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Early Strategies for College Funding

 

“Playing the ‘Long Game’ –  Early Strategies That Pay Off In College Funding”

Dear Parents,

One of the things that we hear from a number of parents over and over again – especially as the time comes for their child to graduate from high school and head off to college – is the refrain “I get the feeling that we REALLY should have started this whole thing sooner.”  Unfortunately, in many cases, we tend to have to agree with them.  If experience teaches us anything through working on college funding year after year, it is that the earlier a family gets started on things, the more favorably things seem to end up as the college years begin!

That is not to say that we cannot assist families who have procrastinated a bit (or a lot), but there is no question that things can sometimes get a lot more complicated and challenging in those cases.  We endeavor to help all families who seek our assistance, but it can be a big relief on all sides if families have decided to start early and “play the long game” when it comes to preparing for the money side of their child’s college experience.

It should be pretty clear that college costs are definitely not on the decline in the United States, so with that reality in mind, it is becoming increasingly important for folks to start their college funding process as early as possible.  Undergraduate student loans will be at 5.05% and Parent Plus loans will be at 7.6% as of July 1, 2018.

Over time, we have learned a number of aspects of the college preparation equation that can be started early on – and also have seen how families can benefit from making the decision to stay ahead of the game by starting early.  The “long game” can include elements that extend throughout the high school years, or even before, and other elements that need to be started as early as possible, but within a specific window of time.

In an ongoing quest to help with this effort, this month’s newsletter covers a number of different things that families can consider as part of their planning for a college future for their kids.  Some of them may be things that you can consider now, others will apply directly to the year in which a child applies for college and financial aid, but all of them are important.

One thing you will note is that we make frequent reference to consulting with a College Funding Advisor – and this is because these things require a firm grasp of the process.  There are families who can manage without our help, and some certainly do.  However, we have a track record of dealing successfully with these financial elements and optimizing them for families in a way that most people cannot.  Should you have any specific questions about the tips below, please do not hesitate to call us.  We will be happy to help in any way that we can.

Tip 1: File The FAFSA Early

The old saying that “the early bird gets the worm” bears particular weight when it comes to financial aid. There have been new and positive changes regarding the FAFSA in the past year. For one thing, parents are now able to file on October 1st rather than waiting until January 1st. This new rule will make it infinitely easier for parents applying for next year to get a start on their financial aid process and stay ahead of the game.

It is also important to note that there are schools that distribute aid money on a first-come, first-served basis. They will continue to distribute until those funds are totally exhausted. Additionally, there are currently seven states that currently have a first-come, first-served financial aid policy for state aid. These states are Alaska, Illinois, Kentucky, North Carolina, South Carolina, Vermont, and Washington.

If you are submitting early, this can mean that you need to use some estimates on your application.  Because of this, you simply need to go into the website later to update the estimated information with the more accurate numbers as soon as you have them. The IRS Data Retrieval Tool, however, is also available to insert current data without the need for you to enter and update the information manually.

There are also some schools that will want to use the additional “CSS Profile” form to assess financial aid eligibility. This application requires more information than is necessary for completing the FAFSA. The CSS Profile will also sometimes have a deadline that is different than the FAFSA, depending on the school. Because of this, it is important to check all the details for each school very carefully.

Tip 2: Make Wise Money Decisions

When the FAFSA formulas are applied to your child’s assets, the government can and will assume that a significant portion of your child’s funds are eligible for use for college. The rate at which the assets held by the parents is assessed is maxed out at a much lower rate. Because of this, family funds should be managed in a beneficial way so that they are not placed in the formula and unduly assessed at a much higher rate.

This is something that your college funding advisor can discuss with you, and his or her advice can make a huge difference!  He or she will be able to explain which options are the most beneficial for you and your child, and which will affect your bottom line most favorably.  Learning where funds can be placed and protected will frequently allow a college student to maintain some assets intact while at the same time making him or her eligible for a more substantial financial aid offer.

If your child is very young then you can save in parental savings accounts instead of accounts set up in your child’s name. This will further protect your child’s funds when it comes time for those funds to be assessed in the financial aid formulas.  Discuss these details with your College Funding Advisor for best results.

Tip 3: Explain Yourself – If You Need To

Unexpected things can happen in life – an accident, a death in the family, a divorce, an illness. These are all things that can occur and can cause a disturbance in one’s life and may result in the need to explain extenuating financial or personal circumstances. If you are the main breadwinner in the family and were unexpectedly injured and it required a long recovery period away from work then this is something that could be explained on your FAFSA application. There are many questions on the application on the form but there isn’t a section that is labeled “Extenuating Circumstances.”

For example, if you or your spouse were laid off from work then you could explain this to them in a detailed letter. It is important to provide as much documentation as possible to bolster your claims for consideration. For example, a notice from your company detailing recent layoffs would be the right type of backup information that would be useful to be included.

Tip 4: Spend Some Money – But Not Too Much

Having a lot of money in your savings account is always a good thing!  Well, OK, except for when you are applying for financial aid with the FAFSA. Since the assets will be assessed at the time of filing, sometimes it’s a good idea to whittle some of those assets down so that you have a lower asset base to be assessed when you file. If you have credit card debt, this would a good time to pay it off. Or, you could pay more towards your mortgage. There are a number of options available, and it is good to discuss them with a College Funding Advisor to see which best suits your situation.

Remember that there is a considerable amount that can be sheltered in the formula before it is assessed (approximately $50,000) so this tip is most worthwhile for those who spend a lot and save a lot.

Tip 5: Pay Attention To Your Assets

There are many things that must be reported on your FAFSA. But, not EVERYTHING needs to be reported. For example, bank and brokerage accounts, CDs, mutual funds, college savings plans, stocks and bonds, real estate and other types of investments are included in the reportable assets category.

There are, however, quite a number of non-reportable assets that may provide some much needed flexibility. These non-reportable assets are the equity in your home, annuities, IRAs, 401k plans and other accounts like that and a small business that is owned and operated by your family.

If you have some concerns, you could consider moving some assets over to the non-reportable category. This, of course, can be discussed in detail with your College Planning Advisor who will be able to show you the best ways those assets can be strategically placed in order to maximize your ability to receive aid.

Tip 6: Be Honest!

There are many ways to strategize and plan the best ways to maximize your child’s financial aid benefits. However, being dishonest in any way on the FAFSA form is definitely not the way to do it. Misreporting, misleading or lying about assets or income is a type of fraud and can result in a fine of up to $20,000.

In addition to the fine, any financial aid rewards are forfeited and there is even a possibility of prison time. Needless to say, it is just not worth the risk and it is definitely not the right thing to do. Working with a trusted advisor will result in the best results and will give you peace of mind at the same time.

We have other ways of helping the parents of college-bound students to learn important details regarding the fiscal preparations for college or university studies.  One way we manage this is via our in-person College Funding Workshops.  These workshops, featuring information directly from the finest college funding professionals around, offer a wonderful service to those who are seeking pertinent details regarding the costs of higher education.  These presentations are kept both timely and focused, with current information that is abreast of any recent changes that can affect rising college students and their families.

Our workshops do not require any entrance fee, but to keep groups to a manageable size we do insist on reservations in advance.  If you would like to know more about upcoming College Funding Workshops near you, please contact our workshop crew at 614-934-1515.  These helpful folks can provide all the necessary information about content, workshop locations, scheduling, or any other workshop questions.  They can also assist with reservations, should you wish to make one.

Aside from the workshops, we also provide a written report for parents who prefer to receive their college financial information in written form.  We have titled this report “Nine New Ways To Beat The High Cost of College.” Just like the workshops, it is available to all parents free of any cost or obligation.  To receive a copy of “Nine New Ways To Beat The High Cost of College,” you can call a member of our team at 614-934-1515 and we will send one to you right away.

Until next month,

 

 

 

A Must Read for College-bound Athletes

I ran across this article and feel it is not only relevant but enlightening.

Dear Prospective Student-Athlete,

I received your introductory two-line email and read through it. I must say your first sentence was painfully familiar as you introduced yourself by first name only. I assumed if you were trying to make an impression that you would have paid more attention to punctuation, but my assumption appears incorrect. While your opening email failed to identify your last name, what year in school you are, where you are from, or what position you play, you managed to include your most pressing question as to whether our team is “giving out scholarships”.

A week later, I received a second email with full color resume attachment including your action photos, and a variety of links to related newspaper articles. Each of these items were compiled in an orderly fashion and sent out directly from both your parents’ emails.

While it took a bit to thumb through the long list of your impressive extracurricular activities, please thank your parents for putting this packet together and understand that it would have been far more beneficial for our staff to speak to you personally by way of an old school phone call. As my staff sent correspondence to your personal email, we have received only a return from your parents apologizing and explaining that you are simply “too busy to answer”.

As a word of advice, while many college coaches support parental enthusiasm, initiative taken by the athlete is crucial if you are serious about connecting with a quality program. Our staff explained to your parents that we would prefer to connect with you directly, but they continue to respond on your behalf. This will be a red flag for any coach, so please be aware of this feedback being a possibility from any of your other options.

When you visited the campus with your parents, the first thing I noticed is that they did most of the talking for you. However, when you did speak, you were openly correcting and verbally scolding them when you deemed their information sharing inaccurate. As a coach, an athlete who displays disrespect, especially to their parents, is a red flag in the recruiting game of analysis and observation.

As we toured the campus I took copious mental notes including a short ponder on how you were too busy for a returned phone call or email to our staff yet, your email-ready smartphone was all but attached to your hand the entire unofficial visit.

Upon your departure, our staff reviewed your stats, strength numbers and transcripts. All are impressive, but of course we had to see you compete. Unfortunately, the highlight film you left us with that was edited to perfection to omit mistakes, was unhelpful.

Despite my reservations, I made the trip to watch your game live so I could determine if your resume matched your talent. After observing only a few minutes of the team warm-up, I noted that you were clearly the most gifted on your squad. However, your talent was unfortunately overshadowed by the lack of energy and effort you displayed.

At halftime, the team huddled up and as always when observing recruits, I honed in carefully on your demeanor and body language. I watched you walk in the opposite direction of your teammates and take a seat on the bench away from the group. You did not return to the team circle until prompted by your assistant coach. As the head coach spoke, I observed you break off into a private conversation with another teammate, rather than offering the coach your attention.

In the second half, when you scored I noticed you waited for the other players to huddle around you and celebrate. In contrast, when a teammate scored, you retreated to your position without acknowledging or congratulating them.

You added much depth in the scoring category with some impressive runs but when you made mistakes you became vocal and eager to point out where your teammates needed to improve. You had moments of greatness but they were followed by sporadic lulls of half-hearted effort.

As you are the team captain, I found it disappointing that you did not contribute to the post game team discussion. I watched as your mother brought over snacks and saw that you made no effort to assist her in bringing those large containers of cupcakes from the bleachers out to your 40 other teammates. Last, as the rest of the team broke the field down and put equipment away, you found a quiet spot on the empty bench to text on your phone.

Perhaps as a high school-age athlete, these are behaviors you are simply unaware of. In a world where you are being taught the X’s and O’s of mastering a sport, so much practice and dialogue in character building is diminishing. I realize that you have been told repeatedly by many of your previous coaches that you are amazing in your sport. However, players like you, with similar demeanor are a dime a dozen.

Since you have been a star in your sport for quite a while with coaches and parents who have clearly allowed these details to slip through the cracks also, you are not entirely to blame. However, please bear in mind, none of this makes you a bad person only potentially, a bad teammate. The attributes I am judging you on happen to be far more important than any of your trophies, all-star selections or travel team accolades.

There is no doubt you are talented. However, from my experience, here are the 10 things I know about athletes like you.

1. Your incredible talent is the same talent that in your sophomore year of college will suddenly suffer an ego blow when a new freshman arrives with equal or greater talent. Battling your feeling of ownership over your position and feeling threatened is inevitable.

2. Rather than working hard to better your game, you are more likely to be the athlete that is constantly comparing your success to others rather than focusing on growth for yourself. This will become a tedious and exhausting process for your coaches and team to constantly have to reassure you of your self worth and value.

3. As those around you put in the work, rather than be grateful to be surrounded by a committed group of individuals who share common goals, you are more likely to resent them and seek out allies to split the team support in half and create locker room chatter.

4. In the event you see time on the bench you may not be emotionally prepared, willing to engage or support the teammate who is starting over you. Also, it is likely you will find it challenging to support the success your team obtains when they win without you on the field.

5. When you become unhappy with your own performance you are more likely to blame your coach, teammates or anyone other than yourself.

6. Since your previous coaches and adult guidance have fallen short in emphasizing the importance of accountability, you will likely be that much more of a challenge for our staff and program to work with.

7. Aside from your time in college, the end goal of being a student-athlete is to get a degree while playing a sport you love. If your goal as an athlete-student is to get a starting position while earning a degree you tolerate, your goals will be out of alignment with the program from the start.

8. Athletes who truly work for their program become stronger people who work well with others and are able to admit their weaknesses in order to improve. If I am forced to spend your first two years of college trying to catch you up on late lessons of being accountable and respectful, it is probable you will spend your second two years resenting me which ultimately leads to an ambush of bad senior exit interview feedback.

9. Athletes are treasured in the workforce and therefore, you are likely to land a job after you graduate. However, if you fail to get along with those in our program you are prone to carrying this over into your professional life. If you are unhappy with your boss or coworker you will be more likely to find yourself unequipped to work through your problem without soliciting complaining or quitting.

10. By choosing not to recruit you, I am saving my team culture. On the bright side, perhaps if you are rejected this will be your first opportunity to face adversity and grow from it.

I recognize that it is possible you could change with guidance by coming to our program. However, the investment on my end presents high risk to the health of team morale, my livelihood and sanity. In my younger coaching years I believed far too often that many like you were capable of transformation. Over time, without consistent support from the powers that be, I have lost my fair share of those battles and have watched colleagues lose their jobs when athletes like you are unsatisfied. I am a great coach who takes so much of my success and failure home with me at night and am actively making the choice to choose ethics and attitude over talent.

Today I crossed you off my list as a potential recruit despite your obvious talent. Over the thousands of hours I have spent away from my family recruiting, answering emails, calls, official visits, watching game film and logging contacts and evaluations, I have learned from my mistakes. As a result, although the athlete playing right next to you has half the stats and three quarters of your speed, they are supportive, determined and selfless. This kind of athlete, will be our next signee.

Please take these words and advice into consideration and I wish you all the best.

Coach

Source: Fearless Coaching, An Open Letter May 16, 2016.