Is Your Family College Ready? How to Get In to College and How to Pay for College...

Wondering how to guide your student to the college of their dreams? What how to pay for it once they get in...without taking on a massive amount of student loan debt? Today we go back to school again and revist the process of college admissions and financial aid with Shellee Howard. Shellee is the author of the bestselling book "How to Send your Student to College Without Losing Your Mind or Your Money" and the founder of College Ready. We Discuss:

1) Misconceptions about college planning

2) When to start planning for college

3) How to get scholarships

4) Tips for lowering your EFC (Expected Family Contribution) and managing the FAFSA

5) Making sure your 529 Plan and other assets don't hurt you in the aid process.

Transcript:

Hello, and welcome to another episode of the six figure investor podcast. Today. We are gonna talk college again, since it's still the very end, maybe a back to school season we're gonna pick up on the conversation. We had a couple of weeks ago, and I'm really excited to bring you a conversation that I had earlier this week with Shelly Howard. She is the author of the best song book, how to send your student to college without losing your mind or your money.

She's also the founder of college. Ready. Shelley and the team at college ready, help students navigate the admissions process, how to get into school, how to find scholarships. If you're interested in finding scholarships, trying to figure out how to pay for school navigating, the significant investment that is college.

As you're probably familiar college is one of the most significant investments that you're gonna make for your kids or for your grandkids. And so getting a good return on that investment, both in terms of your student being happy and successful and living the fulfilled life that we want them to have and not going into debt over your head, is a great thing.

So if you're at all interested in college planning today's conversation is going to be really.

. Welcome back to the six figure investor. And thanks for joining us today. We have a extra special guest Shelly Howard from college. Ready? I know this is a topic that is near and dear to the hearts of a lot of our listeners. And so I thought Shelly would have a lot to offer today on the podcast. So welcome to the show, Shelly, thank you so much for having.. I am really excited that you're here really excited to be revisiting this topic again.

so just to kind of kick us off, tell us a little bit about college ready and how you serve your students and your parents. Absolutely. So college ready was founded in about 2008. And I say about because I was in the thick of being a mom and it really happened when my son had seven full ride offers and ended up going to Harvard.

Everybody wanted to know how did he do it? And then when he graduated without. That's when college ready really blew up. So it got started with a parent and a child and a need, because I don't know about your listeners, but paying, you know, 60 to a hundred thousand dollars a year for a college education was a bit terrifying for this parent.

So I wanted to figure out what are the other. To get a return on investment and that's what college ready specializes in. So we're not just putting a child into a brand name. We are actually looking to do the best financial fit, academic fit and social fit. So that student can graduate without that loan or that debt.

So that is a unique way that we approach this. And last year our students received over 17.6 million in scholarships. That is what we're talking about. Yeah, that that's a lot of money. And I think even more important than the scholarship dollars is just that alignment in fit. I know when we have worked with our clients on helping solve their sort of college challenges and how do we figure out how to pay for college?

A lot of times, what we see is there's just this misalignment between, you know, the resourcing that we have and the capabilities of the student and what they wanna do even. And then what we're talking. When we start talking about college and so getting all those things aligned is, is super important.

And I know that that's a big part of of the work that you guys do. So just kind of, let's go through this process a little bit of starting to think about college and college planning and and, and the right way to, to start that out. What are some of the biggest misconceptions that you see the first time that you talk to parents and students about the college process?

Wow. That list is actually really long. We're in the thick of high school, seniors calling me panicking, crying, parents overwhelmed, figuring out I thought I had this and we don't and now we're in a mess. So let me just give a few places that, that I really find people are challenged with. And that is number one.

You can no longer start this process at the end of the junior year. If you want to get into the best fit school for your student, you can go to college, but it's not necessarily gonna be the best fit. And then, you know, so starting at the right time is critical. The second most common mistake is families.

Just assume. That, because they went to that school, their child will also get into that school. yeah. And then finally, the other big assumption is parents just assume they make too much money and won't get scholarships. And so there's just, the list is very long. And so. What I find is knowledge is everything in this process.

The sooner you get to understand what colleges are looking for and how to find the best college fit for your children, the rest of it falls into place. And when, so kind of starting with that first misconception. What is the right time for families, probably parents really at this point to start planning and, and thinking about college.

Cause I know for me we, I definitely didn't start thinking about college until I was like a sophomore going into my junior year of high school probably. And it was sort of like, yeah, I'm gonna go to college after high school, you know, , I guess I'll figure that out. So when is the right time for that process to start?

Well, I guess to preface it and, and really help parents understand that our high schools, that they do not get a bonus for sending your kid to college. So if you're planning on them doing this process, private or public, or even boarding school, ask. Questions because that assumption is what gets more families in trouble than anything.

And so when is the best time? Well, if you start gently by just talking to your child about how amazing college is and how you get to take the classes you wanna learn about and the social experience of how you can meet your significant other, your best friend for. you know, it, it really is a maturity thing.

I know in my family, we started doing college tours as soon as the kids hit fifth grade. Not as you have to go to this school, but wow. Check this out. Like you would a museum, like you would at a national park, you know, Harvard is in itself. An amazing place to tour. My son started giving tours there and he would tell some great stories.

But why I bring that up is you can download an app to your phone, put your EarPods in and walk around a campus without ever talking to anybody. But just sharing that experience for free with your child at any age. Yeah, that's, that's really great. I, I think for me, what I hear there is in, in whether it's, you know, in middle school or, or really early in high school, I think the answer is it's earlier than you think.

And I, I, I don't know what your reaction is to this, but for me, I, I think the reason that's that's the case is because whether we're talking about financial aid and scholarships or grades or athletics or any of those things, It's really difficult to sort of change the course of someone's high school career, which is predominantly what's gonna be used in the college admissions and the financial aid process when they're a junior or a senior in high school, it's the cake is sort of baked at that point.

But when we're in middle school, when we're really early in high school, that's the, the time that we can sort of make changes that you know, result in, in either more financial aid or different outcomes in the admissions process. Absolutely. And to answer your question specifically, the most critical time is when the student promotes or graduates from eighth grade.

Why? Couple of reasons that summer after eighth grade in between eighth grade and ninth grade starts to count the clock ticks for college. That is the most underutilized summer. Of the high school career. So if they get a jump on their community, service, their leadership internship, research, anything, they are gonna get a huge jump on everything.

And so a lot of people are shocked to hear that. But I incentivize people who, who start early and I give them the same cost to my program. Even if they were to start their senior year, why they make no mistakes, starting as a freshman in remedial classes, you may never get to calc BC. If that's what you need to get into college, that could be a game changer.

A hundred percent. So, so switch gears a little bit and just talking about, you know, now we're trying to choose the school that we want to go to and help navigate our kids or our grandkids sort of through this process. I, I, I hear, you know, a lot of folks to say, well, I really need to send my kid to.

You know, insert the name of some elite private school that I went to or that I've, you know, I, I feel like everybody's sending their kids to you know, whether that's Harvard or duke or Pepperdine in, in California. Do I need to send my kid to some sort of elite private school? And what kinds of, of kids are, are most successful in those environments and what kinds of kids maybe should go somewhere?

That is such a important question. We have a, a program. We start our students with that's called see our future now. And what we do with the students is we actually help them to figure out who they are and why they matter by talking about what are their core values, their gifts, their talents, and their passions.

So we can start. because if you start with the student, the rest falls into place, then we take them through the next stage, which is how do we utilize those now and in the future? And what. Potential majors will lead to the potential career that will lead to the perfect college. And so it really is like building blocks or a puzzle where when you start to put all the pieces together, it's really easy to complete, but when you have a bunch of pieces and you they're all over the floor, it's very overwhelming and very difficult to know.

Where do I even begin? So beginning with the student is really the best place to. Yeah, 100% and I really love what you said there, and I'll, I'll reiterate that there's this alignment that should happen between the student where they want to go, what their career aspirations are. And sometimes you know that when you're in high school and sometimes you don't, but you sort of have an idea, right?

Am I more. Stem oriented. Am I gonna be an artist? Am I gonna be a writer? Right. I don't think there's a lot of kids that go to college, you know, that are sort of inclined in one direction, do a complete 360. I'm sure that happens sometimes, but I think most kids are kind of going to one direction. It's about refining that as they go through college.

So it's aligning your, your child as student. Your grandchild, the student to where they're going, where they want to go in life and then how the school is gonna help get them there. And then how the investment that you are making from a financial standpoint is gonna help propel them to the school and to the job.

And that's how you get, you know, Shelly talked about ROI, right, right off the, off the top of this podcast episode. That's how you're gonna get that ROI is when those things are in alignment. When they're not in alignment. That's where I think you run into you run into, into problem. Absolutely. Yep. So now that we've kind of talked a little bit about when we should start planning for college and the sort of alignment between where our students want to go and maybe a little bit of choosing the right school once we've sort of figured that out a little bit, what is the best way to get help paying for college?

Right. Once we know, Hey, I'm gonna have to spend a lot of money to make this happen. What's the best way to start figuring. How do I get help to pay for college? How do you find scholarships? Which, what are your thoughts on that process? This is such a great question. I met with a grandparent yesterday and they said, listen, I see the value of the education, but I don't want what happened to my child.

the in between to happen to them. And that is deep college loans. And so we started getting. Into the clarity of, I ask the student this all the time, but I think it's brilliant to ask anybody listening is when you think about college is how long do you wanna work for free when you graduate? and that makes sense for a teenager in the, the fact that they simply say, I don't wanna work for forever and they don't understand that that's a loan.

So helping a student understand if they wanna go into social work, do they need to go to USC and take out 75, $80,000 a year in a college loan to have to pay that back for the next 60 years? It really comes down to my son's an example. He went from Harvard, graduated with no debt. Went on to UC San Diego medical school had $30,000 in debt.

And now he's a, a orthopedic surgeon with 30,000 in debt. That's a good return on investment. It's a really good return. so that's what I'm talking about. If it makes sense, think of it as a business decision and not an emotional attachment. Yeah. And that's where it really gets important. Not only for the adult who understands financial literacy, but for a child who doesn't.

Yeah. That makes sense if there's so just kinda. Pushing in a little bit on the scholarship process. Is there any advice that you would give for folks when they start searching? Scholarships in particular. And I want, I want to jump into the, the bigger financial aid picture in a minute, but I think scholarships are where a lot of people just naturally start that process.

Right. So what would you say to folks that say, okay, how do I start finding scholarships? Yes. So this comes up every day. The first thing that you need to do is you need to get really clear in your college list. Everything starts with the college list. If your child is applying to all university of California schools, there are no scholarships from those schools.

I can repeat that, but just let it be known there. They have so many students applying there. They do not need to give away anything. That is the first place to look is the college list. The second part of that is which schools are the most generous. So I tell people to think of this again, as a business, if you own a business and I come to you and you're my first job, you're going to pay me minimum wage.

If I come to you with a very deep, robust resume, you are gonna pay me huge. Same thing with scholarships. If a student has not done anything to earn anything, there are no scholarships. yeah, there's need base, but. And that's not who we're talking to. So, yeah. And, and that goes back. I think to that we talked about earlier, which is this process starts, you know, going into high school and starting to build that resume so that by the time you get to your junior or senior year, you're doing those applications.

You've got a lot of stuff to, to put out there in achievements that you know, can get recognized. Absolutely. So that college list is critical because that 17.6 million came from all. Earned scholarships that don't need to be paid back. That was on top of the need based our clients earned. So it's really helping families get clear.

What is their top priority D financial fit, the social fit, or the academic fit because of its financial fit. Then they better go after the schools that are incredibly generous. Yeah, no, that makes, that makes a lot of sense. So let's, let's talk a little bit about the financial aid process in, in general.

So maybe the, the best place to start is the FAFSA and what that even is. And I think a lot of parents get that form and they eyes just glaze over and I go, what in the world are we doing? And what are your recommendations for navigating the FAFSA and the, the financial aid process in. So I have a whole program on this called college ready debt free.

And the, the main, or the first place to start is don't assume you won't get anything. So it's really comes down to where your assets are held on the day you complete the FSFA form, backing up the FSA form. If somebody is charging you to complete the FSA form, it is not. The real FSFA form. It is the FSFA is a free government form that attaches to your taxes and can be completed by any adult.

So just start there, if somebody is charging you, then you know that it is not straight from the government. So just be careful there. Then on October, first of every senior year, You want to be mindful that the money is first come first serve. So if you want any type merit need base, if you want any kind of money.

From the school or to be eligible, you need to first complete the FSFA. The second step is helping the FSFA know what colleges you will be applying to. So there's multiple steps to this process and just like you could do your own taxes or hire a CPA. That you can do the FSFA without hiring anyone, or you can get consulting.

We, we, we don't sell a financial product. We just help families understand what does the FSFA look at and what do they not look at? And you align your financial house to lower your expected family contribution, which opens up the whole world of scholarships. Yeah. And so let's talk a little bit about that expected family contribution.

Cause I think a lot. Our clients and our friends in particular, they, they fill out the FAFSA, they get that back and then there's sort of this like shock and a moment where they go, I thought this December was gonna be a lot lower than it actually is. And so, and one thing I think in particular there that's noteworthy is that the expect family contribution looks at a couple of years of your.

Income. It's not just the, the last 12 months or the last six or seven months. And so, you know, there's a lot of folks that try to do things right around the time when they're filling out the FAFSA. It's, it's a, it's a little bit longer look back. Do, do you have any recommendations on there's. And as the financial person, I'll say this, there's not a really good way to manipulate your EFC.

I I've talked to folks, a lot of folks are like, Hey, how do I make my income go away? So that these colleges will gimme more money. The reality is admissions officers have been playing this game for a really, really long time. They've been doing a lot longer than you. And so they, they know what it looks like when you're doing things to try to manipulate your AFC.

And so that's probably not gonna work out well for you. But are there, are there any suggestions you have. How to think about what your income looks like and, and making sure that your, your EFC is, is an accurate reflection of, of what your income is, so that you can get all the money you're qualified.

Wow. So I'll unpack that for a moment. There actually are things you can do to lower your expected family contribution. Most people do not know what they are, where to find them, but I have actually read the entire FSFA form. Yes, it was painful. but what I did find is it tells you exactly what they look at and exactly what they don't look at.

So families remember when I started to say, start this process early, the FAFSA looks at the second semester of your sophomore year and the first semester of your junior year. So to your point, you can't do. Figure it out at the last second. But if your student is working on this right, eighth grade, ninth, grade, 10th grade, and the family is getting their financial house in order to align with their best expected family contribution, where the assets sit, even on the day you hit send.

Are critical. If you have money in your child's name, get it out. yeah. So there are things you can do to help. And your assets, you know, where that money sits? Is it, how liquid is it? There are things you can do and ask people like Brian, he can help guide you to where that, where those are and what vehicles you can use.

You can get strategic if you have. Time is critical. Yeah. Time, time is critical. A couple of things that, that we usually work through with clients is, is making sure that one you know, a lot of folks think, Hey, I want to, you know, I want to build up these big savings accounts for my kids so that they have a great start into life.

And that's really great, except that college is gonna come along and want to take all of that money. And so so thinking about the assets that are in the names of your children is a, is a really good place to start. And then also if your grandparent, maybe, and you're thinking about, Hey, what's the best way for me to contribute to my kids going to college?

Sometimes some of the best ways to do that are to are to give money to their, the parents or to a 5 29 plan. That's set up by the parents. That's established for kids to go to college instead of having some of those assets in your own name.

The only thing that I do tell families is to be very careful of the 5 29.

It almost costs my son, his full ride to Harvard. And so just without beating that to the pulp, it, I had it 250 grand in it. And when they got wind of. They wanna take away a scholarship. So it can be, is, is that because Harvard or it's, so some schools are what they call and you can help me with the name here, but they, they provide aid all the way up to the, like the cost of admission or, or all the way down to your expect family contribution.

Is that because of that? Or why? Why is that? Yeah, so , Harvard's like you have a 5 29 with 250 in it. You don't need. This full ride scholarship, the $63,000 that your son earned a year. We're gonna give it to somebody else. And I'm like, whoa, whoa, whoa, wait. He earned it. You gave it. I don't know what you're talking about.

So I moved it to my second child and boom, it was gone in 24 hours. And then I'm like, I don't know what you're talking about, but he doesn't have any money. He has nothing. Yeah. I got burned really bad by it. And so I tell people for everybody's situation is unique and I never say don't do it or do do it.

But I say talk to your financial advisor because I personally was burned by it. And I thought I was a great parent. I really thought that I had done. Yeah, you saved all this money, right? Totally. Yeah. What's what's it was a problem. what's, what's actually interesting about that. So I haven't had that particular scenario come up, but I almost wonder if you're better off,

saving all of the 5 29 assets in the name of your youngest child. And you know, if you've got multiple kids, right, you have the luxury to do that. And then that way, when the oldest one goes to school, they don't have any money. And when the, you know, the next one goes to school, they don't have any money.

And then like for us, we have three kids. So when our youngest goes to school, well, there's 5 29 money there, but the other two have already gotten their free ride. I don't know if I don't know if that's that's the, the strategy, but maybe there's something there's something to think about that,

so that's, that's a little bit of a really quick overview of when to get ready for college, how to start planning for college. Shelly, where can our listeners go to find more information about you, more information about college. Ready? Absolutely. I, I think the, the best place to start is actually our website, which is www dot college-ready plan.

That's P L a n.com. That will give you so much information to start with. The other thing I would like to offer your listeners is a free copy of my best selling book. And that is my gift to you. So if you would like a copy of that book, Go to free book. Ready plan.com. The book is called how to send your student to college without losing your mind or your money.

And it is a best seller. And I highly suggest starting there to walk your grandkids or your kids through this process, it will open up a lot of conversations and it is a great foundational place to. Yeah, I agree. A hundred percent how to send your student to college without losing your mind or your money.

And we'll put some links both to college ready where you can find Shelly and to the, to the book in the notes to this episode. Well, thanks for, thanks, Shelly, for joining us, really appreciate the conversation and I hope our listeners found this super valuable and we will talk to you next time on the six figure investor.

Thank you so much for having me.