Welcome to the
College Planning
America Workshop
Your licensed Presenter
Dave Coen 714-813-1703
When thinking about the future….
Do you still see your children like this?
When….
This is more like it!
Many parents are not financially
and emotionally prepared for their
kids to go to college
Just because
your student is
leaving the
nest…
Does not mean
they have to take
your nest egg with
them!
Our focus is:
Knowledge.
With knowledge you are
empowered to have more control
I am in the same boat as you…
• We all have different
circumstances
• Each family is unique
• This requires timely
information and proper
guidance
What you might
experience at the
end of this:
•
•
•
•
•
•
This is a little overwhelming
I need more information
Why so early? Comment we most often get!
Who are we?
How do I get scholarships?
You are just trying to sell something
• Speak with one of us after the meeting for
specific questions
• And to schedule your no cost, 90-minute
appointment
There are two sides to
this story
Parents and Students
 Assessments
Parents
 $’s and Financial
moves
 Career
 Lowering of EFC
 Majors
 Strategic planning
 Schools
 Plugging the holes
 Scholarships
 4 year Grad Rate
Today’s “Classic” Household
• The last 17 years have flown by
• Total savings between 1% and 5% of annual income
• Has less than half of one year’s tuition banked
• Has more consumer debt than ever before
• May have to sacrifice retirement to pay for
college
Path to Prosperity:
Have a Plan!
Educate: Do not assume.
Map it out: Category, expected
family contribution (EFC) and the
school’s award history, money
saving strategies and
alternatives.
Accomplish: Put your
plan into action
Warning… This may be disturbing
COA- Cost
of
Attendance
EFC- Expected
FAFSA- Free
Family
Contribution
Application for Federal
FAD- Financial
Aid
Director
FAO- Financial
Aid
Director
FDSLP- Federal
Direct Student
FFELP- Federal
Family
PLUS- Parent
Loan Program
Education
GSL- Guaranteed Stafford
Stude
Loan
Loan
Loan for Undergraduate
Financial Aid is a LANGUAGE OF ITS OWN!
Stud
What do these Acronyms mean?
COA- Cost of Attendance
EFC- Expected Family Contribution
FAFSA- Free Application for Federal Student Aid
FAD- Financial Aid Director
FAO- Financial Aid Officer
What do these Acronyms mean?
FDSLP- Federal Direct Student Loan Program
FFELP- Federal Family Education Loan Program
PLUS- Parent Loan for Undergraduate Students
GSL- Guaranteed Stafford Loan
Common Terms to Learn
• Federal
Methodology
• Category
• Institutional
Methodology
• Expected Need
• Award Package
• Profile Form
• Base Year
• Work Study
What is Financial Aid?
Funds provided to students to help pay for
postsecondary education expenses.
Financial aid includes:
• Grants
• Scholarship
– Institutional
– Private
• Work study
• Loans
Present Day Cost
Of College
College expenses are increasing 5- 12% each year
The average increase for PUBLIC schools: 6.6%
The average increase for PRIVATE schools: 6.3%
Source: Collegeboard.com
The Cost of an
Undergraduate Degree
Put these schools in order Based on Cost? $$
1. San Diego State University
2. UCLA
3. California State University, Fresno
4. Concordia University
5. California State University, Fullerton
6. Stanford University
7. University California, Davis
8. University Southern California
9. Pepperdine University
10.University of San Diego
Average Cost
of Attendance (COA)
Cost of Attendance Includes: Tuition, Room and Board,
Book, Fees, Transportation, Miscellaneous Costs
STATE SCHOOL in the area
$ 40,132 per year
PRIVATE SCHOOL in the area
$ 53,702 per year
Source: CPA Research
California Area School Cost
Increase since 2003
$60,000
$50,000
2002-2003
$40,000
2012-2013
$30,000
$20,000
$10,000
$0
Source: CPA Research
Schools in Order
Based on Cost
Based on Average Award, 7% Tuition rate and $20,000 EFC
6. Stanford University
1. San Diego State University
3. California State University, Fresno
5. California State University, Fullerton
8. University Southern California
10. University of San Diego
4. Concordia University
7. University California, Davis
2. UCLA
9. Pepperdine University
Source: CPA Research
$73,080
$96,764
$102,208
$114,372
$123,264
$134,384
$138,436
$138,552
$138,996
$153,796
What is the REAL COST of
College?
The most expensive thing about
college…
• Is not Graduating
The Second most expensive thing about
college…
•
Switching Majors/ Switching
schools
What % of students graduate
in 4 years?
How many students are
Graduating in 4 Years?
Graduation Rate for Public State Schools
California State University, Fresno
California State University, Fullerton
San Diego State University
UCLA
University of California, Davis
Source: CPA Research
How many students are
Graduating in 4 Years?
Graduation Rate for Private Schools
Concordia University
Pepperdine University
Stanford University
University of San Diego
University of Southern California
Source: CPA Research
FINANCIAL AID MYTHS
• “We make too much MONEY”
• “Our home is worth too much”
• “My Child’s grades are too low”
• “I have too much DEBT”
• “Getting Financial Aid is easy”
• Students who are independent get more aid”
 False- must be 24, have children, married, veteran, Ward of the State,
or Completed Undergrad and working on an Advanced Degree
Classic Approach to Paying
for College
• How much MONEY do we have?
SPEND IT ALL!
• Can we get more MONEY?
BORROW IT!
• Do we have a BUDGET?
SQUEEZE IT!
• Do we qualify for
financial aid ?
How do I get
Financial Aid?
• January 1st of your
child’s senior year, fill
out the fafsa form
• For some of you… that
is only 41 days away!
• You must complete your
FAFSA by March 2nd of
each year.
• FAFSA Website:
https://fafsa.ed.gov/
E.F.C.
• you can know your efc today,
no matter what grade your
child is in
•What is my EFC?
•is it a fixed number?
•Same as a credit score?
Know Your EFC!
Expected Family Contribution
–
–
–
–
–
–
–
Parent Income
Parent Assets
Student Income
Student Assets
Number of Children in College
Parents Age(s)
Number of People in Household
Also Consider… SCHOOL SELECTION!
CSS Profile
Formula for EFC
Parent
Contribution
depends on
Student
Contribution
depends on
Adjusted
Income
Discretionary
Assets
Adjusted
Income
Discretionary
Assets
AGI
+
Untaxed
Benefits
Investments
Real Estate
Child Assets
Savings
AGI
+
Untaxed
Benefits
Investments
Real Estate
Child Assets
Savings
FICA
S.S
I.P.A
E.E.A
Retirement
Insurance
Home Equity
A.P.A.
FICA
S.S
I.P.A
E.E.A
Two Types of EFC
Federal Methodology
Institutional Methodology
Determination of
Need Eligibility
Expected
Family
Contribution
(EFC)
$20,000
Cost of
Attendance
(COA)
$40,000
•
•
•
•
•
•
Tuition
Room
Board
Books
Living Expenses
Transportation
•
•
•
•
•
•
•
Parent Income
Parent Assets
Student Income
Student Assets
# in College
Parents Age
# in Household
Financial
Need
$20,000
The Maximum
Amount of Aid
a Family May
Receive
Do you have any of these?
Bonds
Grandparent Contributions
Cookie Jar
Stock Options
CD’s
Mutual Funds
Student Owned Assets
Minor’s Accounts
Stocks
Savings Accounts
Money Market
Trust Accounts
Vacation Home
529 Plans
Rental Property
UC
Out of
State
This is hypothetical illustration only
Cal State
Private
Out of
State
UC
Cal State
Private
Tuition,
room and board
books and fees
transportation
13, 070
14, 272
0
7,774
6,738
11,000
1,666
3,848
42,871
11,934
950
1500
2012-2013 COA
35,116
23,552
57,355
2012-2013 COA
Inflation EST
5%
5%
5%
14-15 Cost Est.
38,715
25, 966
63,324
14-15 EFC Est.
28,447
28,447
50,594
= Need (Aid
Eligibility) Est.
10,268
0
12,640
Cost of Attendance
Estimates for You
This is hypothetical illustration only
UC
Cal State
Private
Tuition,
room and board
books and fees
transportation
13, 070
14, 272
0
7,774
6,738
11,000
1,666
3,848
42,871
11,934
950
1500
2012-2013 COA
35,116
23,552
57,355
5%
5%
5%
14-15 Cost Est.
38,715
25, 966
63,324
14-15 EFC Est.
28,447
28,447
50,594
10,268
0
12,640
X Average % Need Met
88%
76%
99%
Average % Gift Aid
79%
45%
79%
7,147
0
9,911
21%
56%
21%
1,889
0
2,603
Cost of Attendance
2012-2013 COA Inflation EST
Estimates for You
= Need (Aid Eligibility) Est.
Your Estimate
Average % Self Help
Your Estimate
This is hypothetical illustration only
UC
Cal State
Private
10,268
0
12,640
X Average % Need Met
88%
76%
99%
Average % Gift Aid
79%
45%
79%
7,147
0
9,911
21%
56%
21%
1,889
0
2,603
Eventual Cost
31,568
25,966
53,323
Immediate Cost
29,679
25,966
50,720
15,206
49,767
16,548
85%
87%
97%
% graduated 4-5-6 years
33-52-58%
12-12-54%
90-95-96%
% graduated with debt
61%
42%
56%
16,982
12,401
30,341
= Need (Aid Eligibility) Est.
Your Estimate
Average % Self Help
Your Estimate
= Out-of-pocket Cost Est.
Student Information
Total Enrollment
Freshman Returned
$ Average debt
This is hypothetical illustration only
UC
Cal State
Private
13, 070
14, 272
0
7,774
6,738
11,000
1,666
3,848
42,871
11,934
950
1500
14-15 Cost Est.
38,715
25, 966
63,234
14-15 EFC Est.
28,447
28,447
50,594
14-15 Cost Est.
38,715
$10,304 less
25, 966
$10,304 less
63,324
$23,714 less
14-15 EFC Est.
18,143
18,143
26,880
Eventual Cost
24,396
23,077
34,730
Immediate Cost
20,612
Cost of Attendance
Tuition,
room and board
books and fees
transportation
Previous Cost & Est.
New Estimates for You
= Out-of-pocket Cost Est.
Student Information
Total Enrollment
Freshman Returned
% graduated 4-5-6 years
19,473
18,143
$7,172 X 4 =
$28,688
$2,889 X 4 =
$11,556
$18,593 X 4 =
$74,372
85%
87%
97%
33-52-58%
12-12-54%
90-95-96%
15,206
49,767
16,548
The problem with
529 plans?
Our focus is:
Preventing the OOPS!
The 5 most expensive things about College
1. Not graduating
2. Changing schools or courses
3. Saving in the wrong financial vehicle
4. OOPS – Out Of Pocket expenses
5. Structuring how to pay for college
There are steps that can be taken to
minimize the possibility of all 5 of these.
The Transition from College
Planning to College Funding
All our finances are connected.
Just because we compartmentalize them does not
separate the consequences
COLLEGE AND RETIREMENT
RETIREMENT
COLLEGE
YOU ARE HERE
RETIREMENT
Our focus is:
College Planning
2% Principle
Switching majors
Taxes
Social Security
Saving choices
[File and suspend]
Borrowing choices
Financing your house
Category
Volatility
EFC
Inflation
LUC [Liquidity Use Control]
Rate of return
College choices
4 Main questions every financial
Switching schools
advisor should answer
Positioning for acceptance
% Graduation in 4 years
IM/FM
Sequence of returns
Synergy effect
Non-deductible debt
401K
Career choices
Interrupting Compounding
Switching career 7 years
En Passant rule
after grad
Lack of Protection
Term Insurance
Exit Strategy
Consume or conserve my nest egg
This is hypothetical illustration only
This is hypothetical illustration only
Our focus is:
This is hypothetical illustration only
There are two sides to
this story
Parents and Students
 Assessments
Parents
 $’s and Financial
moves
 Career
 Lowering of EFC
 Majors
 Strategic planning
 Schools
 Plugging the holes
 Scholarships
 4 year Grad Rate
The biggest mistake people make…..
they assume
we cannot
help them
Thank you for attending the
CPA workshop
Your licensed Presenter
Dave Coen 714-813-1703
www.collegeplanningamerica.com