By Kevin Kelley
According to the College Board, in-state tuition and fees at public four-year universities in America average $8,244 in 2011-12, up 8.3 percent from the year before. For private, nonprofit four-year colleges, the average annual tuition was $28,500, an increase of 4.5 percent from the previous year.
It’s not surprising, then, that many parents worry about how to pay for their children’s college education.
The good news is that most students do not pay the published tuition fees. About two-thirds of full-time students pay for college with the assistance of grant money, according to the College Board, and many who don’t receive federal tax credits and deductions to help cover expenses. Last year, undergraduate students received an average of around $12,500 in financial aid.
But it’s important for parents to plan ahead to obtain the maximum amount of financial aid, according to Jim Eastwood, a certified financial planner from Westlake.
College financial planning was such a big part of his clients’ needs that Eastwood formed a company called College Bound Cash to focus solely on this topic. He now spends a quarter of his time on college financing.
Eastwood, a 1980 graduate of Ohio University, will present a free workshop on college planning from 7 to 8:30 Wednesday night at Westlake Porter Public Library, 27333 Center Ridge Road. He plans an additional series of workshops in the spring.
Parents need to manage their assets in the right way to qualify for the best grants and scholarships, said Eastwood, who graduated with a degree in creative writing and later got into financial planning.
“If people take a dollar and put it in the wrong place, they could lose a dollar in aid,” he told West Life.
For example, 529 plans, tax-advantaged investment plans designed to pay for higher education expenses, are considered parental assets by colleges and can result in a reduction of financial aid, Eastwood said. But 529 plans can be good vehicles if controlled by a student’s grandparents, he added. Eastwood also advises against placing financial assets in the name of the student.
A key to obtaining financial aid is submission of the Free Application for Federal Student Aid (FAFSA), a form with more than 100 questions about the family’s income and assets. Scholarships, grants and work-study programs are awarded based on the form, which is submitted to the U.S. Department of Education and forwarded to the colleges to which a student is accepted. Eastwood said he helps families complete the FAFSA in a way that maximizes the amount of aid a student can get.
Eastwood suggests that parents fill out the form as early as possible – January of the student’s junior year in high school.
Very few families have financial circumstances under which they won’t receive any financial aid, said Eastwood, whose youngest of two daughters in now a junior in college.
“You don’t have to be destitute to qualify for need-based aid,” he said.
Eastwood said he’s seen cases in which a student is accepted to a college with a $40,000 annual tuition bill but the parents only pay a quarter of that thanks to the financial aid package.
Thanks to smart financial aid planning, many parent are able to send their children to expensive private college for less than the in-state cost of a public school, he said.
Once accepted, a student can negotiate with the university for more financial help, especially if another college has offered a larger aid package, Eastwood said.
Funding a child’s college education is a process, Eastwood said, and parents and students need to be aggressive in the pursuit of grant and scholarship money. Once enrolled in college, students should continue to hunt for financial aid, as many academic departments offer annual academic scholarships, he added.
A growing number of writers have recently questioned the value of a four-year college degree. They cite the growing number of debt-ridden graduates unable to obtain good-paying jobs.
Eastwood, who also helps his client students find the best college match, believes a college education is most valuable for students who have decided on a clear career path.
Eastwood, who works with a New York-based company called Cash College Planning, offers parents and students a free initial consultation. If hired by parents, Eastwood guarantees to refund his fee if it’s more than the amount a student is offered.