College Funding market

Oct 20, 2018

  1. Bankman
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    Bankman New Member

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    Last thoughts on this topic. pfg1 correctly notes that the main factor in calculating the EFC is income, not non-retirement assets; this is true for the vast majority of parents of college-bound students. Once combined parental incomes top $90,000 (speaking in general), public colleges won't offer much financial aid other than loans. Private colleges can be a very different story.

    Which brings up a crucial point in the college planning process: students who are seriously considering even one private college can likely benefit from genuine, professional college planning. Private colleges have a much higher sticker price, but they are able to offer significant discounts, and will do so....if they want a student. The stronger the student is academically - GPA and ACT/SAT score - the bigger the discount (on average) that the college will offer. A good college planning firm with a long track record will have data that gives them a good idea of how much of a discount a given college should offer based on recent history and on the student's academic and financial profile. They can help parents appeal a financial aid offer, using information that parents simply won't have on their own. Doing appeals themselves, a parent might get another $3000 in free money (not loans), where a professional college planner could get $10,000 more.

    The bottom line to all this is that using a professional college planner is almost always worth it if a student is seriously considering a private school(s). For public colleges, the value of a college planner isn't as clearcut, and depends very much on individual circumstances. In both situations, a student wants to present as strong a record to colleges as possible.

    In any case, succeeding at college planning is a very risky proposition - few people succeed, although many try. Forgive my cynicism, but the people who most profit from college planning are the firms who make money off insurance agents who try college planning, pay a fair amount of money, but fail at it. It's a very tough business.
     
    Bankman, Oct 25, 2018
    #61
  2. Allen Trent
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    Allen Trent Guru

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  3. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    Obviously, it's not REAL "college planning" done by real planners.
     
    DHK, Mar 13, 2019
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  4. MedicareMillionair
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    MedicareMillionair Guru

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    There is an FMO based here in Greenville, SC that has a very successful track record in the college market. They produce a huge amount of whole life and IUL premium using seminars as the primary marketing vehicle. If you PM me I can give you their info.
     
  5. Allen Trent
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    actually, he appears to have helped numerous people pass the ACT/SAT & get into colleges, albeit by scamming other entities.

    However, I have seen numerous life insurance agents promote they will assist with all the college applications, financial aid when most merely use the seminar as a set up to sell life insurance.

    I have zero problem with legitimate college planning services, but if all you want to do is market to desperate people looking for college application/FA eligibility, but don't actually do anything to assist them with what they believed you would, you really are no better than this Rick Singer who sold access & a scam for wealthy people to bribe their kid into schools. True, 1 is apparently a crime & the other merely deceptive marketing, but still.
     
  6. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    That's why, for me, "college planning" is incidental to the overall planning I do surrounding life insurance planning. It's a by-product that life insurance and annuities are not reported on the FAFSA... not the sole reason for buying.
     
    DHK, Mar 13, 2019
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  7. MedicareMillionair
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    I don’t hear of many people using life insurance policies to pay for college educations. I think many of these are sold but I don’t think the plans frequently come to fruition. This isn’t necessarily the agents fault.
     
  8. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    It's not for "paying" for college educations, but sheltering the money from being included in the FAFSA so the student can potentially qualify for additional financial aid.
     
    DHK, Mar 13, 2019
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  9. MedicareMillionair
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    I understand that. There are agents that sell overfunded life insurance on the lives of the parents to help pay for the college education. I have never really worked in this market, but I do know this is done. I was simply adding that info to the conversation.
     
  10. Allen Trent
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    it is when the agents business cards, brochures & website list "college savings" in the list of services, but the agent suggests life insurance on the kids 99% of the time instead of 529 plans or other actual investments. The "college savings or Planning" bullet point peaked the prospect interest a ton more than "life insurance you could borrow from for college"

    There is zero problem with permanent life insurance on kids as an extra back up source of supplementing cash needs during college, but it is hard to get enough cash into life insurance in such a short window of time to amount to much after getting through the costs, loads & initial years it takes to ramp up greater values. Now, if mom or dad want to have a policy or Grandma & Grandpa to help offset college costs if they die as a death benefit or if they are alive for some supplemental distributions, a policy can work better because the 7 pay/MEC premiums allow higher deposits into smaller policies on parents/grandparents than on young kids.
     
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