LYNN O SHAUGHNESSY, TheCollegeSolution.com. 5 Simple Yet Effective Ways to Help Clients Cut College Costs

Transcription

1 LYNN O SHAUGHNESSY, TheCollegeSolution.com 5 Simple Yet Effective Ways to Help Clients Cut College Costs

2 Families are stressing about the leap to college

3 Nuts & Bolts of Cutting College Costs

4 Become a Super Hero to Your Clients

5 Simple Ways to Cut College Costs 1. Understand realities of college pricing. 2. Help clients to determine if they will qualify for financial aid. 3. Explain the importance of net price calculators. 4. Share how to research the generosity of colleges. 5. Check four-year grad rates. 6. Dispel fears about saving for college.

6 1st Cost-Cutting Idea Understand the realities of college pricing

7 College Is Priced Like Airline Tickets

8 Sales are Common 58% of students at public universities receive a discount 89% of students at private schools receive a price break

9 At private colleges the average tuition discount is at an historic high: 54% EXAMPLE Tuition: $40,000 Avg. discount: $21,720 Real price: $18,280

10 College Is a buyer s market!

11 Why the Price Cuts? College is actually a buyer s market except for the most elite schools.* 60% of admission directors did not fill their freshmen spots by May 1, 2014 for the school year. 30% of schools spent spring and summer of 2014 recruiting students who had already committed to other colleges. Nearly 90% of admission directors are concerned about meeting enrollment goals in futures. *Gallup/Inside Higher Ed survey of admission directors

12 Throw a Wider Net Don t just look at research universities. Check out colleges and master s level universities. Colleges provide nearly all students (94%) with a discount. Master s-level universities provide 88% of students a discount. Research universities: 66% get discounts.

13 2nd Cost-Cutting Idea Help with this question: Will your clients qualify for financial aid? What schools clients target will depend on their answer.

14 Will Your Clients Qualify for Financial Aid? Help them obtain their Expected Family Contribution Use EFC Calculator on: College Board website

15 Your EFC is what you would be expected to pay for one year of college

16 Hypothetical Family $55,000 Adjusted Gross Income $15,000 Cash/taxable investments 2 parents, 1 college freshman, 12-yr. sister

17 EFC for Hypothetical Family Federal Methodology (FM) Results Institutional Methodology (IM) Results Parents Contribution for Students $5,128 $3,880 Student s Contribution $0 $1,800 Total Estimated IM Contribution $5,128 $5,680

18 Hypothetical Family $160,000 AGI $125,000 Cash/taxable investments $200,000 Home equity 2 parents, 1 college freshman, 12-yr. sister

19 EFC for Hypothetical Family Federal Methodology (FM) Results Institutional Methodology (IM) Results Parents Contribution for Students $34,426 $33,315 Student s Contribution $0 $1,850 Total Estimated IM Contribution $34,426 $35,165

20 Same Family with 2 in College Federal Methodology (FM) Results Institutional Methodology (IM) Results Parents Contribution for Students $21,541 $24,906 Student s Contribution $0 $1,850 Total Estimated IM Contribution $21,541 $26,756

21 Chance for Need-Based Aid and/or Merit Scholarship EFC EXAMPLE Cost of Private College $60,000 EFC $35,000 Demonstrated Financial Need $25,000

22 Help Generate EFCs for Clients It s best to obtain EFC figures early.

23 ? Look for the EFC in award letters

24 3rd Cost-Cutting Idea Use net price calculators

25 Net Price Calculator Net price calculators provide a personal estimate of what a family will pay for one year in college. COST OF SCHOOL - SCHOLARSHIPS/GRANTS NET PRICE Where to Find Net Price Calculators? Every school must offer a net price calculator for freshmen on its website. Easiest way to find a calculator is through Google

26 Beware of bad net price calculators Poor calculators: Use free federal template Ask just a handful of questions Do not calculate merit awards

27 Beware Calculator Income Ranges

28 Net Price Detective Work

29 4th Cost-Cutting Idea Research the generosity of colleges

30 Finding Institutional Money: College Board

31 College Board Tool: Columbia University

32 College Board Tool: New York University

33 5th Cost-Cutting Idea Check 4-year graduation rates

34 Grad Rate Source: College Completion

35 Chronicle of Higher Education: College Completion

36 Chronicle of Higher Education: College Completion

37 Check Four-Year Grad Rate University Rate University Rate U. of Notre Dame 90% Beloit College 71% Washington U. St. Louis 88% U. of Wisconsin 55% Harvard U. 87% U. of Massachusetts 59% Vanderbilt University 87% U. Of Colorado 44% ULCA 69% U. Of Miami 71% Baylor University 57% San Jose State 8%

38 6th Cost-Cutting Idea Dispel fears of saving for college

39 Will Your Investments Hurt Financial Aid Chances? Savings Often Don t Hurt Aid Chances.

40 Family savings is not a time bomb Parents will be in a much stronger position by saving. Every $10,000 in savings, chances for financial aid drop by no more than $564.

41 Asset Case Study Families receive an asset allowance 54-yr-old parent s asset allowance: $35,400 Family saves $100,000 in 529 account Calculations $100,000 $35,400 = $64,600 $64,600 X 5.64% = $3,643 (represents EFC increase)

42 Questions? LYNN O SHAUGHNESSY TheCollegeSolution.com.