Advice For Parents of College Bound Children

What are your options? What can you, as a parent, do?

Option 1

Well, your first option is you can do it yourself. You can study and do the necessary research and, like anything else that you want to become an expert in, if you’re willing to devote several hours per week over a number of years, you can probably figure this out for yourself.

I can tell you personally I’ve read hundreds of publications. I keep up with it each year, the major overhauls, and the process, and in the forms. I subscribe to newsletters. I attend meetings. I read updated publications. If you’re willing to do this and study the formulas, you may be able to do this yourself and do it properly.

But the real question is, “Is it worth your time to learn how to do this?” I mean, even though people get into lawsuits or have medical problems; most people don’t try to become legal experts and don’t try to become doctors to solve those problems. They usually feel it’s worth their money or time to just pay a professional who spent and

devoted a portion of his or her life to learning that area of expertise and it’s just easier to let them do it for you and to solve that problem for you. I mean it just seems silly to gamble.

What will it cost?

The question is would you be willing to gamble $40,000 to $100,000 on your child’s entire future by doing something that you literally have absolutely no experience or expertise in? It amazes me that a lot of parents do just that — fill out the forms, cross their fingers and hope for the best.

But you see people pay any number of consultants or experts to handle most of the other areas of their life, but suddenly they are an expert at college funding — which just doesn’t seem to make any sense because you’re risking such enormous odds as far as money goes and as far as a child’s future — it just seems silly to do that.

Option 2

The second option is basically to let your accountant do it for you. Now, a lot of people think that, “Hey, these are financial experts and they do my taxes and they probably do it for me as a favor and this is a good idea. Why not have my accountant do it.”

Well, I’m here to tell you that I’ve done this for years and I’ve befriended and talked to quite a few accountants who refer their clients to me. And the interesting part about it is that accountants, more than anyone else, interestingly enough, screw up the financial aid process and the financial aid forms worse than anybody that I’ve ever seen — even the novice parent unless they are experts at college funding. And you probably think that that makes absolutely no sense — what is he talking about?

Well, I’m here to tell you that the tax formulas are completely different than the financial aid formula. In fact, doing what you would do for tax preparation and filling out a tax return is totally 100% different than a financial aid formula, which can actually bump the financial aid form.

There are different rules. There are different methods. There are different things that you have to look out for.

Also, accountants have to apply accounting principles that make sense for taxes, like for example; they will recommend things like putting money in your child’s name for tax benefits, which will absolutely kill you for financial aid purposes.

But unfortunately, most accountants are not trained in financial aid, as far as preparation, or in planning, so it’s not that they’re doing anything to hurt you, they just don’t know. So, most accountants are great at being experts at tax preparation and tax planning, but they are not financial aid experts.

Option 3

The third and, in my opinion, best option is to use the services of a college funding consultant. Now, there are false prophets and then there’s the real thing.

Okay, there are a very small number of people who specialize in college funding consulting. So, it’s a little known, but a very important field, and if you find a legitimate specialist who understands the rules, regulations, methodologies, and not just trying to do a scholarship search for you but actually understands the way the formulas work, understands how to negotiate, understands how to fill out the forms and understands how to do all of the little intricacies of financial aid, that will be time and money well invested because it will reap many thousands of dollars in return and this is money you would have never seen or gotten if you had tried to do it on your own.

Before using anyone to help you with your college financial planning, make sure you find out exactly what they will do for you:

• Remember, not all college funding consultants are created equal.
• For example, do they offer any type of satisfaction guarantee?
• Do they fill out the financial aid forms for you?
• Do they help you locate and apply for need-based and non-need based sources of college funding?
• Do they take into consideration tax implications, retirement planning issues, etc. or only focus on short-term college funding?

Okay, the answer to that question is the best time to start is before January of the junior year, as early as possible. Maybe even into the sophomore and since aid is allocated on a first come, first served basis the sooner you start, the better.

Three Categories of Families

There are three different categories of families when it comes to college funding needs. Look at the list and see where you fit:

Category #1 - There are families who based on their income, assets, and the schools their child applies to will always qualify for some form of need-based aid.

• What these families need to focus on is getting all the paperwork filled out correctly and submitted on time. They will qualify for aid, mostly because their income is low enough.

Category #2 – There are families who may or may not qualify for need-based financial aid depending on which schools their child applies to, and how early they get started!

• These families need to understand how to legally set up their finances to minimize their out-of-pocket costs and maximize their eligibility for funding and also pick schools where they have the best shot of getting aid. This requires the ability to search the history of the schools and have a way to compare that to their student’s performance and test scores.

Category #3 – There are the families who won’t qualify for “need-based” aid no matter what they do.

• They need to understand how to minimize their out-of-pocket costs using unique tax and financial planning strategies.

There is no such thing as a “one size fits all” approach when it comes to college funding.

Make sure you work with a consultant who understands this key distinction! We are currently in the process of providing online webinars and teleconferences where we will coach you on the whole college aplication process. Please check out our site to check for the upcoming schedule.

Final Thoughts

If you have not see our free videos on what you can do to get the most money possible for yours or your childs education, please visit the video page at http://www.myschoolplans.com/tips.