Saturday, December 31, 2011

Kurt Epps—kurt@meldrumfinancial.com--732-528-1234



Parents and the "College Thing"



Planning to send a child to college can be an intimidating process, even before you consider ways to pay for it. We know a college education yields potential for greater opportunities and lifetime earning potential. We know also that selecting a college is one thing, getting accepted is another and graduating with a degree yet another. If your child is old enough to be thinking about college, it's a sign that he or she is growing up and preparing for eventual independence. Such independence is inevitable, and the process attached to it comes with a mixture of emotions.




Common Questions



Which college should your child attend? How far away will she be? Will he acclimate himself to his new surroundings? Will she be safe? Will he eat right? Will she come in contact with dangerous or bad influences? Will he get enough sleep?



The answers to those questions will vary, of course, except for the one about eating right. No, they won't. At first. But they'll also find out that they'll have to eat properly eventually to maintain their health. Same thing with sleeping. That's part of the learning process, too. And the bad influences one is also a given. How they handle and react to those influences is what's important. Hopefully, they will make good choices. One of the most important lessons you can impart to your child is that choices have consequences. And, because you're a good parent, you've probably already pounded that home.



By far, the most important question above is the first one, and most experts will tell you that the "right" college is the one that "fits" your child best. That's a nice answer, but the reality is that you can't possibly determine that by a summer visit or even a one-night sleepover. Whether the college fits your child—or he, it—won't be clear until probably midway through the first semester. By then they will have had the full experience and can make more accurate assessments.



Choosing a College



College in modern America is expensive and getting more so each year. The cost of college is outpacing the cost of living—7% to 3%. That means college costs are rising more than twice as fast as the cost of living and the salaries of the people who have to pay for college. Unless you're planning to make your child bear the entire cost of her education, or unless your child is the recipient of so many big-money scholarships that you won't need to contribute a dime, the person paying the tab is you. One of the most important things to take from this letter is that you should not pick a college solely on how much—or how little—it costs. But more about that further down.



The Truth about Scholarships



You may have heard that there is plenty of scholarship money floating around "out there." Be assured that whatever money is out there is accompanied by extreme competition for it. In fact, 90% of all scholarship money will be awarded by the school your child attends, whether that be academic, athletic or otherwise. That money constitutes the lion's share of scholarship cash. The local Left-Handed Inventors' Club, the Native American Dance Foundation and similar organizations may give scholarships, but they are usually small and hotly contested. True, every little bit helps, but with college costs being what they are, you're going to need a lot of "little bits."



Scholarship Search Companies



Everybody has the right to earn an honest living, so I won't bad mouth these businesses. They can sometimes be helpful in ferreting out cash for college, but you also have to lay out cash for the service. My feeling is why pay for something if I can get it free? Your local high school guidance department has access to virtually every scholarship available, and counselors are trained to find them for you. A vist to your child's counselor or guidance office can often pay big dividends with no cash layout. Besides, you're already paying those counselors via your property taxes, so get something for your money. Unfortunately, many guidance counselors in many school districts are burdened with excessive case loads and may not have the time or energy to devote to an intensive search for every counselee. If that is the case in your district, a private scholarship search may be helpful.



The Application Process



Like everything else involved with the College Thing, applications cost money; and the more schools you apply to, the more you're going to lay out. While the average application costs between $40 and $60, some apps cost upward of $75. Be cautious then about how many schools your child applies to. While it's nice to be able to say your daughter got accepted at all twenty schools she applied to, she can only attend one. Guidance counselors and college advisors have a special language to help you sort out this process, using terms like "probable" or "reach" to determine where to send your application money. Listen to them, because they often know what your child can do academically better than you do. You may think Johnny is Harvard material, but his counselors and teachers may think he's better suited to a small state school. While you may occasionally hear the horror story of a guidance counselor (or entire department) who does nothing for the kids, they are few and far between. Most are staffed by competent, caring professionals who sincerely want to see your child succeed in life. And you're already paying for them.



College Financial Aid



There is aid available for almost everyone, whether in the form of grants, which you don't have to pay back, or loans, which you do. Don't be afraid of loans, because the terms of those offered by the federal government are usually pretty fair, but neither should you take on so much loan debt that you have to hock everything to pay them back—or worse, saddle your child with excessive debt before he even starts to work after graduation. This next piece of information is critical. Financial aid—government style—works pretty simply: The more you make or own, the less aid you'll get—and vice versa. But as it's run by the federal government, there's a lot of red tape and it's often confusing. The slightest mistake or omission can have major consequences.



A simple analogy



If I work at the local 7/11, rent a room somewhere, and am single with no children, my taxes are going to be pretty simple to do. 1040 EZ is named that for a reason, and I could probably do my annual taxes myself. But if I own property—or more than one residence-- have kids, own a business, have stocks, bonds, mutual funds or other investments, my taxes become more complicated, and I need to hire a professional. Here's another critical piece of information. One of the biggest mistakes made by people who fit that second description above is that they will never qualify for financial aid. They can, but they require the services of a professional who can show them how to do it, and there are myriad ways to accomplish that. 40% of our clients, middle to upper-middle income, have qualified.



My Story



As a public school teacher, I spent thirty-seven years helping students to realize their dreams by preparing them academically for college. Now I believe it's time to help their parents realize their dreams. Especially if one of those dreams is to provide their children with a college education.



I know how expensive college is because I'm putting my eldest son through college right now. Even after financial aid at his selected school (and he was recruited!), I was facing a monumental bill—and the possible evaporation of all I had worked for all my life. I know a college education is a valuable asset, but to go bankrupt while paying for it did not seem like a good idea. And I have two more sons to educate after him. Their costs will be even higher.



What's more, I have a life to live, too. Oh, I saved for it some, invested a bit and explored other sources—like grandparents—to help cover the costs. But those costs kept rising and the pockets were only so deep.



I'm not a Wall Street Wizard. I worked, saved and made what money I needed to help my family survive. But I realized that what I didn't know could put my bank account, my home and maybe my retirement in great jeopardy.



In short, I knew I needed to get help from somebody who knew the financial ropes.



Lifesaver



I found exactly what I was looking for and more—a way to pay for college without going broke. In fact, by the time my college obligations are done, I will actually have MADE money. But that's another story.



You won't need luck to find the resource that will help you pay for your kids' college educations and fulfill your dreams and obligations. You're holding it in your hand. All you'll need is a phone—or a computer with email—to contact me.



If your situation resembles mine, I look forward to hearing from you. I may be able to help you fulfill those dreams.






Good Luck!