Next Webinar is…

Tuesday, December 8th, 2009 at 7pm Central Time

Register Below

College Finances 101 has now come to the web. Attendees have been praising this ground breaking presentation for years; now you can participate in the comfort of your own home or at work.

In 90 minutes, I will cover the most important aspects of minimizing your students’ costs for college. You will learn…

• How parents can often send their children to expensive private colleges for less money than a state school.
• How to fix lost money caused by popular college savings plans.
• How to identify schools that give you more free money.
• The great myths and misconceptions about college funding that can cost you thousands of dollars.
• What assets are penalized 4 times higher than others when applying for help.
• Why waiting one year can cost you as much as $5,000.

“The information Mr. Anderson shared was
incredibly eye opening.” — Tricia Christiansen, Guidance Counselor,
Hampton-Dumont HS, Hampton, Iowa

“What an eye opener! We wish we had
attended this seminar sooner. This seminar has given us ideas and
information but also hope…” — Dave & Maria Sullivan, Rock
Island, Illinois

“He has provided our families with
invaluable information. Scott does an excellent job…” — Linda
Cutler, Guidance Counselor, Rockridge High School, Taylor Ridge,
Illinois

“Listening to all the options available
to pay for college encouraged us that we don’t have to sacrifice a
quality education because of a lack of money.” Pastor Scott & Tonya
Culley, Silvis, Illinois

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What does it cost to send a child to college is one of the most commonly asked questions by parents and students alike.  Of course, everyone first thinks about the differences in costs between in-state schools and out-of-state schools.  Then perhaps they think about the differences in costs of public versus private colleges and universities.  Sometimes families will assign the same in-state, out-of-state cost differences to private colleges as well.  There are no in-state versus out-of-state costs differences by the way.  It’s a common misconception.

Then you can figure in starting with the lower costs of a community college for the first two years.  What about scholarships and financial aid?  Those ultimately have an impact on costs… don’t they?  Tax credits… subsidized loans… financial aid… college savings plans… military service… these all get thrown into the mix in determining how a family is supposed to pay for it.  Are you confused yet?

Let’s just start looking at the numbers.

First thing to keep in mind is that tuition is not the only number you want to pay attention to.  Tuition, room and board, books & supplies, transportation, and other miscellaneous costs make up a number called the cost of attendance.  This is a holistic number that the schools use to describe what a typical, full-time student’s one year experience will cost at that school.  This however is not what the typical student pays at the school.  Amount paid and cost often have nothing to do with one another when it comes to college.  For example, below are the national average costs of attendance for college according to Collegeboard’s 2008 Trends in College Pricing:

• Community College – $14,054
• In-state, Four Year – $18,326
• Out-of-state, Four Year – $29,193
• Private, Four Year – $37,390

Now compare the costs above with the average amount paid to the schools:

• Community College – $7,440
• In-state, Four Year – $10,600
• Private, Four Year – $23,920

There are some very big differences between those numbers.  And you know what is even more irritating?  Those averages really don’t mean much… unless you particularly want to know the midpoint of a couple million college students.

Do you have an “average” student, with “average” costs, at an “average” college?  No you probably don’t.  You can rest assured of two things from those numbers.  Half of the students paid more, and half of the students paid less.  But there is one more thing to take away from those numbers… families rarely pay sticker price for college.

So the bottom line answer to the question “What will it cost to send my child to college?” is this… you’re asking the wrong question.  Stop worrying about what the average cost is, and start figuring out how to increase your chances of paying below the average.  That’s the key to lowering your costs for college.

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Once again I have been in an online debate on one of the college financial aid forums about the likelihood of finding money to pay for college.  There is a pervasive misconception out there that only the most selective colleges provide the needed money to only the most excelled students.  This is a crock!

First a quick definition… “need” is a term used to describe how much money the government and schools think you need help with after subtracting your expected family contribution from the school’s cost of attendance.  COA – EFC = Need.  You can get a copy of my manual if you want to know the ends and outs of that process.

There are only a handful of colleges across the country that guarantee in writing that they will meet 100% of the student’s need.  Many parents and students get hung up on these few schools and think they are the only legitimate options for getting the most money.  What they are not taking into account are the hundreds of colleges across the country that routinely meet 100% of the students’ need but never put it in a written promise.

Now what are you most interested in?  Do you want a promise?  Or do you want the money?

If you want to get the most money for your student, it is foolish to focus on a few highly selective colleges.  You want to have a well thought out college selection strategy.  It is the strategy you employ that will get your student the money they need and deserve, not some illusory promise.

The basics of that strategy are:

• Always apply to 6-10 colleges.
• Focus on colleges with generous financial track records.
• Always have a safety school where you know your student will get in no matter what.
• Always have 4 or 5 match schools where your student will likely be in the top 50% to 25% of the incoming Freshman class.
• Never short the safety school or match schools if you want to add stretch schools.

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Yesterday I was in an online conversation where a student started out asking, “Can you help me rank these schools in terms of financial aid…”  The first response the student received was, “It is impossible — and totally meaningless — to “rank [schools] in terms of aid…”

This is absolutely and totally wrong!  I don’t know why it shocks me when I see responses like this.  Maybe I just don’t want to believe that the old wive’s tales and bad information are as pervasive as they are.

Well… whatever the reasons are for my reaction, I can’t let this misinformation go without addressing it head-on.  You can rank, evaluate, compare colleges based upon how they treat financial aid; or how generous they are.  Let me show you how…

First of all, you need to estimate your expected family contribution (EFC).  There is a calculator at Collegeboard.com that works fairly well.

Now we need the cost of attendance (COA) from the schools you are interested in.  Each school will have a different cost of attendance.  This can be found at the colleges’ websites, Collegeboard.com, Kiplinger, or a dozen or more other websites.

Subtract the EFC from the COA to find out what your financial need (FN) is at each of the schools.  The formula looks like this…

COA – EFC = FN

Now multiply the financial need at each school by the schools’ financial track records: % of need met; % of gift aid; % of self help.  This will provide you with how much money the school is likely going to give you, and consequently, how much you are likely to pay at that college.

And Voila!  You now have a fairly accurate estimation of your out of pocket costs and at each of the colleges.  You can now see which schools are generous and which are not.  You’ll be surprised.  You are proabably going to find out that some of the schools that look cheaper in the beginning will actually wind up costing the most in the end.

The Secrets to Real College Savings has a far more detailed explanation of how this calculation works.  I recommend you get a copy.

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