College Planning

Hi, this is Dave Zaegel.

Let’s talk a little college planning today.

I was recently talking with a gentleman about his college planning.

And he made the comment slash question, he said, hey, there’s really no silver bullet then to college planning, is there?

I said, oh absolutely not.

There’s definitely no one silver bullet that’s going to solve all of the college planning questions and issues and opportunities.

It really is a combination of multiple different pieces and how you put them together.

And how well you plan in advance to give yourself enough lead time to then execute on those strategies.

Let’s look at a couple of examples of different ways that people in different situations can effectively plan to reduce the cost of college.

I’ve broken this out between merit based and need based.

So you can see here’s low merit based, high merit based.

And low need based, high need based.

So when we talk about merit based, we’re really talking about the credentials going into college.

Whether it’s grades, test scores, activities, things like that.

Things that you are doing personally to get yourself a high merit in the eyes of a college.

Need based is more income that you have available to pay for college.

And you’ll hear a lot of different things about who has the assets or the income and all this stuff.

And shifting income to kids or not and all this stuff.

And a lot of that’s very important.

But let’s realize that the overwhelming majority of what determines a student’s need is the parents’ income.

There’s not even a close second.

It’s parents’ income.

So you’ll hear a lot about like I said shifting money between parents and kids and all that.

That’s great.

It can help.

Parent income is still the biggest determinant of need based aid going into college.

So, merit based, need based.

And as we look at these two, if you’re in a situation for example where you are high merit based, but low need based, meaning that maybe you have a lot of money but the student has good merits and good grades, a lot of times people in this situation will say, well I don’t qualify for any financial aid.

What’s the point in doing all this college planning?

Well there’s still a lot that you can do to help with college planning.

You can look at merit based aid.

That goes a little bit hand in hand with school selection.

And understanding what schools might still give you scholarships, how schools will compete with each other, cause people don’t understand that that’s a big piece of how you can save money on college is by getting schools to compete and knowing where to apply and how to play that game a little bit.

Because schools are, they’re not for profits but they’re still run much like a business where they have to meet certain enrollment numbers.

And they have to keep certain standards.

That way they can continue to look better.

It’s a little bit of a game, but you can benefit from that game.

It can be tough to know year for year who’s going to be willing to compete, but a particular school might be having a rough year enrollment-wise and you might get quite a nice benefit from going there if you know what to keep an eye out for and how to get the schools to compete amongst themselves.

So, still even in this situation where you’re low need, high merit, there’s still plenty you can do for planning with school selection.

Also with test prep.

And also by planning for your own taxes.

Making sure you’re getting education credits, and also helping to reduce your income as much as you can to maybe get some need based aid if that’s even possible.

If you’re in a situation where you’re low merit, low need, meaning you have a lot of money so you don’t qualify for financial aid, but you don’t have a whole lot of merits to get you into different schools, then we’re going to look again at test prep.

Because this is an important piece where just by improving test scores by a couple points, that can get you a lot of different financial aid from various institutions. That varies widely.

We’re not gonna cover all that.

But just realize that test prep can be a very important piece to getting a lot of scholarships and a lot of money from schools that you wouldn’t otherwise get.

And you wouldn’t think a point or two on an ACT would matter that much, but it does big time.

So again, test prep, tax aid, school selection.

And if you’re in that low merit, low need world to where you might not have an easy time getting into schools, but you can still get a very good education and reduce your costs significantly if you’re planning for these in advance.

Again, especially the test prep and getting schools to compete.

That’s gonna be key areas.

If you’re in the high need world.

And you have a low merit.

So this is a case where you might not have as much money and so the college is willing to give you a lot of financial aid, but you don’t necessarily have great test scores or great grades, then we’re looking at trying to get % of your need met.

Cause there are schools out there that will take care of paying for all your financial aid need.

So you want to find those schools.

Make sure that we’re choosing the right schools to apply for.

We also want to make sure that we are trying to reduce your expected family contribution, that’s EFC.

There’s different ways you can do tax planning and what not to try to figure out how do we reduce this over time.

Especially if you’re planning ahead far enough.

And so the more we can reduce that, the more financial aid that we can get from the institutions.

Very important also is that we make sure that we are applying timely.

We see a lot of people miss application deadlines.

That’s not okay.

Especially if you’re in a low merit environment and you need to make sure that you’re getting into schools that will give you the aid.

Definitely want to make sure that we are applying timely.

If you’re in a high need, high merit.

So you have really good test scores, good grades, good accomplishments, but you don’t have a ton of money, you’re actually in a good spot.

A lot of institutions will pay for your education completely.

If you can get in of course.

So you can apply to some very prestigious schools and they will take care of a lot of your need.

So we’re gonna look for merit based aid since you have high merits.

We’re also gonna look at schools that we know will help you meet the need.

And then again, we’re gonna focus on test prep to help you get into those schools.

And then we’re gonna look again at the expected family contribution.

How do we reduce that to make sure that you’re getting the most need based aid you can.

So, we’ve just spent about seven minutes going over a whole bunch of different scenarios.

And the point of all this is that to go back to what we said earlier, there is no silver bullet in college planning.

You can’t pick out just one thing and say, Aha, here it is.

We’re done, we got cost of college saved for.

It really is looking at your particular situation and how does it fit?

And what strategy should we be using in combination to save you a ton of money on the cost of college?

So if you’re out there searching for the silver bullet for college planning, sorry, it’s just not there.

We really have to look at this well in advance to understand what we’re going to be planning for and then what strategies we can use to help you save often times tens of thousands, sometimes six figures on the cost of college if you can execute on these strategies and leave yourself enough time to do so.

So hope this helps at least give you some ideas of where you might fit and what you might be looking for.

If you’d like our help, of course we’re happy to help.

If you have questions, leave me a comment or message me directly.

I’m happy to help.



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