Navigating College Admissions with Financial Planning
The college admissions process can feel overwhelming for both students and parents.
From understanding early application options to maximizing financial aid and planning for expenses, every decision matters. Let’s break down key aspects to help families make confident, informed choices.
Early Action vs. Early Decision
These two common early application paths are typically due around November 1, but they work very differently:
Early Action (EA): Students apply earlier and receive admissions decisions sooner, without any binding commitment. EA applicants can apply to multiple schools and compare offers before deciding.
Early Decision (ED): A binding commitment—if admitted, students must attend. ED can improve acceptance odds because schools see these applicants as highly motivated. However, families must request merit aid at the time of application; later financial aid concerns can jeopardize an acceptance.
Maximizing Merit-Based Aid
Merit aid is awarded for academic, athletic, or artistic achievements rather than financial need. To improve chances:
Look Beyond Trophy Schools. Highly competitive universities offer little merit aid because of their abundant applicant pools. Instead, consider niche colleges or specialized programs where your student’s strengths stand out.
Build Recruiter Relationships. Merit decisions often hinge on personal connections. Encourage students to reach out to local recruiters, share interests, and stay in touch. These relationships can lead to introductions with faculty and admissions staff. When students apply, they should express enthusiasm directly—making their case for both admission and merit support.
Let Students Lead. Recruiters prefer authentic student voices. Parents should support, but avoid writing, editing, or speaking on behalf of the student.
Making the Most of 529 Plans
A 529 plan offers tax-free growth and withdrawals when used for qualified education expenses. To use funds effectively:
Adjust Investments Over Time: As college approaches, consider shifting a portion of funds into more stable investments—such as bonds or money markets—to reduce volatility.
Stick to Qualified Expenses: Withdrawals must cover costs like tuition, fees, books, and room and board. Non-qualified expenses can trigger taxes and penalties.
Understanding Loan Options
Loans can help bridge financial gaps, but terms vary widely.
Federal Student Loans: Typically lower interest rates and flexible repayment terms. Includes Direct Subsidized Loans (interest covered while in school) and Direct Unsubsidized Loans (interest accrues immediately).
Parent PLUS Loans: Federal loans taken by parents. They carry fixed interest rates and repayment flexibility, but parents assume the debt burden.
Private Loans: Offered by banks and lenders. Usually higher interest rates and fewer protections, making them a last resort.
Policy Update: Student Loan Reform
For the first time in years, Congress—not just executive orders—has taken the lead on student loan reform.
The One Big Beautiful Bill (OBBB) changes the “blank-check” borrowing effect:
Parent PLUS Loans: Borrowing is now capped at $20,000 per year and $65,000 total for parents of undergraduates.
Graduate Loans: Master’s/general graduate programs are now $20,500 annually and $100,000 lifetime, while professional programs (e.g., law, medicine) are $50,000 per year and $200,000 total.
Undergraduate Loans: Existing limits remain unchanged at $12,500 annually and $57,500 aggregate.
By placing borrowing caps, OBBB shifts responsibility back to universities to manage affordability, rather than allowing unlimited borrowing. It’s a step toward addressing the root cause of rising education costs—not just the symptoms.
Final Thoughts
Families who plan ahead—by understanding application strategies, targeting schools wisely, and exploring funding options—set themselves up for both financial stability and a smoother transition into college life. For tailored guidance, talk to your Certified Financial Planner.
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.
The original article appeared in the September editions of Local Town Pages for Holliston, Natick, Ashland, Franklin, Hopedale, Medway/Mills, Bellingham, and Norfolk/Wrentham. Additionally the Hopkinton Independent and the Community Advocate for Shrewsbury, Westborough, Northborough, Southborough, Grafton, Marlborough, and Hudson.
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 is 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.
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