Episode 221: Scholarships and Financial Planning for College with Ann Garcia, CFP®

Want to make college more affordable? Listen to this episode with Ann Garcia, CFP® as she explores scholarship funding for college. Discover different scholarship types, application strategies, and the importance of early planning to minimize debt. Make sure you catch these tips to help set up your child's financial future. 

Listen and Learn:

• Explore three main scholarship types to help reduce college costs
• Helpful tips to research colleges and find scholarship opportunities
• How to look for local scholarships to reduce the rising costs of college
• Get ahead of rising tuition fees by using 529 plans

Resources:

• Purchase Ann’s book
• Check out Ann’s website recommendations: College Data and College Navigator.
• Check out the FAFSA resource page
• Check out’s Ann’s FAFSA resource page
• Read: ‘Running Out of Road’ for FAFSA Completion
• Visit the CSS Profile
• Discover scholarship directories here and here
• Ann Garcia has been featured on three past Women’s Money Wisdom episodes
  • Episode 170: The Case for 529 Plans for College Savings with Ann Garcia
  • Episode 132: Paying for College with Ann Garcia
  • Episode 86: Demystifying the FAFSA Form with Ann Garcia.

Links are being provided for information purposes only. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Pearl Planning cannot guarantee that the information herein is accurate, complete, or timely. Pearl Planning makes no warranties with regard to such information or results obtained by its use and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation. Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. Pearl Planning financial advisors do not render advice on tax matters. You should discuss any tax matters with the appropriate professional.

Transcript

Melissa Joy: 0:01

Welcome to the Women's Money Wisdom Podcast. I'm Melissa Joy, a certified financial planner and the founder of Pearl Planning. My goal is to help you streamline and organize your finances, navigate big money decisions with confidence and be strategic in order to grow your wealth. As a woman, you work hard for your money and I'm here to help you make the most of it. Now let's get into the show. How do you plan for the best outcomes when it comes to scholarships and funding for college? That's going to be our topic today, and I am so excited to have return guest Anne Garcia. Anne's a certified financial planner. She literally wrote the book how to Pay for College and she runs the College Financial Plan Masterclass, and your episodes are always so popular.

Melissa Joy: 0:54

Welcome back to the podcast. Thank you so much for having me. Well, we're celebrating 529 day, 529 week this week, and that, of course, brings a lot of attention to the reality of college. You know anticipating the costs of college, and we have had done other episodes on the FAFSA and 529s and we'll make sure to link to those in the show notes. But today we wanted to talk about something entirely different how to get scholarship funding in college.

Ann Garcia: 1:25

Right, let's get other people's money besides just our own.

Melissa Joy: 1:32

And at the end of the episode we're also going to include some updates on the FAFSA and provide some details there. But let's get right to it. Let's talk about. There's a lot of myths out there. Do scholarships even exist and tell us how many are out there there?

Ann Garcia: 1:44

Do scholarships even exist and tell us you know how many are out there. Scholarships absolutely exist and in fact, the good news is every student is eligible for scholarships. You know more good news is every college offers scholarships. Now the challenge for you as a family looking for scholarships is that not every college offers scholarships to every student. So when scholarships are important, it's important to figure out what you're eligible for and then apply to schools that offer those types of scholarships. So scholarships largely fall into three different categories. There is institutional need-based aid, and that is financial aid that covers the difference between a family's ability to pay, as calculated by the FAFSA, and the cost of attendance at a college, and some colleges will step in and fill that gap with grants and scholarships.

Ann Garcia: 2:33

The second type of scholarship is institutional merit scholarships. Now, these are scholarships that colleges offer to attract the kind of students that they want to enroll. We often think of athletic scholarships as merit scholarships, but really it's the mathletes that clean up, you know, students with good grades and often good test scores, despite us being in this test optional world. The third type of scholarships is outside scholarships, and those are scholarships that are offered by anyone other than the college. So Rotary offers scholarships. Your high school's college and career center will have loads and loads of scholarships that you can apply for. There are big databases out there, like the College Board and FastWeb, that allow you to search for outside scholarships. So those are really the three types of scholarships. It's important for families to know that colleges typically offer either financial aid on the basis of need or scholarships on the basis of merit. Very few offer both and, for example, the most selective colleges the Ivy League, Stanford and whatnot only offer scholarships on the basis of need, not on the basis of merit.

Melissa Joy: 3:46

Interesting. So then, where are the tools or resources? Let's talk about two things when are they? And then let's talk about strategy and how to get prepared as a family for this.

Ann Garcia: 3:59

Yeah, absolutely so.

Ann Garcia: 4:01

The best starting point for a family is the federal student aid website, studentaidgov, and they have a tool on there called the student aid estimator, and you can type your information into the student aid estimator and it will give you an estimate of a number called your student aid index. Now this used to be called the expected family contribution under the old FAFSA formula. It's been renamed the student aid index, in part because families expected that their expected family contribution was what they would be expected to contribute to college. And in fact, what the FAFSA does is give schools a consistent set of financial data so that they can evaluate all students on a consistent set of metrics. It does not obligate them to provide need-based financial aid. That's an aside. The student aid index, or that student aid estimator, will give you, like I said, an estimate of your student aid index. That is the number that the FAFSA calculates as your ability to pay for college. Now, if that number is less than the cost of college, that means you're eligible for need-based aid. Okay, of course, there are situations where you're eligible for need-based aid some places and not others. For example, a family with a student aid index of $35,000 is not eligible for need-based aid at public schools, which generally costs less than that but would be eligible at private schools.

Ann Garcia: 5:20

Okay, so that's your first starting point. Let's say you do determine that you are eligible for need-based aid. A good next step is, as your student becomes interested in colleges, do each college's net price calculator. So every college is required to have a tool on its website called a net price calculator and you can type your info into the net price calculator website called a net price calculator and you can type your info into the net price calculator and it'll tell you what students like you pay to attend that college in the current year. This is not a guarantee of scholarships, but it's a pretty good picture of how generous, relatively speaking, the college is with need-based financial aid. Some colleges will also ask questions about academic credentials, gpa test scores, things like that, and may tell you that you're likely to be eligible for merit scholarships if they offer them.

Melissa Joy: 6:15

Is this like? The financial aid department is the one that's giving you this information? Correct, that's?

Ann Garcia: 6:19

information that generally comes from the financial aid department. Some schools include merit information as well. It's really up to them, but every school is required to have a net price calculator on its website. So that's a general tool to figure out am I likely to be eligible for need-based aid, and then the next step being what type of package am I likely to get at a specific school. There are a couple of really good websites out there, too, that have information about a wider range of scholarships and what families actually pay. And here's the thing as much as we talk about the price of college going up the list price of college you know Stanford increased their prices by 7% this year. On average, prices go up by 6% every year. The net price of college, which is what families actually pay, has remained flat, adjusted for inflation, since the financial crisis of 2008, 2009.

Ann Garcia: 7:16

So that is to say, there are loads and loads of scholarships out there, and you will be able to find schools that will offer scholarships to your student. So a couple of great websites are College Data and College Navigator. College Data is just collegedatacom. College Navigator just search College Navigator on Google, because that is not its URL. Both of those websites will tell you what kind of merit scholarships that students got, and what percentage of students who did not have financial merit scholarships that students got, and what percentage of students who did not have financial need got a merit scholarship and what the average amount of that was as well. So if you are looking for so that's a search by college. Exactly, you search by college. Yep, okay, so that's a great. You know, those are a couple of great tools for families who are looking for colleges that offer merit scholarships.

Melissa Joy: 8:05

So that might be a good tool to use during the decision process, not during the process where you've already sent in your check and you know where you're going.

Ann Garcia: 8:12

Exactly exactly. All of these tools are best used before you get deep into the application process for your child, because if you can help your student understand what their budget is for college, you will find good choices that fit your budget. There are almost 5,000 different colleges out there. Somebody wants your kid and chances are good that more than one of them wants your kid.

Melissa Joy: 8:40

Well, that's very helpful and I should say you know we're talking in most cases to parents listening to this episode, but you might want to bring your kid in the car and have you know the drive to school. Be listening to this podcast so that you guys can have a discussion amongst yourselves about, like, family expectations and make sure that you're setting expectations and growing that conversation over time.

Ann Garcia: 9:06

Absolutely, absolutely. And I would say too, on the subject of kids and merit scholarships you did not have to have a 4.6 GPA and a 1500 plus SAT to get a merit scholarship. I mean, my son had about a 3.5 GPA in high school and he got a merit scholarship because he was a good student relative to the population at the school that he applied to.

Melissa Joy: 9:31

Well then, what are some of the factors that they're looking at? Or what are you know like, just anecdotally, what did you talk with your kids about? And then do they need to be proactive, or is it kind of just like the school's like, here you go, yeah proactive, or is it kind of just like the schools?

Ann Garcia: 9:47

like here you go. Yeah well, I think that you know our we talked a lot about college and college costs in my household and you know, part of it was driven by me meeting clients who had these just ridiculous student loan debt balances and I really wanted to make sure that that wasn't where my kids ended up. I mean, to me education should be about opening doors, and when you get in over your head with student loans, education closes doors. You may find yourself in a situation where you can't afford to pay rent on your own, so you are back at home living with your parents because that's your only choice, and then your career options are limited to, you know, the jobs that are in their community and you know, parents live in San Jose or Boston.

Melissa Joy: 10:33

Right, that makes a lot of sense.

Ann Garcia: 10:37

So you know. So we definitely, you know, we definitely talked a lot about the cost of college in my household. I think when kids are in middle school, that's a great time to start introducing the notion of the cost of college and, in particular, college is important to us. College is expensive. We've been saving so that you can go and so that you'll have good choices, but those choices might not be unlimited.

Ann Garcia: 10:59

Okay, I like that a lot, a good way to introduce that. And I think, too, you'll find, when you have a middle schooler, that they have friends who have siblings who are applying to college at that point, and that's a great prompt for talking about the difference in costs between different colleges. I'm in Oregon, so we have kids who apply to U of O and Gonzaga and that's a great opportunity to talk about the difference in costs between the two and kids not being super in tune to the difference of, you know, when you get into five and six digit numbers, you know we talked about it as the difference between, you know, having a car and not having a car. Right, right, absolutely. Or are family taking a vacation every year or not taking a vacation.

Melissa Joy: 11:49

Well, so we've covered kind of what the government does in a way. We haven't gotten deep, deep into student loans, but the government processes the FAFSA, they have the student aid estimator and the student aid index. The school, the institution, is offering both need-based as well as, in some cases, merit scholarships or information. Important reminder that I know you always say, anne it's very few people appeal for more student aid when they get their original finding. But what are the opportunities if you did decide to have an additional conversation?

Ann Garcia: 12:27

Yeah, so appealing a financial aid award can be a great way to get a little bit more money. It's typically not you got nothing and now they're giving you $50,000 a year, but something like 60% of financial aid appeals are successful, so that's almost two thirds. So why not go for it? And my website, howtopayforcollegecom, has some strategies for doing a financial aid appeal. A lot of how you do it depends on what kind of award you've gotten, whether it's on the basis of need or on the basis of merit.

Melissa Joy: 13:01

Well, I can't recommend the website and the book enough, so we'll make sure again. Here's a reminder that there's more details out there and it's really written that book. But now let's talk about the other outside scholarships that have a whole. You know they're not being guided by the institution. It's not these big endowments, they have their own world. Tell me about that part of the world.

Ann Garcia: 13:24

Yeah. So I think first and foremost, the thing to keep in mind about outside scholarships is they will generally be less generous than institutional scholarships.

Ann Garcia: 13:34

Your typical institutional scholarship is a five-digit number. Your typical outside scholarship a very generous outside scholarship is a four-digit number. Okay, Keep in mind that outside scholarships can maybe be the thing that makes it so you don't have to take out a student loan, or the thing that brings a college that's just outside your family's budget to within your family budget. It is not the tool that makes an $80,000 college work on a $10,000 budget Right.

Melissa Joy: 14:03

That makes sense For the vast majority of students.

Ann Garcia: 14:05

Of course, there are always exceptions to that, and I think the best place to look for outside scholarships is close to home. Students love to go to the College Board website or FastWeb because they love to do everything online, and those are great resources. There are tons and tons of scholarships there, but here's the thing there are tons and tons of applicants there. If you go to your high school's college and career center, you will find scholarships that are only open to students at your high school or in your community or a subset of your high school. I mean my kid's high school had a scholarship for the tennis team.

Ann Garcia: 14:41

There's like 10 people on the tennis team, one of them's going to get it.

Melissa Joy: 14:44

That's great yeah.

Ann Garcia: 14:45

So start your search close to home. My daughter found a terrific outside scholarship that her high school computer science teacher recommended that she applied to, and she got $5,000 a year for four years, plus $1,000 every year for technology, plus a corporate mentor who helped her find a summer internship that led to a full-time job offer when she graduated. So there are great outside scholarships out there, but again, there are tools that will close a small gap by and large, rather than a large one. Also, a lot of outside scholarships are for one year, and so you may have very generous scholarships for your first year of college and then, going forward, you're stuck footing the bill for the rest of it.

Melissa Joy: 15:27

Do you kind of just aim for that, whatever you get, and that summer between high school and college is what you're stuck with? Or are there any people that like kind of play that game every year looking for more?

Ann Garcia: 15:40

There are always more scholarships that you can apply for.

Ann Garcia: 15:43

And you know, once you are enrolled somewhere, oftentimes there are specific scholarships within that college, not just ones that you apply for as an applicant. But you know, maybe the business department has scholarships for students in the business major. Well, you might have to be a junior to be a business major, so there may be an opportunity for that scholarship to come up later in your college years. And there are scholarships there are true outside scholarships that you can apply for on an ongoing basis. There are also many that you can start applying for as a freshman or a sophomore in high school. That can help build up your budget of scholarships. These outside scholarships typically have an application that requires an essay and various and sundry other things. So if there are some of those that you can knock out as a freshman or a sophomore or even as a junior, that's one less thing on your to-do list senior year, because applying for college's senior year is a busy, busy job, oh yeah, you know when my kids were applying my daughter applied to.

Ann Garcia: 16:43

She applied to 10 schools. Two of them were public schools, eight were private and she had 24 essays that she had to write just for those applications and I feel like, relative to the population, she almost applied to a small number of schools. So that senior year is a busy, busy time. So if you can be researching those outside scholarships and applying to them ahead of time, you'll be doing yourself a big favor.

Melissa Joy: 17:10

And I know in some organizations you know the Girl Scouts. If your kid has continued to be involved, you can kind of see what's coming because they communicate in their newsletters to everyone. Or I have kids in 4-H and I've seen you know the emails about scholarships or you could get funding for this or that.

Ann Garcia: 17:32

So kind of being cognizant and keeping your head up and proactive looking around definitely makes sense, yeah, head up and proactive looking around definitely makes sense, yeah, all those activities that you participate in. Be diligent, like you said, melissa. Be proactive about looking for what they offer and seeing, because that may be the kind of thing where if your kid says I'm not sure I want to keep doing this, maybe there's a good reason to keep pursuing it through high school to be eligible for a scholarship and scholarships can come from interesting places. I mean, you're a Michigan alum, so is my husband. We were visiting our son in Tucson one time and went to watch the Michigan game with the local Michigan alumni group. Every event they have, they collect money for a scholarship fund, and the scholarship fund had gotten quite large because no one from Tucson had gone to Michigan in several years.

Melissa Joy: 18:21

Well, I was from Kansas so we were also. There were like 10, you know, 10 of us in the school at a time that were from the state. So I get that you've got to keep your ears out and really you know, I think that there's no guarantees, but it goes more to people who are asking. So I'm actually in the process with University of Michigan I know many of our listeners are likely to be Michigan alums but of setting up a scholarship for a client in memory of a loved one with a specific organization on campus. So it wouldn't be academically associated, it's for a participant in their glee club actually, and so you know that would not be probably predestined from assigned when they are high school seniors. It would be something that you would be eligible for in future years, but I anticipate that talking to guidance counselors in the financial aid office would be a great way to connect you and match you with these sorts of opportunities, absolutely.

Ann Garcia: 19:18

Absolutely, and you know and here's the thing you know by and large, outside scholarships are the scholarships that you have to apply for. Most of the institutional scholarships are granted automatically, just on the basis of reviewing your application and your FAFSA and your CSS profile. If needed, there are often on you know. Within colleges, though, it's always a good idea to look at their scholarship website and see if anything else requires an application, just so you don't miss those deadlines. Oftentimes, too, public colleges will have will require you to apply early action to be considered for some of their biggest scholarships. Now, early action is a non-binding early application to a college, unlike early decision, which is a binding application.

Melissa Joy: 20:06

Got it. So then I know I sometimes have conversations with people and they say, well, I'm not sure how much I want to save for my kids for college, because maybe they'll be getting scholarships or maybe they won't go to college. We've talked about both. What is your perspective? Because there definitely are ways to get school finance, but I also haven't ran into many people who were disappointed that they ended up saving too much. So what's the company line? When it comes to balancing the needs of savings? We often you and I both, I know and like 529 plans versus hoping for the best. Yeah.

Ann Garcia: 20:43

So, like you, I've never met anyone who regretted saving for college for their kids. I think the way to think about savings is more savings gives you more choices. Savings is more savings gives you more choices. There are a very small number of colleges that offer full scholarships. A very small percentage of students get full scholarships to their colleges. Even if you get a full tuition scholarship, chances are your student still needs to go and live on campus and so you're responsible for room and board. Now there are loads of free pathways through college.

Ann Garcia: 21:17

My son has a friend who got her degree for $0. She did two years of free community college and then finished her degree online at Arizona State because she worked for Starbucks and Starbucks has a tuition partnership with Arizona State. Lots and lots of companies do things like that. So, absolutely, if you don't save for college, that doesn't mean that your kid isn't going to college. That just means you might need to be a little creative and looking at how they're going to go for it. Savings creates opportunities, for sure, and creates choices. So I think the more you're able to save, the more choices your child is going to have, and I think, as parents, that's what we really want for our kids is a set of good choices. I know my own experience was. You know, my daughter had a full tuition scholarship to University of Oregon and for a lot of reasons it wasn't a good fit for her. Had we not saved, that would have been her only choice. But because we had saved she was able to go to her top choice college, which gave her a.

Melissa Joy: 22:19

And there are always alternatives, whether reclaiming that money, which may have some tax costs or probably will, as well as penalty, but isn't completely punitive as well as using those funds in the future, whether it's for additional training or education and or a gift to children to fund other things or Roth IRA contributions, are now kind of a door that may be open.

Ann Garcia: 22:43

Yeah, that's the thing. I think it's helpful to think of your 529 less as a college savings account and more as a launch fund for your child, because, thanks to Secure 2.0, you can roll $35,000 over to a Roth IRA. If they don't ultimately go to college, if they go to college but don't need everything you've saved, that money is available for grad school. That money is available to be transferred to siblings accounts. It's something that can be saved and passed on to the next generation scholarship. You don't pay the 10% penalty on those distributions and chances are their income's really low, so you could basically take the money out tax-free if you manage it during their college years. If you happen to have an excess, yep absolutely Well.

Melissa Joy: 23:36

we're recording this. In 2024, and this is a unique year there's a whole new financial aid, fafsa form, and it hasn't exactly been the smoothest rollout. So can you give us just a little bit of an update as to what people need to be familiar with and changes? Now, this is high level. I know you've done some writing and work and there's stuff out there. I'll include some links to what's changed, but what should people be familiar with if they'd really boned up and educated themselves prior to this year?

Ann Garcia: 24:05

Yeah. So if you are going to be filing the FAFSA in, you know, going forward, the formula is different now than it was a couple years ago. This was, like you said, the first year of this formula and plenty has been written about all that went wrong with it. But let's talk about what's good because. Let's talk about what went right with the changes, Because I think, ultimately, the new FAFSA is very, very beneficial for families, just because it so dramatically simplifies the process of filing for financial aid. Once it really works as intended, there's some big changes in the formula. This was called FAFSA simplification, and so loads and loads of questions got removed.

Ann Garcia: 24:47

One of the biggest changes is how the FAFSA looks at your income. It used to be that you'd had to take your tax return, plus your W-2s, plus everything else, every other conceivable source of income. You would transfer over your tax return data and then add back a whole bunch of income items your 401k contributions, your HSA contributions, your IRA contributions. Now the FAFSA only looks at your tax return. So instead of having to go back and put in all this other info, it just takes your tax return data, your adjusted gross income, adds back your tax liability, adds back untaxed income. That's on your tax return and that's it.

Ann Garcia: 25:25

So families who want to reduce their student aid index the more you contribute pre-tax to your company's retirement plan, the better off you'll be on the FAFSA, because that will actually reduce your adjusted gross income and those contributions no longer have to get added back. Now if you make IRA contributions outside of your employer 401k, if you're self-employed, those contributions do continue to be added back because they're reported on your tax return. But income that is not reported on your tax return is no longer included in the FAFSA formula. So that's a really nice benefit for families who you know. In the past it was always like well, saving for retirement was bad for the FAFSA. So now saving for retirement is good for the FAFSA. Another big change is students who have other family members who save in a 529 no longer have to report those distributions. So if grandma and grandpa have a 529, in the old days if you took money out, that got reported on your FAFSA. That is no longer the case.

Melissa Joy: 26:35

So can I just pause there. So in the past I've said it's still good, like with the old rules. It was still good to have it in grandma and grandpa's name if everybody's on the same page about how it's going to be handled. But then the first year after distribution it would be reportable. But now it's never reportable, correct?

Ann Garcia: 26:51

It's never reportable. So it used to be that if you had those dollars, you wanted to wait until spring of sophomore year to start taking them out. Now you can use them at any point.

Melissa Joy: 27:02

Okay, good to know, and it's not reportable.

Ann Garcia: 27:05

Now one of the big changes that happened that's been quite a bit less popular is the old formula was called the expected family contribution. The new formula is called the student aid index. So there's a big difference between family and student in a lot of cases, because a family often had multiple college students, and so your expected family contribution under the old formula was divided by the number of college students in your household. If you had two students in college, your expected family contribution was divided in half for each student. Now your student aid index is just for your students. So families with multiple students in college will not get that sibling discount that they used to. Now that means college is going to cost a lot more.

Ann Garcia: 27:50

I think there's one thing about this that is not terrible, which is that I come across families all the time who have two kids. The second kid got a great scholarship going into college and suddenly junior year college doubled in cost. Oh right, Because that sibling graduated and that was an unexpected additional cost that the student incurred. So at least you won't have that negative surprise. Yeah, the downside is it costs more. There is one advantage to this change, which is that, since it is the student aid index. In the old days, with the expected family contribution, you reported every student's 529 balance on your FAFSA. Now you only report the individual student's 529 account balance on their FAFSA, not their siblings. So there's a little bit of a planning opportunity to fund everyone's 529s before you file the FAFSA, so that you can have reduced the assets that count under each individual student.

Melissa Joy: 28:54

Is there any monitoring of if they were to move around beneficiaries, because I know it is somewhat portable? I'm not saying to because I know it is somewhat portable. Yeah.

Ann Garcia: 29:01

I'm not saying to you can change beneficiaries at any point. Okay, what you you know? The other thing people say is oh well, why? Don't? I just put all the money in the youngest kids 529 and then I can just roll it over to the siblings. You can only do one rollover per year, so that's a little sticky if you're trying to manage a bunch of kids 529s there. But it's a very small portion of the FAFSA, so it's one of those. Don't create $10,000 solutions to $500 problems.

Melissa Joy: 29:32

Yeah, I think that's a misunderstood. Consideration. Is that typically 529 assets. They don't go and say, hey, we get all of this, it's not 100%, you know, kind of expected to contribute.

Ann Garcia: 29:44

Yeah, one of the things with the FAFSA simplification is various groups have done different scenarios where they've run people through the old formula and the new formula and they said in 100% of cases other than siblings, the new formula calculates a lower student aid index than the old formula's expected family contribution.

Ann Garcia: 30:07

So that's the good news is, everyone who just has one kid will fare better.

Ann Garcia: 30:12

Now the other important piece of this is the FAFSA is the free application for federal student aid. It's also a tool that colleges use to calculate their own financial aid. The biggest impact I think that the FAFSA change is going to have is large families where students were eligible for a Pell Grant because there were four siblings in college at the same time and the Pell Grant would trigger additional grant and scholarship aid for them. And now these students are no longer eligible for a Pell Grant because the FAFSA gives each of them the full student aid index. But colleges can make their own decisions about how they allocate their own financial aid and so, for example, my daughter's college uses the FAFSA not the CSS profile, and as soon as it was announced, but they also have a supplemental financial aid form as soon as it was announced, but they also have a supplemental financial aid form. As soon as it was announced that the FAFSA was making this change, they added a question to their supplemental financial aid form to say how many college students are in your household.

Ann Garcia: 31:12

So they were intending to continue recognizing that families with multiple students in college do not have the cash flow on hand to support multiple students in college.

Melissa Joy: 31:24

Well, and I think, if you ask for a reconsideration too, that might be an important piece of information you would choose to share. Like you know, we were in the middle of it and this is what it used to be, and here it is Now. This particular year sounds like a big giant muddle through, because I know that the form didn't come out when it was supposed to, even from its delayed, you know kind of launch, and then it sounds like they're having to recalculate some because it hasn't been smooth, and so that's also delaying information for families that would have expected to have received details on what college will cost. Is that what you're hearing?

Ann Garcia: 32:02

Yeah, it's definitely resulted in a lot of delays, you know. One of the things, though, is there is a second financial aid form called the CSS profile, and that's used by a lot of the private schools, particularly the ones that are most generous with financial aid, and that came out on schedule because it hasn't been changed, and so what you know, what we saw was families who applied to schools that took the CSS profile were getting preliminary financial aid offers on the regular schedule. Okay, now, one thing that's gotten really complicated, though, is because things were so delayed. So, you know, originally the FAFSA used to come out in October. This one came out December 31st, but then the colleges didn't actually get the data until March, and then it turned out the data was wrong, and families couldn't make corrections if they made errors in their submissions, and so you know. So it's April when students are getting their first glimpse of their financial aid package.

Ann Garcia: 32:56

Many colleges move back their decision dates, so, historically, may 1st is decision date, and you have to choose a college, pay a deposit, accept admission and whatnot. Many colleges have delayed decision date into June 1st, or, in some cases, even July 1st. Okay, written dot all, and so you may be a family whose student is accepted to five colleges and two require a response by May 1st but the other three don't. So you know what do you do. You may be still in the negotiation process with some of the ones that accept. You know that have a later acceptance deadline, you know. So that's just a you know a choice that people need to make. Am I going to put a deposit down on a May 1st school, knowing that I might not?

Melissa Joy: 33:46

Might walk away from it. Yeah, I've heard some families have you know, sometimes do make deposits a couple places but still aren't sure where they're going to be driving the family car to to drop off the kid in the contents of the dorm room. So well you know college and approaching it is a time that it can be very exciting but also stressful and definitely comes with a lot of transition and change. And the work that you have done is so valuable and I would just encourage people to look at Anne's resources and also, you know, have conversations with your financial professionals, like people, like us financial planners, because we can provide insight. We're seeing it day to day. We know that college is possible for people. What's the wisdom that you would leave for people that are about to be embarking, or in the middle of embarking, on this financial journey to pay for college?

Ann Garcia: 34:37

I'll answer that two ways. So, as a financial professional, I will say to that two ways. So, as a financial professional, I will say you will find good choices whatever your budget is. So just be clear about what your budget is and be honest and transparent with your kids and help guide them to good choices.

Ann Garcia: 34:54

As a parent, I will say there's so much great stuff that happens senior year of high school that you want to be present for. So the sooner you start making plans for how you're going to handle college applications maybe that's writing your Common App Statement of Purpose over the summer. Maybe it's, you know, having a list of schools that you're going to apply to and really having it dialed in so that you're not writing 64 essays, all of senior year. My website, howtopayforcollegecom, has a downloadable spreadsheet to track colleges that you're going to apply to, and one of the things on it is what are the application requirements? So get a sense of what those are ahead of time and be diligent about working on those ahead of time so that you can be fully present and enjoy your senior year.

Melissa Joy: 35:49

What a great reminder. It's like those pictures where everybody is living in a moment but everybody's too busy trying to record it or take a picture on their phone versus being present. So I think that using the time, using the resources and gosh and you're so organized in helping people to think through the process in a way that is very thoughtful but also comes from a practitioner as well as a parent's perspective. So thank you for keeping up on this really important topic. I know that our listeners appreciate it.

Ann Garcia: 36:21

Well, thank you for making the time to talk about it.

Melissa Joy: 36:33

Thank you for listening to the Women's Money Wisdom Podcast. If you found value in this episode, the best way you can support the podcast is to forward an episode to a friend or leave a review. Go to PearlPlancom and the podcast link to get all the resources and links mentioned.