May 30, 2023

College Planning – Where Do We Start?

Welcome to the panic room. It’s more of a state of mind than an actual room and it usually infects parents of college bound students as their children enter their junior or senior year of high school; the looming cloud of college selection and the daunting task of how on earth to manage the college expense without destroying retirement.

Interestingly, there is a very logical approach to this overwhelmingly expensive and complex task, which can take much of the pain and anxiety out of the picture. A first things first system works for most any endeavor and College Selection Process and planning is no different. It is the Heart, Head, and Hands approach to college.

Think in terms of building a home. The first thing you might do is to begin imagining the qualities that you would desire. The number of bedrooms and bathrooms, the size and style of the kitchen and living room, two-stories or ranch and the ideal location. This is the dream. This is the HEART.

The next step might be to begin separating the needs from the wants in order to identify the minimum standards by which our home must be built. If we have a particularly large family, we may need a certain number of bedrooms and perhaps a large garage for storage of things other than cars. We may also expect to run a small business from the home in which case we must account for a home office. This is the practical element. This is the HEAD.

Finally, accepting that the bank account is not an unending supply of resources, we must begin to assign value to our wants and needs in order to recognize, prioritize and finalize the blueprints. While we may want granite countertops, the budget may only account for textured and dyed concrete; an acceptable alternative. This process is the financial evaluation where we define the budget. This is the HAND.

Now think in terms of building a college plan. The Dream: What school, regardless of cost, practicality, or any required measure of reason, would our student wish to attend? What about the 2nd most desired school? A third and fourth choice is welcomed. This step is simply about prioritizing the school choice based on criteria that may or may not be rooted in any standard of your reality or perceived financial limitations. This is the HEART.

With that list developed, we now take a much different tack. We apply reason to our selection. The most efficient way of selecting a school, is to first understand the desired outcome of attaining a degree. With few exceptions, that desired outcome is a career in an area of particular passion for the student. Pursuit of a career in an area where the student demonstrates or expresses no particular passion will be one that serves to frustrate, irritate and in the end, will force the student to change. The change will be either to their career or their sense of happiness, neither of which are particularly comfortable undertakings. If that change is recognized while in college, the degree focus may change and that invariably adds time and cost to the process.

Once the career is understood as the target, the major or majors that might best lead to that career are identified. The schools offering that major are a natural extension which allows us to form a list of qualifying schools. From that list, the application of all other criteria may be applied. These criteria may include any number of characteristics including school size, location, student to faculty ratio, even the quality of on campus food. The short list of possible college choices is born. This is the logical approach to college selection. This is the HEAD.

Finally, and likely the most intimidating element of developing a college plan is the financial aspect of higher education. Unfortunately for most parents, financial advice or truths pertaining to college may be largely myth-guided.

In general, there is a great misunderstanding of financial aid eligibility. All too often the assumption is made that qualification for financial aid is reserved for the neediest of families. In fact, financial aid in some form is available for nearly every family regardless of wealth or income. Therefore, the first financial step a family should make is to fully understand their eligibility.

Another common mistake is the assumption that a state school is a lesser expensive alternative to a private school. While there is great truth that the sticker price of college may adhere to that rule, the actual out-of-pocket expense may produce a significantly different picture. When aid eligibility is taken into consideration, the out-of-pocket expense for a private school costing $10k-$20k per year more than their state sponsored competitors, may in fact be less expensive. Without understanding aid eligibility, an unfortunate majority of parents and students will never recognize this opportunity.