Hey Guys,
We hope you guys are doing great. I wanted to share a couple of great stories that show you what NOT to do. Pay attention carefully, and it will save you thousands.
I’m going to switch gears in this post and tell two stories.
The first story is about a mother of a brilliant, well rounded senior, Justin. He was so well-rounded, in fact, that he was named to a six-student “dream-team” by his high school advisor - for excelling in the classroom and athletically. Justin had more than a 4.0 grade point average, was an All-State swimmer and a great kid. This honor was pretty impressive when you consider that the school is one of the largest in the country.
Justin’s mom went to one of our workshops in the summer between Justin’s junior and senior years. She told us that she wanted to book a free consultation to go over her personal financial situation. But she canceled the first date, then the second. Then we never heard from her (we have a “two strikes and you’re out” policy), so we assumed that she took care of her college planning herself.
By the way if you haven’t been to one of our workshops click here or call the office at 281 822 6200 for upcoming dates and times.
Fast forward to March of Justin’s senior year – approximately nine months later. Justin’s mom booked an appointment with us to go over the good and bad news.
The good news was that, thanks to Justin’s superb high school record, he had been admitted to Columbia University in New York City.
The bad news was that his financial aid package consisted of one component – a $48,000 parent loan – 8.5% interest rate payable over 10 years, 4% origination fee. Columbia offered no other aid period. That was just for year one! Years 2-4 would be the same, or possibly worse.
Justin’s mom was in a panic. She could not afford to send Justin to his dream school. She came in to our office a week after she received the award letter to see if there was anything we could do.
Unfortunately, we were having our meeting way too late. Had we met six months earlier, we would have made some easy adjustments. We could have easily lowered her Expected Family Contribution by around $20,000-$25,000, per year.
Justin’s father (a do-it-yourselfer type; an engineer) made two fatal errors in overstating the fair market value of his home, and including his retirement accounts. Columbia, a private school that accepts the CSS/Profile financial aid form, took one look at his home equity and refused to dip into its war chest of grants and other free money. This is information we give at our free workshops, nonetheless! (Worse, the stubborn dad later made an ill-advised, futile attempt to have Columbia use his original purchase price as the value, which I’m sure the financial aid officers laughed at.)
The unfortunate ending of this story is that all of Justin’s hard work – monumental efforts taking AP and other challenging courses, excelling athletically and in other extracurriculars and kicking butt on the SAT’s - will be for naught and he will not attend his first choice, Columbia.
Justin did everything in his power to get himself into the best college he could. His parents, on the other hand, did not fulfill their end of the bargain.
The second story is similar. Brannon met with Stan, a well-to-do, self-employed businessman (he owned an airplane brokerage business) and his wife in their son’s senior year, right before the financial aid forms were due.
Stan’s business had been hit hard by 9-11 but he had clawed his way back by sheer force of will, working an incredibly hard schedule.
Although time was of the essence financial aid-wise and Brannon offered Stan a slot in his clientele, Stan and his wife disappeared off the face of the earth. Or so we thought.
April rolled around and Stan resurfaced, leaving Brannon a message one week while Brannon was away at a conference. After Brannon returned, they spoke.
Same story. Stan’s child had been admitted to a private college in New England. Stan later told me that he had his secretary do the financial aid forms for him. His secretary!
The result? An EFC of $73,000! Ouch.
Could this have been avoided? Keep reading.
Stan and his wife came in to the office the following week. It was probably too late to address his son’s financial aid this year, but Stan had a daughter in her junior year of high school so there was hope for the future.
In the meantime, we determined in that meeting that Stan’s EFC should have been closer to $14,000! We decided to file an amended FAFSA, however the damage was done.
Brannon said later that he thought Stan’s wife was going to murder him (her husband, not Brannon) based on the glares she was shooting his way. Can you blame her?
So what’s the point of these stories? It’s not what you may think – we’re not telling them to you so you throw yourselves at us, begging us to let you hire us.
No, far from it. We have enough clients and are very selective about whom we work with.
Rather, the main “aha!” moment you must take away from these stories and the preceding pages is that, although it’s been said before, you will not derive any benefit at all from all of the valuable information contained herein if you then do nothing with it!
The delays by each family profiled in this section cost them tens of thousands of dollars in aid per year! And in the case of Justin, it cost him the opportunity to attend the school had been dreaming of.
So don’t just read this blog, surf the web, buy books and think you’ve got your college funding covered. Take the information and implement it! All the knowledge in the world is useless without using, or implementing, it.
Please raise your hand, if you want the same result as Justin and his mom.If you haven’t already, come to one of our free workshops on How to Pay for College Without Going Broke - we’ve got four of ‘em scheduled for this month!
