copy write strategies for college, inc. 2015 college planning & funding strategies copyright...
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Copy write Strategies For College, Inc. 2015
College Planning&
Funding StrategiesCopyright Strategies For College, Inc. 2015
Did You Know?
• 68% of Americans are unhappy with the way they financed college
• 54% wish they had attended a less expensive school
• 27% wish they had delayed going to college so they could have saved more money first
Source: Journal of Accountancy, April 2015
12 Years of InflationTuition 2003 2015 % Increase
Northeastern $24,467 $43,440 +77%UMASS $7,482 $13,443 +80%Boston Univ. $28,906 $46,664 +61%Univ. of Vermont $22,688 $37,844 +67%Univ. of Michigan $25,733 $41,906 +63%Furman Univ. $22,712 $44,668 +97%
Why Worry About Funding Higher Education?
Data from National Center for Education Statistics (https://nces.ed.gov/collegenavigator/), and the Princeton Review, 2015 edition
2013 2014 20150
20
40
60
80
100
120
140
160
180
9
71
160Colleges With Costs > $60,0002013 - 2015
Why Worry About Funding Higher Education?
Source: Strategies For College Annual Update, 2015Princeton Review, The Best 377 Colleges, 2015
Do you know how bad the 4-Year graduation rate is?
39%
Why Worry About Funding Higher Education?
Because $1.2 Trillion in College Debt Is Crippling Students, Parents And The Economy
Source: Forbes, August 7, 2013
Why Worry About Funding Higher Education?
Source: Fidelity College Grad Study, 2013
Why Worry About Funding Higher Education?
50% increase in use of retirement funds to pay for college
Source: April 2013 survey by Fidelity Investments
Spending Plans After College?
Source: Upromise survey, May 2015
We will continue to send our children to college!
However …
Key Questions:
How Much Will It Cost Today?
What’s more important? Cost? Clout?Both?
True or False?
• Not a single Ivy League college awards merit scholarships
• Retirement Account balances are required to be reported on FAFSA in investments section
• There is a criminal penalty for knowingly submitting false or misleading info on FAFSA
Develop a PlanStart EarlyRetirement FirstRemain Open-MindedDon’t Refuse OPMDIY May Not Be Best OptionProtect Family Financial Well Being
The Effective MindsetProvide, Protect, Preserve
Paying For CollegeEffective Mindset Understands This
Your Hard Earned Money (YHEM) Past (assets, investments, savings)
• Present (income) • Future (loans)
• Students• Parents
Other People’s Money (OPM)• Financial Aid Grants• Merit Scholarships• Athletic Scholarships• Tuition Discounts• Other unknown sources
Colleges will calculate the EFC (Expected Family Contribution)
If the EFC is less than the Cost of Attendance, the family is “aid eligible”
If the EFC is greater than the Cost of Attendance, the family is not “aid eligible”
The Effective Mindset Seeks Understanding
Always, Always, Always…
RUN THE NUMBERS!ALWAYS CALCULATE YOUR EFC
LEARN HOW TO REDUCE YOUR EFC
Expected Family Contribution (EFC)
Parent IncomeMax assessment = 47%AFTER ALLOWANCES
Student IncomeFM assessment: 50%after first $6,130IM assessment: $1,850 min, then parent rate.
Parent AssetsMax Assessment: 5.65%AFTER ALLOWANCES
Student AssetsFM assessment: 20%IM assessment: 25%
Parent Contribution + Student Contribution =
Expected Family Contribution
Case Study #1
• Family of 4 (1 in college), lives in MA• Some key factors:
– Income <$100,000 per year– Home Equity $655,000– Business Value 1) $1,000,000, 2) $100,000 – less
$600,000 liabilities
So what does the EFC look like?
EFC Calculation
RESULT?
• Based on an early read of the family’s EFC, the student is now looking only a schools using the Federal Methodology – potential savings:
$160,000!
And Then…
• CPA had a GREAT IDEA! Take a dividend – TAX FREE!
• Saved roughly $18,000 in taxes• Lost roughly $38,000 in college grant eligibility• That’s a -$20,000 decision!
• Still a “GREAT IDEA?”
Case Study #2
DO NOT BE DECEIVEDBY STICKER PRICE!
Cost of Attendance
EFC from FAFSA
Financial Need*
Average % of need met with grant aid**
50% 60% 85%
Estimated Grant Aid $7,500 $15,000 $38,250
Estimated GAP
$7,500 $ 10,000 $6,750
Potential Net Cost of College
$17,500 $20,000 $16,750
$25,000 $35,000 $55,000
$10,000 $10,000 $10,000
College A College B College C
$15,000 $25,000 $45,000
Don’t Be Deceived By Sticker Price –Is it possible to be eligible at one college but not at another?
* Maximum need based aid eligibility.** For discussion. Does not reflect any particular institution’s statistics.
Next: Getting Funding
• Now that you understand how to pay for college… how do you make sure the aid will be there?
• Need to understand the concept of
Enrollment Management
Enrollment Management & Financial Aid LeveragingIf you are looking for money, where is the risk? The opportunity?
Can afford 75% – 100% COA
Can afford 50% - 75% COA
Can afford 25%-50% COA
Can afford 10% - 25% of COA
Top 25%
2nd 25%
3rd 25%
4th 25%
Student rank inadmittedstudentpool
Ability to Pay: College’s assessment of FAFSA and/or CSS Profile
25
A B C D
4
3
2
1
Enrollment Management & Financial Aid LeveragingIf you are looking for money, where is the risk? The opportunity?
Can afford 75% – 100% COA
Can afford 50% - 75% COA
Can afford 25%-50% COA
Can afford 10% - 25% of COA
Top 25% Merit $$$$(If available)
Grant $$$$ Grant $$$$ Grant $$$$
2nd 25% Merit $$(If available)
Grant $$ Grant $$ Grant $$
3rd 25% Full Pay(Merit??)
Gapped - Gapped + Gapped +
4th 25% Full Pay Gapped - Gapped + Gapped +
Student rank inadmittedstudentpool
Ability to Pay: College’s assessment of FAFSA and/or CSS Profile
26
A B C D
4
3
2
1
Objective Assessment of Applicant Profile & Competitive Position
Objective Assessment of Applicant Profile & Competitive Position
Well Thought OutFinancial StrategyFor Each College Year
Well Thought OutFinancial StrategyFor Each College Year
Family & StudentPriorities Addressed“Best Fit”
Family & StudentPriorities Addressed“Best Fit”Win - Win Win - Win
Strategies For College, Inc.“Integrated College Planning”
Strategies For College, Inc.“Integrated College Planning”
The Prime Objective
Affordability + Getting In + Fitting In + 4 Year Finish
Quick Lookup Resources
CSS Profile: https://profileonline.collegeboard.comCSS Noncustodial Profile: https://ncprofile.collegeboard.comFAFSA: www.fafsa.ed.gov Federal PIN: www.pin.ed.govPrivate Scholarships: www.fastweb.comFederal Student Aid: www.studentaid.ed.govCollege Navigator: http://nces.ed.govSFC Blog & Newsletter: www.collegesearchgameplan.comSFC Member Website: www.collegesearchgameplanmembers.comStrategies For College – DIY http://www.strategiesforcollege.com/diy.php
The Beginning
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www.strategiesforcollege.com
www.collegesearchgameplan.com