Being taken advantage of

The final nightmare scenario we hear about are scams and working with the wrong type of advisor. We simple say “beware.” Did you know there are product salespeople and other types of advisors that don’t have a fiduciary responsibility to help you with your college funding plan? For a funny and great example of different the types of advisors, enjoy what-is-a-fiduciary-and-why-does-it-matters.

Many scholarship scam services charge you high fees for something you could do on your own.

Plenty of great FREE resources are out there to help you (like our blog library), and we strive to share them with you.

You are also welcome to schedule a free 30 minute call to discuss your situation and get some free no obligation, no sales pitch advice (we promise).

Let’s avoid these nightmare situations with some pre-planning and awareness, and sweet dreams will be had by all.


5 Facts to Know Before Submitting Financial Aid

EVERYONE should file a FAFSA but not everyone should file the CSS Profile.  One of the biggest mistakes is assuming you make too much money to file the Free Application for Federal Student Aid (FAFSA).

Whether your child is getting ready for the first year of college or the last year at high school, this is an important time for you. While your child focuses on studying, you have to worry about paying the college bills.

And applying for aid isn’t easy.  In addition to keeping an eye on your child’s grades and exam results, your family will also need to review all of your tax and financial assets to ensure that you can afford the fees that the college demands.

Here are the five most important facts about financial aid:



How Divorced Parents Plan For College











There is so much misinformation about how divorced parents plan for college. Coupled with the emotions and stress you may feel about sending your children to college, it is no surprise many families make big mistakes.

As a child of divorce, I can tell you there are many worries going through your child’s mind. They fear that college will be another dividing issue. The last thing you want is to reopen their wounds or reinforce any thoughts that they were the reason for the split. It doesn’t take a psychologist to understand that young minds are still struggling with the family situation.

However, this is a great time to eliminate some scars from the past and help your child move on.

Here are some basic steps and pitfalls to help make a hard time happy.



Your 6 Step College Plan

The college plan is a very important process to lay out in detail. Sometimes, families can feel overwhelmed or stressed out by all the information, the forms, the applications, the deadlines, and the requirements. Now, if your child is already in their senior year of high school and hasn’t started on their college plan…well, let’s just say it’ll probably spell T-R-O-U-B-L-E.

So, how can you and your family get on the right track before trouble hits? Our team has 6 steps to help you get organized and get those documents submitted. Is your child plans to go to college in the next two years? Then this is the time to pull out all the stops.



The 5 Top Considerations for Early Decision and Early Action Success

ED vs EA












College applications can be a frenzied process. Parents are worried about their student’s future. Students are worried about hearing back from that dream school. Those of you with a student who is already set on a particular school may have come across the terms ‘early action’ or ‘early decision’. These terms are deceivingly similar. But, there is a huge difference in each. It is very important that families know what kind of contract they are signing when considering these application tactics. This will literally define your student’s future.

To compound this confusing problem, many families forget to ask their college planner about the benefits and limitations of these application tools. In this post, we cover two core components of the Early Action (EA) and Early Decision (ED) process. Understanding these two terms is critical for your planning strategies. Specifically, utilizing financial positioning and a college’s acceptance rates.

Financial Positioning

You must know your financial position before beginning the college application process. This is even more important as you review using EA or ED. By knowing your financial position beforehand, you are able to accurately estimate a potential aid offer. Combining that with the higher acceptance rates usually produced by the EA / ED strategy can create an admissions win for the family. The pitfall of this strategy comes without a proper plan. If your family does not do their homework, then committing to a school too soon can be a disaster. You must know what kind of aid you can get, how your financial package will look, and if your family can really afford this school. All of this before earlier application deadlines. Sounds a little scary, right? Let’s break down the terms so you have a better idea of what your student will be getting into.

Early Decision Applications

ED programs are usually binding. This means applicants commit that they will attend that school if accepted. One advantage is applying to a highly-selective school that admits 26 to 50 percent of students from the early admissions pool. This can be a great technique for a student with a dream school and an application that may be overlooked in a larger pool.



How much does college cost?

College Costs are high

Many people ask me: “How much does college cost?”

Before providing a number, I am reminded of the families who have saved thousands using the college success plan and those whom called years later wishing they had followed the path’s outlines.  Now, how I answer that question will impact the colleges they select and potentially the happiness of their child for the rest of their lives.

See, if I tell them the average private school’s cost of attendance (COA) is $42,000+ annually, they might dismiss all private schools as too expensive. The same would happen if I told them that the average out of state public school cost is $32,500, they might think “I can only afford to stay in Georgia.”

What people need to ask is: “how do I save save and have a successful outcome?” (more…)


Free Money for College

One of my favorite and memorable speaking opportunities in the last 10 years was to  200 families at the AtlantaCares STEM event at Georgia Tech.  Our topic was how to get free money for college.

As the last person scheduled, I was hopeful the audience wouldn’t be worn out by the other speakers and would be engaged.

Well, engaged would be an understatement,  I had to follow a speaker that literally was a mix of Tony Robbins and Steve Harvey, and he even had interactive props!

I thought I would need to juggle in a clown suit to keep them entertained.   However, what I learned was that great information needs no props.  And my topic:

Free Money for College was the headline act.




High school juniors will begin to look at potential colleges soon and seniors have already applied to many.  For each group, the key factors they will evaluate may include the look and size of the campus, quality of campus life, honors and study-abroad programs, fraternities and sororities, and athletic programs.

It is especially important to evaluate your financial fit at each of these schools prior to event visiting.

However, before the student makes a commitment to any college, here are ten important factors they should consider:

1) Number of Course Requirements

Course requirements vary greatly from school to school. You don’t want to find yourself stuck in courses that don’t interest you while you’re unable to take electives in areas that do interest you.

2) The flexibility of Course Requirements

Schools that require specific courses can put you in a bind if you’d rather take more advanced courses or need to take more remedial courses. Be sure to check that the school allows a choice of course-levels to satisfy your requirements. Also, keep in mind that many top professors avoid teaching required courses which route hundreds of students through them.

3) Availability of your College Major

Never assume your college of choice offers every possible major, especially if you have a specialized major in mind. It’s critical to check the list of majors at each college. Also, at certain colleges, some majors are not open to all students, especially those which are extremely popular (psychology or journalism) or require talent or training (music or art).

4) Availability of Desired Classes

College enrollments have increased in the past few years, but the faculty size has not grown commensurately. As a result, there may be long waiting lists for some classes and shortages in first-year classes for students who did not register at the earliest possible date. Be sure to check the availability of your desired courses before sending your acceptance letter to the college.

5) Availability of Professors Teaching the Course

A significant number of instructors are graduate students at state universities, and it’s important to know how much of your instruction, especially in the first years of college, will be designated to graduate student teachers. It’s okay if a regular professor gives the lectures and the grad student leads discussion sections; however, the real issue arises at schools where grad students are allowed to teach entire courses on their own.

6) Student/Faculty Ratio

You’re likely to get more individual attention from the faculty if you attend a school with a ratio of 10 to 20 students per professor. Once the student-ratio exceeds 20, you may not receive as much one-on-one attention from the professor.

7) Percentage of Students Who Graduate

A school with a graduation rate above 80% is good, and a graduation rate of 60 – 80% is normal; however, a school with a graduation rate under 60% is not good. Also, be sure to determine the average time a student takes to receive a degree; you may want to avoid schools whose students take an average of six to seven years to graduate.

8) Quality of the Career Placement Department

Very few students think to ask about the career placement department, but this should be a key item on your checklist. Students should be aware of the college’s job placement services, the percentage of graduates who are employed before graduation, and which companies and organizations usually recruit from the college.

9) Scholarship Requirements

Many students will be award institutional scholarships if they properly selected the right mix and number of colleges (6-12) but keeping them can sometimes be a little more difficult than realized.   Read the fine print on all awards and ask specifically if your student doesn’t meet the requirement one semester if you can earn it back.

Sometimes if the schools are on par with one another, the scholarship requirement might be the deciding factor.

10) The Total Cost of College

For a decade, we have been preaching know before you go, which means knowing the total cost of obtaining the degree before choosing that college and/or applying.

Our S.P.A.R.K. college funding process breaks down the cost of college so everyone can save into 3 stages:

Stage 1:  Select your financial aid strategy and understand your other cost-cutting options to identify how to not overpay on college.

Stage 2: Know before you go so you don’t make a costly mistake that will cost you a few extra years in the workforce.  Everyone will have a different net cost at every school on their lists so don’t rule out a school because of its high sticker price.  You might miss an awesome opportunity to select the right college and save.

Step 3: Build your four-year funding plan for each college on your list so you have peace of mind that you can pay the entire bill before the acceptance letters come to your student.

Can you imagine the relief of already knowing how you will pay for every school every year even if you aren’t fully funded today?  If you need a hand please schedule a free strategy call or at least view one of our live or online events.


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8 FAFSA mistakes that will costs you money

The 2020–21 FAFSA® application form became be available October 1! If your student plans on attending college between July 1, 2020, and June 30, 2021, you should fill out your FAFSA form as soon as possible!

Just make sure you don’t make one of these 8 common mistakes:

1. Not Completing the FAFSA Form

We hear all kinds of reasons: “The FAFSA form is too hard.” “It takes too long to complete.” “I’ll never qualify anyway, so why does it matter?” It does matter. For one, contrary to popular belief, there is no income “cut-off” when it comes to college aid. Also, the FAFSA form is not just the application for “free money” such as the Federal Pell Grant, it’s also the application for scholarships and grants offered by your state, the school, and even private organizations. If you don’t complete the FAFSA form, you could lose out on thousands of dollars to help you pay for college.

2. Not Filling Out the FAFSA Form as Soon as Possible

If you want to get the most financial aid possible, fill out the FAFSA form ASAP. Some financial aid is awarded on a first-come, first served basis, and some states and colleges run out of money early. Even if it seems like your school’s admissions deadline is far off in the future, get your FAFSA form done ASAP. The 2020–21 FAFSA form requires 2018 tax information, which you should already have -so there’s no excuse to wait!

3. Not Getting an FSA ID Before Filling Out the FAFSA Form

It’s important to get an FSA ID before filling out the FAFSA form. Why? Well, because when you register for an FSA ID, you may need to wait up to three days before you can use it to sign your FAFSA form electronically. An FSA ID is a username and password that you use to log in to certain U.S. Department of Education websites, including fafsa.gov. You AND your parent (if you’re considered a dependent student) will each need your own, separate FSA IDs if you both want to sign your FAFSA form online. Don’t wait! Create an FSA ID now: StudentAid.gov/fsaid.

4. Not Using the IRS Data Retrieval Tool (IRS DRT)

For many applicants, the most difficult part about filling out the FAFSA form is entering the financial information. But thanks to a partnership with the IRS, students, and parents who are eligible can automatically transfer their necessary 2018 tax information into the 2020–21 FAFSA form using the IRS DRT. It’s the fastest, most accurate way to enter your tax return information into the FAFSA form, so if you’re given the option to “LINK TO IRS” button, take advantage of it!

5. Not Reading Definitions Carefully

When it comes to completing the FAFSA form, you’ll want to read each question carefully; sometimes the FAFSA form is looking for very specific information that may not be obvious. Here are some items that have very specific (but not necessarily intuitive) definitions according to the FAFSA:

Legal Guardianship

To determine your dependency status, the FAFSA form asks, “Does someone other than your parent or stepparent have legal guardianship of you, as determined by a court in your state of legal residence?” Many students incorrectly answer “yes” here. For this question, the definition of legal guardianship does not include your parents—even if they were appointed by a court to be your guardians. Also, you cannot be your own legal guardian.


The FAFSA form has very specific guidelines about which parent’s information needs to be reported. It has nothing to do with who claims you on their taxes. On the FAFSA application, you may be asked, “As of today, what is the marital status of your parents?” Use this guide to help you figure out which parent to report on the FAFSA form.

Number of Family Members (household Size)

The FAFSA form has a specific definition of how your household size or your parents’ household size should be determined. Read the instructions carefully. Many students incorrectly report this number, especially when the student doesn’t physically live with the parent.

Number of Family Members in College

Enter the number of people in your (or your parents’) household who will attend college at the same time as you. Don’t forget to include yourself, but don’t include your parents in this number, even if they’re in college. This number should never be greater than the number of family members in your household.

6. Listing only one college

Unless you are applying to only one college or already know where you’re going to school, you should include more than one. Colleges can’t see the other schools you’ve added, so you should add ALL colleges you are considering to your FAFSA form, even if you aren’t sure whether you’ll apply or be accepted. You can add up to 10 schools at a time. If you’re applying to more than 10 schools, follow these steps.

It doesn’t hurt your application to add more schools. In fact, you don’t even have to remove schools you later decide not to apply to. If you don’t end up applying or getting accepted to a school, the school can just disregard your FAFSA form. But you can remove schools at any time to make room for new schools.

7. Not knowing your EFC (Expected Family Contribution) before you file the form

Unless you have had a professional review your financial situation, you cannot assume that filing the FAFSA is not to your benefit.  Every October, we receive many calls from people asking about FAFSA and claiming they know they aren’t eligible for aid and want to know why they should file.  Over 50% of the people on those calls, are actually eligible for need based aid, another 20% tend to be eligible in the future because they will have multiple students in college at the same time.  Assumptions cost people tons of money every year.

8. Not getting help with your college funding plan before filing FAFSA

Families assume they know how they are going to fund college but the truth is many people do not have the proper knowledge and/or their financial advisors are not skilled with building a proper plan.  Understanding the true 4-year cost before you apply is the smart move.  Think about it, if you were going to buy a home, wouldn’t you know what you could afford?  Off course and there is no bank in the world that would lend you more..  However, you can get a loan for almost any amount to pay college.  No wonder college loan debt is over 1.5 trillion dollars…yes, trillion.  Please don’t be another statistic…know before you go.

As you can see, making mistakes on the FAFSA form can cost you money. If you need assistance completing your FAFSA or CSS PROFILE financial aid application form, give us a call.  We may be able to save you considerable money and help you avoid strategic mistakes on these complex application forms.

Have a question about your situation?

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FAFSA And How the Financial Aid System Works

It’s financial aid time, and everyone should apply for financial aid, regardless of income. Even students from wealthy families can take advantage of a low-cost Unsubsidized Stafford Loan. The interest rate for this student loan, during the 2019-2020 academic year is 5.05%! Few families can afford to pass up the opportunity to borrow money for college at this low rate.

Most students that attend college can receive some form of financial assistance. Because there are many kinds of financial aid, this presents a lot of opportunity for students.

Here’s a brief outline of how the financial aid system works:

Rule of Thumb

Families with income less than $75,000 will most likely qualify for some form of need-based financial aid if the student attends a public college or university.
Families with income less than $175,000 will most likely qualify for some form of need-based financial aid if the student attends a private college or university.

How the Student’s Need is Calculated

Financial aid comes in the form of grants, scholarships (free money), loans, and college work-study. It is based on the student's financial need or the student‘s merit. This particular article covers only NEED-BASED AID.

To calculate the student’s financial need, the financial aid administrator of the college first establishes the cost of attendance; then he subtracts the Expected Family Contribution (EFC), or the amount the college expects the student and parents to contribute.

Cost of Attendance - Expected Family Contribution = Financial Need

Cost of Attendance (COA)

The COA used for the Financial Need calculation is considered the full cost of attendance, including:

  • Tuition
  • Room & Board
  • Books & Supplies
  • Transportation
  • Personal Expenses

Expected Family Contribution (EFC)

The EFC calculation is computed using the parents’ and student’s income and assets. It also includes the number of family members in the household, the number of students in the family attending college (excluding parents), the amount of taxes paid by the family and various living allowances that are available to the parents and student. The Expected Family Contribution remains constant, regardless of the Cost of Attendance (COA) of the colleges. As a result, the family’s financial need increases, as the price of the college increases.

Planning Tip: Normally, student loans make up the first $3,000 to $5,000 of Financial Need. The college will fill the remainder with work-study, grants, and scholarships; or leave the family with the obligation to pay the balance. It is essential to ask the college if they will fill 100% of the student’s need before the student applies for enrollment. Asking this question will prevent any misunderstanding that may result if the college only fills a portion of the student’s need and will give you the time to adjust your finances to cover the shortfall.

The Financial Aid Process

The first step of the financial aid process for every student and family is to determine their EFC. The EFC is determined by the Student and Parents’ completion of the Free Application for Federal Student Aid (FAFSA). There are three critical points that families must understand when completing the FAFSA financial aid form.

The first step of the financial aid process for every student and family is to determine their EFC. The data collected from the completion of the Free Application for Federal Student Aid (FAFSA) determines the EFC number. There are three critical points that families must understand when completing the FAFSA financial aid form.

  1. The FAFSA filing begins October 1 of the student’s senior year of high school. Furthermore, the student must submit the FAFSA each year he or she is seeking financial assistance.
  2. The Federal Methodology Formula that calculates the family’s EFC is based mainly on the parents’ and student’s income and assets.
  3. The EFC is directly related to the amount of financial assistance the student can receive.

The online FAFSA is sent to the Needs Analysis Center of the Department of Education once the family completes the application. The DOE calculates the family's EFC and reports the result to both the college(s) and the family using an online form called the Student Aid Report (SAR).

After the DOE submits the SAR to the college, the student receives a financial aid award letter from the college(s), typically in early to mid-April; which spells out the details of your financial aid package.

Understanding how the financial aid system works can save your family thousands of dollars and can keep debt down to a minimum. If you need the assistance of an experienced financial advisor to develop a college funding gameplan for your family and help you complete the FAFSA,  give me a call at 404-477-1772 or schedule a 20-Minute chat.

We may be able to save your family considerable money on your college expenses.

Have Questions About Your Situation?

Schedule a Free 20-Minute Strategy Call with Stuart

It’s FAFSA time, but first it’s vitally important that you understand how the financial aid process works! Don’t make errors that could cost you thousands of dollars in financial aid.  Learn More: 

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How High-Income Families can Combine College Funding and Retirement Planning

Today, more and more high-income parents are having children later in life. The reason for this decision is often to pursue a career and first become financially sound; however, this decision can come back to haunt these late-bloomers when they eventually face a double-whammy: college and retirement.

The decision to delay starting their families has left many couples with only six to twelve years to save for retirement after their youngest child graduates from college. When you consider that today’s college costs can range anywhere from $30,000 to $60,000 per year, per child; it is clearly evident that the high costs of college can place a tremendous burden on a high-income family’s ability to fund both college and retirement.

Furthermore, the actual “true cost” of college for a high-income family is considerably more than the “advertised price.” Because college costs are paid using after-tax dollars, the amount that must be “earned” to cover these costs is much more. A high-income family in the highest tax bracket can pay almost 50% in income taxes, which means that the family must earn twice the amount of money that they pay to the college.

The colleges do not help much, either. While colleges do offer financial aid subsidies to some families, high-income families are usually expected to absorb the entire college-cost burden. But that’s the bad news; the good news is that college is big business and colleges would much rather market to high-income families. Statistics show that students from high-income families are more apt to successfully earn a college degree, which equates to charitable donations to the college’s endowment coffers. Colleges have also begun hiring “enrollment management specialists” who market heavily in high-income zip codes in order to maximize the college’s tuition cash inflow and minimize the financial aid outflow.

Although there are few financial aid benefits available to the high-income family, there are some little-known tax strategies related directly to education which can provide additional cash flow for college expenses. While many of the new tax credits like the “American Opportunity Tax Credit,” “Lifetime Learning Tax Credit,” and the “Student Interest Deduction” have middle-income phase-outs, there are also overlooked strategies in the present tax code which can benefit education.

Here are two examples of simple techniques to increase cash flow for college expenses:

CASE #1 – For the highly-compensated executive, companies can provide a source of college funds for their key executives through a special deferred-compensation plan, which can be done without the business providing any additional funds.

Companies with deferred-pay plans can simply amend their payment timing rules. The amendment allows executives to tap their deferred pay account not only at retirement or separation from service, but also to pay for a child’s college costs. Under the amended plan, the company defers a percentage of each executive’s pay into a “rabbi trust” (subject to the claims of the company’s general creditors). A plan participant gets enough, and no more, of his deferred pay to meet the child’s college costs.

The amendment in the company’s plan allows the executive to avoid all penalties for early withdrawal from the deferred account to pay college costs. The executive receives a firm commitment from his company to pay all of his child’s college costs (up to the amount in his account), and yet he owes tax only as he actually withdraws the money from the trust to pay the college expenses. The company can also take a tax deduction for the payments.

There is a potential problem if the executive does not need to withdraw funds from the plan to pay for college costs. Although he has not taken any money from his account, he could have taken the money. Therefore, he may be in constructive receipt of (and owe tax on) the amount he could have withdrawn but did not. This is very similar to zero coupon bonds. In this case, there is a simple solution to this potential problem: the company could simply amend its deferred payment plans so that the executive can take pay out of college costs only by showing financial need. An executive that needs the money for college can get it, while another executive that does not need the money can leave it in the plan until separation or retirement and avoid current taxation.

CASE #2 – For the self-employed businessperson, there’s the Educational Assistance Program. This program will allow the employer a tax-free fringe benefit of up to $5,250 for each qualifying employee by establishing an Educational Assistance Program (IRC 127). The courses need not be job-related and benefits cannot exceed $5,250 per employee for a calendar year. The advantages of these programs can be substantial for both the employer and employee and are as follows:

  • The employer and employee are not responsible for any payroll taxes on this type of employee compensation.
  • The employee does not need to report the amount of educational assistance as income on his/her tax return.
  • The employer does not have to fund this program, as is the case in other types of employee benefits.
  • The employer receives a current tax deduction for the education assistance paid.

Business owners may be able to provide this fringe benefit to their children if they employ them in their business. In order to qualify for this fringe benefit, the following tests must be met: (1) The child must be age 21 or older; (2) The child must be a legitimate employee of the business; (3) The child must not own more than 5% of the business; and (4) The child must not be a tax dependent of the parental owner.

If the self-employed business owner meets these stipulations, he may be able to write off one or two years of college costs, or $5,250 to $10,500. These are significant savings!

However, there are some specific IRS regulations which must be followed in order to qualify for this benefit. Therefore, the financial advisor should thoroughly understand these regulations or the family must engage the services of a financial professional who does understand these regulations.

These are just two of the many education-oriented tax strategies that high-income families can use to reduce taxes and increase cash flow to help pay college expenses. It requires only advanced planning with a dedicated financial advisor who is knowledgeable of college financial planning.

There are also unique academic strategies which can lower the cost of college. Many grants, scholarships, and tuition-discounts are available to high-income families through proper positioning and negotiation. The following is a list of the “Top 10 Things to Do” to maximize the student’s college success while helping to lower costs:

  1. Apply for admissions early to properly position the student for possible grant money.
  2. Apply to 6 to 8 colleges to maximize your financial opportunity through negotiation.
  3. Apply to private colleges, as many offer tuition-discounts in order to compete.
  4. Apply for financial aid, as some colleges require this for scholarships and student loans.
  5. Prepare for ACT/SAT tests, as top scores can increase grant and scholarship opportunities.
  6. Investigate a career path, as lack of planning often forces students into a 5- or 6-year degree.
  7. Diligently investigate each college to ensure that it fits with the personality of the student.
  8. Do not be afraid to negotiate the price, as private colleges must compete for good students.
  9. Discuss cost-limitations as a family before differences occur between college choice and cost.
  10. Consult with a Certified College Funding Specialist (CCFS®) who can help you link your college funding and retirement planning.

College costs can place significant burdens on high-income families’ retirement plans regardless of how much money they earn. And, regardless of income, there are many opportunities for families to reduce the high costs of college if they do not put off the inevitable. Plan ahead!

If you need a college funding gameplan for your family, give me a call at 404-477-1772 or schedule a 20-Minute chat.

We may be able to save your family considerable money on your college expenses.


Financial Aid Award Letters

The Ins and Outs of Your Financial Aid Award Letter

College financial aid award letters are now being mailed out to countless college-bound students and decisions for college enrollment must be made before the May 1st deadline. Many students will have multiple offers, and families will need to decide which award offer is best.  A lot of time can go into decoding the financial aid award so make sure you understand the terminology.

Financial aid letters can be very confusing to families, and many colleges are borderline deceptive in the current ways they use PLUS loans. This is the time when working with a specialist is worth its weight in gold; after all, the less the student borrows, the less student loan debt they’ll have to repay after college.

Here are a few strategic deceptions by colleges when issuing award letters to families:

The Total Cost Of College

Award letters can seem very generous if all costs are not listed. Many award letters only show basic costs, such as tuition, room and board, and books and supplies, but tuition can vary depending on the availability of classes and there are always fees attached to tuition costs.
Room and board can also vary depending on the meal plans chosen; many students will purchase snacks during the day or Starbucks to get started in the morning, so the full-blown meal plan may not be necessary for everyone.

Books and supplies can also be understated: a $2,000 budget for books and supplies can dissipate quickly when many textbooks cost $200 or more. Supplies can eat up the entire $2,000 budget alone for engineering, art, and computer science majors. There are also travel costs and personal expenses that are rarely covered in the financial award letter, but can add up to $3,000 per year or more.

If the entire cost of attending that particular college is not represented, the financial aid award letter can look pretty good. Here’s a little-known way you can get the bottom-line total cost of attending a particular college: simply call the college’s Financial Aid Office and state that you would like to know the total amount of Stafford and PLUS loans that you can borrow for the entire year of college. That dollar amount will be “true” total cost of that college.

The Missing Expected Family Contribution (EFC)

The EFC is the dollar amount the family is expected to contribute that year before any financial award is given by the college. The EFC is based on the results of the family completing the FAFSA (Free Application for Federal Student Aid) or the CSS PROFILE.

Yet, every college that uses the CSS PROFILE can create its own EFC because there are many additional questions they can add in Section Q which can raise the EFC dramatically. In addition, the EFC may not even be shown on the family’s financial aid award letter; in these cases, call the college and ask for your EFC number so you may determine whether the college is meeting 100% of your family’s “financial need” and compare their award with other colleges.

One-Year Awards

Colleges often award the student grants or scholarships in the first year, only to remove them in subsequent years. The only way you can be prepared is by asking the financial aid administrator of each school what is required to renew each grant and scholarship in subsequent years. This is a must-do! To have a grant or scholarship removed completely by the college after the first year can put your family in financial jeopardy.

PLUS Loan Maneuvering

Some financial aid awards may add loans together with grants and scholarships, or in some cases not even use the word “loan” to describe the award given. You may see award letters with grants and scholarships, the student’s Stafford loan, and the big Parent PLUS loan at the bottom, but guess what? The total amount of that award just happens to equal the entire cost of attendance on the award letter.

I’ve worked with families who believed that their entire cost of college was covered by the college and did not understand their loan options. At a 4.264% origination fee and 7.0% interest, that would be a huge mistake; a college loan for 11.264% is NOT a good deal!

Have a question or need some advice:  Schedule a complimentary call with us.



9 Things You Should Research Before Applying

Hopefully, high school juniors will begin to look at potential colleges now, and some of the critical factors they will evaluate may include the look and size of the campus, quality of campus life, honors and study-abroad programs, fraternities and sororities, and athletic programs.

However, before the student finalizes their choices, here are nine essential factors they should research:

1) Availability of your College Major

At Peachtree, we have found families that use a career pathway approach do not become part of the 33% of students that transfer colleges due to not identifying potential majors before applying.

Never assume your college of choice offers every possible major, especially if you have a specialized field of study. It’s crucial to check the list of majors at each college.

Also, at many colleges, some majors are not open to all students, especially those that are extremely popular (psychology or journalism) or require talent or training (music or art).

2) Availability of Professors Teaching the Course

At most state institutions and research universities, a significant number of instructors are graduate students, and you should know how much of your class, especially in the first years of college, will be not be designated to tenured professors.

It’s ok for a graduate student to lead discussion sections, but not okay if a regular professor does not give the lectures.

Do you really want to pay top dollar for your student to be educated by a graduate student?

3) Student/Faculty Ratio

Schools with a ratio of 10 to 20 students per professor are usually better learning environments for most students. Once the student-ratio exceeds 20, you may not receive as much one-on-one attention from the professor

Also, many students in their first year need the accountability of being in classes where a teacher will notice their absence.

4) Percentage of Students Who Graduate in 4 Years

A school with a graduation rate above 80% is excellent, and a graduation rate between 60 – 80% is pretty standard; however, a school with a graduation rate under 60% is not ideal unless there is a reasonable explanation.

As an example, Kennesaw State University has a lower 4-year graduation rate given it has been a commuter school for many years.  If you looked solely at the lower 4-year rate, you might rule out this school and miss that KSU has some of the best department level majors in Georgia’s public university system.

5) Quality of the Career Placement Department

Always begin with the end in mind.  Very few students think to ask about the career placement department, but this should be an essential item on your checklist. Students should be aware of the college’s job placement services, the percentage of graduates who are employed before graduation, and which companies and organizations usually recruit from the college.

6) The Total Cost of College – Know it or be prepared to overpay

For nearly a decade, we have a saying you need a system that helps you “Know Before You Go!”  If you plan to attend college, you should know the total cost of obtaining the degree before choosing that college, and you should also research any opportunities to receive financial aid to help offset that total cost.

Knowing if the college rewards a high-achieving student, how it disperses financial aid, what grants and scholarships are available, and the average student debt after graduating are all necessary pieces of information for making an informed decision.

7) Number of Course Requirements

Course requirements vary significantly from school to school. You don’t want to find yourself stuck in courses that don’t interest you while you’re unable to take electives in areas that do interest you.

Don’t assume dual enrollment will lessen the load since many colleges have a different view on how those credits are applied.  If you are using dual enrollment as a cost savings strategy, please check with the schools on how they will credit those classes.   Many families waste a lot of their students time on courses that do not help achieve your goals.

8) Availability of Desired Classes

College enrollments have increased in the past few years, but the faculty size has not grown commensurately. As a result, there may be long waiting lists for some classes and shortages in first-year courses for students who did not register at the earliest possible date.  This is a common occurrence at many larger universities so ask how colleges are handling these problems when you visit your college choices.

9) Availability of Online Classes And Summer School

Some colleges offer online classes, which can be cheaper than traditional courses, and some students prefer to go online to take courses that aren’t in their major so they can focus more time classes in the field of interest.

Additionally, summer courses can be a great way of saving costs and fulfilling requirements.  Summer courses are usually one-third of the cost of regular semester class and should be part of your overall college plan if you want to graduate on time and save money.

These are just a small sample of the many ways a family can eliminate common mistakes in the college planning process.

If you need some help or want to learn more, please schedule a free 30-minute strategy call.


How to Get College Discounts

How to get your share of college discounts even when college costs are rising

College costs are increasing, but so are tuition discounts. The nation’s colleges and universities raised their tuition prices again this year, continuing a practice that has been making higher education more expensive for many consecutive years.

College Board reports that tuition, fees, and room and board at private colleges increased 3.4% to $45,370 this academic year.

In-state students at four-year public colleges saw their costs rise by 1.8% to $20,090 given funding cuts from lawmakers.

Deep Discounts

Many families do not realize that private colleges offer deep discounts from their sticker prices in the form of merit scholarships and other non-need based awards. Only the elite, highly-selective colleges refrain from awarding these tuition-discounts.

A recent study by the National Association of College and University Business Officers found that over 50% of incoming first-year students received discounts which reduced their tuition by as much as 40%. In many cases, these institutional funds also lowered private college tuition costs into the same price range as public universities.

With the 94% of all private schools discounting and the average discount being 46%, you should definitely consider the opportunity tuition discounts play in your situation.

Why do colleges offer tuition discounts?

It allows colleges to:

  • Increase their rating average
  • Boost net revenues
  • Improve the diversity of the student body
  • Attract legacies (students of alumni)
  • Attract better students and students from wealthy families (increase alumni contributions)
  • Compete with public university prices
  • Increase the freshman class-size

Understanding where and how to find colleges that offer these discounts is critical. It can give students the opportunity to receive a quality education while reducing their overall college costs.

When the college sets a sticker price for tuition, many higher-income families pay full price subsidizing lower-income families who qualify for financial aid. This practice is how the system has worked for years allowing colleges to attract a more socio-economic group of students or other types of students that meet the enrollment management goals for the university.

In reality, not all higher-income families pay full tuition and not all lower-income families will receive enough financial aid to pay for college.

How does it work?

Colleges arrange incoming first-year students into pools and set a range of tuition-prices based on those groups.  This process is called financial aid leveraging.  This practice is the strategic investment of financial aid funds to help campuses enroll the students they desire and achieve their desired net revenue.

The amount of income and assets a family shows on the FAFSA and PROFILE financial aid forms places them into a specific pool.  Then, the college uses a mathematical formula to craft an offer to specific students in each pool. The institution’s goal is to attract and enroll the best students based on their goals in each pool using financial aid dollars as an enticement.

Who does it help?

In other words, at a $50,000 school, an enrollment manager will take a $40,000 scholarship customarily given to one needy student in a lower-tier pool and break it into four $10,000 scholarships.  Those four $10,000 scholarships will be offered to wealthier students in an upper-tier pool.   The goal is to change their admissions decision since they are being offered a discount they never thought was possible.

So, by discounting, a school can get an additional $30,000 a seat from a wealthy family verse getting only $10,000 for a seat given to a student who has a high financial need.  Net gain $120,000 for four years if they just have one family accept (a huge windfall if two or more accept).

This money is then used to attract other students the school wants to fulfill its enrollment management goals.  By knowing what a school is looking for can help other types of families benefit from this practice as well.

“Financial aid leveraging” is a game colleges play, and they play it well.

By knowing how to play the game, you can avoid paying the full sticker price regardless of your wealth.

How to Get Your Share of College Tuition Discounts

Families hoping to be considered for institutional grants must position themselves correctly to be recruited by private colleges. Proper positioning begins early in high school and involves these seven factors:

  1. Good grades
  2. Good SAT/ACT test scores
  3. A solid resume of achievement
  4. Making application early in the academic year
  5. Applying to schools which recruit the same students
  6. Identifying and applying to schools which have low-yield factors
  7. Having 6 to 10 colleges on your application list

Good Grades

Good grades are self-explanatory. The presumption is that good grades in high school will mean good grades in college and ultimately graduating from college and becoming an alumnus. As an example, a student should have a minimum of a 3.0 GPA in high school to be in the running for a tuition discount.

SAT/ACT Test Scores

The SAT/ACT college prep test scores are merely qualifiers, but colleges have no other way to compare the academic abilities of a student from Ohio with a student from California. Students should have a minimum 24 ACT or 1250 SAT test score to be in the running for institutional aid.

Solid Resume of Achievement

Throughout their high school years, students should build a solid resume of achievement and list any civic groups or community service projects in which they’ve participated. This will demonstrate to the colleges that the student is well-rounded and active in student affairs outside of regular studies. Treat this the same as preparing a resume for a job! Send a resume with the application to each school.

Making Application Early in the Academic Year

Apply to colleges early in the senior year of high school (September – December). The rule of thumb is, “the earlier, the better!” Once a particular school begins to fill the upcoming year’s freshman class, the need for a private college to offer institutional aid diminishes.

Applying to Schools which Recruit the Same Students

Private colleges often compete with each other for the same students.  These schools are more likely to offer significant institutional aid if they know the student is also applying to a competing school.

Identifying and Applying to Schools which Have Low-Yield Factors

The number of students actually enrolled divided by the number of students admitted = YIELD.

Apply to colleges which have a high amount of admitted students, but a lower number of enrolled students. Private colleges fight a constant battle to fill seats. Enrollment is key to a college’s survival! Many colleges select students for admission to their school only to have them enroll and attend another leaving enrollment managers scrambling to fill seats.

Second-tier private colleges are even more challenged because they compete with the low costs of public universities and elite schools.

As a result, the student is more likely to receive institutional aid from private colleges with a low enrollment yield percentage.

Having 6 to 10 Colleges on Your Application List

Students should apply to a minimum of 6 to 10 colleges. At least four should represent private colleges which compete with the student’s first-choice college.

Applying to several colleges also gives the student the opportunity to hopefully receive institutional aid from one college.  This award can be used to ask for a similar or better award from the college the student would prefer to attend.

Bottom line:

There are two prices for college that families pay:

  1. A price for families that have a financial gameplan;
  2. and a higher price for those who do not.

Obtaining an in-state tuition cost for a private college is just one of the many strategies you should consider. If you need a college funding gameplan or want to learn more, please schedule a free 30-minute strategy call.


Career, Major, College

For the last 10 years, we have been educating students and parents on the value of developing a career pathway that will help identify majors of interest to help your student build the best college list.  Colleges want you to focus on getting in, we as parents should want the end goal – setting our students up for happiness and success in life by helping them understand great career pathways that fit them.

The Right Starting Point

Stephen Covey was right with famous Habit 2 in Seven Habits of Highly Effective People: Begin with the end in mind.  The wrong focus could cost you big money.

The cornerstone of your college admissions process should always be focused on finding the best career pathways for your student that will help them select the right colleges based on those majors not the name of the schools.

Great news, it is never too late and even if your student is in college or still in the application process, you have tools and time to get this right.  See the data below to give you a little more insight into the value of finding a career pathway before picking a college.

The Data

A study by the U.S. Federal Reserve found that half of the people under 30 with bachelor’s degrees wonder if the money they spent on college was worth it. It’s a stunning finding in the Report on the Economic Well-Being of U.S. Households in 2017.

Although the unemployment rate among young college graduates has fallen to pre-recession levels at 5.3 percent, it is still higher than the 4.3 percent rate of 2000. And even though unemployment has declined for these young college graduates, the “underemployment” rate, or students working in jobs that do not require college degrees, has risen dramatically.

The New York Federal Reserve reported in April that 42.5 percent of recent college graduates are underemployed. While only 17 percent of industrial engineers are underemployed, some 57 percent of liberal arts majors and 49 percent of biological science majors are underemployed.

Furthermore, William Emmons, an economist with the St. Louis Fed, suggests that so many people now go to college that competition for jobs is intense and graduates should not expect the significant pay increases in salary enjoyed by graduates in the 1990’s.

This competition is the harsh reality for young people nationwide and one reason student loan debt is now at $1.5 trillion.

Upcoming high school seniors will weigh a multitude of factors when choosing their colleges this fall. And the total cost of attending will be at the top. Students may find that their dream school is more expensive than they can afford and should choose an alternative option.  Department level at a University, in the majority of cases, is more important than the name on your diploma and a better solution to put your student on the path of success in life.

The Solution

If you need the assistance of an experienced college financial planning expert, please schedule a free 30-minute strategy call. We may be able to save your family considerable money on your college expenses and set your student up for success.


FAFSA Checklist

It’s FAFSA® time again and starting October 1st, 2018, new seniors in high school can file their FAFSA® forms for the 2019-2020 college year using their 2017 IRS 1040 data. Although both the student’s and parents’ income reported on the FAFSA must be taken from tax forms from two years prior (2017), assets are still reported as of the time the FAFSA is filed, so there is still time to plan.

Every year, families go through the tedious process of filling out the FAFSA and CSS PROFILE in hopes of getting enough money to make college affordable for their children.


  • Be aware of the deadlines for filing the various application forms required by each college. Missing a college’s financial aid deadline can result in a reduced or zero offer of financial aid from the college.
  • Know which application forms (FAFSA, PROFILE, etc.) are required by each college.
  • Know the application form deadlines for each college that the student is interested in attending.
  • Electronically file the application forms, if possible, to speed up the process and keep the student at the front of the line for first-come, first-serve financial aid. Electronic filing will also ensure that the application form is received.
  • Since some types of financial aid are first-come, first-serve, especially at private colleges, it’s important to submit the application forms as early as possible.
  • Estimate tax return numbers to meet college financial aid deadlines or file early to be in line for the first-come, first-serve sources of financial aid.
  • Apply for financial aid even though the client may not qualify because he must file to be eligible for a Federal PLUS loan and file an appeal. Also, some colleges will not consider the student for future financial aid if he/she did not file the application forms in previous years.
  • Know the application form deadlines for the student’s state of residency. To qualify for state financial aid programs, the student must meet the application filing date.

However, even if the student is awarded grant and scholarship money, many families still go into considerable debt or even raid their retirement funds to pay their college tuition bill.

There are many financial strategies which can help you cover college costs without interfering with your retirement fund. These strategies include:

  • Financial aid strategies – Minimize your EFC and maximize your financial aid eligibility
  • Loan strategies – Reduce your education debt to avoid jeopardizing your current budget, credit rating, and retirement
  • Investment strategies – Uncover “hidden costs” that can be converted to real dollars to help fund college costs
  • Cash flow strategies – Find potential areas of cash flow improvement in your investments, health costs, insurance costs, mortgage costs, and current living expenses, all which can be used to help fund college costs

If you need the assistance of an experienced financial advisor to develop a college funding gameplan for your family, schedule a free 30-minute strategy call. We may be able to save your family considerable money on your college expenses


The Most Common Financial Aid Questions

Financial Aid:

The Eleven Most Common Questions

Financial aid season is a few weeks away, and we’ve handled many questions about the subject over last ten years. To make things easy, we have included a free reference guide for completing the FAFSA and our eleven most frequently-asked questions about financial aid:

I make too much money to qualify for aid. Should I apply for aid regardless?

Always! Most families think they don’t qualify for financial aid and prevent themselves from receiving it by merely failing to apply. There are also a few sources of other assistance that could help a family fill a funding gap, such as unsubsidized Stafford and PLUS loans, which are available regardless of need. Some schools require it to be eligible for certain other types of scholarships. Since the Federal Student Aid (FAFSA) is free, there is no excuse for not applying.

Do I need to be admitted to a particular university before I apply for Aid?

No; you can apply for financial aid any time after October 1st. To receive any funds, however, you must be admitted and enrolled at a college or university.

Should I reposition my assets to get more financial aid?

It depends on a family’s expected family contribution (EFC), but most importantly, the school selection will drive your financial aid strategies (lowering your EFC).  Many families can reduce their EFC, but it doesn’t matter since their school selection does not warrant a financial aid reduction strategy.  If you are looking into this type of strategy, you must know how a school awards aid and how much of it is will consist of grants and scholarships (FREE MONEY) verse loans/work study.

Do I need to reapply for financial aid every year?

Yes, most financial aid offices require that you apply for financial aid every year. If your financial circumstances change, then you may receive more or less aid. You will receive a “Renewal Application” after the first year of filing that contains information from the previous year’s FAFSA. Note that if your situation changes, your eligibility for financial aid may vary significantly, especially if you have more or fewer family members in college. Renewal of many financial aid packages depends on earning a specific number of credits or achieving a certain GPA.

How do I apply for a Pell Grant and other types of federal need-based aid?

You must submit a FAFSA application form. To indicate interest in student employment, student loans, and parent loans, you should check the appropriate boxes on the FAFSA. Checking these boxes does not commit you to accept these types of aid, as you will have the opportunity to accept or decline each part of your aid package later, but leaving these boxes unchecked will not increase the number of grants you receive.

Are my parents responsible for all of my educational loans?

Only Federal Parent PLUS loans. Parents will be responsible for other loans if they co-sign on a loan and you are under 18. In general, students should be responsible for repaying their educational loans. If your parents or grandparents want to help pay off your loan or if your loan provider provides an electronic payment service your parents can agree to have the payments deducted from their account.

Why is the expected family contribution listed on the Student Aid Report (SAR) different from the family contribution expected by the college?

The federal formula for computing the expected family contribution is different from the formulas used by many universities. In particular, the federal formula does not consider home equity as part of the assets, while many private colleges do consider home equity for their institutional funds.

Do I need to begin repaying my loans if I take a leave of absence?

No, not immediately. The direct federal loan has a grace period of 6 months, and the Perkins loan has a grace period of 9 months before the student must begin repaying the loan. When you take a leave of absence, you will not need to repay your loan until the grace period is over; if you use up the grace-period before you graduate, you’ll need to begin repaying your loan immediately after you graduate. It is possible to request an extension to the grace period, but this must be done before the grace period ends. If your grace-period runs out in the middle of your leave of absence, you’ll need to start making payments on your student loans.

I received an outside scholarship. Should I report it to the financial aid office?

Yes. If you are receiving any financial aid from university or government sources, you must report the scholarship to the financial aid office. Unfortunately, the university will adjust your financial aid package to compensate. Nevertheless, the outside scholarship will have some benefits; at some universities, outside scholarships are used to reduce the student loan level.

Are work-study earnings taxable?

Yes, the money earned from Federal Work-Study is generally subject to federal and state income tax, but exempt from FICA taxes (provided you are enrolled full-time and work less than half-time). The student should be careful to report amounts based on the calendar year and not the school year.

Why would I take a Direct Federal Loan if I can pay the entire college bill?

Guardrails, financial education, and accountability!  The direct federal loan will be the only loan in the students name solely making it a great tool to use as leverage to make sure your student achieves the families agreed upon college objectives, hopefully graduating in 4 years.

Think about it; colleges don’t give you a contract promising to get your student to study, get them to class and be responsible with your money.  With this loan, your student now has “skin in the game,” and it will be possibly one of your last teaching moments about money with your student.

The financial aid and college admissions can be both confusing and complicated.   Download your free reference guide for completing the FAFSA to make it a little easier.

If you need the assistance of an experienced college financial planner to develop a college funding game plan for your family, please schedule a free 30-minute strategy call with me.


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