College Financial Planning Information


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Discover the Insider Secrets to College Financial Planning

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College Financial Planning Information

  1. 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. 2. Carol Klamo College Funding Strategist College Planning & Funding Strategies, LLC 927 Beville Road, Suite 111 South Daytona, Florida, 32119 Phone: (386) 236-9944
  3. 3. Keep in mind…  The information in this presentation is based on current laws and regulations. The information is general in nature, seeing that everyone’s personal financial situation is complex and very different. Due to this, we offer a FREE no-obligation consultation to those who participate in this presentation where we will take 1 hour of one-on-one time to review your specific and individual situation. We will further discuss details of the consultation later in the presentation.
  4. 4. Our Research of Parent’s Biggest Concerns  Missing deadlines  Making mistakes  Developing a plan to pay for college  Not having the time to do everything involved  Doing something that will hurt their child’s chances for college admission  Doing something that will cause them to not get the most financial aid possible
  5. 5. Today's High Cost Of College! § Why is it so ridiculously expensive? • Less aid from government sources. • Teacher's salaries going up. • Costs of maintenance, upkeep, repairs, infrastructure, etc., all going up. • Changes in technology. • Each year, college cost are increasing faster than inflation rates!
  6. 6. It's Expensive No Matter Where Your Kids Go! §Average Yearly Cost  Not just tuition - includes Of Private Schools books, room and board, Versus State living expenses, etc. Schools!  4 years can cost $69,960 to $45,000 $143,440 ...or even more! $40,000 $35,000  Multiply by number of kids. $30,000 $25,000 Private  Each year, college costs $20,000 State increase faster than $15,000 inflation rates! $10,000 $5,000 $0
  7. 7. How Is A Family Supposed To Pay For All That? • Savings? • Borrow? • Scholarship? • Go To Lesser School? • Not Go At All?
  8. 8. Savings  Take from the $200,000 that is burning a hole in your pocket  If you have savings, I highly recommend that you reserve one of the FREE consultation appointments I’ll be discussing a little later in the presentation.  $10,000 in savings could potentially cost you $500 to $3,500 in college grant money. You need to know what to do BEFORE you play the game…
  9. 9. Borrow  There are several different ways to borrow the money for college…  If you’re going to borrow money, would you rather…  Get a tax deduction or not get one?  Have a fixed monthly payment or a variable increasing payment?  Have interest-free student loans or high-interest student loans?  Have to take a loan each and every semester or have the funds readily available prior to college beginning? Example: 4 ½ years “Same As Cash” Once again, you must know what your options are before you play the game.
  10. 10. Scholarships  What % of the $169 billion dollars available in Student Aid came in the form of scholarships?   Just like in Las Vegas or Day Trading, you only hear about the winners… “Weekend Warriors” - If someone tells you that ‘Your student has been selected to apply for grants from Federal Gov’t. All you have to do is pay us $2,000 tonight’… RUN!!!
  11. 11. Financial Aid §Who Is Eligible? Myths vs. reality- • Income too high. Financial Aid Certificate • Grades too low. Due to your financial situation, you are accepted to the University of Hard Knocks, and are eligible for $5,000 of financial aid in your freshman year! • Own a home. PRESENTED TO: Our kid • Aid is only for special by this day of Type name here , 199 , groups. • It's an easy process. • School people can help.
  12. 12. How Much Aid Is Available? There is about $169 Billion of Aid (and tax relief) available, if you know where to get it! Cost Chart - Billions of Dollars - (2008 Academic Year) 89 Billion Student/ 169 Parent Share Billion Student Aid
  13. 13. How Much Aid Is Available? The 2008 Aid Pie (Billions) Federal Loans Federal Grants The States 13.1% Private Sources Tuition Tax 6.1% $22.1 Credits $10.4 8.2% Employer Paid Tuition $10.5 Military Collegiate Resources 4% $6.8 Military Tuition Tax Credits The States Collegiate Resources Federal Grants 19.2 % Federal Loans Employer-Paid Tuition $32.48 Private Sources 43.8 % 3.95 % 3.7 % $6.7 $74 $6.3
  14. 14. How Do They Determine If I'm Eligible? § COA - EFC = Need- • COA stands for Cost of Attendance.  (Includes tuition, books, room/board, etc.) • EFC stands for Expected 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
  15. 15. Three Kinds Of Families That Need Proper College Funding!  Families with total financial need! (C1)  Those who 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.
  16. 16. 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)
  17. 17. 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.
  18. 18. Sources Of Financial Aid!
  19. 19. Where To Get Money!  Feder al Gover nment. • Pell Gr ants • SEOG Grants • Colle ge Wor k/Study • Subsidized and Unsubsidized Staf for d Loans • Per kins Loans • PLUS Loans and SLS Loans
  20. 20. Where To Get Money!  Feder al Gover nment.  State Gover nment. • Special programs for in-state residents. • Teacher s, health pr ofessionals, minorities, etc. • Contact state higher education agency for more infor mation.
  21. 21. Where To Get Money!  Feder al Gover nment.  State Gover nment.  Colle ges And Univer sities. • Private univer sities have endowment funds, outside of federal and state funds. • Awar ded on a fir st come, fir st ser ved basis.
  22. 22. Where To Get Money!  Feder al Gover nment.  State Gover nment.  Colle ges And Univer sities.  Private Sour ces. • Are private scholar ship ser vices wor th it? • Ver y small % of all the aid. • Don't spend your time looking for
  23. 23. How Do You Apply? The FAFSA. (Free Application for Federal Student Aid.) A large % go in with errors or inconsistencies. 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!
  24. 24. How Do You Apply For Aid? The FAFSA. The CSS/Financial Aid PROFILE And Registration Form. Many private schools want this form as well. Registration and application can only be submitted online via the Internet. Asks about home equity, more detailed explanation of income, assets and expenses. Must be consistent with FAFSA! Not easy to understand or fill out!
  25. 25. 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.
  26. 26. 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.
  27. 27. Financial Aid Forms: End Result „ As a national average, Parents & Students will fill out 5-9 forms for Financial Aid, spending 15-20 hours processing them, and still 75% are completed with errors or inconsistencies.
  28. 28. Which Colleges Give You The Best Shot At Getting Money?
  29. 29. The Best Shot!  Percentage Of Need Met. – Some schools meet 100% of need. – Others only meet 30-60%! – (COA-EFC = Need) – COA: ($20K) - EFC: (10K) = Need ($10K) – 10K - 60% = $4,000 + 10K = $14,000 your new EFC. – You MUST KNOW these statistics BEFORE APPLYING!
  30. 30. 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!
  31. 31. 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!
  32. 32. JONES FAMILY: CASE STUDY Northwestern Univ: Univ of Central FL: Cost - $45,167 Cost - $18,282 EFC - $7,878 EFC - $7,878 Need - $37,285 Need - $10,404 School A: School B: Meets 100% need. Meets 58% need = $6,034 ($4,370 short!) Gift aid - 76% Gift aid - 57% Self help - 24% Self help - 43% What you actually pay at each school: School A: School B: Total EFC = $7,878 EFC = $7,878 Total Gift = $28,337 + Unmet Need = $4,370 Total Self = $8,948 Total EFC = $12,248 Total Gift = $3,439 Total Self = $2,595 Family actually pays $4,370 more out of pocket to send their child to the "cheaper" school! Don't make the huge mistake of picking schools based on cost of attendance only! Your family may not get the best education...because you didn't know the inside secrets of college funding!
  33. 33. How To Negotiate For The Best Possible Package! You must know your options to get the best deal!
  34. 34. 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! – You must know how to to talk to these people in the financial aid offices!
  35. 35. “Financial Aid Leveraging”  65% of private schools and 27% of public schools engage in financial aid leveraging.* This process is used by universities to determine HOW LITTLE AID needs to be awarded to a particular student to still get the student to enroll. * Quoted from Money magazine
  36. 36. How To Get More Need-Based Aid For College! You Can Re-Arrange Your Affairs To Get More Money By Learning The Legally Established Rules!
  37. 37. Financial Aid Legal "Loopholes"  It is perfectly legal and Knowing more, gets you ethical to make use of more!! rules that allow you to get more money! $10,000  It's no different than $8,000 Not using legal tax Knowing $6,000 "loopholes" to save Loopholes Knowing $4,000 money! Loopholes $2,000  You may get thousands $0 more just by knowing the rules that they don't want you to discover!
  38. 38. Example of two parents – one took control! Family A: Family B: Income: $95,000 Income: $95,000 Assets: (Excluding home) $60,000 Assets: (Excluding home) $60,000 Other real estate: $50,000 Other real estate: $50,000 Number in family: 4 Number in family: 4 Number in school: 1 Number in school: 1 EFC - $26,685 EFC - $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!
  39. 39. 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 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!
  40. 40. WARNING! Don’t Even Think About Applying For College Funding Until You Fully Understand These Educational Laws & Tax Provisions That Directly Affect Education Costs!  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
  41. 41. Tax Credits vs. Tax Deductions!  Tax Deductions Reduce  Tax Credits Reduce Taxable Income. Income Tax.  A $1,000 Tax Deduction  A $1,000 Tax Credit In In A 28% Tax Bracket ANY Bracket Saves You Saves You $280 In $1,000 In Taxes! Taxes!
  42. 42. Section 529 Plans Are they all they’re cracked up to be??? What are the “so-called” Benefits? How do they affect Financial Aid?
  43. 43. 529 Plans: Are they right for you? If you own a 529 plan, make sure you have a competent college funding advisor exam it BEFORE you apply for financial aid!
  44. 44. 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???
  45. 45. 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!!!
  46. 46. If You Choose to Have Someone Help You, Make Sure You Ask Them These Questions:  Can you show me how to lower my EFC & maximize my eligibility for aid?  Can you help me pick schools that will give me the best aid package - meet most need, more FREE money, less loans, etc.?  Can you help me fill out the FAFSA & CSS/Financial Aid PROFILE Forms line by line?  Will you help me negotiate if I get a bad package or less than I expected from each school?  Can you show me how to pay for college on a tax favored basis if I don’t qualify for financial aid?
  47. 47. “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!
  48. 48. What Are Your Options? What can you do?
  49. 49. 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!
  50. 50. Using The Services Of A College Funding Consultant! A Specialist In A Little Known, But Very Important Niche!
  51. 51. 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?
  52. 52. The Mission For Our Clients! • Eliminate the administrative nightmare, which is littered with countless opportunities for errors causing families to lose some or all of their financial aid. • Integrate sound financial planning strategies with the financial aid rules and regulations. • Implement programs that help families more easily afford to send their children to the college of their dreams.
  53. 53. 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! – e.) Create a personalized plan to pay your family’s out-of-pocket expenses in the most tax-efficient way possible. 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!
  54. 54. Services We Provide: Student Counseling Student Assessment • Personality Profile Evaluation • Advanced Search Of Careers, Majors & Studies Based On Specific Student Interests • Innovative College Search Based On Demographics & Personalized Areas Of Importance • Personalized Private Student Interview with a Private Admission Counselor From the National Association of College Admission Counselors – Designed By A Ph.D., An M.I.T. Graduate & Former University Professor Extremely Knowledgeable About Admissions Practices • SAT Prep Course Entitled “The Little-Known Secrets of Acing the SAT!” • On Average, Students Who Have Participated In This Course Have Increased Their SAT Scores By 225 POINTS! • ACT Prep Course Entitled “Everything You Must Know To Master The ACT!” • On Average, Students Who Have Participated In This Course Have Increased Their ACT Scores By 4 POINTS! • Admission Essay Review • In-Depth Personalized Analysis On Your Chances Of Enrollment At Up To 5 Colleges • Follow-Up Student /Parent Q&A Interview With Your Very Own Private NACAC Counselor / Admissions Coach • Unlimited Q&A Email Access To Our Highly-Acclaimed Expert SAT / ACT Team
  55. 55. Services We Provide: College Funding Strategies • Calculate Expected Family Contribution (EFC) • Provide Planning Recommendations To Reduce EFC • Provide Financial Aid Award Estimates For An Unlimited Number of Schools & Recommend Additional Schools To Be Considered • Provide Recommendations For The Best Way To Pay Your Share Of College Costs • Provide Tax-Efficient Borrowing Strategies To Help Keep Financial Goals In Line, Along With Cash Flow Strategies For College Years & Beyond • Provide Complete Financial Overview On College, Taxes, Cash Flow, Retirement & Develop A Plan To Improve Each Area • Provide Strategies That Legally Protect Your Savings & Retirement Accounts From The Financial Aid Formulas
  56. 56. Services We Provide: Financial Aid Data Gathering & Processing • College Planning Checklist With All Timelines & Deadlines That Is Updated Electronically & E-Mailed Every Time Something Is Completed &/Or Missing • Free Bonus – Complete Free Application For Federal Student Aid (FAFSA) • Register Your Student For The CSS PROFILE • Complete CSS PROFILE & Walk Families Through All Supporting Documentation • Complete Any Additional Forms Required By The Individual Schools • Confirm The Accuracy Of The Student Aid Report (SAR) • Make Any Necessary Adjustments To The SAR • Advise & Counsel On Stafford & PLUS Loan Applications • Provide Protection From Being Overlooked For Grants, Scholarships Or Loans Due To Mistakes On Your Financial Aid Forms
  57. 57. Services We Provide: Appeals • Spreadsheet Up To 3 Award Letters & Professionally Evaluate If Your Offer Was Fair • Provide Tested Appeal Letters If You Were Under- Awarded
  58. 58. Services We Provide: Value Added Services • Sponsor “Client-Only” Teleconferences Throughout The Year For Parents & Students On Topics Ranging From Essay Writing To Admission Tips • Provide Easy-To-Use Parent & Student Manuals • Provide a Monthly E-Letter To Parents & Students To Keep Them Updated On Everything They Need To Be Aware Of Along The Way With A Weekly College Funding “Tip of the Week” • E-Mails Submitted Monthly To Both Parents & Students On What They Need To Be Doing That Month To Maximize Their College Admissions & Financial Aid Results • Personalized Financial Aid FAQ Page • Interactive Online Page For Each Parent / Student • Provide Parent / Student Feedback On Specific Colleges • Unlimited Support For Parents & Students • Copy Of Our “Student Handbook For Success” • Copy Of Our “College Admissions Boot Camp Handbook” • A One-Stop Shop to Always Have Your Questions Answered With Personalized Contact • Provide “Peace of Mind
  59. 59. Ask Yourself This Question… How many of you are interested in knowing… $ What your financial aid package might look like at the schools you are considering BEFORE you apply AND $ If there are any strategies you can take advantage of to help make paying for college more easily affordable?
  60. 60. Requirements of Free Consultation • Must be scheduled within 2 weeks of Workshop date • If married, both parents must be present • In order to facilitate the volume of free consultations we hold, we ask you to provide a number where you can be reached tomorrow between 9AM and 12PM. – If you can’t be reached between 9AM and 12PM, please provide a time during business hours you would prefer to be called. – Seeing that almost everyone ends up requesting the FREE Consultation…If the FREE Consultation is not scheduled by the end of the day tomorrow, we cannot guarantee that any available FREE Consultation spots will be left.
  61. 61. 1 Out Of 3 Things Will Happen • You will get all of the added info you were looking for so that you can do this yourself. • You will decide that you want to do part and you want us to do part. • You will decide that you want absolutely nothing to do with the financial aid nightmare and let us take everything off of your plate.
  62. 62. Develop a PLAN! “A fool with a plan is better than a genius with none.” -T. Boone Pickens – July 2008