College Planner Referral Program

College Financing Under (Parent) Control

Add Value to Your Client Relationships

A Referral System for College Plannerswww.referral.educate4less.com

[email protected]

© 2013 Education Funding Solutions, Inc All Rights Reserved. www.referral.educate4less.com

It did not take long to notice, however, that in our local market - America’s fourth and sixth highest-income counties - many families would not qualify for need-based aid regardless of our efforts. Unfortunately, we also noticed that these same families did not have the required money saved to afford to pay for college and that they would need to finance at least a part of its cost.

EFS began an intensive inspection of the various finance alternatives and found each of them wanting, with some of them being downright deceptive. We concluded that, for eligible families, borrowing at a fixed rate from the equity they have in their homes is often the least expensive way to finance college. One of the most glaring deficiencies in all of the college loan alternatives - and even every other college planning firm’s suggestion of using home equity - was that parents were never informed of what the total, effective cost of college would end up being for each of the different loan types.

That subterfuge (after all, it’s easier to sell someone a product if they don’t really know its cost) ended with the 2004 invention of the edCelerator™ - America’s only application that shows parents what college will ultimately cost and what every other alternative finance option will cost as well. Parents use edCelerator™ to help them analyze all of their college finance alternatives to identify the best one.

WE shine the light on college finance.

About Us

Education Funding Solutions, Inc., (EFS) was founded in 2001 to accommodate parents of college-bound students who have no idea how to navigate America’s complex and counter-intuitive financial aid delivery system. Originally, EFS’s services consisted primarily of maximizing families’ eligibility for need-based financial aid.


Leadership

Education Funding Solutions, Inc., (EFS) was founded by a 30-year veteran of finance and investment planning. Our first “college plan” was actually completed in 1996 at the behest of one of the founder’s wealthiest investment clients who recognized the need for his grandchildren’s collegiate careers to be funded and who further recognized that his children were not on track to fund them.

Undertaking the college planning assignment fifteen years ago led us to the decision to begin offering a sub-speciality of college planning to our investment practice. As word spread that we had become the local experts in college planning, that part of the practice grew to the point where, in 2001, we launched Education Funding Solutions and laser-focused on helping families navigate the maze of financial aid rules and ultimately, to pay less to educate their children. The stock-brokerage, investment advisory and accounting industries do not offer effective college solutions.

In the years since our founding, we’ve noticed that no loan vendor, no government agency and no other college planning firm demonstrated to parents how much financing college ended up actually costing. And to this day, none does. In order for parents to maximize their net worth as they approach retirement, it is essential that they understand the impact that financing a college education (or two or three) will have upon that net worth. By analyzing ALL of parents’ available funding options, and not just the “popular” ones, we and our national network of edCelerator-Certified College Planners help parents make the best choices to ensure a future bright for their children and for themselves.


Concept

You do a fabulous job “coaching kids up” to shine on the SATs and excel academically. You help them identify their best career, the right major and the right college. You are almost single-handedly resposible for their acceptance into their “dream college.” Your professional assistance helped the student receive a generous merit-aid offer. And then Mom or Dad asks,

“How do I pay for this?”

You arrive at your Moment of Truth. You can respond in a number of ways: (a) You can muddle your way through the financial aid maze and the myriad funding alternatives on your own, unprotected by either a financial license or Errors & Omissions insurance; (b) you can send your client back to the Guidance Department to learn how to fill out a 100-question aid application form but to learn nothing about proper college financial planning and the effect improper planning has on retirement; (c) you can refer your valuable client to a local college funding agent who contnues to promulgate the tired, often ineffective, “we’ll get you more financial aid” canard and sells your client’s perfectly good assets to buy new assets on which the college funder earns commissions.

Or you can call us.

If you call us, your client will get the truth about college financial planning - that “qualifying for more financial aid” usually just means getting more government loans. Your valuable client will also get an in-depth analysis of ALL their finance options and the pros and cons of each. Your client will get all this from the convenience of their home and they will know their options, including our guaranteed approach, PRIOR to making a purchase decision. And you will receive a generous referral fee and the goodwill of a family whose college finance problem you just helped solve.


Who Controls How Much Financing College Costs?

1. Stafford Loans: Rate, Fees, Terms at the whim of Congress, annually



1. Stafford Loans:

2. PLUS Loans:

Rate, Fees, Terms at the whim of Congress, annually




1. Stafford Loans:

2. PLUS Loans:

3. 401-k Loans:



Rate by Plan, Terms by IRS (repay within 5 yrs)



1. Stafford Loans:

2. PLUS Loans:

3. 401-k Loans:

4. Private Loans:



Rate by Plan, Terms by IRS

Lender sets Variable Rate, Fees and Terms



1. Stafford Loans:

2. PLUS Loans:

3. 401-k Loans:

4. Private Loans:

5. Heloc Draws:



Rate by Plan, Terms by IRS (5 years or 90 days)

Lender sets Variable Rate, Fees and Terms

Variable Rate fluctuates with Interest Rates



NONE of these options empowers Parents to LOCK IN their cost of financing college.



NONE of these options empowers Parents to LOCK IN their cost of financing college.NONE of these options empowers Parents to predict what college will actually cost.



edCelerator does!™


What if...

1. We showed parents how to have TOTAL CONTROL over their cost of college?


What if...


2. We told Parents how much working with us was GUARANTEED to save them on college?


What if...



3. We avoided “Financial Aid Manipulation” strategies that often, result in just more loans?


What if...



3. We avoided “Financial Aid Manipulation” strategies that often, results in only more loans?

4. We showed Parents how to borrow for college at an FIXED Effective Rate under 2%?


Would YOU be of more Value to your client Family?


Introducing...

ed·Cel·er·a·tor™Pronunciation: \ed-ˈse-lə-ˌrā-tər\

a: one that accelerates: speeds college loan payoff


Introducing...


a: one that accelerates: speeds college loan payoff b: a system that reduces college loan cost; makes college cheaper


Introducing...



c: a system whereby families borrow for college at an effective FIXED RATE under 2%


Introducing...



c: a system whereby families borrow for college at an effective FIXED RATE under 2%

d: a Tool to QUANTIFY the cost of college and illustrate exactly how much the family will save by working with us, something no other college planning firm does.


Step One: Finance College


Step One: Finance CollegeStep Two: “Enhance” Financial Aid


*

* Only if Necessary and Helpful.

Step One: Finance College

edCelerator Funding is Guaranteed to Work.


TM

Step Two: “Enhance” Financial Aid

Often Unnecessary and Pointless.


If “Enhancing Financial Aid Eligibility” will result in nothing but an offer of loans, is it really necessary?

We Show Parents how to Borrow Smarter.

We Provide a Date-Certain Loan Payoff.

We Improve Their Retirement Picture.

We Pay off College and Mortgage Faster.

Save on College, regardless of Financial Aid


Client Family Profile

$100,000 Income

$350,000 Home

$200,000 Mortgage

$200,000 401-k

$53,000 Savings/Investment

College annual post-aid cost: $20,000

Monthly College Budget: $1,000

College is Georgetown. Family received $33,000 in Financial Aid, leaving about $20,000 annually left to finance.


College Finance Options and Cost

1. Current PLUS and Private loan information from www.simpletuition.com (4/14/11).2. 401-k loans are limited to the Lesser of $50k or 50% of the vested Plan balance. 3. 401-k loans are repaid with after-tax (30% tax bracket) dollars, plus 401-k interest.4. Variable-rate, no caps - amounts can change at any time.5. Private loan information is for average Parent credit score.

Payment Method Amount & Duration Effective Cost of College

Cash $10,000, 2x/year $80,000

College Ten-Pay $2,000/month, 10x/year $80,000

401-k Loan $1,904/month, 5 years $114,285

PLUS Program $966/month, 10 years $115,968

PLUS Extended $612/month, 25 years $183,648

NJCLASS Loan $754/month, 15 years $134,640

NJ Class Defer $928/month, 15 years $141,400

Private Loan $960/month, 15 years $156,712


College Finance Options and Cost

edCelerator™ $66,904$1,000/month, 4 years

Payment Method Amount & Duration Effective Cost of College

Cash $10,000, 2x/year $80,000

College Ten-Pay $2,000/month, 10x/year $80,000

401-k Loan $1,904/month, 5 years $114,285

PLUS Program $966/month, 10 years $115,968

PLUS Extended $612/month, 25 years $183,648

NJCLASS Loan $754/month, 15 years $134,640

NJ Class Defer $928/month, 15 years $141,400

Private Loan $960/month, 15 years $156,712

How is this even remotely possible?!


Current Debt Scenario

$200,176 BalancePayment: $1,799/month

Time to Payoff: 13.58 YearsCost to Payoff: $293,237

edCelerator AnalysisTM


College Debt Scenario

Balance: $280,176New Payment: $1,547edCelerator™ Injection: $1,252Cost to Payoff: $369,391Time to Payoff: 11 Years

edCelerator™ Injection = Monthly College Budget +/-

Difference between Old and New Mortgage Payment



“Using Bi-Weekly Payments, you would pay the same amount of interest as refinancing your mortgage at 1.75%.”

College Debt Scenario

Balance: $280,176New Payment: $1,547edCelerator™ Injection: $1,252Cost to Payoff: $360,141Time to Payoff: 10 YearsEffective Interest Rate: 1.75%

Bi-Weekly



= $360,141 - $293,237

= $66,904

Hmm, Not Bad!

Is the Difference Between the Cost to Pay Off the College Mortgage and the Cost to Pay Off the Current Mortgage

The Effective Cost to Finance $80,000 of College


We just saved the Family $49,064 (a 42% discount) relative to their next best finance option (PLUS loans).

The Effective Cost to Finance $80,000 of College

What does it cost the Family to decide how much they can save of college?


Nothing.

Analysis:College Cost Reduction:

Free$49,064

“Mrs. Client, can I refer you to our college finanicial planning expertsand their Guaranteed Finance Plan or would you rather “Wing It” for the $116,000 PLUS cost, about $49,000 more for college than necessary?


If, after receiving their FREE Analysis of college finance options, they elect to move forward and save $49,064 the edCelerator™ software costs $249. $249 to stay on track to save $49,000.

Effective college financial planning analyzes income, assets, cash flow and loan possibilities. Prior to the family filing the CSS Profile, we sheltered $200,000 the family had in money markets. In this case, financial aid asset sheltering made sense.

How Can Georgetown Cost Only $20,000?

Next is our Analysis of the benefit.


Financial Aid Benefit to Sheltering $200,000

• $200,000 x 5.64% (parent asset) = $11,280 financial aid loss• 75% of Georgetown awards are Gift-Aid (free money) = $8,460• $8,460 / $200,000 asset = 4.23% after-tax “return” on strategy• $8,460 x 4 = $33,840 in Free Money Cost Reduction• $200,000 asset earns ~3%, insured and liquid, while sheltered

Total return on sheltering strategy = 7.23% annually

How Does Georgetown Cost Only $20,000?

Strategy makes sense if current asset location does not provide > 7.23% rate of return.


College Finance Strategy Savings: $49,000Financial Aid Strategy Savings: $34,000

Total Savings to Your Clients: $83,000

How Much Did Our Strategies Save?

Working together, we saved your client family $83,000 on College.Does that help answer the question, “How do I pay for this?”


Actually, we saved the family more than $83,000.

How Much Did Our Strategies Save?

Had they not worked with you and EFS, they would NOT have received $8,460 in annual gift aid.Had they not received $8,460 in annual gift aid, they would have had to finance $114,000.

Had they financed $114,000 of net college cost via PLUS, college would have cost them $165,254. Working together, college will cost this family $66,904 above their current mortgage - a savings of $98,350.

Working with us, you helped reduce this family’s effective cost to finance college by 60%!


Working together, we Saved the Family 60% on College...

Analysis:College Savings:

FREE$83,000

And preserved funds that can help finance Retirement.


What if We Did This, too...

Would an Additional Revenue Stream be a bad thing?

Software:College Savings:Referral Fee to You:

$249$83,000

???

* Compensation is variable, based upon College Finance case complexity; contact us for details.Compensation is paid on cases that implement the plan and after FAFSA is filed.College Planner (you) is required to do nothing more than refer us the family.

*


Just set up a video-conference or phone call with your client and one of our college financial planning specialists. We’ll do the rest!

What Do You Need to Do to Get Started?


View our Referral Marketing Website at www.referral.educate4less.com

Contact us [email protected]

We look forward to Partnering with You!


College Planner Referral Program

Education

Transcript of College Planner Referral Program