Selecting Colleges: Lead, Don’t Be Led
At an early age, parents control and promote math, activities and problem-solving for their kids. It continues through high school, then something strange happens… parents step back and ask their teenager, “Tell me what colleges you’d like to apply to?”.
You’d never take your teenager to a car lot and ask, “Tell me what car you want to drive home?”
Take control, don’t be another victim - The student debt crisis has many sides to fault: government taking over student lending in 2009, unlimited money supply allows schools to raise tuition 5-7% annually and students (plus parents) desire “brand name” schools on top of list rankings.
Instead, work with your teenager to become educated on their true costs, the return on investment (ROI) per degree and school, and unveil family finances available for college before making an applications list.
Use Net Price Calculators (NPCs) - These are designed to generate personal estimates tailored to a particular family looking at specific schools. You’ll discover if $52,000 tuition may be $34K, $28K or harsh reality it will be $52K, before your teenager gets emotionally invested.
What NPCs capture - You’ll share information from tax returns, size of non-retirement investment accounts, children's accounts (i.e. 529s) and for merit scholarship purposes supply GPA, test scores, class rank and activities.
Not all NPCs are created equally - College websites have NPCs, however they’re inconsistent on questions asked and results illustrated. Take Stanford showing potential $4,061 tuition for family income $48-75K. Look elsewhere to see only 62 of 7,034 undergrads (0.8%) paid this average net price. Yet, CNBC used $4,061 to place Stanford atop of “Colleges That Pay Off The Most” based on 10-year ROI. What of the 52% Stanford undergrads paying $74K, would Stanford even make this list?
Eliminate rushed and emotional decisions to raid investment accounts, borrow heavily and/or delay retirement to make your teenager happy.
Consider the government’s collegecost.ed.gov, fee services like College Board’s bigfuture.collegeboard.org, or a coach, counselor and certain Certified Financial Planners who specialize in helping clients through the college admissions and financial aid processes.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Glenn Brown is a Holliston resident and owner of PlanDynamic, LLC, www.PlanDynamic.com. Glenn is a fee-only Certified Financial Planner™ helping motivated people take control of their planning and investing, so they can balance kids, aging parents and financial independence.
Please call me at (508) 834-7733 or directly schedule a meeting to learn more about considerations for planning and investing so you can balance kids, aging parents and your financial independence.
PlanDynamic, LLC is a registered investment advisor. This article is intended to provide general information. It is not intended to offer or deliver investment advice in any way. Information regarding investment services are provided solely to gain a better understanding of the subject or the article. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable.
Market data and other cited or linked-to content on in this article is based on generally-available information and is believed to be reliable. PlanDynamic, LLC does not guarantee the performance of any investment or the accuracy of the information contained in this article. PlanDynamic, LLC will provide all prospective clients with a copy of PlanDynamic, LLC’s Form ADV2A and applicable Form ADV 2Bs. You may obtain a copy of these disclosures on the SEC website at http://adviserinfo.sec.gov or you may Contact Us to request a free copy via .pdf or hardcopy.