Masterclass: How to Send Your Teen to College Without Breaking the Banksign

I'm gonna go ahead and put up a slide for those of you who have entered. Thank you for being punctual. We are gonna get started just a few minutes after 5 to let people who are running their kids all over the place get somewhere settled. And let me share my screen because I think it will help you. Perfect. So here are some questions, and I'd like you to think about each one of them and how it pertains to you. Which of these topics would you most like to hear about tonight? And you don't have to write out the sentence, just write, uh, 1, 2, 3, 4, or just go straight to 10 and say, I need it all, Shellee Howard. Little overwhelmed. I, I don't know what I don't know. And that's okay. We're gonna honor that and, um, go ahead and put that in the chat. If you can share the age of your student or students and where you're located, that way we can speak to that state, to that age group, and be super, super specific where you're gonna get the most out of it. All right, so go ahead and work on that. And welcome everyone. Awesome. We're gonna start it probably maybe 3 minutes to give you guys time to look through this list and, and get clarity about what do I hope to learn about tonight? College admissions is definitely more competitive than it's ever been and definitely more expensive than it's ever been. And so I encourage you to, you know, think about what if I could just learn one thing tonight, what would that be? And that way we can make sure and answer that. Beth and I, I will do a proper introduction in a moment. We're here to serve you. We already know all of this and we want to help you to know what you don't know, and that is really the goal. So, um, go ahead, answer the questions, put into the chat, um, the age of your student, the location. That would be incredibly helpful. Susanna, great to see you. Michelle, excellent. Maria, so glad you're here. All right, thank you all again for being on time, and we will get started in just about 2 minutes. So, um, take a moment, take a deep breath, settle in. I'm sure you've been running from work to picking up the kids. All 4 of mine are out of the house, so it gets way easier, I promise.

Alright.

Thank you for filling in the chat. So it looks like we have some twins. Alright, 9th grade. Excellent. So, Cal, question number 1. Question: When should I start planning for college if I want scholarships? If yesterday was an option, that's the one I would recommend giving. But, you know, let's just be fair. You can start applying for scholarships as soon as your child is in 7th grade, so it can already happen. No need to wait. Um, let's see. Carrie's here to assist us, uh, 2910 San Diego. Woohoo! I love that you're here. Way to get a jump on it. Uh, 15 years old in Texas. Excellent. Um, one freshman in college, 9th, 11th, and 7th NorCal. Okay, that's really helpful. That's a nice span we can speak to. Starting grade 12, Toronto. Oh, I love to throw a twist in it. Yeah, Canada. Excellent. All right, we're gonna go ahead and get started. So thank you all so much for being here. Let me go ahead and take the share off for a moment. So tonight I have the opportunity of sharing the stage with a good friend and a financial guru. Beth Walker is here with me, and she's gonna take the second half of our evening together. Carrie is our executive assistant. She'll be answering questions, making sure we stay on task and end on time. That's a big job, right? We will answer questions at the end, but I encourage you to put them in the chat as they come to mind because Carrie can answer them quickly, or we'll, we'll take them in order. Okay? So I encourage you to stay tuned. It's gonna be a little bit like drinking from a fire hose just because we have a lot we wanna give you, but it's not because we don't wanna give you at all. So, Beth, would you like to introduce yourself and we'll go ahead and start?

Well, hello everyone, and, and again, thank you for joining us. I know how challenging that can be, but I'm glad you're making it a priority because with the kind of guidance that Shellee can give you and, and some of the things you're going to learn tonight, it's a game changer. I have been I'm a wealth manager for 25 years, and for about 22 years of that 25 years, I've also been a college planning specialist. All of that started because I had a baby, and when he was born and I did the math on sending him to college, I said, are you kidding me? It can't be that expensive. And that sent me on a path that I'm forever grateful for because one of the things I learned as a financial advisor is our training as it relates to college isn't very helpful for our clients. And so I had to spend a lot of time learning about things that you don't learn about as a traditional financial advisor. Well beyond things like put money in a 529 plan. And as a result of that, I've written two books. I wrote the book Never Pay Retail for College back in 2017, and I just published a new book this May called Buying College Better. And I have founded a company called the Center for College Solutions. And it's all about the collaboration that it takes among people that are experts to really create the best outcomes for families. I can't do the things that Shellee and her team do. I'm not trained. I don't have the expertise, but I like to think of it as like a kitchen remodel, right? Somebody might be the quarterback or the general contractor and is keeping track of the timeline and the budget, but that doesn't mean they're the plumber or the electrician or the people that put the granite countertops. It all has to happen. And it also has to happen in the right sequence of success. And so that's why I created the Center for College Solutions. And that's why I am so excited to be able to partner with Shellee Howard and the team.

Outstanding. So I'm reading the chat and just loving it. You guys are in it. You have lots of great questions. So let's go ahead and get started. We will leave about 15 minutes at the end. So if you have questions, just know we will honor that. It's very important. This, this is for you. We're not here to sell you anything. We're here to give you everything. All right. So let's go ahead and start the show. All right. So we talked a little bit about what's important to you. And as we're thinking through all of this, I want you to realize if you want to get into the college you want and out without debt, Every one of these and 97 of their best friends need to be accomplished. So this is just a little sampling. If you're just starting this process, I don't mean that to scare you at all. I just want you to know, start now and start chipping away at it. And that's what I want to focus on tonight. So when you signed up, you wanted to learn about getting prequalified for a college purchase, right? Let's buy a home. Let's buy a car. Let's buy something of substantial money and let's negotiate as we do it. And that's what we're going to talk about. So let's talk a little bit about why I got started. Beth introduced herself and her why. Well, these two little precious people over here, they're now adults, were my why. This young man right here in the middle, He was the firstborn of 4, and he came home in 8th grade and he says, Mom, I know exactly where I want to go to college and exactly what I want to do. And I'm like, whoa. I go, I changed my major 5 times and you're in 8th grade. This is awesome. I go, what do you want to do? And he goes, so I want to be a brain surgeon and I want to go to one of those top colleges. Can you help me? And it was silence. And I was like, yeah, sure, I'm your parent. Of course I can do that. You've got it. And he walks away and I'm like, oh, you know, my heart's beating out of my chest. And I'm like, what in the world am I going to do? And so without going into all the detail, I— if you listen to my podcast, you'll hear lots of my detail. But without going into detail, that young man helped me to see that there was a massive need. It wasn't a small need, it was a massive need. And I went to his high school counselor and I asked for her help, and she said, Shellee, he's a straight-A student, you don't need to worry about him, he's awesome. And I'm like, oh, okay. I go, but he wants to be a doctor and we have no doctors in our family. And she goes, oh, Yeah, don't do that. You'll waste your money. They don't make money anymore. And it— yeah, that was the look. I'm like, did you say that out loud? Because he's only in 8th grade. And he looks at me and he looks at her and I'm like, yep, I guess it's time for us to leave. And we're walking out, he looks at me and he goes, Mom, what's your plan? And I'm like, oh yeah, we don't have one of those yet. But we soon did. I went back to school. I got my master's degree. Then I became an independent certified college consultant. Then I started touring 25 colleges a month— or sorry, a quarter. And I got to know college admissions very quickly. He applied to 12 schools, got a full ride to 7 of them, got a full ride to USC, and Harvard matched it. I was heartbroken because now my West Coast child was going to the East Coast, and this mama did not want him to leave. But as he said, Mom, it's Harvard. So enough about him. My second born, she challenged me just as well. She said, Mom, I've been to Harvard, not for me, but my dream school is University of Alabama. And I'm like, why? She goes, "Duh, Mom, the football." I'm like, "You want to play football?" And she's like, "Seriously?" And I'm like, yeah, that wasn't very funny. But I said, "We have good schools here in our state. Unless you get a full ride, you're not going." And she did. So she went off to University of Alabama. My stepson just graduated in 3 years with a dual degree from San Francisco State, completely debt-free. So even in-state, it's possible. My fourth challenged me again. My stepdaughter says, Harvard, Alabama, state school— I'm going to the Czech Republic of Prague, and I'm going to AAU and get an international business degree in 3 years for $27,000 total and travel the world while I'm there. Huh, okay, how do you say no? They're 18. I've been helping students for over 17 years. I'm going into my 18th application season. I've personally completed the SAI and the FAFSA over 9 times. I had a huge reason to learn this process, and that is what I want to share with you. All right, let's dive in. Let's talk about other people. So How do you want to graduate debt-free? In 2023, College Ready students received over $9 million in scholarships. That was 29 students. We're not a mill. We're not looking to just burn a bunch of people through our system. We are there to make a difference. These are some examples. Kate got a full ride tuition to USC. Shervin got a full ride to Northwestern. Madeline received— I mean, On and on and on. We can't make this stuff up because 77% of our clients are referrals. So we know our secret is working. Here's the problem. College admissions can be overwhelming. It could be information overload, especially now with Google, financial obstacles, scarce resources, real resources, and fierce competition. Here's the solution. You can do this yourself, and I'm gonna give you every tool I can. If you're like, yes, I have the time and the desire. It took me 30 hours a week on top of my full-time career to do this. And if that's something you wanna do, I can help you do that. Or you could be like, I can make so much more money by doing what I'm good at. And let you deal with my teenager. Your choice, but just know I'm here for you. Most importantly, what I need you to know about tonight is college is a business. So many people get emotionally connected and they say, I want to go to this school. And I ask, why UC Santa Barbara? Well, haven't you seen the view from the dorm? No, no, no. Why UC Santa Barbara? Yeah, I told you, the view from the dorm. So we have to help our students understand what they don't understand, and their high school is not going to talk about any of this. So this is important because it's your money, it's your future. I partner with Beth because I don't want you to use your retirement to pay for college, and then Beth can't help you retire. That sounds awful to me. Let's jump in. So here are ways to decrease the cost of college. A strong GPA with rigor. Not all A's in easy classes. We have to have some rigor, not in everyone, but some. Your test scores. For those of you who think testing is optional, just this week another school, Johns Hopkins, said we're no longer optional. So all those seniors What are they going to do? They didn't prepare. And guess what? Test scores are your quickest way to scholarships. Everybody wants to know, how do I get scholarships, Shellee Howard? Test, test, test, test. 3, 4, or 5s on your AP scores get you a National Merit Scholar. Ding, ding, ding, more money. Are you starting to see? Here's the money. Dual enrollment. AP classes, money, money, money, looking for colleges with strong merit scholarships. We know where the big money is, and they're not at our California public schools. Sorry. Choose a college your student will graduate from in 4 years. Did you realize that not every school you can get out in 4 years? Right now, there are so many schools— I can show you exactly who they are— are taking 5 to 6 years to get a 4-year degree. It may be because it's too much fun and the student just isn't ready to leave. It may be that, that's so overcrowded that the student can't get the classes in the right order to get their prereqs done. It may be that it goes on and on. So look for out-of-state, um, public colleges or international schools with special pricing for out-of-state students. Look for private schools that meet 100% of need, and just know before you apply, can your family afford it? I'm not gonna steal Beth's thunder here, but I just wanted you to hear it first. Now, what affects the cost of college, right? And how do I really think about this? And, and what affects college admission? I'm gonna tell you. It's changed. It's no longer a GPA and a test score. Everybody's got that. And for those of you parents who are starting this right now, it's now a 5.0 GPA. So if your student has a 4.0 and you're like, yes, and I'm like, whoa, it's not because I'm not being realistic. It's just the average GPA for UCLA this year was a 4.7. I talk a lot about the UCs because it's the number one school students apply to. It's not because I know California more any other place. A lot of people want to live in California. That's it. Grades. Grades affect admissions. It goes GPA and then test scores. Then it's weighted GPA or unweighted. It's how high or how low is your test score? What is your class ranking? Does your school not rank extracurricular activities? Are they good activities, better activities, or are they the best activities? What is your student's unique positioning? Because we know somebody will have a higher GPA and a lower, higher test score and a lower. Okay, what else do they have? What is, what is colleges looking for? The essay is so incredibly important, and the admissions reader has between 4 and 6 minutes to read the whole application and the essay, so it needs to be Perfect. Interests, special skills, passions. I can spend a whole session on number 9 alone, so if you want to talk to me about how to find your child's passion, their interest, their special skills, I would love to help you. Letters of recommendation. Who to ask, how to ask, when to ask, and what they need to do. Diversity, leadership, equity, and inclusion. Colleges are not looking for you to come to a school and leave with an education. They're looking for you to collaborate, raise everybody up, everybody leads, put your diploma on the wall, and you start marketing for them. Then we have college interviews. Okay, all of this is what affects college admission. Here's something that I think everybody should know before they graduate high school. US News and World Report is a marketing ploy for colleges. Be very careful that you do not put all your eggs in this basket. What happens when you take the PSAT is the PSAT sends out all your scores to all of the colleges, and then they what? Start saying, apply to this school, apply to this school, we want you, apply here. And you're like, but I only have a 2.5. Why would Harvard ask me to apply? Because that's called yield. The more people who apply and who get denied makes their yield more important. So please know it's so important. Be careful who you put all the information and the weight into. This is the person who you want to understand. This is called the Strategic Enrollment Manager. They have to balance every class at every school. They need some business people, some, um, uh, literature, some accounting, some engineers, some pre-law. They can't have it all one way or they'd have to fire half their teachers. They also have to balance the class with ethnicity. Diversity, right? That's a hard job. Like, I would never want that job. And so the admissions people are fighting for your child to this person. So help them sell your child. Alright, this is super important. I say they're all important. I'm so sorry, but this is really important. So because GPA is no longer the only thing What else should you focus on? You want to focus on their standout strategy and their positioning. How many awards? How many IB, um, baccalaureate, uh, classes have they taken? How many dual enrollment? How many essays have they written that will stand out? Then you look at the test scores. If you have a high GPA and a low test score, guess what? You're a smart high GPA, low test score, you easy A's, easy A's. That's what they're thinking. Vice versa, if you have a high test score, low GPA, you're a smart lazy student. I'm not judging here, I'm just saying that is what colleges are thinking. We need your profile to match. This one's in bright red because this is critical right here. This is if you learn nothing else tonight. What does it mean when a college says we use the holistic approach? It means they want to know who your child is. They want to know what they value. Are they an academic? Are they an athlete? You know, what do they do? Do they spend their time gaming all day? Do they do nothing? They actually ask your child to put down What do they do? How long have they done it? How many hours a week and how many weeks per year? Okay, they're not wondering, they're specifically asking. And it all can't be done the senior year because they're not silly, right? The next one, um, when you look at what matters most, you have to prove it. You can't say I want to be an engineer and yet done nothing for engineering. You can't say, I want to go into music, but don't play an instrument. It has to make sense. So you have to show proof in your activities, honors, awards, and leadership. Why would they do well? If I invite your child to my school, why do I think that they would be successful? Graduate, put the diploma on the wall, and start marketing. Are you starting to get the rhythm of the business? This is what they want to understand. They want to understand your GPA, your test score. Are they entitled? Do they serve their community? Are they a leader? Are they a team player? Do their teachers like them? How well can they do when they answer a college essay prompt? The essays are so insanely important. Because you can only put what you've already done on your application. Your essay has to put the bow on the gift, icing on the cake. Do not have your parent edit your essay. I'm sorry, parents, I'm just— I gotta be— I'm trying to help you. What happens is, back when we went to school, it was period, double space. Now it's period, single space. Are you with me? So you're now telling colleges you did their essay. Please be very careful. The student's voice has to come out over and over again. So just as a recap and roadmap, I really want you to understand what this all means and what you need to do. If you want to do this, you need to plan a strategic college plan for your child. They don't know how. You need to understand what are their top 3 majors, what test should they take, what passion with purpose will they need, community service, what extracurriculars, and how will the strategy match their positioning. Oop, sorry. Um, uh, where was I? Recommended strategy, essay strategy. You want to have them apply to at least 10 to 12 competitive colleges so you can do financial negotiations. You want to align school with family values. You want them to graduate, pick colleges where they can get a 4-year degree in 4 years. And you want to give them the opportunity to be a high-ranking student when they graduate so they can go on to another school or graduate with honors. With that, I'm going to move it over to Beth, and then I'll come back and wrap it up if we have some time. All right, the screen is yours.

Thank you. And that is a masterclass right there. Everything that Shellee talked about, you know, it— in my book, I created an acronym, and the acronym is MAGIC. Stands for money, academics, gifts, integration, and confidence. And when I think about all the things that go into this project, the thing that strikes me so much is it's all about the student, but the parents foot the bill. And so I always like to talk about having the families think about this as a major purchase. And so I want to talk about— whoops, wrong one. Let me put this screen up and I'll, I'll switch it. I want to have a little paradigm shift for all of you. Are you seeing, um, Just Buy College Like You Buy a House?

Yes.

Okay, good. This is so important because when I was doing research for my book, it occurred to me that this is a 6-figure investment and it's the most emotional purchase most families are ever going to make. I mean, what We're talking about our kids. We're talking about over 6 figures. And in American culture, when we make big purchases, historically, from a financial perspective, we've completely outsourced the whole way we go about making the purchase decision. So when I was doing research, I said, okay, I'm gonna use artificial intelligence. I'm gonna go to ChatGPT, and I'm gonna say, give me guidance on how to buy a car.

Okay.

And it spits out, you know, a 10-step checklist. And in the top 3, it talks about make sure you're shopping for what's affordable for you. Make sure you understand how much you can afford to spend for how long. Then I asked ChatGPT to tell me How do I buy a house? Well, you get prequalified, and then you decide on your criteria, and then you go and you look, and then you make an offer. And it gives you a very detailed list of how to go about buying a house. So then I asked ChatGPT, how do you buy college? And what ChatGPT said was, Hey, I'm just an AI resource, and I can't give you any personal finance, uh, guidance. It had no answer. And it had no answer because in American culture, we don't believe we're making a purchase when we talk about college. We are spending hundreds of thousands of dollars, and we don't view it as a consumer purchase. So the struggle between the parent heart and the consumer mindset is lost. We literally lose our mind when we're buying college. Okay? And that's because we don't view it through the lens of our consumer framework. We're— we want our kids to be happy. We want them to succeed. We want them to be in a great environment. We want them— we want to launch them in the best possible way. But we aren't very smart historically about how we go about it. I mean, if you really think about the way we go to buy a house, we go to a lender and we ask them to tell us, do the math. It's the voluntary root canal. Give, give them all your financial information, your income, your liabilities, all the things you owe, all the obligations that you have. And they crunch the numbers and come back to you and they say, Hey, we've done the evaluation, and based on what you've shared with us, this is the maximum amount of money that you can spend on a house, and we still have confidence you'll be able to pay us back. Right? And, and we accept that, and then we go shopping. And that dictates the zip codes that we're going to shop in. Now, our criteria— hey, it has to be this number of bedrooms and this number of bathrooms and this size of a backyard and this many garages. We're pretty clear on our success criteria, but because we know our spending ceiling, we're willing to shop in the right zip codes. We don't do any of that when it comes to college, but we can And we should. And so what Shellee just talked about, and I love the planning to pay slide where you talk about all the different things that enter into the equation. I call that the academic FICO score. Our FICO score is how the world looks at us from a credit risk perspective. Oh, you seem to be really good with your credit. You have a good track record of paying on time. Of always meeting your obligations. So guess what? If you have a high FICO score, you get a lower rate. Well, if your student has a high academic FICO score because of their GPA and their test scores and their extracurricular and the rigor of their coursework and what makes them unique, guess what? They get a discounted cost at college. They get a disproportionate amount of merit-based aid and tuition discounts. Back to college being a business. It makes sense. Why wouldn't a university make a present-day investment in a future endowment stream? That strategic enrollment, enrollment management says, hey, if that kiddo is in the top 25% of students typically admitted to our institution, the probability that they'll graduate on time, be productive, and answer the call in 10 or 20 years when we do our fundraising campaign goes way up. So I'm willing to give them an incentive to come to my institution now because I have faith that 20 years from now when I ask them, to add to our endowment fund, they'll write a check. So it's good business. The challenge that we face in this very opaque process is finding those schools that are likely to give us those discounts, to give us those scholarships. And a lot of times parents have the attitude, you know, if they get in, we'll figure out how to pay for it. That's like dropping a 16-year-old off at the car dealership and saying, let them pick out whatever they want to drive. You would never do that. And yet we do it every day as it relates to college. If we can be good consumers, if we can be focused on finding schools that are a fantastic fit academically, socially and emotionally for the kids, but also recognize which ones are the better financial fit for the parents, then we've got a home run. And if we're going to apply to 10 to 12 schools, wouldn't it be great if we knew before they hit submit on the application that if they were accepted at any one of those schools, they're going to have a great experience as a student, but you're also going to have a great experience, uh, experience as a parent helping to pay or foot the bill for that. And being efficient with your money so that you can do things in retirement because you didn't spend an extra $40,000, $50,000, $70,000, $100,000 that you didn't have to spend. Well, over a 15 or 20-year period of time, that becomes a really big number. And what I think most families don't understand is they can't see what the true cost is to them if they're overpaying for college. And you look at that over 1 student, 2 students, 3 students. Shellee just told the story of her 3 kids. She put 3 kids through school, right? I mean, if you have to put more than 1 or 2 kids through college, this becomes even more critical for your long-term financial well-being as it relates to the parent's retirement. What I've discovered is the people that are probably in the best position to pay for school are also the ones most interested in making sure they don't overpay because they're good stewards of capital. They might be able to write the check, but they're asking the question, should I? Do I have to? And the answer is no. And there's no incentive on the part of the schools to reduce this until we as consumers say enough. I'm not going to overpay. I'm going to shop in the right zip codes for the schools. Nothing's going to change. So understanding how to put all that together to create what I call a college cash flow plan. Becomes really important. So how much money did we set aside in true savings and investments earmarked for college? That's one component. The teenager tax. Most people don't—

they—

I say teenager tax, they're like, what are you talking about? Well, guess what? It costs money to have those kids live under our roof. They like to eat, they like to brush their teeth, they like to drive our car, they do extra extracurricular activities. And so often parents forget that there is a true cost associated with having those kids at home. And when they go off to school, that cost doesn't go away. It's just that those funds get redirected in the form of room and board. So they're not new dollars we have to find. We just have to redirect money that was already baked into your Lifestyle cash flow and recognize that that's going to be offshored or go to the college campus. We also have to understand the role of the spending ceiling. If, if we did a calculation and we said, hey, based on everything we know about your finances, I'm going to pre-qualify you for the college purchase, all kids, all years, which means you could afford to spend another you call it, $36,000, $48,000 on each student over a course of 4 years, that will begin to inform us on what the total amount of money we're willing to spend each year. And now we can work with people like Shellee Howard to say, let's go find schools that are a fantastic fit for this student. But when it's all said and done, it's not going to exceed this certain amount. What does that mean? That means, yeah, we need to do exactly what a mortgage lender is going to do. We're going to collect information about assets, liabilities, income that's coming in, how much you're contributing to retirement accounts. We're going to get the whole financial picture, and then we're going to reverse engineer a number that we know is sustainable, all kids, all years. So for the participant that came on earlier that said one in college, one in 11th grade, one, you know, that's still in middle school, imagine that timeframe that we have to calculate the sustainability of being able to spend and identify the most tax-efficient and cash-flow-efficient pots of money that are going to pay for that. And it's amazing. It is amazing how we can find ways to keep these costs reasonable. I'll give you a great example. We had a kiddo that went through this process. And what we said was, you can't spend more than $39,000 a year to send him to school. Now, this is a kid with this GPA and these test scores and these extracurriculars and a good essay and all that kind of stuff that Shellee Howard said. Critically important. Think about it as the online marketing profile. It's almost like online dating. That's what you're doing. It's an online marketing profile for the student to that school. Well, this kiddo was really interested in going to Baylor University. Baylor University costs over $80,000 a year. By the time we got through, after doing everything the right way, and negotiating based on offers from other schools, lo and behold, he's going to school for $39,000 a year at an $80,000 a year school. So these kinds of things can happen every single day. Does it take effort? Absolutely. Do you have to share information and go through a detailed process? Absolutely. So while the student is doing all the important work, with regard to GPA, test scores, essays, applications, letters of recommendation. The parents have to be focused on the details around the finances, finding the most efficient way, using tax scholarships if they're a business owner and putting kids on the payroll, filling out financial aid forms even though you don't think you're going to get much from the need-based financial aid system. Ironically, It's by opening the financial kimono to the school and letting them know, you know what, I don't qualify for a lot of need-based aid, but I am the parent of a really standout student that has the capacity to pay. Ironically, when they figure that out, they say, you know what, those are the folks we're going to offer these discounts to. These are the good customers that we want in our business called college. So understanding the details And the level to which we have to commit and put our best foot forward is what empowers you to get the best outcome, both for the student and for the parent. That's why just the framework of let's buy college like we buy a house, let's get pre-qualified for the purchase, and then let's go shop in the right zip codes. It's a paradigm shift, and it's an opportunity for us to take the power back from a consumer mindset perspective. So that's really my message tonight. You can do it, and you just have to think about it a different way.

I say that so many times, and it's so good to hear somebody else say it. All right, we have some questions, um, and we're just going to take them until they're done, and then we will send you the recording, um, most likely tomorrow. Um, only for the people who registered, but you're here, so you're good. All right, first question: Afraid we've started 529 plan too late. Eldest two are 15, 12. Set up 529 plan only for 7, 10-year-old child, but I was told it's transferable if needed. That's a YouBeth question.

So the 529 is a, is a It's the section of the tax code, 529, that governs funding higher education. Even the government understood with runaway costs, we need to create incentives for parents to set their money aside. And the incentive is you can put money in, it grows without being taxed, and if you take it out to use it for education expenses, it comes out tax-free. One of the provisions is you can change the beneficiary.. And as long as the change of beneficiary is in some way related to the original beneficiary— sibling, stepbrother, sister, parent, child of, um, cousin— then it's no problem. So it's totally transferable, um, which oftentimes happens when we sit with families and we're doing planning depending on the student, right? This is all student-centric. We may decide, hey, I've got a super smart older kiddo and we don't need to use the 529 because Shellee found tons of scholarship money. So we're going to move that down to the second or the third sibling. Okay. And we can go vice versa. So we look at the 529 as a down payment strategy on the house called college, and we just figure out where to get the biggest bang for the buck. But it's absolutely transferable as long as the beneficiary is in some way related.

Wow, great answer. I know one kid who dumped full scholarship at UCLA to go to USC with none. Oh, I know lots of those. Um, another ditto at Harvey Mudd but paid at Stanford. Yep, know those too. Rolls-Royces, uh, seems free to the kids. Um, yeah. That just goes to, we all are unique and we all have our unique path. And what I can tell you is last year I had a student who got in both into Harvard and to Stanford. Got a— would have been free, would have been free to Harvard, and they chose Stanford, paid full price. I cannot stop that from happening, but it was an educated decision by the parent And they could, they could. So, you know, and they wanted to. My goal, our goal is just to give you education so you get to choose and you get to be a consumer versus feeling like your back's against the wall and it's happening to you. Anything else, Beth, you want to add?

The one thing I'd add is we oftentimes in the college conversation with our kids miss the teachable moments. To me, it's the beginning of financial education. If you look at the statistics on financial literacy and financial competency in this country, it continues to decline year after year. It's not required. And so it really has to start around the kitchen table. So So having very candid conversations about costs and trade-offs is important. And for example, today we had this conversation with a mom. She could pay for her daughter to go to a school that she chose to go to that's more expensive. But what she's going to do is have her sign a promissory note. That says, okay, I'm going to keep this GPA so I can keep my scholarships. I'm going to finish in 4 years, but I'm making this adult decision to go to the more expensive school. And mom has the prerogative to say at graduation, congratulations, I'm going to forgive the loan. I'll forgive half of it. But having that student have literal skin in the game and recognize the value is an awesome opportunity to really teach them about the trade-offs. So I just would encourage parents to not overlook the opportunity that this presents them, regardless of their decision.

So for those of you who know that I wrote a bestselling book, I have to let you know, little secret, I lost the bet. I'll ask about my firstborn, and we had one of those nice little like promissory note things, and ours had some, you know, do this, do this, do this, do this. And if he was to graduate with at least a B+, I didn't want to be unrealistic, from Harvard, and if he did it without going into debt, that I would write a book to help others do the same. So when he crossed the stage at Harvard and he handed me his diploma, he says, Mom, where's the book? And I'm like, oh, he remembered. So the promissory note could go two ways. So be careful what you promise, I think, is the moral of that story. Um, all right, should kids learn to pay for college on their own by working, or working for a company that invests in their college education, or mom or dad can work for the school they want to attend to possibly cover tuition? Beth, you want to take that?

I can. In terms of— I will say this. I think the days of kids absolutely working to pay for college, that's challenging because of the cost. Very few students today could hold a full-time job that would pay them enough and allow them to have a full-time course load and finish in 4 years. You'd probably agree with me on that.

For sure.

But they can and should contribute to the cost of college by doing everything to have the best possible academic FICO score and do everything possible to earn the scholarships and discounts that Shellee Howard and the team helps them secure. So the, in my model, I think of 25% coming from savings and investments and current cash flow, but I also think of 25% or an entire year of college can be paid for by the student through dual credits, through great GPAs, through, you know, modernstates.org and CLEP exams and all kinds of things that you'll learn about. So I believe every household that 1/4 of the cost of college is paid for by the student, because if they do the things they're supposed to do and apply to the schools that are likely to give them the discounts, that is going to happen. Wouldn't you agree?

Oh, absolutely. And but let's be realistic for a minute, Beth. We've taught our teens, don't brag, don't boast. That's rude. Nobody wants to hear how amazing you are. And now they're applying for college and I'm telling them, brag like your life depends on it. Boast like you hear mom talking to grandma. I need you to absolutely sell yourself. And they're like, what? Like, they don't even understand what that means. And it's not comfortable. And now that you're asking something totally different than you've ever told them. So it really does need to be a conversation versus an assumption that they understand how, what, when, why. Because I promise you, not one high school in this world is preparing them for this.

Amen.

There's no financial literacy going on. They have no idea. They think Mom and Dad's just going to pay for it like they pay for everything else.

Yeah.

And the parent is thinking, well, it's time for them to step out, step up and figure this out, and it's time for them to show that they're an adult and, and, and, and do this on their own. And the high school's got a counselor, they're going to do it. Remember, the high schools don't know how much money you do or don't make. Right. And they really don't care. They get no bonus if you get a scholarship. So again, I'm not bashing college coun— or high school counselors. I think they're angels. I just think they're overworked, and they tell kids who are doing well, you're doing great, don't worry, I have to worry about the other kids who are not doing so great. So just be mindful, your child has no better idea how to do this than you do. And if they could, they would, but it's, it's like deer in headlights. I don't know, therefore I'm not even going to talk about it. Let's just pretend it's not going to happen. And then their friends leave for college and now they figured it out and now it's a sadness.

Well, I think about a lot of things in our parenting culture that we never hesitate to invest in guidance. Driver's ed, physical therapy, club sports. We do that without thinking because we know, oh, I don't know how to do that, or they're going to learn better from somebody other than me because when I talk, it's Charlie Brown parent voice. Want, want, want. They know I'm talking, but they're not listening. And for some reason, we just don't apply it to college. And yet the expense— this is the thing, as a financial person, I never understood, because it's like the return on investment here is enormous. But because it wasn't like this when we went, we didn't need to— well, it didn't cost what it costs now when we went. It wasn't as competitive. It wasn't as complicated. There weren't enrollment management systems. So the landscape is so entirely different that you— if you don't understand that you need a team of experts to assist in this, then you are underestimating what you're entering into.

Mm-hmm. That leads me into the next question. Thank you, Dan, for your input. Wondering about the 10 to 12 colleges applied to target. If we have a good student likely to be accepted, that's, that's where I want you to pause. There is no student likely to be accepted because what if they have some amazing students who are the demographic and the particular major? Remember, it's, it's not just the student. There's a lot of things that, that the student's not in control of that's happening at the college. So, you know, my son had a 4.7 GPA. That was amazing back then. Like, that was, that was awesome. And he didn't get into one school that was his top choice. He did as medical school, but not as an undergrad, and it crushed him. And I will tell you, there is no guarantee. So that's the first thing I'll take a pause on. Do you really need 10 to 12 schools? Only if you want scholarships. If you're happy to just accept anyone as where your child's going to college, don't worry about it. But if you want money, you better have a strategy. You better have competitive colleges that you can financially negotiate against.

That's so important. I just want to put an exclamation point on that because inevitably you get down to the top 3 schools and the kiddo's in love with school number 1 that offered the least, and school number 3 offered the most. And what you may not know is I can now use the offer at school number 3 to compel school number 1 to sharpen the pencil. They may not totally meet the price, but they may offer you more than they originally did. So the strategy of having 10 to 12 schools so you give yourself the opportunity opportunity to have more ammunition for negotiation is very savvy.

And I, I love your thinking, um, honestly, about isn't it better to do a few well. I love that because I have many parents right now who are like, we're just going to apply to 50 and I'll, I'll assume the cost. So, you know, it's $100 each, we've done the math, we're going to do 50.

Oh my God.

And I say Do you realize that 12 colleges equal 20 hours of work a week for that child on top of AP, IB, dual enrollment? High school senior year, like, let's just have a little bit of enjoyment. So thank you for, for being conscientious to your child having a life. But here's the thing. Not all colleges are due on the same due date. Right. They are already starting to accept now, and they're going to accept all the way into some March. Okay, so it's not like they're doing all of this in one month. So with a strategic plan, will they do early decision? Will they do early action? Will they do priority decision? Well, I mean, there's so many pieces to this puzzle. That it's not— they're doing all of them at the same time because yes that would be impossible but I had student this year who proved me wrong! And I told my students do NOT apply to every UC school okay? It so easy right ding-ding-ding money-money oh that parents' money... Money-money or thats parentz moneh?! I said, but you're just clogging the pipeline. You're making it so hard for everybody because you really don't want to go there, and you're just flooding it. One of them got into every UC school, and I asked her, why? Why did you want to do this? She goes, because my sister didn't get into one of them. I cannot stop students from doing silly things. I cannot do it. What I can tell you is we encourage students to have a strategy. When will you apply? Why are you applying? How much will this cost you? Academic fit, social fit, financial fit. Beth, you want to add to that?

I do. There is a happy medium. There's too few that you apply to, which really puts you at the mercy of whatever the strategic enrollment management priorities of that school are, which may leave your student out for no logical reason. There's too many, which is just for the sake of going through it, and it's expensive. So I think there is a sweet spot. And I think 10 to 12 is totally appropriate. On the low end, we've seen 8, and that could work. But that's where we are in the college landscape today. So I totally support your point of view on that.

Awesome. We have time for a few more. I'm going to keep rolling. Also wondering about the likelihood of getting full ride beyond tuition, even to cover room and board allowance Or is that completely unrealistic and full ride for tuition is more likely goal? So think about it this way. If you own a business and I'm like, I really want to work for you, and you say, can I see your resume? And I said, oh yeah, it's my first job. I really don't have one. You'll say, okay, well, I'll let you come on and we'll see how it goes and I'll give you minimum wage. And next student comes in, they say, I really want a job, and I can even do your job better than you can, and here's my proof. And you're like, wow, you pay them the big money. That's what college does. It's identical. So you talk about this amazing student. I wanna meet them, by the way. I love amazing students. We help students from 3.0 all the way up. So here's the thing. How amazing are they compared to who is applying for that major at that school? You can't answer that, and I can't answer that. And that's where it's unrealistic to think that that is possible unless they are the next Nobel Peace Prize winner, honest to goodness. And even that, I don't know if he got a full ride on everything. All right, we have a few anonymous, and I think these are good. I think these are really helpful. We talked about the 529, but we didn't talk about how it can decrease financial aid. Beth, can I take this one? Sure. I saved $250,000. I was mom of the year, patting myself on the back, giving myself a high five until Harvard said, great job, Shellee Howard, we will take that first. Do you feel the long pause? I moved it to my second child and I go, I don't know what you're talking about. That's all I'm gonna say about that. Not a financial advice.

I'm also gonna say the rules changed with the FAFSA simplification. And now if the parent doesn't own the 529, it's financial aid invisible. So there are a lot of strategies around 529 that should be talked about and explored. Shellee Howard.

Good point. Good point. This was a bit ago. Community college is free. I love this question. Thank you, Anonymous. And so is some trade schools. Absolutely. Sometimes the child's not ready. Totally agree. Should they take a gap year or work? Beth, can I take this one?

Please do.

Oh, love this one. So again, we have to look at where they're applying or where you live. If you live in Nebraska, which I didn't see when we entered in here, go to community college or trade school, and you won't have a problem transferring to University of Nebraska. It's, it's easy peasy. If you live in California or Texas or Florida or Boston or where, where everybody else wants to apply, here's the thing. Community colleges are so overcrowded, you're child has a 6% chance of getting a 4-year degree. 6, not 60. Then the next thing is they say, but it's like 2 more years of high school. I don't want to do— I didn't like high school and I don't want to do this either, and I'm going to just get a job. I'm out. Ah, there's another problem. And then trade school. Love trade school. Both my parents went to trade school. And what I will tell you is trade school sounds really cool when you're 18 and you're under a car, or you're a beautician and you're standing on your feet all day. But tell me when you're 50, how much you want to get under that car, how much you want to stand behind that chair. Having them have some type of fallback plan. Say they want to own a beauty salon or they want to own a mechanic shop. That's brilliant. But they don't know how to do that if they don't know finance and marketing and all of the other stuff. Beth, you wanna— Couldn't agree more.

And I'll, I'll be the first to say college is not for every student.

Me too.

But that's part of understanding their gifts. That's part of an assessment and a pursuit of majors and a figuring out of hardwiring. And so going through this process to discover what the path is likely to be and then figuring out the right type of educational support plan is a big part of this. And I think that's why Shellee likes to get started at a younger age because it gives us time to explore. It gives us time to understand. It gives us time to create the strategy. So I completely agree that there's a place for all of those answers, but it can't be done as a default. It can't be done because I really didn't like my math teacher in high school. It takes a little bit more of an evaluation to understand the right path.

First thing we do when we bring on a student is we help them to get to know themself. Step 1. And if you don't do that when they're in high school, when are they going to do that? Do you think they're going to do it during a gap year? Think about applying to college during a gap year. That doesn't sound any more fun than applying when all your other friends are applying and can't go out Friday night. So be mindful. They take one college class, they're now a transfer student and must get 60 units. Before they can go get a 4-year degree. There's a landmine. Okay, we're a little bit over, and if you have to leave, I totally honor that, but I'm going to keep going as long— Beth, are you okay with that?

I'm okay with that. And hey, I want to, I want to talk about what you just said because this— remember, I'm all about the finances. I'm all about spending less. This is the one area where I think parents absolutely need to invest outside of the school system because this is not part of the high school curriculum. Self-awareness, we don't do that in American culture. And yet it's so fundamental to putting that kiddo on campus with a sense of purpose and pursuing what's in their best interest. And that kind of self-awareness allows them to advocate for what's in their best interest. And so I just, I really believe in investing and understanding, hey, how am I hardwired? What career paths will serve and play to my strengths? And what majors are going to support that? And then determine which kind of school environment, community college, trade school, great, you know, and if we've got a baseball player that's going to go to junior college because Sports are part of it first, and it is as individual as that student.

Mm-hmm. Think about it, parents. If you got an evaluation before you left high school about your core values, your gifts, your talents, your advocacy, and your intellect, where would you be today? Just think about that for a moment. All right, how to help kids find— oh, another one. Anonymous, you and I need to talk. How to help kids find their passions and interests and find things to brag about when they've tried a bunch of things that haven't quite stuck. Child number 4. God was so good when he gave me each individual one. Um, so let's think about this for a moment. Colleges want to know your child, and if nothing sticks, what they're telling colleges is, I have no idea who I am. Or what I'm good at, or what I want to do. It goes back to what we just talked about. But what do we do? And we're going to invite you to— Carrie, can you put in the chat? Uh, Carrie and I are going to invite you to our student-led organization called EmpowerEducation.World. Carrie and I mentor these teenagers to change the world with what they're passionate about. Okay. It is student-led, so it's teenagers leading other teenagers. Remember what I said colleges are looking for? Woo! They can earn 8 national awards. Remember activities, honors, and awards? They can learn 4 leadership certifications. Remember what I talked about earlier? And it's all done online. In one year, this group, um, earned $18,000, built a school in Uganda and supported an orphanage in Oaxaca, Mexico. Enough said. You've got to come. They cannot not like it because we start with their passion, unless they're lying about their passion. And if they don't know, I teach them how to know. I've never met a teenager who I cannot get their pa— Now, my own children, totally different. So just know I'm really good at speaking teenager. So thank you so much for that question. Okay, another one. Uh, Middle College allows, um, kids to take college credit free during high school so they can graduate or finish college sooner. Yes, it's called a bunch of different things. It may also affect high school grades and GPA. So better to focus on high school GPA or finishing strong, or high school GPA and finishing strong? So I'm not sure the question. Are you just sharing that?

Maybe.

Is it better to— yeah, so here's the thing, in case people are not clear about what she's talking about, or he's talking about, sorry. Um, there's a thing called dual enrollment where students can take college credit classes at their high school, and it affects both their GPA and gets them in and out of college. Because guess what? They don't charge them. They're free units. It's brilliant. My son could have started as a sophomore But Harvard doesn't care about those free units. You have to take them all over again. Why? Because it's a business. Okay.

But there are many colleges that do.

Yes. Thank you. Yes. Just hurt me. I heard of hard and soft schools that are easier to get into since it's very competitive. 100%. Yeah. We can tell you what those are. Okay, we're going to take one more. If one has a large 529— gosh, if it's larger than mine, you did a way better— you're a better parent than me. How does one hide it from colleges? You need to talk to Beth because it really has to fit your overall plan. Beth, any, any words of a cur—

look, the way the new rules, um, on financial aid reporting, it's pretty clear. If it— if the owner of the 529 plan is the parent, then it's going to be assessed at 5.6% in the formula. If the owner of the 529 is not a parent and not the student, then it's financial aid invisible. So can we have discussions about change of ownership? Absolutely.

Yeah, there, there's a lot of strategies, you all, that Um, I don't do finances, but I had some great strategies. Beth, she knows them all. She's the guru. Unfortunately, it's time for us to say goodbye for now, and we would like to offer you a gift. So Beth, do you want to go ahead and share if people want to reach out to you? What is the best way to do that?

I would say email me, beth@centerforcollegesolutions.com. Sorry, it's so long. Center, just like it sounds, C-E-N-T-E-R, for, F-O-R, college solutions, plural, dot com. I'm happy to have a 30-minute consultation, answer questions, explore ways that we can help. Be happy to do it.

Outstanding. And I just put into the chat, if you go to college ready plan, P-L-A-N— are you starting to hear a theme? Um, .info.

Yeah, there you go.

I gift you 30 minutes and we will help you answer all of those questions and so much more. So thank you all very much, and we wish you all the best. If you need free resources, go to our website We did this at no cost to you. We want you to be successful. Alright, thank you. Have a great time. Bye.