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Every month I get client questions from advisors that leads me to believe there are still a ton of untruths, misbeliefs, and misconceptions in the college market. Forget about the advertised price (which now approaches $300,000 per student), the actual price a family ends up paying for college today will cut deeply into their retirement plans. I think everybody knows it - they just choose to avoid it. So let me point out some of the most prominent misconceptions I often hear and why every family that wants to send their child to college should contact a Certified College Funding Specialist (CCFS®) years ahead to develop a strategic plan.

Dream schools can really be a nightmare

More students than ever today are attending college for 5 to 6 years to get their degree. Picking the wrong major initially, changing majors midstream, or even changing colleges midstream has caused more nightmares for families than dreams. Another way to turn a dream school into a nightmare is accepting a school beyond the family’s financial means.  This heartfelt choice can sink a family’s retirement goals. All these nightmares could have been turned into real dreams with proper planning.

Outside scholarships are more a goose than a golden egg

“There are billions of dollars of free money just waiting for students!”  This is all advertising crap! Most students don’t win enough private scholarship money to pay for books and supplies, let alone tuition. Typically, private scholarships range from $500 to $1,000. Even worse, most colleges will reduce any financial aid you qualify for by that private scholarship amount, putting you back at ground zero. As Elvis once said, “Fools rush in where angels fear to tread.” Be smart. Plan your college finances years before college.

Full rides are for athletes, not scholars

Full scholarships do exist, but they’re rare and typically offered by colleges you never heard of, nor choose to attend. A $20,000 scholarship at a private college with a $68,000 total cost can still leave you in the poorhouse. Good planning will get more merit scholarships than good grades and test scores. It’s all about negotiating the best deal.

Your Expected Family Contribution is NEVER the amount you’ll pay

Every family has an expected family contribution or EFC. It’s a measure of the family’s financial strength. That’s what the colleges say, anyway. But it will never end up being the amount a family actually pays. That amount will be much higher. That’s because most colleges have enrollment management teams that play games with parents. And if the student plans to attend a college before the award letter arrives, it may already be too late. The college has already determined whether, or not, they want the student and it will show on that award letter. Proper planning could have lowered your EFC.

The FAFSA financial aid form doesn’t award financial aid

Filling out the Free Application for Federal Student Aid (FAFSA) only determines the student’s EFC and whether the student is eligible for federal aid. It does not mean the student qualifies for, and will actually receive, financial aid. The FAFSA is only the messenger. And without proper planning, the message is usually bad news.

Colleges don’t care about your retirement

If you think that colleges care about the effect tuition costs will have on your retirement - they don’t! Maybe that sounds cold, but it’s the truth. Here’s another truth. They don’t care about your living costs, your mortgage or consumer debt, medical bills or private high school costs either. They consider it YOUR fault that you’re not financially prepared for college, even if it does cost between $150,000 to $200,000 per child. Do yourself a favor and get prepared - preferably years in advance.

Saving for college may not be the blessing everyone says it is

Again, a college will cost between $150,000 to $200,000 per child. Unless you have that kind of savings when the student attends college, you’re looking at financial aid or debt. But the financial aid formula is based on income, not so much on assets. So if you have high income then financial aid may be out of the picture, even if you have saved some money for college. If you have little savings, you’re looking at some serious debt, which will drive up your cost of college by 25%-50%. Sound depressing? You have no idea. This requires planning with an expert years in advance.

Students can borrow for college - kind of

Yes, students CAN borrow for college. They can borrow up to $31,000 in Federal loans for an undergraduate degree. That equates to one year of college at an in-state public university. The rest is up to the family. Yes, students can sign up for private loans, but their parents must co-sign, and seldom get taken off the loan prior to payoff. Parents can also borrow the Federal PLUS loan, but that comes with an interest rate of 7.0% and a whopping origination fee of 4.264%. That’s 11.264%! When was the last time you paid that much interest to borrow money?

Develop A Cash Flow Plan For College NOW!

The real answer to solving all the above misconceptions is PLAN AHEAD! A Certified College Funding Specialist (CCFS®) is trained in college financial planning and can help families calculate their entire cost of college, develop a cash flow budget around that cost, and control and manage education borrowing.

Yes, I may be biased, but financial professionals that become a Certified College Funding Specialist (CCFS®), are the only real hope families have to make sense of this crazy college system, and give them a fighting chance of not overpaying for college. Good luck if you think the Federal government, or the colleges, will come up with a solution for high tuition costs.

To find a CCFS® in your area visit


Posted by Ron Them

For over 30 years, the nation's leading financial advisors, broker/dealers, and major media outlets have been using his research, funding strategies, training, and insight. Ron is highly regarded as an expert in the college funding field.

He is a former Chief Financial Officer of a Fortune 500 company and currently owns his own financial advisory company specializing in cash flow planning for business owners and executives. He developed the Cash Flow Recovery™ process that uses cash flow management principals to increase asset value and build wealth for business owners.

He is also the originator of several software calculators to help advisors and families make college affordable, including:

* College QuikPlan EFC Calculator
* "Find the Money" College Cash Flow Calculator
* College Debt Reduction Calculator

Ron has been quoted in U.S. News and World Report, Kiplinger's Personal Finance, Smart Money, Financial Advisor Magazine, Small Firm Profit Report, Practical Accountant, LIMRA's Market Facts, Senior Advisors Magazine, HR Magazine,, Employee Benefit News Magazine,, Entrepreneur Magazine, Insurance Selling Magazine,, The Christian Voice, and Columbus CEO Magazine.