August 2017 Newsletter

Navigating the College Admissions & Financial Aid Process as a First-Time College Parent

Dear Parents,

If you’re a first-time college parent, you may not know it, but you’re probably in way over your head.

When it comes to admissions, and especially financial aid, like a lot of parents, you could find the process confusing, frustrating and intimidating.

College is more competitive, more expensive, more complicated, and more confusing than ever before.

When parents find out what they’ll have to pay — and usually it’s too late to do much about it — they are truly shocked.

They ask, “How can the government and the colleges think we can afford to pay this much money?”

Somehow, our culture has convinced us that college is a product with pretty packaging, with a list of enticing features a mile long that our kids can’t live without.

As parents, we want the best for our children, and when it comes to college, we’re willing to go into debt and retire later than planned, just so they can have every opportunity to succeed in today’s economy.

College is a six-figure investment; second only in expense to buying a home. And because it’s about our kids, we become hyper-emotional and don’t think clearly about the best way to honor our commitment to them.

This is not helpful. We need to change the way we think, and feel, about college.

Try thinking of college as a project, not a product. And it’s a project that will take several years — and could be eight to ten times more expensive than what you’d pay to remodel most kitchens. If you’re going to take on the job of project manager, you’ll need to know a lot more about how this thing called “college” works to pull it off successfully.

If someone were to ask you, “Whose running your six-figure project called college?” How would you answer? You? Your student?

Just Who Is Teaching Our Kids?

No matter what your personal contribution is to your student’s college costs, you should know how those dollars are being spent.

You’d think that the majority of your tuition dollars go to educating your child. However, academics play a greater role at some colleges than others.

To find out, during a visit or by sending an email, ask a professor how many pages the student is expected to read on a weekly basis. Ask how many hours of study are necessary per hour of class? This will give you an idea as to the rigor of the college’s curriculum.

It’s very important to know who will be teaching your student?. True/factual student-faculty ratios are not typically published. Without asking or doing research, you won’t know the number of active full-time professors currently teaching. Just because they are employed by the university, doesn’t necessarily mean they are going to teach that year.

Ask admissions how many full-time professors are currently on sabbatical; teaching elsewhere for a year; or turning their classes over to teaching assistants (TA’s) in favor of conducting research or writing papers for publication. College is so expensive that you owe it to yourself to know if your student is being taught by lower “interns” or “adjunct professors” who barely earn minimum wage.

Money is the Honey

As much as we want them to be, colleges aren’t charities. Education is a multibillion-dollar a year business. Like many parents of college-bound students, some schools are having their own financial difficulties, while others are not. I’m not telling you this so that you’ll feel sorry for them; just so you know how this can affect you.

Some colleges have to advertise to get student applicants, and those colleges will offer students who they want a discount on tuition.

Colleges like Harvard, Yale, and Penn have more applicants than they know what to do with, so they don’t have to advertise or offer incentives to get students to enroll.

Many colleges hire specialists known as enrollment managers. The job of the Enrollment Manager is to make sure each new freshman seat is filled at the highest possible price. To do that, they use state-of-the-art analytical tools such as data mining, data visualization, advanced analytics, predictive analytics, resource alignment, and student recruiting strategies.

How does a parent stand a chance against all that?

We offer services to our clients to help them manage this inherently complex process from the beginning to its end in order to achieve a great outcome and reduce stress. Contact us by phone, 732-502-9700, or email at info@mycollegeplan.com, or complete our short contact form to learn more!

New College Parents: Set Yourself Up as a Proxy NOW!

As the parent of a new college freshman, you’re going to find that you’ve been relegated to becoming an ATM machine. As long as you are paying the bills, take the following action now. The Family Educational Rights and Privacy Act (FERPA) is a rule that means you are not allowed to access your student’s grades, courses, or financial aid records without their permission.

Not having access could have serious consequences. Too many students never check their accounts or email or even their grades. You must have access to your student’s secure college website portal.

It’s probably the same one that they registered for when they first applied to the college. So get their user ID and password! We can’t stress this enough. Do it now as part of the orientation. If you aren’t proactive, you could find out well after a deadline that a document or form was missed, and that could have very serious financial consequences.

So, before moving day, find out from the college what the procedure is to become a PROXY on your student’s account. As we’ve said, you’ll need to get permission from your student.

If you’re the parent of a rising high school senior, the last thing you want to find out next Spring is you lost out on free money. Not knowing how to properly value properties and investments can cost you serious dough. When it comes to determining eligibility for financial aid, income counts for quite a bit, but assets are a big part of the formula, too. You may not be able to do much about your income, but your assets can be ethically re-evaluated to a much lower value OR even repositioned so they don’t have to be reported as an asset at all!

Appropriate college planning for those with disproportionate income-to-assets ratios may save a family thousands of dollars in out-of-pocket college costs. Contact us to schedule a consultation to discuss your personal circumstances, and to learn ways you may be able to reduce your college costs.

This is especially true of the value of your home and other real estate — like a rental property or a time-share. While not all colleges assess the equity in your home, they will include the value of any other properties you own, just like cash. As financial professionals, we know how to legally reduce the equity in your home and other properties or assets. The difference in paying the college’s asking price vs. getting a big tuition discount can be significant, especially if you are “land rich/cash poor”.

Don’t make the irrevocable mistake of overvaluing your assets. Find out their true value before you fill out any financial aid forms.

That’s it ’till next month. Enjoy the rest of your summer!

John Tillman

P.S. If you find this newsletter helpful to you please share it with other parents like yourself!

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