Episode 59: How to Prepare for College Financially with Guest John Hupalo
Your son or daughter got into college now what? What is the total cost of attendance really? Can I afford it? What options are there for financial aid, loans, merit aid, scholarship? Do I really have to pay the sticker price? As families start to assess their ability to afford college, what should they be doing and when? How do families prep ahead of time to avoid any last-minute disappointments with not being able to afford certain colleges? John Hupalo joins us today as the Founder & CEO of My College Corner & Invite Education. John is a nationally recognized expert in education loan finance and college planning.
- Be realistic in choosing a college
- Finding the right college ‘fit’ includes not only academic and social fit but also a financial fit.
- Take the emotion out of the decision-making process when you have a couple of offers in hand.
- There is an academic and social fit but what about the affordability fit?
- Financial award letters should be carefully reviewed as work-study and loans are not ‘free money’ or guaranteed.
- Questions to ask yourself: How much have I saved? How will I allocate our savings across the 4+ years? Understand the difference between ‘sticker price’ and the ‘net price’.What is the unmet need?
- Consider the home expenses saved when sending your son or daughter to college to factor into your college planning
- ⅔ of all student loan defaults are for balances of <$10k and 40% are for < $5k
- Focus on completion rates and take the right amount of debt based on the completion rates and the outcome.
- Thumbnail rule – if the total amount of debt while in college is less than the projected starting salary, that is an affordable debt to take on.
- Completing FAFSA forms
- Opportunities to appeal need-based aid due to COVID
- Public schools are not necessarily less expensive than private schools as private schools have more merit aid available to award to students they are trying to recruit.
- Start as early as you can to learn about college costs, your expected family contribution assumptions, and how much you should start to save to afford your college-bound student's academic goals.
Important Resources and Links:
Meet John Hupalo
John Hupalo is a nationally recognized expert in education loan finance and college planning. He is the co-author of Plan and Finance Your Family’s College Dreams (Peterson’s, 2016), and regularly speaks on issues related to saving, planning, and paying for college at conferences, on television and radio, and in print. Prior to founding Invite Education, he worked on Wall Street and served as the Senior Executive Vice President and Chief Financial Officer of First Marblehead Corporation (NYSE:FMD).
John received his B.A. with Honors from Boston University and an MBA in Finance from New York University’s Stern School of Business.
Become a College Scoops Supporter
Thank you John for joining us today to discuss how families can better prepare and plan to finance their kids' education. First and foremost, be realistic with your college list from a financial perspective. Once you get the acceptance letters in hand, take the emotion out of the college decision-making process, and look at the numbers. Is this the right school for your son or daughter from a financial perspective? Review the financial award letter to truly understand the various components of the award as loans and work-study are not free money. If there are significant financial changes in your family based on the pandemic, you can appeal for need-based aid. Start planning earlier rather than later for your kid's education.
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Episode 59 Full Transcript