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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In July of this year, I published an article titled The Mythical Ivy Impact.  I discussed the evidence which suggests striving to get into prestigous colleges like Harvard, Stanford, or Yale may not be worth it if you have to take on substantial debt to do so.  Now it’s the fall, and discussions about college selection are flying all over forums on the Internet.  And I am still surprised how quickly the knives come out when you suggest it may be better to take the money and go to a so called “second tier” school, as opposed to mortgaging your future to pay for an Ivy or near-Ivy college.

I invite you to read my full article at the link above.  Also, here are the links to the supporting articles from USA Today and the Brookings Institute:

USA Today: Wanted: CEO, No Ivy Required PDF

Brookings Institute: Who Needs Harvard PDF

In a nutshell, don’t get hung up chasing prestigious named schools.  If you get in and it’s reasonably affordable, great!  But there is no reason to put yourself under a mountain of debt.

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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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It’s the beginning of July.  All the graduation parties are over, and the summer is in full swing.  Now is a time when a lot of soon to be high school seniors and their parents begin thinking about what colleges to look at.  In conversation… on the web forums… I hear over and over again:

• “Is this school prestigious?”
• “Does this school rank high?”
• “What does the US News report say about this school?”
• “How does this school compare to Harvard… Yale… Georgetown… etc?”
• “What’s the toughest school I can get into?”

The genesis of these questions is the perception that a degree from a select group of schools is somehow going to make your life easier.  You’ll earn more money.  You’ll know the right people.  You’ll get a better job upon graduation.  It’s as if there is an ivy fairy who is going to sprinkle gold dust on a graduating student and their whole life is going to change.

Come on… every one knows that if you make it into Harvard, you are far more likely to earn more money.  Right?

I’m going to let you in on a little secret.  Now be careful who you tell this to, because it could start a fight at numerous block parties and soccer games.  It’s not true.  Yep.  It’s not true.  It’s a lie.  It’s that common sense that if far too common, but makes no sense.

The truth was documented several years ago in a study conducted by Alan Krueger, an economist at Princeton, and Stacy Berg Dale, a researcher at the Andrew W. Mellon Foundation.  They published a study in 1999 that proved incredibly controversial, and has been generating heated debates ever since.  So what did they find?  They found out that where a student goes to school does not impact their future success in life.

They studied 1976 students from 34 colleges across the country.  They did find that some students who went to an Ivy League school were more successful in life than those who didn’t.  But the real shocker was they found that students who were accepted to Ivy League schools but chose to go to a less “prestigious” school did just as well if not better than their Ivy League counterparts.  Their conclusion was that it is the student, not the school that dictates the opportunities for success.

This goes right to the heart of a very big problem.  Many students are basing their self-worth on whether or not they get into the right school.  After all the adjustments of adolescence, along comes the college search process.  Grades evaluate them.  Sports evaluates them.  How they do in the talent contest evaluates them.  The acceptance or decline of one particular college has become the referendum on the sum total of the first 18 years of their life.  This is wrong.

We have to get away from this unholy authority that a single college’s decision has upon the value of a student’s life.  Students must understand there is no such thing as the “best” college.  There is only the best colleges for them.  Colleges… plural.  The college search and selection process needs to be fluid and encompassing.  The student should not be expected to make a rifle shot in the bulls-eye at 600 yards.  This is much more like trying to get the right shotgun pattern at 20 yards.

The student’s goal in the college search process is to find one safety school where they are getting in no matter what.  They want four to six match schools where they have a good chance of coming into the school in the top 50% or top 25% of the incoming freshman class.  Then they may want two to three stretch schools; these are the schools where they are not sure they could get in.

The students also need to be comfortable with the idea of going to any of the six to ten schools that they will be applying to.  If they are able to take this kind of an approach to the college search process, then they will be under far less pressure and have much better opportunities for the monies than are available at the colleges to which they apply.  This selection strategy is not just about finding the colleges that feel right, but it is also about positioning your student to minimize their college costs.  Follow this strategy, and you will do far better than most.

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