Questions & Answers

The amount a family borrows depends less on the published tuition and more on how the overall four-year+ plan is structured. Many families focus on first-year costs and underestimate the total four or more-year commitment. Without projecting tuition increases, housing, interest, and changes in income, borrowing often becomes reactive instead of strategic.

For more information read our e-book on college loans in our e-book portal.

Out-of-state schools can sometimes provide strong programs or experiences, but the cost difference must be evaluated over four+ years. A higher price does not automatically produce a better outcome. The key question is whether the additional cost produces measurable academic, career, or financial benefit.

If you are considering attending an out-of-state college, we highly recommend applying to private colleges instead of out-of-state public college.

Depending on your student’s academic achievements and talents, attending a private out-of-state college could be less expensive than attending an in-state or out-of-state public college.

Not necessarily. Many lower-cost public universities, community colleges, technical colleges and regional institutions provide excellent education and strong outcomes. Prestige and cost do not always correlate with long-term success.

For more information on this subject, view our video in our video portal “Is an Associate or Technical Degree Worth Considering.”

Colleges publish a full retail price, but many students receive some form of aid. However, “discounts” should not be confused with affordability. Families must evaluate net price carefully and understand what portion is grants versus loans.

Most colleges increase tuition annually. A family should project four-year+ cost estimates rather than relying solely on the first year’s published numbers.

Of course, the percentage will vary from year to year, but you could be safe to estimate tuition to increase each year by 3 to 6 percent yearly.

Some colleges will advertise they will freeze tuition cost for four-years to increase their student’s application pool.

To make up for the tuition loss, many colleges will increase the percentage on other college related costs like fees, room & board, etc.

Private colleges often have higher sticker prices but may offer institutional scholarships or grants (college’s own money). The final net cost can vary widely depending on aid packages received by the FAFSA, student’s academic or special talents, and family income.

The institution scholarships normally do not come from the college endowment funds. They come from special scholarship funds that were set-up by alumni, corporation, etc.

Also, institutional scholarships come from tuition discounts. I call these discounts as funny money.

Cost of attendance includes tuition, fees, housing, food, books, transportation, and miscellaneous expenses.

There are other costs that most families overlook, i.e. entertainment, snacks, spending money, lab fees, bus and taxi fares, transportation back home, sorority and fraternity cost, sporting events, sporting facilities (gyms), cable TV hookup and rental, etc.

It is important to account for all components, not just tuition.

Graduation timelines vary from one student to another. According to the College Board, the average graduation time is a little shy of 6-years. Some students change majors, transfer schools, or take lighter course loads.

Planning for potential additional semesters can reduce financial surprises.

This is why the information in our video and e-book portals is so important. In order to graduate on time, four-years or less will depend on the student’s college readiness, and selecting a college that is a good fit, academically, socially and affordable.

Sticker price is the published tuition. Actual cost is what your family pays after scholarships, grants, and aid. These can be very different numbers.

Parent borrowing should be evaluated carefully, especially regarding retirement readiness. Loans should not jeopardize long-term financial stability.

Parents should avoid borrowing if all possible.

Federal loans generally offer more flexible repayment and protections. Private loans depend on credit and lender terms.

Try to avoid borrowing private loans if all possible.

Watch our videos on student loans in the video portal.

All student loan amounts are too much!

But a practical guideline is that total borrowing should not exceed expected first-year salary. Exceeding that amount can create repayment strain.

Federal loans offer certain protections and repayment plans. Private loans have fewer safeguards. Default has serious long-term consequences. Neither federal nor private student loans cannot be file in bankruptcy.

Yes. Missed payments can impact both student and parent credit scores either in a positive or negative way.

Without a doubt! Parent loans, especially later in life, can extend working years and reduce retirement security.

Thousands of parents that are age 55 or older have student loan debt.

FAFSA evaluates income and certain assets to estimate a Student Aid Index. This number does not mean a family can comfortably pay that amount. It is simply a federal calculation used to determine aid eligibility.

Significant changes such as job loss, medical expenses, or income reductions may qualify for professional judgment review by the financial aid office. Families must communicate proactively.

Recent FAFSA updates require reporting information from the parent who provides the most financial support. Not the parent that the child lives with the most. Rules can be nuanced, and accuracy is important.

Certain assets such as savings accounts, investments, 529 plans, assets in a trust, rental property, and some business values are just a few examples that may be considered.

Retirement accounts and personal home value are generally not counted on FAFSA, but institutional formulas such as the (CSS Profile) or the college’s own financial aid application may.

Primary home equity is not counted on FAFSA, though some private colleges may consider it under institutional formulas, (CSS Profile) and college’s own financial aid forms.

Families should file as early as possible after the FAFSA opens (normally Oct 1st). Because some aid programs operate on limited funding.

Aid packages may change annually depending on income, academic progress, and funding availability.

Everyone should complete the FAFSA. You can qualify for low interest loans. Which gives you the opportunity of not liquidating high return investments. Also, many colleges will not award merit-based scholarships (Non-Need Based), if your student qualify for merit-based-awards

Different majors produce varying income outcomes. Families should weigh passion alongside realistic earning potential.

STEM degrees (science, technology, engineering, and math) will be worth the cost of the education.

For many families, beginning at community college and transferring can significantly reduce overall cost.

This is normally true for students that are not college ready. If your student scores less than 21 on the ACT test, it would be advisable to attend a community college for the first two years before attending a four-year college.

Campus living can enhance experience but increases costs. The decision should align with both financial and personal goals.

Many colleges require first year students to live on campus. However, living on campus is a personal choice.

Not inherently. However, families should understand career pathways and potential income trajectories.

We have too many students with a college degree that are delivering pizzas or bar tending.

There is nothing wrong about getting a liberal art degree. However, you need to decide if the cost of getting this type of education worth the cost of the future income potential.

Academic preparation, maturity, time management, and clarity of purpose all contribute to readiness.

You know your student best. If they were an average student in high school (C or C+), or score below 21 on the ACT test, your student may not be college ready.

Without a doubt! Skilled trades and technical certifications can provide strong income opportunities with lower educational debt.

Many students that have a skilled trade degree or technical degree, are earning more income than one half of students with a four-year degree.

Watch the video in the video portal entitled “Is a community or technical degree worth considering.”

Start locally with community organizations, employers, Non-profit organizations, and high school counselors. Reputable online databases can supplement, but families should avoid services that guarantee awards or charge a fee.

Watch “College Scholarships Show Me the Money” and “How to Receive Tax Scholarships” videos in the video portal.

If you have a business or home-based business, you could create what we call tax scholarships.

Be very cautious. No company can guarantee scholarships. Many free resources exist, and due diligence is essential before paying fees.

You should never pay a scholarship service that guarantee scholarship funds, even if they tell you, “If you don’t receive any scholarship funds, we will refund you fees.”

Smaller awards can reduce borrowing and sometimes stack together to meaningfully offset costs. A $500 scholarship could be worth $700 to $800 compared to borrowing $500 due to interest payments.

Academic consistency, leadership, involvement, athletic, special talents, and character often matter more than isolated achievements.

They are competitive and limited. Families should not rely solely on athletic awards to fund education.

Watch our two videos in the video portal, “How to Market Your Student-Athlete for Athletic Scholarships” and “How to Market Your Student with Special Talent” for more information.

Yes, sometimes outside scholarships (scholarships that does not come from the state or federal governments and college’s own funds) may reduce institutional aid, depending on school policy.

For example, if your student were to receive a $1,000 scholarship from the local community, many colleges would replace the scholarship that they offered your student with the scholarship that the student received from the local community.

It all depends on how the scholarship or grant is used. Scholarships and grants are only tax-free if used to pay for qualified educational expenses. If they are used to pay for non-qualified college expenses the student must claim the scholarship as taxable income.

Also, if a scholarship is given to a student that is tied to future employment, the scholarship is fully taxable in the year it is received.

Many times, taxable scholarships could be more beneficial to the student than tax-free scholarships.

The AOTC can provide up to $2,500 per year for eligible college expenses during the first four years of undergraduate education.

This credit helps offset tuition costs for graduate school, professional certifications, or continuing education, but it is smaller than AOTC.

Sometimes. However, expenses cannot be counted twice. Strategic planning is important to avoid losing credits or triggering taxes.

Yes. Using 529 funds for certain expenses may reduce or eliminate eligibility for tax credits if not coordinated properly.