In case you didn’t get the memo, 2011 is now officially the ‘Most Difficult Year for College Applicants Ever’. I can assure you that a) this is true ‘statistically’; and b) anecdotally at least, it feels to many like it is disproportionately affecting professional, responsible, ‘middle class’ Americans. A few weeks back I issued a ‘wake-up’ call, and I hope that we’re all starting to come to terms with the reality that the college process ‘aint what it used to be.’ It is different now. Notice I said “different”, not worse, and if you properly set your expectations for today and arm yourself accordingly, then the process and the price of college will wind up being pretty similar to what an upwardly mobile, middle class American family has always paid for their children’s education.
But it”s pretty obvious that most parents aren’t planning and taking action. Why? I think it’s because we live in a trust-damaged, shell shocked, post-recession world where anything different is daunting. It breeds Fear, Mistrust, Misinformation. And More Fear. And what do most people do when they feel like this? They either do nothing at all, or they do what they’ve always done. The result – most families are not even close to maximizing their college choices or their eligibility for discounts. That means that thousands of deserving teens will continue to needlessly be forced to attend lesser colleges, never apply to schools their parents mistakenly think are unaffordable, graduate with a sick amount of crippling debt or not finish because they simply run out of money and options. That’s a crying shame and it’s flat out wrong and it’s been weighing on me for years, but it reached a ‘tipping point’ for me last week.
That’s when we got this note from a devastated and distraught Dad (not a client) who had just been denied additional aid from his daughter’s dream school, a very selective school that she had clearly worked her butt off in high school to get into, and had to tell her that he couldn’t afford to pay for it. He’s Dad # 1 in this ‘chapter’, and his email was gut-wrenching and raw: “I have a daughter freaking out at home… The price of a college education now is comical and… the struggling middle class get screwed. This financial formula that FASCA (sic) figures… is a joke. They decide that going into huge debt seems to be the American way. This country is going into the crapper.” There was more, but you get the gist. Jill was so worried about him that she reached out to his wife (remember, strangers to us from a different state) to lend support and an ear to rant to; because at this stage in the game for them, there was little else we could do to help.
Now I think we can all agree that to an 18 year-old, getting that ‘Thick Envelope’ acceptance letter to his or her dream college is quite literally the biggest thrill of their young lifetime. And as a parent, you know that the real thrill of a lifetime is seeing one of your own thrilled. So, I’m sure you all understand the sense of despair and anger in his email. Hold onto that for a second as I fast forward to yesterday and Dad # 2.
His situation goes like this: Last week a student came by himself to my college planning workshop. His history teacher told him about it. After the program, he asked us to call his father to set up a consultation with me. Impressive show of drive and initiative on this boy’s part. We scheduled the meeting, which was to have taken place yesterday. Guess who didn’t show – or call? Dad #2. We did call him, so I assure you nothing truly awful befell him. I’m pissed and frustrated for two reasons: 1) because I work really hard for my clients, and I hate that his hour could have gone to another family and 2) because the reality is, that in about 2 years time, Dad # 2 is going to be sending me an email late in April that sounds a lot like the one we just got from Dad # 1! Happens all the time. And that sucks. But it doesn’t have to be that way.
Is college grossly overpriced on paper – absolutely! Is it unfair that salaries have been stagnant for what seems like forever, or that so many of our investments are upside-down and the market is so volatile that one month can wipe out 10 years of college savings… all while college prices have risen steadily at about a 7-8% clip every year since the 1950’s? Yes it is! But you have a choice. You can rant after the fact or you can embrace the new reality and adapt. There are tools and strategies, and real world game changers at your disposal to level the playing field and make college as affordable and accessible to middle America today as it was to middle America in 1957.
And I’m going prove it to you… In the next installment.
Next week, you’ll meet Dad #3, who just happens to be my own Dad. We’ll be running an illustration on a highly selective college using actual tuition bills from 1957 through today. What it will confirm is that there really are two prices for college in 2011: ‘list’ and NET, and that if you accept this new paradigm, then what that you should be thinking about and wind up paying is NET NET the same as the price in 1957.