When Rick Darvis hosts education planning seminars, he always asks participants how old they will be when their youngest child graduates from college.
“I see how many will be in their mid-50s, and some hands go up,” Darvis says. “I ask how many will be in their 60s, and I’m shocked by how many hands I see. Then I ask how many over 70, and there are still quite a few. I’ll be 83 when my youngest finishes college.”

Darvis, co-founder and director of the National Institute of Certified College Planners, confronts a growing problem: As Americans wait longer to start families, conflicts between saving for retirement and children’s education have increased.

“We have a retirement problem, not a college problem,” Darvis says. “Every kid in America can find ways to get to college; we don’t want clients saddled with educational debt going into retirement.”

According to the U.S. Centers for Disease Control, the number of women having their first child between the ages of 35 and 39 rose 24% between 2000 and 2012. For women age 40 to 44, the number increased 35%. The median age for mothers with a 17-year-old increased from 42 in 1980 to 45 in 2011.

At the same time, college costs have outpaced inflation. According to the College Board, the education lobbying organization, the average cost in 2014 dollars for tuition, room, board and fees at a public four-year school increased over 360%, from $2,505 in the 1971-72 school year to $9,139 in 2014-15. The costs for a four-year private non-profit school increased more than 290% in the same period.

“I have three families where parents over 60 have student debt from children; that makes planning tough,” says Joseph Orsolini, a certified college planning specialist and CFP at Glen Ellyn, Ill.-based College Aid Planners. “The alternate scenario, where kids have the debt, is preferable.”

These aren’t foreign problems: Orsolini, at 50 years old, has children in the first and second grades. Wakefield, Mass.-based CFP licensee Jeanne Gibson Sullivan gave birth to her sons at 36 and 38, and this fall the younger son begins his third year at the U.S. Naval Academy. Michael Garcia, a Dallas-based financial advisor with Merrill Lynch, was 42 when his twin daughters were born.

Calling on their own experience, these planners are countering the common assumption that most financial aid is based on academic merit. “Around 90% of college aid is based on adjusted gross income, not on the child’s talents,” Darvis says. “People think only smart kids get scholarships, or that if they have money, they won’t get aid, but it’s all about income, cash planning and tax planning.”

Schools determine need-based aid by subtracting an estimated family contribution (EFC) from the cost of attendance. Two techniques are used to calculate the family contribution, a federal method, using the Free Application for Federal Student Aid (FAFSA), or an institutional method.

The federal method doesn’t include qualified retirement plans when calculating the estimated family contribution. The federal student aid application counts most other property and money, including bank accounts, investment accounts, income from tax-exempt interest, cash and non-retirement tax deferred savings plans.

The application permits parents to shield some money outside of qualified plans through an asset protection allowance—the older the parents, the bigger the break.

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