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Speaker 1: Welcome to How the Money. I'm Joel and I am Matt,

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Speaker 1: and today we're talking about demolishing college costs with Anne Garcia.

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Speaker 1: That's right. Yeah, we are talking about the high cost

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Speaker 1: of college and how you can get that expense under control.

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Speaker 1: And you know, just in case you don't think that

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Speaker 1: this is actually a problem, here's a stat for folks.

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Speaker 1: Since the year two thousand, the price to attend college

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Speaker 1: has skyrocketed. It's increased by nearly one hundred and eighty percent.

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Speaker 1: So just to put things in context, even the higher

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Speaker 1: price of housing doesn't really compare as it's only gone

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Speaker 1: up around eighty percent, So we're talking about one hundred

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Speaker 1: percent more than the cost of housing. So we are

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Speaker 1: excited to be speaking with Anne Garcia, who is known

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Speaker 1: as the College Financial Lady. That's the name of her

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Speaker 1: site where she also has a masterclass and her book

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Speaker 1: How to Pay for College. It covers all the different

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Speaker 1: strategies that you need to employ in order to get

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Speaker 1: your kid through college without wrecking your retirement. So we're

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Speaker 1: excited to discuss all of those different approaches today. And

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Speaker 1: thank you so much for joining us today on the podcast.

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Speaker 1: Thank you so much for having me. We are excited

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Speaker 1: to have this chat. And it's obviously, like Matt outlined,

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Speaker 1: a major problem paying for college, But there are a

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Speaker 1: lot of there's a lot of power in the hands

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Speaker 1: of individuals that we're going to get to how they

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Speaker 1: can kind of make choices that, you know, don't end

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Speaker 1: up completely screwing themselves over financially while still allowing their

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Speaker 1: kid to pursue higher education. But the first question we

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Speaker 1: ask everyone who comes on the show is what do

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Speaker 1: you like to splourage on? Matt and I we spend

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Speaker 1: Some people would say too much money on craft beer.

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Speaker 1: We say, no way, we spend the perfect amount. So

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Speaker 1: what's that in your life? What is it that you

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Speaker 1: love to splourage on? Right now, I'm splurging on the

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Speaker 1: people I care about, and that seems to be you know,

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Speaker 1: and just restablishing those connections that over the last couple

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Speaker 1: of years have maybe not been as strong as they

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Speaker 1: once were. It seems to be expressing itself a lot

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Speaker 1: in travel this year. So is this travel to see

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Speaker 1: those individuals or is this travel with those individuals? I

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Speaker 1: guess I'm thinking of your your kids in college. It's

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Speaker 1: it's both. So we've been doing some college visits, doing

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Speaker 1: some family visits. My kids graduate from college this year,

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Speaker 1: so we are taking a big graduation trip where we're

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Speaker 1: gonna visit some old friends, and then we're taking another

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Speaker 1: trip later in the year with some with some friends

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Speaker 1: we haven't seen in a few years since since pre COVID,

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Speaker 1: and planning a big family Thanksgiving get together, and then

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Speaker 1: just doing a lot of things like, you know, making

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Speaker 1: sure we're making time for friends and sometimes if that's

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Speaker 1: a weeknight that means going out for dinner instead of

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Speaker 1: having them over, you know, really just focused on on

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Speaker 1: rebuilding connections that have that have been neglected for the

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Speaker 1: last few years. Yeah, no, I get it. That's and

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Speaker 1: I'll by the way, I'll say it sounds like you're

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Speaker 1: Your splurage is way more like noble. Sounded you sound

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Speaker 1: like an angel and I where we're just like, oh,

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Speaker 1: we're just like beer. We're dropping money on craft beer.

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Speaker 1: So maybe there's plenty of beer in my splurge too. Okay,

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Speaker 1: all right, maybe we should be connecting over beer. But yeah,

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Speaker 1: connecting with over beer, buying beers four friends, Yes, maybe

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Speaker 1: that should be our new approach. But and the cost

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Speaker 1: of college, it's just a continual national conversation right now

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Speaker 1: and so we I didn't mention this in the little

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Speaker 1: introductory section there, but you're a fee only adviser as well,

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Speaker 1: which is amazing. But like, what is it that caused

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Speaker 1: you to jump so deep into the college planning space? Yeah?

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Speaker 1: I do spend a lot of time on college in

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Speaker 1: my practice, and it really came out of early in

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Speaker 1: my career. I found I was talking a lot to

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Speaker 1: two groups of people. One were parents who were struggling

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Speaker 1: to figure out how to pay for college, and another word,

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Speaker 1: young adults who had taken out so much in student

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Speaker 1: loan that they were struggling with the basic building blocks

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Speaker 1: of their adult financial life, you know, whether it's buying

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Speaker 1: a house, saving for retirement, sometimes even having an emergency

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Speaker 1: savings account. I'm apparent too, And so I also was

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Speaker 1: trying to figure out how I was going to pay

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Speaker 1: for college. And I realized that that if I got

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Speaker 1: deep into that topic, number one, I could help all

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Speaker 1: these clients and my own family, But number two, I

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Speaker 1: could hopefully reduce the number of those young adults with

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Speaker 1: massive student loan debt who were who were who were

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Speaker 1: coming to me? Yeah, yet another noble cause that all right,

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Speaker 1: selfish interest was also a big party. Necessity is always

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Speaker 1: a good mother of invention. Yeah, let's start with one

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Speaker 1: of the one of the easiest questions possible. What's wrong

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Speaker 1: with the way we do college in this country? And

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Speaker 1: and can you answer in fifteen seconds or less? Just kidding,

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Speaker 1: most things I think are wrong with how we with

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Speaker 1: how we do college. Okay, the whole system completely fog.

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Speaker 1: Let's just throw it all out and start over. No,

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Speaker 1: that's not really going to work either. I mean, I

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Speaker 1: do think on the one hand, college is a great investment.

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Speaker 1: Colleges do a great job of educating and preparing young

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Speaker 1: people for adulthood, for careers, for you know, for general citizenship,

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Speaker 1: in addition to you know, knowledge and skills that they'll

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Speaker 1: take into the you know, into into the workforce. But

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Speaker 1: far too many people spend far too much money to

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Speaker 1: get it, to get their kids educated, and there's this

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Speaker 1: huge lack of transparency where people at all levels don't understand,

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Speaker 1: you know, how to make the educational system work for them. So,

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Speaker 1: you know, you mentioned in your intro that the cost

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Speaker 1: of college has increased by what was it, one hundred

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Speaker 1: and sixty percent? Nearly one hundred and eighty percent in

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Speaker 1: the past twenty three years. Yeah. So here's the thing

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Speaker 1: that since the financial crisis of two thousand and eight

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Speaker 1: two thousand and nine, the net price of college has

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Speaker 1: stayed pretty much constant. So the net price is the

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Speaker 1: actual amount that people pay. This is very different from

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Speaker 1: the list price of college, which just goes to say

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Speaker 1: there are tons and tons of bargains out there in

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Speaker 1: college world. Unfortunately, the people who the most need those

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Speaker 1: bargains are the people who have, you know, the least

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Speaker 1: resources available to them to try to find them. Okay,

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Speaker 1: so we're kind of talking about college just from a

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Speaker 1: policy level. I guess frore a systemic level. But let's

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Speaker 1: get personal as well. And you mentioned you've got kids

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Speaker 1: who are in college. You've got twins at least for

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Speaker 1: one more year, they're going to be in college. And

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Speaker 1: so how did you yourself, how did you approach the

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Speaker 1: college admissions process with them? You know, we really went

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Speaker 1: through phases when when they were young, I was all

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Speaker 1: about wanting them to go to my college. My husband

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Speaker 1: felt the same way. You know, we bought them all

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Speaker 1: the cal and Michigan staff. We're in Oregon and we

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Speaker 1: are not duck loyalists. So we always ingrained in them

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Speaker 1: the cal and Michigan stuff that we that we grew

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Speaker 1: up with. And then one day I looked at what

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Speaker 1: it would cost to send either of them to either

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Speaker 1: those colleges, and that was the last time they ever

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Speaker 1: got one of those teachings, because it was a real well,

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Speaker 1: you know, it's a real eye opener. And I thought,

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Speaker 1: you know, much as I loved what I what I

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Speaker 1: got out of my college experience, I was not going

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Speaker 1: to pay you know, sixty thousand dollars a year times

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Speaker 1: four times to two kids to get it. And yeah,

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Speaker 1: and you know, I realized as I was thinking about

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Speaker 1: what I wanted them to get out of going to

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Speaker 1: Berkeley like I did, was really more stuff that I

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Speaker 1: wanted them to get out of an education that wasn't

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Speaker 1: necessarily specific to to where they went. You know. I

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Speaker 1: wanted them to have the opportunity to learn from brilliant

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Speaker 1: professors who are leaders in their field. I wanted them

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Speaker 1: to be able to study abroad and meet new friends

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Speaker 1: and you know, learn how to do their own laundry.

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Speaker 1: And and I realized that that was available at a

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Speaker 1: lot of different places, and so We really switched our

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Speaker 1: conversations at home from which college we wanted our kids

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Speaker 1: to go to to why we wanted them to go

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Speaker 1: to college, and use that to frame our conversations. We also,

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Speaker 1: you know, took a good hard look at our budget

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Speaker 1: and what kind of students our kids were and help

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Speaker 1: them to understand what the dollars were that were available

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Speaker 1: to them for college and help them to find good

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Speaker 1: choices that met their budget but that also were good

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Speaker 1: fits for them as students. Is that a part of

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Speaker 1: the problem that there's a lot of nostalgia oftentimes for

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Speaker 1: parents or they want to direct their kids in a

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Speaker 1: certain way, and they are paying attention less to the

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Speaker 1: budget than they should, and they're paying more attention to

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Speaker 1: the emotional side of things, whether it's personal emotions or

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Speaker 1: the emotions of their of their their child who says, hey,

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Speaker 1: I really want to go to this school, And nobody's

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Speaker 1: really paying attention to the bottom line as much as

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Speaker 1: they should be. Absolutely, I mean one hundred percent. You know,

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Speaker 1: we're parents. You know we would take a bullet for

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Speaker 1: our kids. So the thought of stretching ourselves financially for

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Speaker 1: college to do right by them is a you know,

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Speaker 1: It's not a hard thing for a lot of parents

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Speaker 1: to do, and it's unfortunate because there are so many

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Speaker 1: good choices at so many different price points. And really

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Speaker 1: the best thing you can do for your kids is

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Speaker 1: make sure that they graduate from college with a degree

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Speaker 1: and with a minimum of student loan debt. That creates

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Speaker 1: far more opportunities for them than the college that they

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Speaker 1: actually choose to go to. You yeah, actually graduating and

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Speaker 1: actually actually kidding that degree. It's so important. We're going

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Speaker 1: to talk a little bit here about just the benefits

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Speaker 1: that individuals receive from college. But just another note on

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Speaker 1: the personal note. I guess it's often touted that AP

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Speaker 1: courses how they can help kids appeal to potential colleges,

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Speaker 1: and that there might actually be more scholarship opportunities with

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Speaker 1: some of those advanced courses under their belt, but you, personally,

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Speaker 1: you found that those actually cost your kids money. Can

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Speaker 1: you share that story with our listeners. Yeah, So there's

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Speaker 1: a lot that's great about advanced high school classes. One

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Speaker 1: of the surprising things for us as we went through

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Speaker 1: the application and admission process, because I'm like most parents

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Speaker 1: where school says challenge your kids as much as you

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Speaker 1: can so I encourage my kids to take all the

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Speaker 1: Our high school was an IB school, so I encourage

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Speaker 1: my kids to take IB classes and whatnot. What we

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Speaker 1: learned was that a lot of colleges, particularly the ones

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Speaker 1: that have automatic scholarships. You know, as long as you

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Speaker 1: have a three point seven GPA, you get this scholarship.

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Speaker 1: If you know at four point oh, you get this scholarship,

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Speaker 1: they do that on the basis of unweighted GPA. And

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Speaker 1: my son was not a good fit for IB classes

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Speaker 1: and didn't do as well in them as he would

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Speaker 1: have in standard classes. And ultimately that although he got

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Speaker 1: a great scholarship to the college that he's going to,

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Speaker 1: he would have gotten twelve thousand dollars a year more

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Speaker 1: had we minimized the IB classes that he was taking

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Speaker 1: and manage his courseload a little bit in that way.

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Speaker 1: And I don't want to sound like, don't challenge your kid,

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Speaker 1: but in his case, it wasn't just losing out on

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Speaker 1: the financial aid. It was that he was so frustrated

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Speaker 1: and felt so successful in those classes that I think

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Speaker 1: that ultimately they weren't they weren't a good choice for him.

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Speaker 1: On a lot of on a lot of levels. You

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Speaker 1: know that the number of nights that he was crying

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Speaker 1: over his homework or saying, I'm the dumbest person in

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Speaker 1: my class. You know, the good news is now that

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Speaker 1: he's in college, he's a straight A student in college.

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Speaker 1: He got a D in high school calculus, he's tutoring

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Speaker 1: statistics in college. You know, straight a student, invited to

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Speaker 1: the Honors college after his freshman year, and really seeing

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Speaker 1: a ton of a ton of success. And he also

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Speaker 1: has said repeatedly to me, I think I went to

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Speaker 1: the hardest high school of anyone I know, because all

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Speaker 1: my friends thought high school was easy. In college it's hard.

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Speaker 1: And I thought high school was hard and college was

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Speaker 1: was easy. Interesting, So I think you know, the thing

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Speaker 1: with the thing with those advanced classes are it really

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Speaker 1: depends where you're going to go to college or where

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Speaker 1: you want to apply to college, because obviously, when you're

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Speaker 1: choosing what classes you're going to take in high school,

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Speaker 1: you have no idea where you're going to where you're

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Speaker 1: going to go to college. If you're applying to the

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Speaker 1: most selective colleges having a full suite of AP and

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Speaker 1: IB classes, there's really table stakes in the admissions process

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Speaker 1: and I do think, as a parent who's watched my

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Speaker 1: kids transition from high school to college, that those classes

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Speaker 1: are terrific preparation for college curriculum. But I think it's

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Speaker 1: also a good idea to depending on your student to

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Speaker 1: balance that with giving them opportunities to be more successful

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Speaker 1: as as students as well, you know, maybe choosing for

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Speaker 1: advanced classes the topics that they're the most passionate about,

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Speaker 1: so that they can you know, really excel in those

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Speaker 1: classes and put in the time that they require because

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Speaker 1: they tend to require loads and loads of homework. Okay,

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Speaker 1: all right, I want to talk about value for a second,

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Speaker 1: because to me, so much of the way we talk

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Speaker 1: about college should boil down to value. Although it seems

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Speaker 1: like based on the way parents approach it and based

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Speaker 1: on the way a lot of schools approach it too,

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Speaker 1: that's not necessarily the focus for a lot of people.

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Speaker 1: So I guess how impactful are the most highly selective

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Speaker 1: schools in the outcome for young adults, their their life outcomes,

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Speaker 1: and their financial outcomes. Like does going to the most

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Speaker 1: highly selective schools make that big of a difference? Like

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Speaker 1: I went to a kind of a commuter school here

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Speaker 1: not too far from where I live, and I'm doing Okay,

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Speaker 1: I don't know. I guess I'm just curious how that

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Speaker 1: how that shakes out for most kids. Yeah, and it's

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Speaker 1: such a good question and such an important question for

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Speaker 1: families to to think about. And I'm going to answer

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Speaker 1: this a couple of ways. So first of all, first

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Speaker 1: I'm going to say, you know, as we mentioned, I

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Speaker 1: have twins. They're both graduating from college this year. One

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Speaker 1: is at one of those single digit acceptance rate private colleges,

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Speaker 1: another is at a public college that accepts more than

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Speaker 1: three quarters of applicants. Both of them have virtually identical

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Speaker 1: job offers coming out of college. So there are tools

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Speaker 1: now like handshake and and whatnot that have really democratized

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Speaker 1: the job search process for for for kids and given

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Speaker 1: them loads more opportunities that are not dependent on which

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Speaker 1: college they went to. You know, when I went to

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Speaker 1: college college, there were companies that came and recruited at

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Speaker 1: your college, and those were the companies that you could

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Speaker 1: get recruited to, and if they didn't come to your college,

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Speaker 1: it was really tough to get a job from them.

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Speaker 1: I would say, you know, if your goal is investment,

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Speaker 1: banking management, consulting, hedge fund management. You probably need a

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Speaker 1: name brand degree behind you, or at least you know

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Speaker 1: whether and whether it's undergraduate or MBA is another issue.

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Speaker 1: But for the vast majority of students, where you go

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Speaker 1: to college doesn't have nearly the impact as that you

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Speaker 1: went to college. So you know, college graduates as a group,

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Speaker 1: we'll earn about a million dollars more on average than

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Speaker 1: their peers without college Without college degrees, the unemployment rate

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Speaker 1: for college graduates is typically about half what it is

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Speaker 1: for those without degrees. But the benefits extend beyond just

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Speaker 1: the financial piece of it. College graduates live longer in

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Speaker 1: hell your life. There's less type two diabetes, less heart

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Speaker 1: disease among college graduates. College graduates are more likely to

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Speaker 1: own homes unless they have access student loan debt than

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Speaker 1: those without it. And college graduates actually marry at higher

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Speaker 1: rates and divorce at lower rates than people without without

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Speaker 1: college degrees. So so it's you're absolutely as a parent,

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Speaker 1: you're absolutely right to want this for your kid, but

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Speaker 1: you can want it in a way that doesn't wreck you, Okay,

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Speaker 1: and so given and I completely agree, but given kind

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Speaker 1: of the interestingly enough you talked about the difference between

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Speaker 1: the sticker price and the price that the people actually pay.

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Speaker 1: But when we look at kind of inflation and what

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Speaker 1: it's done to the cost of college, we've seen more

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Speaker 1: a lot of colleges hire more administrators, which has led

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Speaker 1: to in many ways, some of the higher costs that

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Speaker 1: we've seen. But yeah, I guess if we're talking, how

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Speaker 1: would you if there's a parent and a student, a

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Speaker 1: high school student who are kind of on the edge

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Speaker 1: and they're saying, I'm not sure if college is what's

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Speaker 1: best for my child, how would you kind of help

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Speaker 1: that maybe decide to cipher whether or not it's the

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Speaker 1: right path moving forward, given that the stakes and the

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Speaker 1: potential expense is so high. Yeah, so there's no requirement

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Speaker 1: that you go straight from high school to college, yes,

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Speaker 1: first and foremast, And there's also no requirement that you

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Speaker 1: start your education at a four year college. You know,

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Speaker 1: you can also start at a community college. So there

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Speaker 1: are lots of you know, lots of pathways that are

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Speaker 1: that are open to people. There's also you know, we're

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Speaker 1: seeing a little bit of a trend in some areas

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Speaker 1: of reducing degree requirements, and so there may be an

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Speaker 1: increasing number of career paths that become open to people

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Speaker 1: without college degrees in the future than there are today.

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Speaker 1: The challenges most of those are asking for experience in

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Speaker 1: lieu of a degree. So that is not to say

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Speaker 1: that the high school graduate is going to walk into

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Speaker 1: the same set of career options as the college graduate,

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Speaker 1: but that the high school graduate can can put in

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Speaker 1: the time and effort in established a career and perhaps

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Speaker 1: ten years down the road be eligible for jobs that

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Speaker 1: someone newly out of college might have earlier access to.

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Speaker 1: That's true. Yeah, No, I think the taking a gap

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Speaker 1: year is basically what you're saying right like, there's no

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Speaker 1: requirement that you have to go straight into college. That

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Speaker 1: is so underappreciated. I think the ability for high school

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Speaker 1: seniors to realize that there's a lot of world out

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Speaker 1: there that I haven't seen, take a break, think think

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Speaker 1: things through. I think it's incredibly undervalued. But like you said, though,

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Speaker 1: the future might also look different and the different degree

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Speaker 1: requirements may not be there. It's tough to know what

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Speaker 1: folks should do without knowing the exact future. But regardless,

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Speaker 1: we're going to talk through some of the different tactics

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Speaker 1: that we can take as individuals to pay for college,

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Speaker 1: and we'll get to some of those right after this.

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Speaker 1: We're back from the break, still talking with Anne Garcia.

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Speaker 1: We're talking about how to demolish the cost of college,

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Speaker 1: and had a lot of great info there in the

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Speaker 1: first bit of the show, but we want to talk

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Speaker 1: specifically and about how to pay for college and how

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Speaker 1: to get the lowest price possible, because Matt and I

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Speaker 1: like getting the lowest price possible on everything, like getting

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Speaker 1: a deal, and especially on something that costs as much

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Speaker 1: as college. But I guess the first step when it

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Speaker 1: comes to paying lesser college is filling out the FAFTSA.

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Speaker 1: But a lot of families, as you write about in

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Speaker 1: your book How to Pay for College, they don't fill

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Speaker 1: it out. How big of a mistake is that? So

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Speaker 1: the FAFTSA is really the most important tool in available

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Speaker 1: to families in getting scholarships, and families don't fill it

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Speaker 1: out for a lot of reasons. On the one hand,

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Speaker 1: people think, well, I'm not going to get any financial aids,

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Speaker 1: so it's not worth my not worth the time and

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Speaker 1: effort that it takes. And on the other hand, on

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Speaker 1: the other end, you have a lot of students who

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Speaker 1: have less family support, you know, maybe their first generation

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Speaker 1: students whose families aren't familiar with the process and it's

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Speaker 1: really complex and convoluted and becomes a barrier as a result.

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Speaker 1: But if you don't file the FAFT set, you will

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Speaker 1: not be eligible for any need based financial aid. You

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Speaker 1: will not be eligible for any of the federal financial

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Speaker 1: aid programs, and those include the direct student loan, the

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Speaker 1: parent plus loan, work study, PELL grants, and in many cases,

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Speaker 1: merit scholarships still require you to submit the FAFT set

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Speaker 1: in order to be considered for them. As a parenting tool,

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Speaker 1: I always hope that my kids would not take out

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Speaker 1: any student loans to go to college, but I felt

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Speaker 1: like having that in my back pocket as a parenting tool,

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Speaker 1: you know, because one of my requirements for them was

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Speaker 1: that they needed to pursue a degree that would lead

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Speaker 1: to a job in addition to whatever degree they were

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Speaker 1: interested in doing. Now, had they chosen not to do that,

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Speaker 1: I wouldn't have fully pulled the rug out from under them,

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Speaker 1: but I would have them made them take out the

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Speaker 1: direct student loan every year. Families with out financial need

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Speaker 1: who are willing to bear the full cost of college

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Speaker 1: if they think it creates additional opportunities for their child.

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Speaker 1: You know, those families will still benefit from filing the

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Speaker 1: FAFT set just to demonstrate to the college that they

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Speaker 1: are able to that they're able to pay for college.

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Speaker 1: You know. So it's definitely not a tool, you know,

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Speaker 1: not a tool to overlook. But the FAFTS is also

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Speaker 1: a lot like your taxes. You know, you can wait

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Speaker 1: until April fourteenth, April fifteenth and just fill out the

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Speaker 1: form line by line and you'll be okay. But if

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Speaker 1: you plan for it, you might actually do a little better,

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Speaker 1: you know, in the same way that you know there

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Speaker 1: are deadlines to do things to benefit from it on

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Speaker 1: your taxes, they're deadlines to do things to benefit on

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Speaker 1: the FAFT set. Yeah. So I like that you're starting

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Speaker 1: to talk about the strategy here. And at one point

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Speaker 1: in your book, like you mentioned applying to schools that

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Speaker 1: you like that your kids may not even be interested in,

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Speaker 1: because the aid offer that they receive can influence what

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Speaker 1: another school might offer you. Right, And so essentially what

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Speaker 1: you're talking through, like you're talking about negotiating the price

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Speaker 1: of college here, how does that actually work? Can you

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Speaker 1: talk our listeners through that? Yeah? So when you apply

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Speaker 1: to colleges, you'll get every college, along with its acceptance,

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Speaker 1: will send you a financial aid award, and they're all

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Speaker 1: going to be different. I mean, my daughter applied to

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Speaker 1: a few public and a few private colleges, and her

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Speaker 1: net cost after all of the awards she got ranged

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Speaker 1: from eleven thousand dollars a year to fifty seven thousand

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Speaker 1: dollars a year. Wow. Now, the thing that families don't

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Speaker 1: always see is, you know, we let so much of

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Speaker 1: the college narrative be driven by the Ivy Leagues and

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Speaker 1: the Stanfords of the world, which are like you would

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Speaker 1: be so fortunate if we let you in here, Just

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Speaker 1: be grateful to us. The vast majority of colleges are

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Speaker 1: actually actively trying to recruit and enroll students, and the

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Speaker 1: way they do that is by discounting the cost of attendance.

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Speaker 1: Once a college has admitted you, they want you to

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Speaker 1: enroll because they've admitted a certain number of students on

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Speaker 1: the assumption that some proportion of them is actually going

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Speaker 1: to enroll, and when the time comes, they would probably

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Speaker 1: rather discount your tuition a little bit more rather than

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Speaker 1: having an empty seat in the class in the fall.

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Speaker 1: So a good exercise to do is to take all

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Speaker 1: of your financial aid awards, lay them out, compare them,

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Speaker 1: and compare them apples to apples. Then there is a

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Speaker 1: worksheet in my book that walks you through the process

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Speaker 1: of how to break down your financial aid award. And

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Speaker 1: then if your top choice school isn't your lowest cost school,

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Speaker 1: and there is a comparable school that you've applied to

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Speaker 1: that's accepted you with a better financial aid award letter,

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Speaker 1: just go back to your top choice and say, hey,

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Speaker 1: I'd love to come, but you can't afford what you've offered.

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Speaker 1: I would say the last several years, every one of

434
00:22:55,640 --> 00:22:57,959
Speaker 1: my clients who is appealed to financial aid award has

435
00:22:58,040 --> 00:23:02,000
Speaker 1: gotten more financial aid. And that's not because of me.

436
00:23:02,320 --> 00:23:05,720
Speaker 1: That's because that's how the process works. So it's sort

437
00:23:05,720 --> 00:23:08,119
Speaker 1: of like when your insurance company denies your claim and

438
00:23:08,119 --> 00:23:11,080
Speaker 1: you're right back and you say, please, please pay, I

439
00:23:11,119 --> 00:23:13,280
Speaker 1: did break my leg and need you to cover the

440
00:23:13,320 --> 00:23:16,080
Speaker 1: cost of it, and oftentimes they'll come up with some

441
00:23:16,119 --> 00:23:18,400
Speaker 1: more money. College works kind of the same way. Yeah,

442
00:23:18,520 --> 00:23:20,080
Speaker 1: so interesting, is so good? Yeah? Yeah, it's like a

443
00:23:20,119 --> 00:23:22,359
Speaker 1: price match, Yeah, Matt. Matt and I were always talking

444
00:23:22,400 --> 00:23:24,640
Speaker 1: about asking for a discount and how you can't get

445
00:23:24,680 --> 00:23:27,000
Speaker 1: what you don't ask for. It's amazing to know that

446
00:23:27,080 --> 00:23:31,359
Speaker 1: almost everybody who asks for a lower sticker price on

447
00:23:31,560 --> 00:23:34,360
Speaker 1: that college education is going to get it. But most

448
00:23:34,400 --> 00:23:36,320
Speaker 1: people probably don't even know to write the letter, to

449
00:23:36,359 --> 00:23:38,760
Speaker 1: push back, to make to ask the question. And I

450
00:23:38,800 --> 00:23:40,720
Speaker 1: guess at the end of the day, like you have

451
00:23:40,760 --> 00:23:42,879
Speaker 1: to make a decision, you got to compare these award letters.

452
00:23:43,080 --> 00:23:46,360
Speaker 1: It's easier said than done, though, right because schools might

453
00:23:46,359 --> 00:23:49,119
Speaker 1: take different approaches to the cost of attendance. So what

454
00:23:49,160 --> 00:23:51,359
Speaker 1: should people keep in mind as they're trying to determine

455
00:23:51,760 --> 00:23:56,280
Speaker 1: an accurate cost of attendance? Because there's there's different sections

456
00:23:56,320 --> 00:23:58,600
Speaker 1: of the cost of college. There's housing, there's meal plans,

457
00:23:58,600 --> 00:24:01,400
Speaker 1: there's books, right, the travel budget, all that kind of stuff.

458
00:24:01,400 --> 00:24:04,520
Speaker 1: How can people think about that holistically exactly? And it's

459
00:24:04,560 --> 00:24:08,400
Speaker 1: like comparing apples to taco salad, as I like to say,

460
00:24:09,359 --> 00:24:11,920
Speaker 1: so important things when you're looking at a financial aid

461
00:24:11,920 --> 00:24:14,439
Speaker 1: award letter. One is the total cost of attendance, but

462
00:24:14,480 --> 00:24:16,800
Speaker 1: then you need to break down the component pieces of it.

463
00:24:16,920 --> 00:24:20,760
Speaker 1: So like you just said, there's there's housing, there's meal plans,

464
00:24:20,880 --> 00:24:25,400
Speaker 1: there's books and supplies, there's tuition and fees, and so

465
00:24:25,840 --> 00:24:28,080
Speaker 1: there's two pieces to your award letter. One is what's

466
00:24:28,080 --> 00:24:29,960
Speaker 1: in the cost of attendance and the other is what's

467
00:24:29,960 --> 00:24:33,040
Speaker 1: in your financial aid award. So, in our experience, my

468
00:24:33,119 --> 00:24:35,840
Speaker 1: son applied to two colleges and was accepted to both.

469
00:24:36,359 --> 00:24:38,640
Speaker 1: One looked like it costs seven thousand dollars a year

470
00:24:38,680 --> 00:24:41,600
Speaker 1: more than the other. That was his top choice, and

471
00:24:41,640 --> 00:24:44,359
Speaker 1: we kind of said, you know, we're not really interested

472
00:24:44,359 --> 00:24:46,320
Speaker 1: in paying seven thousand extra dollars a year for you

473
00:24:46,359 --> 00:24:49,000
Speaker 1: to have better weather, which seemed like the biggest difference

474
00:24:49,040 --> 00:24:52,120
Speaker 1: between the two between the two colleges, And we said,

475
00:24:52,160 --> 00:24:54,199
Speaker 1: you know, if you can figure this out, you know

476
00:24:54,240 --> 00:24:56,119
Speaker 1: we'll support you in it. And what he learned was

477
00:24:56,160 --> 00:24:59,679
Speaker 1: that the more expensive on paper college had included their

478
00:24:59,760 --> 00:25:03,719
Speaker 1: high price meal plan and their highest priced housing, and

479
00:25:03,760 --> 00:25:06,399
Speaker 1: the one that seemed less expensive had included their lower

480
00:25:06,400 --> 00:25:09,880
Speaker 1: cost housing and their lower cost meal plan. So when

481
00:25:09,880 --> 00:25:11,439
Speaker 1: he looked at where he would actually live in what

482
00:25:11,480 --> 00:25:14,880
Speaker 1: he would actually eat, suddenly about forty five hundred dollars

483
00:25:14,920 --> 00:25:19,199
Speaker 1: of that difference had evaporated. The thing with what's in

484
00:25:19,359 --> 00:25:22,119
Speaker 1: award letters is colleges use one of two philosophies to

485
00:25:23,040 --> 00:25:26,720
Speaker 1: in calculating cost of attendance. One is followed by colleges

486
00:25:26,760 --> 00:25:30,040
Speaker 1: that tend to be more generous with need based financial aid,

487
00:25:30,119 --> 00:25:32,399
Speaker 1: and that is, we can only offer aid up to

488
00:25:32,440 --> 00:25:34,479
Speaker 1: the total cost of attendance, So we're going to include

489
00:25:34,480 --> 00:25:36,679
Speaker 1: everything a student might possibly need in the cost of

490
00:25:36,720 --> 00:25:39,919
Speaker 1: attendance so that we can cover it if need be.

491
00:25:40,359 --> 00:25:43,160
Speaker 1: That other philosophy is we want to minimize the amount

492
00:25:43,160 --> 00:25:45,600
Speaker 1: that students borrow. Students can't borrow more than the cost

493
00:25:45,640 --> 00:25:47,199
Speaker 1: of attendance, so we're going to keep the cost of

494
00:25:47,200 --> 00:25:51,639
Speaker 1: attendance low to minimize borrowing. They're obviously pros and cons

495
00:25:51,680 --> 00:25:55,360
Speaker 1: to each of those, Okay, So one of the big

496
00:25:55,440 --> 00:25:58,959
Speaker 1: variable expenses is always books and supplies. My daughter's college

497
00:25:59,119 --> 00:26:01,640
Speaker 1: always says three thousand dollars a year for books and supplies.

498
00:26:01,680 --> 00:26:05,159
Speaker 1: My son says eight hundred. Neither of those numbers is right.

499
00:26:05,320 --> 00:26:07,560
Speaker 1: Your actual cost for that is going to depend more

500
00:26:07,680 --> 00:26:11,639
Speaker 1: on your field of study. So if you have a

501
00:26:11,680 --> 00:26:14,040
Speaker 1: lot of textbooks, you're going to spend more on books.

502
00:26:14,080 --> 00:26:19,320
Speaker 1: So you know, things like business sciences, math lots of textbooks.

503
00:26:19,560 --> 00:26:22,680
Speaker 1: Humanities not so much. You know, your copy of Hamlet

504
00:26:22,760 --> 00:26:25,320
Speaker 1: does not cost as much as your copy of intro

505
00:26:25,440 --> 00:26:30,560
Speaker 1: to statistics. So disregard the fact that one says a

506
00:26:30,600 --> 00:26:32,840
Speaker 1: lot and the other says a little. Chances are good

507
00:26:32,880 --> 00:26:37,160
Speaker 1: that if you are pursuing the same degree at at

508
00:26:37,200 --> 00:26:39,879
Speaker 1: different colleges, your costs for books is going to be

509
00:26:40,480 --> 00:26:43,120
Speaker 1: fairly similar. I found a great way to find out

510
00:26:43,119 --> 00:26:46,200
Speaker 1: about actual costs like that was to join the Facebook

511
00:26:46,200 --> 00:26:48,480
Speaker 1: parents group from each of the colleges and just ask

512
00:26:48,560 --> 00:26:53,680
Speaker 1: people who kids actually attend that college that college. Now,

513
00:26:54,200 --> 00:26:56,880
Speaker 1: other things we learned. You know, my son, the college

514
00:26:56,880 --> 00:27:01,040
Speaker 1: that he ultimately ended up attending, they guarantee that your

515
00:27:01,080 --> 00:27:04,680
Speaker 1: tuition won't change for four years, and so even though

516
00:27:04,720 --> 00:27:07,120
Speaker 1: the tuition was more expensive as freshman year, we could

517
00:27:07,160 --> 00:27:09,159
Speaker 1: project what the tuition that the other college was going

518
00:27:09,200 --> 00:27:10,679
Speaker 1: to look like based on the fact that it had

519
00:27:10,680 --> 00:27:14,399
Speaker 1: gone up six percent every year for all the years

520
00:27:13,560 --> 00:27:17,239
Speaker 1: previous to that, and guess what it was going to be.

521
00:27:18,040 --> 00:27:20,159
Speaker 1: You know, the total tuition cost was going to be

522
00:27:20,359 --> 00:27:22,720
Speaker 1: about the same over four years, and potentially even the

523
00:27:22,760 --> 00:27:25,760
Speaker 1: less of the college that he that he chose. Likewise,

524
00:27:26,160 --> 00:27:28,120
Speaker 1: the college he choses in a lower cost of living

525
00:27:28,160 --> 00:27:32,000
Speaker 1: area than the other, and his rent is about one

526
00:27:32,080 --> 00:27:34,199
Speaker 1: hundred hundred and fifty dollars a month less on his

527
00:27:34,240 --> 00:27:37,399
Speaker 1: apartment than any of his friends who stayed locally and

528
00:27:37,480 --> 00:27:39,480
Speaker 1: went and went to college here. So all these things

529
00:27:39,560 --> 00:27:41,560
Speaker 1: can add up. You know, with my daughter's school, they

530
00:27:41,560 --> 00:27:44,600
Speaker 1: include the cost of health insurance in cost of attendance.

531
00:27:44,640 --> 00:27:47,960
Speaker 1: If you have health insurance, you waive it, and Wallah

532
00:27:48,040 --> 00:27:51,720
Speaker 1: colleges five thousand dollars a year. But another thing to

533
00:27:51,760 --> 00:27:55,679
Speaker 1: consider is all the other costs that you're likely to

534
00:27:55,720 --> 00:27:59,480
Speaker 1: incur as a student. So if you're looking at colleges

535
00:28:00,240 --> 00:28:02,400
Speaker 1: across the country, what's it going to cost to fly

536
00:28:02,520 --> 00:28:05,119
Speaker 1: back and forth? And not just for the student, but

537
00:28:05,200 --> 00:28:06,800
Speaker 1: chances are good that the parents are going to want

538
00:28:06,800 --> 00:28:09,480
Speaker 1: to visit, So make sure that you include that in

539
00:28:09,560 --> 00:28:13,760
Speaker 1: your considerations. A lot of colleges, particularly bigger colleges, most

540
00:28:13,760 --> 00:28:16,360
Speaker 1: of the social life revolves around the Greek system. If

541
00:28:16,400 --> 00:28:18,119
Speaker 1: that's something that you're going to need to do to

542
00:28:18,240 --> 00:28:21,800
Speaker 1: engage with your campus, factor that into your budget. You know,

543
00:28:21,840 --> 00:28:23,439
Speaker 1: what are the things you want your student to do.

544
00:28:23,440 --> 00:28:26,840
Speaker 1: Do you want them to study abroad? Do you want

545
00:28:26,880 --> 00:28:30,920
Speaker 1: them to do research programs that might not be paid?

546
00:28:31,440 --> 00:28:34,199
Speaker 1: So consider all of those things when you're thinking of

547
00:28:34,240 --> 00:28:38,480
Speaker 1: your total cost of attendance. The other important thing about

548
00:28:38,760 --> 00:28:42,440
Speaker 1: about the award letter is a need based financial aid

549
00:28:42,440 --> 00:28:45,440
Speaker 1: award can include loans and work study as part of

550
00:28:45,440 --> 00:28:48,640
Speaker 1: the package, and so oftentimes families sort of skim the

551
00:28:48,680 --> 00:28:51,680
Speaker 1: details and get to the bottom line. They're like, oh, look,

552
00:28:51,720 --> 00:28:54,440
Speaker 1: this cost twenty five thousand dollars a year, and this

553
00:28:54,520 --> 00:28:57,200
Speaker 1: school costs twenty eight thousand dollars a year. But if

554
00:28:57,280 --> 00:29:01,000
Speaker 1: you look at the actual components of the war, you know,

555
00:29:01,040 --> 00:29:04,360
Speaker 1: fifty five hundred dollars of that was was a direct

556
00:29:04,360 --> 00:29:07,200
Speaker 1: student loan and thirty five hundred was work steady and

557
00:29:07,240 --> 00:29:10,000
Speaker 1: that's all your money. So you know that college is

558
00:29:10,040 --> 00:29:13,520
Speaker 1: actually nine thousand dollars a year more expensive, right than

559
00:29:13,560 --> 00:29:16,200
Speaker 1: the bottom line number shows. Yeah, it definitely pays to

560
00:29:16,600 --> 00:29:18,520
Speaker 1: look at all the line items and seeing if they're

561
00:29:18,560 --> 00:29:21,840
Speaker 1: including that. Oh, by the way, we've actually signed up

562
00:29:21,840 --> 00:29:24,000
Speaker 1: for taking out a bunch of student loans. But I

563
00:29:24,040 --> 00:29:27,960
Speaker 1: really like what you said about you're the one college

564
00:29:28,080 --> 00:29:30,320
Speaker 1: that you're I guess the one that your son is attending.

565
00:29:30,360 --> 00:29:31,720
Speaker 1: It was at the one that actually has like the

566
00:29:31,760 --> 00:29:34,600
Speaker 1: price lock where they have agreed that hey, the tour years,

567
00:29:34,600 --> 00:29:37,680
Speaker 1: it's an incentive to graduate in four years. That is incredible.

568
00:29:37,760 --> 00:29:40,360
Speaker 1: I love that because you now have a fixed cost

569
00:29:40,400 --> 00:29:42,000
Speaker 1: that you can plan for, and so much of this

570
00:29:42,120 --> 00:29:43,760
Speaker 1: is just up in the air. I think that's what

571
00:29:43,800 --> 00:29:46,920
Speaker 1: I'm realizing more is that this isn't like going to

572
00:29:47,000 --> 00:29:49,840
Speaker 1: the grocery store and buying comparing two boxes of cereal.

573
00:29:49,920 --> 00:29:54,080
Speaker 1: This is like, I mean, this is like choosing us partner. Yeah,

574
00:29:54,160 --> 00:29:56,240
Speaker 1: it's there. There are so many variables and so many

575
00:29:56,280 --> 00:29:58,720
Speaker 1: different things to take into account that you really do

576
00:29:58,920 --> 00:30:01,040
Speaker 1: need to look at the overall picture and not just

577
00:30:01,160 --> 00:30:05,400
Speaker 1: look at whatever number, because the more complex and complicated

578
00:30:05,400 --> 00:30:09,040
Speaker 1: things are. I think oftentimes systems or in this case, colleges,

579
00:30:09,120 --> 00:30:10,480
Speaker 1: they want to make it easy for you, and so

580
00:30:10,560 --> 00:30:13,959
Speaker 1: they give you that number and the default is to

581
00:30:14,040 --> 00:30:15,680
Speaker 1: just look at that number and say, okay, well that's

582
00:30:15,680 --> 00:30:18,240
Speaker 1: just how much that's going to cost. But the more

583
00:30:18,320 --> 00:30:20,240
Speaker 1: complexity of there is, I think, the more that we

584
00:30:20,320 --> 00:30:22,520
Speaker 1: need to kind of dig into the details because the

585
00:30:22,560 --> 00:30:25,080
Speaker 1: details matter a lot. The details matter a lot, and

586
00:30:25,160 --> 00:30:28,840
Speaker 1: particularly in college, you know, rounding errors for a lot

587
00:30:28,840 --> 00:30:31,520
Speaker 1: of parents that I see are you know, two to

588
00:30:31,560 --> 00:30:33,600
Speaker 1: five thousand dollars a year where they're like, well, we'll

589
00:30:33,600 --> 00:30:36,920
Speaker 1: just figure that out well times four years, that's a

590
00:30:36,960 --> 00:30:41,520
Speaker 1: lot of money and more than one kid. Yeah, yeah, exactly.

591
00:30:41,560 --> 00:30:43,800
Speaker 1: So you're talking about multiple years, and you're talking about

592
00:30:43,880 --> 00:30:46,800
Speaker 1: multiple kids, and you're you're adding it up to potentially

593
00:30:47,240 --> 00:30:50,440
Speaker 1: sinking the financial ship of your child or for a

594
00:30:50,440 --> 00:30:53,080
Speaker 1: lot of parents taking you on those parent plus loans

595
00:30:53,080 --> 00:30:56,000
Speaker 1: which are horrific as well. Let's talk about let's talk

596
00:30:56,000 --> 00:30:58,440
Speaker 1: about scholarships for a second, because there's financial aid, but

597
00:30:58,480 --> 00:31:01,240
Speaker 1: how how should parents and kids are approach looking to

598
00:31:01,600 --> 00:31:05,400
Speaker 1: outside scholarship offerings to help minimize costs and where are

599
00:31:05,400 --> 00:31:07,880
Speaker 1: the best places to look and how much can people

600
00:31:08,320 --> 00:31:11,360
Speaker 1: expect to find in the scholarship system. Yeah, it's a

601
00:31:11,400 --> 00:31:13,680
Speaker 1: great question. And when that so many families come to

602
00:31:13,720 --> 00:31:16,680
Speaker 1: before so so first and foremost, just big picture, there

603
00:31:16,680 --> 00:31:20,080
Speaker 1: are three types of scholarships. There's institutional need based aid,

604
00:31:20,440 --> 00:31:24,320
Speaker 1: there's institutional merit aid, and then they're outside scholarships. Those

605
00:31:24,360 --> 00:31:27,560
Speaker 1: first two, the institutional ones, come from the colleges themselves

606
00:31:27,640 --> 00:31:31,320
Speaker 1: and tend to be the much much larger awards. Outside

607
00:31:31,320 --> 00:31:34,560
Speaker 1: scholarships are scholarships that are given by anyone other than

608
00:31:34,560 --> 00:31:37,800
Speaker 1: the college that you attend, and there are tons and

609
00:31:37,880 --> 00:31:41,760
Speaker 1: tons of those out there. There are tons and tons

610
00:31:41,760 --> 00:31:45,280
Speaker 1: of websites that have gigantic databases of them as well,

611
00:31:45,800 --> 00:31:49,640
Speaker 1: you know, places like fastweb and Scholarly, and the college

612
00:31:49,640 --> 00:31:54,120
Speaker 1: boards website has a scholarship search function. I encourage people

613
00:31:54,160 --> 00:31:57,680
Speaker 1: to start locally rather than on those big databases because

614
00:31:57,680 --> 00:31:59,680
Speaker 1: in the same way that those big databases have loads

615
00:31:59,680 --> 00:32:02,640
Speaker 1: and loads of scholarships, they have loads and loads of

616
00:32:02,680 --> 00:32:06,000
Speaker 1: people applying for scholarships through them. So when you apply

617
00:32:06,080 --> 00:32:08,000
Speaker 1: for a scholarship there, you might be one of ten

618
00:32:08,080 --> 00:32:12,720
Speaker 1: thousand applicants. Your high school guidance counselor's office also has

619
00:32:12,760 --> 00:32:16,160
Speaker 1: a list of scholarships. Many of them are only open

620
00:32:16,560 --> 00:32:21,280
Speaker 1: to local students, and sometimes even just to your high

621
00:32:21,280 --> 00:32:23,480
Speaker 1: school or just to some subset of your high school.

622
00:32:23,520 --> 00:32:26,200
Speaker 1: My high school had a scholarship. My kids high school

623
00:32:26,200 --> 00:32:28,640
Speaker 1: had a scholarship for someone on the tennis team. There's

624
00:32:28,640 --> 00:32:31,480
Speaker 1: like twelve people on the tennis team and they're not

625
00:32:31,520 --> 00:32:33,800
Speaker 1: all seniors. I mean, your odds with that scholarship are

626
00:32:33,800 --> 00:32:37,560
Speaker 1: really good compared that with them make a duct tape

627
00:32:37,600 --> 00:32:42,360
Speaker 1: prom dress thing that's on fast Web. There's so many

628
00:32:42,440 --> 00:32:48,240
Speaker 1: downside risks to that one. So start local. You know,

629
00:32:48,280 --> 00:32:51,000
Speaker 1: look at your guidance conselor's office talk with teachers. My

630
00:32:51,960 --> 00:32:55,680
Speaker 1: daughter got introduced to a great outside scholarship by her

631
00:32:56,120 --> 00:32:59,800
Speaker 1: high school computer science teacher. And this scholarship she gets

632
00:33:00,120 --> 00:33:02,320
Speaker 1: thousand dollars a year, She gets a thousand dollars a

633
00:33:02,400 --> 00:33:06,040
Speaker 1: year for technology, and she got a corporate mentor who

634
00:33:06,560 --> 00:33:08,480
Speaker 1: helped her find an internship that led to a full

635
00:33:08,520 --> 00:33:11,840
Speaker 1: time job offer when she graduated. So you know, that's

636
00:33:11,840 --> 00:33:16,960
Speaker 1: been a terrific scholarship. I will say outside scholarships nine

637
00:33:17,000 --> 00:33:19,840
Speaker 1: times out of ten are really good for filling the

638
00:33:19,880 --> 00:33:24,320
Speaker 1: gap between you know, for closing a small gap between

639
00:33:24,400 --> 00:33:27,680
Speaker 1: your budget and your dream school, or maybe making it

640
00:33:27,720 --> 00:33:29,320
Speaker 1: so that you don't have to take out a student

641
00:33:29,360 --> 00:33:32,920
Speaker 1: loan at all. They are not typically the difference between

642
00:33:32,920 --> 00:33:35,200
Speaker 1: a twenty thousand dollars a year budget and an eighty

643
00:33:35,200 --> 00:33:38,680
Speaker 1: thousand dollars a year college Okay, gotcha, So so think

644
00:33:38,720 --> 00:33:42,040
Speaker 1: of them as the icing on the cake, not the

645
00:33:42,080 --> 00:33:45,760
Speaker 1: cake batter, all right, Okay, what about other ways to

646
00:33:45,800 --> 00:33:48,120
Speaker 1: help pay for college? So I was an RA when

647
00:33:48,160 --> 00:33:51,160
Speaker 1: I was in school, not the best RA, but I

648
00:33:51,200 --> 00:33:54,760
Speaker 1: was one, and like, I also had an on campus job,

649
00:33:55,080 --> 00:33:56,720
Speaker 1: and so like, are those the kind of things that

650
00:33:56,760 --> 00:33:59,480
Speaker 1: they helped me reduce the cost of college, But I'm

651
00:33:59,480 --> 00:34:02,200
Speaker 1: also thirty nine, it's been a minute, so how impactful

652
00:34:02,320 --> 00:34:05,280
Speaker 1: are doing those things to lower that that college costs

653
00:34:05,280 --> 00:34:08,120
Speaker 1: as well? I think being an RA is a great

654
00:34:08,120 --> 00:34:10,040
Speaker 1: path for students for whom that job is a fit.

655
00:34:10,120 --> 00:34:13,160
Speaker 1: It's definitely not a fit for any for everyone. You know,

656
00:34:13,239 --> 00:34:17,399
Speaker 1: you typically get you know, free housing and at least

657
00:34:17,400 --> 00:34:20,080
Speaker 1: a discounted meal plan. The thing to be cognizant of.

658
00:34:21,160 --> 00:34:25,360
Speaker 1: The job description for ra's varies widely from campus to campus,

659
00:34:25,560 --> 00:34:28,359
Speaker 1: you know, And and I look at this for my kids,

660
00:34:28,400 --> 00:34:31,200
Speaker 1: having gone through college during the COVID years, you know,

661
00:34:31,200 --> 00:34:32,920
Speaker 1: and hearing from their friends, you know, a lot of

662
00:34:32,960 --> 00:34:36,840
Speaker 1: times ras were responsible for for enforcing COVID policies or

663
00:34:36,880 --> 00:34:40,520
Speaker 1: their overnight security in the dorms, you know, manning the

664
00:34:40,520 --> 00:34:43,840
Speaker 1: front desk twenty four hours a day. In other places,

665
00:34:43,840 --> 00:34:47,240
Speaker 1: they're more just a resource for for students for resolving,

666
00:34:47,960 --> 00:34:51,040
Speaker 1: for resolving issues and whatnot. So just make sure if

667
00:34:51,080 --> 00:34:54,200
Speaker 1: that's the path that you're on, it's probably good. If

668
00:34:54,239 --> 00:34:59,239
Speaker 1: you've done something you know, job job related, you know

669
00:34:59,360 --> 00:35:01,680
Speaker 1: that's relate added to that, whether it's being a camp

670
00:35:01,719 --> 00:35:07,640
Speaker 1: counselor babysitting, or you know, something that involves working with

671
00:35:07,760 --> 00:35:11,040
Speaker 1: and potentially dealing with conflict with other people on campus.

672
00:35:11,160 --> 00:35:14,600
Speaker 1: Jobs can be great. Oftentimes they come with added benefits.

673
00:35:14,600 --> 00:35:16,360
Speaker 1: So like at my son's college, if you work in

674
00:35:16,360 --> 00:35:18,480
Speaker 1: the dining halls, they gave you a fifty percent discount

675
00:35:18,480 --> 00:35:22,440
Speaker 1: on your meals, so not just you know, so not

676
00:35:22,520 --> 00:35:25,719
Speaker 1: just a paycheck button, actual reduction in your costs. But

677
00:35:25,800 --> 00:35:28,439
Speaker 1: there are lots of other ways to reduce the cost

678
00:35:28,440 --> 00:35:31,560
Speaker 1: of college. My son has a friend who just graduated

679
00:35:31,640 --> 00:35:35,600
Speaker 1: from college for free. She worked at Starbucks and took

680
00:35:35,640 --> 00:35:40,320
Speaker 1: advantage of their partnership with Arizona State to do online

681
00:35:40,320 --> 00:35:43,480
Speaker 1: college for three and a half years, and she graduated

682
00:35:43,600 --> 00:35:47,080
Speaker 1: in January and she's gonna she's doing her student teaching

683
00:35:47,160 --> 00:35:49,160
Speaker 1: right now and come fall she'll be a teacher. And

684
00:35:49,200 --> 00:35:52,320
Speaker 1: she spent zero dollars on college. So there are lots

685
00:35:52,320 --> 00:35:57,320
Speaker 1: of companies that provide you free tuition to online colleges,

686
00:35:57,640 --> 00:36:02,480
Speaker 1: and typically it's online simply be that cost fits within

687
00:36:03,080 --> 00:36:06,200
Speaker 1: the IRS's level of what you can provide as a

688
00:36:06,239 --> 00:36:10,239
Speaker 1: tax free benefit. Students can get college credits while they're

689
00:36:10,239 --> 00:36:14,560
Speaker 1: in high school ap IB, dual credit, dual enrollment where

690
00:36:14,560 --> 00:36:16,640
Speaker 1: you go to a community college for your last two

691
00:36:16,719 --> 00:36:18,759
Speaker 1: years of high school. All those ways that you can

692
00:36:18,760 --> 00:36:22,400
Speaker 1: accumulate credit can do a great job of reducing the

693
00:36:22,440 --> 00:36:25,000
Speaker 1: time that you spend in college, as long as you

694
00:36:25,000 --> 00:36:27,840
Speaker 1: apply to colleges that will give you credit for the

695
00:36:27,840 --> 00:36:30,160
Speaker 1: credit that you got in high school. So if that's you,

696
00:36:30,640 --> 00:36:33,120
Speaker 1: just make sure that as part of your college research,

697
00:36:33,239 --> 00:36:37,080
Speaker 1: you're googling what the college's transfer credit policy is to

698
00:36:37,120 --> 00:36:39,680
Speaker 1: see if you will if all of your credits will

699
00:36:39,719 --> 00:36:42,879
Speaker 1: be accepted. As one of the biggest ways to save

700
00:36:42,920 --> 00:36:45,279
Speaker 1: money on college, though, is to find colleges that offer

701
00:36:45,360 --> 00:36:48,920
Speaker 1: scholarships to you, and a big part of that is

702
00:36:49,160 --> 00:36:51,960
Speaker 1: enrolling in college as a freshman. So in many cases

703
00:36:51,960 --> 00:36:54,080
Speaker 1: it's actually cheaper to go to a four year college

704
00:36:54,080 --> 00:36:58,480
Speaker 1: for four years because they're much more generous with scholarships

705
00:36:58,600 --> 00:37:03,640
Speaker 1: for incoming freshmen than are for transfer students. Interesting. Okay, wow,

706
00:37:03,680 --> 00:37:05,799
Speaker 1: I didn't know that either. So okay, we have a

707
00:37:05,800 --> 00:37:07,200
Speaker 1: couple of more questions we want to get to with you,

708
00:37:07,239 --> 00:37:09,080
Speaker 1: and we want to talk about student loans in particular

709
00:37:09,320 --> 00:37:11,080
Speaker 1: and maybe get your take on a rule of thumb

710
00:37:11,080 --> 00:37:13,160
Speaker 1: on that, and also talk about five twenty nine plans.

711
00:37:13,160 --> 00:37:15,840
Speaker 1: How effective are those when it comes to saving for college.

712
00:37:15,840 --> 00:37:27,719
Speaker 1: We'll talk about those things right after this. All right,

713
00:37:27,760 --> 00:37:30,520
Speaker 1: we are back from the break talking about demolishing those

714
00:37:30,560 --> 00:37:36,120
Speaker 1: college costs with and Garcia and and you are a

715
00:37:36,160 --> 00:37:38,239
Speaker 1: financial planner, So let's zoom out a little bit and

716
00:37:38,280 --> 00:37:41,560
Speaker 1: talk about five twenty nine accounts because the new rules,

717
00:37:41,719 --> 00:37:44,520
Speaker 1: they've made them a lot more flexible. Right Like, we

718
00:37:44,600 --> 00:37:48,560
Speaker 1: used to be a much less inclined to recommend them

719
00:37:48,880 --> 00:37:52,840
Speaker 1: because your money was essentially a pigeonholed. But that's changed

720
00:37:52,880 --> 00:37:56,480
Speaker 1: a good bit since Secure Act two point zero. How Like,

721
00:37:56,520 --> 00:38:00,320
Speaker 1: what are your thoughts on saving early for a kid's college,

722
00:38:00,719 --> 00:38:02,960
Speaker 1: you know, with your clients, how do you approach those conversations?

723
00:38:03,680 --> 00:38:06,760
Speaker 1: So I'm a big advocate of five twenty nine's even

724
00:38:06,840 --> 00:38:11,200
Speaker 1: pre secure secure two dot O. That okay. One of

725
00:38:11,280 --> 00:38:15,000
Speaker 1: the one of the most interesting things I've learned is

726
00:38:15,760 --> 00:38:20,400
Speaker 1: students whose families have saved for college in virtually any amount,

727
00:38:20,840 --> 00:38:22,880
Speaker 1: not only in role in college at higher rates, but

728
00:38:22,920 --> 00:38:26,520
Speaker 1: they graduate from college at higher rates. And of course

729
00:38:26,560 --> 00:38:28,520
Speaker 1: there's chicken and egg in there. Right. If I'm saving

730
00:38:28,560 --> 00:38:30,719
Speaker 1: for your college, I'm probably talking to you about going

731
00:38:30,719 --> 00:38:34,120
Speaker 1: to college and probably come up and then it's an expectation,

732
00:38:34,480 --> 00:38:37,520
Speaker 1: but the fact that students graduate at higher rates if

733
00:38:37,560 --> 00:38:40,680
Speaker 1: their parents have saved is I think an important consideration.

734
00:38:41,080 --> 00:38:46,160
Speaker 1: I think it's unlikely that two parents who themselves have degrees,

735
00:38:46,200 --> 00:38:49,520
Speaker 1: who have multiple children, the odds that none of them

736
00:38:49,520 --> 00:38:51,960
Speaker 1: goes to college and has or has any use for

737
00:38:52,040 --> 00:38:55,080
Speaker 1: a five twenty nine is slim to none. You know,

738
00:38:55,080 --> 00:38:58,480
Speaker 1: in the advantages of tax free growth and distributions are

739
00:38:58,760 --> 00:39:04,239
Speaker 1: are are huge. Basically makes your money worth about twenty more.

740
00:39:04,440 --> 00:39:06,640
Speaker 1: What does it look like to have those conversations from

741
00:39:06,680 --> 00:39:08,600
Speaker 1: with your kido about going to college. You say that

742
00:39:08,600 --> 00:39:10,680
Speaker 1: we should have them at an early age, but what's

743
00:39:10,760 --> 00:39:13,799
Speaker 1: early and what should those conversations look like? Yeah, it's

744
00:39:13,800 --> 00:39:15,760
Speaker 1: such a good question. So this is not about telling

745
00:39:15,800 --> 00:39:18,000
Speaker 1: your kid when they're in preschool that you're enrolling them

746
00:39:18,000 --> 00:39:19,960
Speaker 1: in this preschool because they have a higher percentage of

747
00:39:19,960 --> 00:39:25,400
Speaker 1: people who go to Carvard. It's about so with young kids.

748
00:39:25,480 --> 00:39:28,680
Speaker 1: I think it's great to introduce the notion of college

749
00:39:28,760 --> 00:39:32,520
Speaker 1: as something that you want for your student. Maybe it's

750
00:39:32,560 --> 00:39:35,759
Speaker 1: something that enriched your own life, and to do it

751
00:39:35,800 --> 00:39:39,680
Speaker 1: in age appropriate ways. So when my kids were young,

752
00:39:39,880 --> 00:39:43,720
Speaker 1: we would always go when we went back to my hometown.

753
00:39:43,760 --> 00:39:45,400
Speaker 1: We would stay with my friend Kelly, who was a

754
00:39:45,440 --> 00:39:48,520
Speaker 1: college friend, and we would go to a football game

755
00:39:48,640 --> 00:39:51,759
Speaker 1: on campus, and you know, and that was a great

756
00:39:51,760 --> 00:39:54,320
Speaker 1: activity for them to see, you know, here's here's a

757
00:39:55,200 --> 00:39:58,120
Speaker 1: lifelong friend of mine who someone I met in college.

758
00:39:59,040 --> 00:40:02,040
Speaker 1: Here are fun things we did as college students. It

759
00:40:02,160 --> 00:40:05,160
Speaker 1: just made the whole topic of college kind of interesting

760
00:40:05,320 --> 00:40:08,879
Speaker 1: to my kids. You know. Maybe it's something like there's

761
00:40:08,920 --> 00:40:13,200
Speaker 1: a thunderstorm, and hey, I never knew about how thunderstorms

762
00:40:13,200 --> 00:40:15,839
Speaker 1: happened until I took a meteorology class in college and

763
00:40:15,880 --> 00:40:18,759
Speaker 1: I learned about friends colliding. And as you can probably tell,

764
00:40:18,760 --> 00:40:24,040
Speaker 1: I didn't actually take amy, but just talk about talk

765
00:40:24,040 --> 00:40:27,600
Speaker 1: about college. I call them college adjacent conversations. So not

766
00:40:28,000 --> 00:40:31,280
Speaker 1: you're going to college, or here's when you apply for college,

767
00:40:31,320 --> 00:40:33,399
Speaker 1: or here's what you can afford for college, but just

768
00:40:34,040 --> 00:40:39,640
Speaker 1: here are good things about about college. Once your kids

769
00:40:39,680 --> 00:40:42,359
Speaker 1: get to the age where money starts to make more

770
00:40:42,400 --> 00:40:44,600
Speaker 1: sense to them, you can be introducing the topic of

771
00:40:44,600 --> 00:40:47,600
Speaker 1: college costs. I think talking about college and money is

772
00:40:47,680 --> 00:40:50,160
Speaker 1: important to talk about from the perspective of goals as

773
00:40:50,200 --> 00:40:54,880
Speaker 1: opposed to from the perspective of limitations. So a conversations

774
00:40:54,920 --> 00:40:58,040
Speaker 1: it's about limitations is we've only saved this much for college,

775
00:40:58,080 --> 00:41:01,040
Speaker 1: so you have to stay in state. A conversation that's

776
00:41:01,040 --> 00:41:04,200
Speaker 1: about goals is we've been saving hard for your college

777
00:41:04,600 --> 00:41:06,799
Speaker 1: and it's really important to us that you go to

778
00:41:06,880 --> 00:41:09,160
Speaker 1: college and that you don't take out a lot of

779
00:41:09,200 --> 00:41:12,920
Speaker 1: student loans. And so we have saved enough that we

780
00:41:12,960 --> 00:41:15,719
Speaker 1: know that can happen at our in state colleges, and

781
00:41:15,800 --> 00:41:18,279
Speaker 1: you can probably find some other options that work within

782
00:41:18,320 --> 00:41:20,920
Speaker 1: that budget as well. We're happy to support you in

783
00:41:21,680 --> 00:41:24,839
Speaker 1: research thing maam and looking for them. I like it. Yeah,

784
00:41:24,880 --> 00:41:27,799
Speaker 1: you're kind of taken the positive spin approach when it

785
00:41:27,800 --> 00:41:30,439
Speaker 1: comes to well, I guess it makes it more exciting too,

786
00:41:30,600 --> 00:41:33,000
Speaker 1: right as opposed to it feeling like this like a

787
00:41:33,040 --> 00:41:36,279
Speaker 1: limited kind of closed ended system or closed loop. It

788
00:41:36,320 --> 00:41:38,920
Speaker 1: feels like this thing that is expansive, but there are

789
00:41:38,960 --> 00:41:41,600
Speaker 1: just going to be certain parameters about maybe what college

790
00:41:41,640 --> 00:41:43,160
Speaker 1: you do attend and how much it's going to cost.

791
00:41:43,480 --> 00:41:46,400
Speaker 1: But let's say that there's a family out there and

792
00:41:46,440 --> 00:41:49,279
Speaker 1: they don't have money set aside for the kid to

793
00:41:49,440 --> 00:41:52,640
Speaker 1: attend college. They're likely going to take on student loans.

794
00:41:53,120 --> 00:41:55,040
Speaker 1: So do you have a like a helpful rule of

795
00:41:55,080 --> 00:41:58,400
Speaker 1: thumb for how much debt that college students should be

796
00:41:58,520 --> 00:42:02,320
Speaker 1: willing to take on. So you know, the federal government

797
00:42:02,360 --> 00:42:04,920
Speaker 1: has a great rule of them. The Department of Education

798
00:42:05,000 --> 00:42:08,719
Speaker 1: actually limits the amount of federal student loans that a

799
00:42:08,800 --> 00:42:12,320
Speaker 1: student can take out as an undergraduate, and so students

800
00:42:12,360 --> 00:42:14,640
Speaker 1: can borrow fifty five hundred dollars their first year, sixty

801
00:42:14,640 --> 00:42:16,839
Speaker 1: five hundred dollars their second year, and seventy five hundred

802
00:42:16,840 --> 00:42:18,960
Speaker 1: dollars each of their last two years or three years

803
00:42:19,000 --> 00:42:21,359
Speaker 1: if need be. So a student on a four year

804
00:42:21,400 --> 00:42:23,560
Speaker 1: path who takes out the direct student loan every year

805
00:42:24,000 --> 00:42:27,920
Speaker 1: is going to graduate with having borrowed twenty seven thousand dollars.

806
00:42:27,960 --> 00:42:30,400
Speaker 1: There'll be some interest accrued on those loans, and that

807
00:42:30,440 --> 00:42:32,840
Speaker 1: translates to a monthly payment of around three hundred and

808
00:42:32,880 --> 00:42:36,240
Speaker 1: twenty five dollars for ten years. So that's a great

809
00:42:36,320 --> 00:42:40,759
Speaker 1: investment in your education. I think for students to go

810
00:42:40,840 --> 00:42:45,040
Speaker 1: beyond that is very, very risky. One of the main

811
00:42:45,200 --> 00:42:48,239
Speaker 1: reasons that students drop out of college is the financial

812
00:42:48,280 --> 00:42:50,760
Speaker 1: burden of college. And so if you take on loans

813
00:42:51,320 --> 00:42:53,680
Speaker 1: and don't earn the degree that gives you the earning

814
00:42:53,680 --> 00:42:57,440
Speaker 1: power to pay back those loans, you're worse off than

815
00:42:58,360 --> 00:43:00,960
Speaker 1: if you never went in the first place. And then

816
00:43:01,000 --> 00:43:02,560
Speaker 1: I think it's good to look at what some of

817
00:43:02,600 --> 00:43:06,120
Speaker 1: the other pathways out there are. You know, maybe your

818
00:43:06,160 --> 00:43:08,520
Speaker 1: state offers free community college and you can do that

819
00:43:08,560 --> 00:43:11,080
Speaker 1: for a couple of years. Maybe there's a local for

820
00:43:11,239 --> 00:43:14,440
Speaker 1: your college that you can that you can attend where

821
00:43:14,960 --> 00:43:16,960
Speaker 1: you know you can live at home. Maybe you do

822
00:43:17,000 --> 00:43:20,719
Speaker 1: what my son's friend did and work at Starbucks or

823
00:43:20,760 --> 00:43:23,640
Speaker 1: one of the other companies that has a free tuition

824
00:43:24,320 --> 00:43:28,040
Speaker 1: program so that you can limit your costs. When parents

825
00:43:28,040 --> 00:43:30,880
Speaker 1: are talking about taking out loans, taking out parent plus

826
00:43:30,880 --> 00:43:34,160
Speaker 1: loans first and foremost, regardless of who's going to be

827
00:43:34,200 --> 00:43:36,880
Speaker 1: responsible for the loan, you always want to start by

828
00:43:36,920 --> 00:43:40,000
Speaker 1: borrowing the direct student loan. The interest rates on it

829
00:43:40,000 --> 00:43:42,520
Speaker 1: are much lower, and it's much more likely that the

830
00:43:42,640 --> 00:43:44,960
Speaker 1: student will have an income low enough that they can

831
00:43:45,600 --> 00:43:49,560
Speaker 1: that they can get the tax deduction for student loan interests. So,

832
00:43:49,680 --> 00:43:51,479
Speaker 1: regardless of who's going to pay it, make the direct

833
00:43:51,520 --> 00:43:54,160
Speaker 1: student loan your starting point. Parent plus loans have really

834
00:43:54,239 --> 00:43:57,759
Speaker 1: high interest rates and really high fees. Now, if you

835
00:43:57,920 --> 00:44:03,120
Speaker 1: are a younger parent relative to your student, and you

836
00:44:03,280 --> 00:44:05,960
Speaker 1: have potentially a long career path in front of you

837
00:44:06,320 --> 00:44:09,839
Speaker 1: those parents. After your kid graduates from college, those parent

838
00:44:09,840 --> 00:44:12,840
Speaker 1: plus loans maybe aren't so detrimental, you know, if you

839
00:44:13,120 --> 00:44:15,520
Speaker 1: if you keep it within balance. You again, this is

840
00:44:15,560 --> 00:44:18,719
Speaker 1: something that closes a small gap, not that is the

841
00:44:18,719 --> 00:44:21,120
Speaker 1: difference between a twenty thousand dollars year in an eighty

842
00:44:21,160 --> 00:44:24,920
Speaker 1: thousand dollars a year a year college. A lot of

843
00:44:25,480 --> 00:44:27,760
Speaker 1: people didn't have kids till they were in their thirties,

844
00:44:27,880 --> 00:44:30,759
Speaker 1: and if that's you, you're going to be in your

845
00:44:30,840 --> 00:44:33,560
Speaker 1: fifties when your kids graduate from college, and you might

846
00:44:33,600 --> 00:44:36,279
Speaker 1: not have a really long time horizon between graduation and

847
00:44:36,320 --> 00:44:39,840
Speaker 1: retirement to get those loans paid off. The biggest area

848
00:44:39,960 --> 00:44:44,359
Speaker 1: of growing student loan debt is parent plus loans, and many, many,

849
00:44:44,400 --> 00:44:48,439
Speaker 1: many parents are taking those loans into into retirement where

850
00:44:48,440 --> 00:44:53,000
Speaker 1: they're you know, draining their retirement savings to pay off

851
00:44:53,040 --> 00:44:57,120
Speaker 1: student loans. And so so I do think if you

852
00:44:57,160 --> 00:44:59,719
Speaker 1: don't have savings for college, you really want to look

853
00:44:59,719 --> 00:45:02,279
Speaker 1: at all the other pathways that are out there for

854
00:45:02,320 --> 00:45:05,839
Speaker 1: your student to go. And I would also say, if

855
00:45:05,880 --> 00:45:07,880
Speaker 1: you're the parent of a high school student who hasn't

856
00:45:07,960 --> 00:45:10,640
Speaker 1: yet saved, it's not too late to start. You know

857
00:45:10,640 --> 00:45:12,360
Speaker 1: and you will give your kid a little bit of

858
00:45:12,360 --> 00:45:15,440
Speaker 1: a headstart. Not only that, but if you use a

859
00:45:15,480 --> 00:45:18,360
Speaker 1: five twenty nine and your state offers a tax incentive

860
00:45:18,360 --> 00:45:21,360
Speaker 1: for contributions, that's a way to get some more free

861
00:45:21,360 --> 00:45:26,359
Speaker 1: money into your college savings savings plan. So like here

862
00:45:26,400 --> 00:45:30,439
Speaker 1: in Oregon, our plan offers a refundable tax credit, which

863
00:45:30,480 --> 00:45:33,400
Speaker 1: means that even if you have no tax liability, you

864
00:45:33,440 --> 00:45:36,040
Speaker 1: can still get the tax benefit of making the contribution.

865
00:45:36,080 --> 00:45:39,200
Speaker 1: And in fact, even kids who have any earned income

866
00:45:39,239 --> 00:45:42,759
Speaker 1: can contribute to their own five twenty nine and get

867
00:45:42,800 --> 00:45:47,480
Speaker 1: the tax credits, so they're basically getting free dollars for college.

868
00:45:47,600 --> 00:45:51,200
Speaker 1: But again, look at those alternate pathways like free community college.

869
00:45:51,480 --> 00:45:55,680
Speaker 1: And also if you are a low income family who

870
00:45:55,719 --> 00:45:58,040
Speaker 1: hasn't saved because you just don't have the money to save,

871
00:45:58,440 --> 00:46:02,600
Speaker 1: look for colleges that are general with need based financial aid. Unfortunately,

872
00:46:02,680 --> 00:46:06,239
Speaker 1: that's not typically your state schools other than free community college,

873
00:46:06,360 --> 00:46:10,440
Speaker 1: but many private colleges are very very generous with need

874
00:46:10,480 --> 00:46:13,520
Speaker 1: based financial aid as they're trying to diversify their student

875
00:46:13,680 --> 00:46:16,080
Speaker 1: their student body. Kind of a rule of thumb is

876
00:46:16,080 --> 00:46:19,360
Speaker 1: if your student receives free and reduced lunch, they're probably

877
00:46:19,400 --> 00:46:21,719
Speaker 1: eligible for a PELL grant, and a PELL grant is

878
00:46:22,120 --> 00:46:25,160
Speaker 1: a nice chunk of free money that they get, And

879
00:46:25,320 --> 00:46:29,800
Speaker 1: many colleges for students who for students who receive PELL grants,

880
00:46:30,200 --> 00:46:33,760
Speaker 1: they will cover the rest of the student's costs. That's

881
00:46:33,960 --> 00:46:36,440
Speaker 1: a whole lot of info in I really appreciate that.

882
00:46:36,640 --> 00:46:39,279
Speaker 1: I'm curious one well, last question for you, what's your

883
00:46:39,280 --> 00:46:42,640
Speaker 1: take on the new income base repayment plan that's likely

884
00:46:42,680 --> 00:46:45,239
Speaker 1: to go into effect. What kind of impact is that

885
00:46:45,320 --> 00:46:48,319
Speaker 1: likely to have? It sure seems like no matter how

886
00:46:48,400 --> 00:46:51,000
Speaker 1: much people take on in student loans, there's going to

887
00:46:51,080 --> 00:46:54,000
Speaker 1: be a more generous participation from the federal government when

888
00:46:54,040 --> 00:46:56,360
Speaker 1: it comes to paying those back. Yeah, you know, I

889
00:46:56,400 --> 00:46:59,200
Speaker 1: think this is one of the areas where where our

890
00:46:59,320 --> 00:47:05,640
Speaker 1: public poll see disconnect from education is really is extraordinarily

891
00:47:05,680 --> 00:47:08,880
Speaker 1: detrimental for young people. So public policy to me is

892
00:47:08,920 --> 00:47:11,840
Speaker 1: more than just providing pell grants and student loans. Public

893
00:47:11,880 --> 00:47:15,719
Speaker 1: policy is things like we have a nursing shortage and

894
00:47:15,800 --> 00:47:18,799
Speaker 1: yet getting into nursing schools like getting into Harvard. You know,

895
00:47:18,920 --> 00:47:22,960
Speaker 1: we have an engineering shortage. We're not creating new engineering programs.

896
00:47:23,000 --> 00:47:25,480
Speaker 1: We're offering H one B visas to tech companies who

897
00:47:25,520 --> 00:47:29,879
Speaker 1: want to higher engineers. So it would be lovely if

898
00:47:29,920 --> 00:47:34,160
Speaker 1: there was more of that type of public policy involvement

899
00:47:34,400 --> 00:47:38,000
Speaker 1: in education. What we do have instead is the ability

900
00:47:38,040 --> 00:47:41,520
Speaker 1: to target dollars towards this. I think that this new

901
00:47:41,600 --> 00:47:43,879
Speaker 1: program is going to be is going to be really

902
00:47:43,880 --> 00:47:46,839
Speaker 1: wonderful for a lot of professions. One of the things

903
00:47:46,880 --> 00:47:51,800
Speaker 1: that happens typically it is students with graduate school debt

904
00:47:51,880 --> 00:47:55,040
Speaker 1: who get into income based repayment. And I know a

905
00:47:55,040 --> 00:47:56,920
Speaker 1: lot of people see that and say, well, these are

906
00:47:57,040 --> 00:47:59,040
Speaker 1: doctors and lawyers, why should we be helping them, they

907
00:47:59,040 --> 00:48:02,040
Speaker 1: can pay off their own life. In fact, it's veterinarians,

908
00:48:02,040 --> 00:48:05,600
Speaker 1: its physical therapists, it's social workers, it's nurses, its teachers.

909
00:48:06,320 --> 00:48:10,640
Speaker 1: And what happens with these income based repayment plans is

910
00:48:10,960 --> 00:48:14,000
Speaker 1: because it's not a fully amortized loan, you're not making

911
00:48:14,040 --> 00:48:17,080
Speaker 1: a monthly principle and interest payment. In many cases, because

912
00:48:17,120 --> 00:48:20,040
Speaker 1: the payment is calculated based on your income, you're not

913
00:48:20,080 --> 00:48:22,920
Speaker 1: even covering the interest payment. So I had a client

914
00:48:23,560 --> 00:48:28,200
Speaker 1: who she's a therapist, got her master's degree, barred seventy

915
00:48:28,200 --> 00:48:30,799
Speaker 1: thousand dollars to pay for her degree, since in the

916
00:48:30,840 --> 00:48:33,800
Speaker 1: ten years since she had graduated, she had paid eighty

917
00:48:33,800 --> 00:48:37,480
Speaker 1: thousand dollars on that seventy thousand dollars loan, and she

918
00:48:37,640 --> 00:48:41,640
Speaker 1: now owed ninety thousand dollars because that interest continues to

919
00:48:41,680 --> 00:48:45,439
Speaker 1: accrue on the loan. It was absolutely suffocating for her

920
00:48:46,200 --> 00:48:48,080
Speaker 1: and the path that she was on. She would get

921
00:48:48,120 --> 00:48:51,360
Speaker 1: to loan forgiveness eventually, but that debt would be taxable

922
00:48:51,360 --> 00:48:54,000
Speaker 1: to her, and the loan balance would continue to grow

923
00:48:54,080 --> 00:48:57,719
Speaker 1: because of that accrued interest, and so she would have

924
00:48:57,800 --> 00:49:02,760
Speaker 1: a taxable forgiveness debt of something like we were projecting

925
00:49:02,760 --> 00:49:05,000
Speaker 1: that would be somewhere around two hundred and fifty thousand dollars.

926
00:49:05,000 --> 00:49:07,440
Speaker 1: So paying taxes on two hundred and fifty thousand dollars

927
00:49:07,440 --> 00:49:11,000
Speaker 1: that you don't have, that you didn't actually get, when

928
00:49:11,400 --> 00:49:13,440
Speaker 1: over the course of the lifetime, she would have paid

929
00:49:13,520 --> 00:49:15,600
Speaker 1: more than two hundred and fifty thousand dollars toward that

930
00:49:15,680 --> 00:49:20,239
Speaker 1: seventy thousand dollars debt. Because you know, this is a huge, huge,

931
00:49:20,360 --> 00:49:24,359
Speaker 1: huge issue. So because we have this system where we've

932
00:49:24,400 --> 00:49:29,120
Speaker 1: put the burden of financing education on young people, and

933
00:49:29,160 --> 00:49:33,399
Speaker 1: we've burdened them with additional degree requirements because now many

934
00:49:33,680 --> 00:49:38,040
Speaker 1: many not high paying career paths require masters or doctorates

935
00:49:38,560 --> 00:49:41,919
Speaker 1: the purpose of the new payment plan, and I give

936
00:49:41,960 --> 00:49:44,239
Speaker 1: you this long backstory so you can understand, so that

937
00:49:44,239 --> 00:49:47,400
Speaker 1: people can understand what the issue here is. With the

938
00:49:47,480 --> 00:49:50,560
Speaker 1: new repayment plan, one of the biggest benefits to borrowers

939
00:49:50,800 --> 00:49:54,919
Speaker 1: is that interest won't continue to accrue on your loan

940
00:49:54,960 --> 00:49:57,440
Speaker 1: while you're in repayment, regardless of what your payment is.

941
00:49:57,920 --> 00:50:01,640
Speaker 1: So in the example of my client who despite paying

942
00:50:01,680 --> 00:50:04,359
Speaker 1: eighty thousand dollars on a seventy thousand dollars debt, now

943
00:50:04,440 --> 00:50:08,760
Speaker 1: owed ninety thousand dollars, that won't happen in the future,

944
00:50:08,800 --> 00:50:13,320
Speaker 1: and students will actually be able to repay their loans

945
00:50:13,480 --> 00:50:17,360
Speaker 1: or to be contributing a portion of their salary for

946
00:50:17,840 --> 00:50:19,799
Speaker 1: ten or twenty years, depending on the types of loans

947
00:50:19,800 --> 00:50:22,400
Speaker 1: that they have, and then have that balance forgiven, and

948
00:50:22,480 --> 00:50:25,400
Speaker 1: it won't be as onerous as having two hundred and

949
00:50:25,400 --> 00:50:29,120
Speaker 1: fifty thousand dollars forgiven when you borrowed seventy thousand and

950
00:50:29,120 --> 00:50:31,719
Speaker 1: paid two hundred and fifty thousand. Right. Yeah, So there's

951
00:50:31,719 --> 00:50:33,640
Speaker 1: definitely you can see where the relief can come in

952
00:50:33,680 --> 00:50:36,480
Speaker 1: and be just a lifesaver for mini folks. But I

953
00:50:36,520 --> 00:50:39,320
Speaker 1: do agree, I wish there can be some more creative

954
00:50:39,320 --> 00:50:43,600
Speaker 1: solutions where the government can target specific industries or just

955
00:50:43,680 --> 00:50:48,920
Speaker 1: different programs as opposed to what feels like a general solution,

956
00:50:49,000 --> 00:50:50,960
Speaker 1: like a general band aid that might only be a

957
00:50:50,960 --> 00:50:53,920
Speaker 1: band aid, as opposed to maybe addressing someone underlying causes.

958
00:50:53,960 --> 00:50:56,759
Speaker 1: But and this has been a great conversation. We really

959
00:50:56,800 --> 00:50:59,440
Speaker 1: do appreciate you taking the time and talking through ways

960
00:50:59,440 --> 00:51:02,319
Speaker 1: for us to the cost of college. Working folks. Learn

961
00:51:02,440 --> 00:51:05,240
Speaker 1: more about what you're up to, and specifically working folks

962
00:51:05,440 --> 00:51:07,879
Speaker 1: buy your book. First of all, thank you so much

963
00:51:07,920 --> 00:51:10,319
Speaker 1: for having me on that spend a pleasure talking with you. Both.

964
00:51:10,719 --> 00:51:13,040
Speaker 1: My website is how to pay for College dot com

965
00:51:13,080 --> 00:51:16,280
Speaker 1: and I have tons and tons of free content there

966
00:51:16,400 --> 00:51:19,040
Speaker 1: that's all about paying for college. I also have my

967
00:51:19,480 --> 00:51:22,760
Speaker 1: College Financial Plan Masterclass on my website. That's a course

968
00:51:22,800 --> 00:51:26,080
Speaker 1: that's designed for families of high school students who really

969
00:51:26,120 --> 00:51:31,719
Speaker 1: want to build out a detailed plan for applying funding

970
00:51:32,360 --> 00:51:35,360
Speaker 1: and choosing and choosing a college. And then my book

971
00:51:35,400 --> 00:51:38,440
Speaker 1: is how to Pay for College, and that's available from Amazon,

972
00:51:38,560 --> 00:51:42,239
Speaker 1: bookshop dot org, you know, bookstores everywhere. It's great and

973
00:51:42,360 --> 00:51:44,520
Speaker 1: thanks so much for joining us. We really appreciate it.

974
00:51:44,880 --> 00:51:47,560
Speaker 1: Thank you all right, Matt, you gotta love someone who

975
00:51:47,600 --> 00:51:50,680
Speaker 1: can break down something really complicated in a pretty straightforward,

976
00:51:50,719 --> 00:51:53,040
Speaker 1: in simple way. There's a lot to consider when it

977
00:51:53,080 --> 00:51:55,000
Speaker 1: comes to the cost of college, but I feel like

978
00:51:55,040 --> 00:51:57,719
Speaker 1: an laid out a bunch of helpful information, like how

979
00:51:57,760 --> 00:52:00,799
Speaker 1: to proceed right, how to make it happen, some actionable advice. Yeah.

980
00:52:00,840 --> 00:52:04,160
Speaker 1: I didn't even realize that those third party scholarships that

981
00:52:04,239 --> 00:52:06,719
Speaker 1: you get to look with those online websites, those were

982
00:52:06,719 --> 00:52:08,759
Speaker 1: just icing on the cake. I didn't realize that they

983
00:52:08,800 --> 00:52:11,279
Speaker 1: were that insignificant. Yeah, but yeah, you got to look

984
00:52:11,440 --> 00:52:15,200
Speaker 1: towards those institutional scholarships. Yeah, the funds that you get there,

985
00:52:15,239 --> 00:52:19,560
Speaker 1: but that's the cake batter. Where where's the beef? You're

986
00:52:19,560 --> 00:52:21,759
Speaker 1: always looking for that? What was your big takeaway though

987
00:52:21,760 --> 00:52:24,160
Speaker 1: from this combo? Okay, so mine I also has to

988
00:52:24,160 --> 00:52:26,680
Speaker 1: do with scholarships, and I really really like that she

989
00:52:26,800 --> 00:52:29,840
Speaker 1: said to start locally when it comes to the different

990
00:52:29,920 --> 00:52:32,759
Speaker 1: scholarships that might be available for your kid. If you

991
00:52:32,920 --> 00:52:35,120
Speaker 1: go straight to like you said that, the scholars and

992
00:52:35,120 --> 00:52:37,640
Speaker 1: fast webs if you go straight to these resources that,

993
00:52:37,680 --> 00:52:40,520
Speaker 1: by the way, are accessible to millions and millions of people,

994
00:52:40,600 --> 00:52:42,359
Speaker 1: there's like a there's gonna be less of a chance

995
00:52:42,360 --> 00:52:45,359
Speaker 1: of you actually getting that. Yeah, firstus something that might

996
00:52:45,440 --> 00:52:48,800
Speaker 1: be set up locally. Maybe it's something for your specific county,

997
00:52:48,880 --> 00:52:51,319
Speaker 1: or even maybe there is an alum there at the

998
00:52:51,400 --> 00:52:53,400
Speaker 1: high school that your your kid went to. In every year,

999
00:52:53,440 --> 00:52:57,480
Speaker 1: they award a certain amount of funds towards a scholar

1000
00:52:57,719 --> 00:53:00,000
Speaker 1: towards a young student who's going to be going down

1001
00:53:00,239 --> 00:53:03,480
Speaker 1: a specific degree, right, a specific path of education. So

1002
00:53:03,560 --> 00:53:05,719
Speaker 1: I really like that and the added benefit there is

1003
00:53:05,800 --> 00:53:08,759
Speaker 1: I think this is also it's just less likely going

1004
00:53:08,800 --> 00:53:11,280
Speaker 1: to be what a lot of students are doing today. Anyway.

1005
00:53:11,400 --> 00:53:14,359
Speaker 1: I think it seems just a little bit easier to Okay,

1006
00:53:14,360 --> 00:53:16,239
Speaker 1: I'm just going to search this on the web see

1007
00:53:16,239 --> 00:53:19,120
Speaker 1: what pulls up. As opposed to going in person, having

1008
00:53:19,160 --> 00:53:21,160
Speaker 1: that face to face conversation. I think there are going

1009
00:53:21,239 --> 00:53:23,160
Speaker 1: to be less folks doing that anyway. I'm just looking

1010
00:53:23,160 --> 00:53:26,000
Speaker 1: for scholarships on TikTok Matt Okay, Now we got a

1011
00:53:26,040 --> 00:53:28,040
Speaker 1: zig when other people are zagetting. Exactly, if you go

1012
00:53:28,120 --> 00:53:30,759
Speaker 1: in a different direction that very few people are exploiting,

1013
00:53:31,000 --> 00:53:32,960
Speaker 1: it can help you pay for college. Yeah. Yeah, what

1014
00:53:32,960 --> 00:53:36,080
Speaker 1: if there's a scholarship that's only available if you write

1015
00:53:36,120 --> 00:53:38,839
Speaker 1: a letter by hand and send it in I don't know, again,

1016
00:53:38,880 --> 00:53:43,080
Speaker 1: I look cursive, yeah, but I mean, yeah, being facetious here,

1017
00:53:43,120 --> 00:53:44,400
Speaker 1: but like, I think there are going to be more

1018
00:53:44,400 --> 00:53:47,320
Speaker 1: opportunities for students who do actually go talk to that

1019
00:53:47,320 --> 00:53:49,440
Speaker 1: guidance counselor. I think that's huge. I think the biggest

1020
00:53:49,480 --> 00:53:51,960
Speaker 1: takeaway for me it was just the list price versus

1021
00:53:51,960 --> 00:53:54,600
Speaker 1: the actual price. And it was so fascinating. You mentioned

1022
00:53:54,640 --> 00:53:57,560
Speaker 1: one hundred and eighty percent increase over what the last

1023
00:53:57,640 --> 00:54:01,480
Speaker 1: twenty something years in the price we pay for college,

1024
00:54:01,480 --> 00:54:05,080
Speaker 1: but and very quickly dispelled the myth that college costed

1025
00:54:05,080 --> 00:54:08,200
Speaker 1: that much more. She said, no, actually that's the sticker price,

1026
00:54:08,440 --> 00:54:11,319
Speaker 1: but what people actually pay is far less than that.

1027
00:54:11,680 --> 00:54:15,000
Speaker 1: And I man, I also love there's so much information,

1028
00:54:15,120 --> 00:54:18,799
Speaker 1: but just like how different those award letters can be,

1029
00:54:19,280 --> 00:54:21,879
Speaker 1: that they might be apples and what she said, chicken

1030
00:54:21,880 --> 00:54:25,320
Speaker 1: salad salad. Yeah, yeah, And that's just kind of fascinating

1031
00:54:25,360 --> 00:54:27,040
Speaker 1: to know you got to dig into the details because

1032
00:54:27,120 --> 00:54:29,319
Speaker 1: and we want it to be easy. Yeah, again, like,

1033
00:54:29,440 --> 00:54:31,319
Speaker 1: especially when it's complex, we want it to be easy.

1034
00:54:31,320 --> 00:54:33,359
Speaker 1: And so we're just gonna go look at the bottom line,

1035
00:54:33,360 --> 00:54:36,239
Speaker 1: We're gonna look at what they and it spits out

1036
00:54:36,239 --> 00:54:38,200
Speaker 1: a number but this is a big decision up to us,

1037
00:54:38,200 --> 00:54:40,080
Speaker 1: and if we if we take the easy route and

1038
00:54:40,080 --> 00:54:42,840
Speaker 1: we don't compare all the details, we are liable to

1039
00:54:42,840 --> 00:54:45,240
Speaker 1: pay too much sign our kid up for the Lexus

1040
00:54:45,320 --> 00:54:47,040
Speaker 1: level food plan or something like that that they don't

1041
00:54:47,160 --> 00:54:49,800
Speaker 1: need or even want. And so I think it's important

1042
00:54:49,800 --> 00:54:52,080
Speaker 1: to dig into those details to make sure one that

1043
00:54:52,120 --> 00:54:55,200
Speaker 1: you're paying not the actual list price, but two that

1044
00:54:55,280 --> 00:54:59,160
Speaker 1: you're not signing up for something or neglecting maybe a

1045
00:54:59,239 --> 00:55:03,400
Speaker 1: college it offers you a better actual price because you

1046
00:55:03,440 --> 00:55:06,120
Speaker 1: haven't dug into the details and you ever realized, wait

1047
00:55:06,160 --> 00:55:08,680
Speaker 1: a second, they're quoting the quote seems higher than it

1048
00:55:08,680 --> 00:55:10,520
Speaker 1: should be. Oh, it's because they're including this, this this, and this,

1049
00:55:10,560 --> 00:55:12,959
Speaker 1: and we don't need the health insurance. So boom boom boom. Wow.

1050
00:55:13,000 --> 00:55:14,360
Speaker 1: Now it turns out the college we really wanted to

1051
00:55:14,360 --> 00:55:16,040
Speaker 1: go to doesn't cost as much as we thought. They

1052
00:55:16,200 --> 00:55:17,920
Speaker 1: got this one set up to where all the kids

1053
00:55:17,960 --> 00:55:20,080
Speaker 1: are staying in the penthouse. Yeah, you know, like my

1054
00:55:20,120 --> 00:55:21,920
Speaker 1: kid doesn't need that, right exactly, Put him in the

1055
00:55:21,920 --> 00:55:24,919
Speaker 1: basement apartment and save us, save some couple of geese

1056
00:55:24,960 --> 00:55:27,719
Speaker 1: big bucks. Let's introduce the beer you and I we

1057
00:55:27,880 --> 00:55:32,840
Speaker 1: enjoyed a sponsor Nail um little mash up of spontaneous

1058
00:55:32,880 --> 00:55:35,320
Speaker 1: and ale, So sponsor Nail. This is a beer by mckeller.

1059
00:55:35,480 --> 00:55:37,080
Speaker 1: What are your thoughts on this one, buddy? Okay, So

1060
00:55:37,239 --> 00:55:39,880
Speaker 1: this one I've been sitting on honestly for probably like

1061
00:55:39,920 --> 00:55:44,600
Speaker 1: eight years. What Yeah, really, no joke, and it's it's

1062
00:55:44,680 --> 00:55:46,319
Speaker 1: a lovely beer. I don't know if I've ever had

1063
00:55:46,360 --> 00:55:47,759
Speaker 1: this beer before, but I've literally had it on my

1064
00:55:47,800 --> 00:55:50,319
Speaker 1: shelf for a long time, just letting it age, just

1065
00:55:50,360 --> 00:55:53,359
Speaker 1: sitting there, and it has gotten better with age. It's

1066
00:55:53,360 --> 00:55:54,919
Speaker 1: really good. Oh good. How do you know it's gotten

1067
00:55:54,960 --> 00:55:56,719
Speaker 1: better if you've never had it? You're right, I don't know.

1068
00:55:56,760 --> 00:55:59,680
Speaker 1: Maybe I'm assuming what if it was even better before?

1069
00:56:00,000 --> 00:56:03,080
Speaker 1: Imagine it's just degraded. I can't imagine. Its every delightful.

1070
00:56:03,120 --> 00:56:05,840
Speaker 1: It was subtly oky, little funk, little tart. It was

1071
00:56:05,920 --> 00:56:08,799
Speaker 1: exactly what I want in a spontaneously fermented beer. This

1072
00:56:08,840 --> 00:56:11,080
Speaker 1: one was off the charts. You hit all the tasty

1073
00:56:11,200 --> 00:56:12,839
Speaker 1: nights that I was playing into cover as well. Man, Yeah,

1074
00:56:12,840 --> 00:56:15,279
Speaker 1: this was a really tasty one. And even though it

1075
00:56:15,400 --> 00:56:18,239
Speaker 1: had some unique for kind of funky flavors, I this

1076
00:56:18,280 --> 00:56:19,759
Speaker 1: is the kind of beer that I would love to

1077
00:56:20,440 --> 00:56:22,480
Speaker 1: if I had a beer, which I don't every night

1078
00:56:22,480 --> 00:56:26,040
Speaker 1: at dinner. This is like a really nice table beer,

1079
00:56:26,280 --> 00:56:28,520
Speaker 1: right because it's not like there was a certain flavor

1080
00:56:28,520 --> 00:56:30,520
Speaker 1: pushing it in one direction or the other. It was

1081
00:56:30,560 --> 00:56:33,960
Speaker 1: just a nice, overall, well balanced beer with a lot

1082
00:56:33,960 --> 00:56:38,440
Speaker 1: of fantastic flavors going on interesting without being too much. Yeah, exactly, Yep,

1083
00:56:38,640 --> 00:56:40,000
Speaker 1: I really liked it. Glad you and I got to

1084
00:56:40,000 --> 00:56:41,640
Speaker 1: share this one. Thank you for bringing this one in

1085
00:56:41,800 --> 00:56:44,120
Speaker 1: to the podcast for us to drink here in front

1086
00:56:44,120 --> 00:56:45,920
Speaker 1: of all the people. Well, my wife is glad that

1087
00:56:45,960 --> 00:56:48,000
Speaker 1: it's no longer on the shelf, and I was tired

1088
00:56:48,360 --> 00:56:50,840
Speaker 1: tired of looking at that bottle. But that's gonna be it.

1089
00:56:50,880 --> 00:56:53,720
Speaker 1: We'll make sure to leak to and cite her book

1090
00:56:53,920 --> 00:56:56,560
Speaker 1: where it is that you can purchase that. You can

1091
00:56:56,560 --> 00:56:59,520
Speaker 1: find that up on the website at how tomoney dot com. Joel,

1092
00:56:59,560 --> 00:57:01,640
Speaker 1: that's gonna be it for this episode, buddy. Until next time,

1093
00:57:01,760 --> 00:57:03,839
Speaker 1: Best Friends Out, Best Friends Out.