New Podcast with Peg Keough- Send Your Teen to College Without Spending Your Retirement Savings

Parents, is your teen college ready? Are you feeling overwhelmed, stressed out, or excited about your teen applying to college? Do you know what colleges are looking for? And if your kid gets in, do you know what you'll pay for it? College admission has never been so competitive or expensive. Shellee Howard will take you on a journey to help you and your teen get college ready. Now here's your host, Shellee.

Hello, this is Shellee Howard with Parents Is Your Teen College Ready podcast, and I'm super excited to bring our guest to you, Peg. But before I do, I want to go ahead and give you a little bit about her background. So she has joined College Aid pro because she really has a huge passion for helping families and more importantly, planning for the financial side of college. As a director of education, she works with both parents and students as well as financial advisors that want to serve their clients in this area. She is a speaker, She is a wonderful person and she is a mom. I think all of those makes her a perfect expert for today's show. So welcome, Peg.

Oh, thanks for having me. Happy to be here.

You got it. So maybe we can start out. Our parents may be wondering what exactly is College Aid Pro.

Yeah. So College Aid Pro is a company that started maybe 5, 6 years ago, and I met the founders because at the time I had my own company called Way to the Quad. Where I worked with parents just like, just like your listeners, just like everybody listening here, to really help understand what I affectionately call the crazy world of financial aid. But then even more importantly, where individuals, families fit, and students fit around affordability. And I was actually looking for new software to use in my business and, and came across a webinar of one of the founders, Joe Messinger, and immediately connected with him through the webinar, reached out to them, and started— fortunately, they were beta testing their software at the time, and they asked me to jump on the team, which I was more than happy to do. And we developed this software together. I was, you know, happy to be a part of it. And so what College Aid Pro really does— our mission is two, two missions, I think— of to, to stop the student loan crisis one family at a time. But also to help families shop smarter for college because you really, you are purchasing a product. And when you go on college tours, you're really, you're, you're shopping for colleges. So I always tell parents, and it sounds a little cheesy, but if you are an informed consumer and you have the knowledge, that is power. That is power in your pocket to understand where you fit and to ask the right questions to admissions and financial aid when you are going on college tours or you're interacting with the colleges. So that's really what we do at CollegeAid Pro, and we do it by helping parents directly, but then also supporting, as you said, financial advisors and independent education counselors that work with families but aren't necessarily focusing on the financial fit, or they're learning how to focus on financial fit. Because there's really 3 types of fit when you're building a college list. There's academic, personal, and financial fit. And, and ideally, you're looking at all three at the same time, especially if parents want to sleep at night. The financial is not an afterthought after applications have been sent in, and that's not the best time to think about financial fit.

And that is why you're on the show. We are so aligned in that way. When people ask why, why College Ready, why we're unique, why we're different, is we do focus on all And having people support our families and help them become knowledgeable. I always tell families, you would never allow your 17-year-old to go buy you a home, right? And so it's a little terrifying that we might allow our 17-year-old to buy a college education because that's what it is. If you, if you take the emotion out of it, Colleges need the student as much as the student needs the college. It's a business transaction, just like you were stating. So maybe you can give us a little bit about your personal background, what it was like having twins go through this process, so they might be able to connect with you on a different parental level.

Yeah, yeah. So when my kids hit high school, as I'm sure a lot of you have done, my husband and I were like, all right, now we got to get a handle on this. Like, we've been saving for college. But then when I got into what was going on at that point, and that was like 2009 or something when they hit high school, and I couldn't believe it. I was like, oh my gosh, this is so much more complicated. Of course it's more expensive than when I was a kid, but just much more complicated. And that was actually my aha moment of you know what, all this financial planning and investment expertise I had, I could then couple that with this niche that I had developed by working with my kids on this. And so that was my background. And the other thing that I noticed was I had a lot of friends and colleagues, super smart people that were drifting. They were drifting through this piece. And it's a really— it's kind of this perfect storm of emotions with college because this is what as parents we've been building up to, right? They turn 18, they become semi-adults, and they go on to their next chapter, right? So it's exciting, but it's a little melancholy because they're going on to their next chapter. And I think for the kids, it's exciting because they get to make all their own decisions. But most kids, even if they don't want to admit it, it's a little scary, right? Completely being on your own. So it is this perfect storm of emotions. And I think it's hard. It's not the same as buying a car or buying a house. It's your kids. Like, what's more precious, right, than your kids? And as you said, you know, they're 17, 18-year-olds, so they really are kids. Like, I'll just tell a quick story about my daughter. You know, we gave her the big book and said, you know, go highlight what's important and the schools you're interested in. And one of the schools, we come back and she had highlighted the weather's cold and there's a tennis bubble because she had played tennis. And we just laughed like, okay, she's a typical 17-year-old, right? So this is what she's thinking about. So I don't know if that totally answers your question, but when I work with parents, I almost feel like there's a bit of psychology around it. And honestly, I love that part as much as the financial part because I tell people, you're going to make it, you're going to get through this. I did it. Take a lot of deep breaths. If you're listening to this podcast, like beating yourself up, feeling like I haven't saved enough, or, you know, I didn't do things right. You know, really take a couple deep breaths. You're here. So pat yourself on the back for listening to Shellee Howard's podcast and just move forward. Because wherever you are in the process, you can just take it the next step and start benefiting from getting knowledge and understanding the process.

So well said. So then we hop to the next topic of conversation, and that is Well, how do you have that conversation with your teenager about debt if they are not financially aware of how much $100,000 or $200,000 is? They're like, yeah, that sounds fine to me. I'll just, you know, I'll just sign my name and not worry about it. And I tell families all the time, it is a hard conversation, or it could be a wonderful opportunity to help your student understand the cost of adulting. They're so anxious to move across the United States away from their family, and yet they have no idea how much toothpaste costs. So how do you help bridge that gap between students who really may not have that financial aptitude and helping them understand, is this a good return on investment?

Yeah, yeah. So, and this, I just— is it to me is just with my background is so important because if you make this decision and you model good financial decision-making, you are giving your kids an education that's outside of picking college, right? You model that. I think what's really important is for the parents to sit down or whatever the family situation is, the people that are going to take care of payment to sit down and they get on the same page because that's not always the case. You know, I've met with parents where one had it all paid for, another worked through school and they're not even agreeing. So that's the first piece. Parents should sit down and agree, whoever the parties are there. Then get a plan and sit down with your child and say, You lay out, you know, we've got this much saved and how much, you know, I didn't tell my kids how much we made or any of that kind of stuff. I didn't think it was their business, right? But we were very clear, this is an investment we're making. It's a 4-year investment. Here's the different buckets and this is how it's going to go. And so we set that expectation. So as they're building a college list, if you know you've got projected net costs, because I'll just say this, Colleges are all discounting. So when you see what I call these big sticker prices, which are now— some of these schools are pushing $90,000 a year. Please don't freak out about that and say, well, there's no way I can afford even $50,000. The colleges are all discounting. And I'm saying, I'm— when I say discounting, I'm talking 5 figures a year, right? So it's a lot of money in the discounts. So please don't shy away from higher sticker price schools. But that's where the planning comes in for the parents is what are my projected net costs? And then you bring in what can I afford? And at College Aid Pro, we actually call that college pre-approval. Like very similar to— we all have the concept of mortgage pre-approval, right? You move somewhere, a realtor says go to the bank. We don't want to be looking at $3 million homes if you can afford $1.5 mil, right? Or $500,000 if you can afford $300,000. And it's the same thing for college, but people don't do that. So if you take anything away from this podcast, sit down with your partner and talk about what you can afford. And we help parents do that. We kind of pull out, well, what about this? What about this? And they don't think of certain buckets. So if you do that and you understand that, and then you keep your child in that conversation as you're building the list. So you said, Shellee Howard, you know, there might be some schools that look great from an affordability standpoint, maybe even no loans,. Then there's other schools where it's like, wow, we've got a $150,000 funding gap. You can show them all that. And that's what we do in our tool without ever showing them what you make. And, and we're projecting based on what, how the colleges function. And they don't all act the same. If they did, you honestly could, you wouldn't, you wouldn't need experts and you wouldn't be up at night worried about this. Because it would be so simple. And unfortunately it's not. It's not. But that's what I'd say. Set the expectations. And again, I did it with my two, my son, both my kids were flown. I live out in the state of Washington and they were flown to a school in Pennsylvania, I think because they wanted them to go and have fun and they wanted to draw kids from that state. And so of course my son came home and he wanted to go there, right? He had friends, he had a good time. And I did my numbers and one school was $70,000— this school was $70,000 over 4 years more than the other one. And he liked both schools. And I just said, Brennan, that doesn't work financially. And he said, okay. And he went to the other school, had a phenomenal experience, but I didn't have the friction, you know, that I see some of my families have because my husband and I set those expectations. We made it clear. So we educated them about how to do this. We led the charge, but they were involved, and I didn't have— I didn't have those problems. And I— and it's a really hard conversation for a parent to let a child apply wherever they want and then after the fact say, yeah, we really can't afford this. Like, I—

painful.

And I think the parents have kind of dropped the ball, right? Because you can know that before they apply. You, you can't know exactly but you can know this school is going to be a lot more affordable for a myriad of reasons, right, than this school. And, and don't, don't build a list of all very unaffordable schools because that's, that's going to be really difficult for you as a parent to make happen, or it's a very difficult conversation to tell your child no. I'm a big advocate for not enabling my kids, but you need to do your homework. I mean, we're talking about some very high sticker prices. Times 4 years, times potentially more than one child that people who are listening could have, right? It's, it's a lot of money.

Absolutely. And I, I think the hard conversations come when I get somebody who's already committed to a school they can't afford, and then they say, well, Shellee, can you get us scholarships? And I'm like, that's like buying a home and figuring out how you'll pay the mortgage. That is a disaster waiting to happen. So I, like you, Peg, totally think it is critical to have a plan and a strategy— academic fit, social fit, and financial fit— before you apply.

Yep.

And we take our families through that. And you know what that allows them to do is when they get the acceptances back, they can look at the return on investment. And sometimes I'll ask a student, where do you want to go to school? You know, just conversation. And they'll say like, uh, UC Santa Barbara. And I'm like, outstanding school, I love it. And then I'll say, why? And they go, have you not seen the dorms? They're on the beach. And I'm like, oh, so we're going to college to go to the beach. And they're like, ah. So it is interesting when you help the student to walk through it mentally and logically And, you know, think about it. The other thing that I think is important to address is for those parents who say, oh, we'll figure it out after they get in, we'll use our retirement. Well, what, what are your thoughts on that?

That, that can lead to sleepless nights. It really, really can. And, uh, I've had parents tell me through the years, you know, I'm really losing sleep over this whole process. If you don't plan, you're going to end up causing yourself a lot of stress. So when people start looking at loans on their 401 and those are the ways that they can make it happen, that it can get pretty crazy. And then you get into equity. If you've got younger kids, well, what are you going to do for the younger kids if you shoot the moon for the first child because you didn't really plan? That's— it's just, I really don't recommend doing that. It's just, it can, it can be very costly. It can put strains on the relationship too. And like, that's, that's awful, right? That's really not where you want to go. So I would really encourage people, if it's scary to you, just take a deep breath and get past it and do some initial work around it. If you're a DIYer, you can dig in and do all this on your own. If you're not, we have resources. We actually have a free resource, and then you can upgrade and you can book time with an expert if you need it. And there's a big support community as well. But like I said earlier, you gotta get knowledgeable about this. And the other thing I'll share is your family and your friends are lovely, but in this arena, You, you can't listen to what your neighbor's doing. You know, if I hear one more time, well, I'm not submitting financial aid forms because Joe next door didn't— well, Joe probably should have for a bunch of reasons, but it doesn't really matter what your sister— unless you're going to get in the weeds on, show me your tax return, tell me everything about your child. It's not apples to apples. So it's real, and it could be different from one of your kids to the next, right? Forget about another family. So it's just, it's really important to, to just, again, I feel like I'm a broken record, but just understand how things work because it's, it's not even intuitive all the time. Like I can say one thing on a webinar that people are just like, wow, oh, that could be something that could help my family. And there's no way they're going to know, right? The internet is a wonderful thing, but it's also filled with a lot of information that's not accurate or maybe not complete. Like, the colleges will tell you things. They're not lying. They're telling you truths, but they might not be painting the whole picture for you. And when you mention retirement, Shellee, I say this all the time on webinars, colleges do not care if and when parents retire. They really don't. So if you're working till 80 to make that $85,000 full price tag times 4 years work, They're good with that, right? You probably aren't. And so you need to think about that. And debt, you know, you talked about debt at the beginning, and obviously, unless you're living under a rock, you hear all the time about student loan debt, right? It's— a lot of that debt parents are co-signing. They call it student loan debt, but very little is usually only the student. Because if you think about it, a high school student or college student with no collateral and no income is not a good risk, right? So they're gonna have grandma or mom or dad or whomever signing, signing on that loan. And at that point, it's your debt, it's your debt as much as it's your child. I had— there was a Wall Street Journal article back in 2019 and the slide on it, and it was just the amount of people over 60 that had the average debt was like almost $34,000. And these were people over 60 and they still had that much student loan debt. It was either theirs or a child's or grandchild's. So it— yeah, again, talking about what kids want, you know, people can really go overboard to try and make that happen. And I, I firmly believe, and it happened with my kids, is that you can find schools where your child will thrive and you don't have to go broke doing it. It might not be a school that you've heard of right now, but there are so many awesome schools out there. In this country.

Yeah, let's, uh, flip it the other direction. So the media and, and well-meaning friends and family might say, why are you going to college nowadays? It's ridiculously expensive, and I don't want to go into debt, and this whole thing is blah blah blah blah blah. And I'm the person telling them, well, our students earned over $10.7 million in scholarships last year what would you tell them about opportunities to graduate without debt?

Yeah, yeah. Well, first of all, the data shows that if you, if you have a college degree, your earning potential is much higher. You just have more opportunities in life, right? But as far as all the money that you're talking about, Shellee Howard, there's a lot of money out there, and the best place to get that money is college endowments. And they are built, like I said earlier, to discount their costs. Sure. Do they love full-pay families? Absolutely. And they have some, right? But they are fully ready to start discounting. The Office of Admissions starts it before they have any clue about your ability to pay. You could be making $1 million and your child's getting a $20,000 per year discount because they want your child. There's departments at universities called enrollment management. That's all they do. It's all about net revenue. It's not about getting that sticker price from every family because that just is never going to happen. So the money is out there. It's a matter of finding those discounts that are unique to your child and to your family based on your finances sometimes, and based on your child always, right? I mean, a lot of families I've worked with through the years they can't get what's known as need-based aid. And a lot of parents think, well, not doing any of this, I make way too much money. Some of them are flat out wrong because they don't make too much money and they think they do. But some of them, yeah, they make too much money. Like Bill Gates is not going to get any need-based aid, but his kids could still get discounts on college, right? For sure. All day, every day from a lot of schools, right? So That's just something to keep in mind. And again, it's not just about the money. It's the academic, I call it personal, but I know social is another word that they use, and financial fit. It's all, it's all three. And I just firmly believe that kids can find all three. And then I have a slide that, you know, and sometimes I get choked up talking about it, but for parents here, you've got a senior, junior, sophomore. You're going to be waving goodbye to your kids in no time. They're going to be standing at that door. I'm starting to feel it. And it's like, oh my gosh, they are starting this next chapter. And if you do this in the right way and you do a little planning and you spend a little time or you hire somebody so you don't spend as much time, but you're engaged in the process, it's going to really make the high school time better. And then you're going to sleep at night because, you know, okay, I know what this is going to cost me over 4 years. It's not a 1-year expense, really looking at it that way. And then bringing in what you're paying, you know, you're cutting the cost by what you can bring to the table. And if you don't have to spend everything you thought, that's awesome, right? That could go toward grad school, that could go toward a trip, a family trip. So, um, all of these things come to play, but it really— that's the biggest positive is just sleeping at night and, and having a good relationship with your kids and modeling that, that smart decision, financial decision-making, you know, gets into financial literacy and really modeling that for your kids.

That's so, so well said. I often, when I'm working with students and they're looking at schools that don't make much sense and are very out of their family's wheelhouse budget-wise, I will ask the student, so how long do you want to work for free? And they say, well, I don't want to work for free. And I'm like, okay, well, who's going to— well, my parents are going to pay. And I'm like, well, how long do you want your parents to work for free? And they're like, what do you mean? So there's really not that concept of what that loan could potentially do to them in the future. This week I had a parent reach out to me who is not a client yet, and they said, our student really wants to go to this school and we don't think it's necessary and we don't agree. We'd like to sign a legal document. We're going to loan them the money and they've got to pay us back with interest. And I said to the parent, what happens if they don't? Are you going to take them to court? And they're like, well, no, we would never do that. I'm like, then why do we need a legal document? So yeah, you can look at it from one extreme to the other. The beauty is they had that conversation. They are talking through the finances.

Yeah.

The challenging part is, right, helping that student understand what that looks like when most of them don't know how much it costs to live on their own. So that is another thing I encourage families to build into this conversation is at some point, do you want to move out of our house? And that's a whole nother conversation. I love how you put the positive spin because there is a ton of money out there. Now, if a family does need help with this and it's just a bit overwhelming, they can't sleep at night, how could they learn about this software that you're talking about?

Yeah, the best thing to do would be to email, um, call, um, support@collegeaidpro.com. And in that email, just reference that you heard me, Peg— you could say Peg or Peg Keough, um, on a podcast, and on Shellee Howard's podcast, and you want to get some more information. And what we can do is we can set up what we call discovery call. And basically we'll, we'll hop on a Zoom with you for 15, 20 minutes and just hear a little bit more about your situation. I always ask parents like, what's keeping you up at night? And everybody smiles and it kind of helps them say, oh, okay, this conversation is going to be okay. And, and just really, really chat with you. And then we can talk about how we can support you. As I said, we've got free software. For some people, they want a lot of handholding, so we can help you. It's really where where you're showing up and really what support you need. It could just be our software but upgraded, and you're going to go to town and you love it because you're a financial person. Or could be getting support when needed from our college planning experts. I'm one of them, but we've, we've got people that are actually in financial aid at some big schools that work for us and do these hour consults with parents. So we're really— we provide this tool, but then we also have free support around it. We have a webinar, educational webinar series, where we talk to you about filling out financial aid forms, and that's all free, right? We have an academy if you're in our software where there's office hours every other week. So we're really trying to be there for families, provide the resources, some paid, some free. But then we know, we know the hard parts of this process, right? You get— your child gets in, you get financial aid award letters, and it's like I don't understand these. How do I compare one school to another? Can I reach out for more money? I don't want to do it wrong. All of that, we can, we can help you and we can give you resources about how to do things correctly. So that would be the easy best next step is just to email support@collegeaidpro.com, reference the podcast, and I will let my team, the support team that monitors those emails know that this will be coming, and then we'll get you links so you can sign up for a Zoom call and just chat with us for free, and, and, and we'll see how we can support you.

Well, thank you so much. You are a huge resource, and as soon as I found you, I knew I had to share you with all my family and friends. So thank you so much, Peg, for being on the podcast today.

Oh, you're welcome. Yeah, have a great rest of the day, everybody.

Thank you.

Thanks for listening to Parents, Is Your Teen College Ready? with Shellee Howard. Make sure to check the show notes for our expert guest's contact information, links, and more details on how to get Shellee's free bestselling book, How to Send Your Student to College Without Losing Your Mind or Your Money. Thanks again for listening.