College Planning
Services for
Accounting
Professionals
BENEFITS OF COLLEGE PLANNING FOR
ACCOUNTANTS
•
Many clients expect their CPA, EA, or accountant to guide them through the
college process. Filling out a FAFSA is only a small piece of the help they need.
•
By knowing all of a client’s financial records it is a natural fit to help them make
financial decisions regarding college.
•
College planning is a process oriented approach that ties in with tax planning,
tax preparation, and record keeping.
•
Giving an independent opinion and approaching it from a financial viewpoint
means fewer loans and better options for the student.
•
CPA’s and accountants provide an additional layer of expertise in this growing
field.
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WHAT A TURNKEY COLLEGE PLANNING SERVICE
CAN DO FOR YOUR BUSINESS
College Plan 101 offers a turnkey process designed by a CPA, an expert in the
college planning profession, who developed this approach after years of working
with parents, students, and other professionals in the college planning field.
Using this simple turnkey process in your business can:
•
improve your productivity,
•
increase your bottom line,
•
minimize seasonality; and
•
give your clients better results than they ever expected.
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WHAT A TURNKEY COLLEGE PLANNING SERVICE
CAN DO FOR YOUR CLIENTS
•
Clear direction in a complex process
•
Increased opportunities for financial aid - by directing families to get the
best results (such as Merit aid vs. Need-based aid)
•
Participation in a core college selection process that starts and ends with a
financial solution.
•
Coordination of tax benefits with 529 plans, Coverdell ESA’s, American
Opportunity Act, etc.
•
Effective usage of asset and savings distribution strategies.
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USING A TRIED AND PROVEN PROCESS CAN GET
GREAT RESULTS!
Award / Loan Summary
HOPE Scholarship
Tuition Equalization Grant
Gift Aid
Gift Aid as a % of the COA
Fed. Stafford Load Subsidized
3.4%
Federal Perkins Loan
Federal or College Student
Work
Institutional Loan
Self Aid
Cost of Attendance
EFC
Financial Need
Net Award
Unmet Need
Net Award as a % of COA
UVA
BC
$16,103
35%
$26,600
47%
$28,490
50%
$3,500
$3,500
$3,500
$2,400
$2,400
$2,500
$0
$1,500
$5,900
$5,900
$6,000
$0
UVA
$46,097
$22,070
$24,027
$22,003
$2,024
BC
$57,068
$22,070
$34,998
$32,500
$2,498
48%
57%
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Dickinson GA Tech
$7,600
$7,600
36%
Dickinson GA Tech
$56,830
$20,900
$22,070
$24,620
$34,760
-$3,720
$34,490
$7,600
$270
-$11,320
61%
36%
Drexel
WPI
$21,000
36%
$25,900
48%
$15,000
31%
$16,000
33%
$3,500
$3,500
$2,750
$3,500
$3,500
$5,000
$6,250
$3,500
$3,500
Drexel
$58,463
$22,070
$36,393
$26,000
$10,393
WPI
Furman Clemson
$53,940 $48,000 $48,000
$22,070 $22,070 $24,620
$31,870 $25,930 $23,380
$32,150 $18,500 $19,500
-$280
$7,430
$3,880
44%
60%
Furman Clemson
39%
41%
USE THIS PROCESS WITHIN YOUR EXISTING
BUSINESS MODEL
The EFC Path (Details on following slides) is a turnkey approach for school selection
and maximizing financial aid. The cost ranges from $250 to $350 and can be priced
in the $500 to $1,000 range as part of your accounting service.
The FAFSA Planner is a great complement when preparing the FAFSA for a client to
help improve the student’s position when applying to colleges. The cost ranges from
$100 to $250.
The Award Letter Analyzer/Appeal will determine the best direction for the
student to take and prepare necessary paperwork to appeal awards, if necessary.
The cost ranges from $100 to $250.
College planning can fill in gaps before and after tax season:
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CSS/Profile preparation takes place toward the end of the year
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FAFSA filing is in early January
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Spring, Summer, and Fall seasons can be filled in with school selection
•
Fall and Winter seasons are an excellent time for analyzing and planning for
financial aid
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THE EFC PATH:
A TURNKEY SOLUTION FOR ACCOUNTANTS
The Turnkey Process:
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Determine what the schools expect the family to contribute
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Understand student’s profile, family’s profile, income level, savings level, assets,
and liabilities. The right balance in the individual components is critical in the
making recommendations. Are levels consistent with those determined by EFC
formula or Department of Education?
•
Determine the most effective financial path
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School selection – Core school selection will also incorporate academic options
that are tailored to the students and families profile
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Add more schools based on individual preferences and other factors
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Finalize selection and create a customized report.
The report provides all the information you need to present it on your own. College
Plan 101 will be available as a resource.
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WHAT DOES THE SOLUTION LOOK LIKE?
Three Detailed Case Studies to Follow
EFC-Federal Methodology
EFC-Institutional Methodology
Total Cost of Attencance
Less: Expected Family Contribution
Financail Need
% of Need Met
% of Gift Aid
$16,928
$18,313
$18,313
Emory
$58,180
Rhodes
$49,001
$16,928
$18,313
Spring Hill
$44,470
Davidson
$52,648
$18,313
Mercer
$45,056
UNC
$41,140
$18,313
$18,313
$16,928
$18,313
$16,928
$18,313
$39,867
$30,688
$27,542
$34,335
$28,128
$22,827
100%
85%
79%
65%
88%
72%
89%
100%
82%
84%
100%
74%
Average Need Based Aid
Average Non Need Based Aid
$26,544
$16,024
$14,269
$16,383
$16,997
$9,373
$13,012
$11,145
$12,683
$9,650
$17,251
$4,934
Tuition & Fees
Room & Board
Books & Supplies
Transportation
Personal Expenses
Total:
$42,980
$12,000
$1,100
$900
$1,200
$58,180
$36,464
$8,976
$1,071
$1,075
$1,415
$49,001
$28,060
$10,760
$1,500
$2,950
$1,200
$44,470
$39,016
$10,857
$1,000
$575
$1,200
$52,648
$31,448
$10,408
$1,200
$1,000
$1,000
$45,056
$26,834
$9,470
$1,150
$1,404
$2,282
$41,140
Estimated Grant
Total:
$36,772
$36,772
$25,310
$25,310
$19,360
$19,360
$27,873
$27,873
$24,300
$24,300
$23,647
$23,647
$5,500
$2,500
$8,000
$5,500
$2,000
$7,500
$5,500
$0
$5,500
$5,500
$2,100
$7,600
$5,500
$0
$5,500
$5,321
$2,700
$8,021
$13,408
$16,191
$19,610
$17,175
$15,256
$9,472
Student Loan
Student Work
Total:
Remaining Cost:
2010 4-Year Grad Rate
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82.4%
75.9%
50.5%
88.7%
42.7%
74.9%
CASE STUDY #1
STUDENT AND FAMILY PROFILE
•
The family had an Expected Family Contribution of $22,000 using the
Institutional Methodology.
•
The student wanted to go to a highly selective college. Notre Dame, Carnegie
Mellon, and Vanderbilt were some of the top schools. There was little flexibility
in this requirement.
•
The family was intent on only focusing on schools that meet 100% of the
financial need.
•
There was only one Georgia school that was of interest, Georgia Tech.
•
This was the first child in the family going to college so they were not familiar
with the financial aid process.
•
Getting the right financial aid award was very important because there were
younger children who would be going to college in a few years.
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TAKING THE RIGHT STEPS TO GET GREAT
RESULTS
• The process begins by describing the framework on how to look at the college
planning process.
• We first explained the landscape of what students were faced with in the current
economy.
• Next we discussed the types of financial aid available and how to get it.
• The next step was to help the student understand how she was best positioned for
the different admissions models.
• We then used search engines to expand the college search for an academic and
financial fit
• We reviewed the EFC with the family and made some changes to reduce it
including spending down a UGMA/UTMA account.
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HERE ARE THE ACTUAL RESULTS!
•
The student was accepted to 8 schools and received solid financial aid
packages from each of them.
•
The combined financial aid packages were in excess of $620,000.
•
They were able to leverage their financial aid packages to improve their final
financial aid award.
•
The right financial aid award was a key factor in making their decision. After
talking to the University of Virginia they learned that the only guaranteed award
was for the current year. They then talked to Boston College. Boston College
increased their initial award and guaranteed the award for 4 years.
•
The student is now thriving at Boston College.
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CASE STUDY #2
COLLEGE PLANNING FOR A BUSINESS OWNER
Parent's Assets
Description
Checking and Savings
IRA's/401K's
Non Qualified Assets
Primary Residence
529 Plan in Siblings Name
Rental Properties (4 Properties)
Net Worth
Asset Value
Liability Value
$15,200.00
$325,000.00
$63,000.00
$700,000.00
$500,000.00
$102,000.00
$1,200,000.00
$2,405,200.00
$500,000.00
$1,905,200.00
Parent's Income
Line 22 Total Income
Line 37 Adjusted Gross Inconme
Line 72 Tax Payments
$11,084.00
$5,754.00
$3,293.00
Retirement Plan Contributions
Employee Deferrals
Employer Contributions
$20,000.00
$10,000.00
Student's Assets
UTMA/UGMA Account
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$10,000.00
CONSIDERATIONS FOR A BUSINESS OWNER
•
Corporate Entity - Is business an S Corporation, LLC, C Corporation?
Assessment of 47% can be reduced to as low as 0%.
•
Asset Ownership - How are assets owned? Individual versus business
ownership will impact assessed value.
•
Asset Valuation - How is real estate valued? FMV, Tax Assessment, and sales
comps are a few options.
•
Income Reduction - How will retirement plan contributions reduce income?
The type of plan i.e. Profit Sharing, SEP IRA, or Defined Benefit is a factor. Will
contribution be made by employer or employee.
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DETERMINING WHAT SCHOOLS EXPECT YOU TO
CONTRIBUTE
Calculate the Expected Contribution using the Federal Methodology and Institutional
Methodology. The different methods have a major impact on how a business is
valued.
Here is the initial estimate of the EFC:
Federal Methodology (FM) Results
Parents' Contribution for Student =$40,403
Student's Contribution =$2,000
Total Estimated FM Contribution =$42,403
Institutional Methodology (IM) Results
Parents' Contribution for Student =$63,073
Student's Contribution =$4,300
Total Estimated IM Contribution =$67,373
Let’s look at the revised EFC on the following slide.
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SIGNIFICANT RESULTS AFTER EFC REVIEW
Federal Methodology (FM) Results
Parents' Contribution for Student =$0
Student's Contribution =$0
Total Estimated FM Contribution =$0 (compared to $42,403)
Institutional Methodology (IM) Results
Parents' Contribution for Student =$39,798
Student's Contribution =$1,800
Total Estimated IM Contribution =$41,598 (compared to $67,373)
ADJUSTED for business ownership, real estate valuation, and assets in student’s name
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CASE STUDY #3
THE IMPACT ON STUDENT’S SCHOOL SELECTION
•
The initial college selection included a state public university, The University of
Georgia ,and three competitive out of state colleges.
•
The Institutional Methodology was used by the out of state schools which would
result in an expensive college experience.
•
In order to maximize financial aid opportunities, we also included schools that
use the Federal Methodology.
•
Adding these schools to the mix created a competitive environment to help
lower the cost of college for this student.
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HOW IT WORKS!
This family was also interested in financing their child's college education with few
resources. This student had primarily A’s in high school. He took the ACT and
scored well with a 32. This student was interested in forensic medicine and in
science. When selecting schools the family picked from the big-name colleges
including:
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Stanford
•
Emory
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Scripps
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Stetson
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University of Georgia
•
University of Tennessee
This family had a low expected family contribution of $2200 using the federal
methodology and less than $1000 with the institutional methodology.
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COMING UP WITH A SOLUTION
By selecting big-name colleges and schools that have a low acceptance rate, the
family faced two huge hurdles—getting admitted and getting financial aid—and
selecting schools on the West Coast further heightened the level of competition.
We shared some options that could improve the student’s results include:
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Expand the choice of colleges geographically
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Diversify colleges by using a range of acceptance rates
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Focus on schools that fill a high percentage of financial need.
Starting with the EFC path, the school choices should be directed as follows:
#1 – Schools that fill a high percentage of need
#2 – Schools with the lowest price tags
#3 – Schools that offer the largest merit aid packages.
Next we looked at the schools that fit the above criteria.
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SCHOOLS TO CONSIDER
Expanded college options that fill a high percentage of need and screened for a
financial fit are as follows:
College
Tufts University
Oberlin College
Lehigh Umiversity
Bard College
Macalaster College
Brandeis University
Whitman College
Carnegie Melon University
College of William & Mary
Barnard College
Colby College
University of Richmond
Washington & Lee U. VA
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Top 25% Top 10% State
96%
80% MA
92%
68% OH
99%
93% PA
85%
63% NY
90%
68% MN
96%
71% MA
91%
61% WA
95%
75% PA
96%
80% VA
94%
75% NY
90%
60% ME
89%
62% VA
96%
80% VA
City
Enrollment
Medford
5,015
Obellin
2,762
Bethlehem
4,732
Annandale on Hudson
1,707
St. Paul
1,912
Waltham
3,216
Walla Walla
1,455
Pittsburgh
5,645
Williamsburg
5,629
New York
2,295
Waterville
1,867
Richmond
2,718
Lexington
1,775
THE RESULTS
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The family had a new perspective on the direction they should be pursuing.
•
The new school selection created a competitive environment amongst the
colleges which resulted in a variety of financial aid awards.
•
The student chose to go to a local college, Emory University, at a fraction of the
price.
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NEXT STEPS
Now that you see how adding a College Planning Service can benefit your accounting
practice and your clients, give us a call and we’ll show you how easy it can be to get
started.
CollegePlan 101
770-656-2885
www.collegeplan101.com
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