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529 Accounts for Sending the Kiddos to College · Money In Motion with Klaas Financial

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Speaker 1: Our retirement planning professionals from Class Financial. Love to have
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Speaker 1: you join us anything retirement related, planning related, Love to
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Speaker 1: get you on the airtel for number six oh eight
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Speaker 1: three two one thirteen ten. That's six oh eight three
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Speaker 1: two one thirteen ten. You can learn more about Coss
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Speaker 1: Financial on their website class financial dot com. That's class
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Speaker 1: klaas financial dot com. Great website. To learn more about
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Speaker 1: Class Financial, listen back to this previous shows podcast. There.
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Speaker 1: You can also schedule a complementary conversation right online at
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Speaker 1: Cossfinancial dot com or call the office right here in
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Speaker 1: Madison at six oh eight four four two five six
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Speaker 1: three seven. Don't forget that initial get to know your
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Speaker 1: appointment at Coss Financial. It is complementary to you again
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Speaker 1: their number six oh eight four four two five six
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Speaker 1: three seven and joining this week. Joining us this week
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Speaker 1: from Class Financial. CJ Closs and Nate Briby. CJ. How
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Speaker 1: you doing this morning?
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Speaker 2: I'm doing great, Sean? How are you?
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Speaker 1: I'm doing really really well. Nate, great to hear from you.
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Speaker 1: How you been good morning?
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Speaker 3: John doing good.
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Speaker 1: It's good to talk with both of you, and we're
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Speaker 1: going to talk about a really uh really great topic
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Speaker 1: this week a great tool as well. We're going to
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Speaker 1: talk about five to nine contributions when it comes to,
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Speaker 1: of course understanding for parents and grandparents, understanding that blueprint
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Speaker 1: and all those different strategies when it comes to five
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Speaker 1: to two nines, and then other other things when it
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Speaker 1: comes to helping out with tuition. As mentioned, if you've
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Speaker 1: got questions, whether it's about five to nine contributions or
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Speaker 1: any type of retirement planning related question, love to hear
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Speaker 1: from this morning at six eight three two one thirteen
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Speaker 1: ten At six h eight three two one thirteen ten.
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Speaker 1: This week, of course our chance for you to win
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Speaker 1: a fantastic prize from our friends at Coss Financial. This
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Speaker 1: week they provided a twenty five dollars gift card to
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Speaker 1: Panera with the class quiz question sleek little tip listen
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Speaker 1: close to the program because just about every show, the
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Speaker 1: question and answer to the class quiz question in the
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Speaker 1: week comes up during the show. Little tip on that
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Speaker 1: pay attention, don't forget as well. We'll do that at
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Speaker 1: the end of the program, give you more details on
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Speaker 1: how you can win it. And before we start talking
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Speaker 1: about that that Parents Guide to Undergraduate let's look back
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Speaker 1: at last week's program, CJ get the question and answer
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Speaker 1: to the class quiz question the week as well.
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Speaker 2: Yeah, thanks everyone for for listening. We hope you enjoy
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Speaker 2: these Closs Quiz questions of the week. They're they're a
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Speaker 2: way to get you engaged and give a give away
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Speaker 2: a little prize. But last week's question was was a
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Speaker 2: tru or false question? The question was form adv Inform
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Speaker 2: crs are mandatory public filings for investment advisors and broker
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Speaker 2: dealers registered with the sec or state securities authorities. And
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Speaker 2: is that true or is that false? And and our
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Speaker 2: winner last week answered that's true. So listen again closely
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Speaker 2: this week and you you could win the prize this week.
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Speaker 1: This week, Yeah, a twenty five dollars gift card to
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Speaker 1: Paneras we talked this morning with CJ Closs and A Riby,
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Speaker 1: they love to answer your question at six oh eight
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Speaker 1: three two one thirteen ten. That's six oh eight three
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Speaker 1: two one thirteen ten, gets you on the air. Don't
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Speaker 1: forgot about class financials website class financial dot com. That's
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Speaker 1: k l aa s financial dot com and Nate as
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Speaker 1: we look at kind of that undergraduate blueprint, the parent's
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Speaker 1: guide as parents like my kids. What four thirteen thirteen,
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Speaker 1: I'm thinking, goodness, that done? Yeah the year. What's bad
3:19
Speaker 1: is I have to think of how old the dog
3:20
Speaker 1: is and shatty. Oh boy, I know, I know.
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Speaker 2: If you're wrong, your wife, it's gonna tell you about it.
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Speaker 1: I'll hear all about it. But as I'm looking towards that,
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Speaker 1: like goodness, it's it's I still see him as a
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Speaker 1: little dude. But college is going to be here in
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Speaker 1: no time, and for parents, Nate, we're to even start
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Speaker 1: with that college planning? Sure?
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Speaker 3: Well, first we want to acknowledge that this can be
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Speaker 3: such an emotionally charged decision for families with high social pressure.
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Speaker 3: Parents often see their child's dreams as priceless and may
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Speaker 3: feel guilty if they believe they haven't done everything possible
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Speaker 3: to support them. But hopefully this show will provide some grounding.
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Speaker 3: So first, start with an honest conversation with your spouse.
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Speaker 3: To start the blueprint, ask each other about your own experiences.
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Speaker 3: Was my degree the return on investment I expected? Do
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Speaker 3: you find value in your degree? Did you pay your
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Speaker 3: own way or did your parents help out? How much
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Speaker 3: of your child's education do you want to fund all
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Speaker 3: of it? A quarter or half. Be mindful of how
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Speaker 3: your own experiences can anchor your thoughts and your expectations
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Speaker 3: to your children. If you struggled to pay your own way,
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Speaker 3: you might be over correcting by wanting to pay every
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Speaker 3: cent for your child. Or if you had a full ride,
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Speaker 3: you might have unrealistic expectation for what's available today. You
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Speaker 3: have to get on the same page as a couple
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Speaker 3: before you can help your child.
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Speaker 1: Really good guidance there. It makes a lot of sense.
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Speaker 1: And Nate, then what about you mentioned obviously parents sitting
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Speaker 1: down having this conversation. When do you bring the kiddos in?
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Speaker 1: When do you bring the kids into that conversation?
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Speaker 3: Yeah, we suggest bringing them in with transparency, sit them
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Speaker 3: down and talk about cost, majors, return on those majors,
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Speaker 3: and contributions. The most dangerous phrase in financial excuse me,
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Speaker 3: college planning is don't worry if you get in, we'll
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Speaker 3: figure it out. That is a recipe for a financial
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Speaker 3: hangover that can last decades. You need to be clear
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Speaker 3: we can contribute x amount. Anything beyond that requires scholarships
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Speaker 3: or a very specific plan for a return on investment
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Speaker 3: based on your major. Like we said, we acknowledge there
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Speaker 3: is massive social pressure to send your kids to the
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Speaker 3: best school, regardless of the price tag.
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Speaker 1: But here is the hard truth.
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Speaker 3: We tell our clients, you can get a loan for college,
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Speaker 3: but you can't get a loan for retirement. Prioritizing your
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Speaker 3: child's education by draining your four oh one K or
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Speaker 3: taking on a massive parent plus loan isn't a gift.
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Speaker 3: It's a financial burden you're placing on them when you
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Speaker 3: can't support yourself later on. We want to build a
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Speaker 3: blueprint that graduates the student and protects the parents.
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Speaker 1: Talking this morning, without retirement planning professionals from Class Financial,
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Speaker 1: Nate Briby and CJ. Closs don't think you can learn
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Speaker 1: more about them online Class Financial dot Com. That's Class
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Speaker 1: kl aas Financial dot com and CJ. Once then parents
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Speaker 1: have kind of had that heart to heart with their
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Speaker 1: with their students. Where do they start researching schools without
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Speaker 1: getting overwhelmed?
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Speaker 2: Yeah, that's a million dollar question. You know. Literally, the
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Speaker 2: first place every parent needs to bookmark is the Department
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Speaker 2: of Education's college scorecard. Think of this as like the
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Speaker 2: car fas for colleges. So you know, Nate was just
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Speaker 2: talking there before and I just want to reemphasize it.
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Speaker 2: Some of the most dangerous words we hear parents say.
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Speaker 2: And by the way, this is because they themselves don't
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Speaker 2: understand how the college process works. But they go, I
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Speaker 2: don't know, center, daughter, don't worry. If you get into
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Speaker 2: a great school, we'll figure it out. And by the way,
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Speaker 2: I'm a parent. I have children, one child in college
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Speaker 2: and others nearing it. I get it. This is not
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Speaker 2: an indictment on parents. This is more of a of
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Speaker 2: a warning to you. We would say, don't say that. Instead,
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Speaker 2: educate yourself on figuring out what those costs will be beforehand.
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Speaker 2: And then, more importantly, as we go on through this
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Speaker 2: through the show, we're going to talk about can you
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Speaker 2: afford that? Because it does you know good to say
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Speaker 2: that to your child and then you know they get
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Speaker 2: into I don't know, Notre Dame. Let's say eighty five
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Speaker 2: ninety thousand dollars a year, and you go, wow, that's
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Speaker 2: I never thought little Johnny would get in there, And
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Speaker 2: you go, but I told him we'd figure it out,
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Speaker 2: so we will. And by the way, I just want
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Speaker 2: to be clear the only quote unquote figuring it out,
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Speaker 2: as Nate will be talking about here in a little bit,
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Speaker 2: is you taking on parent plus loans. That's the only
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Speaker 2: figuring it out, because the child for an undergraduate degree
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Speaker 2: can't qualify for more than a few thousand dollars a
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Speaker 2: year in student loans. So it's not like you can go, well,
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Speaker 2: we'll figure it out, because little Johnny will take on
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Speaker 2: student loans and it will be his problem. No no, no, no,
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Speaker 2: no no no, no, that's not right. Little Johnny either
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Speaker 2: doesn't go to that school because you refuse to take
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Speaker 2: on parent plus loans, or you get it for him. Okay,
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Speaker 2: I'm going off down a rabbit trail. I'm gonna bring
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Speaker 2: myself back. Well, you know, we would suggest you do
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Speaker 2: what's called an ROI reality check, a return on investment.
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Speaker 2: You can search by specific majors. And I'm kind of
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Speaker 2: going back to this Department of Education's college scorecard, So
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Speaker 2: when you go to this website, you can search by
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Speaker 2: specific majors to see what graduates are actually earning four
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Speaker 2: years out from their graduation. In fact, as of twenty
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Speaker 2: twenty six, the site even flag schools where graduates earn
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Speaker 2: less than a typical high school grad in that state.
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Speaker 1: So you get the idea.
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Speaker 2: This is a powerful reality check for a seventeen year
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Speaker 2: old choosing a major. The other thing you can do
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Speaker 2: that on that website again it's Department of Education's College Scorecard,
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Speaker 2: is you can look at something called the net price calculator.
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Speaker 2: So every school's sticker price, as we call it, is
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Speaker 2: actually a myth. And this is one of the areas
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Speaker 2: where parents they go, hey, I've heard that what I
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Speaker 2: see isn't even really true. So that's why I'm telling
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Speaker 2: my kids if they get in there, we can figure
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Speaker 2: it out. So we would say, you're right, the sticker
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Speaker 2: price is a myth. But here's the key. The scorecard
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Speaker 2: helps you find the net price calculator for each campus,
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Speaker 2: which gives you an estimate based on your specific income,
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Speaker 2: not the brochure's list price. So we would say you're right, Well,
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Speaker 2: you've heard that the sticker price is a myth. True statement,
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Speaker 2: But that doesn't mean that you just go so we'll
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Speaker 2: figure it out, right. It means find out what it
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Speaker 2: would be based upon your information. This is often, by
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Speaker 2: the way, as everybody just everybody knows why you fill
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Speaker 2: out a FAFSA because they need to determine what your
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Speaker 2: financial need is, and Nate's going to be talking about
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Speaker 2: that in a little bit.
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Speaker 3: Here.
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Speaker 1: Got a great information this morning, as always from our
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Speaker 1: retirement planning professionals from Class Financial CJ. Closs and Nate Briby.
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Speaker 1: Of course, you can learn more about COLSS Financial on
9:47
Speaker 1: their website Cossfinancial dot com that's Coss k l a
9:50
Speaker 1: A S Financial dot com and their telephone number six
9:53
Speaker 1: oh eight four four two five, six three seven. Don't
9:56
Speaker 1: forget no charge for that initial get to know your
9:58
Speaker 1: appointment det Coss Financial will be complementary to you again
10:01
Speaker 1: their number six oh eight four four two five six
10:03
Speaker 1: three seven. Talked about some of those raw numbers. We'll
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Speaker 1: kind of take those numbers and kind of see how
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Speaker 1: they fit in a typical family. We'll get the details
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Speaker 1: from CJ and Nate. We will do that next as
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Speaker 1: Money in Motion with Coss Financial continues right here on
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Speaker 1: thirteen ten. Wuibi talking with our retirement planning professionals CJ.
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Speaker 1: Closs and Nate Bribey. Yes they do come to us
10:22
Speaker 1: from Class Financial online coss Financial dot com that's Coss
10:26
Speaker 1: k l a A S Financial dot com. Great resource.
10:29
Speaker 1: Learn more about COSS Financial. Their separate divisions how they
10:32
Speaker 1: can help you, or if you're an employer, they've got
10:34
Speaker 1: some great options for you there. Also you can schedule
10:37
Speaker 1: right online a complementary conversation right at class financial dot com.
10:41
Speaker 1: Or you can call the office six oh eight four
10:43
Speaker 1: four two five six three seven again no charge for
10:46
Speaker 1: that initial gets to know your appoyment at Loss Financial.
10:48
Speaker 1: It will be complementary to you again their number six
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Speaker 1: O eight four four two five six three seven talking
10:54
Speaker 1: about getting your kiddos ready financially for college and some
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Speaker 1: of some great information, a lot of great data in
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Speaker 1: that previous segment. O'fk. You can always listen back at
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Speaker 1: clausfinancial dot com. But CJ, you had some really good numbers.
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Speaker 1: There is there kind of a way then, or kind
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Speaker 1: of great information as far as that data. Is there
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Speaker 1: a way then for families to kind of figure out
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Speaker 1: how this fits in their specific financial future.
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Speaker 2: Yeah, so I was hinting about this previously, but the
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Speaker 2: answer is absolutely. That's where we move from from the
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Speaker 2: previous kind of solution to this thing we call the
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Speaker 2: crystal ball. So you specialize software like College Aid Pro.
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Speaker 2: Now we have to pay for a subscription to this software.
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Speaker 2: It's fairly intensive. For College Aid pro to gather all
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Speaker 2: this information from all the universities across the country, so
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Speaker 2: they it is a paid subscription, but they provide us
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Speaker 2: with a lot of things. So one would be like
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Speaker 2: the investment Roadmap. This software doesn't just show costs. It
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Speaker 2: compares the total investment against the career outcome. It's the
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Speaker 2: only tool that lets you see side by side how
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Speaker 2: much debt your student might carry based on their specific
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Speaker 2: major versus their expected starting salary. It'll also break out
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Speaker 2: needs based versus merit based aid. This is the often
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Speaker 2: what we call like the Aha moment for most parents.
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Speaker 2: The software tells you if you're a need candidate or
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Speaker 2: a merit candidate. Now we'll talk a little bit more
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Speaker 2: about what those terms mean here in a little bit.
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Speaker 2: But a software like this can change your entire target
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Speaker 2: list of schools for your student. Just cannot suggest it enough.
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Speaker 2: Here would be some great examples if you guys, if
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Speaker 2: our listeners don't hear anything other than what I'm about
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Speaker 2: to tell you, let this sink in. So take a
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Speaker 2: school like Northwestern University. Their total cost of attendance for
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Speaker 2: twenty twenty six is approaching ninety six thousand dollars a year,
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Speaker 2: which could apt add up to nearly four hundred thousand
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Speaker 2: dollars over a four year degree. Obviously, that sounds terrifying, terrifying,
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Speaker 2: But if you are a needs based family, meaning your
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Speaker 2: income and assets qualify you for what they would consider
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Speaker 2: as a financial need, Northwestern is incredibly generous. If you
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Speaker 2: can both get in and you qualify for need. Get this,
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Speaker 2: they might meet up to one hundred percent of your
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Speaker 2: demonstrated need without loans, and for the right family, Northwestern
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Speaker 2: could actually be cheaper than a state school. Okay, now
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Speaker 2: let's flip to another one. If you don't qualify for
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Speaker 2: needs based aid, right, my parents make too much money.
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Speaker 2: We've got too much in liquid assets, too high a
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Speaker 2: net worth, whatever it is. That's why you fill out
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Speaker 2: the FACA. So if you don't qualify for needs based aid,
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Speaker 2: then you can look for merit based powerhouse schools like
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Speaker 2: the University of Alabama. They are the gold standard for
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Speaker 2: GPA driven aid. They have a clear, transparent tier where
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Speaker 2: a higher GPA or test score automatically unlocks massive scholarships.
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Speaker 2: If you're a high achieving student, your parents make a
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Speaker 2: good amount of money for to qualify for any financial aid.
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Speaker 2: Alabama will roll out the red carpet for you. With
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Speaker 2: merit money. You aren't just looking for a good school,
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Speaker 2: You're actually looking for the school that wants your specific
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Speaker 2: financial profile. So think about that.
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Speaker 1: Everybody.
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Speaker 2: One school in Northwestern University huge financial aid, meaning if
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Speaker 2: you can get in and you don't have a lot
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Speaker 2: of money, they'll make up the difference. University of Alabama
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Speaker 2: not so much on the financial aid side of things,
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Speaker 2: but if you're a high GPA student, they will give
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Speaker 2: you a bunch of merit aids. So just cannot suggest enough.
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Speaker 2: Work with an advisor or somebody that has access to
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Speaker 2: a tool like College Aid Pro because it can really
14:42
Speaker 2: help to narrow the list of where your student might
14:44
Speaker 2: want to end up.
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Speaker 1: Really powerful tools, great information as well. Don't forgus we
14:49
Speaker 1: talk with CJ and Nate. You can learn more about
14:51
Speaker 1: them and Class Financial all online, Class Financial dot Com
14:54
Speaker 1: that's Class klaas Financial dot Com and Nate. Once we
14:58
Speaker 1: then have kind of that list of schools, how do
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Speaker 1: parents actually then determine where that check is going and
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Speaker 1: what it's going to look like and kind of how
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Speaker 1: do they figure out ultimately what the big number here
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Speaker 1: that net price is going to be Yep.
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Speaker 3: It all starts with one number, your Student Aid Index
15:14
Speaker 3: or SSAI. Now this used to be called the Expected
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Speaker 3: Family Contribution, but the government realized that name was misleading.
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Speaker 3: People thought it was the only amount.
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Speaker 1: They'd have to pay.
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Speaker 3: What the ESSAI is is actually just an eligibility index.
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Speaker 3: So the formula looks at your income and assets and
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Speaker 3: spits out a number that tells then that tells the
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Speaker 3: government and colleges basically how much buying power they think
15:37
Speaker 3: you have. Think of this as a pre approval number,
15:40
Speaker 3: and if as we slow down, you know, that's kind
15:42
Speaker 3: of the only number that kind of says, hey, this
15:44
Speaker 3: may be your once again, your pre approval number at
15:47
Speaker 3: your buying power. That really tries to put a limit on,
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Speaker 3: you know, flashing a warning side if you get up
15:52
Speaker 3: to schools that are much higher than the cost of attendance.
15:55
Speaker 3: So I would definitely pay attention to that number as
15:57
Speaker 3: the first like red flag, like slow down on cost
16:00
Speaker 3: of attendance if they exceed much of that SAI.
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Speaker 1: Now, oh ahead, go ahead. I was just going to
16:06
Speaker 1: I was going to ask, is if I know there's
16:08
Speaker 1: a lot more to this, Isn't there Nate.
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Speaker 3: Yeah, yep, so p rental income from two years prior,
16:13
Speaker 3: so filling out the fast with this, you know, for
16:15
Speaker 3: this fall, for example, would be based on p rental
16:18
Speaker 3: income from two years prior twenty twenty four obviously, and
16:21
Speaker 3: this by far carries the highest weighting in the formula,
16:26
Speaker 3: along with liquid.
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Speaker 1: Assets, which we'll get into a second.
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Speaker 3: What counts as accountable asset and a non countable asset
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Speaker 3: in a.
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Speaker 1: Little bit here.
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Speaker 3: But so after that SAI is determined, it is subtracted
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Speaker 3: from the cost of attendance of a school, and if
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Speaker 3: there's a balance, that is the amount of financial need
16:41
Speaker 3: you have demonstrated. So once again, cost of attendance minus
16:45
Speaker 3: student aid index equals your demonstrated financial need. If your
16:50
Speaker 3: SAI is higher than the cost of the school, you're
16:52
Speaker 3: likely paying the full sticker price unless you find merit scholarships.
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Speaker 1: So, Nate, let's you mentioned, you know, the accountable assets.
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Speaker 1: Let's kind of get a real world example then of
17:02
Speaker 1: how how those numbers might look.
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Speaker 3: Yep, So let's take a typical Wisconsin family, perhaps married
17:08
Speaker 3: filing joint, two kids making around one hundred and fifty
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Speaker 3: thousand a year, combined with two hundred thousand accountable assets.
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Speaker 3: Their SAI is going to land somewhere around thirty six
17:17
Speaker 3: thousand dollars. Now, if you look at UW Madison for
17:21
Speaker 3: this school year, the in case in state cost of
17:25
Speaker 3: attendance is roughly thirty one thousand to thirty five thousand,
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Speaker 3: depending on the program. Since that family's SAI is higher
17:32
Speaker 3: than the cost of the school's attendance, they shouldn't expect
17:35
Speaker 3: any needs based aid from that school. And my example,
17:38
Speaker 3: there are full pay candidates at Madison. And keep in
17:42
Speaker 3: mind that the thirty six thousand is per student. There's
17:44
Speaker 3: no longer a discount for having two kids in school
17:47
Speaker 3: at once.
17:48
Speaker 1: Okay, note to self, quit jobs soon. All right, we
17:55
Speaker 1: talk about this stuff exactly.
18:00
Speaker 2: That's that's what we're trying to get across that everybody.
18:03
Speaker 1: The big takeaway today is exactly just stale. You know,
18:07
Speaker 1: we've got You've got a lot more actual, legitimate, great
18:10
Speaker 1: information from our retirement planning professionals. I ignore the knucklehead
18:14
Speaker 1: that's joining them each week. Of course, C J. Class
18:17
Speaker 1: and Nate Briby, they are our retirement plant professionals from
18:19
Speaker 1: Class Financial website, Class financial dot com. That's Claus k
18:23
Speaker 1: l a a s Financial dot Com. We'll tha get
18:25
Speaker 1: a little bit more to those accountable assets. We'll so
18:27
Speaker 1: uh get to the class quiz question a week. We'll
18:29
Speaker 1: do all of that. Next has Money in Motion with
18:31
Speaker 1: COSS Financial continues here on thirteen ten wib A talking
18:35
Speaker 1: with CJ. Closs and Nate Briby of Class Financial Online
18:38
Speaker 1: Coss Financial dot com. That's Coss k l a a
18:41
Speaker 1: s Financial dot com and Nate. We just started the
18:44
Speaker 1: conversation aboutcountable assets. Let's talk about that and kind of
18:47
Speaker 1: does everything in the bank then count against you? And
18:51
Speaker 1: what about these these five to two nine plans that
18:53
Speaker 1: I hear so much about.
18:55
Speaker 3: Sure, so yeah, not everything counts against you as far
18:57
Speaker 3: as being accountable asset. Notably your four oh one k
19:01
Speaker 3: iras so retirement accounts right and your home equity are
19:05
Speaker 3: totally ignored by FASTPHA when calculating your federal SAI. And
19:09
Speaker 3: this is a big However, if your student applies to
19:12
Speaker 3: a private school that uses a different formula called the
19:16
Speaker 3: CSS profile, which is currently used by about two hundred
19:20
Speaker 3: to four hundred selective schools, they actually might count your
19:24
Speaker 3: home equity, basically viewing it as a checking account, which
19:27
Speaker 3: is crazy to us. Obviously, separately parent owned five twenty
19:32
Speaker 3: nine s are included as parental assets and only assessed
19:35
Speaker 3: a maximum of five and a half percent, So that's
19:37
Speaker 3: a good thing. Under the current rules, however, assets in
19:40
Speaker 3: a grandparent's name are not countable assets, and the distributions
19:45
Speaker 3: from those grandparent owned five twenty nine plans are no
19:48
Speaker 3: longer counted as student income. Therefore, if you have larger
19:52
Speaker 3: five twenty nine plans, it may make sense to transfer
19:55
Speaker 3: the ownership to a grandparent and remove those assets from
19:58
Speaker 3: the equation.
20:00
Speaker 1: Talking this morning with CJ Closs and eight Briby are
20:03
Speaker 1: retirement planning professionals from Class Financial Online, Class Financial dot Com.
20:07
Speaker 1: That's Class Klaasfinancial dot Com and CJ wants to kind
20:11
Speaker 1: of have that, you know, the data and the math.
20:14
Speaker 1: I'm guessing it's time to start moving forward and progressing along.
20:17
Speaker 1: Where can parents start the actual application process?
20:21
Speaker 2: Yeah, good question. So this is where the blueprint meets
20:24
Speaker 2: the construction site, so to speak, and things tend to
20:27
Speaker 2: move pretty fast. So the first thing parents need to
20:30
Speaker 2: know is that in twenty twenty six, the regular decision timeline,
20:33
Speaker 2: which is you know, applying in January is quickly becoming
20:37
Speaker 2: the leftover round. Most selective schools are now filing fifty
20:41
Speaker 2: percent to seventy percent of their freshman class through early
20:45
Speaker 2: action or early decision. I said filing. They're filling up
20:49
Speaker 2: their freshman class. So if you wait until January to apply,
20:53
Speaker 2: you aren't just competing for a spot, You're actually competing
20:55
Speaker 2: for a few spots that are left. Think of it
20:58
Speaker 2: as a choice between commitment and flexibility. So early decision
21:02
Speaker 2: is a binding contract. If you get in, you are going.
21:06
Speaker 2: It's great for your dream school, but it's a major
21:08
Speaker 2: financial risk because you won't be able to compare financial
21:11
Speaker 2: aid offers from other schools. Whereas early action, this is
21:14
Speaker 2: kind of a sweet spot. You apply early, you hear
21:17
Speaker 2: back early, but it's not a binding commitment. This gives
21:20
Speaker 2: you the leverage to see multiple net price offers side
21:23
Speaker 2: by side in the spring before you actually commit.
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Speaker 1: So what Cjerry you actually filling out? I mean, is
21:29
Speaker 1: it different from every school or what's some of the guidance?
21:31
Speaker 1: So understanding there?
21:33
Speaker 2: Yeah, thankfully, No, I'm sure you know parents who have
21:35
Speaker 2: gone through this have had this experience. But most students
21:38
Speaker 2: will use something called the common app. It's accepted by
21:41
Speaker 2: over a thousand schools, and you fill out the main
21:43
Speaker 2: profile once your activities, your essays, your grades, and then
21:47
Speaker 2: you just plug in the specific supplements for each college.
21:50
Speaker 2: Now here's a pro tip. There is also the Coalition app,
21:54
Speaker 2: which is great for families who want to start building
21:56
Speaker 2: a portfolio as early as ninth grade. Think of that
22:00
Speaker 2: portfolios like what are your extracurriculars, what are you up to?
22:03
Speaker 2: What are your essays? But for most high school seniors,
22:05
Speaker 2: the Common app is now the standard.
22:08
Speaker 1: Really interesting stuff and really really great information go as
22:11
Speaker 1: aspect at Clossfinancial dot Com. That's COSS, klaas Financial dot
22:16
Speaker 1: com and CJ. Obviously, there's mistakes that are made. Oftentimes,
22:19
Speaker 1: what's kind of the biggest one that you see when
22:22
Speaker 1: it comes to parents during this phase.
22:25
Speaker 2: Ooh, overstepping, over stepping. So it's so tempting to want
22:30
Speaker 2: to fix the essay or manage the portal for your child.
22:35
Speaker 2: But in twenty twenty six, admissions officers have become incredibly
22:38
Speaker 2: good at spotting parent written essays. So the parent's job
22:42
Speaker 2: in the blueprint process isn't to be the lead architect,
22:45
Speaker 2: it's to be a project manager. So you know, set
22:49
Speaker 2: like a college meeting, time with your with your student.
22:52
Speaker 2: Don't nag them at the dinner table every night. Did
22:54
Speaker 2: you get that done?
22:55
Speaker 1: Did you do this?
22:56
Speaker 2: What's going on? Set one hour on Sunday or someday
22:59
Speaker 2: of the week to view deadlines and then watch watch
23:02
Speaker 2: the spike. So schools aren't looking for well rounded kids anymore.
23:06
Speaker 2: They're just looking for like what we call well lop
23:09
Speaker 2: sided kids. So if your child is a coder, don't
23:12
Speaker 2: force them to join join like the French Club just
23:14
Speaker 2: for for their resume. Help them lean into what they
23:18
Speaker 2: actually love. That that spike is what often gets the
23:21
Speaker 2: merit scholarships.
23:23
Speaker 1: Fascinating stuff for sure. Talking to CJ Class and a bribe, Yeah,
23:26
Speaker 1: retirement planning professionals from class financial and Nate. Let's bring
23:30
Speaker 1: you back in as these you know, all these thick
23:32
Speaker 1: envelopes starts showing up in the in the mailbox and
23:35
Speaker 1: you got to obviously happy kids, happy parents, a lot
23:38
Speaker 1: of you know, excited and celebration all this stuff and
23:41
Speaker 1: a parent's you know of we're all keeping score. These
23:43
Speaker 1: are kind of reward letters. What are some of the
23:46
Speaker 1: red flags that that we should be watching out for? Here.
23:49
Speaker 3: Yeah, because nothing is easy. There's no standard format for
23:52
Speaker 3: these letters, so it's imperative to read closely. First, look
23:56
Speaker 3: for the biggest number, which is the cost of attendance.
23:59
Speaker 3: That's not just too, that's housing, meal, plans, books, and
24:02
Speaker 3: even travel. If the letter only shows tuition, they're hiding
24:05
Speaker 3: the indirect costs that will hit your bank account later.
24:08
Speaker 3: And then there's the free money. The scholarships are grant.
24:10
Speaker 3: Be sure to read the fine print. Is it renewable?
24:13
Speaker 3: Some schools give a front loaded scholarship, a big chunk
24:16
Speaker 3: for the freshman year that disappears in year two and forward.
24:20
Speaker 3: Is there gpa hook? You know, if that twenty thousand
24:23
Speaker 3: scholarship requires a three point eight GPA to keep it,
24:26
Speaker 3: you need to make sure that they, you know, are
24:28
Speaker 3: in a decent program to keep that GPA up. Otherwise
24:31
Speaker 3: the money is at risk in the future.
24:33
Speaker 1: It's real dangerous. And before we wrap up this week, Nate,
24:36
Speaker 1: I did want to ask you about that loan word.
24:38
Speaker 1: How do parents tell what's a gift and what's that
24:42
Speaker 1: when it comes to making those loans.
24:44
Speaker 3: Yeah, this is a huge deal. Many schools will list
24:47
Speaker 3: a parent plus loan right next to the scholarship, and
24:50
Speaker 3: you know, to make the net price look like zero.
24:52
Speaker 3: But obviously a loan is not an award, it's a loan, okay,
24:55
Speaker 3: So make sure you slow down and then when you
24:57
Speaker 3: do see the L word, understand what type of loan
24:59
Speaker 3: it is. Like CJ mentioned before, who is actually taking
25:02
Speaker 3: out the loan. So the federal direct loans are in
25:04
Speaker 3: the student's name and they are capped per year about
25:07
Speaker 3: fifty five hundred to seventy five hundred per year school,
25:10
Speaker 3: depending on the grade level. Any shortfall is most likely
25:16
Speaker 3: going to be in the student's name, excuse me, would
25:18
Speaker 3: fall in the parent. So any shortfall above the direct
25:20
Speaker 3: loan would fall in the parent, whether it's a federal
25:24
Speaker 3: parent plus loan or a private loan that you have
25:26
Speaker 3: to co set on, that is obviously your debt as
25:28
Speaker 3: a parent. And to put these loan numbers into perspective,
25:31
Speaker 3: an easy rule of thumb is for every ten thousand
25:34
Speaker 3: dollars that you or your student borrows, your monthly payment
25:38
Speaker 3: would be about one hundred dollars okay, amortized over ten years.
25:42
Speaker 3: So if a student graduates with forty thousand in debt,
25:44
Speaker 3: that's about a four hundred dollars a month payment to
25:46
Speaker 3: start off their career. Now, for a parent, if you
25:49
Speaker 3: take out obviously one hundred thousand dollars in parent plus loans,
25:51
Speaker 3: that's one thousand dollars a month coming out of your
25:54
Speaker 3: retirement budget. And believe me, we've seen it here in
25:56
Speaker 3: this office and it is crushing for our retirees. Now,
26:01
Speaker 3: most schools will let you sign up for a payment
26:02
Speaker 3: plan for the amount due each semester as well, so
26:05
Speaker 3: you may not have to pay the full amount up front.
26:08
Speaker 3: One final thought, don't let the brand name of a
26:11
Speaker 3: school distract you from the blueprint. The best school is
26:14
Speaker 3: the one that fits your student and your budget. And
26:16
Speaker 3: remember your child has a whole life of earnings ahead
26:19
Speaker 3: of them. You have a finite window to save for retirement.
26:22
Speaker 3: Continue to build your financial health and don't build it down.
26:25
Speaker 3: Don't burn down your future to do.
26:26
Speaker 1: It well stated that is for sure. Talking this morning
26:29
Speaker 1: with Nate Briby and CJ. Closs, our retirement planning professionals
26:32
Speaker 1: from Class Financial, hope you have a chance to head
26:34
Speaker 1: on over to the website Class financial dot com. That's
26:37
Speaker 1: Coss Klaas Financial dot com if you haven't done that yet,
26:40
Speaker 1: head on over there right now learn more about the team. Also,
26:43
Speaker 1: you can, of course head to the phone give them
26:45
Speaker 1: a call six so eight four four two five six
26:47
Speaker 1: three seven. No charge for that initial gets to know
26:49
Speaker 1: your appointment tech Coss Financial. It will be complimentary to
26:52
Speaker 1: you speaking. You have the number. Time now for the
26:54
Speaker 1: class quiz question the week. It works like this. In
26:55
Speaker 1: just a moment, I'll ask you the class quiz question
26:57
Speaker 1: of the week. You will then have thirty minutes from
26:59
Speaker 1: the inter Today program to call the Class Financial Office
27:01
Speaker 1: right here in Madison at six oh eight four four
27:04
Speaker 1: two five six three seven. If you are the first
27:06
Speaker 1: call with correct answer, you will win this week's prize,
27:08
Speaker 1: which is say twenty five dollars gift card to Panera.
27:10
Speaker 1: This week's class quiz question weak. Is this Near the
27:13
Speaker 1: beginning of today's show, Nate told us quote, you can
27:16
Speaker 1: get a loan for college, but you can't get a
27:19
Speaker 1: loan for blank. What is the answer to that blank?
27:24
Speaker 1: Telephe number six oh eight four four two five, six
27:26
Speaker 1: three seven. First gart correct answer win this week's prize.
27:29
Speaker 1: Don't forget as well. That's Class Financials Office right here
27:31
Speaker 1: in Madison, that number six oh eight four four two, five, six,
27:35
Speaker 1: three seven CJ Nate. It's always great chatting with both
27:38
Speaker 1: of you guys. You enjoy this great day. Thanks Sean,
27:41
Speaker 1: Thanks Sean Tire Take care guys. News comes your way
27:43
Speaker 1: next here on thirteen ten wu ib A