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Eight late-stage college planning strategies you don't know about but should

Eight late-stage college planning strategies you don't know about but should

| December 18, 2017

Recently I had the opportunity to learn from Chris Wills from   He's a specialist on how to fund a college education.

He claims to help about half a million students per year and saves on average over 75,000 off college “sticker” price.

So obviously with four kids, my ears perked up while I assumed this was way too good to be true.

But there were some takeaways that I thought might be helpful that I wanted to share with you.

Today, the average family takes out over $48,000 in loans.  Tuition inflation is out of control, for example, costs at the University of Minnesota have increased 570% since 1987.  We are commonly looking at schools for our clients where tuition is in the $40,000 to $65,000 range, and there's no sign that the cost will be reversing any time soon.

Obviously, if we can avoid massive student loans, that will help the kids in the future, and the best way to do this is usually two kinds of aid:

  • Need-based
  • Merit aid.

There's a lot of information that goes into these aid forms, but bottom line, it's important to keep things well done correctly to maximize the potential for aid. 

Strategies to consider:

1. If need-based aid is an option, consider moving assets out of the child's name. Assets in the kids' name can be assessed at 20% against their expected contribution rate or EFV, but if it's in the parent's name, it's only 5.64% because the parents have other responsibilities.

2. Review financial aid forms for accuracy. Chris said 40% of the families make errors on this paperwork, primarily including their primary residence as an asset on the form. Also remember, your retirement accounts are not counted as assets on the form!

3. Grandparent 529 plans aren't disclosed on the Free Application for Federal Student Aid or FAFSA, and it's important to consider delaying distribution for some complex reasons.

4. Get the most merit-based aid possible. Spend most of your time trying to get aid from the colleges, not private scholarships.  Out of all scholarship and grant sources, college aid accounts for 35% of aid given versus 7% for private  It's nice to win a $500 scholarship through a local organization, but the colleges are where the real money is at.

TIP: When you're looking for merit aid, you have to: 

-Make sure that the school offers it. Not all schools do, and it's not always easy to find out because the schools that don't, don't exactly advertise that fact, otherwise applications would go down, which could hurt their numbers.

-You want to have the applicant be in the top 25% of grades and test scores. Obviously, extracurriculars  Gender and ethnicity help along with geographic diversity.  I found it interesting that he was able to send one kid from Minnesota to upstate New York with low grades and a low SAT score on a full ride!  Some colleges really want kids from different parts of the country for diversity and will pay their way to have them come.

5. Scholarship award displacement. Chris says this is the dirty little secret where colleges will grant you scholarships but then take the scholarship away to the degree that you have other grants or scholarships.  So you want to negotiate with the colleges and ask that the college loan that you would be taking out be removed first, not the scholarship.

6. Avoid losing aid. Many times, aid is given with strict academic requirements and you have to fill out the form annually and on time in subsequent years to make sure this is done and be careful with school transfers, as that can really screw up aid.

7. Fill out financial aid forms as soon as possible. A lot of these things are first come, first serve and they need to be completed to receive merit aid.

8. Negotiate the financial aid award. Another dirty little secret that you can appeal what they're giving you and many schools do negotiate.  Keep in mind, the negotiation normally does not take place with the admissions office, but the financial aid office that can actually make adjustments.


-529s are treated as parental assets. Again, waiting on 529 distributions owned by grandparents to junior year, late in the year, can help with numbers, but caution is needed to avoid pitfalls. 

-If you need money for college, go to the colleges that actually award it. Private scholarships don't move the needle very much.  Colleges want you to apply even if you can't get in since it helps their number.  Call and ask first if they have merit aid and if you're in the top 25%, you've got a chance.

If you would like to discuss planning for college, please call or email.  We'd love to get together and discuss.  

Thanks for taking a look!

Tom Gartner, MSAPM, CFP®