It is important to understand that colleges have tuition schedules which are variable, and the tuition that is charged to a family is predominantly based upon that family’s financial position (income and assets). Tuition structures are a taxation model, and are progressive in nature. The higher the income and the larger the asset base of the family, the higher their tuition will be. The exception to that being if the student ranks within the upper most range academically of a given school, they could be eligible for merit aid. And then it gets confusing.

Here is an overview of the key aspects of applications and aid. We won’t go into excessive detail here. We will provide you with a high level understanding of the key applications, and the types of student aid that ‘might’ be available to the family.

FAFSA (Free Application for Federal Student Aid). The FAFSA serves 2 primary functions: 1- it is like a ‘global application’ that you must fill out because most colleges won’t even accept a college application without having a FAFSA on file for the student, 2- the financial information contained in the FAFSA will guide the college in determining the Expected Family Contribution (EFC) (A cute term for tuition) they will charge the family.

To complete the FAFSA, you’re going to need information from your clients’ tax return, such as annual income and assets. FYI- the hardest part of filling out the FAFSA is getting all of the information together that goes into the FAFSA. Start this early so that you’ve got the necessary documentation on time. Here’s your starting point for the FAFSA. The good news about the FAFSA is that when you submit it electronically (easy to do) every college that you consider applying to will have access to your application.

Here’s a little helper - if you do a Google search on ‘filling out the FAFSA’ you will find a mind numbing amount of resources, most of which are as time intensive as the FAFSA itself. That said, here is a solid guidance resource for filling out the FAFSA. If you prefer video tutorials, this series of short videos was created by a financial aid expert at Stanford FAFSA Walkthrough.

The FAFSA is the big hurdle in the applications process, and much of the other work you’ll do in preparing your client for applying to college flows off the FAFSA – so get that out of the way first.

Next up - College Student Scholarship (CSS) Profile. The likelihood of getting scholarship monies is over-rated. However, once you’ve filled out the FAFSA, it is worth repeating the abbreviated process of filling out the CSS application. Be advised that many institutions will promote the fact that ‘$ billions in scholarship aid are available’ as though the money is easy to get. Scholarships disbursed by the Feds or state are generally reserved for outstanding or needy students. Scholarships awarded by a specific college are inherently unique. It is also worth noting that scholarships are generally awarded for a single year. Advise the family not to bank on an award unless it’s being explicitly granted.

Financial Aid - there are two types of college aid, ‘need’ and ‘merit’. Need based aid is crucial in making college affordable to low income students. Your clients however, will rarely qualify for this form of aid. Merit aid is just as it sounds – if you’ve made the grades, you’ll possibly get the aid. Inform your clients though, at top colleges, every kid has excellent grades. We’ll jump ahead in the process for a moment here to let you know that in Module 3 of this System, you’ll use the College Admissions Probability Program. You’ll enter some basic FAFSA info and the students’ grades into the program. You’ll enter the colleges that the family is thinking of applying to and then, for each college, the program will give you the estimated EFC and probability of admission.

Your client should be informed that they can negotiate the ‘aid package’ that will be offered by a school. When a school accepts a student, they’ll send an acceptance letter with an offer of aid. The ‘aid’ will include federal and state aid (if it’s a lower income family), as well as the ‘institutional aid’ which is a college specific grant. The net price should reflect the values derived from the College Admissions Probability Program and the folks in the admissions office won’t be surprised if your client is informed and is asking for a tuition that is consistent with what other ‘similarly situated’ families have paid.

Financial Positioning – this is the exercise of structuring and presenting the clients’ finances and assets in a manner that reduces their tuition liability. The family’s primary residence is exempt from their net worth calculation. Retirement assets are also not counted in the calculation of EFC, but other assets: savings, CDs, money market accounts, investment real estate, stocks, bonds, mutual funds, commodities, are all included in the EFC calculation. If your client wishes to engage in structuring their finances in a way that reduces their tuition, they should consult an expert in what is allowable in the current year, as well as a tax lawyer.

Here’s an opportunity to engage your clients and help them to understand where the value lies in college, and it’s not in the brand on the diploma. The hard skills that a student develops in college is what is valued in the job market. The bottom line is that Science, Technology, Engineering and Math (STEM) related jobs pay 2.5 times more than ‘soft’ degree jobs.

Employers don’t want philosophers and historians. Look at Zip Recruiter or Indeed – today’s jobs flow from tangible skills. This is a serious topic and your clients will be immeasurably thankful for you initiating the discussion. The sooner, the better. They should not be stressing over which over-priced private schools they should apply to. Shift the discussion to academic majors that lead to real careers.

The following programs will allow you to explore the pathways from academic major, to the job market. Facts and data – thankfully.

College Buddy – 48 different majors and all of the jobs, with salaries where recent grads are employed.

Career Buddy – a solid reality check regarding the jobs that actually exist for recent grads, and the competition for those jobs. This ones’ an eye opener.

Many families have pre-conceived ideas about which colleges their kids should consider. The ETC College Rankings Index will show them the schools that offer great educational value, and those that don’t. The Index empirically determines the Economic Value Added, by each college ranked within our system. Climbing walls and social scene are not part of the calculus. Grad rates, occupational outcomes, and other economic factors are what the Index is comprised of.

Hundreds of 2nd and 3rd tier private colleges are closing each year. Ensure that your families avoid schools that offer low value, and those that may actually close their doors. There are many hundreds of great colleges to choose from, and we’ve ranked them for you. What you’ll see generally as you scroll through the Index is that public state colleges tend to rank very highly. They typically provide a good education, with a taxpayer subsidized tuition.

The ETC College Admissions Probability is a fundamental tool for financial advisors in college planning. It personalizes a combination of FAFSA and test score information to provide a family with 2 incredibly valuable data points:

• The probability of the child being accepted at specific colleges.
• The Expected Family Contribution (tuition and fees) that each college will expect them to pay.

The FAQ and User Guide for this program contains some of the most strategic information available regarding college admissions pricing models. Your clients will find this intelligence to be incredibly valuable. When you generate a list of prospective colleges, you’ll be enabled to make deeply informed decisions regarding finalizing the college selection. Share this with your clients – they will appreciate the value and guidance you’re providing to them.

The ETC College Business Plan will replace the need for hundreds of hours of data collection, cost/benefit analyses, cost accumulations, and so forth. Just run your analysis, and you’ll instantly receive all of the input costs, along with the earnings outcomes, formatted as an income statement, in an Excel spreadsheet. The spreadsheet includes 4 year, 5 year, and 6 year graduation assumptions – so you can really ‘run the numbers’ with your clients! This is an exceptional value adding program to your business.

The ETC College Business Plan is revolutionary in the world of college to career planning.

We’ve provided here a listing of various assets and resources that are relevant to the college planning process.

SAT – learn here about the testing dates, locations, fees and other information relating to the SAT

ACT – learn here about the testing dates, locations, fees and other information relating to the ACT

Lean on our Checklist as your ‘project management’ document. The Checklist allows you to easily upload the schools being considered for applying to, and then manage all of the important steps and dates along the way. FYI - most advisors set this up with the family and then hand it off to the client for the ongoing maintenance. Another valuable tool for your business.

We also offer a variant of this program to families – the ETC College to Career Planning System. This version of the program is considerably longer than the Financial Advisors’ version. It offers extensive insight into the need for students to understand that college is not a career unto itself, but a crucial stepping stone to the job market. We also cover the hazards of student debt as few others will warn an 18 year old of the damage they can do to themselves with an onerous debt burden. We encourage all parents and students to immerse themselves in the excellent insights provided by the ETC College to Career Planning System.