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How to Get the College Planning Conversation Started With Clients

How can we get people to listen? And we don’t mean simply getting them to nod their heads and say things like  “uh-huh” and “sure”, but rather, to actually listen. 

To really hear you.

It’s a rather difficult task in a cultural moment that sees the average American checks their smartphone nearly 100 times a day.

Indeed, this is also the chief challenge for financial advisors in 2021: to compel their college-bound clients to look up from their iPhones and appreciate the gravity of their impending investment.

We’re a team of financial advisors here at CAP. But we’ll be honest: while higher education has long been our forte and our focus, it took time for our own clients to take our college concerns seriously. 

Eventually, after countless conversations with college-bound families, we identified an effective, three-point approach to get our clients and prospects to listen and take action.

We hope you find it useful. 

1. Show Them The True Cost of College

Many families have absolutely no idea how much college actually costs.

According to a recent Fidelity study, 25% of parents believe one full year of college costs less than $5,000

Maybe that’s what their alma maters charged in 1980, but in 2021, things are very different.

Today, the average all-in cost of attendance for one year at an in-state public college costs over $26,000. Meanwhile, one year at a private college averages over $54,000. 

As for the average cost of the most elite schools like Harvard, Dartmouth, and Columbia? They average over $75,000 per year. 

Here is the good news, the sticker price of college is irrelevant if you know how to shop.  According to the Sallie Mae report “How America Pays for College 2021” free money from scholarships and grants covered 25% of the costs.  

TRUE COST after grants and scholarships: 

In-state public = $20,000

Small Private = $54,000

Elite private = $61,000

And if they had a better appreciation for the true costs of higher education — and developed a robust financial plan to handle it — perhaps far fewer Americans would have such debilitating student loan debt.

As it stands, there are over 43 million student borrowers with an average debt of nearly $40,000 each

While that’s a terrifying reality, the conversation can’t stop there. It needs to show clients what that kind of debt might mean for their financial future. 

Point to this recent Sallie Mae study to show how much families are draining their savings (and affecting their retirement) to pay for college.

During the academic year of 2019-2020, 83% of families helped pay for a portion of their child’s college education directly out of their own pockets. That’s up from 66% the previous year, amounting to an average of $13,072 in cash contributions, $5,272 more than in 2018-2019. 

The numbers are bad, and the trend is worse.

An additional 14% families tapped their retirement funds and 35% liquidated savings and investment accounts to make ends meet. 

In other words, families are jeopardizing their retirement plans so their children can go to college.

Something has to change. 

2. Remind Them They’re Making an Investment

Earlier this year, The New York Times ran an incisive op-ed titled, “An Invisible Cost of College: Parental Guilt.” 

In this piece, author Ron Lieber speaks to a psychological scar driving many Americans’ approach to college funding. In short, parents feel compelled to pay whatever colleges demand, so their child can get the education they deserve.

These same parents are afraid to admit that they won’t be able to pay for tuition, let alone disappoint their child by not letting them attend their dream school. 

Though this parental philosophy stems from deep-seated benevolence, it’s a dangerous mindset that drives them into debt.

They follow the terms of the Expected Family Contribution (EFC) algorithm, which Lieber deems, “hateful…the great expectations, the presumptuousness around family composition, the notion that it is a gift.”

He’s right. After all, parents seem to be irretrievably bound by the terms and conditions of the colleges and universities. In reality, they’re not. America’s academic elite have simply done a marvelous job of appearing like a fait accompli, a foregone conclusion in their child’s educational career.

Instead, parents must be reminded that they are in the driver’s seat of their college investment. And yes, it is an investment — one of the biggest investments they’ll ever make.

As their advisor, encourage your college-bound clients to take the proverbial field with intent to play offense, not defense. They’re there to invest in the right school at the right price — not any school at any price.

3. Help Them Stay Future-Focused

Investments are always made with a return in mind.  What if you

But if parents don’t have a clear vision for their child’s post-graduate future, their college investment may simply be reduced to a crippling cost. 

We hear it all the time. Colleges and their loyal alumni loudly preach about how incoming students will enjoy “the best four years of their life,” but parents need to know how those four years establish the next four decades for their children. 

Anything less is shortsighted. 

To that end, press your college-bound clients to answer specific questions about the schools they’re interested in and have them explain why they’re interested in them. The conversation must go deeper than the school’s name brand alone. 

While the campus quad, the new library, and the athletic facilities are undeniably enticing, it’s the individual field of study and faculty that are paramount. That’s what families are paying for.

To that end, your clients need to focus on two important financial facts on the back end of their investment:

  • The expected earnings potential for graduates of each school (and each major within it)
  • The anticipated monthly student loan payments 

By bringing these categories into the conversation, you’ll help families better understand the full scope of the college funding process. After all, it’s not just about getting in to schools. It’s about what you get out of them. 

What if you had a college crystal ball?  When you use CAP’s advanced new outcomes tool it is right at your fingertips.  You’ll be able to show families dollar-specific and school specific answers in each crictical area:

  • Their student’s first year salary
  • Their student’s fifth year salary
  • Their student’s tenth year salary
  • Their student’s monthly take home pay
  • Their student’s monthly loan payment

Ultimately, college-related questions help clients reveal two things: what they know and what they don’t know. 

By asking the right questions (and using CAP to provide the granular facts), you’ll be able to help clients plan for their future and get the most out of their college investment. 

Want to see how our software can help? Click below to schedule a complimentary demo with our team.

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