Halstrom Blog Post
5 Critical things Parents need to know TODAY about College Planning
By: College Planning America
There are always two sides to the College Planning story. Here are some tips on the Financial side.
1. Even if I have high Net worth or High income, it’s possible to get the cost of college reduced by 1000’s of dollars – if I have the correct plan in place before I apply.
Many families have been told that they make too much money or have too many assets and have to pay the full price for college. This is not necessarily true and we have helped many families to receive Endowment money even though they fall into this category. In order for this to happen though, the proper planning needs to be put in place long before you apply to college.
2. I need to know what my EFC is TODAY for each methodology [even as a freshman or sophomore and junior] so that I know how that affects the school choices that my student has?
Families of incoming Freshmen at high school and even earlier can get an estimate of their EFC number that they will get when they complete the FAFSA form. It is vital to know this number as early as possible to plan for maximum efficiency.
3. Repositioning my assets could save me $20,000 or more in college costs
Obviously each family’s financial situation and circumstances are different, but it is not uncommon that with proper planning that many families end up receiving much more financial aid than what they would have received without any planning.
4. A $100,000 Parent Loan could cost me an extra $56,000 in retirement money – there might be a better way. I might even be able to get my portion of the parental commitment on a tax deductible basis.
5. My Coverdell savings account, my 529 Plan and my UTMA account could be making college more expensive for me. We applaud many parents and grandparents who have tried to do the “Right Thing” by saving money for their kids of grandchildren in some of these types of accounts. These are not good and they are not bad accounts. They have different functions but also have different effects on College costs. Also, some are savings, some are investments and they have to be handled differently depending on market expectations and the timing of college. It does nobody any good to think that they have money in these accounts, but then lose money in the market 6-9 months before college time. Have an College Planning expert look at these for you and work out what the best thing is to do and when because everyone’s circumstances are different.
This is why we do what we do at College Planning America.