Last month I was up in New England (a little business and a little vacay before the Oct crunch). I stayed just outside of Boston, not far from where I was born and pretty close to where Jill and I met (first day of college, to be exact). Coincidentally, it was move-in week and the city was brimming with newly minted, excited and anxious soon-to-be college freshman (and their equally excited and anxious parents).Thinking about it has made me nostalgic. As a parent, college drop off is one of things you plan for, imagine, anticipate, maybe dread from the time your kids are little.
In fact, if you’re reading this blog post, you’re probably thinking about your own child/ren’s college drop off. Hopefully you have been reading my emails, watching my videos, absorbing all of the information we’ve been sharing over the past 15 years. In the last email I sent, I mentioned the deadline-intensive nature of the college admissions and financial aid processes. If your have a college-bound teen, I want to remind you to take action on what you’re learning!
After all, ‘without knowledge, action is useless… but without action, knowledge is futile. So, with that in mind, I wanted to share with you a couple of stories that I think help illustrate the importance of both knowledge AND Action!
Long time subscribers might actually recall the first story. It’s from eleven years ago, but still relevant today. The story about the father of a rather brilliant, well rounded 12th grader from Connecticut. ‘Marissa’ excelled both in the classroom and out of it; and in April of 2011, we received this email from her father. Fair warning: it 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.
He was clearly in a panic; his daughter had just been admitted to her dream school and he had just awoken to the fact — literally days before the deposit was due — that he could not afford it. Marissa’s father (a do-it-yourselfer type; an accountant in fact) had made a couple of fatal errors with both Marissa’s admissions strategy and in his financial planning for college.
The first error was that he assumed that his highly ranked, highly motivated daughter would get a scholarship from any school to which she applied. But most highly selective, competitive colleges are very generous to students who demonstrate financial need, not so much for merit or talent. And Marissa’s schools did not give merit scholarships whatsoever.
The second misfire was in how he had saved for Marissa’s college in the first place. Like many families, Marissa’s Dad had used UTMAs, 529s and similar vehicles to reduce his tax burden while saving for college. While this is often a sound tax strategy, it can be very costly when it comes to demonstrating financial need. Under the Title IV Department of Education Regulations, UTMAs are the student’s assets (and are penalized at a 20% rate), while 529 plans are considered parental assets and are ‘taxed’ in the formulas at a much lower rate (about 5-6%. Marissa’s Dad had his assistant (yes, his assistant) fill out her financial aid applications.
After reviewing their forms, we estimated that Marissa’s EFC was inflated by at least $20,000 – $25,000, per year, which at Marissa’s dream school would have meant that she could have enjoyed at least $80,000 in grants over the four year period. The unfortunate ending to Marissa’s story is that although these were easy adjustments to make, by the time we heard from Marissa’s Dad (April) it was way too late to credibly do so. All of Marissa’s hard work – monumental efforts taking APs and other challenging courses, excelling outside the classroom and kicking butt on her SATs – were kind of for naught. Which was awful and worse, totally avoidable.
The second story has a much happier ending. Mathew’s parents came to us, first, for help with his older brother, and then again in September of Mathew’s 11th grade year to start working on Mathew’s plan. He was a ‘B’ student, decent ACT scores and ranked just below the 50th percentile in his class. We put together a sound admissions strategy, full of schools that while not necessarily brand names, were well known in academic and professional circles. Quite a few are considered ‘Colleges that Change Lives’.
Mathew had great results; the kind that left his classmates scratching their heads. He was accepted at 80% of the schools to which he applied. Better still, each school came back with an average merit scholarship for him of $20,000 per year before his financial needs were even considered (remember, Mathew was just below the 50th percentile in his class). When all the dust settled, Matthew enrolled in the 2nd ranked Regional College (according to US News and World Report). And he was given a total financial aid package (scholarships and grants) of $37,900.00.
Mathew’s story is pretty typical of the students who receive and take action on the information and guidance we provide. The lesson, the “aha!” moment you should take away from these stories is that, although it’s been said before, you will not derive the full benefit from all of the valuable information you’ve been receiving these past few months (years) if you do nothing with it!
Delays can not only cost you thousands of dollars, but as in the case of Marissa, it can cost your son or daughter the opportunity to attend their dream school. Needlessly.
Now, can you do this college thing yourself? Yes. absolutely you can, just like you can do a lot of other things yourself. You can practice law yourself, you can diagnose yourself on the Internet and do your own taxes. By the same token, when was the last time you did something really well the first time you tried it? What if you fill out a form incorrectly, or include an exempt asset, or apply to a ‘safety’ school that doesn’t offer a major in your child’s chosen field…or you do apply to safe academic schools, but you find out after the fact that those schools don’t have any money in their coffers to give you a discount?
We know you’re probably getting inundated with information about college from every source imaginable. And if you’re like most people, you’re so overwhelmed by all the information that you’re not sure what to do next, or you have so many unanswered questions that you don’t even know where to begin.
Well, we’d like to help! On Thursday, September 15 at 6:30pm we’re holding a free LIVE training class where we’ll be sharing with you the exact tools and techniques that we use in our private practice to help our families and their children find and get accepted to great colleges…that offer great discounts to boot.
We’re doing this live and will try to keep the ‘lecture’ short, so that we have enough time to answer your personal questions and provide you with the information that you need to take control of the college process and make sure your son or daughter is on the right path to getting into a great college that you can actually afford.
So, join us on Thursday Sept 15 (6:30pm EDT) to get the edge you deserve.
Register here now while there’s still room.