College Financial Network, Inc.
Case Studies
OUR WINNING SOLUTIONS:
Listed below are some of the real life situations that we have worked with and the winning solutions that we enacted. We’ve selected a sampling which matches many of the families that we see.
Guidance Counselor Doesn't Know Family Finances
Divorced Parents- Joint Custody (A Smart MOVE)
Divorced Parent- Planning Remarraige (Hold that "I Do!")
Desperate Single Mom
Two Income Earners – State Schools Are NOT Necessarily Cheaper
Using Diversity as an Asset (Going further than 2 hours from home)
Business Owner Gets a “Tax Scholarship”
Appeal of a Financial Award – Ask and You Shall Receive
Guidance Counselor Doesn’t Know Family Finances
The student had met with his guidance counselor who recommended a “prestigious” (name dropper) school that had the major he was interested in for college. The school definitely had a good program. The only problem was that guidance counselors for the most part do not know about a family’s financial circumstances. They are advising the students from the academic side of things. Unfortunately, at no fault to the counselor, they are advising in a vacuum. They don’t have the time to delve into student and parent finances.
This particular student was an excellent student. We reviewed other colleges locally that had that same major. We recommended another private school that was about $7,000 a year cheaper than the prestigious school at the time. In addition we knew the 2nd school had a grid for scholarships. If your SAT score AND GPA was between A and B you would receive X number of Dollars in free scholarship money. This particular student’s SAT scores and GPA resulted in him being eligible for $32,000 over 4 years. When you factor in the school was $7,000 a year cheaper ($28,000 over 4 years) and the $32,000 scholarship it resulted in a savings of $60,000 for that family! This was really valuable to them as they had a daughter 2 years younger than her brother!
Mom and Dad were divorced and had joint custody of their son. Mom made significant income and dad made very little. Both parents lived in the same school district. The son resided more of the time with the mom.
After reviewing their circumstances we suggested that the son move in with the father, and to notify the school system. By living more time with the father it made him the custodial parent. Only the custodial parent’s income and assets get listed on the FAFSA form for financial aid. The college the student wanted to go to did not use the non-custodial parent’s income. The result was the student qualified for “need based” financial aid including “free money” in the form of grants and scholarships.
Divorced Parent – Planning Remarriage (Hold that “I Do!”) A divorced mom had planned an upcoming marriage. Her daughter was already accepted to the school that she wanted to attend and had received a GOOD financial aid offer which included over $15,000 in scholarship money.
After meeting with the family we informed the mother, the student and the soon to be step father that when filing the financial aid forms for parents who remarry it is the income and assets of the mother in this case AND the step father that would get reported next year and that the biological father’s info was NOT reported on the FAFSA form. (Some schools that use the CSS Profile or their own institutional method might require a non-custodial form to be filed but it is not required for schools that only use the FAFSA form).
In reviewing the new step dad’s 6 figure income and hefty assets it was determined that the student would lose the ENTIRE $15,000 in scholarship money. That amount would be $45,000 over the remaining 3 years of school! They were happy to learn about this from us before they went ahead with the wedding. Eventually, they decided they would wait until she finished college!
A good client of ours referred a desperate mother to us. Her situation was that her daughter was attending a 2 year art school and was in the middle of the fall semester in her second year. Because of the mother’s financial circumstances, she had maxed out her ability to get any additional financial aid in the form of loans. The school gave the family of 2 weeks to get the money into the school for that fall semester or the daughter would be “kicked out” of college. You could understand the mother’s anxiety and why she would be crying in our office.
At the meeting we broke her problem down into two parts. Part 1, the college did NOT need all of the money they needed a down payment in 2 weeks and Part 2 she needed a way to find the monthly payments from October until June when the student graduated. It was determined that the student’s brother had graduated from college 2 years ago and was working. We instructed the mom to approach the son for a short term loan so she could meet the 2 week deadline. We then looked at restructuring her credit card payments to increase cash flow for those 8 months. And finally the mother usually got a $5,000 to $6,000 refund each year from the IRS. So we had her change the number of exemptions she was claiming so that she could get that additional money in her paycheck every week.
This allowed her to meet the longer term need for the next 8 months. She was crying when she left our office only now they were tears of joy.
Desperate Single Mom
Two Income Earners – State Schools Are NOT Necessarily Cheaper
We explained that most parents thought that and that is why applications have risen to public colleges. We gave them a list of private schools to investigate and to visit. They heeded our advice and their son liked one of the private schools and applied there, even though it cost $40,000. You could hear the excitement a few months later when they got the acceptance letter from admissions. It turns out their son was accepted to the honors program and would receive a $19,000 scholarship EACH year as long as he maintained a 3.0 GPA. Next we reviewed their monthly cash flow and made some revisions to their debt payments which freed up about $400 a month which they could use to help pay for the $21,000 cost without having to borrow additional monies for college.
With the reduction of the $19,000 scholarship it meant that the private school would only cost $21,000 vs. $25,000 for the state public school! Oh and by the way because he was accepted to the honor college his tuition AND fees were FROZEN for ALL 4 YEARS WITHOUT ANY PRICE INCREASE!
Too many families get hung up not wanting to drive more than 2 hours from home when they select colleges for their kids. Only problem is that most of the colleges within 2 hours from home are inundated with local students.
This was the case with a student who was in the top 10% of his class. We explained to the family if they let him go further from home schools will entice him with money so as to build a more diverse class of students. We selected a school some 700 miles from home. This was a public school. The school was so excited to get a student of his academic caliber AND from a state that far from their home state that the first thing they did was inform him they would reduce the out of state tuition and fees to the lower instate amounts. Not only was this a significant saving but they also awarded the student a sizable scholarship and put him in the running for their top scholarship. The student eventually won the top scholarship and was able to go to the school for almost ZERO out of pocket costs!
Using Diversity as an Asset (Going further than 2 hours from home)
It was evident from the beginning that this family was not going to get any “need based” financial aid with over $1.5 million dollars in investment assets. He told us there was no reason to meet with us because we “can’t get him any money” and he would “simply write the college a check for the full amount!”
His case was not so unique. Business owners have a lot of options to use for paying for college if they simply become aware of them. In this case there were 2 children who needed funding for college. We are not arguing that the father couldn’t simply write a check, but why would you do that if you haven’t used up all of your other options. We suggested that the father hire both children to work in his business. They MUST actually perform work, you can’t just give them a paycheck. But they can answer phones, clean the office, do filing, run the computers, etc.
The children earned money working and the father got a tax deduction for his business. The children paid taxes on their income (after reducing their income by the standard deduction). Since they were in a lower tax bracket there was a significant tax savings to the family. They could then use their wages to pay for college. The result was a savings of over $40,000 over 4 years of college. That tax savings represented in effect a “tax scholarship” for that family.
The student was a top student in his class and received a very good award from 2 different schools. When the family called the school of his choice they were told that the school was sorry but there was nothing else they could do to improve the financial aid award.
We asked the family if they were willing to take the student out of school for a day and to have the parents take a day off from work. Once they agreed we sat down with them and prepared our strategy. We focused on the fact that the parents business had taken a down turn AND we focused on the competing college award and of the quality and caliber of student the school was getting and what an addition he would be to their college. We coached the parents and students on what to say and how to say it. The family called us after their visit to the school to inform us of the additional $7,000 grant the school was awarding the student.
Appeal of a Financial Award – Ask and You Shall Receive
Free Report
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"The quality of a university is measured more by the students it turns out than the kind it takes in."
-Robert J. Kibbee