College Planning

  1. The Cost
  2. College Selection
  3. Saving and Funding for College
  4. The Admission Application Process
  5. The Changing College Landscape
  6. The Plenaris Experience

College planning is one of the unique services that Plenaris Advisory® provides that is not available from many advisory firms.  Given the current crisis with student debt, we believe that college planning should be an integral part of comprehensive financial planning, though it is not a planning item that every client needs. 

According to the Federal Reserve, more than $1.5 trillion in student loans are owed by 44 million Americans in 2019, and Americans over age 50 owed more than $260 billion of the total debt in 2018.  The Consumer Financial Protection Bureau found that 40% of borrowers over age 65 are in default.  Money Magazine also reported that borrowers between 65 and 74 owe an average of $35,400.  College cost has become the greatest threat to Americans being able to retire with financial security, and the threat extends all the way to the younger generations. The only way to reduce the risk of student loans is by understanding the critical issues pertaining to college finance and plan accordingly.

College planning entails the following issues:

  1.  The cost.

According to the College Board, the average cost for tuition, fees and room and board for a public 4-year university was $21,370 for 2018-2019, which amounts to about $85,000 for four years, assuming no increase.  However, the average cost for 4-year private schools was $48,510 per year, and $194,040 for four years, which is twice as much as for public school.

The College Board also found that for the 10-year period from 2008-2009 to 2018-2019, there was an average annual increase of 2.6% and 2.3% for public and private schools respectively.  If this trend continues, the annual cost for public schools will be about $27,185 per year in 10 years and $35,017 in 20 years.  For private schools, the annual cost will rise to $62,096 in 10 years and $79,489 in 20 years.

The problem with these estimates is that in some cases, we already have reached or exceeded the College Board’s 20-year cost estimate.  For example, the University of California at Berkeley’s cost of attendance for 2019-2010 will be $36,264 for tuition, fees and living on campus.  Similarly, for the University of .Southern California, the cost of attendance for 2019-2020 school year is $77,459.

Additionally, since many students take five to six years to graduate, and some students intend to continue to graduate school, the total cost for a college education may have to cover more than 4 years of school.

  1.  College Selection.

Given the wide dispersion of cost among colleges, it is critical that students and their families take great care in selecting the appropriate schools.  Despite the high costs posted for some schools, financial aids are available to make a college education affordable.  Financial aids are particularly available for lower income families in the form of grants, scholarships and loans.

  1.  Saving and Funding for College.

Generally, it is estimated that families usually pay about 35% of the cost out of pocket, which may be the target of their savings.  While 529 plans are often used for college savings, there are alternative savings vehicles that may be equally effective, depending on the financial resources of the family.  However, as of 2018, if college expenses are funded by a home equity loan, the interests of such loans are no longer deductible, at least until 2026.

  1.  The Admission Application Process.

It is well-known that getting into good schools is a highly competitive endeavor.  Besides academic achievements, students are expected to also do well on the applications that schools rely on to select their candidates.  It is therefore important for students to take great care in filing their admission applications that would give them a good chance of getting in the schools of their choice

  1. The Changing College Landscape.

Higher education is undergoing significant changes in recent years. 

Did you know that many colleges do not require SAT/ACT?

Did you know that some colleges are more generous than others with financial aid?

Did you know that some colleges have a tuition free program?

Did you know that most people do not pay the sticker price posted by colleges?

Did you know that financial aid offers can be negotiated?

Did you know that the 4-year graduation rate is only 33% at public colleges and 53% at private colleges, and that only 60% of all college students graduate within 6 years?

Did you know that student loans cannot be cancelled in bankruptcy?

  1. The Plenaris Experience. 

Our firm has provided advisory services to scores of students and parents.  To date, our clients have enrolled in such schools as UC Berkeley, UCLA, UC Santa Barbara, UC Irvine, UC Santa Cruz, US Davis, USC, Santa Clara University, Georgia Tech, San Jose State University, Brown University, Columbia University, University of Washington, Chapman University, and Rochester Institute of Technology.

Our college planning resources will help you make the right decisions for your students:

  • How to select the right college with affordable cost.
  • How to maximize financial aid.
  • How to save for college beyond 529 plans.
  • How to match your student’s academic interest with future career.
  • How to assess the benefit of a college.
  • How to evaluate the financial aid offered by each school.
  • How to prepare high quality admission applications.
  • How to graduate on time or earlier.

For the most positive college experience for students and parents, early planning is key.  It is no secret that many parents begin to plan for college when their children start kindergarten.  However, it’s never too late to begin the process.

Contact for assistance on planning your child’s college.