College Planning – Where do we start?

Welcome to the panic room. It’s more of a mood than an actual room and usually infects parents of college students as their kids enter their junior or senior year of high school; the looming cloud of college selection and the daunting task of managing college expenses without destroying retirement.

Interestingly, there is a very logical approach to this overwhelmingly expensive and complex task, which can take away much of the pain and anxiety. A first things first system works for most endeavors and college selection and planning is no different. It is the heart, head and hands approach to the university.

Think in terms of building a house. The first thing you can do is start to imagine the qualities you would like. The number of bedrooms and bathrooms, the size and style of the kitchen and living room, two floors or ranch and the ideal location. This is the dream. This is the HEART.

The next step could be to start separating needs from wants to identify the minimum standards to which our home should be built. If we have a particularly large family, we may need a certain number of rooms and perhaps a large garage to store things other than cars. We can also expect to run a small business from home, in which case we should consider a home office. This is the practical article. This is the HEAD.

Finally, accepting that the bank account is not an endless supply of resources, we must begin to assign value to our wants and needs to recognize, prioritize and finalize the blueprints. While we may want granite countertops, the budget may only allow for textured and stained concrete; an acceptable alternative. This process is the financial evaluation where we define the budget. This is the HAND.

Now think in terms of building a college plan. The Dream: Which school, regardless of cost, practicality, or any required measure of reason, would our student want to attend? What about the second most desired school? A third and fourth option is welcomed. This step is simply about prioritizing your school choice based on criteria that may or may not be rooted in any standards of your reality or perceived financial constraints. This is the HEART.

With that roster developed, we now take a very different tack. We apply the reason to our selection. The most efficient way to select a school is to first understand the desired outcome of earning a degree. With few exceptions, that desired outcome is a career in an area of ​​particular passion for the student. Pursuing a career in an area in which the student demonstrates or expresses no particular passion will serve to frustrate, irritate, and ultimately force the student to change. The change will be in your career or your sense of happiness, neither of which are particularly comfortable undertakings. If that change is recognized while in college, the focus of the degree may change, and that invariably adds time and cost to the process.

Once the race is understood as the goal, the race or races that could best lead to that race are identified. Schools that offer that major are a natural extension that allows us to build a list of qualified schools. From that list, the application of all other criteria may be applied. These criteria can include any number of characteristics, including school size, location, student-teacher ratio, even the quality of food on campus. The short list of possible university options is born. This is the logical approach to college selection. This is the HEAD.

Finally, and probably the most intimidating element of developing a college plan is the financial aspect of higher education. Unfortunately for most parents, financial advice or college-related truths can go a long way. guided by myth.

In general, there is a big misunderstanding about eligibility for financial aid. Too often it is assumed that qualifying for financial aid is reserved for the neediest families. In fact, financial aid in some form is available to almost all families, regardless of wealth or income. Therefore, the first financial step a family should take is to fully understand their eligibility. A visit to the FAFSA is a great first step.

Another common mistake is the assumption that a public school is a less expensive alternative to a private school. While it’s a great truth that the college sticker price may adhere to that rule, the actual out-of-pocket spending may produce a significantly different picture. When aid eligibility is factored in, out-of-pocket spending for a private school that costs $10k-$20k per year more than its state-sponsored competitors may actually be less expensive. Without understanding aid eligibility, an unfortunate majority of parents and students will never recognize this opportunity.

Another factor to consider is the probability of graduating within 4 years. Statistically, there are a number of studies that suggest that private schools graduate their students within 4 years at a significantly higher rate than many public schools. However, most families forget to include the time it takes to earn a degree as a cost factor. Five or six years in a public school can end up costing more than 4 years in a private school, regardless of how they are able to offset the cost of education from their endowment funds. This process is the most powerful key to proper college selection.

Finally, a family must identify a budget for college. The timing of college expenses closely coincides with the start of retirement. If parents spend too much on college without acknowledging the impact on their other financial goals, particularly retirement, they may not have time to recover. This holistic approach to the financial side of college is the HAND.

Rather than an act dictated largely by convention and the application of common tradition, college selection is much better approached with an educated plan. If a family uses the HEART, HEAD, and HAND approach, measuring wants, needs, and financial ability, they will be handling a daunting task with great acumen and will be much more likely to enjoy the fruits of their labor.