Free Report
FREE Report: The 10 Core Principles For Battling The High Cost Of College
We at Treasure Coast College Planning, have made the dream of affording college a reality for many families. When families adhere to our “10 Core Principles”, many have been able to save thousands and send their students to college for less. The 10 Core Principle are:
1. Create your personalized, step by step, college financial action plan.
2. Understand the financial aid system and how it works.
3. Save thousands of dollars by repositioning assets you already have.
4. Choose colleges with the highest percent of financial need met.
5. Eliminate debt.
6. Learn the power of grants, scholarships and loans.
7. Apply income strategies and tax credits to receive more aid.
8. Protect your home equity, business equity and your retirement plans.
9. Prepare your student to stand out from thousands of other applicants.
10. Unite parent with student through an invaluable teaching opportunity that will help the student understand the cost and financial sacrifice made in order to send them to college.
1. CREATE: Your personalized, step by step, college financial action plan.
As you prepare for the college experience, you will quickly find the sources that will help you the most in choosing the right school and creating an action plan. These sources may be your school guidance counselor, college admissions offices, or trusted friends or family members who have gone through the process before you.
These sources may be able to help you with timely issues such as application dates, aid deadlines, or even filling out the dreaded FAFSA form. However, in most instances, it has been our experience that most of the people who you are relying on as your trusted advisers are not experienced in how to prepare a financial action plan that can prepare you and your student to thrive financially and potentially save thousands of dollars along the way.
Your written college financial action plan should include standard items such as application deadlines, SAT/ACT dates, and college tours to name a few. As equally important will be to include items such as when to review and adjust your and your student’s assets, a review of your personal debt, annual income breakdowns, and a calculation of your Expected Family Contribution.
It is important to understand how all of the financial categories of debt, income and assets work together and affect the amount of financial aid you can receive.
It is best to begin this process by creating a written college financial action plan. Without a written financial action plan, you may still receive aid, but may never know how much more financial aid you could have received if you had taken the time to create a written, step by step, college financial action plan.
2. UNDERSTAND: The financial aid system and how it works.
My 10 year old daughter recently baked us a cake. She insisted that she didn’t need any help from mom or dad and that she understood exactly what she was doing. After she was finished, our family gathered to enjoy a fresh baked piece of cake. It looked great and smelt even better, but as soon as I took my first bite, I quickly realized that something was missing! After reviewing with my daughter some of the ingredients she had used and how they all worked together, we discovered that she had left out one key ingredient that changed the taste of the cake. By choosing to bake her cake all on her own without understanding the entire process, my daughter had an end product that looked and smelled great, but was incomplete. It was a good thing that this “lesson-learned” was on a cake, and not something far more costly! Just imagine if the cake mix cost upwards of $18,000-$50,000 per year….just like many college educations!!
You must understand that financial aid is a government regulated industry. There are many rules, regulations and guidelines that applicants must adhere to. It is your responsibility to learn and understand how to work within those guidelines and use them to your advantage in order for you to receive the best aid package available to your family.
Most programs offer to help families understand the financial aid forms, when to submit them, general information on scholarships, or student preparation services such as SAT or essay writing courses. While all of these are extremely important, you will find that the key missing ingredient to those types of programs is that they do not help you understand what financial information is necessary for your family to receive the best financial aid package available.
To maximize your financial aid package and potentially save thousands of dollars on college, you must take the time to understand the government rules and regulations and how they specifically affect your family.
3. SAVE: Thousands of dollars by re-positioning assets you already have
We can all appreciate how difficult it can be to save money. Nevertheless, you hunker down, beat the odds and saved so diligently throughout the years, now only to find out that where you kept your savings could drastically affect the amount of financial aid you could be awarded.
You may have chosen to save money in retirement plans, bank savings accounts, personal investment accounts, real estate, or federal/state government tax advantaged college savings plans. Furthermore, you may have also diligently put aside money for each of your children in accounts in their own names.
Now as it comes time for you to apply for financial aid, it is your responsibility to know and understand that where you keep your money, will drastically increase or decrease the amount of aid you will receive.
When you fill out our financial aid application (FAFSA), it is very important that you understand which assets will be counted against you and which will not. For example, did you know that under the federal methodology assets in the name of a younger sibling, even if that child is not applying for aid, will be counted as an asset to the parent and ultimately counted against the older sibling who is applying for financial aid? This may not seem fair, but it just one of the many guidelines that you must consider when applying for financial aid.
You can save thousands of dollars just by knowing where to keep your hard earned dollars. It is important for you to know that you are allowed to reposition where you hold your dollars right up until the day you submit your financial aid application….each year!
4.CHOOSE: Colleges with the highest percentage of need met
If you are reading this, it is very likely that you are having conversations with your son or daughter about various colleges. They may be bringing up colleges that are private or out of state with “price tags” that you would perceive as insurmountable. Your perception, however, may be inaccurate!
One of the greatest ways to save on the overall cost of college is to learn and understand a concept called “percentage of need met”. It is vital to know that colleges are not required to offer you the entire amount of financial aid that you are eligible for! The amount of aid covered will vary from student to student and will be determined by criteria ranging from how well-endowed a university is, to how much federal funding they may receive, as well as how interested they are in having your student attend their college.
There is a published percentage that each college has that will state their average percentage of financial “need” that they meet per student. Knowing and understanding what that average percentage is can make a huge difference in how much financial aid your family can expect to receive.
To prove the point of just how much money this can save you, let us share the story of Chris, a man who has recently sought our advice on saving money for college. Chris is a single father, working for just above minimum wage, owns his own home (no equity) and has no liquid financial assets.
Chris decided that he wanted to go back to school and further his education. He is eligible for a substantial financial aid award, yet is paying the full tuition out of his pocket, to attend an on-line college that meets 0% of financial “need”. After speaking with Treasure Coast College Planning, Chris was shocked to find out that there is a local, 4 year college, within driving distance, that would meet up to 97% of his financial aid “need” and also be able to offer him on-line classes.
Don’t be a Chris! Choose colleges that meet a high percentage of financial need, and save yourself thousands of dollars each year!
5. ELIMINATE: Debt
The allure of buy today and pay tomorrow can come with a very costly price tag! The old “Finance 101” illustration portrays it best: a person who buys a $2,000 television today on a credit card with an 18% rate of interest will pay just $40 per month for their new television. Not too bad, right??? Well after counting the costs, they will find that, in the end, the “low” $40 per month payment, will result in a staggering 30 years and 1 month repayment plan, complete with a total cost of over $7,000 for a television that will most likely be long gone and buried by then.
Eliminating consumer debt sounds all so elementary, but the sad reality is that most Americans are plagued by some sort of consumer credit debt, and unfortunately, there are many who are drowning financially just to keep up with all of their “low” monthly payments. Consumer debt is a drain on cash flow, period!
Now, to make matters even worse, financial aid offices will not consider how much you spend each month in consumer debt when calculating your family’s financial need. This can be a problem to many families as they are already allocating cash flow to mortgages, auto payments, and consumer debt. Imagine having to add the cost of college to that list?
There are strategies that can be implemented that will not only work to eliminate consumer debt, but possibly increase the amount of financial aid you may receive and ultimately reduce your effective cost of college. Be careful! If you use money from the wrong sources to eliminate debt, you may decrease the amount of aid you could receive!!
Take proper steps to eliminate consumer debt and turn those same dollars into “cash flow” that you can use to help off-set the effective cost of college.
6. LEARN: The power of grants, scholarships, and loans
Imagine for a moment two small ponds. One of them has 99 fish in it and the other has one. Which of the two would you drop your fishing line into? You are probably raising an eyebrow right now and pondering if my question posed is a trick one; and I want to assure you that it is not! To catch the most fish, fish where there are the most fish!!
In our experiences, we have found that people have spent the majority of their time hunting private scholarships that may be very hard and competitive to receive. Unfortunately, these same people have spent very little of their time learning how to apply for financial aid funds from state and federal government program as well as the colleges they apply to. These avenues are where the largest majority of financial aid dollars comes from.
Recent studies have shown that up to 99% of all financial aid funds that are available come through state and federal government programs and the college your student applies to. While we do encourage you to apply for every private need based scholarship and private loan (including our scholarship) that you or your student may qualify for, we highly recommend that the majority of your time is spent learning how to position your family to receive the best aid package available to you from the largest “pond”.
It is also important to understand that many financial aid packages WILL NOT be made up of all “free money”. Usually a financial aid package will be broken down in the form of free grants, low interest loans, work study programs, and possibly scholarships.
Take the time and learn strategies that can help position your family to receive the best financial aid package; and leave you and your student in a good financial position during and after college.
7. APPLY: Income strategies and tax credits to receive more aid
There are many moving parts that need to be considered when applying for financial aid; but none is more important than income. When considering income, a family must think past the simple “how much we make” statement. There are specific guidelines that the government has established, that if you learn, understand and apply to your specific family circumstance, can potentially save you thousands of dollars towards the effective cost of college.
How you’re paid, who earns your income (family dynamics), if a student earns income and what income and educational tax credits that you can qualify for under the IRS and Federal Aid guidelines are all factors that must be properly worked together. Not taking advantage of income strategies and tax credits when applying for financial aid can potentially cost your family more money than any other area of the financial aid puzzle. For example, many families either do not know about or wrongly assume that they will not qualify for a federal educational tax credit, when most families who earn less than $180,000 annually may qualify! Furthermore, many families automatically disqualify themselves for aid because they simply think that they will not qualify due to their income or assets without knowing what the allowable guidelines are. These wrong assumptions can be very costly. A staggering statistic from Collegeboard.com stated that in 2007, a major university with a $47,000 per year cost of attendance, reported that out of the 720 freshmen who enrolled, only 397 of those students even applied for financial aid. That would leave 323 families who don’t even know if they would have even been declined!
Since income is the heaviest weighted factor in determining financial aid, you must learn and apply all applicable strategies to help your family potentially save thousands towards the effective cost of college.
8. PROTECT: Your home equity, business equity and retirement plans
We have found that the two most popular places that families look to draw funds from to pay for college are their home’s equity and their retirement plan. We strongly urge you not to look to these sources as your first options, as the effects may be damaging to your financial aid application and devastating to your long term financial plan.
You must absolutely understand the guidelines and effects of how using equity and raiding retirement funds as sources to pay for college are viewed. Most importantly you must weigh the ramifications of using these funds as an aid short fall tool. A misunderstanding on your part may have substantial negative effects.
For one example, let’s say a family chooses to take money out of their retirement plan to off-set a financial aid short fall. Without understanding the rules and guidelines of federal financial aid, that family would not know that they were taking money out of a place that helps them to receive more aid, but actually turning it into income. Remember, income is the hardest hit factor in the financial aid calculation. This course of action can potentially decrease the amount of aid that family can receive. After being awarded less financial aid, what may end up happening is that they need to raid their retirement fund for even more money to make up for the short fall; compounding the problem.
Always remember that a student can receive a loan for college, but a family cannot receive a loan for their retirement. Use the guidelines and rules available regarding financial aid in order to protect your home’s equity, your business equity and your retirement plan.
9. PREPARE: Your student to stand out from the thousands of other applicants
To illustrate our ninth core principle, let us revisit my daughter’s cake baking adventures. When we last left you, we had endured a dry and tasteless cake. However, since then, my daughter took extreme measures to prepare herself and try again. She saved her our money and bought a few baking magazines, searched the internet for best baking practices and became a dedicated viewer of popular baking television programs. As a result she has learned tips and techniques that have drastically improved her baking abilities. Her tasty treats are great, but one of the most important lessons she has learned is to prepare all of her ingredients before mixing them together; always measuring them twice.
This important concept of properly preparing for something is a core principle that you must adhere to when your student is applying for financial aid. Studies have shown that students who use SAT, ACT, essay preparation and review courses not only score higher, but also have a better chance of attending the college of their choice. These same students also have a greater tendency to receive a better aid package.
The savings in real dollars and cents to you can be quite substantial. The average student will take 4 1/2 to 5 years to complete a 4 year college education. It has been found that students who have made career choices early based upon tested abilities and desires, rather than the “I’d someday like to….” approach, can take as much as 6 to 18 months off of the time it would take to graduate. If we put this “off-setting” occurrence into real dollars, let’s assume a cost of attendance to a college is $20,000 per year and the student graduates 12 months earlier due to proper preparation. This will result in a savings of $20,000!!!! The mathematics seems obvious, but are you taking the steps to capitalize on the obvious situation?
A few dollars spent to prepare your student to stand out can potentially save you thousands of dollars.
10. UNITE: Parent with student through an invaluable teaching opportunity that will help the student understand their responsibilities before, during and after the college experience
Every parent said at one time or another, “don’t touch the stove, it’s hot”!! Nevertheless, it always seemed that the red glow or the flickering flames of the stove’s surface was too hard to resist for a small child. The idea behind properly planning to pay for your child’s education is to keep you and your student from getting burned.
It is imperative that parent and student unite together and understand one another. From the student’s perspective they want their parents to know what colleges they are interested in attending, possible career paths, and maybe even a concern about paying for college. However, there typically is an unspoken desire for the child to have their parents understand that they will be nervous, maybe even scared, about the unknown of leaving home and facing the college experience.
The parent will also be struggling with emotional anxiety as they prepare to send their child off to the next stages of their life. The emotions of the parent and child can often lead to a lack of communication and improper planning on both sides. It is vital that the parent, more than ever before, unite with their child and understand the student’s wishes and concerns. It is important to share with your child what the family can afford, discuss who is paying for college, teach them about the ramifications of any debt that the student may incur, and the student’s responsibility in repaying that debt after college.
When this last core principle is applied properly, we have seen parents and their students unite and use the experience as a building block as their relationship progresses to a different level.
We at Treasure Coast College Planning hope that we have given you some insight to our “10 Core Principles”. Our mission is to take the mystery out of the financial aid process and give you the information you will need to save your family thousands of dollars throughout your student’s time in college.
Treasure Coast College Planning has created this program as an avenue in assisting regardless of whether you are wondering “how in the world are we going to pay for college” or you believe that your income and/or assets eliminate your chances of qualifying for any financial aid.
We recommend that you start by purchasing our program and discovering the rules and strategies that apply to your family and using them when completing your financial aid forms.
The best part of our program is that we have created it for you to take in the comfort and convenience of your our home, on your time frame, on-line, 24 hours a day and with an outlet for assistance if you need assistance.
Thank you for considering Treasure Coast College Planning to help you save thousands and send your student to college for less!
