You know those postcards you get? “How to send your child to college without going broke” and so on? I’ve been throwing them in the recycling bin, but recently my husband and I decided to check out a free session. We are very good at resisting sales pitches and hoped to learn something. This particular consultant charges a flat fee for the family and then helps you with a financial plan and with filling out all financial aid forms.
The bottom line from the workshop? Look at colleges where the child is more likely to graduate in 4 years, don’t take on more total debt than your expected first year of salary, and don’t expect a lot of aid from OOS public schools. Avoid parent loans. It actually wasn’t too bad – and I didn’t get the impression that he existed to sell annuities – but as a CC stalker I didn’t learn a thing. I can’t really imagine how this guy could help us.
FWIW, I was thinking how basic it all seemed, and then heard some of the questions from other parents and realized that what’s obvious to us isn’t obvious to so many. When he said what a student’s absolute maximum debt should be, (an average of 30k because that’s the average annual starting salary) several parents jumped in with “you mean per year, right?” Parents were saying “my kid’s planning on NYU and we figure he’ll get about 40k a year” and the guy literally laughed and told them they were dreaming. Someone else thought he was all set for financial aid because he was divorced and they wouldn’t need his extremely wealthy ex’s financial info.
Has anyone else attended one of these, and learned something and/or signed up for the services?
Another nugget- it’s cheaper for a kid to take a gap year and apply again, then to throw caution to the wind and send them off for Freshman year at a college where you can only afford two years (but think-hey, he’ll take a year off and save enough money to finish).
I went to one once, I learned about a Texas scholarship that I wasn’t familiar with but it’s only available if you go to an in state school public school and we would likely not qualify for it anyway. I also learned that for some schools you can ask them to reevaluated your FA package to see if you can get some additional money. One of the services he offered was to assist in writing such letters…
He asked some questions to gauge knowledge of the audience and asked me if this was my second kid going through school since I knew so much. I said no I just read CC. He claimed he had never heard of College Confidential!
@3scoutsmom That’s interesting. Something I actually found strange was that he didn’t ask any questions at all. I’d have liked to know a smidge about the other people at the table! We did fill out cards with our contact info and the names and grades of our kids, but I would have expected some introductions when it’s just 15-20 people sitting around a table. It was really just lecture style. There wasn’t Q&A, either. If you had a question you could raise your hand and he’d usually answer with “I’ll get to that.”
If a college expert claimed they hadn’t heard of College Confidential, I’d wonder just a bit! When you google college questions CC is frequently the top hit, and it’s also been quoted in articles on other websites, etc.
All in all, this guy seemed to know some good stuff, but nothing I hadn’t already read here, and I think I’m saving my $1500 to put towards tuition.
@Pheebers I don’t think he was being honest when he said he’d never heard of CC. My guess is that he did want others in the room to know that they could get all the info he had for sale free here!
I did, for S’12. It was OK. I am positive i Learned more from the Princeton book “How to pay for college without going broke” (I think that’s what is’ called, I picked one up a couple of years old for $1), and then, here in the FA forum.
I didn’t get too much follow-up sales stuff after, but i also took off right when it ended.
I only went to one organised by the high school and they don’t sell anything. It was very informative. We learned about some local scholarships that my D actually got only later on. They provided help in FAFSA and CSS profile. submission. They even invited the FA officer from the in state flagship to explain the FA package. After that, there is no need to look elsewhere.
What was the part of the service that offered the financial planning for college. How early did he expect people to contact him? Usually when this gets on people’s radar, college is upon them. Your comments indicate that the people were just looking for answers for this or next year, yes?
My wife and kids went to one of these college planning presentations. They learned a lot. The same stuff I told them which I learned here, however, hearing from a third party made the information sink in with them.
They did get a better understanding of how the EFC is determined.
The group my family went to see, did try to sell them an annuity to lower assets and they would complete your FSAFA for you as part of the fee. My wife asked if I needed the help filling out the FSAFA. I said no as I had already filled out the EFC formula. It explains how the EFC is determined based on your income and assets.
These services can be beneficial for some people. H went to one offered by our HS several years ago, and he likens them to auto-detailers. Most of us know how to clean our cars, and we can vacuum them, even a rinse-n-vac or carpet cleaner for the floor mats, and then wash/wax/polish them.
Is it cheaper to do this ourselves? Absolutely.
But some folks don’t want to be bothered taking the time to learn about something when they can pay, what they feel is a relatively modest amount to have someone do the hard part, and explain it to them.
For the record, I have never had my car detailed, but I don’t resent anyone that does.
The difference between washing your own car and getting it detailed, vs. some of these financial aid “counselors” or providers, is that if the guy waxing your car doesn’t get the car immaculately clean, wait a week until you’ve got snow or salt or grime on the windshield and you can take it to someone else.
Once you’ve moved an asset- or retitled an asset- or transferred money from a money market account to an annuity, you are stuck. As I’ve noted before (but I will repeat myself) I know people in real life who have done financial maneuvers to increase their need based aid by 3 or 4K per year. Not nothing- multiplied by four years. But in some instances they have made financial errors which over time can cost 100K plus. Which is better- 12K in extra aid, or 150K in extra savings plus growth plus dividends when you retire? If you are 40 years old, some might argue that you should go for the known payout (more aid) now. But if you are 60 when your kid is heading off to college, you are seriously screwing yourself over.
Most of these financial aid planners do not know that an inherited IRA is treated differently by the IRS than one you have funded yourself. This can be a costly error. Most of these planners don’t know (or don’t want to know) why a healthy 40 year old is often better off with term life insurance vs. whole life (hint- the commissions on whole life are much higher). Most of these planners don’t know how to effectively use a capital loss on a stock you own, or the best ways to deal with a huge capital gain if you are planning to sell the stock to fund tuition.
They don’t know this. So you can “win” at financial aid and still lose at retirement or estate planning or just paying your taxes and making the mortgage every year.