Email Article Print Article

A Day In The Life Of College Planning

By Andy Bowman, CWPP™, CAPP™ - Email Editor

Date : June 9, 2009

Dear Valued Reader,

College Planning, with its complexities revolving around academic and financial decision-making, has proved to be daunting tasks for today’s families. The escalating need for real-world planning has brought with it a never-ending array of questions and somewhat confusing solutions. Unfortunately, there has been no “magic bullet”, as skyrocketing costs of higher education has outpaced previous financial remedies.

Front and center in this melodrama is how the higher education system has strategically positioned itself as the necessary ingredient for the success, both psychologically and financially, of America’s youth. In addition to a college/university degree becoming a must-have requirement to fulfill the American dream, and possibly the dream career, it has also become one of the family’s core financial concerns. No longer can we simply choose where our teens want to go to school based on Mom or Dad’s alma mater, now we must choose based on an ever-increasing set of criteria, and, unfortunately, in many instances the cost is becoming the deciding factor.

To add to the complexity of college planning, advisors are divided on how to solve the families’ concerns. On one side of the ‘solution’ you have what could be called “true college planners”. These are advisors that concentrate on the academic side of the equation. Their fees can range from $1,200 to $30,000. The academic side is by far the most difficult to grasp for families and advisors alike. College selection, student positioning, admissions, scholarships and grant searches, college visitations, SAT/ACT prep, personality testing, and FAFSAs are the need to know topics. The areas in which the typical family can benefit from assistance on the academic side are very valuable.

These decisions are a crucial piece of the college-planning puzzle.

Total success on the academic side of the equation still leaves a family with the challenge of how to pay, and an equal challenge to the advisors focusing on the funding aspects. Unfortunatly the financial professionals that provide answers to questions of funding higher education are also divided in their approach. As you already know, these inconsistencies in advisors approaches can be confusing and frustrating to families.

Half of the financial camp has determined that the funding solution should be the reduction of the family’s EFC (Estimated Family Contribution) in order to increase aid eligibility. The reality of the more sophisticated reduction techniques (those that venture beyond a shifting of assets) can be complex, loop-hole-driven explorations viable in only the most perfect of circumstances. In many cases, the solution is worse than the problem, not to mention the 300 or so schools that utilize the Federal Methodology that can scrutinize all income and assets.

That brings us to the other half of the financial advisor camp, those who have determined that if a product is used in a specific way, then the costs of college can be accessed, earned, saved, or borrowed. There are definitely solutions embedded in these ideas, strategies, products, and, I dare say, schemes.

Often the problem of helping families afford college brings with it an open door opprotunity for marketing firms to sell whatever is paying an advisor the best fees. Many of the solutions are unfortunately touted as the ‘magic bullet’ we all seek. This simply is not the truth. Whether it is cash value life insurance, an annuity, an ESA funding plan, a 529, or whatever else the mass marketers of the world come up with, these vehicles never work 100% of the time. They work some of the time and should be offered as one solution, not the “only” solution. College planning should not be just a marketing tool for those without the ethics and knowledge to back it up.

A family should seek an advisor that provides a holistic approach. The true professional advisor should be able to provide legitimate solutions to the myriad of choices. The advisor you choose should have a comprehensive approach that deals with the academics of college as well as the finance. For those interested in further education on the topic of college planning, you can view Trustmakers 56 page educational module for sale.

There is an old saying, “If you cannot dazzle them with brilliance, bury them with BS.” Be careful of the “BS” as it is not the way to your kids’ college degree.

For more information on complete college planning solutions contact info@trustmakers.com.

Until next time,

RELATED ARTICLES:

• Managing Asset Protection Offshore
• Making the Most Out of Hedge Funds That Drive Success
• Working Your Portfolio to Being Green
• Finding Better Ways to Manage Your Money