0:00:00.0 ANNOUNCER: So you wanna know the ins and outs of managing your money. Well, lucky for you, you are just in time for another episode of Master Your Finances with Certified Financial Planner professional Kurt Baker. Kurt and his panel of experts are here for you and will cover topics from a legal and personal standpoint. They’ll discuss tax efficiency, liability, owning, managing, and saving your money and more. Master Your Finances is underwritten in part by Certified Wealth Management & Investment, and Rider University. Rider offers continuing studies programs for adults who need flexibility. Want to add new skills to your resume? Take a continuing studies course at Rider University. Now let’s learn how we can better change our habits with Kurt Baker.
0:01:02.2 Kurt Baker: Do you like shopping around to find a good deal? Do you like finding shortcuts that save you time and money? You may not realize this, but many of the colleges your child applies to are going to offer you discounted tuition in the form of needs-based aid and merit-based aid. Unfortunately, applying for these discounts is difficult and time-consuming, and universities are not always transparent about how they award aid. Ryan Visniski, the founder of College Financial Guide, is here to provide you with a simple and easy framework to understand this confusing system. Colleges will likely be your largest or second largest expense, but Ryan is here to make sure you know how to pay as little as possible and avoid the pitfalls along the way. Yeah. Ryan, this is kind of a major thing that I think that at least my own experience like going to college and so forth, is that, once you… Like, the child’s interested, right?
0:01:57.1 Kurt Baker: And now you’re like, they’re going around looking to the college, I know it’s kind of a complex process. Of course the parents are like, “Well, if they choose college A, it’s gonna cost this much. College B, it’s gonna cost this much.” But actually the process can be much more systematic and actually have a better match for the child as far as your cost as a parent as far as what is actually applicable for your child, what they wanna go to. So you wanna tell us a little bit of like what you did and how you got involved in this process?
0:02:20.6 Ryan Visniski: Absolutely. So as much as I teach these things, I have four children. So this is soon to be a huge factor in my lifestyle choices. And I found that a lot of people, when they’re saving for retirement, the biggest hurdle they face is college expenses. Where, you know, if you don’t, if you make the wrong choice, either you or your child could really impact their future. So that’s where I like to focus in, not on the sticker price.
0:02:48.2 Kurt Baker: Right.
0:02:48.7 Ryan Visniski: ‘Cause it’s not about, it’s just like going to a car lot. You know, you’re not gonna pay the sticker price. Schools are gonna offer a discount, but it’s knowing which schools are gonna want your child and which schools are gonna offer you more money. That’s where I really get into this process and that’s where I teach parents to be smart shoppers. You know, to look and see which school for your child is gonna offer the best all-in package, AKA the lowest net cost and something that’ll also work for what you’ve saved.
0:03:20.9 Kurt Baker: Right. So when, I guess when you start off the process, like your child sometimes will have an idea of where they wanna go. All right, so I find there might be two scenarios. One is, I have no idea what I’ll do, but I wanna go to college and let’s figure this out. And I know parents who travel all over the country visiting different college, whereas others are like, “Hey, I wanna go to this school and maybe this is my backup and then might apply to a few others just in case.” So how do you handle like those two different scenarios or the one kind of, “I know exactly where I wanna go and assuming I get in, now what do I do?” Okay, so you’re kind of the eager buyer, so to speak, right? Well, I really wanna get in. So how much, you know, how does that kind of work?
0:03:54.5 Ryan Visniski: Right. So sometimes parents do fall in love with the school or children will fall in love with the school and they’ll say, “This is exactly where we wanna go.” I still encourage them to look at similar options because what’ll happen is other schools that are similar may give you a better offer, and you can leverage that against the school that you wanna go to. But the second thing I’ll say is don’t fall in love too much because sometimes the schools don’t love you back.
0:04:22.6 Kurt Baker: True.
0:04:22.9 Ryan Visniski: And so that school that you went all in on, they may not offer you anything. Especially if it’s a big public university and it’s out of state, and I’ve had that happen with clients before. And then there’s the other scenario. I have no idea where I wanna go. Well, I’d encourage you to really sit down and think about what are your priorities? What do you wanna study? What school’s gonna be the best fit for your type of major? And that’s a good starting point to start making a list.
0:04:51.0 Kurt Baker: Right.
0:04:52.6 Ryan Visniski: A big mistake parents make is sometimes they’ll only look at the state schools. They won’t consider the private schools ’cause they’ll say, “Oh it’s $80,000. There’s no way we could afford 80,000 a year.” Well, little known secret, that number comes down quite a bit, especially if your child is in the top 25% of the applicant pool. So that’s an important factor to consider when you go to look at this.
0:05:16.1 Kurt Baker: Now, I recall like when we first… Like during the COVID process, we’re coming out of that, and actually… But a lot of people don’t realize is, and I mean I’ll take out the Ivy League schools for a minute ’cause they’re never a buyer’s… [chuckle] You know, but it became a little bit of a buyer’s market for the majority of schools. In fact, you hear about colleges, actually some of the smaller ones, having trouble and some of them even closing. So you’re a little bit in the driver’s seat. Not totally, but I remember they… I think it might have been, I may be wrong but the state, I believe it was New Hampshire, they were starting to offer in-state tuition to out-of-state residents purely to try to bring them into their schools because they were trying to fill up the classrooms and so forth. And I think that started to spread once they did it. So there’s a little bit of this competitive thing going on across state lines where it used to be, hey, you had to be a resident of the state to get that price. But that’s not necessarily the case, it sounds like, where, as far as the negotiation side goes.
0:06:04.8 Ryan Visniski: It really depends on the school and where you fit within their applicant class and how much they want you. So there are schools that’ll offer you in-state tuition if you’re an out-of-state student. It all depends on the school and where they are that year and what they’re looking for. I mean, keep in mind they do this scheme all day long. Many colleges hire consultants behind the scenes to help you to figure out exactly how much you’re gonna pay. And so their goal is to get the right student that’s a good fit, and your goal is to put your child in the best situation possible to do, to include the right things, to know what the mission of the school is, and to tailor your application so that it reflects those things that are important to the school.
0:06:53.1 Kurt Baker: And I guess getting into the mission and the right school and so forth, I think, you know, a lot of it has to do with like what are they really focusing on? ‘Cause, you know, every, colleges don’t… They may say they’re like all things to all people, but they’re really not. So each school tends to have certain specialties, like it might be engineering, it might be nursing, it might be, you know… Certain majors tend to kind of rise above like all the others as well. So how does that kind of fit into the scenario where, let’s say the college focuses on something I might be interested, let’s say I wanna be a nurse as an example. Is that… That would probably come into this calculation about how… Where I’d want to apply and what I might wanna do.
0:07:26.3 Ryan Visniski: I’ll say that’s a double-edged sword.
0:07:28.0 Kurt Baker: Right.
0:07:28.1 Ryan Visniski: ‘Cause actually some schools will admit fewer students and offer less aid for a major that’s very popular. If you look at Penn State is an example, Penn State, if you go to apply for engineering or business, you’re actually going to have a lower admit rate and be more likely to kicked up to get accepted into a branch campus as opposed to main campus. But if you chose something that was less popular initially, get the grades for a couple of years, then you could transfer over into that business major. But ultimately, the key factor is it’s a numbers game, right? It’s your child’s GPA, it’s their test scores, and it’s depending on the school you apply to, whether that school’s gonna offer you need-based aid or merit-based aid and what percent of that need-based aid is free money as opposed to loans. That’s the dirty thing that you don’t really see, is a lot of times you’ll get that “award letter,” and you’ll find out, “Oh by the way, they’re factoring in student loans is a big part of this package, they’re not really giving me very much free money.”
0:08:33.6 Kurt Baker: Oh right. Yeah. I’ve seen some of these letters where they say, well, your cost is, you know, here’s the cost of school and it’s X, but they’ve already included things they’re assuming you’re getting, like they might figure you’re actually taking out a loan for part of this and things like that and you’re like, well, wait a minute. I didn’t… Wasn’t planning that part of it. And they’re like basically bringing the cost down. Well, here’s your actually out of pocket, but they’re not actually telling you that part of that out-of-pocket minus was really a loan that you’re taking out as well.
0:08:58.0 Ryan Visniski: Right.
0:08:58.3 Kurt Baker: So you have to be really careful about reading these award letters because they’re not all written, they’re not… There’s no standardization on how these are written. So you have to understand like what they’re saying and what they’re including and what they’re not including. So right?
0:09:08.0 Ryan Visniski: Right.
0:09:08.2 Kurt Baker: That’s my understanding from what I see… Ones I’ve seen.
0:09:11.2 Ryan Visniski: And then there’s one more complicating factor, which is if you’re family doesn’t have means, if you’re a family that is true financial need, making sure that you can get enough aid to finish school. A lot of kids will get to year two, year three, and if their parents don’t have good credit scores or if their parents aren’t in the picture, they can really get in trouble where they’ll run out of the ability to borrow money, and then they’ll end up at the last minute kind of scrambling to see what sources they can get loans from to finish school. It’s a sad situation.
0:09:43.3 Kurt Baker: Right. So they don’t… They’re not really committing to the entire process necessarily, like you got in for this year, but based on what occurs during the year, you may or may not get similar things the following year.
0:09:52.7 Ryan Visniski: That’s right.
0:09:53.4 Kurt Baker: Right. So that you’re taking a little bit of a risk as far as that process goes, you have to be aware of that. So I mean you mentioned two different areas of the need. So one is, maybe we’ll break these down a little bit. One is the needs-based aid of course. And that’s just for people that are truly like have lower income or middle income. I mean lower income these days is not necessarily what most of us think of as low income, but it’s low enough for the colleges. Right? And then you have the merit-based aid, which is a little bit different, which I think is sometimes misunderstood as well. So I guess, why don’t we start off with the need-based aid and what kinds of things are available for people that might need the funding to actually help them get into the college and pay for it?
0:10:28.1 Ryan Visniski: So the one place that this can be a bit of a misnomer is people think, “Oh well, our middle class income is too high. There’s no way we’re gonna get need-based aid from the school.” But you have to keep in mind these are all artificial numbers. So right now the schools will calculate what’s called an expected family contribution. That’s based on the parents’ income and assets and the student’s income and assets. That’s when you fill out the FAFSA, that’s the number that they spit out at the end. Then they’ll take the cost of attendance of the school minus that expected family contribution, and they’ll get you this number that says, need. From there, schools will meet a percentage of need depending on their track record.
0:11:12.9 Ryan Visniski: So some schools, especially private schools with the big endowment will meet 100% in need, others will meet 50% to 60%. But that’s still not a guarantee because sometimes schools won’t offer you any, even if you’re a family with a very low expected family contribution. That’s gonna change in the near future, they’re moving to something called the Student Aid Index and they’re simplifying the FAFSA. So fewer questions, but they do… They’re doing this because people think, oh you really think I could write a check for that expected family contribution, when in fact it’s just the way to index how much aid they’re gonna give.
0:11:49.1 Kurt Baker: Okay. That’s interesting. And I know you talked about the FAFSA a little bit, so I wanna like reference a little bit. Sometimes they misunderstand like what’s included as far as specifically the assets that are included. When somebody fills out the form, like, well, we have way too much in assets, they’re not gonna do that. But in fact, they may have something like a large retirement account, a big 401k plan, things like that, which is very common. So can you just explain a little bit about how they actually calculate the assets as far as what’s available to pay for college?
0:12:14.0 Ryan Visniski: Absolutely. So they’ll look for the parents’ adjusted gross income. Okay. So if you’re a business owner or you’re somebody that has a corporation where more money flows into adjusted gross income, that’s a big factor in the calculation. They’ll also look at your liquid assets. So that would be your cash, your brokerage account, savings CDs, the types of things that are not locked up in retirement.
0:12:40.0 Kurt Baker: Right.
0:12:40.9 Ryan Visniski: That’s the factoring from the parent side. And then from the student side, and this is unfortunate, but if you make above 3000 a year and/or if you have over 3000 in assets as a student, they’ll say that that really weighs heavily against you.
0:12:57.5 Kurt Baker: How interesting. Well, that’s very fascinating. We have to take a quick break here. You’re listening to Master Your Finances. We’ll be your right back.
0:13:03.3 ANNOUNCER: This is Master Your Finances with Kurt Baker, certified financial planner professional. Learn about tax efficiency, liability, owning, managing and saving your money and more from Kurt and his experienced panel of guests. Master Your Finances is underwritten in part by Certified Wealth Management & Investment, and Rider University. Rider University offers flexible education for adult learners. For more information, it’s rider.edu/nextstep.
0:13:49.9 Kurt Baker: Welcome back. You’re listening to Master Your Finances. I’m here with Ryan Visniski, and we’re talking about a big expense in people’s lives that have college… That have students that are gonna be college bound, because many of us wanna go to college ’cause that’s one way to increase your lifetime wealth. And so, I think there’s some misunderstandings about how aid is calculated and how the actual offer letters are sent. I know when people send offer letters, it can be very confusing as far as what you actually have to pay out of pocket. So it’s helpful just to have somebody help you decipher that so you can compare different offers from different colleges, and it almost feels like they do this intentionally. It just feels that way because they’re using their own formula. And then when you try to put two letters next to each other, one may look higher than the other one. In fact, it might be lower than the other when you actually make in all the calculations. So I think that’s really important to understand when you’re actually comparing the cost. And so when we started off, we really were… When we start… Left the break, we were talking about how you fill out the FAFSA and how certain assets are included in the calculations as far as the parents go, but also as far as the child goes, right? So you wanna pick up for that where you left off there about the child?
0:14:56.1 Ryan Visniski: Absolutely. So it really is a… It’s unfortunate because you disadvantage a child that’s entrepreneurial or you disadvantage a child that maybe they’re contributing to the household expenses. Right? So ultimately you wanna make sure that you don’t leave assets in your child’s name and that includes, you know, uniform trust to minors accounts, the types of things that will be disclosed in the FAFSA, ’cause that is gonna count… That’s gonna count against you. You’d be better off just taking that money and rolling it into a 529 or making another move that’ll move it out of your child’s name and into yours. Even if it’s with the understanding that, hey, this is your money, it’s just in our name.
0:15:44.8 Kurt Baker: Right.
0:15:45.1 Ryan Visniski: You know, let’s move it over.
0:15:47.1 Kurt Baker: Right. Yeah. So it is important how you hold the assets to make sure… So it’s really important to understand the FAFSA form in its current state. And then you also mentioned they’re gonna do some updates to the form itself. Can you tell us a little bit about what we’re looking at or what we might be seeing as far as changes go when they come out with the new form?
0:16:01.7 Ryan Visniski: Absolutely. So I would say the main beneficiaries of the change are the people that have total need, right? That will receive need-based aid from just about everywhere they apply because they’re gonna lower the minimum expected family contribution, and they’re gonna raise the income require… The income levels where they give Pell Grants. The other change that’s gonna happen is they’re gonna significantly reduce the number of questions and they’re going to eliminate a couple of things that have helped some of the families I work with. For example, divorce parents will now have to disclose both incomes and assets. Where before, it’s just the custodial parent that have to do it. The second big change is they’re gonna ask more detailed questions about family-owned businesses where right now you just put a net value of the business.
0:16:56.5 Kurt Baker: Okay. Any idea like what they’re after as far as the family-owned business goes? They’re looking for like the true value of the business, is that what they’re trying to figure out?
0:17:03.3 Ryan Visniski: I think they’re getting more into the cash, the assets of the business.
0:17:07.7 Kurt Baker: Okay.
0:17:08.7 Ryan Visniski: Where before it would just be like a net worth calculation that would be net assets minus net liabilities. So they are gonna drill into that a little bit further, and it is gonna count against families where right now it doesn’t count as heavily.
0:17:21.5 Kurt Baker: Okay. Well, that’s… It’s interesting as a business owner, ’cause sometimes at least the businesses I’m aware of and I’ve been involved in the cash in the business is typically there for a reason because you’re running the business, it’s not necessarily available for you to spend as a family. So that’ll be very interesting to see how they come up with that. And then you mentioned that the divorced parents. I know, just some experiences through my time is that you’ve got various situations where maybe there’s a friendly, a “friendly divorced financially,” where they’re both willing to contribute to the college education and things like that. So if we’re calculating in both parents, now you have maybe one where may not be quite as willing to pay for the college, let’s just put it that way. And the other one’s like, “Hey look, we really need to take care of this and somehow take care… ” So now if they’re adding all this together, how do you see that impacting, like the decision the child’s gonna have to come because you have one… Let’s say if one parent is very wealthy, like they end up… They have a… You know, they maybe have a little more wealth, good betting on the time frame. Right? And the other parent may be a little bit lower. They have to divide the payment of the college typically it’s how that works. Right?
0:18:19.6 Ryan Visniski: Right. So that’s a case where it really needs to be either in the divorce agreement or some type of settlement afterwards, how college is gonna get paid for, and it’s a huge sticking point. And for a lot of divorce attorneys that I’ve spoken with, it’s something that can really hold up the final settlement. But ultimately, it’s best to have that spelled out up front and it’s also best to settle, okay, whose name are the 529 assets in and making some sort of legal arrangement that guarantees that that money’s gonna go to the child and not be used for another child or another source.
0:18:58.7 Kurt Baker: Okay. Well, that’s good. That’s great advice. So you touched on one thing real quick. Do you want to explain how, what the Pell Grants are and how those work?
0:19:06.4 Ryan Visniski: So essentially, Pell Grants have a income limitation, and if you come in below that, you’ll get a supplemental grant from the federal government. It’s calculated during the FAFSA process and it’ll be factored into your final aid award from the university. Just like they’ll also include things like work study and other programs like that. They’ll also tell you if you’re gonna get subsidized or unsubsidized federal loans, if you get subsidized loans, that means they’re going to… They’re not gonna charge you interest during the time you’re in school. If it’s unsubsidized, the interest clock will start running as soon as you take the money out. And then you can either pay that interest only during your time in college, or you can wait and let that roll up until the end.
0:19:54.3 Kurt Baker: Okay. Well that sounds like it make it a little bit easier. So, let’s say I’m a higher income person and I need to fund the college, what type of lending is typically available for those that wanna borrow money for their student, for their college, whether it’s the student themselves or whether maybe it’s the parents wanna take out loans. So what types of things are available out there for that?
0:20:16.3 Ryan Visniski: So after the federal loans, a lot of times they’ll suggest going right to what are called parent PLUS Loans. That’s where you co-sign with your child and then you borrow money. The challenge being, of course, like I said, if your parents have poor credit, that can be a challenge to get those parent PLUS Loans and to qualify. There’s also private loans available at banks, but another resource people don’t always consider is going to the state higher educational authority. So, in Pennsylvania, it’s PHEAA in New Jersey, I don’t remember exactly what it is, but if you look at New Jersey Higher Education Authority, they actually have loan programs available there as well that have lower interest rates. And some of them you can actually just get in your students’ name. So I always recommend to families go look at those programs. And also there’s a lot of New Jersey grant programs available to parents that look, and especially if you’re a first generation college student or you’re somebody that is otherwise from a lower socioeconomic status community.
0:21:25.6 Kurt Baker: You bring up a great point here, which I was gonna ask you about. Let’s assume I’m a very entrepreneurial young child, but I have a very disadvantaged family. It’s had a rough time. Maybe their credit’s not so great, but I still really wanna go to college. Right. And I’m pretty much gonna be carrying this thing on my own. My parents really can’t be involved. They just unable to be involved or don’t wanna be, whatever the case may be. What are some ways like that young person really should, like, plan as much as they can for when it comes time to go to college? What are some points for them to think about?
0:21:56.2 Ryan Visniski: I would say the main thing is focusing on programs where you can get your college tuition covered. Looking at ways that you can get credits before you start school. Looking at community college programs, do two years at the community college. Sometimes you can get scholarships to the community college, and then you come in with a lot of credits, and you only have to do two years at the university. If you’re okay with the military thing, which I know is a dicey subject these days, you can also look into RTC scholarships. You can get phenomenal benefits from the federal government if you’re… If you can qualify for an RTC scholarship and get into a place. They’ll cover your entire tuition. They’ll pay you a stipend while you’re in school. And then you do have mandatory military service afterwards. But it’s still a great program if you’re a family that needs it, or if you’re entrepreneurial and you need It.
0:22:50.5 Kurt Baker: Absolutely. And one of the things that we’ve experienced ourselves was that… And we learned a lot about this, the community college oftentimes will have some of the major colleges literally on campus. So you may actually have them teaching on the campus, and as you point out, they can actually transfer. Like they have partnerships with, I know in our case it was Mercer Community College has a partnership with TCNJ as an example. So our daughter went to community college for two years, did really, really well, and then was able to transfer to and graduate with a TCNJ degree. And so those are becoming much more readily available from what I’m seeing over time. Is that something you see people doing?
0:23:25.5 Ryan Visniski: That’s correct. Absolutely.
0:23:29.5 Kurt Baker: So who typically does that that you’re saying, as far as that?
0:23:33.6 Ryan Visniski: It’s really just a matter of, again, there’s a lot of different ways to skin the cat [laughter], but at the end of the day, it’s choosing the way that makes the most sense for your family and fits your family situation. A family that hasn’t saved for college, has low income, that doesn’t have the assets to pay for it, their situation’s gonna be a lot different than somebody that, let’s say is more affluent that, they could write a check for college, they just wanna write less of a check. But in any situation, there’s a lot of ways that you can reduce the college costs. We also touched upon merit-based aid. So if you have somebody that’s a good student, and I would say this applies across the spectrum, and good student, I would say starts at three five or above GPA and I would say it starts, 1350 and above on SATs or the ACT. In those situations, you really wanna look into finding a good SAT tutor. Having somebody that can help boost that SAT score by 200 points can make a huge difference in what awards you’re available for. I come across parents that they’ll miss out on a program that’ll offer them substantial discount over 10 or 15 points.
0:24:52.7 Kurt Baker: Oh wow.
0:24:54.0 Ryan Visniski: Or 10 or 20 points. And I’m like, that investment in SAT tutoring could have gotten you over that hump.
0:25:02.6 Kurt Baker: Wow. Amazing. Well, that’s awesome, Ryan. You’re listening to Master Your Finance, gonna take another quick break.
0:25:06.8 ANNOUNCER: This is Master Your Finances with Kurt Baker, certified financial Planner professional. Learn about tax efficiency, liability, owning, managing, and saving your money and more from Kurt and his experienced panel of guests. Master Your Finances is underwritten in part by Certified Wealth Management & Investment, and Rider University. Rider University offers flexible education for adult learners. For more information, it’s rider.edu/nextstep.
0:25:53.7 Kurt Baker: Welcome back. You’re listening to Master Your Finance. I’m here with Ryan Visniski, and we’re talking about planning for college and getting ready to bring them in. So, I mean, what I’ve noticed is there’s a couple areas here. I mean, this was just our own personal experience. Of course, I handled the financial aspect of it, but what was interesting about was the actual admission process itself. I ended up hiring a coach specifically to get my daughter involved in the process because, as a third party, somehow that seemed to work better. Even though I had the “information,” a lot of times in this, and I know in our case it helped a lot because they tend to be… They don’t come in with any predetermined opinion about what’s happening and they tend to have a much, broader look at the landscape of what’s available out there.
0:26:37.6 Kurt Baker: Whereas parents, I know that was probably my case and my wife’s, we had certain ideas about what would be thinking, right? And of course the child here growing up. So we found it beneficial to hire a third party ourselves purely as kind of almost like a mediator and an expediter in making… Helping the child get involved. So I’m all about having a consultant on this. I’ve seen the benefits and I know it resulted in a better experience for us personally as well as other clients that I’ve had do this. So how do you start the process and what do… Somebody says, Hey look, I have somebody going to college. When would they wanna start talking to somebody? In your opinion as far as getting the consultant involved, what’s the ideal time to do so?
0:27:16.7 Ryan Visniski: Sure. So I’ll generally say that freshman year is too early because if the need really isn’t present yet, and you’re really thinking high level, your child likely might be thinking about college, but really isn’t thinking seriously about it. I would say at that point, you’re really just trying to think about activities and what you’re gonna put onto the resume. 10th grade, that’s where things start to get really interesting, because parents don’t always start that early. But I would highly recommend that you do, A, just start a resume of what your child has done in terms of extracurricular activities, be it paid work or unpaid work. I’d recommend that you have your child do 50 hours a year of community service. That sounds like a lot, but you can knock that out in the summer and it’s something that really looks good on your resume, and bonus points if you could tie that in to whatever your choice of major is gonna be later on.
0:28:20.5 Ryan Visniski: And then also sophomore year, that’s when you really wanna start working with an SAT tutor and start taking the exams, and you wanna make sure you have some interesting experience. If you don’t have one, then you should think about how to manufacture one, because at the end of the day, you’re gonna have to put that into an essay. So you don’t wanna be like everybody else and just say, well,: My son’s on three travel teams and is in the chess club. It’s always good to have something a little different or unique that your child has done. For example, one of my clients, his son has been fixing computers since he was a kid. So I was like, this is great. That’s a great experience. Yeah, let’s flesh that out and let’s talk about that as a… Something to grab onto.
0:29:04.4 Ryan Visniski: But I’ll also say it’s a good time, sophomore year or junior year, to really start talking finances, to make the moves that you need to make to know where do you fall on the need-based aid and the merit-based aid spectrum and where do you need to get to to get onto that college list that you wanna have. And that’s when I really start working with parents to understand that process. And that’s where we will go through for each of the colleges on your list. And for colleges that may not be on your list, where do you fall in the applicant poll? Are you at the higher end? Are you in middle, or are you at the lower end? And if you’re at the lower end, well, maybe we need to look another run-down at universities that don’t have as stringent application requirements and that might be a better fit.
0:29:50.0 Kurt Baker: Right. ’cause a lot of this data is out there, which I don’t think people understand. I mean back at least when I was applying for college, I gotta, ah, take a shot at this one or that one. But now, I mean there’s a lot of data available. And I know the people that do this for a living, you can literally drill down and say, Hey, here’s kind of the averages SATs score, here’s the other… Here’s all the other metrics that maybe, that they’re looking at as far as who they’re admitting or who they have been admitting. And that gives you at least a rough idea of your likelihood of getting into that school. Now, I touched on SAT and so did you real quickly, but I’ve also heard that some schools are not using those scores currently. How does that impact this process, or is it just like one factor you just remove? Does it matter that much or how does that affect you as far as your process goes?
0:30:29.5 Ryan Visniski: So it is true that there are schools that are calling themselves test optional and some truly are, but for the most part, I advise just taking it anyway. It can only help you. And if it’s test optional, you don’t wanna disclose it, it’s not gonna hurt you. And I’ve had students with special needs that maybe their math scores are very low or maybe they have trouble with reading. So that’s where I would say get ’em up to like a minimal level. And that way, if anything else, it can help you avoid having to take like remedial classes before you start university, which is a tough situation.
0:31:09.6 Kurt Baker: Okay. So still take the test anyway, even though you hear these thing, it’s not really that widespread. So it’s still valuable.
0:31:14.7 Ryan Visniski: Right. ’cause so, again, even though schools say test optional, you look at the merit-based awards that they have and a lot of them are around SAT scores. So you may think, oh, this score isn’t good enough. But I’ve seen merit awards that start at like 1100, 1200. So doesn’t hurt to try and try more than once, and who knows, whatever that best combined score is, that’s what you’re gonna get.
0:31:44.7 Kurt Baker: Okay. Well, that’s good advice. Okay. So, I know from our, the financial aspect, we tell people like, you have the baby shower and then you plan for the college expense. [laughter] It’s kind of at the same time. But as far as the actual planning for the specific college, when you’re trying to nail down like where you’re gonna go, so now that I’ve started this process, let’s say I come to you and we’re 10th, 11th grade. So now what are we doing next? Like how are we going through and screening for the different types of things that we’re going through?
0:32:15.1 Ryan Visniski: Sure. So I have a software that gatherers in all the data from the different universities across the country. And this isn’t a database. You can access the database but I’ll tell you, it is not user friendly, and it’s very complicated to try to get through everything. So what this software does is it pulls it all together. I’ll take income and asset information from the parents and the student, and then we’ll look at what colleges are on your list right now, and I’ll give them a general sense of where you’re gonna fall with the expected family contribution, whether you’re likely to receive need-based aid or not. And then based on your test scores now, whether you’re likely to qualify for merit-based aid. And then I’ll talk to them about why this list, and that’s essentially what I do in the free consultation.
0:33:08.7 Ryan Visniski: And then if parents decide to work with me, then we’ll get into a lot more detail and we’ll work to make the moves to put them in a better position, expand the list and really build it out. And what they’ll get at the end is they’ll get a… Similar to a financial plan, right, where it gathers all of your information in one place. It shows you exactly, for each of your schools, what merit options are out there. And for each of your schools, what need-based aid they’re gonna offer and gives you a picture of the net costs of the universities. Then we’ll work through your budget, we’ll see what can you really afford relative to the net cost of the schools you’re looking at. Maybe you need to consider an alternative option so that you’re not overextending yourself and borrowing too much.
0:33:53.6 Ryan Visniski: Maybe you and your wife need to be on the… Or maybe the spouses need to be on the same page as far as who’s gonna pay, how much we’re gonna pay versus how much the student’s gonna pay. I’ve come across parents that say, well, it’s all on our kids. Well if you put it all on your kids, you have to know what the financial consequences are gonna be for them. ’cause you don’t want them to walk out with 120,000 in debt, and a huge debt payment, especially if it’s a major that they’re not gonna have that great an outcome coming out.
0:34:19.8 Kurt Baker: Right. No, I agree. So, yeah, getting everybody involved. So I think one thing that I find fascinating, at least when you do some of these searches, I know you can put in things like their interests, like what types of areas they’re interested in. And when you put in this information, sometimes you would come up… You may be surprised at some of the schools that you come up with, right? Have you ever seen… Like this experience where it’s like, Hey, maybe I’m interested in being, I don’t know, let’s say a writer or something like that and you’re like, oh, I wanna go to, I don’t know, I don’t… TCNJ teaches writing, I know that. So that’s where I wanna go. But what… Maybe there might be better schools, frankly. And you may get a better price and not even realize that that’s something they do pretty well.
0:35:00.1 Ryan Visniski: And that goes back to what we talked about earlier in the conversation. Sometimes people fall in love with the school, but they don’t realize there’s another school they can fall in love with too that has similar characteristics, similar attributes. Maybe it’s a smaller school, maybe it’s one you haven’t heard of, but still offers a lot of what you want and will be a better financial fit. So that’s why it’s important to look holistically at this and not just to look at the academic or the social aspects, or the brand name. Or, they wow you with the college tour and the great catered food when you really need to think about making a good financial decision.
0:35:35.6 Kurt Baker: Right. I agree. ’cause that helps you get that first… Maybe the name helps a little bit, but I mean the long term it’s more about the education and what they taught you while you were there so you can take that forward. ‘Cause really life is about, it’s a long term education process throughout life. I mean, that’s just one step on the learning ladder, so to speak in my opinion. Right.
0:35:55.2 Ryan Visniski: Right. And then geography also plays a factor as well. A lot of parents are sending their kids south, they used to go to a northeast school for any number of reasons, be it fun, be it lower costs, or just better weather, or whatever the case may be. Maybe it’s a good football school. Well, keep in mind your kids are probably gonna get a job in around and wanna stay in that area. So, you might wanna talk ’em into looking at schools in the geography where you are if you want ’em to stay close to home.
0:36:26.0 Kurt Baker: Interesting. All right. That’s great advice. We’re gonna take another quick break. You’re listening to Master Your Finances. We’ll be here right back.
0:36:33.4 ANNOUNCER: This is Master Your Finances with Kurt Baker, certified financial Planner professional. Learn about tax efficiency, liability, owning, managing, and saving your money and more from Kurt and his experienced panel of guests. Master Your Finances is underwritten in part certified Wealth Management and Investment & Rider University. Rider University offers flexible education for adult learners. For more information, it’s rider.edu/nextstep.
0:37:20.5 Kurt Baker: Welcome back. You’re listening to Master Your Finances. I’m here with Ryan Visniski and we’re talking about college education, how to get in and get the right fit at the right price. And Ryan’s been working on this, and I know it’s can be a little bit overwhelming to parents and students alike when you’re like, Hey, I wanna go to college. But wow, there’s just so many different options out there. And now you’ve gone through this process where you’re like, Hey, at least I have some basic idea of what area of the world I’d like to work in, whether it’s a writer or an engineer, an artist, whatever the case may be. And so let’s narrow it down to some schools that might do pretty well by you and fit in with your profile and your parents’ profile. And now you get a couple offers on the table, they send them back to you. They might be very confusing ’cause they look… They’re all written totally differently and now you compared them and you’re like okay. Here’s what we wanna do. I wanna get the best price and let’s figure out which of these schools is gonna work out best for us. Now we’re gonna try to negotiate.
0:38:14.0 Kurt Baker: So how does that work? ‘Cause most people don’t realize you can actually negotiate with the schools. That’s like their offer. You went in and bought a car, “Here’s the price.” And you’re like, “Well, that’s good, but maybe we’ll do this instead.” So how does that process work?
0:38:27.5 Ryan Visniski: Well, one key piece of terminology to keep in mind is never use the word ‘negotiation’ in the letter that you write to them. You always wanna say ‘reconsideration’ or ‘reconsider.’ And ultimately, the process depends on the school you’re applying to. I always recommend reaching out to the admissions counselor and asking them, “What is the process at your university for reconsidering a financial aid offer?” And what you wanna do is you wanna craft a letter, you want it to be something written in the name of your student, and have them actually draft it. Always say thank you in the beginning. Then you wanna list the factors to be reconsidered. So, is there a huge expense your family is gonna get hit with? Is there somebody that has a sickness or a problem, or something that is showing up in your financial records that isn’t accurate? You know, “Hey, we have this $50,000 in cash, but we have it because we’re buying a house this year.” Or, “We have it because our income looks really high, but it’s because I had to pull money out of my 401k to pay for some big expense.”
0:39:42.1 Ryan Visniski: But there’s also looking at the different offer letters you have and saying, “I received a better offer from another school.” Or you just ask for more money. You just say, “To make this work financially for our family, we need this amount of a discount.” I recommend putting a specific number in there per year that you wanna ask for. And then finally, you close it by saying thank you and you send it off. This doesn’t need to be another essay, it doesn’t need to be perfectly manicured and reviewed. And it also doesn’t need to be a narrative of your life story and all the problems that have ever happened to you like a country music song. Keep it simple, keep it short. They’re reading a lot of these things. Make it memorable. If there is another offer that you receive that’s better, like let’s say it’s two competing universities, you can present that offer and say, “Hey, can you match this?”
0:40:36.4 Kurt Baker: So yeah, I was gonna ask you that. Is it a good idea to say, especially if they’re like rivals, like, “Hey, Rowan just gave me this.” [laughter] Maybe they gave you this. So is that okay? As long as you do it in a nice way, I’m assuming, right?
0:40:49.8 Ryan Visniski: Absolutely, absolutely.
0:40:52.1 Kurt Baker: You gotta be kind about it, right?
0:40:52.2 Ryan Visniski: Yeah, you can definitely include the offer you receive from another school, and that gives you a little more heft and credibility as you make the ask. And generally speaking, they have discretionary dollars for this. They know it’s coming, but it’s just like anything else. If you don’t ask, you don’t receive. Even $3000 a year, $4000 a year in extra award times four, that is well worth it to write a short letter.
0:41:20.5 Kurt Baker: Now, you spoke about that, for the short letter, and we’re talking about per year now, in this letter, ’cause usually it’s their offer’s for one year, right? For this coming year. Can you address the fact that you wanna be there for more than one year? Can that be also addressed up front so that you don’t get in and then all of the sudden next year you can’t afford it?
0:41:36.1 Ryan Visniski: Well, it is something that you ask for a number per year, and you are asking them to… Let me think about how to phrase this. But ultimately what I would say is, you’re asking with the implication that it’s gonna be renewable for four years. You’re not asking for a single year, and they know based on what you’ve listed in the letter that if it doesn’t work for you this year, it’s not gonna work for you next year or the following years.
0:42:06.5 Kurt Baker: Okay, so it’s kind of built into the process. They kind of understand that, “Hey look, this really is over the time frame. We’re likely to go along those lines once we commit to it upfront,” it sounds like.
0:42:16.2 Ryan Visniski: Correct. And that’s where, especially if it’s a one-time receipt of income or it’s a one-time big expense, you wanna make sure it’s disclosed. You wanna make sure they know about it and they can consider that in their decision.
0:42:34.8 Kurt Baker: Now, you mentioned you have four children. Let’s just assume for one moment they were all the same age and they’re all going to college in the same year. Now, would this be something that colleges would take into consideration when they’re doing… ’cause sometimes they overlap. Like let’s say that one every year for the next four years, so now I’ve got like seven years or eight years of kids going to college. Does that play into this process as well, to some degree?
0:42:56.6 Ryan Visniski: So it does currently. I’ve heard that in the new formula they’re not gonna take that into account, but I have to say, I don’t have a lot of specific information yet, and I think a lot of it’s still being determined.
0:43:10.0 Kurt Baker: Okay, ’cause it would be kind of rough, especially if you have three or four kids going to college at the same time, that would be difficult.
0:43:16.0 Ryan Visniski: At this point, I’m gonna have two kids in college, assuming everybody does the four-year plan. But if anybody goes longer or there’s another graduate school or whatever the case may be, that’s gonna be three or four kids in college.
0:43:31.5 Kurt Baker: That’s another factor you just brought up that we probably should discuss, is that they also talk about how long their typical student takes to graduate. So if the average… If you’re looking at the different colleges and one says, “Yeah, on average they graduate in whatever, 4.2 years,” or something like that. Whereas one other one’s like 5.5 years, you could literally be committing to potentially another year’s worth of expenses and not really understanding that, “Hey wait, if people that go to the school don’t typically graduate in four years, that’s not good for me because now I may have a whole another year of expenses to send them for one more year,” right?
0:44:00.4 Ryan Visniski: That’s exactly right. And you also have to consider the retention rate. You don’t wanna send your child to a school where 50% or 60% of the freshmen move on to sophomore year because what if you’re in that other category where they’re not gonna make it through the four years of the school? Well, then you’re looking at transferring. That’ll often add a semester or two, or what if your child’s just not into college? You don’t wanna force them. There’s a lot of great options as far as trades are concerned and that type of thing. And you can always go back later as an adult with a better appreciation of what your dollar can buy and what you wanna study as opposed to forcing your kid, let’s say a square peg into a round hole. And then they get in and they drop out after a year.
0:44:46.1 Kurt Baker: I agree. Unfortunately, I see that a lot around here ’cause we’re so lawyer, doctor type of professions, and we tend to want our kids to do similar things because it pays well. And you have to be careful because I’ve known some situations where like, “Hey look, I wanna go to Carnegie Hall and play. I don’t wanna really do what the parents did.” And so I think having that conversation up front is important. I think you’re right, and the other thing is the trade schools I think are way undervalued by parents. Because I know plenty of people that you’d be shocked, they’re like, “Oh well, they’re an electrician, they’re a plumber.” I go, “Well, you realize they make three times as much money as you?” [laughter] If they’re good at what they do and they love it, that’s the key. If you love it and you’re good at it, you’re probably gonna do pretty well whatever the profession is as long as you understand how to do it.
0:45:34.3 Ryan Visniski: Absolutely.
0:45:35.4 Kurt Baker: Yeah, so I think that’s critical, and I think that’s part of the screening process where the trade schools… Do you have any recommendations if somebody thinks, “Hey look, maybe I do wanna go to a trade school?” Are there any entrance processes there as well that maybe they should consider?
0:45:50.0 Ryan Visniski: Typically, your district will have a, let’s say, a trade school or… In my school district, I’m at Central Bucks School District in Pennsylvania. They have the Middle Bucks Institute of Technology. You can go and visit. So look into one of those opportunities where they have a night where families can come in, and just walk your kids through the different programs that are there. See what they offer. And what you’ll hear, what I heard repeatedly that night, was how many of these teachers are getting texts or calls from employers saying, “Hey, do you have anybody? Who do you like?” And a lot of these kids are going on to great careers and really doing well. The guy that I talked to in the horticulture program, he said, “Some of these kids are making more than I am two years out of school.”
0:46:36.2 Kurt Baker: Right. No, they’re very well-paying jobs, and I think that a lot of people don’t really understand that it’s not a step down. It’s actually for many cases, a step up. One, lifestyle-wise, if they like it, they’re going to enjoy it more, their life is gonna be much more enjoyable, and they’re gonna be doing something that they like and make a decent living. And you can make a decent living in a lot of these trades, which I think many people don’t understand.
0:46:55.8 Ryan Visniski: And it’s more of a hands-on curriculum, which for some kids works better than sitting and book learning.
0:47:02.1 Kurt Baker: Right, right. So this has really been awesome. Do you wanna kinda wrap this up for us and just kinda walk us through that thing one more time, like how we do all this and how we get started and make sure we get to the right school?
0:47:11.3 Ryan Visniski: Yeah, absolutely. So my biggest piece of advice is just to be realistic, keep your options open, don’t fall in love with one school. And when you go to look at this decision, don’t just look at the academics and the social piece, really consider the financial piece, what the schools are gonna offer you, and be realistic about which schools you can afford. And from that basis, you can either work with somebody like me that can make it easy for you, save you a lot of time, that knows the system inside and out, or you can try to do it yourself. Make a spreadsheet, look at the different schools, go to each of their websites, map out what they offer, map out what’s available, and see where your child will fall in that applicant pool. But whether you do it yourself or whether you work with somebody like me, just keep in mind that the number that they offer you is not the final offer, that there’s a school out there for every child if you wanna go to school. If you don’t want a school, if you wanna go to a trade school, that’s a whole different thing, but you can do that. But there’s a school that’s gonna offer you more money, that’s gonna be affordable for your family, and I recommend that you consider that and make sure you factor that into your decision as opposed to just sending them any place and saying, “Well, we’ll just pay for it and figure it out.”
0:48:33.7 Kurt Baker: Right, yeah. That’s never a good strategy. Well Ryan, this has been awesome. I appreciate it very much. You have been listening to Master Your Finances. Have a wonderful day.
0:48:41.1 ANNOUNCER: That was this week’s episode of Master Your Finances with Kurt Baker, certified financial planner professional. Tune in every Sunday at 9:00 AM to expand your knowledge in building and managing your wealth. Missed an episode? No worries, you can subscribe to a free weekly episode of Master Your Finances to listen to on your favorite podcasting platform, Apple, Spotify, Google Podcasts, whatever. Master Your Finances is underwritten in part by Certified Wealth Management & Investment, and Rider University. Rider offers continuing studies programs for adults who need flexibility. Want to add new skills to your resume? Take a continuing studies course at Rider University.