Honing Your Expertise in College Planning

The Crisis

There is a crisis in college planning in America. "Many families are over extended financially and emotionally" says Joe Messinger, CFP®, ChFC®, CLU®, the director of college planning at Capstone Wealth Partners, "We, as financial professionals, are in a perfect position to help relieve their stress."

The cost of college is on the rise, usually flowing at nearly twice the rate of inflation and student loan debt is out of control. The national student loan debt has grown from $240 billion in 2003 to $1.3 trillion as of March 2016. That is a 510% growth rate in the last decade. The stress of paying for an education that could cost between $100,000 and $250,000 for each child is going to be an important topic for parents for the forseeable future. In fact, one of the top concerns for GenX is that many may be sending their children to college while still paying their own student loan debt.

Heather Jarvis, a leading student loan expert, assures, "Higher education isn’t just for the rich!" She founded her own business, Heather Jarvis, Student Loan Expert LLC , after learning the hard way herself. Jarvis graduated from Duke University School of Law owing $125,000 in student loans and facing 30-years’ worth of $1,200 monthly payments. She didn’t realize she couldn’t afford an expensive education until after she got one, she says.  She went on to practice public interest law for more than a dozen years before focusing her advocacy work on reducing the financial barriers to practicing public interest law.

Jarvis has contributed to student debt relief policy for the House Education Committee and others in Congress, and has dedicated her professional efforts to advancing public service loan forgiveness which allows recent graduates to dedicate their careers to the greater good.  

"Student loan repayment and forgiveness provisions are complicated," say Jarvis, "Young professionals routinely borrow mortgage-sized amounts in student loans and seek advisors they can trust to give them the sophisticated advice they need."

The Expertise

"Families are desperate," said Messinger, "Financial professionals are not giving the right advice because we have never been formally taught. Learn how to really help families and you'll earn trust & respect in your community."

Messinger speaks from experience. He became a leading expert in college planning after co-founding an independent fee-only RIA in 2009 to deliver unbiased, fiduciary advice to college-bound families. "The families we serve come to us with stress, anxiety and even guilt about the college-funding process," said Messinger. "We act as a guide through the process and alleviate the stress by advocating and advising them through the maze of college funding."

Messinger now educates other financial advisors about how to best serve college-bound families through Capstone College Partners. Messinger and Jarvis will both offer one-day pre-conference sessions in St. Louis in September 2018 in connection with XYPN LIVE.  Jarvis says anyone interested in serving young professionals and highly educated clients should attend. "I remember after our 8-hour student loan training (at #XYPN16), a bunch of folks were like, 'whoa, I thought this was going to seem long, but we could go for three days on this subject!'" she recalls.

Messinger urges financial advisors to hone their expertise to provide meaningful help for the families they serve. "The sticker price of college is irrelevant if you are an informed consumer and you know how to shop for higher education."

Messinger honed his expertise by building a network of experts in different areas of college planning. He worked with high school counselors, college admissions counselors, test prep reps and financial aid administrators to stitch together a complete offering for his clients. Jarvis honed her expertise from "a dozen years of experience!", she says.

For Messinger, it's about more than being a sought-after advisor in an under-served niche. He gets to talk to families about what they care about most - their kids.

The Solution

To effectively prepare families for the cost of college, Messinger says, you need to be able to help them determine their budget and develop their criteria for choosing a college. Help them weigh important considerations such as majors offered, graduation rates, and job placement services. Jarvis advises, "Don’t be tempted to oversimplify—establish a strategy and don’t hesitate to revise as you go."

Each student should have a list of six to eight schools divided between three categories: safety, target, and reach. Part of the process, according to Messinger, is to project the client's EFC, or Expected Family Contribution. From there, you can determine the out-of-pocket net cost of each school on the list after merit-based and/or need-based financial aid has been factored.

When guiding families in applying for admission & scholarships, determine which colleges will accept the Common Application. It's imperitive to meet application deadlines and criteria for each specific college, as well as deadlines and requirements for institutional & private scholarships. Instruct students to gather letters of recommendation and secure transcripts to be sent to colleges and universities, Messinger advises.

Next, families will analyze financial aid offers. In some cases, appeal letters are warranted. Students may also leverage competitive offers from other colleges.

When helping families choose the right school, ensure they choose based on value — not emotion, says Messinger. That means determining the best fit academically & financially.  Analyze net cost after financial aid vs. benefit of schools that have accepted the student. Present the family a side-by-side net-cost comparison of schools and ensure the school fits the family's pre-determined budget.

Other ways to help college-bound families, according to Messinger:

• Determine optimal asset, income, and tax strategies
• Advise on distributions from savings and investment accounts
• Identify eligible tax credits and deductions
• Coordinate contributions from other family members
• Evaluate and select the proper loans 
• Explain key differences between the FAFSA & CSS Profile
• Outline key differences between federal & institutional methodology
• Identify income & asset strategies to maximize aid eligibility in advance of their "Base Year"
• Maximize scholarship money through student academic positioning
• Calculate additional funds needed to cover estimated shortfalls  

A prepared, educated advisor can make a monumental impact on generations.  "We are on a mission to end the student loan crisis one family at a time," Messinger said. Jarvis adds, "I’m glad to be able to ease the anxiety felt by student loan borrowers."

About Heather Jarvis

Heather Jarvis is an attorney and a nationally recognized expert specializing in student loan law. She has provided award-winning student loan education and consultation for universities, associations and professional advisors since 2006 and is sought after for her sophisticated knowledge and accessible teaching style. Widely recognized as an expert source of information, Ms. Jarvis has advised congressional committee members and administrative officials on issues affecting student loan borrowers since 2005. Ms. Jarvis recently completed service on the American Bar Association’s Task Force on Financing Legal Education. She graduated cum laude from Duke University School of Law. Follow Heather on Twitter @Heather_Jarvis.

About Joe Messinger

Joe Messinger, CFP®, ChFC®, CLU®, is partner and director of college planning at Capstone Wealth Partners. He is a trusted authority in the area of college planning and funding, and is frequently asked to speak to professional groups and parents to demystify the college financial aid process. Through his work with Capstone College Partners, he is on a mission to empower financial planners with the tools they need to help families beat the high cost of college. Reach out to Joe on Twitter @CapstoneCollege