Rising college costs can have a big impact on families and their financial advisors. College costs are up another 3-5 percent nationwide over last year and 1120 percent since 1978. College debt has hit $1.3 trillion.  

Sending kids to college has never had the potential to so dramatically derail the financial objectives of college-going families.

Financial advisors can play a pivotal role in helping their clients reach the American dream of a college education, preserve more of their investment portfolios and retirement assets, and teach young people life lessons about fiscal responsibility that will serve them for decades.

You Can Be A Hero  

With the news full of alarming statistics and policymakers scurrying for solutions, you can propose strategies that offer peace of mind and better outcomes for clients who often feel torn between their financial goals and giving their kids the “best” possible college education.

Herein lies the opportunity: High school and private college counselors focus on admissions. They typically do not consider how (or if) a family can pay for the schools on the student’s college list, causing families to scramble to find last-minute solutions after the best options are no longer available.  

This disparity frequently leads to negative results, including: crippling college debt, students dropping out because of cost or students transferring to a less expensive school.

Runaway college costs impact families in other situations, too. Investment and retirement portfolios can get severely depleted. In addition, parents often delay retirement to pay for college.

I spoke with a mother who was crying as she explained that her hard-working daughter was admitted to an Ivy League school but would be attending community college because “we were keeping up with the Joneses when we decided where Jennifer would apply.”

Indeed, soaring college costs accentuate the importance of students taking steps early so their families have more options for how much they spend on college.

The challenge is that parents don’t know what to do or how to start to create a plan to leverage achievements to pay less for college. They are overwhelmed. Misinformation compounds the problem.

What Can The Financial Advisor Do?

As families focus on college admissions, you can become the savvy advisor who addresses the reality: “Getting into college is one thing. Paying for it is another.”

You can counsel clients to teach their children fiscal responsibility and offer guidance early in the college-planning process, when there is time to implement strategies that have the potential for the biggest financial benefits.

Your clients do not have too much or earn too much to follow these strategies.

Most families do not realize how early they can—and should—take deliberate steps to position their students to combat skyrocketing college costs. The biggest, most expensive mistake families make is waiting.

These strategies go beyond 529s and other financial products. They offer the long-term benefit of empowering students with “skin in the game” and enhance admissions success. 

Students who use their own efforts to contribute to the cost of college, receive better internships, awards, self-esteem and jobs.

Plan Ahead To Pay Less

Share the following with college-bound families so they can combat skyrocketing college costs and empower their kids with “skin in the game.” These strategies are particularly well suited to families that don’t qualify for need-based aid.

Pursue Private Merit Scholarships ASAP!

Students can win private merit scholarships—money for college based on achievement—starting in middle school and continuing through graduate school.  

Choose Extra-Curricular Activities Wisely

Encourage students to engage in extracurricular activities revolving around their passions. Quality of involvement is more important than quantity.  

Suggest that families look for opportunities to demonstrate commitment, contribution and leadership. There are many private merit scholarships that reward these attributes.

Pinpoint The College Major

Changing college majors can be expensive. It may require another year of college (and college costs) or force the student to transfer colleges. Encourage students to gain hands-on experience through internships, for example, in areas of interest to secure as much “real life” exposure to career goals as possible.

Study Smart

Recommend that students take the most rigorous load that they can excel in. Support the idea of working with academic tutors as necessary.

Students who take Advanced Placement and online classes can sometimes receive college credit.

Prepare For The SAT And/Or ACT

Propose that students prepare for the SAT/ACT with private tutoring and plan to take the tests several times to increase opportunities for renewable institutional merit scholarships. 

Grade point average (GPA) and course rigor are calculated alongside standardized test scores for awarding institutional merit aid. As a rule, colleges offer merit scholarships to students who score in the top 25 percent of their peers. Remember, however, some colleges—including the Ivies and other highly selective schools—do not award any merit aid. (They do, however, offer need-based aid.)

The Best Tip For Lowering College Costs

The easiest way to win the most institutional merit aid is through colleges where merit scholarships are based on the admissions application. These do not require a separate application or any additional effort. Colleges may also offer merit scholarships that do require another application.

Apply To Schools That Offer A Financial Advantage.

Stress the importance of applying to colleges that will cost less. “Sticker price” can be deceptive. Also compare graduation rates, opportunities for institutional merit scholarships, tuition discounts, fixed rate tuition and other incentives.

Summary

Figuring out how to combat soaring college costs is overwhelming.

These strategies provide relief for families that don’t qualify for need-based aid and want or need to pay less for college.

Additionally, encourage parents to talk openly about their expectations. Even happily married couples can have opposing views about how much to spend and how to pay for it.

Paying less for college takes planning, a lot more of it than most families realize. One of the biggest, most expensive myths is that families should wait until they know where students are going to college.

Financial advisors can indeed play an important role as trusted advisors who help lower the cost of college while empowering students to maximize their potential.

Nancy Paul is the president of Three Wishes College Strategies.