How to pay for College with out going broke!

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How to send your child to the school of their choice without breaking the bank!

How to send your child to the school of their choice without breaking the bank!

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  • 1. The Little Known Secrets Of How To Get Maximum Money For College! How To Legally Arrange Your Financial Situation To Pay For College With As Little Out Of Pocket As Possible!
  • 2. Kevin P. Saia, CFP President & Owner College Planning of New Jersey Ledgewood, NJ, 07852 (862) 251-4665 [email_address]
  • 3. Today's High Cost Of College!
    • Why is it so ridiculously expensive?
      • Less aid from government sources.
      • Professor’s salaries going up.
      • Costs of maintenance, upkeep, repairs, infrastructure, etc., all going up.
      • Changes in technology.
      • Each year, college costs are increasing
      • faster than inflation rates!
  • 4. It's Expensive No Matter Where Your Kids Go!
    • Not just tuition - includes books, room and board, living expenses, etc.
    • 4 years can cost $69,960 to $143,440 ...or even more!
    • Multiply by number of kids.
    • Each year, college costs increase faster than inflation rates!
    • Average Yearly Cost Of Private Schools Versus State Schools!
  • 5. How Is A Family Supposed To Pay For All That?
    • Savings?
    • Borrow?
    • Scholarship?
    • Go To Lesser School?
    • Not Go At All?
  • 6. Financial Aid
    • Myths vs. reality-
    • Income too high.
    • Grades too low.
    • Own a home.
    • Aid is only for special groups.
    • It's an easy process.
    • School people can help.
    • Who Is Eligible?
  • 7. How Much Aid Is Available? There is about $169 Billion of Aid (and tax relief) available, if you know where to get it!
  • 8. How Much Aid Is Available? The 2008 Aid Pie (Billions)
  • 9. How Do They Determine If I'm Eligible?
      • COA - FC = Need
      • COA stands for Cost of Attendance.
        • (Includes tuition, books, room/board, etc.)
      • FC stands for Family Contribution.
        • (Based on parent's and student's income, assets, ages, number of people in school.)
      • Need is how much aid the family is eligible for.
      • 3 Categories of People
  • 10. Three Kinds Of Families That Need Proper College Funding !
    • Families with total financial need! (C1)
    • -Those who will get financial aid wherever they go to school. However, everything must be done 100% accurately and on time to get the maximum amount of FREE money and less loans.
  • 11. Three Kinds Of Families That Need Proper College Funding !
    • Families with partial financial need! (C2)
    • -Those who will get financial aid DEPENDING on which school they choose and how their assets & income are positioned. (the majority of people participating in this workshop)
  • 12. Three Kinds Of Families That Need Proper College Funding !
    • Families who make too much money to qualify for “need based” financial aid! (C3)
    • -Those who will not qualify for “ NEED based” aid but still must go through the process to get the “ MERIT based” money. These people must also be concerned with paying for college in the most tax-efficient fashion and must take into consideration how this will effect all other financial and retirement goals they may have.
  • 13. Sources Of Financial Aid!
  • 14. Where To Get Money!
    • Federal Government.
      • Pell Grants
      • SEOG Grants
      • College Work/Study
      • Subsidized and Unsubsidized Stafford Loans
      • Perkins Loans
      • Parent PLUS Loans
  • 15. Where To Get Money!
    • Federal Government.
    • State Government.
      • Special programs for in-state residents.
      • For Teachers, health professionals, minorities, etc.
  • 16. Where To Get Money!
    • Federal Government.
    • State Government.
    • Colleges And Universities.
      • Private universities have endowment funds, outside of federal and state funds.
      • Awarded on a first come, first served basis.
      • Give preferential packaging to student who are in the top 25% of applicants.
  • 17. Where To Get Money!
    • Federal Government.
    • State Government.
    • Colleges And Universities.
    • Private Sources.
      • Are private scholarship services worth it?
      • Very small % of all the aid.
      • Don't spend your time looking for crumbs!
  • 18. How Do You Apply?
    • The FAFSA. (Free Application for Federal Student Aid.)
      • EVERYONE must fill out this form to get aid!
      • You cannot apply for Federal Loans if you do not
      • fill one out!
      • If it is done wrong, it usually gets bumped,
      • adding another 4-6 weeks processing
      • time…which often results in lost financial aid!
  • 19. How Do You Apply For Aid?
    • The FAFSA.
    • The CSS/Profile And Registration Form.
      • Many private schools want this form as well.
      • Asks about home equity, more detailed explanation of income, assets and expenses.
      • Must be consistent with FAFSA!
      • Not easy to understand or fill out!
      • Fill out a separate form to register for the CSS/Profile form and pay a registration fee just to receive the form!!!
  • 20. How Do You Apply For Aid?
    • The FAFSA.
    • The CSS/Financial Aid PROFILE And Registration Form.
    • The School's Own Institutional Forms.
      • Some schools will make you fill out their own additional forms.
      • They must be consistent with the other forms.
      • Usually will ask similar questions to the other two forms.
  • 21. How Do You Apply For Aid?
    • The FAFSA.
    • CSS/Financial Aid PROFILE And Registration Form.
    • The School's Own Institutional Forms.
    • Additional Forms:
      • Business/Farm Supplement.
      • Divorced/Separated Agreement.
  • 22. Which Colleges Give You The Best Shot At Getting Money?
  • 23. The Best Shot!
    • Percentage Of Need Met.
      • Some schools meet 100%
      • of need.
      • Others only meet 30-50%!
      • (COA-FC = Need)
      • COA: ($20K) - FC: (5K) = Need ($15K)
      • 15K x 50% = $7,500 + 5K = $12,500 your new FC.
      • You MUST KNOW these statistics BEFORE APPLYING!
  • 24. The Best Shot!
    • Percentage Of Need Met.
    • Percentage Of Gift Aid.
      • Some schools meet most needs in FREE money, while others give mostly loans.
      • You MUST also know about this BEFORE applying!
  • 25. The Best Shot!
    • Percentage Of Need Met.
    • Percentage Of Gift Aid.
    • Percentage Of Self-Help Aid.
      • Some schools meet most or all of needs in work/study or loans. (You do not want to find out in June that they met most of your need in loans!)
      • You must have a history on what that school has done in the past!
    • Know BEFORE applying!
  • 26. JONES FAMILY: CASE STUDY Northwestern U. Cost - $45,163 EFC - $7,878 Need - $37,285 School A: Meets 100% need. Gift aid - 76% Self help - 24% Kent State U. Cost - $16,576 EFC - $7,878 Need - $8,698 School B: Meets 55% need = $4,784 ($3,914 short!) Gift aid - 33% Self help - 67% What you actually pay at each school: School A : Total EFC = $ 7,878 Total Gift = $28,337 Total Self = $8,948 School B : EFC = $7,878 + Unmet Need = $3,914 Total EFC = $11,792 Total Gift = $1,770 Total Self = $3,014
  • 27. How To Negotiate For The Best Possible Package! You must know your options to get the best deal!
  • 28. How To Negotiate For The Best Possible Package!
    • Some schools mis-award.
    • Some schools under-award.
    • Some schools will try to compete with other schools.
      • You must know whether or not to accept the first award letter or to appeal it!
      • You must know how to to talk to these people in the financial aid offices!
  • 29. How To Get More Need-Based Aid For College! Depending on Your Particular Situation, You Can Re-Arrange Your Affairs To Get More Money By Learning The Legally Established Rules!
  • 30. Financial Aid Legal "Loopholes"
    • It is perfectly legal and ethical to make use of rules that allow you to get more money!
    • It's no different than using legal tax "loopholes" to save money!
    • You may get thousands more just by knowing the rules that they don't want you to discover!
    Knowing more, gets you more!!
  • 31. Example of two parents – one took control! Family A : Family Income: $95,000 Assets: (Excluding home) $60,000 Home Equity: $50,000 Number in family: 4 Number in school: 1 FC - $26,685 Family B : Family Income: $95,000 Assets: (Excluding home) $60,000 Home Equity: $50,000 Number in family: 4 Number in school: 1 FC - $9,613
    • Difference of $17,072 per year , (more than $68,000 over 4 years) because Family B took the time to understand the process, how the pieces of the puzzle fit together...and take control!
  • 32. You must understand these complicated laws and tax provisions, and most importantly, how they impact many areas of college funding. There are many opportunities and pitfalls you have to watch out for! Educational Laws & Amendments
    • $1.35 Trillion Economic Growth - Tax Relief
    • Reconciliation Act Of 2001
    • Deficit Reduction Act of 2005
    • Higher Education Reauthorization Act Of 2006
    • Second Higher Education Extension Act of 2007
    • College Cost Reduction & Access Act Of 2007
  • 33.
    • 1. HOPE Scholarship Credit
    • 2. Lifetime Learning Credit
    • 3. College Tax Deduction
    • 4. Student Loan Interest Deduction
    • 5. Coverdell ESAs (formerly called Education IRAs)
    • 6. Penalty Free IRA Withdrawals
    • 7. Employee Education Assistance Plan Extension
    • 8. Qualified State Prepaid Tuition Program Tax Advantages
    • 9. Changes To Eligibility Formulas, Loan Limits & Interest Rate
    • Calculations
    WARNING! Don’t Even Think About Applying For College Funding Until You Fully Understand These Educational Laws & Tax Provisions That Directly Affect Education Costs!
  • 34. Tax Credits VS. Tax Deductions!
    • Tax Deductions Reduce Taxable Income.
    • A $1,000 Tax Deduction In A 28% Tax Bracket Saves You $280 In Taxes!
    • Tax Credits Reduce Income Tax.
    • A $1,000 Tax Credit In ANY Bracket Saves You $1,000 In Taxes!
  • 35. Getting Maximum Money For College Under The Confusing And Complicated Laws and Tax Provisions Is No Easy Task!
    • Will taking advantage of one of these new tax provisions actually cost you by reducing the amount of aid you would otherwise qualify for?
    • Should you elect the HOPE Scholarship Credit or the Lifetime Learning Credit?
    • Do you make too much money to qualify for the HOPE Credit or the Lifetime Learning Credit?
    • Should you take advantage of the student loan interest deduction?
    • Should you refinance your home to pay for college.
    • Do you qualify for, or should you start a Coverdall ESA?
    • What are the restrictions on IRAs used for college expenses?
    • Are Qualified State Tuition Programs a viable option?
    Can You Honestly Answer All of These Questions???
  • 36. How NOT To Become A Casualty Of These Complicated Laws & Tax Provisions !
    • Start your financial and tax planning early... NOW!
    • Make sure your tax professional is completely aware of the required integration and coordination necessary between your tax and college funding situations!
    • Don't even think about filling out either your tax or college financial aid forms without doing PROPER PLANNING FIRST!!!
  • 37. “ But What If I Make Too Much Money To Qualify For Need Based Aid?”
    • College Funding Planning Isn’t Only Trying To Get Need Based Aid!
    • Other Planning Strategies Are Available To Reduce Your Out Of Pocket Costs!
    • There Are Many Legal Ways To Skin The College Funding Beast That Most People Never Heard Of…And Their Current Advisors Don’t Know About!
  • 38. What Are Your Options? What can you do?
  • 39. What Are Your Options?
    • Do it yourself!
      • You can study and do the necessary research. Like anything else, if you're willing to devote several hours per week, over a number of years, you can figure this out for yourself.
        • Do you solve your own legal problems, or treat your medical conditions yourself?
        • Are you willing to gamble $40,000 - 100,000 and your children's future by doing something you have no expertise or experience in?
  • 40. What Are Your Options?
    • Do it yourself!
      • The colleges will love you for it!
  • 41. What Are Your Options?
    • Do it yourself!
      • The colleges will love you for it!
    • Let your accountant do it for you!
  • 42. What Are Your Options?
      • Do it yourself!
        • The colleges will love you for it!
      • Let your accountant do it for you!
        • Tax formulas are totally different than financial aid formulas!
        • Filling out tax returns is totally different than filling out college aid forms!
        • Accountants tend to apply accounting principles to financial aid, which will destroy the results!
          • Accountants are experts in accounting, not financial aid!
  • 43. Using The Services Of A College Funding Consultant! A Specialist In A Little Known, But Very Important Niche!
  • 44. Questions To Ask A College Funding Specialist!
    • What exactly will they do for you?
      • Income and asset planning.
      • Pick best schools.
      • Fill out forms.
      • Negotiate with schools.
    • Do they offer any guarantees?
    • When should you start planning?
    • What's the next step?
  • 45. Questions To Ask A College Funding Specialist!
    • What exactly will they do for you?
    • Do they offer any guarantees?
      • Most don't!
      • If they do, is the guarantee fair to you?
    • When should you start planning?
    • What's the next step?
  • 46. Questions To Ask A College Funding Specialist!
    • What exactly will they do for you?
    • Do they offer any guarantees?
    • When should you start planning?
      • Best time is before January 1 of the junior year!
      • As early as possible, since aid is allocated on a first come, first served basis!
    • What's the next step?
  • 47. Questions To Ask A College Funding Specialist!
    • What's the next step?
      • Try to do it yourself.
      • Try to get guidance counselor or financial aid officer to do it for you! College will love you!
    • Check the "Yes" box on your evaluation form to schedule a FREE, no obligation consultation! Let's discover whether we can help you send your child to the college of their choice without spending your life’s savings to do it!
  • 48. Three Kinds Of Families We Can Help With College Funding !
    • Families with total financial need!
    • Families with partial financial need!
    • Families who make too much money to qualify for “need based” financial aid!
      • We can show high income, high net worth parents how to pay for college on a tax favored basis!
  • 49. What Have We Learned?
    • There is a ton of false, misleading and plain incorrect information about college funding!
    • There are literally billions of dollars available through various government & private grants, loans, and work study programs!
    • The FAFSA forms are almost always messed up when families send them in…creating costly delays and/or loss of money you would have been eligible for if the forms were filled out right!
    • All public schools use only the FAFSA. Private schools can require additional (and confusing forms) with other financial information!
    • Financial Aid is given out on a first come first served basis. Once their allotment of aid is gone, it’s gone!
    • Some schools historically provide more aid than others!
    • Just like buying a car…you usually have to haggle the right way to get a better deal! (“Sticker price” means nothing!)
  • 50. Our GUARANTEE To You!
    • We GUARANTEE our services in writing with no fine print or “hidden”clauses!
    • If you aren’t thrilled with our services, for any reason, we’ll refund 100% of your fee with absolutely no hassles, no hard feelings!
    • We stand behind our services and YOU 100%, and put our money where our mouth is!
  • 51. Our GUARANTEE To You!
    • We GUARANTEE we will:
      • a.) Do income and asset planning recommendations
      • to reduce your EFC as much as possible.
      • b.) Help you pick the schools that give the best financial
      • aid packages!
      • c.) Help you fill out the financial aid forms, (or in some cases actually fill the forms out for you!)
      • d.) Negotiate on your behalf to get the best possible financial aid packages!
      • If we do not do all this in a professional, timely manner in YOUR opinion, and you’re not satisfied with our performance…we’ll refund absolutely 100% of your fee with no hassles, no hard feelings!
  • 52. What's Next?