Broker Check

Yes, Virginia, You Can Afford College!

December 08, 2018
Share |

  What if you had to buy a new car each year for four years, at least, and you couldn’t drive them? Sound absurd? That’s the cost of a College Education. Whether you pay for a fleet of Honda Civics, Priuses, or loaded Corvettes depends on your family finances or, more accurately, on how they are perceived by the Financial Aid Office.

  College cost of attendance runs from $15,000 to $80,000; most students pay near the high end. Much faster than inflation, costs have  compounded at 5.8% annually for 20 years. 

  College Admission is a business – designed to enrich both the coffers and the academic standing of the schools:  Schools want to demonstrate they have a “diverse” student body. Bright students push up average test scores for admission (ACT & SAT).  Foreign students, funded by their governments, give the school an international flavor as well as full price. Talented athletes bring broader recognition, keep alumni and their families involved, and support “money sports” (football, basketball) that make a profit.  A rising mix intellectually, culturally and economically allows institutions to get higher rankings and then charge more

  Acceptance by a College or University is not the only concern.  Whether your student will thrive at a particular type of school – small, big, urban, bucolic, a limited or broad curriculum, a grind, laid back, etc. – requires forethought, including soul-searching questions and hard answers.  An easy way to break the bank is to change majors halfway through or to hate a school and have to start over.  Almost 40% of 2016 graduates took more than 4 years to finish.  Or, what if George or Julie get into Stanford, but the cost is too high; what is Plan B? 

  Financial Aid, whether merit or need-based, as most is, requires planning to qualify academically and to wisely present one’s financial situation to qualify for some aid whether scholarship, grants or loans.

  Few students attend without significant financial support from their parents.  The minimum cost is determined by a ‘universal’ application process using FAFSA (the Federal Application For Student Aid) or CSS (the College Board Profile) or, sometimes, an additional College-generated application.  They represent the ‘tip of iceberg’ in College funding and aid eligibility.

  There is no magic to assuage these hurdles and many others along the way. There is, however, a great book written by a colleague of mine, Beth Walker:  Never Pay Retail For College – How Smart Parents Find The Right School For The Right Price published by Prussian Press, available as an E-Book, an audio book or in paperback. 

  This is your Christmas Present, parents of College-bound students.  It covers what she says – how to avoid the mistakes so many parents and students make trying to select the right school and how to go about it responsibly and systematically. She recommends using multiple resources to analyze a student’s options and talents and to maximize parent finances. 

  Her approach is comprehensive, not only financial. It is a Family Project and as such, she assigns different chores to parents, the family as a unit, and the student, organized clearly with timelines and checklists to measure their progress. Her guiding principal is to educate parents so they feel empowered and in control of what is otherwise an overwhelming exercise in emotional and financial frustration. At the same time, she shatters the myths of who does or does not qualify for financial aid and how those who will not qualify, may still better arrange their finances to pay for college.

  While the book is a good blueprint, Beth recommends parents and students work with various experts to assure they are on the right path (for them).  She strongly recommends starting in earnest no later than Ninth Grade.  The sooner one starts making wise financial choices, the better.  

  I wholeheartedly endorse her approach and have used her methods with clients to good result.  I strongly recommend Never Pay Retail For College to any parent of a college-bound student no matter what their financial situation.  Even those intent on Junior following Dad’s footsteps at Harvard can benefit, but those who are open to a non-legacy selection will definitely get a greater benefit.

  Beth’s book is available on Amazon for under $20.00.  My only criticism is that the charts and tables are in black & white, small print, and hard to decipher.  If anyone who buys the book sends me an email [ghvanv@vancofinancial.com] requesting color copies of the illustrations, I have Beth’s permission to email them.  They are provided in color to those who buy the audio-book or e-book.  I personally prefer having a printed copy to use as a handy reference, especially to the resources she so kindly includes.

  Which fleet(s) will you buy?  If George and Julie will learn better at Florida State than Harvard, how soon do you want to know?  The number one regret of College Graduates of the last ten years:  the amount of debt they accumulated. 

   As always, once you have read it, please let me know what you think. I look forward to hearing your feedback.  Merry Christmas!