“Well… that’s just the way it is.” Those seven words embody the college crisis facing America.
While universities and colleges live large in their ivory towers, families are forced to find ways to fund their child’s education without robbing themselves of their future. If only it were so easy.
During the 2019-2020 school year, 83 percent of families paid for a portion of their child’s college education out of pocket. That’s up from 66 percent the previous year, amounting to an average of $13,072 in cash contributions, $5,272 more than in 2018-2019.
This trend shows no signs of stopping, and as tuition costs continue to rise, families are left in an increasingly precarious situation. And note: all of these problems come before the nagging reality of student loan debt.
Why College Funding Is America’s #1 Concern
The financial burden of college can drain families of their income and their retirement savings.
According to a recent Sallie Mae study, 70 percent of families used their current income to pay for college in 2019-2020. During the same academic year, 14 percent withdrew from their retirement funds, and an additional 35 percent of families liquidated savings and investment accounts to make ends meet.
If these short-term solutions could cover the full cost of college, the crisis might seem more manageable. However, these emergency investments don’t even satisfy a majority percentage of the average college investment. In fact, parent income and savings combined to cover just 44 percent of total tuition costs.
As for the other 56 percent? After scholarships and grants are taken into account, the outstanding balance leans primarily on loans. As a parting gift, the average student typically graduates with nearly $30,000 in debt.
That’s why college funding remains the number one concern for American families.
A Window of Opportunity for Advisors
College-bound families have a lot on their plates. While assessing the academic, social, and locational value of schools, parents are also busy pushing their kids to boost their test scores. Then, after their child gets accepted at one of their top schools, they desperately try to make sense of their finances to ensure their beloved child actually gets to go.
Most families don’t plan for college from a position of power. They do so from a place of panic.
There are over 2,600 accredited colleges and universities across the United States, yet how much of the high learning landscape can parents actually see? If we’re being honest, not that much.
Most families don’t have the time or resources to research and visit a vast array of schools. That means they’re operating with a relatively limited set of information and are therefore vulnerable to seductive marketing campaigns and the allure of name brand schools. Add that to the various emotional factors at play — i.e. their desire to please their child (and/or their competitive neighbors) — and you have the perfect recipe for poor financial decisions.
Far too much is being asked of the average American family, and as a result, their financial futures are at stake. College-bound families need the guidance of advisors who can help them see more of the playing field.
At the same time, advisors must consider embracing late stage college planning, as interest in higher education isn’t dwindling. Despite the pandemic and increasingly prohibitive tuition costs, enthusiasm for college has hardly flagged. Recent studies actually expect the number of college students to grow over the next decade.
This presents a momentous opportunity for advisors to define their niche in an overcrowded marketplace. We’re not talking about getting another certification or spending months working to become a college funding expert. Instead, we’re talking about having access to state-of-the-art tools that confer such expertise to help your clients make smarter decisions.
The Tools You Need
If families don’t have the time to make sense of college, advisors have even less. Considering it often takes hours to research and understand the financial profile of just one school, many advisors understandably avoid college financial planning like the plague.
Of the financial advisors who do provide college planning, their services typically begin and end with 529 Savings Plans. Though that’s an important start, there’s so much more advisors can do to truly help their clients prepare for the future.
College Aid Pro™ gives you the tools to join the conversation with confidence. Our software is designed to simplify college complexities and help families make sound financial investments.
How does it work? We start with College Pre Approval™, our proprietary approach to budgeting. From there, our Advanced Search function allows you to identify exciting schools that not only fit your client’s budget, but that satisfy other key criteria (i.e. searching by Distance, State, Major, Funding Gap, Forbes Ranking and more).
These tools unite to answer your clients’ most pressing questions, including:
- How much do colleges expect me to pay?
- What will each school actually cost us out of pocket?
- What will our monthly student loan payments really be upon graduation?
- What are the average first, fifth, and ten year salaries of graduates?
- Is the pricey big name school significantly better than the affordable liberal arts college?
With College Aid Pro™, the guesswork is gone. In just a few short minutes, you can get detailed and statistically-proven answers to previously unanswerable questions.
You can then take that information and run detailed, apples-to-apples cost comparisons on every school on your client’s shortlist. The result? Clients will not only be able to select the right school, but they’ll receive a future-focused look at their investment today, rather than in five years.
College Aid Pro™ empowers advisors to rectify the college crisis one family at a time. You can better serve your existing clients and earn referrals to grow your business by helping more families in your community find a great college at a price their family can afford!
Want to learn more? Click below to check out our revolutionary lead acquisition tool, the College Money Report™.