Tom BottorfFounder, GetCollegeFunding, Dana Point, CA

www.GetCollegeFunding.org

7 Mistakes Families Make When Planning for College ...

but Don't Know Until It's Too Late

Join Tom for his College Planning showWednesdays at noon (CA time)

www.GetCollegeFunding.tv

GetCollegeFunding WELCOMES You

Tom BottorfFounder, GetCollegeFunding, Dana Point, CA

www.GetCollegeFunding.org

7 Mistakes Families Make When Planning for College ...

but Don't Know Until It's Too Late

Join Tom for his College Planning showWednesdays at noon (CA time)

www.GetCollegeFunding.tv

GetCollegeFunding WELCOMES You

blunde

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www.GetCollegeFunding.org

text GCFmobile to 69302

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• Free subscription to GCFmobile• Important Deadlines– SAT/ACT/PSAT– Admissions– Financial Aid Forms

• College News• College Planning Events

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Wednesdays at Noon (CA)

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For Copy of Presentation

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You’ll also receive:Link to Archived Broadcast (A/V)

EFC Calculator Software Downloadand more...

What’s the GOAL?

How ‘bout... Getting DOWN?

65% of the deathsOccur on the way DOWN

College Planning

OUR THEME atGetCollegeFunding

College Planning

OUR THEME atGetCollegeFunding

It’s not just about getting them INTO college...

College Planning

OUR THEME atGetCollegeFunding

It’s not just about getting them INTO college...

It’s about gettin’ ‘em OUT!

Undergraduates

• 4 Years 35.3% – Public: 27.9%– Private (non-profit): 50.2%– Private (profit): 22.1%

• 6 Years 53.1%– Public: 54.1%– Private (non-profit): 64.0%

– Private (profit): 29.1%Source: National Center for Education Statistics (www.nces.ed.gov)

GRADUATION RATES

7 MISTAKES

1.Not Understanding “EFC”2.My EFC is the same at all

colleges3.We make too much for ANY

financial aid4.We should apply EA/ED for a big

edge5.Our scholar student will receive

merit scholarships wherever he/she goes

6.Creating a college list is easy7.We've got it covered

7 MISTAKES

1.Not Understanding “EFC”2.My EFC is the same at all

colleges3.We make too much for ANY

financial aid4.We should apply EA/ED for a big

edge5.Our scholar student will receive

merit scholarships wherever he/she goes

6.Creating a college list is easy7.We've got it covered

Mistake #1:Not Understanding “EFC”

EFC: What It IS and What It Is NOT

EFC IS:• Expected Family Contribution• The means to determine a family’s

legitimate FINANCIAL NEED for college

• Only the STARTING point of determining need-based financial aid eligibility

• Inherently CONFUSING (misleading?) by its very name

EFC: What It IS and What It Is NOT

EFC Is NOT:• A GUARANTEE of what we as a

family will pay for college (with few exceptions) - even though the name IMPLIES otherwise

• A determination of MERIT-based Financial Aid

Not Understanding EFC

2 Typical Phone Calls to GetCollegeFunding from parents

of high school seniorsEVERY March/April

Phone Conversation #1Parent: There MUST be a mistake on

our child’s Financial Aid AwardGetCollegeFunding: What’s your EFC?Parent: EFC? What’s THAT?

Not Understanding EFC

Phone Conversation #2Parent:

There MUST be a mistake on this Financial Aid Award.

We went to Financial Aid Night at our high school in January and learned all about EFC.

Our EFC is $15K and our daughter got accepted to UCLA.

Next year’s cost is $33K.

We thought we were responsible for $15K and “someone else” would be paying the difference.

We just received the Financial Aid Award letter and we received NOTHING but loans!

Not Understanding EFC

Phone Conversation #2Parent:

There MUST be a mistake on this Financial Aid Award.

We went to Financial Aid Night at our high school in January and learned all about EFC.

Our EFC is $15K and our daughter got accepted to UCLA.

Next year’s cost is $33K.

We thought we were responsible for $15K and “someone else” would be paying the difference.

We just received the Financial Aid Award letter and we received NOTHING but loans!

Not Understanding EFC

Phone Conversation #2Parent:

There MUST be a mistake on this Financial Aid Award.

We went to Financial Aid Night at our high school in January and learned all about EFC.

Our EFC is $15K and our daughter got accepted to UCLA.

Next year’s cost is $33K.

We thought we were responsible for $15K and “someone else” would be paying the difference.

We just received the Financial Aid Award letter and we received NOTHING but loans!

Not Understanding EFC

Phone Conversation #2Parent:

There MUST be a mistake on this Financial Aid Award.

We went to Financial Aid Night at our high school in January and learned all about EFC.

Our EFC is $15K and our daughter got accepted to UCLA.

Next year’s cost is $33K.

We thought we were responsible for $15K and “someone else” would be paying the difference.

We just received the Financial Aid Award letter and we received NOTHING but loans!

Not Understanding EFC

Phone Conversation #2Parent:

There MUST be a mistake on this Financial Aid Award.

We went to Financial Aid Night at our high school in January and learned all about EFC.

Our EFC is $15K and our daughter got accepted to UCLA.

Next year’s cost is $33K.

We thought we were responsible for $15K and “someone else” would be paying the difference.

We just received the Financial Aid Award letter and we received NOTHING but loans!

Not Understanding EFC

Phone Conversation #2Parent:

There MUST be a mistake on this Financial Aid Award.

We went to Financial Aid Night at our high school in January and learned all about EFC.

Our EFC is $15K and our daughter got accepted to UCLA.

Next year’s cost is $33K.

We thought we were responsible for $15K and “someone else” would be paying the difference.

We just received the Financial Aid Award letter and we received NOTHING but loans!

Not Understanding EFC

GetCollegeFunding:When would you like to come in to discuss loan options?

Cost Of Attendance (COA)

• Direct Costs– Tuition & Fees– Room & Board

• Indirect Costs– Books– Living Expenses– Transportation

College Costs (COA)

• Average 4-Yr Public College: ~$20K

• CSU System (23 schools):$18K - $25K• UC System (10 schools): $25K -

$33K• Private Schools: $28K - $53K• Highly-Selective Privates: $48K -

$60K+

EFC vs COA

Need-based Financial Aid is basedon a simple formula:

The “Needs-Analysis Formula”

COA (Cost of Attendance) - EFC (Expected Family Contribution)

Financial NEED

EFC vs COA

Need-based Financial Aid is basedon a simple formula:

The “Needs-Analysis Formula”

COA (Cost of Attendance) $55K- EFC (Expected Family Contribution)$20KFinancial NEED $35K

EFC vs COA

Need-based Financial Aid is basedon a simple formula:

The “Needs-Analysis Formula”

COA (Cost of Attendance) $25K- EFC (Expected Family Contribution)$70KFinancial NEED $0K

EFC vs COA

You DO Qualify forNeed-Based Financial Aid IF:

EFC < COAEFC represents the MINIMUM out-of-pocket costs for college, based on “need eligibility” - but by NO means should a family assume this is the “GUARANTEED MINIMUM”.

EFC vs COA

You DON’T Qualify forNeed-Based Financial Aid IF:

EFC > COAIn this case, EFC is nothing more than a GAUGE. The actual number means nothing!It simply indicates “Need-Ineligibility”.

EFC does NOT effect MERIT Aid!

EFC... WHEN?

When should a family learn their EFC?

Before ANY Financial Aid Applications

and ideally BEFORE any ADMISSION Applications are

submitted!

The Sooner, The Better !

7 MISTAKES

1.Not Understanding “EFC”2.My EFC is the same at all

colleges3.We make too much for ANY

financial aid4.We should apply EA/ED for a big

edge5.Our scholar student will receive

merit scholarships wherever he/she goes

6.Creating a college list is easy7.We've got it covered

Mistake #2:My EFC Is The Same At All Colleges

Financial Aid Forms

First of all, THE purpose of

Financial Aid Forms is:

To Calculate Your Family’s EFC

Financial Aid Forms

3 Types of Financial Aid FormsFAFSA

CSS PROFILEINSTITUTIONAL

FAFSA Form

FreeApplication forFederalStudentAid

FAFSA Form

• Administered by ED• Required to qualify for NEED-Based:

Federal AidState AidSome Institutional Aid

• ED provides the SAME EFC to you AND ALL of the colleges applied to• EFC computation based on FM

So When Does EFC Vary?

SO... If ED provides the SAME EFC to you and ALL of the colleges applied to, what do I mean when I say that different colleges compute DIFFERENT EFC’s?

So When Does EFC Vary?

SO... If ED provides the SAME EFC to you and ALL of the colleges applied to, what do I mean when I say that different colleges compute DIFFERENT EFC’s?

This applies primarilyto PRIVATE colleges, and ESPECIALLY to “PROFILE

Colleges”

CSS PROFILE Form

• Administered by College Board• IM Used by ~250 Colleges• Required to qualify for Need-Based Institutional Financial Aid• College Board provides EFC ONLY to the colleges applied to, NOT to you• EFC can vary DRAMATICALLY from college to college! (hmm...)

10 California PROFILE Schools

• Cal Tech• Claremont Colleges

Claremont McKenna, Harvey Mudd,Pitzer, Pomona, Scripps

• Occidental• Santa Clara• Stanford• USC

INSTITUTIONAL Forms

Required by mostPRIVATE colleges

How Is The FAFSA EFC Calculated?

Parent Contribution

Due to Assets

5.64% (max) over APA

Parent Contribution

Due to Assets

5.64% (max) over APA

Student Contribution

Due to Income

50% over IPA

Student Contribution

Due to Income

50% over IPA

Parent Contribution

Due to Income

47% (max)

Parent Contribution

Due to Income

47% (max)Student

ContributionDue to Assets

20%

Student Contribution

Due to Assets

20%

EFC Examples (FM)

TOTAL PARENT INCOME

$50K$100K$150K$250K

EXPECTED FAMILY CONTRIBUTION

$2,407$15,307$30,221$59,448ASSUMPTIONS

4 in Household 1 Student in College

Student Income < $5250 Parent Assets < $50K

No Student Assets Older Parent is 50

An EFC “Nugget”

IF our student has a solid academic record AND our Family’s FAFSA

EFC < $25K

Then we can likely send our child to any one of a number of expensive ($50K+) PRIVATE colleges for LESS money out-of-pocket than that of many PUBLIC colleges.

Another EFC “Nugget”

EFC has FAR MORE significance at PRIVATE colleges as compared to

PUBLICS

EXAMPLEIn CA - you may have a “moderate” EFC and receive NO “free money” from CSU or UC. Expect none UNLESS you qualify for the CalGrant.

7 MISTAKES

1.Not Understanding “EFC”2.My EFC is the same at all

colleges3.We make too much for ANY

financial aid4.We should apply EA/ED for a big

edge5.Our scholar student will receive

merit scholarships wherever he/she goes

6.Creating a college list is easy7.We've got it covered

Mistake #3:We Make Too Much For ANY

Financial Aid

2 Types of Financial Aid

• NEED-Based (EFC < COA)– Family income and assets– Many students that have average grades

and test scores receive need-based financial aid

– Offered by FINANCIAL AID Office

• MERIT-Based (EFC-independent)– Based on achievement/talent/value to school– Many students from affluent families receive

merit-based financial aid– Current trend: INCREASING merit funds– Offered by ADMISSIONS Office

Financial Aid: What’s Included?

~ Parents often equate Financial Aidexclusively to Grants,

but Loans and Federal Work Study programs are a BIG part as well ~

• Need-based Financial Aid includes– Grants (free money/”gift aid”)– Loans (pay it back... with interest)–Work-Study (a job... work for it)

• Merit-based Financial Aid includes– Scholarships (free money, often

renewable)

“We Make Too Much To Qualify...”

When a family says,“We make too much money to qualify for Financial Aid.”

What they’re TRYING to say is,“We make too much money to qualify for any Need-Based Grant Money from the federal government, the state gov’t, or any of the colleges.

“We Make Too Much To Qualify...”

• They’re sometimes wrong about their EFC– Bad “assumptions” (e.g., 6-figure income)– Assets assessed MUCH lower than Income– Many EFC factors BESIDES Income/Assets• Number of students in college• Business assets sometimes NOT assessed• Extenuating (Special) Circumstances

• What about Merit-Based Financial Aid(i.e., University-Based Scholarships?)

NEED-Ineligible: Options

NEED-Ineligible: Options

• Option A: You must have a plan in place to pay for the entire cost of college out-of-pocket... ideally, BEFORE Admissions Applications are submitted

• Option B: Determine if your student is eligible for MERIT-Based Financial Aid– IF Merit-Eligible, seek out those schools you

KNOW will offer your student merit scholarships

• Option C: Vigorously pursue– Tax-Efficient Strategies– Income & Asset Restructuring Strategies

with the goal being to optimize cash flow

NEED-Ineligible: Options

• Option A: You must have a plan in place to pay for the entire cost of college out-of-pocket... ideally, BEFORE Admissions Applications are submitted

• Option B: Determine if your student is eligible for MERIT-Based Financial Aid– IF Merit-Eligible, seek out those schools you

KNOW will offer your student merit scholarships

• Option C: Vigorously pursue– Tax-Efficient Strategies– Income & Asset Restructuring Strategies

with the goal being to optimize cash flow

NEED-Ineligible: Options

• Option A: You must have a plan in place to pay for the entire cost of college out-of-pocket... ideally, BEFORE Admissions Applications are submitted

• Option B: Determine if your student is eligible for MERIT-Based Financial Aid– IF Merit-Eligible, seek out those schools you

KNOW will offer your student merit scholarships

• Option C: Vigorously pursue– Tax-Efficient Strategies– Income & Asset Restructuring Strategies

with the goal being to optimize cash flow

Achieved MERIT (Option B)

MERIT-Based Financial Aid

• Academic: GPA, SAT/ACT, PSAT• Talent: Artistic, Musical, Athletic• Has nothing to do with NEED• Offered by Admissions Office

7 MISTAKES

1.Not Understanding “EFC”2.My EFC is the same at all

colleges3.We make too much for ANY

financial aid4.We should apply EA/ED for a big

edge5.Our scholar student will receive

merit scholarships wherever he/she goes

6.Creating a college list is easy7.We've got it covered

Mistake #4:We Should Apply EA/ED For A Big Edge

Early Rounds 2015 2014 2013Admit Applied % Admit Applied % Admit Applied %

Ivy League

Brown ED 577 2,796 20.64 567 2,847 19.92 551 2,348 23.47Columbia ED 632 3,229 19.57 631 2,995 21.07 594 2,945 20.17Cornell ED 1,215 3,456 35.16 1,176 3,594 32.72 1,249 3,405 36.68Dartmouth ED 444 1,759 25.24 461 1,594 28.92 401 1,550 25.87Penn ED 1,195 4,557 26.22 1,200 3,842 31.23 1,156 3,666 31.53Yale SCEA 761 5,257 14.48 730 5,235 13.94 742 5,557 13.35More Selective Schools

Stanford SCEA 754 5,929 12.72 753 5,566 13.53 689 5,363 12.85MIT EA 772 6,405 12.05 590 5,684 10.38 540 4,681 11.54Chicago EA 1,400 6,960 20.11 1,676 5,855 28.63Duke ED 645 2,287 28.20 602 1,924 31.29Georgetown 1,122 6,654 16.86 1,160 6,105 19.00Northwestern 715 2,127 33.62 618 1,776 34.80J. Hopkins ED 518 1,330 38.95 493 1,155 42.68

Early Admissions Considerations

Early 2015 Overall 2015 Admit Applied % Admit Applied %

Ivy League

Brown ED 577 2,796 20.6 2,692 30,976 8.7Columbia ED 632 3,229 19.6 2,419 34,929 6.9Cornell ED 1,215 3,456 35.2 6,534 36,392 18.0Dartmouth ED 444 1,759 25.2 2,178 22,385 9.7Penn ED 1,195 4,557 26.2 3,880 31,659 12.3Yale SCEA 761 5,257 14.5 2,006 27,282 7.4

Early Admissions Considerations

Tips for Early Admission Applicants

Don’t consider applying Early Action OR Early Decision unless you’re confident that the student is in the top 10-to-20% of the incoming applicant pool

If applying Early Decision, get an “early read” from the Financial Aid Office, UNLESS money is truly NO object

7 MISTAKES

1.Not Understanding “EFC”2.My EFC is the same at all

colleges3.We make too much for ANY

financial aid4.We should apply EA/ED for a big

edge5.Our scholar student will receive

merit scholarships wherever he/she goes

6.Creating a college list is easy7.We've got it covered

Mistake #5:Merit, Merit, Everywhere!

Early Rounds 2015 2014 2013Admit Applied % Admit Applied % Admit Applied %

Ivy League

Brown ED 577 2,796 20.64 567 2,847 19.92 551 2,348 23.47Columbia ED 632 3,229 19.57 631 2,995 21.07 594 2,945 20.17Cornell ED 1,215 3,456 35.16 1,176 3,594 32.72 1,249 3,405 36.68Dartmouth ED 444 1,759 25.24 461 1,594 28.92 401 1,550 25.87Penn ED 1,195 4,557 26.22 1,200 3,842 31.23 1,156 3,666 31.53Yale SCEA 761 5,257 14.48 730 5,235 13.94 742 5,557 13.35More Selective Schools

Stanford SCEA 754 5,929 12.72 753 5,566 13.53 689 5,363 12.85MIT EA 772 6,405 12.05 590 5,684 10.38 540 4,681 11.54Chicago EA 1,400 6,960 20.11 1,676 5,855 28.63Duke ED 645 2,287 28.20 602 1,924 31.29Georgetown 1,122 6,654 16.86 1,160 6,105 19.00Northwestern 715 2,127 33.62 618 1,776 34.80J. Hopkins ED 518 1,330 38.95 493 1,155 42.68

Merit Money - NOT!

Prestige: n (pre-stēzh)Latin-praestigium, meant jugglers' tricks, illusion, deceit, imposture; to blindfold; to darken, obscure, deceive. French- conjuror's trick

Prestige: n (pre-stēzh)Latin-praestigium, meant jugglers' tricks, illusion, deceit, imposture; to blindfold; to darken, obscure, deceive. French- conjuror's trick

BRAND NAME

PARALYSIS

7 MISTAKES

1.Not Understanding “EFC”2.My EFC is the same at all

colleges3.We make too much for ANY

financial aid4.We should apply EA/ED for a big

edge5.Our scholar student will receive

merit scholarships wherever he/she goes

6.Creating a college list is easy7.We've got it covered

Mistake #6:Creating A College List Is Easy

Constructing a REALISTIC College List is THE single most important task AND challenge for families planning for their children’s college

• Excellent FIT for Student

Academic/Social/Spiritual/Political/etc.• AFFORDABILITY for Family

The COLLEGE LIST

3 Most Common Reactions toCollege Counselors’ Picks for Students

1. I’ve never heard of that college !

2. But it’s smaller than my high school !

3. I will earn a lot more $$if I graduate from a“prestigious” school

CAL STATE

UC

65% of the Deathsoccur on the way

DOWN

REMEMBER!

65% of studentsDON’T graduatein 4 years

4-Year Undergraduate Rate

• 65% of students are requiring > 4 years to earn undergraduate degree• Almost 50% still have not graduated after 6 years• Nearly 1/3 freshman DON’T return to the same campus as a sophomore• Average time to degree: >6 years

The REALITY

2 Biggest Factors• Financial Pressure• Poor Fit• Academic disqualification

(42% in CA need remediation)• Cultural/Social

Part of the Problem: Dropouts

Poor Cultural Fit

Conservative Christian Student

Progressive Democrat Student

Poor Cultural Fit

Some Resources For You

7 MISTAKES

1.Not Understanding “EFC”2.My EFC is the same at all

colleges3.We make too much for ANY

financial aid4.We should apply EA/ED for a big

edge5.Our scholar student will receive

merit scholarships wherever he/she goes

6.Creating a college list is easy7.We've got it covered

Mistake #7:We’ve Got It Covered

Higher Education Loans

• Stafford (student)the ONLY “entitlement” loan6.8% !

• PLUS (Parent) - 7.9%• Private (Both)

U PENN

Plan COMPREHENSIVELY

Your Next Step

www.GetCollegeFunding.org

www.GetCollegeFunding.org

Learn Your EFC, PLEASE !

• EFC Calculator–About 20 to 30 minutes for data

entry–FM & Nominal IM

• Ideally, BEFORE the senior year–Sometimes you can reduce your EFC

• Merit Assessment– If your EFC > COA, then seek colleges

that will offer:Merit-Based Financial Aid

text GCFmobile to 69302

College Readiness Report Card

Webinars: Live & Archived

Tom & Lawrene BottorfFounders, GetCollegeFunding, Dana Point, CA

Join Tom for his national College Planning show

Wednesdays at noon (CA time)

www.GetCollegeFunding.tvtom@GetCollegeFunding.org

Thanks for Attending!