Today’s Guest:

John Munley, College Funding Specialist  

Despite being a successful foreign currency trader with a 27-year career on Wall Street, John Munley was still worried about paying for college, saving for retirement, and spending quality time with his family. This urged him to sign up as a financial planning client years ago.  

As John’s financial planner guided him through obstacles and showed him the path to success, John discovered that he wanted to do the same for others. 

When he was presented with the opportunity to leave Wall Street behind and start his journey as a financial planner, John co-founded wHealth Advisors, a New Jersey-based company that aims to provide the highest quality, objective financial planning to its clients.  

John actively works as a College Funding Specialist, helping thousands of families find the best possible college fits for their students and demonstrating how to attend college for the least amount of money. 

Questions Answered Today:

How do I maximize the benefits of my 529 account?  

There are many strategies that you can utilize around 529s. Most of them work if you know how to play around them. Here are guidelines that might help you out:  

1. Apply the principle of “cycling”, which means maximizing the amount of money you put through your 529.  

The rule around cycling is easy: the more money you contribute, the more tax exemptions you get. For example, in New Jersey, the maximum yearly contribution is $20,000. The income tax exemption, on the other hand, is 6.5%. This means that maximizing a contribution of $20,000 would generate a tax savings of $1,300 a year, which is a huge benefit.  

Make sure you understand the rules that apply to your state.  

“An important thing to realize is that every state has its own rules as far as how taxes work and how deductions work.” – Brad Baldridge 

The premise that “the more money you contribute, the more tax exemptions you get” is also attached to some ground rules, and these rules vary per state. Here are some variations based on the sample scenarios we discussed:  

• Deductions can be per beneficiary. In Wisconsin, the limit is per beneficiary, and beneficiaries can include parents. It’s subject to change, but  at the moment, their limit per beneficiary is $3,500. This means that a maximum of $3,500 contribution per beneficiary will be tax-free. Knowing this allows families to be strategic in setting up 529 accounts to maximize the tax benefits.  

• Tax benefits can be carried forward for lump-sum contributions. For example, in Wisconsin, even if you contribute a lump-sum amount of $50,000, for the year 2021, only $3,500 out of that $50,000 will be tax-free. The tax benefits will “carry forward” for the remaining $46,500 in the succeeding years, which means that you’ll get another $3,500 per year in tax benefits in 2022, 2023, and so on. Note that this is applicable in Wisconsin, but it may not be in other states, so make sure to avoid over-contributing.  

• The “net contribution rule.” If you put money in and take it out at the same year, the tax benefits only apply to the remaining amount. As an example, if you invest $20,000 and take out $9,000 in the same year, the only tax-free amount is the $11,000 that was left in the account.  

2. Work with someone who knows taxes.  

The tax rules can be tricky as they continue to change, and they vary depending on where you’re located. This is why it’s important to be working with someone that knows these rules and can help you apply them properly.  

3. Understand that these rules can change. Sometimes these rules change, sometimes they don’t. The rules can vary because of many factors such as the income tax, inflation, and more. Again, make sure you’re working with someone with expertise who keeps up with the rule changes and can provide guidance on how and where to invest your college savings for maximum potential benefits based on your needs and goals.  

What are your insights around setting up 529s accounts under a grandparent’s name versus the parent’s name?   

Having a 529 account under a grandparent’s name has its pros and cons.  

One indispensable benefit of a 529 account under a grandparent’s name is that doesn’t count as the parents’ assets. Therefore, it has no negative impact on the student’s consideration for their financial aid package.  

It is important to note though that there is a new law to be implemented in full in 2024, which entails that 529 accounts under the grandparents’ name would count as an untaxed income for the student and therefore could decrease their financial aid package. The workaround for this is to fund the account once the student is in their last two years in college.  

But having the 529 account set up under a grandparent’s name could also have some disadvantages:  

Parents have no control of the money. The grandparent is the legal owner of the money, so they can do whatever they want with it. For example, if one of your child’s grandparents gets into a certain medical condition and ends up using the college money they’ve saved to pay for the expenses, they can do that. It’s worthwhile to remember that there are a lot of protections around 529s, but they vary per state. So if you’re thinking of doing this, make sure to familiarize yourself with the rules around:  

• Medicaid and Medicare 
• Bankruptcy  
• Lawsuits  
• And others.  

In addition, some grandparents might not want to deal with the hassle of setting up the account themselves. This happens especially when they want to contribute in small amounts (i.e. birthday cash gift of $500). For smaller amounts, it may be wiser to just put the money into a parent’s account instead of creating a brand new one.  

What happens to a grandparents’ 529 accounts when they pass away before the beneficiary (student) reaches college?  

The principal 529 account owner would have to list a “successor owner” that could take over once the principal account owner is no longer able to manage the account.  

At this point, it’s important that there’s somebody that understands these processes that may involve generation skipping, estate planning, legacy planning, etc. This is because failing to comply with these tax rules around 529s can be really expensive, especially if there are big investments involved.  

Here are some more tips that could potentially help out families in saving for college:  

1. Cash gifts could go straight to a 529 account rather than a taxable account. If it’s a usual practice in the family to give gift cash for college on occasions such as birthdays and Christmas, it may be wise to open a 529 account and have the money go straight to it.  

2. Be aware of “family politics” involved. Some family members may willingly help out pay for college but with some strings attached, such as:  

• An uncle offering money if you get admitted to a good school  
• A grandpa offering money if you go to their alma mater  
• And other similar scenarios.  

It would be better to talk with them and know what these conditions are. Doing so allows a projection of how much money they’re planning to contribute, when they’re giving the money, and under what conditions. Having these conversations early helps in narrowing down your options in terms of affordability.  

3. Legacy planning. As 529s are transferable, it may be a good idea to do some legacy planning. There are families that contribute money to fund college for grandkids, great grandkids, and the generation that comes after. This needs to be done carefully, but it’s worth exploring. 

What do I need to know when investing?  

1. Think globally. Thinking globally is very much the opposite of envelope saving. This means thinking of your money as a whole, rather than allocating it to separate expenses. While envelope saving promotes discipline, it may hinder you from thinking big, and it minimizes your ability to be creative in investing, missing benefits such as tax breaks and the like.  

2. Understand the resources that you’re using to pay for college. Investments are always linked to risks, and this is something that investors should always keep in mind. The equity and the stock market won’t always be up, and it’s important to understand how these markets work. For the past 11 years, 529 plans have always increased, but this year, it has a negative return. Taking out your investment now could be a bad idea, as it has a decreased value. Take a look at this illustration:  

Student A is a beneficiary of a 529 plan with an investment of $80,000. His parents plan is to take out $20,000 per year from his freshman to senior year. But since the market is down, the value of the original investment has gone down to $65,000. So instead of taking out $20,000 this year, they decided to use cash and give the investment more time to gain value.  

The bottom line is that these investments could help you save, but they could also make you lose money if you’re not careful. The decision whether to keep it safe or to risk it is yours to make.  

Therefore, having a clear understanding of how your resources work will dictate how aggressive your investing will be. Also, time is critical for growth. It helps recover your losses and teaches you to reinvest when necessary. The last thing we want to happen is to cancel college just because your investment has gone downhill.  

Interested in getting started? Contact Brad now.

Disclosures

Investors should carefully consider investment objectives, risks, charges and expenses. This information and other important information are contained in the fund prospectuses, summary prospectuses and a 529 product program description. These documents can be obtained from financial professional or directly from the plans website. Please read them carefully before investing.  

Depending on your state of residence, there may be an in-state plan that offers tax and other benefits, which may include financial aid, scholarship funds, and protection from creditors. Before investing in any state’s 529 plan, investors should consult a tax professional. If withdrawals from 529 plans are used for purposes other than qualified education. The withdrawal could be subject to a 10% federal tax penalty, state penalties, federal income tax and state income tax. 

Registered Representative, Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, Member FINRA / SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Baldridge College Solutions and Cambridge are not affiliated. John Munley and wHealth Advisors are not affiliated with Cambridge

Check the background of firms and investment professionals on FINRA’s BrokerCheck.

This communication is strictly intended for individuals residing in the states of California, Colorado, Florida, Georgia, Iowa, Illinois, Indiana, Maine, Maryland, Minnesota, Missouri, Montana, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. No offers may be made or accepted from any resident outside the specific states referenced. 

Links and Resources

Helpful Articles and Resources 

• College Financial Planners: What They Do and Why Families Hire Them 
• College Money Report 
• Cost of Colleges by State 
• Taming The High Cost Of College 
• John Munley’s contact info:  
• LinkedIn 
• wHealth Advisors – Website   

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Transcript Email Download New Tab

Brad Baldridge 0:00
Advanced planning for 529s, getting grandparents and others involved. Stay tuned.

Presenter 0:06
You have kids, they grow up, and before you know it, it's time to plan for college. Where do you start? How much is it going to cost? Will you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? The list of questions is never ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College podcast. Here is your host, certified financial planner, Brad Baldridge.

Brad Baldridge 0:36
Hello and welcome to Taming the High Cost of College. I'm your host Brad Baldridge. Today is the final chapter in the 529 planning that we're doing with John Munley. Today we're going to talk a little bit about grandparents and how they might be involved. We'll talk a little bit about legacy planning, how families could use 529s for multi generational planning. Then we'll get into the final ideas and some of the advanced planning that some families might consider as they work with 529s. As always, show notes are available at our website at tamingthehighcostofcollege.com. Let's go ahead and jump into the interview.

All right, we're back today for our fourth episode on 529s. As always, we've got John here. So welcome.

John Munley 1:20
Thank you, Brad, and how are you today?

Brad Baldridge 1:22
I am doing fantastic. So this is our last installment, we're going to talk about some of the advanced strategies around 529s. And again, some things that a lot of people probably have not thought of, or haven't fully taken advantage of. The thing is even a lot of advisors out there aren't pushing things as far as they could, as far as running things rights the limits and making sure they get all the breaks they can every which way they possibly can here. So I guess that being said, some of these strategies will work really well, but not all of them. So you really need to understand your situation. And figure out if what you're, you know, again, sometimes having a lot of tax breaks when you don't pay much in taxes as an example, isn't that great of a benefit compared to what you might do in some other way. But I wanted to just cover a few of the things that we do quite often with people or give you some examples. But the first topic I want to talk about is cycling. So cycling is where a general concept is that we try and maximize the amount of money that we put through the 529. Because for many cases, you get tax deductions for adding money to a 529. Therefore, the more you add, the more deductions you get. And a relatively simple example would be, and I think you mentioned this as well, but you have a situation where you have $20,000, you happen to have a college kid and a bill for $20,000. So you're about to pay the bill. And you're saying well wait a minute, if I put this into the 529 and then pay the bill next week, out of the 529, I will have contributed to the 529 so now we'll get some tax deductions. I think that's something that you mentioned that's working well and some of the states where you have some clients. Can you speak to that a little bit?

John Munley 3:12
Sure. I'm in my home state of New Jersey, up until this year 2022, they never gave you any deduction off of your state income tax for contributions to 529s, they just switched this year, which as long as your AGI is below $200,000, you can take up to a $20,000 deduction for 529 contributions. So a lot of my clients have kids who are going to either private school, high schools, K through 12, or in college, and they were just that have college savings in a taxable account because, you know, they never got a deduction for the 529. So they're like, alright, we're gonna save some money in a taxable account. Now, what we have them do is have them make that contribution to a New Jersey 529 plan, they get that deduction up to 20,000. And then they just pay that bill from the 529 rather than the taxable account. And here in New Jersey, we're about six and a half percent income tax. So for every $10,000, you're saving $650 on your tax return. That's real money. You know, when it comes to, when you look at the price bills for college and even private high schools, what the tuition rates are.

Brad Baldridge 4:28
Right, absolutely. So I guess that's an important thing to realize is every state has their own rules as far as how their taxes work, and how the deductions work. So you need to be careful because like here in Wisconsin, we have a per beneficiary limit. So it's 3500 or so. And I can't, I'd have to look up the exact number. And it changes every year because it started at 3000. And then they've been indexing it for inflation for the last 7,8,9 years. So every year it changes so I have a hard time keeping track of it. But so for many Wisconsin families, it makes sense to contribute up to that limit for each of the children, instead of laying it all in one account. Other states, it doesn't matter as much that you have multiple accounts, because it's per tax return, it's how the limits apply. So that, it doesn't no matter if you put it all on one account, or you put it in five accounts, it's per tax return. But here in Wisconsin, we might even add parents as beneficiaries where we might have three children each with an account, and then parents, each have an account. So now we were able to put in, 15, 16, 17,000 per year and still deduct the entire contribution on our state taxes. Versus if we put that all into one account, all at one time, we would only be able to deduct the 3500, the current limit, and then it would carry forward. That's another benefit that some states have and some states don't is whether or not you can carry the benefit forward. Here in Wisconsin, we can. So now, even if you're going to put in a large sum, we've had that situation where maybe you put in $50,000 as a lump sum, all at once, you get to deduct the accounts this year, next year, and the year after that all because of that $50,000 contribution and because of the various carry forward. So working with your accountant or someone that really understands how your taxes work, and making sure you don't break any rules. Another caution is some states out there have what's called a net contribution rule, which says if you put money in and take money out at this in the same year, they they're actually going to give you a benefit based on the net. So you put in 20,000 and take out 10, then your contribution for tax purposes and tax benefits is only 10,000. Because they netted out the amount that you took out in that same year. So now we might need to alternate years or do other creative things in order to not get tripped up by some of these rules.

John Munley 7:04
And that's a great point, Brad that you bring up is you really have to know what your state rule is, because every state is going to have a different way on how much you can deduct it and how you treat that deduction and the timing of it all. So I'd love to give a blanket statement here and say this is how it works. But it really does matter where you live and what your individual state plan is.

Brad Baldridge 7:26
Right, and every year a state or two make some changes. So again, your state may do it the same way for 10 years and then change at some point or not change at all, it just depends. But certainly, as advisors, where we're working in many, many states, it seems like every year, there's something new to learn, because some states somewhere, changes their tax rules around the deductions or even just changes the tax rules around whether or not you have an income tax, and how much in what the rate of the income taxes and some of those things.

John Munley 8:00
And at the end of the day, we really, we can't lower what a college is going to charge for tuition, room and board. But what we can do is hopefully, based on where you live, create some tax breaks. So at least you'll save a little bit of money, not a lot compared to what the cost of college is. But any little bit that you can save is definitely valuable.

Brad Baldridge 8:22
Absolutely. All right. Well, let's change gears a little bit. Let's talk a little bit about grandparents, why limit the fund to just mom and dad?

John Munley 8:30
Anybody can have, own a 529 account and have whoever they want as a beneficiary and whatever funds they use goes towards that beneficiary. So grandparents can definitely own 529 plans, there's a new law that just passed this beginning in 2024, and I won't go into the whole financial aid component of it, but grandparents that own 529, if they paid out of that 529 within the student's first two years of college, that counted as untaxed income for the student and could decrease their financial aid package. So we'd always tell if you had a grandparents account, wait till the last two years of college to pay for that. But with this new rule change, you grandparents can use that money anytime they want to pay for their grandchild or their child's, anybody's college that they want to, on top of that, because in the grandparents' name and not in the parents' name, it doesn't count against you for financial aid purposes, because they only look at parents assets, not what grandparents own. So those are two of the benefits of having it in grandparents name, but I know Brad had discussed this before and Brad had some great points about what could be a disadvantage of having parents basically gift money to grandparents and having grandparents keep it in their name.

Brad Baldridge 9:59
Right absolutely. So, yeah, I certainly believe that if grandparents are going to take their own money and set up, you know, college accounts for their grandchildren, or great grandchildren, or whatever it might be, they certainly can do that. And then they have control of the money, and it's still their money, and they get the tax benefits. And they can then spend the money where they want to, with these new rule changes around financial aid, there might be some advantages to having parents take the money that they've saved for college and shifted over to grandparents. Now, the challenge there is, you are, in fact, gifting the money to the grandparent, and now you no longer have control of it. And theoretically, grandma, and grandpa could take the money and go to Hawaii, or do whatever else they want with the money. Or sometimes it might be out of their control, if they ended up needing nursing home care. Or if they were in a car wreck or something and they were sued for a million dollars, there's a potential that that money could be tapped. And you could lose it. Again, because it's at risk, because it's in the grandparents' name and not the parents' name. Now, obviously, if it's in the parents name, the parents could lose it under those same circumstances. And there are protections. So I don't want to scare you and say, well, there's you know, there are a lot of protections for 529s, but it varies by state. So again, you need to understand the bankruptcy rules, you need to understand the Medicare and Medicaid rules, and then ultimately, things like lawsuits and those types of things. If you're going to be doing that, and especially if it's larger sums of money. In addition to that, sometimes grandparents really don't want to deal with it, right. And if you're giving relatively small amounts, you know, here's $400, for your birthday, I'd like to put it in a 529. But now I have to open an account and go through all left bet fun, can I just put it in the 529 that mom and dad already own for you. And in some states, you actually can do that. And the parents could take the benefit for it still, so they could take the tax deduction even though they put it into a 529 that they don't even own, though, there's a lot of planning around that I think we're seeing a lot more multi generation planning, as college is getting more and more expensive, and grandparents tend to be later in life and have more money than they can spend in some situations and are trying to figure out well, how can I use this money wisely? I think I see a lot of grandparents are saying well, let me help with college. Whether it's... Often it's not enough to move the needle terribly. But even 10,000 or $20,000 can be make a big difference for a typical student. And then I've had a few grandparents that are saying, big numbers, let's, you know, 100,000 per grandchild, so that they can cover a full state school, most likely, when they need the money. And the other thoughts are on grandparents?

John Munley 12:57
And we kind of just touched on it. I think they're both pros and cons. I definitely think if grandparents want to save and help their kids, it's they should open that 529, put their own money in to get the tax break, use it for the students beneficiary and they can pay, parents say 'Hey, can you contribute $10,000 this year for college?' They can pay right directly to the school from the 529. So to your point, Brad, if parents want to not hold those assets, want to give money to grandparents to set up a 529, that's kind of again, there, you have to weigh the pros and cons of each individual situation.

Brad Baldridge 13:38
Right, exactly. And again, I think sometimes grandparents might be a little concerned they will What if I'm not around by the time college rolls around for my grandkids, or even great grandkids. And again, we talked about that much earlier, but grandparents can list a successor owner to the account. So grandma and grandpa can own it while they're capable of doing that. And then they can have either the next generation so the parents of the student could then take over as owners, or sometimes it makes sense to skip a generation and go directly to the grandkids depending on how old they are. And how much money and you know the situation in that in the family there were generation skipping, sometimes works and sometimes doesn't. You really need to understand the rules there. And again, as the dollars get bigger, the more you need to have someone that understands generation skipping and estate planning and all that be involved because you don't you want to make sure you don't inadvertently run afoul of gift tax and other rules that can be very expensive mistakes.

John Munley 14:46
No and just, I'll finish this up with my own personal experience before I got into this whole realm of financial planning and 529 plans. I have older kids to graduate from college, one that's in college and another one on the way, but my parents would each year for birthdays contribute towards their college fund. But what they did is basically wrote a check to me, and then we put it in a taxable account, in hindsight would have been much better for them to open their account, they would get a tax break, it would be in their names. And then when my kids were ready for college, rather than me having to go to the taxable accounts, sell this out, to have to pay income tax of capital gains tax on it, because again, a 529 grows tax free, it just would have been better for them to directly open the 529 plan, put my kids as a beneficiary and be there to pay for college as it went along.

Brad Baldridge 15:39
Right, exactly. So there's a lot of different planning around that. And the other, I guess, wildcard to pay attention to is there's also a little bit of what I would call family politics involved. Where, again, sometimes grandmas and grandpas, or aunts and uncles are helping, but they might have some strings attached to that help where it's like, well, I'll help you if you go to these schools or those schools, but not that school, or whatever it might be, right? Common one would be, you know, grandma, or grandpa say, well, I really want my grandkids to go to my alma mater. So if they go there, boy, will I be generous. But if they're gonna go to the competition, then now maybe not so much, right. So again, there's often times of, you know, I think, as parents understanding and talking with grandparents, especially if you know that there is some money set aside, having an idea of how much it is, and if there are strings attached, or when you can have the money. And that type of thing is an important part of the puzzle. Because, as we mentioned, depending on where the rules are, currently, grandparent money doesn't count as an asset, but it could count as income when it comes out and pays the bills in the future, it might be neither an asset, nor an income. So now there might be some additional benefits to having grandma and grandpa hold on to their money. Again, it's the control issues and some of the other issues that also come into play.

John Munley 17:10
Right, that's another great point that you just made with parents should have, they should have a conversation with their parents about, hey, are you contributing to college, how much? Because that really will help dictate what kind of schools that the student can look for based on an affordability amount. So having that information, a year or two in advance really does help with the college search and a college selection and what schools you're going to look at, because it gives you, alright, this is a number that we can afford to go to a school, what schools are in that price range.

Brad Baldridge 17:41
Right, absolutely. And then if we take this grandparent, great grandparent thing to the next level, now we can start looking at it more of a legacy planning where I've seen situations where families are putting in more than they know that their grandkids could ever use, or at least projected depending on rates of return to that type of thing, with the intention of kind of building this snowball that will then roll downhill where grandkids can use what they need to pay for college and whatever they don't need will continue to grow for great grandparents, great grandkids, and then the great grandkids will use what they need. And then hopefully it can continue to grow for the next generation. You know, so getting that snowball started, and again, I would be careful in that, it's really hard to know where things are going to be two and three and four generations down the line. But it might be a good thing to do for the next few generations, as a way to take advantage of the rules. And there are limits to how much can be in a 529. So you can't, you know, per beneficiary rules where you can't have multi-millions in one account, you may have to divide it among multiple accounts in order to make that work as well. But again, there's a lot of planning around some of these ideas. And if they fit in your situation, I think it's something that you could explore. All right, well, let's jump into one more concept. I think this has a little bit to do with the psychology of investing for some people. And I run into this quite often where some people can think what I would say as globally can they kind of think of oh, this is all our money and we'll just do the best things at the right times with our money and not worry about what it's for specifically. And other people have a very, they essentially have either actual envelopes where I put money in this envelope for this and that envelope for that, which again, is kind of an old concept back when we dealt in cash where you save up for Christmas by putting $10 week into the Christmas fund or whatever it was. Now for a lot of people, colleges, there's benefits to saying well, that's college money, I can't tap that for a vacation or some of these other things. But occasionally, it hinders you when you are looking at the college money must be kept separate from the money I'm saving for a car. And that has to be kept separate from the vacation fund, or the long term savings fund or whatever it might be. Because when we run into situations where, oh, if we could, if we had another $10,000, right now, we could slip that into a 529 and then we could take that out in a year or two and get additional tax benefits. But unfortunately, we don't have 10,000 because we can't take the money that's for a car and borrow it, so to speak. Whereas if you can think globally, it's like, okay, well, it's all my money, I'll just pay for the car when we get there with the money I didn't spend on college, because I prepaid it now. So if you can think globally, and kind of not get too worried about this bucket is exactly for this, in this bucket is exactly for that, it allows for a little more creativity sometimes around how you invest, and again, around how you might take advantage of tax breaks and other things.

John Munley 21:01
Yeah, and I think it's, it's important one to understand the resources you have that you can use to pay for college, because in the last 10 or 11 years, we've seen an equity market that just has gone up every year. So your 529 plan should have been increasing every year. For 2022, we've seen a negative return on the stock market, I'm sure most people's 529 plans are down. Ideally, you don't want to ever sell equities in a down market. So let's say in your plans, you basically had, hey, I'm going to take 20,000, you have an $80,000 529 plan, and I'm going to take 20,000 freshman, sophomore, junior and senior year but now, the markets down, it's only worth 65,000. Do you have somewhere to take, get that first year is 20,000 and give this account time to grow back over the next two or three years? So it really is important to take an inventory of where your liquid assets are, and different ways that you can find different things that are going to happen in your life.

Brad Baldridge 22:04
Right, absolutely. And that's where when I'm talking with people, sometimes they might have, say $100,000 already set aside for college and college is a year away. And they're saying, okay, well, we've got to cover, we got to state schools 25,000 a year, we have the 100,000, we're there, we really don't want to take any sort of risk and and have it go down because if it goes down, then again, we don't have a lot of other resources. You know, I would hate to cancel college because we took a risk with money that we didn't have any way to recoup the losses. And other people are in a different financial situation where it's like, okay, well, I got 100,000 for college, if I invest it, and it goes down, I don't want that to happen, of course, but if it were to happen, I've got 50,000 reserves over here and 10,000 reserves over there and other money here and other money there. And I can borrow money. And I've got a lot of different ways that I can cover that short term downturn, and still not have to cancel college, I mean, if you're gonna say, well, college is canceled, because my account went down, then maybe you shouldn't be taking any sort of risk with it. Other people are on that other end of that spectrum where they're willing to swing for the fences, again, ultimately, because the tax benefits or tax free growth are fantastic. But in order for the tax free growth to mean much, you actually have to get some growth, in order to get some growth, then usually you have to take some risk. And you know, if you're taking risks to get growth, sometimes it doesn't work out and you get downturns instead. But again, for many people across, two or three kids over 5, 10, 15 years of college, there's a lot of ways that you can maneuver things so that you're not necessarily taking that full loss and yours There's ways to recover and ways to, again, you'll still get the downturn, but there might be a way to reinvest money elsewhere so that when the markets come back, or if the markets come back, you're made whole again. All right. So I think that covers it for the advanced 529 plans, there's certainly other things that people can do that are a little more fringe, and we're not going to get into them here. But there are a lot of great strategies around 529 planning. And if this is your first episode just a reminder that we do have 529 information for four episodes starting from the basics and beginners all the way through these advanced strategies. So go back and catch the the whole show or the whole four podcast series so you can kind of learn it all so to speak. And I really do appreciate you John, being my guest for these four episodes. Can you one more time tell people who you are and how they can reach you.

John Munley 24:50
Sure. And thank you very much for the invitation for this, Brad, I had a great time over these last sessions discussing 529s and hopefully, people listening to this are able to pick up some more 529 education from these podcasts. Again, my name is John Munley, I have a financial planning firm based in Red Bank, New Jersey. And really work with families with college planning, whether they have a newborn or two or five year old, how to start saving for college, then once they're in high school and get closer to those college ages, we really kind of dive into not only how to fund college, but how to lower college costs. So you're not paying the sticker price. And again, thank you for listening to the podcasts.

Brad Baldridge 25:37
Alright, well, we'll put all your information in the show notes as well. So if people can go to tamingthehigh costofcollege.com, and find the shows where John's the guest, and there will be his contact information as well. That's all we have on 529s. I hope you enjoyed it. And we'll see you next week.

All right, there you have it. Four episodes on 529 and 529 planning. Hopefully, you've gained enough that you can get out there and get to work on your 529s. If you need additional help or have other questions, please feel free to reach out to John or myself, we'd be happy to answer any questions you might have. Again, as always, show notes are available at tamingthehighcostof college.com. And there's lots of other free resources there as well, including the College Money Report that can help you understand how much aid your family might receive. Cost of Colleges by State, which will help you understand the prices that many states charge for both their in-state and out-of-state and private schools, and how all that works. And if you have any further questions, like I said, feel free to reach out. That's all that we have for this week. We'll talk to you again next week.

Presenter 26:46
Thank you for listening to the Taming the High Cost of College podcast. Now it's time for you to take action. Head to tamingthehighcostofcollege.com for show notes, bonus content, and to leave feedback for Brad. The next step on your college journey starts now.

Brad Baldridge 27:04
Disclosures. The information provided to you today is for educational purposes only. It is not intended to be specific recommendations or advice. Please consult with a qualified professional before acting on any of this material. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principle. 529 College Savings Plan disclosures. Investors should carefully consider investment objectives, risks, charges and expenses. This information and other important information are contained in the fund prospectuses, summary prospectuses and the 529 product program description. These documents can be obtained from a financial professional or directly from the plans website. Please read them carefully before investing. Depending on your state of residence, there may be an in state plan that offers tax and other benefits, which may include financial aid, scholarship funds, and protection from creditors. Before investing in any state's 529 plan, investors should consult a tax professional. If withdrawals from 529 plans are used for purposes other than qualified education, the withdrawal could be subject to a 10% federal tax penalty, state penalties, federal income tax, and state income tax. Brad Baldridge's disclosures. Brad Baldridge is a registered representative with Cambridge Investment Research. Securities are offered through Cambridge Investment Research Incorporated, a broker dealer and member of FINRA and SIPC. Brad Baldridge is also an investment advisor representative with Cambridge Investment Research Advisors, a registered investment advisor. Baldridge Wealth Management and Baldridge College Solutions are affiliated. Cambridge and the Baldridge companies are not affiliated. The registered brand's location is at 10521 West Leighton Avenue, Suite 200, Greenfield Wisconsin, 53228.

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The post THCC 529 Plan Series EP 4: Advanced Strategies Around 529 Plans appeared first on Taming The High Cost of College.

Today’s Guest:

John Munley, College Funding Specialist  

Despite being a successful foreign currency trader with a 27-year career on Wall Street, John Munley was still worried about paying for college, saving for retirement, and spending quality time with his family. This urged him to sign up as a financial planning client years ago.  

As John’s financial planner guided him through obstacles and showed him the path to success, John discovered that he wanted to do the same for others. 

When he was presented with the opportunity to leave Wall Street behind and start his journey as a financial planner, John co-founded wHealth Advisors, a New Jersey-based company that aims to provide the highest quality, objective financial planning to its clients.  

John actively works as a College Funding Specialist, helping thousands of families find the best possible college fits for their students and demonstrating how to attend college for the least amount of money. 

Questions Answered Today:

Is it too late to start 529 plans for teenage kids?  

No. There are a lot of unmatched benefits for opening a 529, regardless of the age of the student. With a 529 plan, you have an opportunity to not only save money for college but grow it tax-free, so it’s important to never assume that it’s too late to start a plan, even if you have a child who’s headed off to college soon. 

1. Tax savings  

One of the primary benefits of 529 plans is that, to some extent, they are tax-free, which is quite a huge savings for many families. You can potentially invest and grow your money, and you can even earn tax deductions for your 529 plan contributions. The rules regarding taxes greatly depend on the state where you live, but let’s take a look at some of these examples:  

• In New Jersey, couples with $200,000 adjusted gross income (AGI) can contribute as much as $20,000 a year to their 529 plans and get a major tax deduction. The tax rate in New Jersey is 6.7%, so contributing that much money gives you a savings of $1,300 each year.  
• In New York, they have state tax and city tax that add up to 11%. They generally have no limit on how much money you can put in your 529 plan, but the tax-free contribution is up to $10,000, which means that you can get as much as $1,100 in tax savings from contributing to your 529 plan.  
• In Wisconsin, the contribution limit is currently $3,580 per beneficiary, and this number changes based on inflation. If you have four kids, you could potentially get that $3,580 tax break four times, for a total of $14,320! Sometimes with clients, I set up 529 plans for mom and dad as well, which allows them to get the tax deduction six times. 

There are different rules when it comes to tax breaks, so it’s always smart to get to the details of how 529 funds work in your state.  

Brad notes that your contribution, together with the money it has grown, is tax-free as long as it’s spent on qualified expenses, which include, but are not limited to:  

• Tuition  
• Room and board  
• Books and school fees 
• And more  

Refer to the first episode of this series for a deeper dive on qualified expenses.  

As your kid becomes closer to college age, it makes even more sense to put money in 529 plans to “save more aggressively.” 

“I think every college saving strategy should at least have 529s as a part of it.” – John Munley 

2. 529 savings are “more sticky,” reducing the temptation to spend your money mindlessly.

It’s easier to spend money when it’s readily available. Your kid’s college money could be gone in a heartbeat if you make an impulsive decision to withdraw it from a savings or checking account and go on a vacation, buy a house, buy a boat, or anything similar.  

Brad and John believe that 529 plans offer another layer of protection to your hard-earned money because they’re a dedicated place to put your college savings.  

A 529 plan is completely separate from your other bank or investment accounts, and it’s clearly earmarked for college. When you put your money into something that’s labeled “college,” it tends to be a lot more hands-off. You’re much less likely to tap into those funds unless it’s an absolute emergency.  

There isn’t that same temptation to “borrow” from the account and pay it back later either. Paybacks often never happen once the funds are withdrawn. Additionally, the taxes and penalties you’ll pay for using 529 plan funds for non-educational expenses are another powerful deterrent. 

Be smart and consider investing in a 529 plan because it will likely help you ensure that your college money is preserved and used for that purpose.  

Are there any instances where it makes more sense to skip 529 plans?  

As mentioned, families who spend 529 funds for a different purpose are met by harsh consequences. Hence, there are situations where you need to think twice about 529 plans.  

1. When you’re not paying taxes in the first place  

If you can’t reap the tax benefits, maybe it makes more sense to put your money somewhere safer such as mutual funds or bank accounts. This way, you have full control of the money and can use it for emergencies (e.g. surgery) without being penalized.  

2. When you already have solid investment accounts 

Navigating 529 accounts can be tricky and time-consuming, especially since you need to keep track of your savings for tax purposes and keep track of your withdrawals to prove that you’ve spent them on qualified educational expenses. If you already have investment accounts that are all set up, you could consider just using those (i.e. add an extra $1,000 a month to your existing account) and save yourself some time and paperwork. But you should weigh that against any potential tax benefits you might lose in the process. 

Are there other college savings plans that offer tax benefits?  

Absolutely! There are other college savings options and these are somewhat old, having been overtaken by 529 plans, but they are definitely worth a look.  

1. Coverdell Education Savings Account 

• Its maximum annual contribution is $2,000 a year, limited to 18 years ($36,000 maximum overall) 
• You can’t contribute if your income is too high. Its income thresholds are $110,000 for single and $220,000 for joint contributors.  

2. Uniform Transfers to Minors Act (UTMA) 

• Unlike a 529, which is a parent’s asset, a UTMA is essentially a child’s asset. That means parents hold the money in custody, and, if the child turns 18 or 21, the ownership of the money gets legally transferred to the child.  
• This may not be a good idea if you’re aiming to get need-based financial aid. Why? Since a UTMA account is a child’s asset, its value counts 20% towards the student aid index formula, contrary to a parent’s asset, which is only 5%.  
• Your child can do whatever they want with the money, in or out of college. But if you, as a parent, spend it as if it’s your own money, you can get sued.  
• A UTMA account’s capital gains are taxable. For example, if you put $20,000 in the UTMA at the time your kid was born, and it grew to $50,000 after some time, only the base $20,000 is tax-free. The remaining $30,000 is taxable. 

3. Roth IRA 

• A Roth IRA does not offer tax benefits, but it’s always accessible.  
• If you take your Roth IRA money before you hit 59 and 1/2 years old, you’ll be charged a 10% penalty. That penalty only gets waived (although the funds are still taxable) if you use the money for qualified expenses (e.g. college).  
• Messing with your retirement plan could be tricky, so make sure to do this with planning and caution. For example, a couple with big pensions, social security, and huge incomes has strategically used its Roth IRAs to pay for college and thus avoid borrowing money. They were able to bridge the gap between their saved college money and what college actually costs. This only worked because they have a good grasp of how they’ll be living in retirement.  
• For older parents, college is a retirement expense. In these situations, having different retirement plans [e.g. 401(k) and 403(b) plans] and saving aggressively are necessary.  

Hence, as parents, it’s important to ask the following questions:  

• Where am I now in terms of my income and my assets? 
• What do I project my retirement to be? 
• What’s the best way for my family to approach college/retirement and pay for it? 
• What can I do to qualify for tax credits and save more?  
• What are my efforts in understanding how taxes and investments work?  

Tax rules and investment options are not easy to understand at all, and it takes time to get the hang of them. It’s important that you gain understanding, if not mastery, of them and find what’s the best strategy for your family.  

What are your recommendations for families with young kids?  

According to John, if you have a newborn and a four-year-old kid, you’ll probably need to save about $700,000 for college, especially if you’re paying for it in full.  

If you’d like to help your kids pay for college, you need to start thinking about the future early. Here are some guidelines to help you make better money decisions:  

1. Start assessing your ability to save. What’s your discretionary spending? What’s your non-discretionary spending? Are you funding your retirement? Assessing these expenses determines how much “excess cash” you have.  

2. Make a conscious decision to save. If your kids are younger, saving may be harder because of the expenses that come with having babies (i.e. diapers, day care, etc.). As soon as money becomes available, make it a habit to set aside money for contributions.  

3. Plan how you’d like to pay for college. One great way to think about it is to strategically divide the expenses into three. For example, you can pay for a third, borrow a third, and then the rest might be paid by scholarships. Or it could be a different variant. The idea is to think about where you’ll get the money so there’s no room for last-minute debt, which could be detrimental to the family’s finances.  

Now, if you have older students, it’s even more important to ask more college-specific question:  

• What’s the cost of going to a state college or university? 
• Which public or private schools offer nice scholarships and are more generous with aid?  
• Is it better to go to a public school rather than a private school?  

The bottom line is understanding your options and piecing them together help you make informed decisions. 

For personal assistance, contact Brad now. 

Disclosures

Investors should carefully consider investment objectives, risks, charges and expenses. This information and other important information are contained in the fund prospectuses, summary prospectuses and a 529 product program description. These documents can be obtained from financial professional or directly from the plans website. Please read them carefully before investing.  

Depending on your state of residence, there may be an in-state plan that offers tax and other benefits, which may include financial aid, scholarship funds, and protection from creditors. Before investing in any state’s 529 plan, investors should consult a tax professional. If withdrawals from 529 plans are used for purposes other than qualified education. The withdrawal could be subject to a 10% federal tax penalty, state penalties, federal income tax and state income tax. 

Registered Representative, Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, Member FINRA / SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Baldridge College Solutions and Cambridge are not affiliated. John Munley and wHealth Advisors are not affiliated with Cambridge

Check the background of firms and investment professionals on FINRA’s BrokerCheck.

This communication is strictly intended for individuals residing in the states of California, Colorado, Florida, Georgia, Iowa, Illinois, Indiana, Maine, Maryland, Minnesota, Missouri, Montana, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. No offers may be made or accepted from any resident outside the specific states referenced. 

Links and Resources

Helpful Articles and Resources 

• College Financial Planners: What They Do and Why Families Hire Them 
• Scholarship Guide For Busy Parents 
• College Money Report 
• Taming The High Cost Of College 
• John Munley’s contact info:  
• LinkedIn 
• wHealth Advisors – Website   

THANKS FOR JOINING US!

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Transcript Email Download New Tab

Brad Baldridge 0:00
Understanding 529 plans and their state tax benefits.

Presenter 0:04
You have kids, they grow up, and before you know it, it's time to plan for college. Where do you start? How much is it going to cost? Will you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? The list of questions is never ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College podcast. Here is your host, certified financial planner, Brad Baldridge.

Brad Baldridge 0:34
Hello, and welcome to Taming the High Cost of College. I'm your host Brad Baldridge. Today, we have another interview with John Munley, where we're going to talk even more about 529 plans. Now in this episode, we're going to talk a little bit about 529 plans, and they how they fit into the overall plan. We're gonna talk about tax benefits, which we haven't talked as much about, we're also going to talk about some of the other options that you might consider, in addition to 529 plans or instead of 529 plans. So for many families, 529 plans are an important piece of the puzzle. But we also use other types of accounts, in addition to the 529 plans. And some rare instances 529 plans aren't the best option and we choose to go a different way. So John and I will talk a little bit about all those different ideas and help you understand what some of the options are, and perhaps guide you in a slightly different direction than you might have gone otherwise. So stay tuned and learn even more about 529s. All right, John, we're back talking 529s again. How have you been?

John Munley 1:39
Been? Great. Thank you, Brad, how about yourself?

Brad Baldridge 1:42
So far, so good. Just graduated my second son. So he'll be off to college in the fall. So we're moving right along, I guess.

John Munley 1:52
And ready to break open that 529 plan. Tap into it, I guess, huh?

Brad Baldridge 1:57
That's right

John Munley 1:57
Great timing for this discussion. And congratulations.

Brad Baldridge 2:02
Yes, thank you. Alright, so we're going to talk about 529 strategies. We've talked about some of the basics. And now we're going to kind of dive deeper into strategies that families can use to really leverage a 529 if they want to, and talk about maybe some alternatives as well. So I think I mentioned it in one of the other podcasts. But I want to beat the drum on this one a little bit. So this is rumor out there where people say something to the effect of, 'Well, you have a teenager or you have a kid in high school or whatever it might be. And now it's too late to use a 529.' Have you heard people say something like that in the past?

John Munley 2:40
I definitely have, basically their premise is, 'Well, I didn't open it when they were young child. So it's too late now. And there's really no point in doing it. Now we can just save it in a checking account or a savings account and have that money there when we need it, which there's definitely some fallacies around that.

Brad Baldridge 3:01
Absolutely. Right. So I don't agree that it's too late ever to participate in a 529. I think maybe there's diminished returns where you might get a lot more benefit if you started with your kids were newborns or grade school or whatever it might be. But I think we use them all the time and lots of people I'm working with we have high school juniors and seniors, and even then it makes sense to start using a 529. Even if you haven't so far. There are rare exceptions where maybe it doesn't make sense. But let's talk about why 529s make sense. And I would say number one is taxes, right? There's lots of potential tax benefits for 529s.

John Munley 3:44
Exactly. So depending on the state that you live in, there are certain amounts of states that they'll give tax breaks for contributions that you make to 529 plans, they have different rules. For instance, where I am in New Jersey, if you make under $200,000 AGI, you can contribute as a couple up to 20,000 a year into the New Jersey 529 and get a tax break. Now, our tax rate in New Jersey here is 6.7%. So you're basically saving yourself $1,300 in taxes by contributing that money to 529. I worked with also people who live in New York City and not only do they have the New York state tax, but they have the New York City tax that's almost 11%. In New York, you can contribute whatever you want, but your tax deduction is up to a maximum of $10,000. Again, if you live in Manhattan or Brooklyn, Queens, anywhere in New York City, you're getting an 11% return on that money, you're getting $1,100 back off of your New York State taxes, which that alone is a really great reason to invest in a 529.

Brad Baldridge 4:51
Right? Absolutely. And here in Wisconsin, if the two you mentioned there was a limit, it sounds like maybe protects return up to that 10,000, here in Wisconsin, that limit is 3580, which that number changes every year, because it's based on inflation. So it started at $3,000. And it's gone up for the last 7, 8, 9 years or whatever it's been that they've had it in place based on inflation, so it keeps clicking up. But that's per beneficiary. So, essentially, we're in round numbers, 3500 per beneficiary. So if you have four kids, you could do it four times. And then sometimes in Wisconsin, we'll actually set up plans for mom and dad as well. So now we can do it six times. So if you're saving aggressively for college, which again, a lot of times we are, especially in the late stage, where we're saying, oh, we need to be putting in $4,000, every quarter, or 2000 a month or something like that, where we're really are saving aggressively. Sometimes we will hit those limits, sometimes not. But it just makes sense to understand how they work. Because that's a state tax benefit on top of the federal benefits, which again, if reviewing from the last couple, which would be that they grows tax deferred. And if you spend it on qualified college expenses, then you don't have to pay taxes on the growth either. So it's 100%, tax free. And we talked about all the details. So you can go back to the previous episodes if you need to brush up on the very basics of how they work. But generally, qualified expenses are college tuition, room and board, books and fees are typical.

John Munley 6:32
All right, as a general rule of thumb, whenever you can save money on taxes, that's always a good thing.

Brad Baldridge 6:40
Right? Exactly. And the reality of it is from when you start doing college planning, a lot of families are going to need to set up some sort of segregated college account anyway. Because if you just say, 'Well, you know, there's 25,000 in our savings account, and we're going to start putting 2000 a month into the savings account, then anytime an emergency comes along, like oh, we need a nice vacation, then you tap the savings account.' And you don't really pay attention to how much of that was set aside for college, and you inadvertently start spending your college money. Whereas what I found is as soon as you segregate it into a 529, and label it college, it's much more sticky, it's you're not going to tap into that unless there's truly an emergency. And again, you have access to as we've talked about in the past, you may have to pay some taxes and penalties. But it is your money. So in a dire emergency yet I need to get this operation and I got to pay for it now. Well, then you could tap your 529 if you needed to. But the the wayward vacation usually then doesn't mess up your college savings.

John Munley 7:47
And it eliminates the temptation to go into a taxable account, say, 'Well, it is really for college, but we'll take it out now we'll put it back in a few months,' and this way through 529, you really don't want to do that, again, for tax reasons.

Brad Baldridge 8:02
Right, absolutely. All right. So that's kind of the benefits of the 529. Let's review the the downside again, you know, when people say it's too late to use a 529. Again, I would argue that, 'Well, if you can save 10 bucks, it's probably worth doing a 529.' Especially if you're setting up an account already, right, you're gonna have to open a new account, why not a 529. But occasionally, you will run into someone that already has college savings set up, maybe inside their own retirement because they're older, and they think, well, we're gonna I'm gonna tap my retirement for college. Or maybe they just want to put it in a bank where they know it's, quote, unquote, safe. And those makes sense sometimes. But again, the tax benefits are there. But the downside, I think of the 529 is if you're not paying any taxes at all, both federal and state, then maybe you don't need a 529. And you could use other similar investments, whether it's mutual funds, or bank accounts, or whatever it might be.

John Munley 9:08
Exactly, and again, that you hit on again, that taxes, if you pay no taxes, federal or, or you don't get the state benefit for doing a 529, then it's probably not worth it. But again, in most other cases it is

Brad Baldridge 9:22
Right. But then you're still gonna maybe need to set up that separate college savings account, again, to keep it safe and not mix it with your other money and inadvertently spend it rather than the other point, I think that people run into is obeying the rules of the 529 adds a little layer of complexity, right? We keep saying, 'Well, if you spend it properly, you get all these tax benefits. If you don't spend it properly, you get some tax penalties.' So I guess there's some people out there that say, 'Well, it isn't worth the benefits because I'm afraid I'm going to get the penalties instead.' So that, I think it was legitimate, and then finally, just the overall hassle that factor of it, I've already got some sort of brokerage account or investment account or whatever it is, that's all set up and ready to go. And all I have to do is turn it on and put an extra 1000 a month into it. That's easy. If I have to figure out which 529 and do all the paperwork and figure it all out, that's a lot more effort, I don't want to do that effort, which I guess is fine. If you don't mind, again, foregoing whatever benefits there might have been from the 529. So let's talk a little bit about those benefits. I did some kind of back of the napkin math on a bunch of 529s. And what's come up is there's about 30 states where you can save $100 a year or more by using your 529. And a lot of that might be, again, going to the maximum limit, right? You mentioned, here in Wisconsin, it was twenty five $180. So if you did that for four people, now we're getting about 189 per account times four accounts, you know, so we're getting some serious money to do the full 10,000. And your state, what was the number again?

John Munley 11:12
That's 6.7% tax rate here so basically, for $10,000, you're gonna get $670 back by contributing that

Brad Baldridge 11:24
And you can go up to 10 or 20?

John Munley 11:26
20,000 so you're looking at 1300.

Brad Baldridge 11:31
Right? Exactly. So, especially for families where you're aggressively saving in some of the states that high cash flow is going to equate to pretty substantial amounts of money. So based on 30 saving more than 120, saving more than 500. That means there's 9 or 10 that are in between there where it'll save you 100 or 200 or $300 a year. But if you look back and say, well, you know, my student had to work for that, and they could make $15 an hour in order to get $300, they have to work 20 hours. So if it's not worth mom and dad's time, maybe it's worth the students time to figure it out. Because if they could save $300, and then you gave it to them, that's probably a pretty good pay, because I don't think it's going to take that many hours for them to figure it out, especially for a brighter kid that understands this stuff a little bit. And again, mom and dad may have to help in either way, because that's a little bit new to most students. But again, the 529 is not the only game in town. So let's talk a little bit more about what else is out there. What else can we put our money in? We've already mentioned just the straight taxable account where instead of putting your money in a 529, you could go put it in a bank account, or a mutual fund or whatever, and get essentially the same investment options as you have inside the pipeline. So if cash is paying one or 2% cash type accounts or bank accounts, savings accounts are paying one or 2%. You can probably do that inside the 529 or outside 529, so you're gonna get the same rate of return, you just get the different tax treatment and the different rules. So you could like I said, take it to the bank and just get your 1%. But then there's other types of accounts where we do get tax benefits as well. So there is another college savings account out there. You want to tell us a little bit about that.

John Munley 13:26
During the call to Coverdell savings account, and you don't see them used much anymore because they're very popular before 520 names became established and the rules are very similar except with a Coverdell the maximum annual contribution is $2,000 a year, which per beneficiary. So even if you are going to max that out every year for 18 years, the most you can put in a Coverdale account is $36,000. It just makes sense in today's day to with the 529 plans, because your maximum amount is so much higher. That and the benefits are the same that it just makes more sense to go to a 529 plan. I know I was talking to you Brad beforehand, and I've never come across anybody who's had a Coverdell. You said you've come across a bit a couple times.

Brad Baldridge 14:18
Yes, there's been a handful. You know, I've talked with like a grandparent that had started many, many years ago. Might have been prior to 529. Or about about the same time as 529. Yeah, the other challenge, of course, is in order to get the deductions, there's income rules where if you earn too much, you can't you can't get the savings that you can't make contributions. I guess they're not it's not the deductibility. It's the contribution, I'm sorry. So that's another challenge is you can't actually even contribute if your income is too high.

John Munley 14:51
Right. I think it's 110,000 for single and 220,000 for joint right tax filers.

Brad Baldridge 14:59
Yeah, so that's one and then we've got something else out there that used to be very popular, but is is waning now as well. But I do run across these as well, which is a huge EMA or a huge GMA type of account.

John Munley 15:13
And I come across them, actually quite frequently. And I think just because when parents start to save, everyone's heard a lot of people have heard of custodial accounts or like, go to my child's name, I'll put it, I'll put it in their name. The problem with that is just for financial aid purposes, and this is a topic for another podcast. But quickly, if it is UTMA, it's a student assets, student assets count 20% towards the expected family contribution formula, parent assets counts about 5%, 529 is parent asset, the UTMA is a child's asset. So that's going to have much more impact on a family's ability to get need based financial aid. So and the other thing with a UTMA is a 529, the parent owns it, the child's a beneficiary UTM a, depending on the state of majority that you live in, once that child turns 18, or 21, that account gets turned over to them legally, it's their money, right? So if it's 18, and they don't want to use it for college, it's technically their money, and they can do whatever they want with it.

Brad Baldridge 16:26
Right? And well, then technically, it's their money, no matter how old they are. So you can't spend it, you can't take your student's UTMA, and go to Vegas with it. Now, your student could maybe go to a Vegas, because it's for the beneficiaries benefit, benefit, which is, again, usually the child. Now, because a two year old can't manage their own investments, there's another person involved in the UTMA, which is often the parent, and they're the custodial parent, and their job is to manage the money for the benefit of that student. So if you think your kid going off to Vegas is a good thing for them, you can spend their money on that trip. And of course, you can say if college is good for them, you can spend that money for college. What you probably can't do is say, 'I'm going to take the money to Vegas, and I'm going to have a good time with it.' Because technically, they if they found a good lawyer and sued you for their money, and you say, 'Well, I spent it in Vegas,' they could recover it, so to speak and now in reality, most UTMAs are small dollar amounts, and most kids have no idea what's going on. So they don't get the lawyer it and very seldom happens. You see it, you see that in the high profile, child actor cases and that kind of stuff. But the typical, grandma gave me $10,000 of stock. And here it sets. You know, there's not a lot of police watching what's going on there.

John Munley 17:28
And the one other disadvantage with that is, let's say you've you put 20,000 to a UTMA. When your child is born, it's now worth 50,000, you're going to use that for college. When you sell that out that 30,000 capital gains that's 30,000 in gains, you have to pay taxes on again on like a 529, where you don't have to pay taxes, if it's used for qualified education, UTMAs, you still have to pay taxes on those gains.

Brad Baldridge 18:22
Right. So the UTMA used to be a good thing because 529 didn't exist. And at least when you paid taxes, you paid it at the child's rate. Well, with the kiddie tax. Now, a lot of times the children are at the same rate as mom and dad. And there's taxes to begin with. And of course, it's also tied up now belongs to that child, you can't change it from one child to the next either. So there's just lots of reasons why UTMAs are kind of the old way of doing it. And I would never start them. And when as we're doing college planning, we're often spending time trying to figure out how to unwind them. So because this money needs to be spent for the benefit of the child, we might spend that money on their lessons or their sports or on their private high school or whatever it is, and then take the money that we would have spent on those things and put it into the 529. But that way the UTMA goes away before college happens, again because of the financial aid reasons. So in a nutshell, UTMAs are probably not worth it, there'll be that rare case, where we often go or where I often go is the other two. Now, the other main thing would be the Roth IRA. Now Roth IRA is generally for retirement. But sometimes we will do a 529 for most of the money or a lot of the money and also put some money in a Roth IRA or an IRA or retirement plan or something like that. Again, because there's that challenge of you can have too much money in a 529 as we talked about, you need to qualified expenses to take it out. So if you have two kids, and they're going to go to the local state school, an example might be 25,000 per year of qualified expenses. So you have 100,000 of expenses, times two kids, if you already have 175,000, in 529 accounts, and you're saying, 'Well, let's save a little bit more, we may need it, we may not need it, depending on what happens with the growth.' And if they win any scholarships, or if the price of the college goes up, or if the price of the college goes down, don't count on that one by the way, but there's some variability. So often, what we might do is say, okay, well, we've got a little more saving to do, but we're not sure we're going to spend it on college, because we don't know the final prices. You know, our youngest isn't even in high school yet. So it's hard to know, we might split up the savings and say, well, if we need to save 1000 a month, we'll put 600 a month into 529s and 400 a month into a Roth IRA, because we have access to all of our contributions into the Roth IRA, anytime, any reason. So college would be that reason. Now the challenge is we don't get the growth, and we don't get the tax deductions, the state tax benefits and a lot of those other things. And that's why we might pair them up. In your state, you mentioned you can put in $20,000 per year and get a deduction. If you happen to be saving 25,000 a year for college that, you know, the obvious decision, there might be, well, the first one that goes into the 529. And then another five goes into the Roth IRA, where we have some flexibility, because a great situation is we don't need it for college. Turns out, they won some scholarships, or we did good planning and other ways. And now we don't need it. So we're just going to now re label it as retirement. And that's a great place to have retirement money as well.

John Munley 21:49
Now, and I've come of exactly what you said. So the Roth is great, because you can take the contributions out and use them for basically anything. So if you do have that gap, and you don't want to borrow money, and you do have enough save for retirement, Roth is a great place to go and use those contributions. In other cases with clients, we've also looked at their traditional IRAs. So if you're under 59 and a half, and you take money out of your IRA, there's usually 10% penalty, if you use it for qualified expenses, which college is, that 10% penalty gets waived, you still have to pay income tax on that. But you don't have to pay the penalty. But I've had a few clients do is you know, once they hit towards retirement age 65, we know they're going to have a big pension, we know they're going to have social security. And they do have a big IRA established that if there's a little bit of shortfall for college, rather than borrowing, we borrow it, we can kind of project out how they're going to be living in retirement. And if they have access to that IRA, we're able to utilize that to pay for college and prevent them from borrowing money. It doesn't happen, for most people, I would not recommend that going into retirement for people who are going to have a large income, again with pensions, and social security and they have a big IRA as it is, it's one way to maybe bridge that gap between what college is going to cost and what they have saved already in dedicated, 529 account.

Brad Baldridge 23:18
right. And I've seen other situations like I had someone that had relatively high income, and they are in high tax brackets, and they were older parents. So they actually were going to be 60 during most of the college career. So they were going to have access to the retirement plan if they wanted. And they thought they might even be retired by the time college happened. So for them, and this is a rare instance, but for them college really was a retirement expense because they would be retired. And they had access to not 401(k) plan at work and a 403(b) plan at a different job. And they were maxing them both. So they were saving somewhere in the neighborhood of 52,000 a year. And they assumed some of that was going to be used with college and the math worked, right they didn't they're not really robbing their retirement to pay for college. They're just choosing to use a retirement plan as the vehicle and their situation because they again, they were the right age. And everything was kind of in their favor in that situation.

John Munley 24:19
And this is where planning really comes into play in terms of paying for college because you're not only looking at, alright, where am I now in terms of my income, my assets and what I project my retirement to be. But also, here's this college bill, what's the best way for my family to approach this and pay for this? And I think every situation is unique and prevents its own opportunities and challenges.

Brad Baldridge 24:43
Right. Yeah. Again, another example that I've seen is around tax planning where we decided to put some of the college money into the 401(k) so that we could bring down the income, by bringing down the income we qualified for tax credits. The college tax credit And that tax credit was more valuable, by far than the little bit they were going to get from their 529 benefits in that situation. Now, some states are more generous than other, we've talked about that, some states, you're only going to get a couple 100 bucks, other states might be 1000, or 2000. So that's where understanding all the options and how it all fits together, again, full disclosure, right, you really need to understand all the rules and all the tax rules and understand the investment opportunities, whether the money is gonna go up and down, and all that type of stuff, and will of course, put all the actual disclosures at the end here. But again, this was not advice, it can get very complicated in some situations, sometimes it's quite simple, 529 is the easy winner, but not always. And that's where you need to understand and do that comparison for your own situation. So how do you generally recommend for families that have very young kids, right, if you're talking with a young couple, let's say they've got a four year old and a new baby on the way and they're saying, we want to save for college? What comes up usually there, as far as when you're working with families?

John Munley 26:10
Well, the big things is first to see, are they in a position that they can even afford to start saving for college? So we'll kind of look at their, what's your discretionary spending? What's your non discretionary spending? Are they funding their retirement? So are you getting the full benefit from your company by putting money towards the 401(k) so you're getting the match? If they're getting all those things, then we say, alright, here's your excess cash, how much of this excess cash that you have a year? Do we want to start contributing to college, especially now, if you have somebody who has a newborn and a four year old, they're probably looking at $700,000 in college costs. But again, not taking financial aid or scholarships into consideration. If you're paying full sticker price, you're looking at a price like that, that's 700,000 isn't going to magically appear if you're putting in $2,000 a year for the savings? So we have a discussion, do you want to help your kids pay for college? How much do you want to help them? Do you want to help them pay all of it, and then we kind of get them on a plan and say, alright, this is a monthly amount that you're able to afford to do, not affect the money that you're saving towards retirement, and we make smart investments again to the 529. If the kids are younger, we'll go with the aggressive approach and for most of inequities, and hopefully over time, this account will start building up.

Brad Baldridge 27:35
Right, exactly. Yeah. So I would do something similar. I guess one of the challenges that many families have is to understand that, you know, if you started at $200 a month, let's say, and you did that for 18 years, to get to a similar amount, if you only have five or six years to get to that same amount, it could be more like 1200 a month to get there, again, because you lose all that opportunity for the growth. Now sometimes that's just the way it has to be, though a lot of families are saying, but we don't have $200 a month because we're paying 2000 a month towards child care or something like that. So as long as you shift your priorities, as the money becomes available, you can kind of agree to will save higher dollar amounts later. That can work. But you have to have the discipline to actually do it and not use that as an excuse to not save now.

John Munley 28:35
And again, it's hard. You were just talking Brad, so your son's graduating high school. I'm sure you started thinking about his college education when he was born. I have four daughters, two graduated college, one's in college down, I have another one who's just gonna be a ninth grader. So I have a lot of tuitions that I have paid and have to pay. And, yeah, I mean, if you want to help your kids pay for this, you've got to start early and really make a conscious effort to make these contributions, year in and year out. Because it's not magically just going to balloon to big numbers, you've got to make it a habit too. 'Alright, this is how much I'm setting aside each month.' And then you let the magic of compounding work. And hopefully it grows so that you're at least can help them pay for part of it.

Brad Baldridge 29:26
Right? Absolutely. I guess that's the other side of it is I've heard a number of people say things, well, maybe you divided into thirds, were going to borrow a third, mom and dad will pay a third, and the student will pay a third or different, or they're responsible to get scholarships for a third. So there's a number of different ways, but I think part of it is to understand what you're up against, and plan accordingly. And then of course, if you have older students, you know, both John and I spend a lot of time really running those kinds of numbers and figuring out what is going to cost to go to the state school, what about that public or private school with a birthday giving a nice scholarship? How does that compare? And maybe we want to find another school that will give us a similar scholarship. So just understanding the options and, and piecing it all together. All right, any final thoughts as far as 529? Because I think we're gonna get together one more time and talk about some very advanced strategies and kind of go from there.

John Munley 30:28
No, and I think this was great in terms of in almost every situation, it makes sense to put some money into a 529. Whether it's tax advantages, or having a dedicated account just for college, just the flexibility that you're able to have to change beneficiaries, use it for grad school, I think every college-saving strategy should at least have 529s as a part of it.

Brad Baldridge 30:53
Right, absolutely. All right, well, we're gonna end it there. And we're, like we said, we'll get together one more, we'll talk about very advanced strategies around things like leveraging grade school in high school and paying off student loans and maximizing your savings and working with family and grandparents and all different things like that. That's all for today. We'll talk to you again soon.

All right, so that was our third of four episodes, on 529 planning. So the next episode will be our last episode on 529s, where we're going to take a deeper dive into advanced five to nine strategies. And then we're gonna move on and start going back to other topics. Now in the meantime, please visit our website, we've got a lot of other free resources if you're new to this podcast, there's a lot of other podcasts out there that you can listen to on all sorts of college topics. And also at our website tamingthehighcostofcollege.com. We've got a number of free resources, including things like a newsletter, where we send out all the relevant information on college planning. We also have the Scholarship Guide for Busy Parents, the College Money Report, and other free resources as well. So go ahead and go check that out and see what can you can find that will help you in your college planning journey. And of course, if you need some personal assistance, feel free to reach out and give us a call. That's all for this week. We'll see you next week.

Presenter 32:21
Thank you for listening to the Taming the High Cost of College podcast. Now it's time for you to take action/ Head to tamingthehighcostofcollege.com for show notes, bonus content and to leave feedback for Brad. The next step on your college journey starts now.

Brad Baldridge 32:39
Disclosures. The information provided to you today is for educational purposes only. It is not intended to be specific recommendations or advice. Please consult with a qualified professional before acting on any of this material. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss including total loss of principal. 529 College Savings Plan disclosures, investors should carefully consider investment objectives, risks, charges and expenses. This information and other important information are contained in the fund prospectuses, summary prospectuses, and the 529 product program description. These documents can be obtained from a financial professional or directly from the plans website. Please read them carefully before investing. Depending on your state of residence, there may be an in-state plan that offers tax and other benefits, which may include financial aid scholarship funds, and protection from creditors. Before investing in any state's 529 plan, investors should consult a tax professional. If withdrawals from 529 plans are used for purposes other than qualified education, the withdrawal could be subject to a 10% federal tax penalty, state penalties, federal income tax, and state income tax. Brad Baldridge's disclosures. Brad Baldridge is a registered representative with Cambridge Investment Research. Securities are offered through Cambridge Investment Research Incorporated, a broker dealer and member of FINRA and SIPC. Brad Baldridge is also an investment advisor representative with Cambridge Investment Research Advisors, a registered investment advisor. Baldridge Wealth Management and Baldridge College Solutions are affiliated. Cambridge and the Baldridge companies are not affiliated. The registered brands location is at 10521 West Leighton Avenue Suite 200 Greenfield, Wisconsin 53228.

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The post THCC 529 Plan Series EP 3: 529s and Other College Savings Plans appeared first on Taming The High Cost of College.

Today’s Guest:

John Munley, College Funding Specialist  

Despite being a successful foreign currency trader with a 27-year career on Wall Street, John Munley was still worried about paying for college, saving for retirement, and spending quality time with his family. This urged him to sign up as a financial planning client years ago.  

As John’s financial planner guided him through obstacles and showed him the path to success, John discovered that he wanted to do the same for others. 

When he was presented with the opportunity to leave Wall Street behind and start his journey as a financial planner, John co-founded wHealth Advisors, a New Jersey-based company that aims to provide the highest quality, objective financial planning to its clients.  

John actively works as a College Funding Specialist, helping thousands of families find the best possible college fits for their students and demonstrating how to attend college for the least amount of money. 

Questions Answered Today:

What are the basic building blocks of a typical 529 plan?  

The rate of return of your 529 account depends on what kind of investments you choose inside your account. Here are the basic options:  

1. Stocks. With stocks, you invest in a company and you get to own a portion of the company in return.  

• This is often one of the most aggressive or riskiest types of investment, as your returns depend greatly on how well the economy is doing.  
• When talking about investing in stocks, the most common companies that appear in conversations are the S&P 500 companies or the 500 largest companies in the U.S. such as:  

1. Apple  
2. Walmart 
3. Microsoft 
4. Procter & Gamble  
5. Boeing 

2. Bonds. With bond investments, you lend companies money in exchange for a rate of return. This also means that you have no ownership in that company.  

• Bond investments are less risky compared to stocks, and you shouldn’t expect as high of return as when you invest in stocks.  
• Unlike stocks, bonds move around based on interest rates. If interest rates move higher, you get a higher return.  
• When interest rates increase, newly issued bonds offer higher interest rates, which means that existing fixed-rate bonds must be sold at a reduced price in order to remain competitive. This means that your existing bonds become lower in value. For example, if your bond is worth $100, it can go down to $94. However, any value lost can be compensated by the return on the initial investment that you made. 

3. Cash. With cash investments, you put money in the bank.  

• This is the safest way to invest because banks have more guarantees compared to companies.  
• However, your returns are limited by the fact that banks typically offer relatively low interest rates on the money you deposit with them. Thus, you typically don’t earn much money from your deposits compared to other investment options.  
• Cash can’t keep up with inflation. The money you deposit now won’t have the same purchasing power 10 years from now. For example, a college that costs $75,000 today may cost $150,000 in 10 years. But if you put your cash in the bank, it won’t grow much over that same timespan. Any interest you earn will typically lag well behind inflation. 

Is there a way that I can eliminate the risks of my investments?  

You can’t completely eliminate risks—and this is why investments aren’t for the weak-hearted. But you can reduce investment risks by diversifying your portfolio.  

Diversifying means reducing the risks by not putting all of your eggs in one basket.  

There are certain ways to diversify, and they include:  

1. Investing across industries. Instead of investing in just one company, you invest in many companies all at once. As mentioned earlier, one of the most popular diversified funds is the S&P 500. This allows investors to invest in all 500 companies at one. That way, even if one or two companies go down, there will be 498 more to rely on.  

Of course, this kind of investment is not only limited to the S&P 500. There are also options to invest in international companies, companies that are outside the S&P 500 bubble, or any other fund that offers investing across hundreds of stocks.  

2. Mixing bonds, stocks, and cash. To reduce risks, building portfolios that are part bonds, part stocks, and part cash may also work. This is actually the very core of 529 funds—a  very good example of diversified funds where investors have full control of how exactly they want to invest their money (e.g. 80% stock and 20% bonds).  

Diversification sounds really good, but are there any downsides?  

There are downsides to diversification. One is that investing has one simple rule: the higher the risk, the higher the return.  

Diversification lowers risk, but it consequently lowers investment returns. Lower-risk investments generally have lower rates of return. Also, diversification wasn’t the decision made by billionaires such as Mark Zuckerberg and Bill Gates, who once decided to put their money and full trust in one company and converted their millions to billions.  

Is there research on the risks and returns of different investments?  

Yes, as you might expect, there has been extensive research into investments, including long-term historical studies of investment returns and risks. Here are a few highlights:1. Vanguard created a 100% stocks and 100% bond portfolio, considering the stock and bonds data from 1926 all the way to 2019. Here are some vital data it uncovered:  

100% Stock Portfolio 

• Has an average return of 10.2%.  
• At its best year, it went up 54% while the worst year it was down by -43%.  
• It had 26 losing years out of 94 years 

100% Bond Portfolio  

• Has an average return of 5.3% 
• There was one single year that went up to 32% (which can happen when there is a sudden change), while its worst year was -8%.  

Had the portfolio been more diversified, say, 50% stocks then 50% bonds, the results would’ve looked different:  

• Average: +8.2% 
• Best year: +60% 
• Worst year: -23%  

2. Another study by JPMorgan showed the rate of return for the S&P 500 (diversified stocks) over the last 42 years (1980 to 2021). Below are some key data:  

• The lowest rate of return was -38% 
• The highest rate of return was 34% 
• The average rate of return was 9.4% 
• 32 out of 42 years, the S&P 500 had a positive rate of return  
• 1 out of 42 years had zero return  
• 9 out of 42 years had a negative return 

These data coincide with notable economic crises that occurred over the last few decades. Some of the more recent crises include:  

• Hurricane Katrina in 2005 
• The Sub-Prime Blowout in 2007 
• The financial crisis of 2008 
• The Flash Crash in 2010 
• The Ebola pandemic in 2014 
• Brexit in 2016 
• Trade wars and inflation scares in 2018 
• COVID-19 in 2020 
• COVID Omicron in 2021 

3. Dimensional also did a study with data from 1926 to 2021 (95 years). They looked at two time periods: every 10 years and every 15 years. 

Among all 10-year periods, only two were negative at -2%, and the rest had a positive return. These years were 1998-2008 and 1999-2009, which are both presumably because of the dot-com bubble in 2000 and the mortgage crisis in 2007.  

For the 15-year periods, there has never been a negative return. 

These studies all say essentially the same thing: time is the key. While there’s always the fear of uncertainty, the longer you sit tight and wait, the more you’re likely get a positive rate of return.  

What about media perceptions and reports about investing?  

We don’t have a crystal ball. We don’t know what the future holds. But based on the past, the longer time period that you have, the more you’re able to generate a positive rate of return.

— John Munley

Journalists could be saying two different things about the market, so it’s important to be smart about processing information they share.  

Journalists 

One preconceived notion about the stock market is that “it’s like gambling.” Financial journalism plays a huge part in this. This is because more often than not, their goal is to sensationalize the stock market in order to get more clicks on their articles or more views and listens on TV, radio and podcasts.  

As John and I have been talking about, we don’t have a crystal ball. Nobody knows for sure where the market is going, but there are people who are paid to say something negative or something positive in order to stir up the public’s interest.  

The bottom line:  

With the world facing crisis after crisis, there will always be a reason not to invest. But there’s time-tested data to look through to help you make better investment decisions, and there are experts who can guide you through the process. So invest smartly.  

How do I know which kind of investing works for me?  

John shares that it all comes down to three things:  

1. Your risk tolerance, or your willingness to take risks and suffer losses. For example, do you want to aggressively put your money in 100% equities, or do you want a safer route?  

2. Time horizon, or the time you have before you actually need the money for a specific purpose (e.g. college or retirement). The longer the time you have, the more aggressive you can be in order for your money to attain maximum growth. 

3. Ability to take risks. How mentally and emotionally strong are you to bear losses? If you watch the news and find out that the market goes down by 2% or 3%, do you lose sleep? If you do, then it’s probably not good for you to have a risky portfolio, so you should opt for safer investments.  

Where do I start if I’d like to start investing for my kids’ college?  

Most 529 plans have age-based options based on the age of your child or children. There’s a target date, and depending on that date, you can opt for riskier and safer options. Typically, these questions need to be answered:  

• How old is your child? 
• How long before your child gets to college? 

Brad, having worked with families to plan and save for college and invest in 529 savings plans for nearly 20 years, encourages beginner investors to go beyond those two questions. There could be other options after looking at your family’s situation and circumstances.  

Brad would love to answer your questions, point you in the right direction, and even serve as your 529 plan advisor if you’re in one of the states that he serves. 

To get started, contact Brad now.

Disclosures

Investors should carefully consider investment objectives, risks, charges and expenses. This information and other important information are contained in the fund prospectuses, summary prospectuses and a 529 product program description. These documents can be obtained from financial professional or directly from the plans website. Please read them carefully before investing.  

Depending on your state of residence, there may be an in-state plan that offers tax and other benefits, which may include financial aid, scholarship funds, and protection from creditors. Before investing in any state’s 529 plan, investors should consult a tax professional. If withdrawals from 529 plans are used for purposes other than qualified education. The withdrawal could be subject to a 10% federal tax penalty, state penalties, federal income tax and state income tax. 

Registered Representative, Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, Member FINRA / SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Baldridge College Solutions and Cambridge are not affiliated. John Munley and wHealth Advisors are not affiliated with Cambridge

Check the background of firms and investment professionals on FINRA’s BrokerCheck.

This communication is strictly intended for individuals residing in the states of California, Colorado, Florida, Georgia, Iowa, Illinois, Indiana, Maine, Maryland, Minnesota, Missouri, Montana, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. No offers may be made or accepted from any resident outside the specific states referenced. 

Links and Resources

Helpful Articles and Resources 

• Taming The High Cost Of College 
• John Munley’s contact info:  
• LinkedIn 
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Brad Baldridge 0:00
529 College Savings Plans. We're covering the basics for beginners.

Presenter 0:05
You have kids, they grow up, and before you know it, it's time to plan for college. Where do you start? How much is it going to cost? Will you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? The list of questions is never ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College Podcast. Here is your host certified financial planner, Brad Baldridge.

Brad Baldridge 0:35
Hello, and welcome to Taming the High Cost of College. I'm your host Brad Baldridge. Today, we have a great episode with John Munley again. Today we're going to cover the very basics on investing in 529s. So if you're a beginner investor, and you don't have a lot of confidence in how to work with a 529, this episode may be for you. If however, you've got a lot of advanced planning under your belt, you've worked with IRAs and 401ks and you understand mutual funds and stocks and bonds and that type of thing, this may be a little bit basic for you, it may be stuff that you've already learned over the years. You're certainly welcome to continue to listen. But again, this is really targeted to be the very basics on what people need to understand in order to invest in college. Now, 529s have a lot of pros and cons. So we have all the disclosures at the end of this episode. But just be aware that 529s do have some benefits and they certainly have drawbacks as well. And we cover some of that in all these episodes. And also, it's all covered in the disclosures at the end of this episode. As always show notes and a lot of great resources are available at our website at tamingthehigh costofcollege.com. We've got Scholarship Guide for Busy Parents, a college money report that can help you figure out how much college might cost for you. And that may help you of course, figure out how to do 529 planning as well. And lots of other great free resources. So head on over there, sign up for our free newsletter. And again, get a lots of free resources. Alright, let's go ahead and jump into the interview with John Munley. All right, John, we're back to talk more about 529s. How have you been?

John Munley 2:17
Excellent. And glad to be back. Thank you, Brad. And hopefully everything's doing well out by you.

Brad Baldridge 2:23
Oh, yeah. So we're gonna do 529 for beginners today. So we're going to talk about things that are pretty basic. So if you're a seasoned investor, you can put this on fast forward, or just breeze through it or skip it all together, because most of the more technical and is going to be in the other 529 programs that we have. So this is designed for somebody that has not been investing their whole life or doesn't understand a whole lot about how the very basics of investments work. So and again, everybody starts somewhere. So let's jump into a little bit. And what's your advice for someone that's just getting started in investing in general? And then 529 specifically?

John Munley 3:11
Well, I think what we're doing right here is perfect. It's kind of knowing what is investing? What kind of instruments do I have to actually start investing? What are returns? How do you diversify portfolios? What is the risk component of all this, there's a lot of different things that go into making investing decisions. So I think what we'd like to do here is break them down so everybody has a good understanding of what these different things are and how they affect at the end of the day, what you're really looking for is the rate of return on the portfolio that you've created.

Brad Baldridge 3:47
Right, absolutely. So I think a great analogy would be that a 529, basically, is very similar to a retirement plan that you may have at work or an IRA, where you're doing basic, and you're doing investing in those types of accounts as well. And it's designed for retirement, where you get tax benefits and that type of thing. And then you have choices to make, like at your 401k typically, they give you a menu of 10 to 50 options, depending on where you work and what's out there. And then you get to pick from the menu, which course now ideally, you understand what your choices are and which ones make sense. It's almost exactly the same with a 529. There's the mechanics of actually opening the account and giving them their your socials and picking an owner and a beneficiary and all that all this stuff we covered last time. But now we're gonna get into the basics around well, how do you choose an investment or what do you look out for that type of thing, because that's going to be the next step right as you decide you want to save 200 a month for each child. And then you set up to 529. And that part's not that hard. It's you go online, you put in your names and addresses and socials, and it's owned by a parent, and it's for the benefit of a student. And then they're going to ask you, where do you want the money to go. And there's a whole list of age base, this and aggressive growth and small cap, and international funds and guaranteed accounts or CD accounts. And there's all these different choices. So that's what we're going to talk about first, I think is what all that stuff means. And not only is this this part of it applicable to 529. But it's very applicable also to all your investing your 401ks, your IRAs, all those things. So I guess what are the basic building blocks, let's start there, for a typical investment?

John Munley 5:54
Basically, for simplicity's sake, it's there's three options, you can own a stock on a bond or have money in cash, and what's the difference between them. If you own a stock, so you own an individual company, let's say Apple, if you actually have ownership in that company. So when you say I have a certificate or a stock certificate, or I own Apple, you are an owner of Apple. With bonds, you don't own the company, but you're lending that company money. And when you lend that company money, they're giving you a return on that money. So companies, if they have to raise money, they'll put out bond issues. If you'd like the return, you like the company, you like the risk of the company, you're able to purchase that bond, you're essentially giving them that price that they're asking for. So let's say a bond is $10,000, you're giving them $10,000. They're giving you a return on that money, but you have no ownership in that company. And with cash, you're just keeping it all to yourself, whether it's in a checking account savings account under your mattress, you're not giving it to anybody, that's yours, and you're keeping it. And that's where you can expect the lowest rate of return over time.

Brad Baldridge 7:03
Right, exactly. So stock allows you to invest in the market. And of course, bonds, you're also investing in the market, just a different market. So I guess that's another clarification is people talk about the stock market. And in reality, depending on how you look at it, there's many stock markets, right? A very common market that people talk about all the time, and we're going to talk about as well is the S&P 500, which is 500 of the largest US companies. And they kind of track that as an indicator of how stocks are doing. And you can even invest in those 500 companies through various instruments and that type of thing, but it's all the big names, we're all familiar with are Apple and Walmart, and the oil companies and etc. etc. Microsoft, all the tech, but also some of the boring companies Procter and Gamble, and Boeing and some companies that we use every day are in the S&P 500. So let's talk a little bit about that. So I have a chart in front of me. And it shows the rate of return for the S&P 500 over the last 42 years. So it starts in 1980, and goes through 2021, which is the last full year. And it shows the rate of return had you invested in the S&P 500, which again, is diversified into a whole bunch of different stacks. But the actual rates of return are all over the map from the lowest year would have been '08 at -38%. So had you invested $100, you'd have $62 after that year, and then the best year is 34%. So if you invested $100, you'd have $134 at the end of the year. And every year, all kinds of numbers in between, so if I started and say 90, and it was like -7, +26, +4, +7, -2, +34, +20, +31. And then we get into the '07, or excuse me, we get into the tech crash in 2000 and have -10, -13, -23 and then +26, down, and then we get to 2007 is -38%. That was the big drop around the mortgage crisis, and so forth and so on. So if you add them all up, if you had just invested for those 42 years, your average rate of return would have been 9.4% long term. So that's a pretty decent rate of return. But as you remember, for all the numbers I just talked about, you very rarely actually got anywhere near 9%. You had some minus you know 10, 20 numbers and you had some up, zero 10, 20, 30% up. And it averages 9.4%. Because in general, there's more ups and downs, if we look at this, there's 32 of the 42 years were positive, one was zero, and nine were negative. So there are no negative years and there are downturns. But over the long haul, if we can stay invested 5 years, 10 years, that type of thing, it's relatively likely, at least historically, and again, nobody can predict the future for sure. But if it acts anything like historical, then we generally are positive over a 3-year, 5, or 10-year number, and the longer you can invest, the more likely it will be positive. So that's great news for young people that are a long, long ways from retirement. Put it in the stock market, maybe diversify it, that type of stuff we'll get into. But it's very likely in 20, in 30, in 40 years, you make money. Unless, again, there is no guarantee, nobody can predict the future, for sure, maybe life as we know it will change. But it's probably the only reasonable option for most people, is to use some form of investments in order to build for their retirement and or college.

John Munley 11:26
Brad Dimensional did a study on this exact thing that you're talking about, they looked back from 1926, out to 2021. And they looked at two periods of time, every 10 years and every 15 years. So you'd go like 1926 to 1936 1927 to 1937, every 10 year period outside have to always had a positive return with the S&P. The only two down years was 1998 to 2008 and 1999 to 2009. And they were both under down 2%. And there you had two major crises, you had the .com bubble in 2000, you had the mortgage crisis in 2007. So you had to sit through a lot of pain in those two 10 years, but even then you pretty much came out flat. When they looked at 15-year time periods, there's never been a down 15-year time period. So like you were saying, we don't have a crystal ball. We don't know what the future holds. But based on the past, the longer time period that you have, the more you're able to generate a positive rate of return when you're investing.

Brad Baldridge 12:37
Right, exactly. So when I'm working with families, we talk about, well, maybe the stock market alert return 8% or 10%, or some number in that neighborhood. It's kind of the assumption as we're doing things like retirement planning and that type of thing. So do we know that for certain, of course not. But we need to start somewhere. And that seems like a reasonable assumption, based on the fact that it's 9.4. And you see a lot of averages at various time periods and various stock markets and that type of thing. And they're often, 8, 9, 10, 12, something in that neighborhood. Again, some years are better than others, and some time periods are better than others. But that's one building block that we that we've talked about. So that's stocks. So that's the one that you know, I would say the roller coaster ride of the stock market is the wild that's that goes up the most goes down, the most can have some very sudden twists and turns. But if you can stay in your seat, it's probably worth it. Next, we have the bond market. So explain a little more about what a bond is. Again, I think he just mentioned it briefly. But so what is a bond? And why do we care about bonds?

John Munley 13:53
Sure. So with a bond, you're actually lending money. So you're giving your money to a company, or in terms of a bond, mutual fund or ETF to a group of companies. And you're expecting a real rate of return back for lending company the money. With stocks, unlike stocks, you're not in for that much of a wild ride, they definitely have lower risk, then stocks and we'll show an example of this in a little a little while. But it's really, bonds are kind of used to as an anchor to your portfolio in terms to dampen risk a little bit. And again, their rate of returns are historically going to be lower than the stock market again, but you're taking less risk. So you shouldn't expect as high of return as when you invest in stocks. But it's kind of a way between rather than sitting in cash and getting no return or just a small return. It's a way to lend companies money and be able to expect a higher rate of return. And again, the riskier the company, the more rate of return, you should expect, how bonds actually move around is based on where interest rates are going. So if interest rates are moving higher, you'll still get your rate of return. But that price of that bond is going to be worth less. So let's say interest rates go up a percentage point and your bond was worth 100, when you bought it, when that interest rate does move up, that value will go from 100 down to 93, or 94. So you will lose some money. But because you're getting a return on that, you will get a return on the initial investment that you made.

Brad Baldridge 15:43
Right, exactly. So that's the way you think about it is if I got a bond, let's say I got a John Munley bond, and you promised to pay me 5% interest. So I give you $10,000, you pay me 5% interest, but then rates rise. And now John Munley's saying 'I'll pay people 10%.' Now if I want to sell my 5% bond, when somebody to go directly to John and get a 10% bond, nobody's willing to buy my bond for what I paid for it. So I'm gonna have to sell it at a discount, essentially. And if I sell it at a low enough discount, anybody would buy it for a dollar. So somewhere between the dollar and what I paid for it is a fair price. So that's the bond market where just like stocks are bought and sold every day, bonds are bought and sold every day. So there's the way the instruments themselves work. And then there's the way that the markets react, stocks tend to react to things like how well the economy is doing and how well companies are being profitable. Bonds tend to react to interest rates, and what's going on there, again, because that's what people are concerned about, if I can get a bond over here for 6%, or a bond over there for 4%. You know, we get that's the comparison. And then of course, the last thing is cash, which again, is money in the bank, we know the bank has a lot of nice FDIC guarantees and stuff. So the money is very safe. But as we all know, banks don't pay a ton, especially in this environment where maybe we can get one or 2% on CDs, and half a percent or a quarter percent on our savings account or whatever it might be. So we're not making a lot of money by having the money there, but we know that money is relatively safe, and maybe appropriate for at least some of our money as well.

John Munley 17:42
And the one downside with cash, it's great to have cash because you have it there. But the purchasing power as years go on that cash most likely does not keep up the return you get or the interest that a bank pays, you most likely will not keep up with the growth of inflation. And if it doesn't, something that costs $100 today may cost, 10 years from now, $120, you still have that $100 It doesn't have the same purchasing power as it will in 20 years, which is why a lot of people invest in the capital markets against stocks and bonds, because they want to at least keep up with inflation to keep their purchasing power. Keep up with the inflation rate that's going to happen throughout the years, right. There's a study like the whole McDonald's study, I forget what it is, but a big a big mac that cost 20 cents in 1960 versus now, whatever I don't even know, McDonald's. But let's say $5, it's the 20 cents that you had back then you can't buy a Big Mac now with that money. So again, you want to make sure you're able to keep up with the rate of inflation when you're making investments.

Brad Baldridge 18:53
Right. And if we're parents of teenagers, we all can talk about, I can remember as an example getting five doughnuts for $1. I can remember 25 cent candy bars, I can't remember go into a movie for $4.50. You know, and now obviously those prices are much higher.

John Munley 19:12
And let's come back to colleges, which we're talking about a 529. I remember when I went to college, it was 12,000 when I was a freshman and now the same college is 75,000. So inflation has definitely taken its toll over the last 30 some odd years.

Brad Baldridge 19:29
For sure. So and that's where again, a lot of times the stock market is a better way to fight inflation. And cash is a way to minimize risk. So we got to find a balance. And that's what's important I think is when I'm working with families a lot of the times we're doing all the above we have some money in the stock some money in bonds and some of the in cash. Especially if college is imminent, right if you've got a high school senior or even Junior and you're saying well college very close, you might have some of your money tucked away in cash, just so you know it's there when you need it freshman year, but then the money that you might have for the youngest in your family who might say, say is in seventh grade, and we know, college is 5, 6, 7 years away. And now all of a sudden, we've got more of a time horizon where we might choose to invest a little more aggressively. And the other thing we need to talk about is diversification, because diversification is built into both 529s. But I think it's important that you understand it. And I mean, there's diversification a couple of different ways. So as we mentioned we have the stock market where you can go out and own a stock of a particular company. So, I like to use the example of Facebook, because there's a story that most people can remember. But you could go out and buy individual Facebook shares and say, I own Facebook. And had you done that when Facebook first came on the scene, and you still owned it today, it would have been a great investment, and you would have made a lot of money. But there was a time when there was not just Facebook, but there was also that company called MySpace. And there was a time when they were neck and neck and you had you know, some people were doing one and some were doing the other some people were doing both. Obviously, Myspace didn't make it. And Facebook kind of won that war, so to speak. Now, you could have just as easily said, 'No, I believe in MySpace,' put all your money in MySpace, and essentially lost it all or a vast majority of it. That's where diversification comes in. Where, again, if you invested in an S&P type of fund it would spread your money across all 500 companies in the S&P. So now any one company is not much of a risk anymore, because there's only a small piece, right? So if my space was in the S&P and it went bankrupt, you still have 499 companies to go. So yes, it hurts a tiny bit, but it's well-diversified and you don't even notice it. And again, big names used to be in the S&P 500 that are no more today, you know, Kodak and Sears and a number of different companies were big stalwarts until they weren't. And that's where I think, especially if you're a beginning investor, there's no, in my opinion, no reason to go and try and figure out which stock to buy. I think you're better off diversifying across many stocks by using either mutual funds or ETFs, or other financial products out there that automatically will find a good 529 do this automatically as well. They have stock funds and bond funds and cash accounts, but they're all diversified across many stocks for the stock funds, many bonds for the bond fund, and often many banks for the cash accounts. So

John Munley 22:59
I think a good thing to remember about it is you're not only with the S&P, you have 500 of the biggest companies in the US, but you're also investing across industries. So any given year, you may have healthcare industry does well, but software doesn't. So you're exposed to all different industries also. So again, that just increases your diversification, because it's not just the companies, but it's the industries that they're in. Because any given year, certain industries are going to perform better than others.

Brad Baldridge 23:31
Right? Absolutely. And that's where, so that's one way to diversify, right is when you buy a particular fund that says we're going to invest across 100 stocks or 200 stocks or 500, stocks or whatever choices you have there. Another way to diversify those that not diversify the types of stock you own, or even mixing stocks, bonds, and cash. So you can choose a fund that invests in the S&P 500, which is 500 US companies, then you could choose another fund that invests in international companies, and at different times, they do different things. And because you have not your eggs are not in all one basket. Now, you know what some do? Well, some don't do well. And on average, you do okay. Now, that's the downside of diversification, right? If you want to become a multibillionaire, you need to do it like Bill Gates or Mark Zuckerberg, where you put all your money in Microsoft or all your money in Facebook, and let it ride and let it ride and let it ride. You know, there was a time when these billionaires had only had 100 million. And it was probably concentrated in their company. And what did they do? They said, well let it ride. And then it got to a billion. And they said, oh, let it ride. And then it got to 10 billion and oh, let it ride. Now. That's not prudent and I'm hoping, and most likely some of their financial advisor were having them peel off 100 million and put it in cash or something here and there. So that they would, you know, never be truly broke. So that's a way to hit a homerun. But then you get to the MySpace example of, I don't even know who founded MySpace. He's not famous, because he's not as famous because his company didn't thrive and do the fantastic.

John Munley 25:27
But you can also see where diversification works. If you look at Warren Buffett, like he looks at undervalued companies across multiple industries, and he'll buy different companies. And granted, he's got a lot of money to go and buy these different companies at large blocks. But he's over the course of the year, him and Charlie Munger have always followed a philosophy, find companies that are valued, and that are undervalued right now. And hopefully, down the road, they're going to be much higher priced, which not to complicate what we're talking about. But we've been talking about the S&P 500. But there's when you look at the stock, when you look at stocks, they've broken down into different categories, there's large cap, mid cap and small cap, and that's based on the market capitalization of those companies. But then you also have growth and value stocks. growth stocks are well established. And it makes it harder for them, because they've always got to keep up with their expectations. And what's expected of them were value stocks are, you know, they're not quite where they need to be yet, but they have the potential. So there's all different ways to invest in stock markets. And like Brad was saying diversifying amongst everything is the best way to get exposure to all of it.

Brad Baldridge 26:50
Right, exactly. And then, right, and then the second way to diversify would be to say, well, some stocks, some bonds and some cash. So a lot of times, in retirement, or even in your 529, you might say, well, there's funds available, that might be a 60% stock and 40% bonds, or there might be a choice, that's 80%, stock and 20% bonds. And then there's some that are more conservative that are mostly bonds and a little bit of stock. So that's another way to take some volatility out. I think we've got another study that would make sense to talk about now, which is kind of expected the Vanguard study, and

So Vanguard, built portfolios with 100%, stock, and another portfolio with 100% bonds. And again, they didn't actually, and they used indexes. So they went and looked at the history and said, 'Well, we're just going to follow some historical numbers.' So this is not an actual investment, you can't actually invest in it. But they went back and looked at the various returns. And they actually started all the way back in 1926. So they pulled the historical data from 1926. And this study ended in 2019. And the 100%, stock portfolio, its average return was 10.2%. Its best year was 54%. Its worst year was -43. And it had 26 losing years out of 94. So the other study we talked about had 9 down years out of 42. When we expand it and include things like the Great Depression, and in the '30s, now we have 26 out of 94. So roughly a quarter, a little over a quarter of a third are down in that time period. And the best year and worst year, by the way happened to be in 1931 in 1933, which, you know, again, during The Depression, the stock market was very volatile, and had both good years and bad years. On the other end of that spectrum, the bond portfolio did 5.3% and its worst year was minus 8%. So dramatically less volatile as far as the downside. And there was one good year that at 32%, which was definitely an outlier but it can happen here and there in the both the stock and the bond market where you have a sudden change. And then if you just mixed it up and if you went 50-50, well you kind of get somewhere in between. So if you're a 50-50, you would average 8%. So again, all bonds 5%, 50-50, 8.2%, all stocks 10% on average over that whole time period, but the best year is 36%. And the worst year is -23%. In the 50-50, which also is less of a roller coaster ride than 100% equity for sure. So, a lot of times people add bonds to reduce the volatility a little bit. And I think that makes sense. You know, for some, both for retirement, and for college, and again, you don't have to do 50-50, you can also do 70-30, or 80-20. So there's all kinds of different mixes out there that might be appropriate.

John Munley 30:47
And I think people listening to this right now is saying, 'Okay, Brad, okay, John, this is great. But how do I know if I'm 100% fixed Income? How do I know if I should be 100% equity?' And that all comes down to risk tolerance. And it there's basically three components to look at when you're looking at your risk tolerance. And that's something that we both touched on a little bit here is your time horizon. So how long you have before you actually need the money, your risk need? Do you need to take a lot of risk? For instance, if you're, you know, if you have a newborn, and you're putting $5,000 into a 529 plan, you need that money to grow, and you have a long time horizon. So you may say, you know what, I have the time horizon, and I need this money to really grow. I'm going to put it in 100% equities, because I know historically, that's had the highest rate of return. And I know over a 10-year period, I'm most likely I'm not going to lose money. But the third component, and this is a hard one for people, it's the ability to take risk, are you the type of person who has CNBC on and if the markets down 2% in a week or 3%, that you lose sleep, if that's the case, you probably don't want that risky of a portfolio, because you don't want to be following it up and down and all the all the different gyrations that the market will take. And if that's your personality, you'll sleep a lot better having a less risky portfolio where you'd want to supplement the equities with with bonds and cash.

Brad Baldridge 32:23
Right? Absolutely. So that's the basics on investing. The other important piece of the puzzle is, a lot of times people talk about what is the rate of return of a Roth IRA, or what is the rate of return of a 529. And we need to just mention that the 529 or the Roth IRA, or IRA are all those are tax wrappers around an investment. So the rate of return is based on what you choose inside the account. So the rate of return is based on whether you choose stocks or bonds, or combination or cash or whatever it is, if you put cash, you've already put a savings account inside a 529, you're gonna get savings account like returns, and if you put us S&P 500, inside of 529, you're gonna get S&P-like returns. So the return is based on the basics of the investments, the building blocks that we've talked about what the account does, like a 401k, or a 529, that determines who has control of the account, what the account can be used for, penalties if you don't use it properly, all that type of stuff. So obviously, we got things like 401ks and 403bs at work, that are designed to help us retire, and IRAs and Roth IRAs that we can do personally that are designed mostly for retirement. And then we've got 529s and Coverdales for college. And then there's all kinds of other types of accounts out there, as well. But those are the basics. For again, this is the basic score. So that let's start there for now. And you can kind of go on from there as you learn more. And then finally, let's talk a little bit about financial journalism and the overall markets because I think a lot of beginning investors have preconceived notions, a lot of times based on what they see in the press or, you know, maybe they invested a little bit at work once and had a tough year right out of the gate so that it's like, okay, never again, stock market doesn't work. I mean, I hear lots of people saying things like, well, stock markets, just like gambling, all kinds of things like that, where so I think financial journalism comes into play because there's a lot of people out there that write about the markets and their number one goal is to get you to click on their article. So generally speaking, they need to write a headline that's going to get your attention, you know, another boring day in the stock market, click here doesn't work. They have to sensationalize it and give you reasons to be scared, again, fear sells in the stock market. So they tend to focus on that as well. So even in good times, they try and find some black cloud somewhere that may or may not come to fruition. But again, it's something that will get a click. And that's their goal.

John Munley 35:24
And I have perfect examples for this. Just remember, nobody has a crystal ball, and everybody who is giving you advice is getting paid. And they have to have, they can't say I don't have a view. Perfect example. Before I got into this wonderful career with helping families through college and financial planning, I was a currency trader on Wall Street. So we had economists, we had strategists, and they had to come up with recommendations. A lot of times, they didn't have a view, they didn't have an idea of where the market is going. But they're getting paid to tell clients and customers, this is what we think it's going to happen. So even if they did not believe it, they had to say something. So just remember a lot of the things that you're hearing, people are getting paid to say, and they're looking to stir up interest. And so it's kind of, again, remember your risk tolerance, if you have a long time horizon, you don't care about the noise, just block out the noise. Again, if you're somebody who just can't, then you probably want to have less risk exposure, so less equities, more cash and bonds. Really, it's kind of how your personality is.

Brad Baldridge 36:38
Right, absolutely. So then, right. So here's, I found a piece from JP Morgan, where they talk about all the different things that were going on. So you know, again, some examples in 2005, we had Hurricane Katrina 2007, the subprime blowout, we had the financial crisis in 2008. Flash Crash in 2010, the S&P was starting to downgrade the US debt and whether the US will be able to afford to take to pay off their own debt. And the Greek debt was in trouble. We had the Ebola pandemic in 2014, the Brexit in 2016, trade wars and inflation scares and 2018, obviously, COVID in 2020, Omicron in 2021. So there's all kinds of reasons. And sometimes the markets did react to these, and sometimes they didn't. And, actually, we don't even know that the market reacted to these particular things, or if they just reacted to something else. That's another interesting, journalists love to say, well, the markets are down today, because XYZ, and it's like, they have no idea why the markets are down. But those two things happen to happen at the same time. So they assume that they're together, which isn't necessarily the case. But so there's always reasons to not invest. But over that time period, from 1999, through 2016, to 2021, the cumulative return was 400%, more than 400%. So your money grew if you put in $100 in 1999 in the S&P, it would have grown to over $400 by the end of 2021. So again, that's that cumulative rate of return of 8, 9, 10%, year after year after year. But of course, we don't get it all in one year, right, we get 12%, one year, -3%, the next year, +26%, the year after that downtime the year after, but generally more up than down. So we made a good rate of return over those years when there was always something bad to talk about.

John Munley 38:55
And the other thing that generally happens when people trade off of the news is it's easy. Let's say you own equities. And there's negative news out and you say okay, I'm going to sell out of my equities, I just want to go to cash, and I'll buy back in on the bottom. Well, if somebody can always tell me where the bottom is, I wouldn't be sitting here right now. And I don't think you would be sitting here either Brad right? You don't know where the bottom is, you don't know when the markets going to turn. You don't know if the market is going to bounce off 10% then drop back down 20% or it's just going to keep going straight up. Again, I had I had experience with this in 2007, 2008. With the subprime crisis in the mortgage crisis, getting out of investments saying, okay, this is great now, and it dropped down even more and I'm like Google, I'm a genius, but then it bounced back up. And I'm like, okay, when do you get back in when you get back in and you hear a lot of that from clients. So it's easy to make the decision to get out. It's very hard to make the decision on when to get back in. Which again, why if you have a plan in place and a long time horizon, you kind of just want to block out that noise knowing that over the course of years, your portfolio is going to have a positive return.

Brad Baldridge 40:11
Right, absolutely. All right. So what it really boils down to at the end is, families need to make choices around how they're going to deal with this. So obviously, we just spent a half an hour, 40 minutes talking about things. And now many of you out there your eyes have glazed over, you said, oh my god, there's no way I just not interested, I don't want to deal with this. And some of you are like, okay, I understand, you know, I'm ready to take the next step. Investing that for everyone, and not everybody wants to do it can do it. So you've got some choices, right, you can do it yourself. So you can study the markets learn more about it, you can take a course, or you can just jump in with both feet and try and figure it all out. But you also have the option, you can also get help, right, you don't have to do it alone. You know, you could if you've got friends or family that can help you with it. And you feel like you can trust them, then maybe that's the course. And then of course, you can hire someone like John and myself financial advisors who do this essentially, for a living where we help people talk through what kind of risk are you willing to take and what makes sense and understand all the tax benefits and all the different nuances and build a portfolio that goes together? I think that's a challenge for a lot of people. And then somewhere in between might be just find someone that can do some spot checks to make sure that what you're doing make sense for your situation

John Munley 41:50
And that's the minimum, and two things we've been really talking about our 529 plans and 401k plans which are similar. Most 529 plans have an age-based options. So you basically put that money in and they'll adjust it as you get closer to needing that money for college, it'll get less risky, more fixed income. Same thing with your 401k, they have target date funds. So let's say you're going to retire in 2035, you'll have more risky assets now. And you know, as you get closer to retirement, you'll have more, much more exposure to fixed income. There's inherent problems with those two, which is beyond the scope for what we're going to talk about now. But at least if you're looking to start out and don't know where to start, those are two kinds of places you can look.

Brad Baldridge 42:46
Right? Absolutely. I mean, they, the people that run the 529 essentially say this is what we think is appropriate for someone that has a 12 year old or a 17 year old or a 4 year old. Now, they don't know the whole story, that's all they know is how old is your child? And how long till college? So, again, you might want to go beyond that. But again, that's often a place where people will start? I encourage, when I'm working with families, we go beyond that, because I think the problems are real. And eventually we might move away from those, once we understand what our other choices are. But it is a good place for some to start. All right. I think that covers the basics for 529s. We appreciate you sticking around and listening, we will continue on this 529 path here. So we will have a couple more episodes to talk about strategies, advanced strategies, some of those types of things. So if you need to listen to this more than once to absorb it all, or take some notes or go ahead and do that. But if we appreciate you listening, and we'll see you again next week. All right, that was a great interview with John, hopefully you've learned the basics and are ready to get started. If you're still feeling overwhelmed, as we mentioned, us always can work with professionals to help with this, I would encourage you to find a professional that understands college in more detail than just the saving and investing. You know, hopefully, they might be able to help you with need-based planning or merit aid and all the other areas of college planning all the things that we've covered on this podcast over the years. But again, you know, there are people out there that can and will do it themselves. And there's some people out there who either don't have the inclination and don't want to learn how to do this. Or perhaps they just don't have the time and don't want to spend it on this and they would spend their time doing other things instead. Alright, that's all we have for today. Stay tuned for the disclosures.

Presenter 44:56
Thank you for listening to the Taming the High Cost of College Podcast. Now it's time for you to take action head to tamingthehighcostofcollege.com for show notes, bonus content and to leave feedback for Brad. The next step on your college journey starts now.

Brad Baldridge 45:14
Disclosures. The information provided to you today is for educational purposes only. It is not intended to be specific recommendations or advice. Please consult with a qualified professional before acting on any of this material. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss including total loss of principal. 529 College Savings Plan disclosures, investors should carefully consider investment objectives, risks, charges and expenses. This information and other important information are contained in the fund prospectuses, summary prospectuses, and the 529 product program description. These documents can be obtained from a financial professional or directly from the plans website. Please read them carefully before investing. Depending on your state of residence, there may be an in-state plan that offers tax and other benefits, which may include financial aid scholarship funds, and protection from creditors. Before investing in any state's 529 plan, investors should consult a tax professional. If withdrawals from 529 plans are used for purposes other than qualified education, the withdrawal could be subject to a 10% federal tax penalty, state penalties, federal income tax, and state income tax. Brad Baldridge's disclosures. Brad Baldridge is a registered representative with Cambridge Investment Research. Securities are offered through Cambridge Investment Research Incorporated, a broker dealer and member of FINRA and SIPC. Brad Baldridge is also an investment advisor representative with Cambridge Investment Research Advisors, a registered investment advisor. Baldridge Wealth Management and Baldridge College Solutions are affiliated. Cambridge and the Baldridge companies are not affiliated. The registered brands location is at 10521 West Leighton Avenue Suite 200 Greenfield, Wisconsin 53228.

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The post THCC 529 Plan Series EP 2: 529 Plan Investment Options   appeared first on Taming The High Cost of College.

Today’s Guest:

John Munley, College Funding Specialist  

Despite being a successful foreign currency trader with a 27-year career on Wall Street, John Munley was still worried about paying for college, saving for retirement, and spending quality time with his family. This urged him to sign up as a financial planning client years ago.  

As John’s financial planner guided him through obstacles and showed him the path to success, John discovered that he wanted to do the same for others. 

When he was presented with the opportunity to leave Wall Street behind and start his journey as a financial planner, John co-founded wHealth Advisors, a New Jersey-based company that aims to provide the highest quality, objective financial planning to its clients.  

John actively works as a College Funding Specialist, helping thousands of families find the best possible college fits for their students and demonstrating how to attend college for the least amount of money. 

Questions Answered Today:

What is a 529 plan and what are its benefits?  

A 529 plan is a popular way to save, invest and grow money for college. One of its most popular features is that it’s tax-free, which means that, as long as it’s used for qualified expenses, you never have to pay taxes on any withdrawals or growth from your 529 plan. Any growth and subsequent withdrawals are free from federal taxes and, in most states, they’re free from state taxes as well.  

Aside from the fact that it’s tax-free, it’s also an investment, so you’re not just saving money but potentially growing it over time. Like other forms of investing, you can choose to invest your money aggressively or conservatively.   

What are the cons of a 529 plan?  

Because 529 plans are funded for a specific purpose, if the money is not used for that intended purpose, aside from taxes, account owners are liable to pay penalties, making it disadvantageous to be used for family emergencies or other costs outside of education. Hence, it’s important that:  

• Your 529 plan doesn’t get overfunded 
• You use your funds for qualifying educational expenses 
• You meticulously track your expenses (to avoid over-withdrawing and keep proof to present during a possible audit)  

What are considered ‘qualified educational expenses?’  

To get the benefits of tax-free withdrawals from your 529 savings plan, you must spend the money on qualifying educational costs, such as: 

• College  expenses, which includes but are not limited to:  

1. Tuition 
2. Room and board (including Internet, electricity expenses, etc.)  
3. Books 
4. Computers  
5. Rent and food money 
6. Etc.  

However, 529 plans have evolved over the years. Some states now provisions that allow funding for additional educational expenses, such as:  

• K-12 tuition costs (up to $4,000 for K-8 tuition and $10,000 for high school) 
• College loans [Just recently added]  

1. Let’s say there is $20,000 left in the 529 plan, and the student graduates with a $27,000 loan. The money left in the 529 plan can be used to pay off the student loan. In states that allow this, the withdrawals will be taxable, but there will be no additional penalties.  

VERY IMPORTANT: Make sure to keep records of these expenses to make sure they’re honored when audited.  

How do I get started with a 529 plan?  

When you want to set up a 529 account, the first thing to do is to check if your state offers tax benefits with 529 plan investments. If not, you can check with other states’ 529 plans, since you can invest in another state’s 529 plan as an alternative. Tax benefits, investment options, and fees vary per state, so make sure to pay attention to those. 

Remember that you can use your 529 in any college in any state, regardless of the state where it was set up.  

To learn more about 529 plans, plan options in your state, and which options you might want to consider, you can contact Brad Baldridge for expert guidance. 

As a Certified Financial Planner, Brad has been helping families plan and save for college and invest in 529 savings plans for nearly 20 years. He can quickly answer your questions, point you in the right direction, and even serve as your 529 plan advisor if you’re in one of the states that he serves. 

To get started, contact Brad now. 

What happens once I set up a 529 plan account? 

Once you decide to open a 529 plan account, you’ll need to decide on a few important things to start:  

• Ownership 

1. Owner – one who has full control over the account, can change the beneficiary and successor, can use the money however they want 
2. Successor – one who controls the account if the owner is rendered incapacitated to do so  
3. Beneficiaries – the one who’ll use the fund for education expenses  

• Investment options – these are usually age-based, which means:  

1. When your children are 0 to 5 years old, you might make more aggressive investments (e.g. stocks and bonds) 
2. When your children are closer to college age, you might make safer or more conservative investments (e.g. equities) 

• How you want to fund your plan – usually it’s linked to a checking account, which can:  

1. Send monthly payments  
2. Send a lump-sum deposit  

Money gifts can also go straight to a student’s 529 fund. John notes that money gifts that are not higher than $16,000 are tax-exempted. Any amount that’s higher (the maximum is $12,000,000) may be subjected to tax.  

• How you want to withdraw funds  

1. Through the same checking account  
2. A check to directly send to colleges (easier for you, but may be harder to track)  

• Important forms the schools will give you  

1. 1098-T – tells how much you’ve spent on tuition and other qualified expenses  
2. 1099-Q – tells how much you’ve already withdrawn from your 529 plan 

Note: It’s always better to ask for the help of a financial adviser when going through the process of setting up a 529 account. Also, 529 plans have websites where you can find disclosures, so make sure to go through those.  

If the beneficiary can’t use the 529 fund, what happens to the money?  

There are several cases where a student might not need to use your 529 plan money. For example, your student might get a full-ride scholarship or might change plans and not go to college. There are many ways to deal with cases like these:  

• In the case of a full-ride scholarship, you are allowed to withdraw the money with no penalties, but you need to pay the taxes.  
• Withdraw the money and pay the taxes and penalties. One of John’s clients did this in the past. They ended up paying $12,000 taxes and penalties for $80,000, with $68,000 leftover.  
• Change beneficiaries – the rules for changing beneficiaries are very flexible. In fact, you’re allowed to transfer a 529 plan’s benefits to:  

1. Brothers  
2. Sisters  
3. Parents  
4. Children  
5. Nieces 
6. Nephews 
7. Cousins 

As long as you’re spending the 529 plan money on qualifying educational expenses, any withdrawals will still be tax-free if you change beneficiaries. 

John notes that it’s best to start early so you have full control and view of how much exactly you want to spend. Starting early helps you fine-tune your funding and perfect it, most especially if you have multiple kids that use 529 funding for college.  

Disclosures

Investors should carefully consider investment objectives, risks, charges and expenses. This information and other important information are contained in the fund prospectuses, summary prospectuses and a 529 product program description. These documents can be obtained from financial professional or directly from the plans website. Please read them carefully before investing.  

Depending on your state of residence, there may be an in-state plan that offers tax and other benefits, which may include financial aid, scholarship funds, and protection from creditors. Before investing in any state’s 529 plan, investors should consult a tax professional. If withdrawals from 529 plans are used for purposes other than qualified education. The withdrawal could be subject to a 10% federal tax penalty, state penalties, federal income tax and state income tax. 

Registered Representative, Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, Member FINRA / SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Baldridge College Solutions and Cambridge are not affiliated. John Munley and wHealth Advisors are not affiliated with Cambridge

Check the background of firms and investment professionals on FINRA’s BrokerCheck.

This communication is strictly intended for individuals residing in the states of California, Colorado, Florida, Georgia, Iowa, Illinois, Indiana, Maine, Maryland, Minnesota, Missouri, Montana, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. No offers may be made or accepted from any resident outside the specific states referenced. 

Links and Resources

Helpful Articles and Resources 

• Taming The High Cost Of College 
• John Munley’s contact info:  
• LinkedIn 
• wHealth Advisors – Website   

THANKS FOR JOINING US!

We’d like to extend an invitation to our listeners to share their feedback and questions. Contact us to submit a question.

If you find our podcasts helpful, please share us on social media and tell your friends!

The bottom line is that we care what you think and want to help you out, so we’d appreciate you reviewing us on your favorite podcast platform. Even better, receive automatic updates by subscribing to the show through your preferred podcast service. 

Transcript Email Download New Tab

Brad Baldridge 0:00
529 college savings plans and why you should consider them. Stay tuned.

Presenter 0:06
You have kids, they grow up, and before you know it, it's time to plan for college. Where do you start? How much is it going to cost? Do you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? The list of questions is never-ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College podcast here is your host, certified financial planner, Brad Baldridge.

Brad Baldridge 0:36
Hello, and welcome to Taming the High Cost of College. I'm your host Brad Baldridge. Today, we have a great interview with John Munley where we talk about 529 plans and how they can fit into your overall college plan. As a matter of fact, John and I recorded four episodes. So we're going to cover a lot of material all about 529s. So in this first episode, we're gonna get into the basics of 529 plans, some of their key benefits, that type of thing, and why you should consider using them for your college plan. Now we're going to follow up with three other episodes. So part 2, we're going to cover college savings plan basics. In other words, we're gonna get into stocks and bonds and cash and different types of investment strategies that you can use, we're going to compare them to think very basic things like your 401ks and basic investing strategies. So this is really designed for the beginner that really needs to understand some of the basics as well as 529s. Now, if you have a lot of investing experience, perhaps you've been working your own IRAs and 401ks for the last 20 years, if you feel like you've got investing down, and you really just need to focus on how 529 plans are different, and how they might be helpful from a college savings perspective, then perhaps you could skip this next episode where we go over the basics, because that's something that you've already got under your belt. In the third episode, we're gonna get into some strategies that you can use and we're going to compare and contrast 529s with other vehicles that you might use. And often times, in planning, John and I will use more than one type of investments, we may use a 529 paired with something else like a Roth IRA. So we'll talk about some of those strategies. And then finally, the fourth episode, we're going to cover advanced 529 strategies. So we're gonna talk about using it as part of your estate planning, where I'm talking about how 529s and grandparents can work together, we're going to talk about using it as a part of your global strategy and integrating your 529 planning with the rest of your overall financial planning to get you further in your goals, not just for college, but retirement and other goals as well. Now, 529s are a pretty complicated topic, and we've got taxes are involved in investing and so forth. So you need to be careful and understand the pros and the cons for 529. And they have a lot of great benefits, but they also have some potential pitfalls and problems. At the very end of this episode, we're going to have all the disclosures that talk about all the different things you need to be looking into. So stay tuned for that. But in the meantime, very basically, what I'm trying to say is, this is not a recommendation, you really need to understand and perhaps work with professionals in order to make sure that this is the best option for you. As always, show notes are available at our website. So you can go to tamingthehighcostofcollege.com and look up the show and get all the information that we talked about as well as links to all the various resources. Alright, so let's go ahead and jump into the interview with John.

Today I'm talking with John Munley. He's the co-founder of wHealth Advisors. Welcome, John.

John Munley 3:44
Hi, Brad. And thank you for having me here today. It's great to be here.

Brad Baldridge 3:49
All right. So this is the first podcast you've been on, but we plan on doing a series so can you introduce yourself a little bit, as far as wHealth Advisors is and what it is that you do?

John Munley 4:01
Sure. So wHealth Advisors we are an IRA firm based in Red Bank, New Jersey. And what we do is we're comprehensive financial planners, but we have a specialized niche in college, late stage college funding. How I got into this is I have four daughters, who, basically in 2016, I have twin girls and they graduated high school, they were going to start college so I kind of dove into this being a financial planner, I dove into this whole college experience, figuring it can't be that difficult, and I realized all the different intricacies that are involved in it. And even somebody with my background. There were a lot of ways that kind of tripped you up. So I really wanted to understand the process and realize that there are a lot have different things that you have to know, it's a specialized experience. So I wanted to help other people and guide them through this process. And that's kind of how I came up with, again, working with people who have high school aged children and and trying to figure out how to pay for college.

Brad Baldridge 5:19
Right? Absolutely. And to go with that, we're gonna dive into 529s today, because you're a financial advisor, as am I and I spent a lot of time talking about 529s, especially when the subject of college comes up. So, why don't we do that? So let's start with the very beginning of what is a 529.

John Munley 5:44
And a 529 is basically if you think of it like a retirement account, it is a place that you can start to save for college for your children. But it has tax advantages that make it definitely worth considering. You invest your initial amount, and that can be one time lump sum, it could be a monthly contribution, and then that money grows tax free. And as long as you use it for qualified expenses. You never have to pay tax on that money. So that's why it's a great way, at least to save partial part of your money that you're going to use to help pay for college in a 529 plan.

Brad Baldridge 6:22
Right. So yeah, I mean, 529 is essentially a popular way for families to save for college. So you mentioned a couple of the benefits. So I think the number one reason people use 529 is tax benefits. And there's federal tax benefits and state tax benefits for some. But what are the basics there, we got the tax deferral, which means the money grows, we don't have to pay taxes as it's growing. And then we have to, I guess we don't have to, but if we take the money out for qualified expenses, then we avoid taxes at that point as well. So kind of the best of both worlds where once we invest the money, it grows, and we spend it on college without ever paying taxes on it.

John Munley 7:09
And that's anytime you can do that. It's a great thing.

Brad Baldridge 7:13
Right, exactly.

John Munley 7:15
That's why we like these.

Brad Baldridge 7:16
Right. And that's pretty rare. Another place I'm aware of it is the health savings account and the Roth IRA, where you get to spend money without paying taxes on it after it's grown.

John Munley 7:28
They both have low limits, where what's nice about the 529, and we'll get to in a little while, is you can put a lot more money towards that. And you can with a Roth or an HSA.

Brad Baldridge 7:39
Exactly right. So, again, all of the things we've been talking about is all because of the tax benefits. So I guess a couple of the other benefits of a 529 is you can choose how you're going to invest the money. So if you want to be an aggressive investor and put it in some form of stocks accounts and that type of thing, you certainly can do that. And I think that's appropriate, especially when your children are young. And often it's also appropriate when your children are older. But that's not the only choice is what other investment options are out there as far as the 529?

John Munley 8:13
In terms of inside five, most plans have an age-based investment option where they have the funds in there. And they basically are more aggressive when you have newborns, zero to two years, zero to five years. And as we get closer to college age, it becomes much more safe, so more towards fixed income and equities. And if you're not much of a do it yourself, and you just want to set it and forget it, that's one option to do this, because the plans will automatically just adjust what the allocation is based on the age of the beneficiary.

Brad Baldridge 8:50
Right? Absolutely. So and then they also have the very safe accounts that are some of them use like CDs or bank accounts of some sort. Some of them are just some form of guaranteed account. But we've got the whole gamut of choices anywhere from very conservative to aggressive. So that's all the good news. What's some of the bad news?

John Munley 9:15
Well, if you don't use it for college, there are taxes on the earnings and penalties that you may have to pay. So it's definitely something that you want to consider not over funding this because if you don't use it, you will come and pay the tax man and it will be a penalty. So while we said it's great investment, it grows tax free. It's one of the best things out there for paying for college. If you don't use it for college, you will pay the tax, man, and they'll also be additional penalties.

Brad Baldridge 9:48
Right? Absolutely. I think there's some additional challenges, you can lose money in a 529 especially if you choose the more aggressive options in a time when aggressive investing is not working out. So you think of the stock markets and bond markets and those types of things, they go up and down, and they can go both directions, just depending on how that works out. The other thing you need to keep track of all the paperwork around, yes, you get some tax benefits, but that also means you got to figure out how to put it on your taxes, so that you actually get the benefit.

John Munley 10:22
Yup, the schools, I was gonna say, the schools will give you a 1098T, which basically tells you what you've what you spent on tuition. And you'll get a 1099Q, what you withdrew from the 529 plan, and you need to keep track of how much room and board you paid how much in books you paid. Anything that goes under that qualified expense, you want to make sure you know exactly how much you use. Because if you take out more than if you withdraw more from the 529, when you spent, that's when you're going to be paying taxes on the amount that you've overwithdrew by.

Brad Baldridge 11:02
Right, absolutely. Alright, so let's get into a little bit more about... But before we get into that, let's briefly talk about where we can get more information about 529s. If we say, 'Oh, I think I like it, maybe go learn more,' there's certainly websites, every 529 has a website.

John Munley 11:23
And then there are some 529 plans that are better than others, just because they may have more investment options, they may have a lower fee. So what the first thing I think you want to consider is, in your own state, do you get a tax deduction for contributing to 529? If you don't, you don't only have to invest in 529 in your own state, you can use any of the 50 states' 529 plans. If you don't have a tax advantage in your state, it may be worthwhile to look outside the state and see if there are any plans that offer more investment options or lower fees.

Brad Baldridge 12:01
Absolutely. So every state offers a plan. Just about I think Wyoming might be the one state that doesn't. And

John Munley 12:09
See, I learned something, awesome.

Brad Baldridge 12:12
And you don't have to use this your own state's plan, if you don't want to, you can use any 529 plan no matter where you live. And but you might get some additional benefits if you use the states that you pay taxes, and if you use one of their plans. So that's the big advantage. But sometimes we'll see people that some states don't offer mentioned benefits. So it doesn't matter which plan you take. But you can use any plan in any state and spend that money in any college in any state. So a lot of people get confused and say, 'Well, I gotta use this in my home state', or something like that, which is not true. So that might be being confused with the other type of 529, which is a prepaid plan. And those have a lot more restrictions. And that's not at all what we're talking about here. So prepaid plans is a topic for a different day. These are just the general 529s where you can invest and grow your money for college and then spend that in any state that you choose to go to college.

John Munley 13:17
And I know Brad, before this, we were kind of looking. The one thing is to find out information on these plans, you go to specific date, state, and they're called all different topics. So we saw a plan description, investor handbook, program disclosure statements. So it's going to be hidden somewhere on the bottom of the website. So if you want to go through and see all the investment options, and all the regulations and disclosure statements, you're able to find that there.

Brad Baldridge 13:44
Right, exactly. So just like other forms of investing, you know, all the disclosures and information is in some form of document that has various names, you could go get them at the website. They're not necessarily all that easy to find. That's the 50 to 100 page document with amendments and all kinds of gobbledygook. But it also has sections like this is your tax benefits. And this is how it works. And here's your investment choices. And here's the pros and the cons. And here's the penalties. And here's the expenses and all the different pieces that you need to understand. And of course, in many cases, your there's going to be information on the website itself, where maybe it's not quite so densely presented, and you can just look up average expenses on various investments and that type of thing. All right, so let's jump into qualified expenses. That's a key topic when it comes to 529s in order to keep your tax free status, you have to spend the money on what's called qualified expenses. So what are the qualified expenses?

John Munley 14:55
And each qualified expenses have different limitations on what you can spend, but there's for college basically three categories are college, high school, K through 12 tuition costs, and paying back student loans, which is something that was just recently introduced. So with college won't cover the qualified expenses college travel, no, but you have tuition, room and board, books, computers, anything like that is a qualified tuition.

Brad Baldridge 15:25
Right.

John Munley 15:26
And one thing to keep, and I know this from my own experience is if you have children or students now in college and they're living off campus, the rent that you're paying, and the food money that you are giving them does count towards a qualified expense, you just need to keep good records of that. So know what the lease is what you're paying in rent. Also, if you're giving your child's money for food, that is a qualified expense, that's a great way to use a 529. But again, if the tax man comes and asks you for receipts, you're going to want to have those so that you're able to justify using the 529 money for that.

Brad Baldridge 16:07
Right, exactly. So room and board covers your typical meals, your rent, but also some of your expenses if you have to pay for the internet at the location, or the water or heat or whatever it is all those things. And again, it would be the student share. So if you get two or three roommates, then it's just the part that your students actually paying.

John Munley 16:29
Yep. So like you mentioned early, Brad, in this when we first started, it's very important to keep records on this on these things, especially if you're going to use 529 money up to the limit of what you can in terms of qualified expenses.

Brad Baldridge 16:42
Right, absolutely. Now, they've added a few things that weren't always part of a 529. So about five years ago, I think it might have been they added high school and grade school tuition. So there's no room and board and that type of thing involved. But it's up to $10,000 for high school tuition. So if you're paying some sort of tuition for a private school, or I guess maybe some states, there might be schools where it's a public school, but you still pay tuition, I've not heard of that. But I guess it's possible, or great, or up to 4000, for K through 8. So high school, it's 10000, 4000 is the limit for K through 8th grade. And that's the amount that you can take out. Most states are now following those rules. And they get because every state has their plan, and every state has their own opinions on whether their state tax rules are going to follow federal tax rules. Some states may not allow some of these other deductions that are not directly college. And then the last one is you can take money out to pay back student loans up to $10,000 per beneficiary. And this one is very new, so a lot of states are still trying to decide if they're going to go along with it. So I've seen a couple states, just recently that do not allow paying back loans as far as avoiding taxes for the state taxes. So you're gonna avoid taxes federally, but you may have to add it back in when it's time to pay your state taxes.

John Munley 18:18
Now, and this is great in terms of if you do have leftover money in a 529 plan. And let's say your student did borrow for college, so they took the Federal Student Aid loan, they borrowed the 5500, freshman year 6500, sophomore years 7500 junior and senior year for a total of 27,000. Now they're coming out of college, they have this $27,000 debt. If you have 20,000 leftover in a 529 plan, you can take 10,000 of that and pay down part of that student loan debt, which is which is great. It's a great way to use some of that leftover 529 money if you have it.

Brad Baldridge 18:55
Right, exactly. And just to be clear, you can do that without paying taxes on it, you could take the next $10,000 and apply it to loans as well, you just have to realize that you may have to pay taxes and penalties in order to make that piece. So it's always important to understand that this is your money, you can do whatever you want with it. There just might be some tax consequences. So they're not saying you can't have it. They're just saying if you take it for the wrong reasons, we're going to hit you with some penalties. So in a dire emergency, I gotta have the surgery no matter what, and you want to use your college money, you can do that. It's just again, they have tax consequences.

John Munley 19:33
Exactly.

Brad Baldridge 19:34
All right. So let's talk a little bit about you know, when I say you and that type of thing, so what we're really talking about is owners and you know, so that's the other next piece of it is a 529 plan has an owner, typically that's the parent that owns it for a beneficiary and typically that's a student. And then we have what's called the successor owner and that's somebody that will take over for the owner if the owner should pass away or otherwise be incapacitated. So oftentimes that might be the other parent, you know, so mom owns it for the benefit of little Johnny and little Susie. So you might have two accounts. And dad is the successor owner should something happen to mom. But we can also have grandma and grandpa owns this for the benefit of a grandchild. Or mom and dad owned this for the benefit of mom and dad. But the owners are always the ones that are in control. And they can actually change who the successor owners and the beneficiaries are, again, it's your money, you have control. And because you're the owner, you control all different things like changing things, how it's invested, if and when the money is withdrawn and actually spent on college. So I think this is an important thing when it comes to divorced and separated families and blended families and that type of thing. A lot of times, I've been in a few situations where the ownership was never really discussed as part of the divorce because they said, 'Well, that's money for college.' That's not, we're not dividing that per se, because it's really the kids' money for their college, we're just going to keep it intact. And it'll be there for college. What was neglected to talk about, though, is, whoever owns it is the person that gets to control it, and decide when and if it's used and how its invested. And could even theoretically, decide to take it out, pay the penalties and walk away with it. So that's why understanding the owners is important, again, because the technically does not belong to the beneficiary, and they don't have much recourse in a typical 529. As far as well, someone, my parents set aside this money for me, and then they decided to take it back. It's like, yeah, they can do that. It's their money.

John Munley 22:00
And we'll talk about this in another episode, I believe, but it's people get confused with 529 in a custodial account, say, well, it's both of my child's name. So it's all his money. And it's not in a custodial account, once they turn the age of majority, which in some states is usually 18 or 21. That's their money. So you're no longer the owner, they're the owner, they can use it for whatever they want. Again, with the 529s, it's your money. So you don't, it's just to, it's for the benefit for. And another thing we'll talk about later on is strategic ways to make sure who's the owner for financial aid purposes that could come into play in terms of helping families get financial aid.

Brad Baldridge 22:44
Yes, absolutely. Yeah. So let's talk a little bit more about the withdrawal process. So I think they're the owners obviously get to decide when to take the money out. from a tax perspective, there's what we would call qualified withdrawals, which we already mentioned, which are, again, tuition, room and board books, a computer, that type of thing, non qualified, which would be, I'm gonna take out the money and go to Vegas with it, or I'm going to take out the money and pay off a car with it, or I'm gonna take out the money and give it to my kid and they're going to buy an airplane ticket, again, because travel doesn't count. So that would be non qualified as well. Then there's a withdrawal that's kind of falls in between, it's either qualified or non qualified. And that would be if you take money out for things like scholarships. So there's a provision in the 529 that allows you to take money out up to the amount of a scholarship that your student receives. And then you do not have to pay penalties on that withdrawal. But you would have to pay taxes. And that purpose, I think, is that that Catch 22 that some parents are worried about of well, what if I save a big pile of money for college for my student and then they somehow land the full ride or something, and then they don't need the money. What do I do then? So this is there are withdrawals where you can take out up to the cost of a scholarship, and what there's one around the tax credits as well. But again, it's just kind of a safety valve that allows families that veteran that situation say, 'Well, if they got $100,000 with scholarships in their career, well, then we can take out $100,000 and avoid penalties.' So if we did have that big pile of money for the expensive school, and it turned out, the expensive school gave us a big scholarship while we have a safety valve and that allows us to take it out. Of course, we would also have the option of doing other things with like changing beneficiaries and stuff that we can get into here as well.

John Munley 24:55
Then I had a situation where I had a client and they had saved and 529 money for private schools. So private schools run anywhere from 60 to 70 to 80,000 a year. So they'd saved a good amount for college and 529, again, with the assumption that they were going to be paying 60,000 a year for college, that an only child, they ended up going to a state school so that tuition was only 30,000. So they had about 80,000 leftover in their 529 account. Again, only child didn't want to save it to put it towards a grandchild down the road. Their kid wasn't gonna go to grad school. So it's like, right, we have 80,000. And there's about $30,000 of taxable earnings that they would have to pay on plus a penalty. And at the end, we decided to take this money, you weren't even thinking about, this wasn't your money. This was going to college. So we ended up paying the tax paying the penalty, and they ended up getting out of that 80,000, $68,000 that they didn't think they would have. So yes, you kind of stumped that they lost that 12,000 in taxes and penalties. But it was money that they never thought they were going to have anyway. So it was kind of like, 'Alright, now we have this money, what are we going to do with it? So you're able to do different things.' As Brad said, maybe buy a car, maybe go to Vegas, I'm not sure what they do. But it is your money. And if it does get overfunded, there are ways to get it, you do have to pay it. But again, we kind of looked at it as this was set aside for college, we weren't even budgeting anything for your lifestyle with it. And all of a sudden, you get to use it.

Brad Baldridge 26:40
Yeah, so when it comes to leftovers, as we mentioned, you can change beneficiaries. So you're allowed to change beneficiaries within the family of the existing beneficiary. So you can change it to brothers and sisters, parents, and children of that beneficiary, cousins, nieces and nephews. So there's lots of ways that you can change beneficiaries. For many families with multiple kids, I often recommend that parents consider 529 as just a big lump sum for college doesn't matter who the beneficiary on the account is, especially when it all came from mom and dad, if you're setting up a specific savings account for some reason, and maybe the students putting their own money in it, or all their birthday gifts are going into it well, then you probably want to keep it separate. But many times I'll have parents that are saying, 'Well, we're putting in 2000 a month for college, over the next eight years, because we've got three kids that we're going to have to deal with. Whose account do we put it in?' Well, it doesn't matter, because we can always change it from one student to another. Sometimes you'll get a two out of three students go to an expensive school and one goes to a lower cost. And then you can shift the money around. And we'll talk more about strategies as as we get into the next couple episodes, but there's a lot we can do there as well.

John Munley 28:05
And Brad, that happened in my family some like I said, my twins went to college, they graduated in 2021. One had her 529 plan, we used it all, one had leftovers, we've rolled it into the one who's now a sophomore in college, she'll probably have leftover money, so it'll get rolled down into my youngest child. So it's a nice way that you don't have to earmark, who the child is for it just keeps getting rolled over. And hopefully, you've planned it well enough that you use it to the penny for the last child.

Brad Baldridge 28:37
Right, exactly. And I think it's important to understand too, that as your income and wealth grow, the more important 529 is or the more beneficial 529s become. Because if you can avoid state and federal income taxes, or at least federal income taxes, depending on your state that can add up, as your income climbs that can be you know, up in the 30%, maybe up to 40 to 45%, and the highest earners and avoiding those taxes has a huge benefit to the point where you might get more aggressive with these types of accounts. And then the end if you had if you have a $3 million estate, or whatever your net worth between all your stuff, and there happens to be $30,000 529s, I don't think that's the end of the world, you can just leave it there and wait and see what might happen. Again, because it might be grandkids it might be one of your existing children going on to grad school. It might be mom and dad wanting to go back to school where you can use that money. So and then for others it's it is where we really don't want to have any leftovers, which then you just want to be more careful as you're putting the money in. And this is something I work with families a lot as well where you kind of say, 'Alright, well, where are we now? Well, we've got $100,000 in our 529s but we've still have three kids, and nobody's gone to college yet. So between all three of them, we could easily spend that and a lot more. Let's go ahead and keep saving.' And then a few years later, you know, now we have 95,000 because we've added money and taken money out and so forth. But we're starting to wind it down. You're one kids graduated one kid has one year left, and one kid has two years left. And by that time, you pretty much know what it's going to cost. I mean, once you're in college, and you've kind of have a couple of years of history, you can say, well, year over year, we know what it's going to be. And you can say, well, if things continue as they are, we're going to need 100,000 based on our projections, and we already have 95,000. If you're worried about having leftovers within maybe you slow down or stop, and don't push it right to the very limit, and maybe you're 5000 short, and you actually pay that out of pocket, just to avoid leftovers. And other people would keep going and say well, if I have 5000, leftover, or 10, or 20, I can always pull whatever's left over and cover the student loans. You know, I can say, got 8000 leftover, well divide that by three, and each of the kids can then apply that to whatever student loans they have.

John Munley 31:20
And I think, yep, and I think the key to what you're talking about Brad is start early, you can fine tune later on as you're approaching college or in cars. But it's never too early to start with that 529 plan, starting funding it. So baby's born, open that up, start funding it. And again, as they get closer towards that college age, you can start fine tuning it into the amount Do we still need to contribute? Or do we stop? Or do we put more towards your younger child? Things like that.

Brad Baldridge 31:51
Right? Absolutely. And then we have. So that's leftovers, I guess the talk a little bit more about investment options. So mentioned earlier, we kind of went through them pretty quickly. But let's talk a little more detail as far as what it typically is available, what does it look like in a 529.

John Munley 32:12
So a 529 isn't that much different than in terms of options that you would see in 401k. So basically 529 plans will have different funds, depending who the state owner is, and who's managing the fund. And you're able to basically go two different ways with it, you can build your own, using the funds that are within that plan, you can build your own asset allocation. So again, if you want to be 100%, equities all the way through as you're investing, you're able to invest, if you want to be conservative and only have 20% equities, you can do that. So you're able to individually create your own portfolio and asset allocation within the investment options that are available to you. Right, the other thing they have is an age based an age based is basically and you have to be careful with these, because every different fund manager looks at age, aggressiveness aggressiveness differently. So, one fund, Brad, where you are in Wisconsin, or I am in New Jersey, your allocation, depending on an age is could be different than where mine is. But how age based works is portfolios tend to be more aggressive when the kids are younger. And as they're getting closer to college age, they will become less aggressive. So let's say again, zero to three, it's 100% equities. As you're going age two to five, maybe it goes to 90%. So on so on. And when you hit that junior and senior year, you may only be 20% equities. Again, that will vary depending on the plan.

Brad Baldridge 33:51
Right. And I've seen a few plans where they actually have age based aggressive and age based conservative so they even have, and again, it's the fund managers opinion of what someone with a 15 year old should be invested in. And sometimes they offer two choices, you can be the aggressive choice or the conservative choice for your particular age.

John Munley 34:12
Excellent point.

Brad Baldridge 34:13
So, but then again just to clarify, when we talk about equities and that kind of stuff. Realistically, what we're talking about is mutual funds. 529 plans are generally under the hood somewhere, there's typically a mutual fund company, popular ones are like Vanguard and TIAA-CREF, and Fidelity and so forth. Same people, by the way that probably are involved in your 401k at work. So that's why they might look very similar but they're all mutual funds. You can't take your 529 and say, 'Well, I'm gonna put it all on Facebook or on Google,' or something like that. It is, again, just aggressive portfolios, or, and then some of them will have things like a small company stack or a large company stack or S&P 500 would be a very common one where you can choose that particular fund. And then a lot of them will have various portfolios. So that'd be aggressive portfolio, where they lay it out for you. So they, they think that aggressive portfolio should be this much US stock, this much international stock, this much large company, this much small company, that type of thing. So, they may have a portfolio that within it has three, five, ten, mutual funds, that they've kind of selected for you, very similar to your 401k, where you might have the exact same options, right, where you can go pick, XYZ small company mutual fund, or you can say, I just want to take the aggressive portfolio. And the managers there have said, well, the aggressive portfolio is 10%, this and 8% that, and 12% this, and they built an aggressive portfolio that provides some additional diversification as well.

John Munley 35:58
Again, similar to your target date funds that you will find in a 401k, their retirement their 2030, 2035, 2040, the longer you have for retirement, the more aggressive it's going to be similar with the 529 plans.

Brad Baldridge 36:13
Right? So let's just actually talk about the mechanics. If I say, well, I want to go set up a 529. How do we actually do that?

John Munley 36:22
Well, I think the first thing to do is you check your state and see does your state give you some kind of tax benefit from investing in that plan? If it does, definitely want to consider it and look into it. I know here in New Jersey, it's 10,000 per individual, 20,000 total, as long as your AGI is below 20,000. I think New Jersey is actually one of the few states that has an AGI limit on if you can take the deduction, neighboring state where I have a lot of clients in New York, it's $10,000. That's it's capped at $10,000, no income limit. But I think first you want to check out and see if your state does have that tax deduction. If it doesn't, then I think you can open your search to 529 plans across the country. But the process is basically once you decide on a 529 plan, there's the application. So you're the owner of who's the beneficiary, they'll ask you questions, you'll fill out the form, you'll fill out your investment options, and then they'll basically say, when you open this, how do you want to contribute? And there's different ways that you can contribute to the 529 plans? Brad, I'm sure you've had experience with different clients they've funded in different ways.

Brad Baldridge 37:33
Yeah, and I think it's important that I guess that is this decide, right, you're gonna pick these, the owner and the beneficiary, that kind of stuff. But I guess even a decision before that might be, am I going to do this myself, or am I going to go to a financial advisor, because many states offer programs that are essentially designed for an advisor to be involved, and many of them also have a direct to consumer where you just go to a website, typically and set up your account online. And then you're kind of in charge, and you get to do it all or again, having an advisor. So I work with families where we do both, just depending on on what makes sense. And then as part of that process, you're just gonna be linking it up. So typically, to have like a checking account, so you set up the account, you link it to a checking account. And then you can set up, you can automate it, you can do one time deposits. So you can say 200, a month is going to go into Johnny's and 300 a month is going to go into Susie's. And it's going to go into this investment choice. And it'll keep going until you stop it or change it. And then what people don't realize as well is you can use that same checking account to get your money back. So when it's time for college, and you're saying, well, now I need $5,000 to contribute towards tuition, you can go to the 529 company, or to your advisor, depending on how it's set up and say, hey, I need the 5000 for college. And oftentimes in a week, they'll put that money back into the checking account that's linked to the account. And then from there, you can spend it for college by setting... Oftentimes, because the idea of writing checks has kind of gone away. Now you just go to the college's website and have them draft your checking account or you do a bill pay of support. And so it's all electronic. Now if you want it to be you can go old school the checks, but it's getting harder. They're wanting people to do that a lot less than they used to let's put it that way.

John Munley 39:41
I was gonna say how I've done it is in these plans. There's the you know, you can go right into it and it'll basically say, how do you want to check distributed to the owner, which would be to myself to the beneficiary, which would be the mic out or directly to the school directly, the school is kind of easy just they know the address, you plug it in, once you plug in your student's ID, and you can just put the amount you want, and there's the 529 plan will directly send that to the college, so you don't have to worry about getting a check from them and then going and pay the college. So sometimes that definitely seems you want some paperwork to have a 529 plan, send it directly to the school.

Brad Baldridge 40:25
Right? I think the Catch 22 there is that depending on if you can log into the school or not as a parent, now you got to make sure that it actually happened. And so for those that aren't aware, again, schools run everything electronically now. So there's a portal of some sort that your student has access to typically. And they can now often send a request where you can add a parent, so the parent gets their own username and password. And it can be linked to the students account. And then the parent could go in and see whatever the student allows the parent to see. Usually they parents can get into the billing section and see if again, because most of the time the parents are billing, so the college makes it as easy as possible for mom and dad to see the bill and pay the bill. They're not fools, of course. But and then you may have access to grades, you may have access to course schedules and that kind of stuff.

John Munley 41:19
Nope, I just have access to the bill. I have access too, so nothing else

Brad Baldridge 41:25
In your situation. Again, sometimes it's up to the student to turn that on and off if they want to. And other colleges just decided that these are the things parents can see. And these are the things students can see. And, you know, so that's just kind of generally the process. All right, any other thoughts, major things that we need to touch out on the 529 at this point?

John Munley 41:47
Yeah, I was gonna say and this won't affect most people now because the gift tax rolls up at like $12 million per person. But if you give a gift of more than $16,000, you're supposed to fill out a gift tax, you don't owe taxes, but he's supposed to fill out a form with the IRS. So basically, any contributions up to 16,000 is a gift, you don't have to worry about that. So if you have a mother and father you can, you can contribute 32,000 to 529 in a given year, and not worry about having to fill out a gift tax. There is a five year election rules so you can overfunded in one time with 80,000 if it's one person, so if it's a husband and wife, you can put 160,000 in and that gets split out over five years, it's a little bit more complicated and technical that we probably want to go into, especially again, with a gift tax roll up at 12 million, it's not going to really affect many people, but just something to be aware of if you are in that situation.

Brad Baldridge 42:45
Right, exactly. And that's where people get confused around the gift tax rules as recipients of gifts generally never pay taxes, it's the donor or their estate that may have to pay taxes. And oftentimes, that's not the case, either, unless, again, you have multi-millions at this case, so that that limit really is not about paying taxes, it's about having to fill out paperwork, to prove that you don't need to pay taxes. So once you've crossed that $16,000 line, you're gonna fill out a tax return a gift tax return, the net result for most of us is going to be no taxes do. But you have to, technically you're supposed to fill out the form and document that back because you can give up to $11 million in your lifetime or whatever the big number is. But if you're wealthy, and you happen to already have given away that $11 million. Now, once you give more than 16,000, then you're going to have to figure out how to pay the taxes on that. And again, for most of us, that'd be a good problem to have. But most of us just aren't going to deal with it other than maybe having to do a little bit of paperwork. All right, well, let's wrap it up here as that's, I think covers 520 nines, again, we didn't cover everything we actually plan on doing things and you know, having more coming episodes here where we're gonna get into some strategies, and we'll have one for beginners, one for a couple advanced strategy or basic strategies, and then advanced strategy. So we've got a lot more coming. But we're gonna wrap it up here for now. Thanks, John.

John Munley 44:19
Thank you again, Brad. Really appreciate it.

Brad Baldridge 44:22
All right, so there you go. 529s part one is complete, we've got three more parts coming. Again, the very basics are coming next. Some of you may want to skip that if you're more than capable of handling, investing and some of the basics you can move on and skip for some of you are overwhelmed a little bit and that's the purpose of the next one where we will cover a little more detail as far as just basic investing strategies in stocks versus bonds and that type of information that people need to understand as part of 529s. Again, as always, show notes are available at tamingthehighcostofcollege.com. We also have a free newsletter at lots of other great resources. So go to the website and check it out. That's all we have for today. Stay tuned for the disclosures.

Presenter 45:11
Thank you for listening to the Taming the High Cost of College Podcast. Now it's time for you to take action head to tamingthehighcostofcollege.com for show notes, bonus content and to leave feedback for Brad. The next step on your college journey starts now.

Brad Baldridge 46:01
Disclosures. The information provided to you today is for educational purposes only. It is not intended to be specific recommendations or advice. Please consult with a qualified professional before acting on any of this material. Investing involves risk. Depending on the types of investments there may be varying degrees of risk, investors should be prepared to bear loss including total loss of principal. 529 college savings plan disclosures, investors should carefully consider investment objectives, risks, charges and expenses. This information and other important information are contained in the fund prospectuses, summary prospectuses and a 529 product program description. These documents can be obtained from financial professional or directly from the plans website. Please read them carefully before investing. Depending on your state of residence, there may be an in-state plan that offers tax and other benefits, which may include financial aid, scholarship funds, and protection from creditors. Before investing in any state's 529 plan, investors should consult a tax professional. If withdrawals from 529 plans are used for purposes other than qualified education. The withdrawal could be subject to a 10% federal tax penalty, state penalties, federal income tax and state income tax. Brad Baldridge disclosures. Brad Baldridge is a registered representative with Cambridge Investment Research securities are offered through Cambridge Investment Research Incorporated, a broker dealer, and member of FINRA and SIPC. Brad Baldridge is also an investment advisor representative with Cambridge Investment Research Advisors, a registered investment advisor. Baldridge Wealth management and Baldridge College Solutions are affiliated. Cambridge and the Baldrigge companies are not affiliated. The registered brands' location is at 10521 West Leighton Avenue Suite 200 Greenfield, Wisconsin, 53228

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The post THCC 529 Plan Series EP 1: 529 Plan Basics  appeared first on Taming The High Cost of College.

Today’s Guest:

Lesley Martin, Founder and CEO of ClassTracker® 

Lesley Martin is an author, educator and entrepreneur who has worked with students for over 20 years as a classroom teacher, track and field coach, personal tutor, and academic coach. She’s worked with students in every capacity, understands how the adolescent brain works, and understands how to address the challenges that middle, high school, and college students face.  

Lesley is the author of the books Where’s My Stuff? and Make the Grade, which focus on organization and time management, different ways kids learn, getting and staying motivated, methods to avoid procrastination, goal setting, study skills, and more.  

Lesley is also the founder of ClassTracker®, a company that produces academic planners that are currently used annually by over 50,000 students nationwide.  

Questions Answered Today:

How are ClassTracker®’s academic planners any different from other organizers?  

Lesley has worked with students for decades, and, over the years, she has learned that a person’s planning habits vary depending on their academic level. Therefore, a middle schooler needs a planning tool that’s different from what a high schooler or an adult uses.  

ClassTracker® makes planners combining two critical principles:  

• How much structure does the brain need?  
• What is that academic experience like?  

Lesley shares what their planners look like per level and the rationale behind them:  

1. Middle schoolers’ planners need to be quite structured. Each class would have to have a specific bucket, such as:  

• A bucket for English class  
• A bucket for Math class  
• A bucket for Social Studies class  

2. As the student levels up to high school, their lives become fuller and richer, making their schedule tighter not only due to academic responsibilities (more projects and tests) but also due to other engagements, such as:  

• Extracurricular activities (e.g. sports)  
• Jobs  
• Etc.  

Therefore, high schoolers’ planners need to have specific spots that will remind them of those academic and extracurricular activities.  

3. A college student’s activities are pretty similar to a high school student’s except that each day in college usually looks different. On Monday, they may have 4 classes while there’s none on Tuesday. Therefore, a college student’s planner needs to give them a space where they can plan each day individually.  

If the student asks “What does my day look like tomorrow?”, they will have a spot in their planner where they could list their activities for the day.  

“I had known from my experience in teaching that students who kept track of their assignments and got things done on time, were the students who were most successful.”

— Lesley Martin

How can parents help students with organization issues?   

There is more than one way that parents can help their kids build the habit of being organized. One of them is providing them with organization tools while the other is finding them a mentor.  

1. Giving your student organizing tools (e.g. a planner). The effectiveness of this approach depends on the relationship between the parent and the student. There are two possible scenarios:  

• Get your student a planner, then they can do whatever they want with it. Most of the time, if you give them material that’s structured and intuitive enough, they can make do with it on their own. 
  
• Get your student a planner, then guide them as they figure out how to make the best out of it. Statements such as the ones below should help:  

• I got you a planner. I don’t know if you know how to use it or not. But I’m happy to sit down with you and talk you through it.  
• Why don’t use it for a while and then show me how you’re using it. And we can talk about if it’s helping you or not.  

2. Finding your student a mentor. Parents sometimes have a complicated relationship with their kids where your child will take advice from anyone but their parents. In this situation, finding your student a trustworthy mentor could help. These mentors could be coaches such as Lesley, but they could also be other people the student has close relationships with such as:  

• An aunt or uncle  
• An older sibling 
• A friend  
• A teacher 

What challenges should my student look out for when transitioning from high school to college?  

High school to college is a big transition for students, whether or not they realize it. Parents can inquire about their student’s assignments and test scores in high school, but it’s not the same in college. Hence, failing to take note of tests or deadlines could be a big deal.  

Another issue could be students thinking that they have too much “free time.” In college, just because there’s no class doesn’t mean it’s free time. Most of the time, students should spend such time doing other activities. Lesley thinks it helps students to map out their time and think of their schedule as ‘layers.’ For example:  

• The first layer: when are your classes?  
• The second layer – when you’re not in classes, which could be:  

1. At work  
2. Playing sports  
3. Attending practices (for extracurricular activities)  
4. And similar activities 

• The third layer – studying and studying breaks  

Mapping out your time like above should help the student determine empty blocks, which they can use for studying and study breaks. 

Lesley recommends the book, The Teenage Brain, by Frances Jensen, which is a good resource for parents to mentally prepare their students for the big college transition.  

The book talks about “future scenario planning,” which opens a conversation for how the student will actually manage their life in college. While this approach does not necessarily force the student to do something in the moment, it gives them an opportunity to start seriously thinking about the future.   

How does an academic coach (or another professional) contribute to a student’s success?

“What’s lovely about an academic coach is that they can work with your student in a very non-judgmental, supportive way.”

— Lesley Martin

Sometimes, the student may feel judged if they’re working with their parents. It’s not because parents are judgmental—it’s simply because of how some parent-student relationship dynamics work. 

Academic coaches’ expertise is based on experience. As professionals, they:  

• Have worked in schools and have coached lots of students  
• Have greater breadth and depth of understanding of different strategies, techniques, and tools to support students’ learning of executive functions and skills.  

Since academic coaches are experts, there are costs for their expertise, so Lesley reminds parents that there are other resources that are out there, including:  

• Academic support centers in colleges and universities 
• Writing centers  
• Time management organizations  
• College programs that support students  

What parents need to understand is that a student’s executive function skills such as organization need to be taught. It doesn’t matter how—they can learn through hired experts or from programs and tools from their schools or, sometimes, from the Internet. The most important thing is knowing that there are resources available. You just have to find the ones that fit your student’s learning style.  

Why opt for paper organizers vs. digital organizers?  

As we are in a digital era, everything can be done digitally, and there are hundreds of apps that students can use if they really want to be organized.  

However, Lesley believes that there’s nothing more distracting than our digital devices. The human brain is prone toward distractions.  

There’s a huge advantage in using paper for planning because:  

• You don’t get alerts or notifications about other things that distract you.  
• You don’t suddenly go to YouTube or check your email.  

The use of paper may no longer be a trend these days, but your student is likely to create firm organization habits if you encourage them to use paper organizers.  

Links and Resources

Helpful Articles and Resources 

• Taming The High Cost Of College 
• The Teenage Brain  
• Lesley Martin’s Contact Info:   
• Website 
• Instagram  
• Facebook  

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Transcript Email Download New Tab

Brad Baldridge 0:00
How to help your students stay organized. An interview with Lesley Martin.

Presenter 0:04
Do you have kids? They grow up, and before you know it, it's time to plan for college. Where do you start? How much is it going to cost? Will you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? The list of questions is never ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College podcast. Here is your host, certified financial planner, Brad Baldridge.

Brad Baldridge 0:34
Hello, and welcome to Taming the High Cost of College. I'm your host Brad Baldridge. Today, we have a great interview with Lesley Martin. She is the founder and CEO of Class Tracker. She's also worked as a teacher, an academic coach, and many other roles with students for the last 20 years. We're going to talk about Class Tracker, an organizer that she's developed for high school and college students. And we're going to have a lot of great discussions about how to help students stay organized. So if you're a parent that has a student that is not very organized and needs to improve, or even if you have a student that just loves the idea of being organized and looking for additional products or ideas, this podcast is for you. As always, shownotes are available at our website. Let's go ahead and jump into the interview. So today I'm talking with Lesley Martin. She's the founder and CEO of Class Tracker. Welcome, Lesley.

Lesley Martin 1:31
Thank you for having me here today, Brad.

Brad Baldridge 1:34
All right, so Class Tracker, that's the company you founded. And I know you're involved in some organization and that type of thing. And also have some background, can you tell us a little bit more about why you decided to start Class Tracker and a little bit of your history?

Lesley Martin 1:48
Sure. So I was a high school teacher for about eight years. And I decided to take a break from teaching and see what other things might be out there. And so during that sabbatical, I started working with students one on one. And as a tutor, helping them with their assignments. That was my job. And I quickly realized, as I was sitting with my students that we were spending at least half our time figuring out what they had to do in any given week, and how they were going to do it. And then about half the time maybe doing the assignments together. But there was this huge amount of time that we spent organizing both their stuff, and what they needed to do. And I had known from my experience in teaching that students who kept track of their assignments and got things done on time, those were the students who are most successful. And the students that I was working with really needed something they needed a tool to help them plan. And so I developed a weekly planning sheet. And I worked with students from many of whom went to the school that I had taught. And so I gear that planning sheet to match the schedule of the school. And so we use this planning sheet week after week after week, the students, all of a sudden, I noticed two things. One, they became better planners, I was like, 'Wow, look, look at, they can actually do this, their brains were learning how to plan and to that this tool gave them the structure to be able to do so.' And so I thought, 'Well, gosh, this is kind of working. What if, what if I could like get just beyond my roster of students and maybe make a tool that can help more students, like maybe all the students that went to that school?' And so I designed a planner, and I pitched it to the school that I had taught at so they were kind to me, and they said, 'Yeah, we'll try this out.' And that was when Class Tracker was born in 2005. And so from there, you know, I expandm, over the course of the following 10 or 15 years, I grew that. Roster of one school to a roster of 40, and I made custom planners. So that's how the company was started. And then five years ago, I started saying, 'Hey, you know, wouldn't it be great if not just the kids who went to my schools, they weren't really my schools, but the schools that were I bought my planners, what if more students can use planners?' And so I started a direct consumer arm of a business where I sell planners that are designed for specific educational levels, middle school, high school and college, online at classtracker.com.

Brad Baldridge 4:34
Right. And obviously, because you were working with students, you built a tracking system. So how was your planner or your ideas different than if you just went to the office store and bought a weekly planner so to speak?

Lesley Martin 4:49
Well, what I realized in all the time that I've been spending working with students one on one it and you know I learned a lot more about adolescent brain development after I left the classroom. But what I've learned is the prefrontal cortex, which is the part of the brain that helps you to organize and prioritize and think about the future is really developed, it's still developing, isn't fully formed until you're 25 or so years old in some people. And so what I realized is that, at each academic level, students needed a different structure to help them manage their times in their lives. So in middle school, you need a lot of structure, you can't give, you know, this is exactly what I have to have for my math class. In my english class, in my social studies class, you need very specific buckets. And so the middle school planners are very structured. When you get into high school, students have all sorts of their lives, their lives become more full and rich, right, they might have a job after school, or they might have sports after school, or they might have reminders, and they have a lot of more tests and projects that are due. And so the weekly planning pages of those planners are structured, they have a structure that asks the kid sort of the question without being obvious, like, 'Hey, what are those tests that you have this week?' and they have a specific spot for it? What are the after school things you have this week, there's a specific spot for it. And then when you get to college, it's also similar to the high school except in college, your days look different every day. Because one class you might have one day, you might have four classes, and another day, you might have zero. And so you really need a spot in your planner to figure out, what am I going to do each day and make a plan on for that day? And so those planners have a special area for that. So it's an overlay of like, what does the brain need? How much structure does the brain need, coupled with what is that academic experience like? And that's how they're different.

Brad Baldridge 6:53
Right? So you spent a lot of time obviously working with students and then talking with parents and students and organization, you have to have this discussion a lot as far as. So if a parent is starting to feel like oh, my students, quote unquote, disorganized, and maybe you could benefit from a planner or other planning techniques? I mean, what do you think the first step for a typical parent might be? Is it just buy them a planner and to hand it off and say, 'Here you go use this,' Or you need to sit down and teach them how to do it? Or what kind of resources or thoughts would you have her on that?

Lesley Martin 7:28
That's a great question. You know, I think a lot of people come to looking for, they see parents, they see it, they see if their kids are struggling, and they're like, 'I need to help them or I want to give them a tool,' especially when you're in middle school, right? Like, oh, there's a lot going on, you go from being in a single classroom where everything happens in one room, to once you're in sixth grade, you start moving around, and every teacher could have a different system. So a lot of times parents will look for a planner. And they do because of the way that mine are structured, it's sort of kind of intuitive, however you ask a good question. And that is like, what can parents do? It's one thing to say, 'Hey, I got your planner. Good luck.'

Brad Baldridge 8:12
Right.

Lesley Martin 8:13
Another is, 'I got you a planner. I don't know if you know how to use it or not. But I'm happy to sit down with you and talk you through it.' Or why don't use it for a while and then show me how you're using it. And we can talk about if it's helping you or not?' So I think there's different ways like know, obviously parents and other kids best, and they know how they're going to respond, whether it's like I will teach you let's sit down and do it. Or I will ask you how it's going. And I'll be here for feedback. So that's just kind of how that the parenting relationship is what I would say would dictate that.

Brad Baldridge 8:47
Right.

Lesley Martin 8:48
Yeah. And I think that you know, when you get to high school, as an academic coach, that's when people, a lot of people come in, they sometimes come in middle school, but it's mostly in high school, because that is the time when parents and students, their kids don't always, kids don't always want to hear what their parents have to say. Right. And so that becomes a little bit more difficult in terms, and that is where at least if you hand off a product that is thoughtful, then there is a chance that it's intuitive enough that the kids are going to know it a little bit about what to do with it.

Brad Baldridge 9:19
Right? Absolutely. So my oldest who's in college now, at his high school, freshman year, first day of class, they handed out a planner to every student. And then I don't know exactly, but I think maybe the first three or four weeks they collected them, just to, so they kind of forced them to at least try to use it. Whereas again, I think that's a situation a lot of parents would deal with, is you hand off this planner, and you see it sitting on the edge of the dresser or the corner of the desk and it hasn't moved for six weeks. So you know they're not using it. So let's talk a little bit about the motivational side of things. It's hard to help a student or a parent or anybody else for that matter that doesn't think they need the help, but they've got it. So what has been your experience been around that process of talking or working with your student?

Lesley Martin 10:12
Yeah, I mean, when I work with kids privately, the way I bring them into my coaching practices, the first thing I do is I asked them to fill out an online form. And in that online form, the Google Form, it asks them a lot of questions. And then the first question I ask is, when you think about school, on a scale of 1 to 10, 10 being a lot, and 1 being none, how stressed do you feel? And so, oftentimes, if kids have something above a seven, that means that they are internalizing the discomfort that the disorganization is causing them. And so oftentimes, when I asked them, we go through all these different parts of executive function categories, we talked about, like, 'Well, how's your backpack look? Is it tidy, or not? Does that make you feel stressed?' 'No, it doesn't make me feel stressed.' Okay, move on. But when you can find the nugget where I'm like, if we fix this a little bit, would that help alleviate your stress? Then you can find the motivation. So most kids don't want to feel stressed, most adults don't want to feel stressed. And there's obviously there's healthy stress, which is what I would call pressure. And then there's unhealthy stress where you like, can't sleep at night or your stomach hurts or whatnot, and where you have these negative physical manifestations of stress. And so, oftentimes, when I'm talking to kids, I'm sorry, when I'm talking to kids, I look for the openings where I can tell that we can turn the conversation into, 'Hey, I think that maybe you could feel less stressed, if you did x, would you be willing to try that?' And that's where I think you can get the motivation. Right.

Brad Baldridge 12:08
And if you know, organization is an issue, you could, like, for my son, we worked with, essentially an uncle, when it was time to write the essays, because we knew it would be hard for us to coach him just because of the parent dynamic. So someone that's not around him all the time, because they know they could have very structured conversations around the essays and that type of thing was useful. So I think that might be another situation where maybe it's not mom or dad that's trying to instill organization, maybe it's somebody else with a coach, a teacher, an aunt, or uncle or friend, or whatever, that might be helpful there.

Lesley Martin 12:48
Or even an older sibling sometimes, right?

Brad Baldridge 12:52
Yes. And again, I think the other thing to talk about is the transition from high school to college is another big transition. Because most high schools that I'm aware of have a website, where even inquiring parent can dig in and see where all the assignments are, and what all the tests and test scores are. And but when you get to college, a lot of times there is no 'here's where all the assignments that the wherever assigned show up,' there is and it's the first time for a lot of kids that are just gonna say, 'Oh, when the professor said, we have a text next Thursday, if I didn't write it down, then it's gone forever.' Because I can't go back and look it up on a website, or maybe it's on a syllabus. But again, it's the requirement to keep things organized, I think shifts strongly from the organization to the individual in college.

Lesley Martin 13:46
Yes, it does. And I think that well, what I've noticed in the past few years is there actually has been a greater migration of in middle school, high school and universities to have everything, at least, assignments and things like that listed online. So they're mostly out there. Now, to your point, if you're in high school, your parents can often get a login to that online system, and they can see and they can see your grades, there's all sorts of stuff they can see which that's a whole different topic. And in college, those systems exist as well. I think that the greatest challenge for students, those systems are in place, right? So they know how, okay, I know how to look up on my syllabus. But I think really, when I think about the transition from high school to college, what I see is the biggest challenge for kids is that they go from a very structured, you go to school at this time, and end the day at this time, and then you have your activities in high school too. You go to college and all of a sudden you have a lot of unstructured time, and some kids might call that free time. And so what happens is that is we know, in college and universities, those courses require plenty of work outside of your actual class. So you might go to class for three hours a week. But that might mean that you still have about nine hours of work that you need to do to support what's going on in that class.

Brad Baldridge 15:24
Right.

Lesley Martin 15:24
And oftentimes, students neglect to put into their personal schedule, time dedicated to each of their classes outside of class. So one of the tips that I like to offer to students, when they go to college is 'Look, you have to map out your week. And the first layer of that map is when are you in classes? The next layer is, when are you in other things? Like, if you have a job, when are you at work, if you are playing a sport, when are your practices, if you do some extracurriculars or clubs, one of those things, and that's the next layer.' So I think about tissue paper, the first layer is your classes. On top of that, you layer on those extra things that are commitments. And then what you see after that is the empty blocks that are left. And it's in those empty blocks, that I encourage students to block out what I call study blocks. So it's like, you're gonna have on Monday, you have four hours in the afternoon, put two hour and a half study blocks in there, give yourself a break in between, but put to an hour and a half study blocks there. So that you know, 'Okay, it's Monday, at this time, I'm gonna go get some work done.' Because if it's not scheduled and planned out, it's really easy to think, 'Oh, I can do it later. I've got plenty of time. I've got all this free time.' But in fact, that's not true.

Brad Baldridge 17:02
Right, absolutely. Reminds me of, you know, way back a long time ago, when I was in college, I had a friend that was very disciplined around that. And between classes, he would go to the library or go find a quiet place or whatever, instead of coming back to the house that we were living in. And watching Days of Our Lives, or whatever it was when we were some silly thing that we did. But then at seven o'clock every evening, he was done, because he had already done all this studying and all that type stuff. And then he could go do whatever he wanted, he was fun, you could do as fun or you go out whatever it was. And I didn't even realize what he was doing till I was, 10 years later, I was fully an adult. And I look back at it and said, 'Oh, that made a lot of sense. I don't know why...' I didn't recognize it at the time for sure. So I think a lot of students are in that boat where they don't even know what they're up against. And it's kind of new to them. And that's where parents can give them some guidance, talk about it a little bit. Maybe it'll stick or maybe it won't, but at least they've seen it or heard about it prior to the them learning the hard way that, 'Oh, I really need to organize a few things here and there.'

Lesley Martin 18:08
Yeah, I mean, there's a woman named Frances Jensen, who wrote a book called The Teenage Brain and she talks about in that book, as a parent, what you can do with your adolescence is do sort of future scenario planning. Right? So when things are not in the moment, you can just say, Hey, you're going to college next year, you got life is going to be looking really different. Tell me how you're thinking about managing your schedule, what what plans might you have, they may not have a plan, but just the fact that you as a parents, say, 'Hey, that is a good idea,' it might make them think about it. And then you can have that conversation again, like, 'Hey, when we talked a couple weeks ago, you didn't really have much thought about a plan. If you've given it any more thought, I'm just, I'm really want to make sure you are set up for as much success as you possibly can. And I would love to hear what you're thinking.' So that there can be ways in which you know, because as kids get older, and they're 18 years old, they're they're adults, right? So we have to give them the agency, or at least the first pass is at least you try and give them the agency to come up with something and have a conversation about it.

Brad Baldridge 19:24
Right. Absolutely.

Lesley Martin 19:26
I mean, the truth is that for a lot of students, and a lot of families, sending your kid to college, and a kid going to college is a big deal. Big financial investment, which obviously you are an expert in. And anytime you make a big investment, it's probably a good idea to think it through a little bit and have a plan. So it's kind of a good precursor to thinking about how you make, spend money in the future is like, you know, it is an investment. So how are you going to make the most of it?

Brad Baldridge 19:56
Right. So let's say we're, we're tightening to get didn't have this organizational thing and now and we're realizing that maybe we're in over our head, both as parents and as the student, you mentioned that you did you do some coaching or did some coaching around that, I think that's the first point I'd like to make is there are people out there that teach this stuff for a living, and they might know seven different ways to be organized and help your student pick the one that's going to work for them or whatever it is. But can you speak a little more to that process or being the expert, where how you can help compared to what a parent might do by quickly reading a book and trying to do it on the fly?

Lesley Martin 20:37
Yeah, for sure. So there has been this blooming industry called academic coaches, and they've, that term didn't exist a lot, a few, you know, called 10 years ago. And now, there's a lot of people who are academic coaches, and really, What's lovely about an academic coach is that they can work with your students in a very non judgmental, supportive way. And not the parents need to be judgmental, but sometimes, like, kids will feel judged by their parents. And what happens when you have a coach is that I'll tell students that like, 'Look, I'm the number one, the number one member of your fan club, like, I'm here to support you, I'm here to help you. And I am able to offer and lend expertise, because I've worked in schools.' And because I've worked with so many students that I have a greater breadth and depth of understanding different strategies, techniques, tools, etc. that to support a kid's, to learn more about these sort of executive function skills. Parents are not experts in this, it's hard to say, 'Oh, okay, well, if I'm not a particularly organized person, and now I'm trying to help my kid who's not very organized, that's not fun for anybody.' And so there are people who are professionals. That said, it costs money. And I'm sensitive to that. And so there are ways in which certainly, in colleges and universities, there are academic support centers, there are places you can go, that they will help you. Right, whether it's a writing center, or more and more and more, there are time management organizations, and there are there are programs at colleges that are meant to help and support students. There are actually courses that are offered for a lot of first year students, they have like a, you know, a, how are you going to be successful in college kind of introduction course. So I think that there is an understanding that those skills are needed to be taught. And it's a matter of looking to see what resources are out there. So some of them, yes, you can pay for us, for someone like me. And I certainly know that there are others that are available as part of your college education.

Brad Baldridge 23:03
Right, absolutely. So the last idea is, again, the generational divide between parents and students, where most parents that went to college, I distinctly remember that, I just barely was able to use a computer to write a paper, just a couple of years before it was a typewriter. And it was just fantastic that we had access to computers and printers where we could be able to edit a paper and not have to try and type it and all that kind of fun. And then of course, but now, we're all the way to students, perhaps doing this all in an app on their phone, or can you speak to, obviously your company makes paper planners still, and you didn't make the app, so to speak? Is there advantages or disadvantages of paper compared to the app that a student might think they're going to do instead? Or what are your thoughts?

Lesley Martin 23:54
Yeah, sure. So I will say, my blanket statement is, first of all, everyone needs a system to manage their time and stay organized. And I don't care if that system is an electronic system, a paper system or some combination of the two. As long as you have something that works for you, that is the most important thing. So from the beginning, like I will say, a system that works is is a good system. I'm partial of paper for a number of reasons. I right now in the world that we live in, the way our human brains are built is we're prone towards distractions. Okay, so, and there is nothing more distracting than our digital devices.

Brad Baldridge 24:47
Yes.

Lesley Martin 24:48
So when one is trying to focus, and think and plan and organize, you don't want to be distracted.

Brad Baldridge 24:59
Right?

Lesley Martin 24:59
And so there's a huge utility in using paper as a device to help you plan because paper does not have alerts, it does not have you notifications. And that when you open it up, you can look at, 'Okay, here's the plan I made, here's what I told myself, I'm going to do, it's in front of me.' If you put your plan on your device, there is a very good chance, very, very good chance that when you go to look for the plan that you've carefully thought through and put together, but all of a sudden, you might be at YouTube watching a video, like you could easily get distracted. And so the way the brain works is we are prone towards distractions and what I understand and believe and know to be true, is that paper is not distracting.

Brad Baldridge 25:54
Yes, I think that's huge. I see that myself with when you have to go to get online and go, I gotta go find that email to get the answer. Of course, when you open your email program, there's a couple new ones. So I may as well read them first, so that you're good on that hole for a while. Then you close the email and you go back to what you were doing. And you say, 'Oh, that's right, I was gonna go look up that number in the email.' Right? So I just spent a half an hour looking up a number, and I didn't look up the number. So I think we all can relate to that. And I think there's a lot of people out there that just love paper. So, and I think sometimes when students try it, they love it, which but they have to get be encouraged to try it. I think that's...

Lesley Martin 26:36
Right. And I think that a lot of times too, one of the things that there's a lot of pushback when you talked about like, 'Oh, I buy my kid a planner, and then it's on its desk for six weeks and never gets used.' A lot of times because of this migration, of putting syllabus and assignments online students don't think they're like, 'Oh, it's I don't need to write anything down in my planner, because it's all up there.'

Brad Baldridge 27:02
Right.

Lesley Martin 27:02
'Up there. It's all online, I can look it up.' But really what I want people to do with a planner, and when I work with students, is I say like, 'Okay, yes, it's all up there. But let's, let's pull it down. And let's put it in the spot where you're going to do it.' Right? So you have this list of, my one of my my expressions that I coined is a list is not a plan. Online is one big series of lists. So you have all these things up there. But you haven't actually taken those items and planned out when and where and how you're going to do them. And that's where a paper planner is super effective. So yes, my planner, I have one coming out for adults. It's not out yet, but it's coming. And I'm working been using it. And what's nice about the way I use it is I have my list on it. So when let's say you and I are having a conversation, I say oh, you will be talking. And I'll know there's a follow up item. So I'll jot it down in my planner and then later on, I'll move it to where I'm going to actually do it. Or if it's like I know Lesley write a thank you note to Brad and I put it for a week from now or tomorrow on my to-dos is I just entered on that day. So some of it requires more thinking about when you're going to do it and and others you just put it on the day. But the point being is that you have taken you deconstruct the long list. So long lists are intimidating, but if you spread them out across many days, then it seems tangible. It's, I mean, seems doable. And that also can help with motivation. A lot of times kids get really overwhelmed, they get behind. They think I'm never going to be able to do anything. They have this massive stack of things to do. And all they see is like all these things, and they haven't mapped it out, but you knock it out. You're like, 'Oh, I can do two things a day. It's totally doable.'

Brad Baldridge 29:09
Yes.

Lesley Martin 29:10
That's why I love paper.

Brad Baldridge 29:11
Yes, I agree. And I think also having that big picture and the idea that you have to put it on your schedule in a time slot. As you get busier, it helps you say no to where, 'Hey, do you want to go do this next Thursday night?' You open your planner and say, 'Well, I've got this scheduled for Thursday night and there's no way I can move it to.' So now I have to say no to something. And I have to start prioritizing and I think that's where it's a challenge for a lot of kids to realize that if I say yes to these immediate gratifications now, then all this stuff I'm saying no to is gonna pile up in this weekend. I'm gonna spend it all weekend doing my homework because I was led astray and I did something that wasn't all that much fun. I would have my head much rather had a free weekend. but it just, I blew it in my overall organization.

Lesley Martin 30:03
Yeah, and I mean, this is a little bit of a tangent, but related, a student is that, what I've noticed in the work I've done with students privately, specifically students who have attention deficit disorders, that they're the tendency of those students is procrastination. It's just part of the way because the ability to look into the future is just really, it's very much about the moment. So what I've noticed in when I have students who will lay things out in the planner is they actually procrastinate less. Because they can see just what you said, they can see like, 'Oh, no, I've got like a mock trial all weekend. There's absolutely no way I can do anything on the weekend. And I have all these things to do. So I have to do them now.' Right. So this, I will do it later. Or in your case, like Thursday is the only time I have to do it. So I have to do it. It's very powerful. Very powerful.

Brad Baldridge 31:02
Right? Absolutely. All right. Well, we've learned a ton about it. And I guess there's one other real quick thing I want to talk about, you've got a book out there called Where's My Stuff? Can you tell us a little about bat book? And who should maybe read it? And a little more there?

Lesley Martin 31:19
Yeah, sure. Where's My Stuff, it's yeah, I would say it's great for middle school parents and maybe a middle schooler, it's a real fun, read about how to manage and organize your stuff. And there's a lot of different, and some of it, it was written quite a while ago, at this point. Now, when you know, maybe there was digital wasn't as dominant as it is now so there's a lot of information about how to organize paper, which still is relevant, but maybe not as relevant. There's also another book I wrote called Make the Grade and that is more of a book written for high school students and their parents. And it's really a, sort of takes a lot of what I learned as an educator and as a tutor, and as a coach and helps students understand some of the concepts we talked about and, and layered on as well. You know, study skills, self advocacy, skills, things like that. So it's a little bit of a guide to how to do well in high school.

Brad Baldridge 32:20
Wow, great. Okay. Well, I appreciate it. If people want to learn more about your planners and that type of thing. Can you give us your website or however else they can find them?

Lesley Martin 32:31
Yes, please visit classtracker.com. That's C-L-A-S-S-T-R-A-C-K-E-R dot com.

Brad Baldridge 32:41
Great. I appreciate it. And we'll stay in touch.

Lesley Martin 32:44
Great. Thanks so much, Brad. Super fun.

Brad Baldridge 32:47
All right. That was a great interview. Thank you, Lesley. Hopefully, you've learned a lot about staying organized. I would encourage you to go ahead and check out the Class Tracker website and look at some of her products. They can be customized, they would make a great graduation gift or Christmas gift for our students. And also she has some good books out there that you can track down. Alright, that's all we have for today. I look forward to talking to you next week.

Presenter 33:14
Thank you for listening to the Taming the High Cost of College podcast. Now it's time for you to take action. Head to tamingthehighcostofcollege.com for show notes, bonus content, and to leave feedback for Brad. The next step on your college journey starts now. Brad Baldridge is a registered representative of Cambridge Investment Research and an investment advisor representative of Cambridge Investment Research Advisors, a registered investment advisor. Securities are offered through Cambridge Investment Research Incorporated, a broker dealer and member of FINRA and SIPC. Brad owns two companies Baldridge Wealth Management and Baldridge College Solutions. The Baldridge companies are not affiliated with Cambridge Investment Research.

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The post THCC Episode 166 – Class Tracker: How to Help Your Students Stay Organized appeared first on Taming The High Cost of College.

Today’s Guest:

Vicki Nelson, College Parent Central Founder/Editor 

Vicki has nearly forty years of experience in higher education as a college professor, academic advisor, speech coach, and administrator. She has also weathered the college parenting experience successfully with her three daughters—all now graduated and married.  

Vicki began her website, College Parent Central, in 2009, to help college parents navigate the delicate balance of support, guidance, appropriate involvement, and knowing when to get out of the way. She also co-hosts the College Parent Central podcast.  

Vicki lives in the Boston area and teaches Communication at Curry College in Milton, MA. When she isn’t at school or writing, you will find Vicki playing flute in a local orchestra, cooking, kayaking, or in her favorite role of “Gram.”  

Dr. Lynn Abrahams, College Parent Central Contributor 

Dr. Abrahams is a professor in the Program for the Advancement of Learning at Curry College in Milton, MA. She is the co-creator of the College Parent Central podcast and has worked with students with learning differences in post-secondary education for 30 years. She has studied the neurodevelopment of students with learning differences in multiple contexts: alternative high schools, correctional settings, and community colleges.   

Lynn’s interests include investigating how college students with language-based learning differences develop a separate identity in relation to changing family relationships. She has also examined the particular experience of multilingual, multicultural, and international post-secondary students who have learning differences. And she has explored best practices for supporting students and families transitioning into the college environment.  

Dr. Abrahams has two sons and has experienced being a college parent with both of them.  

Questions Answered Today:

What’s the main thing that parents need to understand as they’re sending their student off to school?  

One common mistake that happens with families is that they fail to explore options and miss one of the most critical parts of pursuing education. Therefore, it’s imperative that parents have a conversation with your student because there’s more than one path to choose from. After high school, they have so many choices, such as:  

• Taking a gap year  
• Going to community college first and then transferring  
• Going to a big university 
• Going to a small, liberal arts college.  

Knowing what the student wants is critical, as each student is different.  

Choosing the best route begins with figuring out what the student really wants and who they really are. Questions such as the following should help:  

• What do you want to do?  
• What are your strengths? 
• What are your dreams?  
• What makes you comfortable?  
• What makes you uncomfortable?  

“Talk to your kids. Find out what they want to do, find out what their strengths are, find out what their dreams are… because every single kid is different.”

— Lynn Abrahams

What’s the role of parents when there’s trouble?  

Your student is more resilient than you think! Your role when your student is in high school changes as they move to college. Instead of being the problem solver, you need to step aside and empower them to fix their own mess and make their own decisions.  

But this doesn’t necessarily mean that you need to be completely out of the picture. Instead, you can have a coach-like relationship with your student and can be on their side, asking them questions that could lead to solutions rather than giving them the solution.  

Here are some questions that could help:  

• Have you done/tried this?  
• Have you thought about this?  
• Have you talked to this person? 
• What if you took a break?  
• Wow, that sounds like a real challenge. What do you think you’re going to do? 

College, most of the time, is not a place for you to barge in and bring your lawyer with you.  

Vicki and Lynn’s website, College Parent Central, has tons of resources with tips and strategies to help parents when their kid is in trouble. For more information on this topic, check out their page on what to do When There’s Trouble.  

What is FERPA and why should parents care?  

The Family Educational Rights and Privacy Act (FERPA) is a federal law that protects the privacy of students’ records. Only when the student waives this can parents have complete access to the student’s academic and financial records. Otherwise, the student has sole access to their:                                                

• Grades  
• Academic requirements  
• Bills.  

It could be a hard pill to swallow, especially if you bear the financial responsibility of sending your kid to college. But trusting your student to become independent in college teaches them to be fully responsible and accountable for their actions.  

With that, a student fully surrendering this responsibility may not always be a good sign. Sometimes, they just need to feel supported, which is understandable. But sometimes it could be because they don’t want to bear the responsibility of constantly checking their emails and relaying any important message (e.g. when it’s time to pay a bill).   

Important: Colleges, whether or not a student signed a FERPA waiver, should still notify parents in times of any crisis that jeopardizes the student’s health and safety.  

What can parents do to help their students become well-prepared in college?  

There are families who help their students prepare for college in the late stage, and there are those who plan much earlier, such as in middle school. For Vicki, it can never be too early to prepare. College preparation can start earlier than you think. It doesn’t have to be grand, but it has to be gradual and consistent. 

Vicki and Lynn shared some pointers that can be helpful for parents:  

1. Create an environment where your student can make mistakes and learn.  

As an example, if your student has trouble doing something small but important, then maybe it would be a good idea for them to do trial and error to start doing things on their own. You could apply this in simple tasks such as:  

• Waking up in the morning 
• Making a doctor’s appointment  
• Getting their own medications  
• Doing their laundry  
• Being conscious of what they eat (e.g. eating something nutritious and knowing that it’s not okay to eat ice cream thrice a day).  

2. Teach your student how to communicate properly.  

Because it seems trivial, there are students who won’t even know how to construct a proper email. Vicky and Lynn, who are both in higher education, can attest to this.  

Therefore, as parents, it might be a great idea to coach your kid on proper communications, especially in a professional manner. It could be:  

• Writing an email with proper introduction and ending  
• Talking to a professor in person  
• Talking to a professor over the phone 
• Etc.  

3. Do not write your student’s essays.  

College admissions officers would know when parents write essays on their student’s behalf. So make sure to guide your student, but don’t do it for them.  

Giving your student an opportunity to do things on their own teaches them to be accountable, and it teaches them that there could be consequences if they don’t fulfill their responsibility. The goal is to help them grow into a responsible adult.  

For parents, it could be really scary to let go of their kids. But if this is done in little steps and if it’s not forced, then the transition becomes much smoother and seamless. Both the parents and the student can be confident that whatever comes the student’s way, they’d be smart enough to handle things on their own.  

“Often what we see is when students struggle, it’s not the academic work, it’s not that they’re not able to do the work. It’s life that gets in the way of them being able to function.”

— Vicki Nelson

How about for college students who live at home? How do I deal with them?  

The biggest challenge that parents of this kind of student often face is that they tend to just continue things that they used to do without showing growth.  

For Vicki, here are some things that certainly need to be addressed in order to help them slowly detach and be on their own:  

• How are things going to be different now that you’re not a high school student anymore?  
• What’s going to be different about how you do your work?  
• What do I expect you to do? Do I expect you to continue to function as part of the family?  
• Do you still have a curfew?  
• Do you have to report to me when and how are you going to do your work?  
• Are you going to stay overnight with friends?  

Brad Recommends:

Today, I’d like to recommend the College Parent Central website. I think it’s a great resource that offers lots of information for parents.  

Once you’re on the home page, you’d see tabs that will lead you to the different types of resources that they offer, which includes these sections: 

• New College Parent 
• When There’s Trouble 
• Future College Parents 
• Resources and Help  
• Gift Suggestions 
• Articles 
• A search box where you could use keywords to find what you’re looking for 
• And more. 

I especially recommend that you visit the section When There’s Trouble, as it talks about things that are helpful for students who are struggling. It discusses things such as:  

• Transferring schools 
• Taking a year off 
• Other options when students are struggling in school. 

One of the resources there that I find fascinating is their e-book called 60 Practical Tips for Using the High School Years to Prepare Your Student for College Success. It’s not overwhelming at all. It’s about 30 pages. You can pick the most important tips and start implementing them right away and then come back later. It’s divided by chapters:  

Chapter 1 – High School Curriculum 

Chapter 2 – Preparing Emotionally 

Chapter 3 – Financial Knowledge (e.g. credit card talk and discussing living expenses, etc.) 

Chapter 4 – Managing Life 

Chapter 5 – Looking Ahead to Next Steps 

Chapter 6 – Two Final Questions  
 

Each of these topics would have a sentence or two describing it, and then about a paragraph that provides a little more information. 

Make sure to pay this website a visit—I’m sure you’ll pick up a thing or two!

Links and Resources

Helpful Articles and Resources 

• Taming The High Cost Of College 
• The College Parent Central Podcast 
• College Parent Central – Website  
• Vicki and Lynn’s Contact Info:   
• Vicki’s LinkedIn 
• Lynn’s LinkedIn  
• Twitter  

THANKS FOR JOINING US!

We’d like to extend an invitation to our listeners to share their feedback and questions. Contact us to submit a question.

If you find our podcasts helpful, please share us on social media and tell your friends!

The bottom line is that we care what you think and want to help you out, so we’d appreciate you reviewing us on your favorite podcast platform. Even better, receive automatic updates by subscribing to the show through your preferred podcast service. 

Transcript Email Download New Tab

Brad Baldridge 0:00
Tools and information for the future college parents.

Presenter 0:03
You have kids that grow up and before you know it, it's time to plan for college. Where do you start? How much is it going to cost? Will you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? The list of questions is never-ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College podcast. Here is your host, certified financial planner, Brad Baldridge.

Brad Baldridge 0:33
Hello, and welcome to Taming the High Cost of College. I'm your host Brad Baldridge. Today's interview is with Vicki Nelson and Dr. Lynn Abrahams. They are the founder and podcast co-hosts at collegeparentcentral.com. So College Parents Central has a lot of great resources. And they talk a lot about what it's like to be a college parent and give you advice for challenges that college parents might have to deal with. And they also have a couple of sections around new college parent and future college parents. And they have a whole bunch of podcasts as well where you can download and learn about other authors and great other information around being a college parent. As always, our show notes are available at our website at tamingthehighcostofcollege.com. We appreciate any reviews you can give us wherever you're getting your podcast. Alright, let's go ahead and jump into the interview. Today I'm talking with Vicki Nelson and Dr. Lynn Abrahams. They are the co-host of College Parent Central. Welcome Vicki, and welcome, Lynne.

Lynn Abrahams 1:39
Nice to be here.

Vicki Nelson 1:41
Thank you. It's good to be with you.

Brad Baldridge 1:43
So tell us a little bit more about how college parents central came about both the website and the podcast and a little bit of your history because I think I find a little fascinating. So I don't know who has to go first. But jump right in there.

Vicki Nelson 1:58
I will start since I started the podcast. And then I'm going to let Lynn talk about the, I mean, since I started the website, and then I'm gonna let Lynn talk about the podcasts since she joined me for that. And I started College Parent Central back in 2009. Really, after Lynn and I were doing a series of workshops for parents at our institution, and we were doing that because our kids were starting to go to college. And we were overwhelmed by the process. So much to keep track of, so much to understand, so many forms, all of that. And we said we work in higher education, and we're overwhelmed by this process. What must it be like for people who don't understand this world? So we started doing some workshops for parents at orientation and some of the events at our school. And then an outgrowth of that was the website, to try to provide some of that information for a wider range of parents. It's basically an informational website. And that chugged along for a while. And then a few years ago, I began doing a little arm twisting on Lynn. And she joined the podcast.

Lynn Abrahams 3:17
I wasn't sure at first.

Brad Baldridge 3:21
All right.

Lynn Abrahams 3:23
So and I am a learning disability specialist. I work with college students and their families. So this is what I've been doing my entire career. And then I got to the point also where when my kids went to college, I was overwhelmed. And so as Vicki said, that's when we started our workshops. And then we decided to do the podcast. It has been really fun talking about, talking to parents, about all the issues that come up in terms of parenting, college students, and the differences between parenting high school students and college students. So this has been quite an adventure. And I'm glad I said yes to Vicki.

Vicki Nelson 4:12
So am I. It's been interesting because we bring these were both in higher education, but slightly different roles. Lynn works with students with learning disabilities. And then I'm a professor of communication. And I also served for several years as Director of Academic Advising. So we have that and then we have our experiences with our kids. And we tell stories about them, which they're still talking to us. So I guess that's okay. And then the other thing, of course, is we've had the wonderful opportunity of like you, Brad, of talking to all kinds of people and interviewing and we learn more all the time too.

Brad Baldridge 4:55
Right? Absolutely. So I guess one of the things that I've noticed out there is in the media and that type of thing. They try and boil college down to generic statements like, 'Well, everybody should get a college education,' which is okay. But college is very different for different people, they have different goals, it could be community college all the way up to an elite college. And a typical politician or whatever that speaking, doesn't spend the time to talk about all the variability and all the gray areas and all that kind of stuff. So just interesting that you guys talk about one of view works with the learning disabilities. And that's one end of the spectrum all the way up to the crazy competitive schools out there. What do you guys see out there as I guess, what parents generally don't know or understand as they're sending their students off to school.

Lynn Abrahams 5:56
I'm going to start in first, Vicki, if that's okay. There are so many choices, as you mentioned, going from taking a year off to deciding maybe college is not the right environment, or doing the community college first and then transferring, or, you know, shooting for the the college of your dreams. So there are so many choices, and so many different students with different abilities and skills and strengths. And so I think, one of the messages to parents, is talk to your kids find out what they want to do, find out what their strengths are, find out what their dreams are. Because every single kid is different. I mean, I have two sons, and they were both totally different. So so the first message is talk to your kids, and figure out, you know, what are some of the choices?

Brad Baldridge 6:53
Right, absolutely.

Vicki Nelson 6:55
And I think that idea of choices is, is so important, because there are so many colleges out there, and so many of them that are excellent schools that no one has heard of. And so you're doing doing your homework in terms of understanding the choices as well. And we hear a lot, I think these days about fit, and students finding the college, that's the right fit for them. And for some students, that's the university of 30,000. And for some students, that's a very small, liberal arts college, or it may be a community college. And really, one of the things I think the parents perhaps, don't think about as much, and it goes to what Lynn is saying about have talked to your student, is that finding the right college really begins with the student doing some work on figuring out who they are. And what it is that makes them tick a little bit what they what makes them comfortable, what makes them uncomfortable. Of course, asking, you know, an adolescent or teenager to get to know themselves is really is really a challenge. But but really thinking about what do I want? What do I need, and then really doing the homework of what's out there, that we do tend to paint college with one paintbrush, right, and also similar.

Brad Baldridge 8:34
Exactly. And I think that's where it implies that it's a commodity in some ways, where it's like, well, any college will do, because it's just a piece of paper you're after, or, and I think there's a lot more to it, as far as finding that good fit, not just for the student, but also for the parent and the pocketbook, that's the other piece of the puzzle.

Vicki Nelson 8:58
They need to work with you,

Brad Baldridge 8:59
Right? And that's, all that process, but so, you know, your target, you're College Parent Central on your website, you've got a whole category that says When There's Trouble. So let's talk a little bit about what the types of things are there. And then maybe we can talk about how to maybe not have to ever read this section.

Vicki Nelson 9:26
Well, I think it's impossible to anticipate whether or not you're going to have to read this section, I think. And I think that's perhaps one of the first and most important messages and that is that for many, many, many students, there will be trouble. It might be little trouble, it might be big trouble. And by trouble it can mean academic trouble. It can mean social trouble. It can mean health issues, it can be financial issues. There are all kinds of things that can go wrong. And I think one of the first things is realizing that the path through college isn't one straight shot straight through college, that it is a very one twisty, windy road for a lot of students, and for some there will be detours. I just had an email from a parent a couple of days ago, actually, 'My student is flunking out of college, what do I do?' And one of the first things when I responded was, it's not a dead end, it's a detour. And so recognizing that there's no shame, in the trouble and in the struggle. And for some students, it may mean, let's take a break. You know, I went to college, because that's what you do after high school, and everyone expected me to, and my heart's not in it. And so really thinking about what does it mean to be on academic probation? What does it mean to be dismissed? So a lot of the things in our section of the website are about, should you appeal or not appeal? Should you take a break? Should you transfer? Transfer, the number of students who transfer from one school to another is growing, growing, growing. So there are so many different paths and what is not right, and what is not wrong. But there's often a lot of struggle.

Brad Baldridge 11:35
Right.

Lynn Abrahams 11:36
And one of the things we talk about is the role of parents when there's trouble. Because when kids are in high school, we you know, we tend to kind of swoop in and try to fix some things. When they're in college, there's, that's a big shift. And now, parents role is to step on the sidelines and be more of a coach and let their kids ask questions and let their kids jump in and try to find out what to do and, and figure out what to do. Often our kids are way more resilient than we think.

Brad Baldridge 12:11
Right?

Lynn Abrahams 12:12
And so as a parent, it's it's hard to make that shift, though.

Vicki Nelson 12:16
And sometimes as a parent, it's asked, it's not giving the answer and fixing, but just asking questions. Have you done this? Have you thought about this? Have you talked to this person? What if, what if you took a break? You know, just prompting the student to think through what they want to do.

Brad Baldridge 12:36
Yeah, another great example, like, I can't remember where I saw it. I was reading a book or an article somewhere, but the parent question was, 'Wow, that sounds like a real challenge. What do you think you're gonna do?'

Lynn Abrahams 12:51
Good response

Brad Baldridge 12:53
Was the Parent Question of the Day, so to speak in that in that article. So, and that's a, I guess, a way to look at it. And again, I've, my wife's in higher education, too. So the other end of that coin is when the parents decide that they and their lawyer are going to get in there and help figure this out. So if you guys were in higher ed, I'm sure you've at least heard the horror stories of again, I would almost never recommend that. I don't think that ever ends well. But who knows.

Vicki Nelson 13:26
With or without the lawyer, it often doesn't end well of the parent who's who calls and says, I need to find I'm having trouble registering my student for classes. He can't get into this parent, you shouldn't be registering your student for classes. It shouldn't be parents who...

Brad Baldridge 13:44
Right. And that brings us to FERPA. Could you tell us a little bit about what FERPA is. I think there's a is it HIPAA? Is it almost exactly the same for healthcare?

Lynn Abrahams 13:56
Oh, HIPAA.

Brad Baldridge 13:57
If HIPAA for health care, what's FERPA?

Vicki Nelson 14:01
FERPA is the, see of I get it right. Federal Educational Rights and Privacy Act. I think that's right, or Family Educational Rights and Privacy Act. And it it started to give parents of elementary school students and secondary school students the rights to see their students records. If my is in trouble in fourth grade, I want to see the records I'm allowed to do that. And that's I think, really how FERPA started. And then what happens is when a child, a student, goes off to college, that right to their educational records transfers to the students. So, you know for many parents in elementary school, middle school, high school, they're on their students portal, there's a parent portal, they can go in every day, they can see what the assignments are, they can see all the grades, anything happens at school, the first phone call is to the parents. And that's what we're used to. And then your student goes off to college and all that transfers to them. So now I, I can't call up the school and say, 'I want to see my students grades.' The financial piece goes along with that, too, right? So I, and some colleges now I think are sort of waiving that piece that they really will send the bill to the parents. But when my kids were in college, the bills went to them. And I used to have to say to them, 'You've got to check your email. And if there's a bill, you better send it to me.' Because otherwise, I don't know. So there are waivers that schools can have parents sign saying, the student signs saying 'I waive my rights, and allow my parents to see everything,' to see my grades and all of that. That may or may not be a good idea. I know Lynn likes to talk about that.

Brad Baldridge 16:18
Yes.

Lynn Abrahams 16:19
Well, I think sometimes if we require our students to sign away all of that, it gives the message to students that we don't believe in them. And we don't think they'll be okay. I know, when my kids went to college, I said to them, 'I'm not going to require that you sign this, but if you don't tell me the truth, you're going to have to sign it,' you know? And, and that worked out. I know, the students that I work with, I work with a lot of students with neuro diverse students and who want their parents to be involved. So they will sign something because they want that support. There's also it's important to know that in terms of FERPA, if there's a crisis in any college campus, parents are going to be notified. If there's a medical crisis, if there's a you know. So yes, it's it's frustrating for parents that they can't call up and get the grades and get a lot of information about their son or daughter, but they will find out if there's a crisis.

Brad Baldridge 17:26
Right? I mean, it seems to be the general standpoint as well. And again, the typical college student is an adult, and...

Vicki Nelson 17:33
Sort of.

Brad Baldridge 17:34
Right. And well, according to the law, they're an adult, they now are entitled to privacy, and that their grades are their grades and their bills, and whatever is going on at the school is their business, not mom and dad's. And of course, most parents would say, but I'm paying for it. Yes, you are. But the college is stuck in the middle. So they've made some pretty clear lines and said, these are all privacy rights of the student. And if we can't just share that, no matter who's paying the bill, unless the student signs off in some form or another. And I think for some parents, that's a hard pill to swallow where it is. I just wrote a check for tens of 1000s of dollars. And now you're not going to tell me what's going on?

Lynn Abrahams 18:24
They're closing the door.

Brad Baldridge 18:26
But yes, that is the way it is.

Vicki Nelson 18:28
I think there's something that's interesting, because we've been in this world for a number of years. And back, you know, even in 2009, when we started College Parent Central, there was this image of helicopter parents, we still talk about that, the Black Hawk that swoops in or submarine parents that are under the surface and with the periscope checking and, and lawnmower parents. Oh, mow all the way, and all of this, but the image was of these helicopter parents who would swoop in and the student who was trying to fend them off, who didn't want. 'leave me alone. I'm an adult now.' And the parents were hovering. And I think I've seen a change.

Lynn Abrahams 19:21
Totally.

Yeah. And students now want their parents involved and are unfortunately sometimes too willing to abdicate responsibility to their parents. So yeah, it's fine. I'll give you my email password. I'll give you my portal password. And you can check my email and you'll let me know if there's anything important that I need to know. So it really, the partnership is different, and I think we need to be careful instead of being all thrilled that, 'Oh good. My student is happy to let me in.' That may not be the best thing.

Brad Baldridge 20:04
Right. And I think there's a lot different, you know, a big difference between being involved in coaching and supporting, and doing, and, etc. where. And I think in some of your some of your articles, you even talk about, maybe high school is a good training ground for some of these things. Can you give some examples of what parents might do in high school so that they're a little more prepared for college?

Vicki Nelson 20:33
Yeah, I think we were always happy to talk about that. But you know, I think it's even, even middle school. I don't think it's too early. You know, Brad, I've heard you talk about in terms of financial planning, early planning, and late stage planning. And I think the same thing is true. In terms of preparing your student, there's that late stage, sort of scramble to make sure your student is ready. And sometimes that happens in the car on the way to move in day. And sometimes it's over that summer, all of a sudden, this summer, we've got to make sure because you're you're going but laying the groundwork in high school leg, the groundwork, even beginning in middle school is going to make the path a whole lot smoother and gradual. So yeah, there are a lot of little things. Lynn, you want to? I know you're like...

Lynn Abrahams 21:33
Sure, oh, there's so many things. But you know, the general idea is letting kids make mistakes. So for example, in high school, if your high school student and relies on you to wake them up to go to school, you may want to have a conversation with them and say, you know, when you go to college, you have to get yourself up, why don't we do this trial, where you're on your own, you're getting yourself up. And if they get up late, and they are late to school, there will there will be a consequence, but that's how they're going to get into that rhythm of taking care of it themselves. stuff, like having students make their own doctor's appointments. You know, my kids never made a doctor's appointment when they were in high school. And when they get to college, they have to call the clinic if they get sick, you know, doing stuff on their own were in high school, if they, if they mess up, it's not too bad. It's okay. You know, so you talk about it. But once they get to college, they have to do this stuff on their own getting their own medications, doing their own laundry, thinking about food, and what they eat and nutrition, because no one's going to tell them in college, that they should eat ice cream three times a day.

Vicki Nelson 21:36
Learning how to write a decent email with a greeting and an ending. A number of times, it's sort of a standard joke among faculty that we get the 'Hey, Prof' email...

Lynn Abrahams 23:05
Yeah, I get that

And all in text speak and all of that. So writing an email, how to talk to someone like a professor, students are scared to come to our offices, because they they're not comfortable having a conversation, they would rather text us, or, I mean, they think our emails are old fashioned, but send an email or text us or something, but the idea of picking up a phone and calling or coming in and having a conversation, parents can coach students, here's what to expect and and here's how to be professional and if you have to go talk to a professor about an assignment or something, here's what you want to take with you. And here's how to ask some questions. Just just those really looking at what happens all day, every day with your student and thinking, what can I hand off?

Brad Baldridge 24:06
Right

Lynn Abrahams 24:06
And know that making mistakes is okay, that's how we learn this, this this thing about failure that there's all this hype around we're not, we're supposed to be perfect. And that's just not human to be perfect, and everybody makes mistakes. So that's a good thing to talk about with your kids.

Vicki Nelson 24:26
Right? And the scary time to let go. When I would say you don't want this to be the first time you say I'm going to step back and let you take charge is the college application process. Because you know, yes, they need to be the driver and but they will need guidance and they will need help and and all but that's not you can't do it for them. We can tell message to parents, colleges, college admissions offices can tell when the parent has written the essay.We know that. So it's not where you want to do, you want to, you want to guide. But if that's the first time you're trying to step back, it's really, really difficult.

Brad Baldridge 25:15
Right. And I see a lot of parents very, in that regard. It's one of those challenges of, you know, there's certainly a lot of students that will just excel at it and just take charge and get it done and do really well. But I have many parents that say, 'Well, I still got to be pretty involved, because they're not going to get all seven things on the checklist done in a timely manner. So I'm gonna have to manage at least manage the checklist with them and that kind of stuff.' So I think there's some sort of balance of what works for some students doesn't work for others, right. And that's anybody that has multiple kids eventually realizes that, kids are different, and there's different rules and that type of thing.

Vicki Nelson 25:58
But, you know, the choice of words matters. I'm a communication professor. And what you said is, you have to manage the checklist with them. And that's very different than managing the checklist for them.

Brad Baldridge 26:11
Right? Absolutely. Right.

Lynn Abrahams 26:13
That's why parents can frame it differently and think differently,

Brad Baldridge 26:17
Right. And I think that should, in my opinion, you know, my wife, and I would always joke in middle school, you get that email about homework, and it's like, well, why are they sending me information about homework, I don't do homework. You still send me an email when I have to take the cell phone away. Other than that, I don't want to hear about homework. Right? I mean, that's, that was my opinion. And I told my kids that it's like, they might be sending me emails about stuff you're supposed to do. I delete them. I'm not gonna chase you around to figure out if you've done your homework. I'm just gonna take your cell phone away when it isn't done. And, you know, that's the way I, I handled it.

Vicki Nelson 26:59
Well, and they're learning consequences, right? I can do what I want. Right? Nobody's looking over my shoulder, checking the email. But there will be consequences.

Lynn Abrahams 27:10
Right.

Brad Baldridge 27:10
Right.

Lynn Abrahams 27:11
If it comes to that

Brad Baldridge 27:12
Exactly. And I think that's where, you know, transitioning from, yes, you mentioned the alarm clock idea, and so forth, where maybe in seventh grades, you set your alarm to just to make sure that, you know, but in eighth grade, you just skip it and that type of thing. But

Lynn Abrahams 27:29
So it's all about these little steps, you know, and the goal is that our kids grow into adults. Yes, that's the goal, that they are independent adults, but little tiny steps forward are is the way to go. Not big, huge things.

Vicki Nelson 27:33
And if you've done those little tiny steps, as a parent, you have so much more confidence when you send your student off to college, and so many of us are terrified when we send our student off, you know, what are they going to do? Are they going to be able to handle themselves? Are they going to be able to do the academic work are they going to, and if you have some confidence that you have seen them demonstrate some of this independence, some of these life skills, then you're a little less nervous, sending them off to school. Students, you know, we talked earlier about students who struggle. And so often what we see, when students struggle, it's not the academic work. It's not that they're not able to do the work. It's life that gets in the way of them being able to function.

Brad Baldridge 28:43
Right. Yeah. And I guess I see that a lot as well in working with parents. I think the other thing again, is there's a wide swath of students out there, so the student that's going to live at home and go to the local community college because they're not ready to go far and wide. It's kind of a different process than we're flying across the country and looking at schools in 10 states. And when they're gone off to college, they're going to be 1000 miles away, and they can call me but I've been that much I'm able to do about whatever problem they've encountered. So we got to have them a little better trained and understanding what their options are, etc.

Vicki Nelson 29:29
But you know, there's a challenge, a different kind of a challenge when your student is living at home. So the student who graduates from high school and then is going to live at home. Parents have a challenge of how to help that student begin to detach, begin to let go. It it's so easy to just continue the way you've been doing things. Now instead of going off to the high school they're going off to the community college, but we continue to function the same way. So I think parents who have students who are going to live at home, really need to talk to that student about how are things going to be different to you're not a high school student anymore, you're a college student? What's going to be different about how you do your work about what I expect you to do? Do I expect you to continue to function? is part of the family. Do you still have a curfew? Do you have to report to me when and how are you going to do your work? Are you going to stay overnight with friends on there? There are so many other issues and challenges that parents who have students who are living at home face as well.

Brad Baldridge 30:45
Yes. And then so I have a high school. I have high school kids yet. I also have a college freshman, who is now home for the first summer. So that's kind of a bit of a transition now to where, you know, he spent the last school year with nobody telling him when he has to go eat or whatever it is. And he struggled a little bit was well, dinner's at seven, be here. No, I mean, when I go to the commons, I can go anywhere in between five and eight, and I can get dinner. And it's like, yes, but here dinner's at 7. So or if we're not, you know, we're not able to get it done, done the table at seven, it'll be at eight. And you're just gonna have to live with that. And some of those things. But yeah, so there's a lot of great information on your website and your podcast. So let's talk a little bit about that. Because I think that's one of the challenges of learning some of this in general is okay, I've, we've scratched the surface on a couple of these things, I need to dive into, you know, again, something that caught someone's attention on this podcast. So can you tell us about your website and podcast and what's there and who it's for and what they might gain from it?

Vicki Nelson 32:00
Sure, well, let me talk about the website. And then Lynn can talk about the podcast. As I said, the website is an informational website. That's the whole purpose of it, to help parents have the information that's going to help them we believe that information is empowering, and understanding your role, understanding how it's different. So the website has categories. One thing to do is look at the categories that are there and say, 'Well, okay, my student is transitioning to college, I might want to start with those articles, or my student is struggling, I don't need to worry about transition right now I just have to look at that. My student is graduating, I just found this website, and I have a student who's graduating from college, what should I be thinking about? What should I do?' So if parents have a specific need to go to those categories. Otherwise, it's really just sort of browse and and see, you can do a search, I have a specific question and do that. Try to include everything from what can you do in high school? To help them prepare? What should you be thinking about in that transition? That really tough summer between high school and college? And and how that that late stage planning, what do we do there? Now my student has gone off to college? What should I be thinking about in that first year? What might be going on? What happens in sophomore year to just do a search on the website for sophomore and talking about sophomore slump and sophomore challenges and so you know, to look at categories and browse to look for a specific thing and and see what you need and, and what's going to be helpful. And then the podcast.

Lynn Abrahams 34:09
Podcast, the podcast is available wherever you get your podcasts. And you could also find it on our website. We put out a podcast every two weeks. We cover some of the similar topics. We are talking to parents about how to parent college students, but it starts earlier than college. The shifts start earlier. And in addition, we have had the honor to interview a number of writers who have put out fabulous books on the topic. So definitely check our podcast for some of the best stuff out there. Best authors out there deal with things from you know, college health to finances to emotional, mental health issues, addiction. So the interviews are have been really, really fun to do. So just check us out.

Brad Baldridge 35:11
All right. And again, that is at collegeparentcentral.com.

Vicki Nelson 35:15
Yes.

Lynn Abrahams 35:15
Yep.

Brad Baldridge 35:15
And the podcast is called College Parent Central podcast.

Lynn Abrahams 35:24
We tried to keep it simple.

Brad Baldridge 35:27
Okay, well, I really do appreciate you guys spending the time with us. And a lot of good tips there. And again, a ton more on your website and in your podcasts. So I appreciate it. And we'll stay in touch.

Lynn Abrahams 35:39
Thank you so much for having us.

Thanks, it's a pleasure.

Brad Baldridge 35:43
All right, that was a great interview. Hopefully you learned as much as I did. I appreciate Vicki and Lynn giving us all this great information. Stay tuned for Brad Recommends, I'll talk a little bit more about their website, I am recommending you go check it out, and perhaps their book as well.

Presenter 35:58
The latest tips, tricks and tools you can use today. This is Brad Recommends on Taming the High Cost of College.

Brad Baldridge 36:08
Today, I'm recommending that you check out College Parent Central. We just had an interview with the authors and there's a lot of great information on this website. They have sections called New College Parent, When There's Trouble, Future College Parents, Resources and Help, Give Suggestions, and there's a lot of things that you can search for. And then it's relatively well-organized so you can find some of the stuff that you're interested in learning more about. They also have an e-book, if you're wanting to buy the ebook. It's 60 Practical Tips for Using the High School Years to Prepare Your Student for College Success. That's another great tool, I did buy it and download it, and it's about 30 pages long, it's not overwhelming. It's nice because it has again, the kind of the 60 tips where you can quickly go through and pick the 10 or 20 tips that are most important to you and start implementing them. And then come back six months or a year later and see if there's other tips that might be appropriate. Now in the book, the information is organized by chapter as well. So Chapter 1 is High School Curriculum. Chapter 2, Preparing Emotionally, 3 is Financial Knowledge, 4 is Managing Life, 5 is Looking Ahead to Next Steps. And then 6 is Two Final Questions. So each of these topics has typically a sentence or two describing it, and then maybe a paragraph that gives you a little more information. So as an example, in Financial Knowledge, it talks about have the credit card talk and discuss realistic living expenses, understanding how a credit report works, and the implications of that. So there's a lot of different, quick tips that many families can use as you're preparing your student to get ready for college, and all the things around life and finances and all the different categories we just mentioned. So a lot of this information, of course, is also in the blog and on the website, in various articles as well. And when there's trouble was, of course, an area that I haven't seen other places where it talks about things like transferring schools or taking a year off, or other options when students are struggling in school or have other problems. Well, go ahead and check out the website. Again, it's collegeparentcentral.com. And that's all we have for you today. I look forward to talking to you next week.

Presenter 38:37
Thank you for listening to the Taming the High Cost of College podcast. Now it's time for you to take action. Head to tamingthehighcostofcollege.com for show notes, bonus content and to leave feedback for Brad. The next step on your college journey starts now. Brad Baldridge is a registered representative of Cambridge investment research and an Investment Advisor Representative of Cambridge Investment Research Advisors, a registered investment advisor. Securities are offered through Cambridge Investment Research Incorporated, a broker dealer and member of FINRA and SIPC. Brad owns two companies, Baldridge Wealth Management and Baldridge College Solutions. The Baldridge companies are not affiliated with Cambridge Investment Research.

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The post THCC Episode 165 – College Parent Central: Parenting in the Best Way Possible appeared first on Taming The High Cost of College.

Today’s Guest:

Scott Marshall, CEO of Semester at Sea  

In Scott’s role as the President and CEO, he is responsible for the overall strategic direction and financial well-being of the Institute for Shipboard Education and the Semester at Sea program. He works to advance the mission of Semester at Sea and ensure sustainable revenue in partnership with the Senior Leadership Team (Advancement, Academics, Finance & Accounting, Human Resources, Marketing & Communications and Operations & Risk Management), the over 70,000 Semester at Sea alumni and the ISE Board of Trustees.  

Scott collaborates closely with Colorado State University, the Academic Partner to Semester at Sea, and stewards strong support for the philanthropic community.  

Prior to his position as President and CEO, Scott served as Vice President of Academic Affairs at ISE/Semester at Sea and various leadership roles at Portland State University, including Vice Provost for Academic and Fiscal Planning and Interim Dean and Associate Dean of Graduate Programs in the School of Business. 

Questions Answered Today:

What is Semester at Sea and what does it do?  

Semester at Sea has been operating for decades. It’s a study-abroad program that takes place on a ship, MV World Odyssey, taking college students to 8 to 10 countries in a span of 100 to 105 days. They spend about half of those days on the ship and half on land.  

Semester at Sea, which embarks in two voyages yearly (Spring and Fall), consists of:  

• 500 to 600 students  
• 25 faculty members  
• 30 staff  

Students who are enrolled in the program spend about four to six days in each country. While en route to their destination countries, they spend time doing various activities, such as: 

• Taking classes 
• Doing community events  
• Getting to know people with diverse backgrounds (about 85% of participants are U.S. passport holders, while 15% are international passport holders) 

Note: College students from freshmen to senior can enroll, although most enrollees are in their junior year.  

MV World Odyssey is quite comfortable for students, offering many amenities such as:  

• Swimming pools  
• A fitness center 
• Evening activities 
• A library  
• Areas to play board games with peers 
• Summer spa service (with extra pay) 
• Pedicure and manicure (with extra pay) 
• And more!  

What does the students’ mode of learning look like at Semester at Sea?  

Semester at Sea’s official partner institution is Colorado State University, making it part of an accredited system. This means that the transcript of records for the semester spent at Semester at Sea comes from Colorado State University.  

Scott describes learning at Semester at Sea using three words: comparative, experiential, and international where students learn both in classroom and in real life and are given the opportunity to reflect on everything they’ve been learning.  

Students learn in and out of the ship. Semester at Sea offers:  

1. More than 70 course sections, which include:  

• 100-level courses for students in their gap year  
• 200- and 300-level courses 
• 400- level courses for students who are trying to complete their major. 

They have a small class size, averaging 24 students per class.  

1. The Global Studies Course. It’s a large, special class with about 250 students, where students gather in a huge classroom and discuss specific content. All students are required to take this course.  

1. Field Classes (on land). There is one required field class per course, specifically for experiential learning. During a field class, the teacher-in-charge brings the students someplace where they can see the concepts that they’ve studied in action (e.g., a day at a contract shoe manufacturer to understand the supply chain for shoes).  

1. Field Programs (on land). These are special programs where students can stroll and enjoy each place and perhaps do something adventurous, with the guidance of local tour operators that are partners with Semester at Sea.  

To maintain the academic rigor that’s necessary for a college experience, students still have to pass tests, submit writing assignments, and complete presentations and such, in order to complete their course requirements.  

As Internet connection is limited, students and teachers rely on their intranet-powered learning management system called Moodle. Teachers use Moodle for assignments, attendance, grading, and distribution of learning materials. 

In the event that a student is not able to be physically present in class, the classes are live-streamed and recorded so they can watch live while in their cabin or watch the video later.  

How are the students’ health and safety ensured?  

Managing hundreds of students is not easy, but Scott ensures that Semester at Sea puts their students’ health and safety above everything, in and out of the ship.  

Semester at Sea ensures their students health and safety through their:  

• Fitness center  
• Mental health counselors  
• Medical staff 
• Travel insurance 

Each student needs to go through their scanner on their way in and out the ship, ensuring that everybody is off and on-board.  

Once out, the students have a set of rules to follow, which results in penalties if broken. Scott shared some of these strict rules, some of which include: 

• Prohibition of renting motor vehicles. This is mainly because motor-vehicle mishaps are not covered by students’ standard travel insurance. If an accident happens, it’s the student’s liability.   

• Compliance with on-ship time. Semester at Sea is obligated to never leave anyone behind. Students who break this rule and are not on ship on time are penalized and will have less time to explore the next destination country.  

In a rare incident that a student needs to be left behind (e.g. a student lost their passport and won’t be allowed to enter the next country), a staff member from the ship gets off with the student and assists the student until they’re able to rejoin the voyage.  

Students’ accommodation while in the port  

The ship serves as the students’ home while they’re on land, so they can come back at any time and stay on the ship if they prefer to do so.  

During the time they’re not in field classes or field programs, students can design their own plan and program (e.g. get an Airbnb and simply relax), as long as they strictly follow Semester at Sea’s rules.  

How much does it cost to participate in Semester at Sea?  

Without any financial aid or scholarships, the base price ranges from $26,874 to $32,874. This excludes:  

• Cost of airfare to get to the port where the voyage begins 
• Fees for getting visas or anything similar 
• Field programs 
• Extra tours in port 
• Some special services on the ship (e.g., spa, manicure, pedicure)  

The cost depends on the type of cabin and number of roommates.  

Type of cabin:  

• Interior – doesn’t have an ocean view 
• Exterior – has an ocean view 

Cabins can be occupied by four, three, or two students. The room pricing rules are pretty straightforward. Like room and board in college, the better the arrangement (e.g., exterior cabin with only 1 roommate), the higher the cost. For example:  

• An interior cabin with 1 roommate can cost roughly $27,000 
• An exterior cabin with 1 roommate can cost roughly $33,000  

It’s worth noting that these prices vary. Scott recommends that parents and students use Semester at Sea’s Cost Calculator for an estimate. Financial aid or scholarships are available, so those can significantly lower your costs. 

Can costs be covered by financial aid or scholarships?  

YES. Since Semester at Sea is a program that’s part of an accredited college, students who want to join can get federal financial aid such as:  

• Pell grants 
• Supplemental grants  
• Work-study loans  
• Student Direct Loans 
• Parent PLUS Loans 

Semester at Sea’s Cost Calculator can also help with fees calculation with the consideration of financial aid.  

Other source of funding honored by Semester at Sea include:  

• Donor-funded scholarships  
• Semester-at-Sea-funded scholarships, which could be merit-based or need-based  
• Private scholarships (e.g., Coca Cola)  

Visit their website for more information about scholarships at Semester at Sea.  

Scott also mentioned student assistantships, where they hire 15 to 20 students to help in various roles across the ship. This could be a potential source of income to help fund the voyage.  

Is sending my kids to study abroad worth the cost?  

“Overall, across the United States, what we find is kids who studied abroad are more likely to be retained in college and complete their studies.”

— Scott Marshall  

Absolutely! It may be intimidating, but it’s a great experience to build your student’s confidence. It’s a great opportunity to:  

• Learn about other cultures  
• Meet different people  
• Find life-long friends  
• See the world in a global lens, which can be helpful for career-building later (like Scott’s experience) 
• Realize what it means to ‘make a difference’ 

Still, it’s not for everyone. In this regard, parents should greatly consider their student’s inclination toward this kind of experience. 

Brad Recommends:

Today, I’d like to make sure you have access to great resources I offer on my website. If you’re mapping out how you want to pay for college, then these are for you. Access them with no cost.  

1. Scholarship Guide for Busy Parents. Four video series that tell you everything you need to know when applying for scholarships and strategies for winning them.  

2. Cost of Colleges by State and Income. A chart for each state that provides estimates of how much college will at each school, depending on your family’s income.  

3. College Money Report. If you’re shopping around and want an accurate estimate of much college will cost at the schools on your list, plus how much in financial aid and scholarships you might qualify to receive, then this resource is for you. 

To get the report, just enter some basic information: 

• When your student is graduating and starting college  
• The top few colleges your student is interested in  
• Some basic academic and financial information 

The Free College Money Report then generates a report that shows you  

• How much the schools on your list think you can afford 
• How much you might receive in financial aid and scholarships 
• How much you might be expected to pay out of pocket 
• Estimated costs for each college you’ve specified  

To access these tools, visit my website’s Resources in the main menu. 

Links and Resources

Helpful Articles and Resources 

• Taming The High Cost Of College 
• Cost Calculator  
• Scott Marshall’s Contact Info:   
• Website  
• Facebook 
• Twitter 
• Instagram 
• LinkedIn 
• Pinterest 

THANKS FOR JOINING US!

We’d like to extend an invitation to our listeners to share their feedback and questions. Contact us to submit a question.

If you find our podcasts helpful, please share us on social media and tell your friends!

The bottom line is that we care what you think and want to help you out, so we’d appreciate you reviewing us on your favorite podcast platform. Even better, receive automatic updates by subscribing to the show through your preferred podcast service. 

Transcript Email Download New Tab

Brad Baldridge 0:00
Taking college courses while traveling the world. Learn more about Semester at Sea.

Presenter 0:05
You have kids, they grow up, and before you know it, it's time to plan for college. Where do you start? How much is it going to cost? Will you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? A list of questions is never ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College podcast. Here is your host certified financial planner, Brad Baldridge.

Brad Baldridge 0:35
Hello, and welcome to Taming the High Cost of College. I'm your host Brad Baldridge. Today, we have a great interview with Scott Marshall. He's the CEO of Semester at Sea. He operates a company that provides study abroad programs that are actually based on a ship. And the study abroad programs sail from port to port, and you have the opportunity to study in many countries and learn a lot doing something maybe in the South Pacific or Asia or even the Mediterranean. But there's lots of great opportunities. This interview went a little bit longer than usual because I found it so fascinating. I personally did a semester in London when I was a college student. And I highly recommend any sort of study abroad program that students might be interested in. I think it's a great experience. And I think this program that Scott is talking about is something that some families should consider. Let's go ahead and jump into the interview and learn more about Semester at Sea. Today I'm talking with Scott Marshall. He is the CEO of Semester at Sea. Welcome, Scott.

Scott Marshall 1:45
Thank you, Brad. It's a pleasure to be with you today.

Brad Baldridge 1:47
All right, so are a unique interview. Now this is something I haven't seen much about or learned much about. So we're going to learn together. But what is Semester at Sea? What is it that you guys do?

Scott Marshall 2:02
That's a great place to start. So Semester at Sea, as a study abroad program, has been around since 1963. So it has a very long history. It started at Chapman University, actually inside the university as world class and float. But now it has, for many years has been called Semester at Sea, we are a study abroad program that charters a ship and takes college students for three and a half months to 8 to 10 different countries. And those students spend anywhere between four to six days in each country. They are taking courses on board the ship. Those courses are actually Colorado State University courses in which, so Colorado State University is our academic partner, which makes sure that the courses actually are something that can transcript back to a student voyager's home institution. So we take between 500 and 600 college students, another 25 faculty, 30 staff on two voyages this year. All voyage in a springboard. What's interesting, Brad, if I could just add one more thing, we basically put up a college campus twice a year. That is that we have brand new students, brand new faculty brand new staff every year, every twice a year.

Brad Baldridge 3:28
Okay, right. So I'm guessing, you get some staff that is relatively permanent, but you have some faculty that come and go as... So if I'm a faculty, if I'm a parent, that's a faculty if I want to take a sabbatical and then come work for you. Is that kind of thing that happens?

Scott Marshall 3:47
Of course, of course. So again, we hired 25 faculty twice a year. And those faculty come from all over the US and around the world. They are not single source, they wonderful diversity. We teach business classes, but we also teach art, history, and political science and psychology and sociology. So it's a tremendously rich environment for learning. And of course, for faculty members who want almost like a mini-liberal arts experience for three and a half months. Faculty are oftentimes on sabbatical, or they've taken leave or in their transition between one institution and another. So there's obviously a variety of ways a faculty member could find themselves eligible to to apply and participate in a voyage.

Brad Baldridge 4:37
Right. So then the mechanics from the academic and college side is you're essentially an institution. Do you have like a federal ID number and an accredited college kind of thing, or?

Scott Marshall 4:52
Yeah, excellent question, Brad. So that's why we partner with an institution like Colorado State University. They are the accredited institution and they are the ones who provision the courses. So every course we offer is in the course catalog, has gone through their faculty governance process, and therefore are part of an accredited system. And the transcripts actually come from Colorado State once a student finishes.

Brad Baldridge 5:18
Okay.

Scott Marshall 5:19
So if you if you had a child who was at University of Illinois, and they came at Semester at Sea, they would basically have been a visiting student at Colorado State University for that semester, those courses would be transcribed back to University of Illinois.

Brad Baldridge 5:34
Right? Okay, so it's just like many other study abroad programs where sometimes your home institution is running the program and their credits flow through them. But sometimes, you're going to get involved in a program that happens to use a different university as the core university, and you transfer that university for the semester or the year, or however long it's going to be, and then you transfer back to wherever you came from.

Scott Marshall 6:01
Exactly. That's exactly it is.

Brad Baldridge 6:03
When I did my study abroad. Long ago, I went to England. And that's the way it worked, where there's about five or six of us from the home university that we're going, I happened to be going to the home university, but there was 100 in the program, or 150, from the Wisconsin area, and they all transferred to my university in order to go and then they transferred back from wherever they came from, when they returned.

Scott Marshall 6:25
Right. So it's a common model, and it's a long standing model.

Brad Baldridge 6:29
Right? It's not unusual. So the courses you're taking, then are they applicable to where we're traveling? Or are they more well, Business 101 and Math 101. And, or, you know, that type of thing where it's not really any different than what you would have gotten at home, it's just during your off time, you get to do all kinds of exciting things.

Scott Marshall 6:54
Yes, so we offer up to 72, 73, 74 course sections, so different courses. And there's quite a diversity. Obviously, we don't offer nearly as many as a large institution does. Nonetheless, there's quite diversity, right communications, or marketing, or our history, or sociology. And they're also offered at 100, 200 trainer foreign level, we try to match our course offerings to interests of students. So there's more students to study abroad in their sophomore junior year. So we try to offer more 200 and 300 level courses. Some students travel as gap year students, and so 100 level courses would make sense for them. And yes, we do offer some 400 level courses for people who are trying to complete their major. So we have that diversity.

Brad Baldridge 7:58
Okay.

Scott Marshall 7:58
And then to your other, I think, where you started this question is, how does that map on to a voyage where we're seeing each 10 countries. So the faculty who are hired for a particular voyage, take the standard syllabus of Psych 101, or Marketing 350. And they map the itinerary in there by making sure that their course experience is concurred. So you really dive into these topics within a syllabus, based on where you're going. And that can be that is, in fact, part of the true richness of this experience that it becomes comparative, where you're not just standardized syllabus, but you're saying how does marketing apply across these different environments? Or how does art history come alive in these various different countries?

Brad Baldridge 8:58
Yeah, I mean, I can see that there's courses that have lend themselves like art history, or I took a course when I was in London, I wasn't actually in London, it was in a suburb of London, but on theatre, so a lot of our homework was to go to the West End and other places and watch shows, which was fantastic, right? And the shows were great having to write a paper about it, not so great, but you know, that's you take the good with the bad when you're doing study abroad, that way you can get some credit. So is that the type of thing that would be like similar to that where you know...

Scott Marshall 9:34
You got it, you got it. Yeah. And that's what you talked about in terms of going to the West End. That's the experiential piece. So I like to use three simple words to describe the Semester at See experience, which is comparative, experiential, international. Comparative, experiential, international. So I describe the comparative piece and then experiential one, which is talk about is you take the classroom experience on a ship, and then you take it into a port, and you experience and then you come back on the ship, and you do more reflection on what you've just experienced. You do more coursework, and then you go experience it again. So you see that compare to experience are part of it.

Brad Baldridge 10:22
Right. Okay. So I was looking at, I don't even know, I think it was maybe 2023. Somewhere in there where you're starting somewhere and East Asia, Hong Kong or something. And then you go, okay, Tokyo. Yeah, you already started in Tokyo, and you ended up in Europe somewhere.

Scott Marshall 10:42
Yeah, that would be a spring voyage, for sure. Our fall voyages start in Europe.

Brad Baldridge 10:49
Okay.

Scott Marshall 10:50
And generally head East. And then our spring voyages, start East and head West and end up in Europe. That's right.

Brad Baldridge 10:58
Okay. So how long is that journey?

Scott Marshall 11:03
So we usually go 100 or 105 days, so three and a half months? Mirrors closely a semester, would start sometime in relatively early September, usually the second week and within the third week of December. Right before the holiday season comes?

Brad Baldridge 11:26
Right. So you do similar to the college semester that most colleges are on? So, I mean, it seems like a lot of miles do so how much time do you spend in port compared to? I mean, I don't know how long it takes to go from point A to point B is it going to be a few days or a week? Or how does that work?

Scott Marshall 11:44
Oh, just a side note, right. So I grew up in higher ed than the faculty system and was in administration. And then I came in and started working for Semester at Sea, and I have learned so much about how ships operate nautical miles, ports, you know, pilot boats so much. It's been amazing. So in the first part of your question about how much time on land and how much time on the ship, it's roughly half and half, you know, 55 to 56 days on the ship and about 50 days on land. And the on-land time again, is split between the 8 to 10 countries we visit. So there's four to six days in each country. And again, the time on the ship, you're in classes, you're dining together, you're going to a fitness center, you're doing community events, and so on.

Brad Baldridge 12:39
Right. So if we're on the ship and doing classes that I guess that makes sense. So you have like a typical college schedule. You're I mean, is this a boat full of classrooms? Or how does that work?

Scott Marshall 12:52
So first of all, we got to call it a ship, because...

Brad Baldridge 12:55
Is it a ship or a boats

Scott Marshall 12:56
Yeah. Ships carry boats, and so on the ship, it is in many ways of traditional looking cruise ship, but we've modified it to make sure it has these classrooms. So there is a screen there's a laptop, there's a podium there's chairs for students to sit in. Right. So in that sense it is it's modified for university set things that are unlikely college campus because it's on the ship, you're not going to have great internet access ships just simply don't unless they are equipped with millions of dollars with the satellite technology, which certainly military do some rescue operation ships do. But most standard cruise ships do not.

Brad Baldridge 13:47
Right.

Scott Marshall 13:48
That's why it's outrageously expensive when you go on a standard cruise to get internet and it's even then not very good. So that would be something that's different, but also quite refreshing. Because it's so community-based. So in many ways it is like a college campus. Imagine a very large floating dorm. You have five or six students residing on three or four different decks. You got faculty of dining halls, so you know there is this comparability to a college campus.

Brad Baldridge 14:22
So how many hot tubs and waterslides and ice skating rinks and bowling alleys do you have?

Scott Marshall 14:31
None. We have some pools, some swimming pools, although when the weather is cold, they're not heated so that's a little bit tougher to go in the water. We have a fitness center. But unlike any of the sort of fancy cruise ships, this is an academic program. And as such, we don't have any water slides. There are no hot tubs We do have a summer spa service. So people who want to go get a massage, they have to pay extra for these things. So pedicure manicure that you know they can go get that done. So we do have some of that available for students and faculty and staff. Okay, indulge a bit.

Brad Baldridge 15:19
Oh, okay. So when you're on the ship, you have class at 8 and 10 and 11. And just study in between, and then what are the kids doing? Or kids is probably not a fair term. But you know what I mean, the what are they doing for entertainment? If they don't have access to the internet? I mean, I can't imagine what my daughter would do if she didn't have access to TikTok. I mean, that fills her day. So what

Scott Marshall 15:47
So it's not that there's no internet access, it's just not great. So

Brad Baldridge 15:50
Alright, so they can get email and stuff. But they're not watching video after video. TikTok or that kind of stuff, right?

Scott Marshall 15:57
Yeah, there's no streaming, you can't stream and just not enough bandwidth to stream. So there is a bit of a shock for people a little what's wrong. What we have seen time and time again, and I tell you, you almost get tired of it. But then you don't, is alumni come off this program. Like that was the most amazing experience of my college life. Because the community that formed was unlike anything that experienced part of that, not all a part of it is you start to do things that maybe you did more often as a younger person, your card games, board games, there's skits, there's evening activities, there's affinity groups, you dine breakfast, lunch, and dinner with faculty and staff and other peers. You go to the fitness center, you decide because you are, I am not, but maybe a young adult is certified in Bar, one of these fitness programs, and they decide, hey, I'm going to run a Bar session twice a week when we're on the ship. And so they do that. And every time I go talk to alumni, they say, that was the best experience of my life, best friends come out of this, that last a lifetime. And it's because not just again, not just because the internet access is limited, but I think that's part of it. Because it's a closed community, which is so unusual. So powerful.

Brad Baldridge 17:34
Right, now I can see a lot of that where, you know, people around the world made a lot of good friends in college, and then, or the military, or those types of situations where you are in close quarters, you can't help but make friends or enemies as the case may be. But hopefully you gravitate towards friends and then right, and especially at that age where you're out there looking for people to connect with so. So it sounds like there's movie nights and activities and stuff going on that people can participate in. So that there's 500-ish students, what's a typical class size? Or I can't imagine that there's the 100 student lecture hall, that sounds like there's too much diversity, where classes are going to be smaller.

Scott Marshall 18:33
There's one course called Global Studies, which is required for all students. And it's really a gathering point for a common discussion and content. That one has two sections held in a fairly large union, what we call 'the union.' And it is it can be as large as 250.

Brad Baldridge 18:56
Okay.

Scott Marshall 18:58
Beyond that, we don't have large classrooms. Beyond that, the largest classrooms are 35. And the average class size is 24. All right, there's actually smaller classes, you know, that can be 18, 19. So we do try to match the class size.

Brad Baldridge 19:20
Right. Okay. And then the classes are very, well, I mean, while you're on the ship, at least, they're very similar to a college course, where there's some combination of lectures and writing and labs and tests and quizzes and panels. It's not dramatically different in that regard.

Scott Marshall 19:42
Yeah, you got, we have, we have to get a nice syllabus for a course that's offered. Our voyage has to be approved by the relevant department chair at Colorado State University, which means they hold us to a high standard which we should be, which means just as you said, there's got to be tests and writing assignments and presentations and so forth. But it maintains all that rigor that's essential for a college experience. Right?

Brad Baldridge 20:13
So then how does IT work on the ship? That's always a, something that happens a lot on college campuses, right? You have access to a printer, you don't you need to bring a laptop, you need to what are you recommending for, for students there?

Scott Marshall 20:28
Oh, for sure, I have a laptop, we have a learning management system. We use Moodle, which is an open source learning management system. And it resides within the intranet on the ship. So faculty use this as an assignment tool, attendance tool, a grading tool, and provisioning of all course materials. So that learning mentioned system works within the ship environment. That's a really important aspect. The other investment we made recently in terms of the academic programming, and it is a live stream technology. So that, particularly for Global Studies, in the large union, if someone is seasick, or otherwise not able to attend something, they can livestream into the cabin so that they can get that they can also watch videos later, which, of course, is a key piece, we've learned through the pandemic, that the ability to go back and review is key. And so we've put this kind of technology in, we have other sort of communication tools on the ship, that allow people to communicate, obviously, it's not a huge campus, so you can find people in person relatively easily. But there's also an internal communication system, WMET.

Brad Baldridge 21:55
Okay. Let's talk a little bit about the accommodations then. I've not been on a cruise myself. So I don't even have a frame of reference here. So if you're a student on the ship, you have a roommate and a portholes and like a bunk bed, there's something in this little little room like you see in the military, or how does that work?

Scott Marshall 22:19
Actually, this ship, the MV World Odyssey is quite comfortable. There, well maintained, well designed cabins, you can have, you can have a cabin by yourself. But of course, that's more expensive, just like it would be on a cruise ship, just like it would be on a college campus. If you're living on your own, you're gonna pay more, you can have a double. So you know that, and then you can have a triple and in some cases, there's actually what we call quads, which is four. Obviously, the more people in your cabin, the less someone pays, it's simple logic in the world we live in, right. There's also what we call interior cabins that do not have a view to the ocean and exterior cabins, which do. Okay, so that's, you know, yeah, cruise ship would have a similar model, but so does life.

Brad Baldridge 23:18
Yeah.

Scott Marshall 23:18
This is the reality, which kind of mirrors reality that the more people you're residing with, the less you pay, the more you get a view to the outside and natural light in terms of your living situation, the more someone will pay. So that's, that's the general way of describing. Okay, so there's tiered pricing according to the combination.

Brad Baldridge 23:40
And then if 2, 3, 4 people in a small cabin gets a little overwhelming is there, you go to the library like you would on a campus or go to the Student Center, or go to some other places where there might be a desk where you can sit quietly and study because you've got to cram and your roommate wants to sleep, but that kind of stuff?

Scott Marshall 24:00
Absolutely, there is lots of space for people to move around, find space on their own, find space to meet as teams from a class. And that's key, what we find is students probably at the front end, and parents even at the front end have decided to go on a Semester at Sea voyage place so much importance on a cabin choice, when in fact, during the voyage itself. The student voyager does not spend that much time when they can't. They're out on the deck. They're going to the fitness center. They're at the dining hall. They're in the main union hall, right? They're finding other places to be right. And I sailed as a faculty member with my wife and two boys and we were all in one cabin. And cabin both was a retreat for us to sort of find our own space, but also we found out all kinds of space outside of our cabin to do our own thing.

Brad Baldridge 25:05
Right? Yeah, I mean, I guess I see that as well that, you know, even in my home today, my one son that has his computer elsewhere, only sleeps in his bedroom, that's about the only reason he would go in there. Because his computer set up in the rec room, and he does stuff with friends and everything else. And you know, he blows in and out a lot.

Scott Marshall 25:27
How old is your son?

Brad Baldridge 25:28
He's a senior in college now, appears to be a senior in high school going to be going off to college. So, yeah, I mean, I can see that where again, it's we I go in there and I sleep. And maybe I lay on my bed read here and there. But if I need to study I could there's a desk there. But I might get in the habit of studying at the library or on deck somewhere where I can? Or who knows, right? I guess I know, that makes sense. So let's talk about that. You know what everybody's wondering, because we've it's come up now as well, what does it actually cost to get involved in this? Can you give us some ideas of pricing?

Scott Marshall 26:07
Absolutely. So the first thing I would say is, before we go into because it's on our website, there's no secrets here, is if you're a parent thinking about where you're sending your kid to college, which you and you've clearly given some thought to because your child's heading off here soon. And your child or you as a parent, our thinking, well study abroad would be cool. As a parent, one thing I would keep in mind is the retention rates that is and completion rates for college students who have studied abroad is typically higher, notably higher than those who didn't. So if you're making an investment in your kid to go to college, it actually, now, of course, there's diversity among groups. But overall, across the United States, what we find is kids who studied abroad are more likely to be retained in college and complete. So just keep that in mind. All your listeners keep that in mind that in terms of making an investment in study abroad, it actually leads to kids completing their college degree at a higher rate.

Brad Baldridge 27:22
Right.

Scott Marshall 27:22
So for many, it is actually a very worthy industry.

Brad Baldridge 27:26
Yes, for sure.

Scott Marshall 27:28
For sure, right. The second thing is, of course, you know, we'll go into the pricing and our financial aid and so forth, is, as you know well, because of your podcast and your real awareness of higher ed, there's a huge gap between low cost higher ed and high cost higher ed, massive, right?

Brad Baldridge 27:49
Exactly. You know, and we talked about that all the time that a year of college is, low end is 25,000, all in 20,000. In some states, a few very low cost states will even do better than 20. But that's, you know, that's Wyoming and other very low-cost locations. But a lot of states will have higher costs where they're typically paying 25, 28, 30, 32 all in for one year of college. And that's just the low cost option. And in that state, it goes up from there all the way to Harvard, and Yale and etc. The most expensive at 85-ish all in.

Scott Marshall 28:30
Yeah, exactly. Exactly.

Brad Baldridge 28:31
Actually it's 90, because it goes up three 4000 a year, so

Scott Marshall 28:37
So you nailed it, you've got the prices, massive, massive bearing. So for us, when we state our price, it includes tuition, room and board and all the programming on the ship, right. So a basic double inside cabin is about 26, almost $27,000. Right?

Brad Baldridge 29:05
Okay

Scott Marshall 29:05
That's without any financial aid and scholarships so far, that's the base price. Now, this does not include the cost of airfare to get to the ports, does not include any visas someone would need to apply for if it's required based on their passport to get into certain countries along their voyage. It does not include in country expenses. So if someone wants to travel when they get into the country, that would be an addition. So, that is the price to complete our voyage, right? It goes all the way up to almost almost 33,000 for an outside double. So this is your only got one roommate and you get a view of the ocean.

Brad Baldridge 29:48
Okay

Scott Marshall 29:48
So this basically from 26,874 for the lowest price to 32,874. So you get a sense of that variance. Again, there's a lot that goes into it. And we actually have a cost calculator, which is pretty common now. So students, and it's very popular tool for our prospective voyagers to go in and do this cost calculator. How much financial aid is the receiving. So these are folks that have submitted their FAFSA, put their Pell Grant in, and we match Pell Grants so that immediately some tracks cost and so forth. So that's a really important tool.

Brad Baldridge 30:28
Right. And just to be clear, you are an accredited college that is part of the federal system. So they can use their, they can do the fast, they can be awarded federal financial aid, which would be Pell Grants, supplemental grants, work-study loans

Do you guys do work-study?

Scott Marshall 30:47
We do some work-study. That's right. And that would be obviously an internal funded effort. So it varies bit by voyage. But we have somewhere between 15 and 20, student assistants who really are important for us, they help in it to help them a library, they help in various roles across the ship. And people apply for those student assistantships, which certainly can help raise money today.

Brad Baldridge 31:14
And then right to go back to the list. And the two things I haven't mentioned yet would be the Direct Loan to the student and the Parent PLUS loan. So all you know, all those things would be available. So I guess certainly with the loans, you can make it happen almost for sure. Because the Parent PLUS loan will cover the full cost. And that's now and that'll get you get you going. Now, whether or not you should borrow that much money is a good thing. Kind of a different question. Of course, of course. So and let's, but you also mentioned a little bit that there is some merit aid and some scholarships

Scott Marshall 31:53
Yeah. So we have obviously donor-funded scholarships, which are shown on our website. And we also have scholarships that we fund for certain groups. Some are merit based and some are need based. And they're all outlined on our website, in terms of what was going on before. The other thing we do, and this is something I'm guessing you really recommend to parents and students is don't just look at the institution and the federal government. There's this third large group of funding opportunities. Where else are our organizations are providing scholarships for students to do higher ed, which would include study abroad. So we actually, our Director of Financial Aid, she's amazing. She's really mapped out, here's what we provide, here's what you get federally. And here's the other set where we encourage you to look for other opportunities as well.

Brad Baldridge 32:58
Right? Yeah, so exactly the outside scholarship piece, private scholarships, different names, but so you can go to Coca Cola and win a scholarship or you can go to various places, wins, scholarships, your local rotary, you know, the corporation down the street, etcetera, etcetera, that offers scholarships. And generally, those scholarships, you can spend them at any institution. So you're this qualifies as one of the institutions you could use it at for that. So as an example, I won a four-year scholarship locally from a manufacturing company in my little hometown. And it was $1,000 a year for four years. And the year I studied abroad it I could have, again, I just mixed in with everything else doesn't matter what, where it actually applied. But theoretically, it could have been used on that semester. Because, so that general scholarship and of course, you win scholarships, it kind of comes out in the wash as well, where even if you couldn't use it on that semester of, well, you use it on your other semesters then, and you reduce their costs, and I have more money available to pay. Right. So yeah, this isn't necessarily going to be a low-cost endeavor. Just like when I studied abroad, it was my most expensive semester by far. But well worth it. And

Scott Marshall 34:18
I studied abroad as well. And I exactly the same, what you're saying is that it was my most expensive and it was the most fun. I can attribute my almost my entire career to having derived from the impact of that experience. I studied abroad in Japan. And I didn't know it a ton, of course, but my entire career has been focused on global and Global Education, global experiences, full teaching. So yeah.

Brad Baldridge 34:54
if we look at a typical I don't know what you call it class or cohort, or whatever? Is it mostly US students? Is it mostly, you know, college juniors? Is it? What can you give us some demographics of is it mostly, you know, equally split men and women or what? You know, what does that look like?

Scott Marshall 35:17
Let's start with the US International. So, generally about 85%, US based US passport holders, we would say, and 15% international passport holders. And we distinguish that because we always have to look at passports to see what the visa entry requirements are for our voices. Right. So about 85%, US based 15% international base. And then in terms of class, we have, it's pretty spread across your traditional four year distinctions. That is that we have freshman, sophomore, junior senior, however, certainly students are more likely, and we mare them more likely to study by my sophomore and junior years, juniors is most popular with freshman and senior, not representatives as much. So it's roughly 30% junior 25% senior, maybe 30-30. And then the freshman and the senior and our gap year and our post-grad make up the other portions of that. In terms of gender, we look a lot like all other study abroad. And if you look at the historical trends and study abroad, it has not changed for decades. And that is that two thirds of study abroad students are female.

Brad Baldridge 36:51
Really?

Scott Marshall 36:53
Yes. A third are men. And we actually have tipped at times above that in terms of the female-male representation. And if you can find out the answer, we'd love to know, because we'd like to go against that trend, just because the balance probably is better for our voyage environment. You know, it's still a amazing experience. And interesting enough, just a little anecdote, my older son three years ago, and seventh grade, went on a study abroad for a week and the and the proportion was exactly the same. There's something I think that starts very early. That sets this up. And I've got a lot of hypotheses. I don't have any answers.

Brad Baldridge 37:41
Yes, exactly. Okay, so when I studied abroad, back in the good old days, my method of communication was to call home with an international calling card from a payphone on the street, somewhere in the middle of the night, because I wanted to call while people were awake, I was in Europe. So the best time to call was midnight, because then it was six o'clock, and my parents were home. You know, it was after work at home, I could do that was a good time to call and I was student often up at midnight, and often on the street at midnight. So it wasn't that big a deal to, you know, pop into a phone booth, which, that's a public phone, for those of you that are really young that you know that you put money in to make calls home because there's not one in your pocket. But anyway, so the, how does that work? How do students and families stay in contact? If you know, in this day and age? I'm sure technology has something to do with it.

Scott Marshall 38:47
Oh, you bet. You bet. So internet based messaging services, like WhatsApp were relatively well, there certainly are moments when the ship is moving, and satellite connectivity. So internet connectivity may not be stable. So that wouldn't work. But from most voyages, most of the time, a messaging service like that will be functioning.

Brad Baldridge 39:16
So that a text message or like a recorded video, or...

Scott Marshall 39:21
Video will be very difficult. So just a message, you know, yeah, text-based message would generally work. Most of the time, not all the time, but most of the time. Anytime you're trying to upload through that system, like a video, that's going to be really hard anytime you're trying to live stream that's going to absorb tons of bandwidth. Right, but for sure, something like WhatsApp, which is still in an app based of course, but it's all but the text portion of it would genuinely work.

Brad Baldridge 39:54
Okay. Now so would a student have a cell phone with them that would work in ports and stuff, or is that it just not? You know, I guess, because the international cellphone concept, I think has kind of been kind of solved, perhaps at this point where your iPhone may work wherever you turn up. Is that true?

Scott Marshall 40:18
Yeah. So there's, yeah, yeah, there's a lot of different ways to do this, some will actually have phones, dual SIM card phones, which, so they go into a country, they get a local SIM card, they slide that into the second slot, and then they're using a local number. That's one way. Second way you can, within your current service provider, get an international plan. I used to do AT&T, and it has a certain fee that I pay when I traveled, right? I use Google FI, which has only one cost per month, no matter where I'm at. And so that works, that has worked well for me. And so there's a variety of ways you can do it. Right? You can have a dual SIM, or you can have a single SIM and just take out your SIM card usually loose and switch it, right or a dual SIM. So you could do the SIM card mechanism. You could do the international plan mechanism, or Google FI or other. Maybe there's other types of providers that have a similar approach. So yeah, when young adults get into an international country, they're, they've got it figured out much quicker than I ever.

Brad Baldridge 41:32
Yes, for sure. All right.

Scott Marshall 41:35
They're suddenly TikToking and Snapchatting and doing things that I don't do.

Brad Baldridge 41:41
Right. Yeah. So I think that covers most of my credit, I guess what I didn't cover yet is, what is it like when you're in port, then? So you pull into, I don't know, pick a big, Shanghai, or some big city that happens to be on the itinerary? Or, and they say, 'Alright, well, we're going to be important for the next six days.' Is it get off the boat and good luck? Is it, 'Well, here's your exact itinerary, you're gonna go here for this class, and you're gonna do this for this class? And then you're gonna do this for...' What is it?

Scott Marshall 42:15
Yeah. So there's three things that can occur. When you pull into a country. One is, as a faculty member, you will have one field class per course you teach. And so a student in the class knows that the 8 to 10 countries, and the 3 or 4 classes they're taking each of those classes will have one day in one country in which they are with a faculty member and their fellow students in that class. Give an illustration, when I was a faculty member, I taught three courses. One of those courses within, was international business. And so when we went to Vietnam, for one day, all the students and I went to a contract shoe manufacturer, to really understand the supply chain for shoes, right? A great international business. That's an example of a field class. The second option, our field programs, which are designed in partnership with local tour operators, which you can pay extra for. Those could be all the way from a half day, orient with the city to a three day two night homestead situation, right. So there's that right. And the third one is just as you described, which is you don't have a field class, decided to not do a field program. So you're going to explore with three or four of your fellow student voyagers and you get to design your program. Like there's there's just an independence. And I will, you spend time in London during study abroad. Right? That independence is intimidating and extraordinarily confidence-building.

Brad Baldridge 44:16
Yes

Scott Marshall 44:18
You get a student who has never traveled before, and the first time they step off the ship in a port they've never been and they have to explore. It can be overwhelming, intimidating, exciting, just by halfway through the voyage. These young adults have gotten such presence, such confidence to go into a brand new environment and find their way it is phenomenal transformation that occurs.

Brad Baldridge 44:47
Yes, I would agree with that. I mean, just in my own experience, and you know, when backpacking through Europe after I was done in London, I don't know what it was a loving, beloved 12 countries in 14 days or something. And yeah, and it was interesting too, because you run into people that are doing the same thing. And you make friends and I ran into people I studied with in London, randomly in Switzerland and that type of stuff. So it is an interesting community in general. So, you mentioned then if, when we pull in the port, maybe we've got to participate in a class for one day, if we chose to take a lot of classes that have that component? Would it be well, Tuesday with this professor Wednesday with that professor? Or would there be conflict? Where you probably couldn't do that?

Scott Marshall 45:41
Yeah, we address that upfront, because absolutely, that potentially exists, but we work directly with the student to ensure that it doesn't, that is, they've kind of chosen, I want these three or four classes. And we say, actually, these two classes, or courses, these two courses have a conflict on field class. So what else can we suggest? What can we sub one for? So we do that work way ahead of time with the student to ensure that that conflict doesn't exist? I was very savvy. And you Brad to think about that possibility.

Brad Baldridge 46:20
Right. Exactly. Okay. And then you mentioned, so when you're in port, do this, students have access to the ship? And they can they sleep on the ship, essentially, so they're not trying to find accommodations? And but they could theoretically, I guess, what is the rules around how you keep track of 500 young adults? How often does a student miss departure? Because they, you're supposed to be here at six o'clock, and we wait to anchor at eight o'clock and we set sail and now you've got to, we'll meet you in the next port. Good luck. Yeah. Or do you, is that your problem? Or is that their problem? How do you know? What's the...

Scott Marshall 47:04
Yeah, there's a lot in your question. The first thing I would say is, to start this off, is health and safety is our top priority at all times. I mean, these are young adults, we want to care for them every way possible. So the ship stays in port, the gangway is down, they can come to the ship, anytime it can hotel on the ship, right, this is their home, they come back home at any point in time, we have mental health counselors, we have medical staff, we have everybody there to support them all the time. That never leaves, right. And so that's really important. If a student twist an ankle, we have an on-call system so that that person can call the ship. And we can either provide the service on the ship for that twisted ankle, or if for any reason. In a terrible case, maybe they've broken an ankle. And we make sure that we already have assessed where the best medical care is, and how do we get enough care within that port. So those services are always available. 24/7 while we're in port. The second question is is more more interesting, kind of funny at time. So there's do we ever leave anybody behind? So our obligation is to never leave anybody behind. Right, right. Again, of health and safety is our priority, we would never leave behind. We are very strict with on-ship time. If it's five days in Shanghai, there'll be an on ship time, that last day, if you do not make that on ship time, you will be penalized in what we call 'deck time.' On the next port, you will have to stay on the ship for a certain number of hours, as a consequence of being late for the previous point. Now, has anybody been left in a country in the past? Very, very infrequently. We had a case many years ago where two students lost their passport, their passports. And they had to go visit the consulate in that country to get those renewed.

Brad Baldridge 49:17
Right

Scott Marshall 49:17
They couldn't get back on the ship and continue the next country without their passports. So we actually have different swing positions. They're not permanent, full time employees on the ship, but swing positions called into action in those cases. So that individual from the ship will get off with those students and make sure that they are taken care of and they get a passport and then they will have to wait and fly to the next country that the ship's going to in order to rejoin the experience. So it has happened but again, our obligation is to ensure that everybody is on board.

Brad Baldridge 49:56
Right but you're well aware of who's not showing up, so it's not like a typical, I don't know train or something where they say we're closing the doors and leaving. And if you're not on it not my problem.

Scott Marshall 50:07
That's exactly right. We have in our own parlance, we have what we call, swipe on, swipe off, swipe up. We have a ship ID. When you come on board, it's scanned. So we know. And so, on ship time. We have a full and sort of enrollment. Like who's here. Looks like everybody's here. Good, closes doors, pull up gangway. We're gonna go set sail. So if someone gets off, they scan, we recorded it, they're off the ship. So we track that all the time.

Brad Baldridge 50:42
Right. Okay. So then, let's talk a little bit about, again, if I don't if I have a class, where alright, Tuesday's booked, because I have to do what the professor's scheduled for us. But then Wednesday, Thursday, Friday, I'm on my own time. Do you? Is it like a cruise ship that might say, 'Here's your tours and different things you can pick?' And? Or do they just want? Do it on their own? Or some combination thereof? Can they say, 'Well, I'm gonna get in a, where it happened to be in Africa, I want to go to a Safari. So I'm going to get in this jeep with this random stranger and go off in the savanna and look at lions.' I mean, is that allowed or?

Scott Marshall 51:24
It's a combination of all that? So? I would say, first of all, yes, they can choose what we call it field program after they finished that requirement. Right. So they can buy another program from us and beyond that program. And for all the parents out there, this is something we that we designed in partnership with a tour operator, right? So it can feel better to a parent to send their to insist that their young adults participate in those. And yes, if they opt out of doing a field program, they can design their own activity. There are some constraints on it, there are what we call prohibited activities, right? There are things that we say you are not allowed to do this example, they are not allowed to go, they're not allowed to rent motor vehicles. That's prohibited. Okay, simple, simple story there is there is no insurance coverage. We are we have standard insurance, travel insurance that students purchase, but it's not covered. So if a student decides against our prohibition, to rent a moped, and they get in an accident, guess what, that's not the parent, that's on the student. There's no company. So we are very clear on those prohibited activities. Beyond that, they do design our own experience. And that's part of the power of this, of study abroad. We want students to be able to do this more independent confidence building activity. Because at the end of that, they do come away as transformed individuals with a whole nother level of confidence in themselves to be able to navigate uncertain situations. Right, life's full of uncertainty.

Brad Baldridge 53:18
Absolutely. And I think that, you know, and again, as a parent, letting go and letting them know, take charge is a challenge for many parents. But if you remember back when you know, you were 18, or 19, or 20, and you were just ready to go do it, and you didn't have quite the concerns that most parents do. And of course, parents are saying, exactly, that's why we have to, and it's like, no, you don't, most of the time, things will turn out just fine. Or they'll learn something or both. Alright, so then what kind of budget would be reasonable to think about, as far as you know, if we're going into ports and buying extra tours and that kind of stuff? You know, is that a couple $100 here and there or is that 1000s of dollars?

Scott Marshall 54:13
True, truly does vary widely on how people want to approach it and their own resources. So we've had people spend as you know, $1,000, outside of the program to because they they don't have the resources or they like to be frugal and have minimalist approaches, they have six friends and they hire a driver together and they keep it low. And we've had those with more resources by all the field programs, all overnight, and I've spent many, many 1000s of dollars on this. So it really does depend on how someone wants to approach it.

Brad Baldridge 55:01
Right? So it sounds like maybe you put a little effort into having a couple of reasonable cost options on the list where it might only be a few $100 instead of every choice is $1,500 times 10 ports. You know, that's another 15,000, where...

Scott Marshall 55:17
Exactly, you've nailed it, Brad. So people can do a couple, there's always a couple programs that are less than $100. They're fairly simplistic, they get you into a city, they get you into the cuisine, or dance or something, right, just six hours, kind of immerse yourself in this environment, get familiar with it, explore something kind of cool about the city, all the way to much more expensive. Like you said, if we're selling safaris, and these overnight experiences, when we visit India, people will go on a multi-day experience and includes the Taj Mahal and other major sites, and that could be 1000s of dollars, or I can't remember I should be careful $1,500 or something for that, for that experience. So it will really vary. And people will have choice, right, we want to make sure they have choice. Sometimes people are like, you know, 'For this port. I'm just gonna stay in the city and get an Airbnb with some people and relax.' Right. And actually, the family when we sailed in spring of '17, we did that in a couple of ports. We're like, you know, 'We just want to show up. We'll explore the area by foot or by taxi, but we're going to keep it really simple.' Other places, we did major field programs and other places we really adventurous. So you have that ability, right to make a choice.

Brad Baldridge 56:48
All right. Well, great. Well, it's been a great learning experience for me. I've had obviously, I had a lot of questions, and I can see the value in it. Can you speak to a little bit more you mentioned, you studied abroad, I studied abroad, we found it to be a great experience. You mentioned a lot of alumni come out of it saying it's it was a great experience. Is there, do you think it was certain people gravitate to this type of thing? And therefore they're likely to enjoy it? Or is it kind of the other way around? Where anybody that's just gets over the fear of it is going to benefit from it?

Scott Marshall 57:26
It's a great question. And I don't know if I know the answer perfectly. So if I could give you example of two alum.

Brad Baldridge 57:35
Alright? Yeah. Well, let me let me tell you why I'm asking the question, right. As a parent, if my student says, I don't think I'm interested, are we done? Should we just say, well, if they're not interested, we're not going to, you know, we're not going to push them into it? Or, you know, how do I engage if it's a good fit? You know, again, because there is times when you push your student into something, you know, gymnastics, or baseball or whatever, when they were seven or 10, or 12. And you realize that that was a disaster. Maybe I wanted to do it a lot more than they wanted to do it. And that's very clear, and it ended poorly. Yeah, what, you know, where have you seen things end poorly? I mean, I don't know this for certain, but I'm guessing occasionally a student flies home. And, you know, we're done now. And whether it's medical emergencies or family emergencies at home, or, you know, how do we avoid the...

Scott Marshall 58:36
Yeah, that can happen that stuff, for sure. And it's gonna happen, semesters, even happen and study abroad. It can also happen on an average campus. All right. It happens every week. Like, oh, that was mistake. They just spent a semester studying two courses that were worthless to them. And yet, right, so and this is like, where we make choices. We're like, 'Huh, that wasn't the right one.' So that happens, what I would... So I have two kids as well. And what I would say to them is, you at some point in your life, will reflect on this and know how important to you, whether it's in the moment, or six months, or two years or five years later, you will reflect back on that experience and say, that really was important to me, that was really important experience whether it changed my major, or it changed how I think about the world. Or I found great new friends that are dear and will be friends for life, whatever it could be. It could be all of those things. Because it's such a step out of normal life. It has the greatest potential to impact people in really important ways. It's only when we step out of normal life and take a small risk. And it's a relatively small risk, actually.

Brad Baldridge 1:00:04
Yes. Right, right. Yeah, that's right. I mean, that's defined risk. Are we talking about, you know, something terrible happens that we regret it? Or we tried it, and we didn't like it. Those are two completely different risks, right? Just like taking your summer job, right? I don't think I'm gonna like this job. I'll take it anyway, and see how it goes. Oh, I was right. I didn't like it. That's one thing versus 'Well, I ended up in prison because I took this job. That's a different type of risk.' Right? So

Scott Marshall 1:00:34
Oh, yeah, exactly. Deciding to, I'm gonna go up Mount Everest, where, what is it? Like, a third of the people die?

Brad Baldridge 1:00:42
Right, exactly.

Scott Marshall 1:00:43
That's like a known risk, like, wow. But going on a study abroad, the known risk is this is going to be uncomfortable, I'm going to meet new people, I'm going to be challenged in my comfort zone. Right? Those are the real risks that are known. And those are really important risks to take in life, to launch someone into true adulthood into their career into the personal life. In my view, now, I'm biased because I study abroad, you studied abroad, but for those who didn't study abroad, I would, I think they probably had enough experience now in life to not yes, actually taking a small risk like this will be tremendously valuable to my kids, they will not look back on that and regret it.

Brad Baldridge 1:01:29
Right. But getting back to the, you know, another analogy, right? Boarding school of some sort, right, where my kid is running with the wrong crowd and doing the wrong things. And he's about to fail out of college, and he just needs a change of venue. So I'm gonna force him to go on your ship, as a 'Get straight now kid and get away from your friends and go make new friends.' And, you know, that would be the extreme, of course, but you understand what I'm saying is, there's different reasons, you're not necessarily equipped to be the bootcamp kind of place. So. So they have to want to do it to some level, where if they, you know, decide that well, I'm just not getting off the ship. I'll show him.

Scott Marshall 1:02:15
Yeah. You know, going back to one of the early questions was what motivates people to do something like this? Is it because they're inclined ahead of time? Or is it? This was just a big step. And they decided, what the heck, right? I mean, what, what is that initial inclination, I would go straight two alongs, who are almost polar opposite of the next. One works in Seattle, works at the Bill and Melinda Gates Foundation at the Gates Foundation. And she was a first gen student. So clearly her not only did her parents not stay abroad, they didn't go to higher ed. And she just said, 'I have to do something different. I want to step out, I want to see something.' And when Semester at Sea was somehow presented to her, she didn't know anybody. She hadn't traveled internationally. She took the job. And I met with her about a year and a half ago. And she says, to this day, after 20 years, Semester at Sea experience convinced her that she needed to be involved in something that she believed everyday she was making a difference. Like, that's right. So her pre-inclination was not, oh, 'I gotta study abroad.' It was just, I want to do something different. I gotta step out. And this was what was presented to her and she took the job. And I, again, I talked to a lot of alumni. And I talked to someone not too long ago, she sailed about five years ago, and her aunt and her mother sailed. And so it was just this thing for her that she'd grown up, knowing she was going to do

Brad Baldridge 1:04:11
Right. Yeah. Right, exactly.

Scott Marshall 1:04:13
Very different, very different environments. And we have all of that, like, what pre-inclines someone to do something like this.

Brad Baldridge 1:04:21
Right? Yeah, exactly. And that's good, again, that these questions arise from, where I consult with a lot of families and will have that situation where, you know, one student is, you know, very outgoing and out of their shell and looking for adventure and the next student is 'No, no, I really want to kind of study close to home' and sometimes parents are like, 'Well, you know, you got to push them out of the nest a little somehow, and get them to get out in the world and who knows, they might actually like it if they're willing to try it,' but for whatever reason, we can't you know, get that going and if that was me a little bit around study abroad where I was a little bit quiet and got the chance to go out and go to London where nobody knew me. And then because nobody knew me, I could be whoever I wanted, and just kind of restart, so to speak, make friends.

Scott Marshall 1:05:16
And what a valuable experience. That's tremendous for young adult. Right, absolutely tremendous.

Brad Baldridge 1:05:22
Now, do you see a lot of people that you mentioned, like an aunt and that so you got a lot of repeat customers and generational customers and that kind of stuff. But you also see people that, a lot of people obviously are taking a leap, and they're coming all by themselves, so to speak, whether it's, they knew someone that did it, but they're not there. Now, they got a great recommendation two years ago, or whatever. But do people show up in pairs? And, you know, friends and that kind of stuff? Where say, 'Hey, let's do this together?' Maybe they're college buddies or whatever?

Scott Marshall 1:05:56
Yeah, we see that quite a fair amount. Absolutely. You know, best friends get on the share tab. And we see both we see people who don't know a soul when they get on board. And we see people who come with their college roommate or their best friend from high school. We see all that.

Brad Baldridge 1:06:14
Okay. Yeah. Well, good. I think we've talked quite a long time here. So this is probably one of my longer podcasts. But again, it's something I found interesting. So I have lots of questions. I really appreciate you spending all this time. If people want to learn more, I can you tell us, you know what the process would be of, obviously, we can go to your website, if we wanted to talk with somebody, how does this process work?

Scott Marshall 1:06:39
We're super easy to find semesteratsea.org. Super easy, right Semester at Sea, you enter it in, you'll find this. And we also have what we call regional directors. So we basically have recruiters who operate within regions, and you can find this on your website, depending on where young adult is going to school, can find the regional recruiter and immediately contact him say, 'Hey, I'm thinking about this,' that regional recruiter will be back in touch, whatever questions you might have timing when this makes sense, of course, is the voyage iteneraries, all kinds of advice. And then, again, just like universities, the application process is really straightforward, and so forth. So we have that all set up to make sure it's a relatively easy process for you to get engaged.

Brad Baldridge 1:07:32
Right. So it's currently may this may not go live till say July? I'm not exactly sure when but sometime in the future? What is the timeframe for making the decision? Like, if I'm gonna get on a reasonable timeframe? And if I wanted to do this, in 2023, is it? You know, when should I be working hard now to get it, try be working six months in advance to when we depart, or a year and a half and advance to when we depart?

Scott Marshall 1:08:01
Yeah, so there's still is a possibility, right? Contact us talk to us. You know, there's a lot of there's work to do to get it done. But it's been done within that small range. But then really look at Spring '23 and Fall '23. You know, plan out. For sure. Again, July, you know the months, then you got August and September before we start that voyage, so it's pretty limited. But again, we've done it. Beyond that, start looking to the January voyage, Spring 2023. And then Fall 2023 and beyond. Those voyages are up on our website, you can see iteneraries. All of them are super, super cool. I wish I could just retire and go on these voyages. I have an office job.

Brad Baldridge 1:08:52
Yes, exactly. All right. Well, I do appreciate it. And we're gonna put all this information in the show notes as well. And you know, let's stay in touch.

Scott Marshall 1:09:01
Thanks, Brad. I really appreciate it. Have a good one!

Brad Baldridge 1:09:04
All right. That was a great interview with Scott. I learned a ton about Semester at Sea. And I wish I was young again. So I had the opportunity to look into something like this again. I really did enjoy my London trip when I did that many moons ago. Next we have a Brad Recommends I'm going to talk a little bit about some of our free resources. So stick around.

Presenter 1:09:25
The latest tips, tricks, and tools you can use today. This is Brad Recommends on Taming the High Cost of College.

Brad Baldridge 1:09:34
Today I'm recommending some of the free resources we have on our website. If you go to tamingthehighcostofcollege.com We've got a number of free resources that families can use as you're planning and trying to understand how to pay for college. We've got the Scholarship Guide for Busy Parents. This is a program it's a four video series that helps families understand how scholarships work again, we'll get into those scholarships from the colleges themselves as well as outside scholarships. For some families, scholarships is a great strategy. And for other families, some of the scholarships may be a complete waste of time because you're not going to win. Well, The Scholarship Guide helps get you up to speed to figure out what strategy is going to work well for your family. Whether it's working really hard at scholarships, or just taking the scholarships at the college you're attending, or something in between. The second item there is what I call the Cost of Colleges by Income. We have a state chart for each state that shows each of the colleges and what they cost based on a family's income. Again, this is average cost for a particular group. So let's say the average cost is $35,000 at a $65,000 school, for a certain income. Of course, what does that mean? Well, that helps you understand that there are scholarships and other free money available, because this chart shows what the net cost after scholarships and other free money is out there. So it's useful if you're just starting the process, because it can give you an idea of what college might actually cost, because the sticker price isn't necessarily that indicative of what it really costs. If you're further in the process, then you can kind of compare your results with the chart and see if you're in the ballpark of what other people have seen. That's a great resource. And then finally, if you want to delve a little deeper into your specific situation, we've got the Free College Money Report. If you sign up for this, you can essentially put in some of your information when your students are graduating and starting college, and the colleges you're interested in and some of your academic and financial information. And it will help figure out what scholarships are available and give you a estimate of the cost for each college. Again, based more specifically on your specific family situation. So that's also a great resource for people that are starting to shop for colleges and trying to figure out what the real cost might be based on scholarships and other resources. Again, all of these are at tamingthehighcostofcollege.com. And you can click on the 'Resources' tab or if you go to Scholarship Guide it would be at tamingthehighcostofcollege.com/scholarships. Alright, that's all we have for today. I really appreciate you listening. We'll continue to put out new episodes. So we'll see you again next week. I would appreciate it if you wanted to reach out or if you had any questions you can send us an email, but also give us some ratings and reviews wherever you're getting your podcast. It helps us get found by other parents. That's all we have for today. We'll see you next week.

Presenter 1:12:45
Thank you for listening to the Taming the High Cost of College podcast. Now it's time for you to take action. Head to tamingthehighcostofcollege.com for show notes, bonus content, and to leave feedback for Brad. The next step on your college journey starts now. Brad Baldridge is a registered representative of Cambridge investment research and an investment advisor representative of Cambridge Investment Research Advisors, a registered investment advisor. Securities are offered through Cambridge Investment Research Incorporated, a broker dealer and member of FINRA and SIPC, Brad owns two companies, Baldridge Wealth Management and Baldridge College Solutions. The Baldridge companies are not affiliated with Cambridge Investment Research.

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The post THCC Episode 164 – Semester at Sea  appeared first on Taming The High Cost of College.

Today’s Guest:

Casey Barneson, author of The College Wellness Guide  

Casey Barneson is the college counselor at Beverly Hills High School, a public high school in Beverly Hills, California, and along with the staff of Princeton Review, she is the author of The College Wellness Guide: A student’s guide to managing mental, physical, and social health on campus.  

Casey is a California-based college counselor with a 10-year career in advising students about college admissions, attendance, and career development. She actively helps students navigate college and career choices through her website, Barneson Counseling. 

Questions Answered Today:

What problems do college and college-bound students often face?  

Preparing for college is one of the milestones that students face at an early age, so it’s inevitable that they feel overwhelmed and anxious as they make college-related decisions.  

In fact, according to a recent study by the Association for University and College Counseling Center Directors, the biggest concern among students seeking help at their college campuses is anxiety. Other problems include:  

• Depression  
• Family concerns  
• Relationship problems  
• Academic performance  

If students aren’t able to get help or don’t know how to handle these sources of stress, these problems could later cause serious detriment to their physical health, mental health, and social health.  

Physical health entails the body being in good condition. In order to maintain physical health, students need good sleep, exercise, and a healthy diet. There are students who may be in good health and don’t require special care, but there could also be those that need stricter health maintenance because of chronic conditions such as diabetes, ADHD, etc.  

Mental health deals with the student’s emotional well-being. Navigating a new world could be hard and a lot to handle, so students need to manage these stressors (e.g. academic pressure and finances in college, thinking about their careers, etc.) and remain healthy and competitive at the same time.  

Social health focuses on the student’s healthy and fruitful interpersonal relationships. At such a stressful time, it’s imperative that they feel supported by and connected with like-minded communities. Rather than being stuck and scared alone, it would be great if the student can interact with people with whom they can relate, or people who could give them the support they need.  

How do self-awareness and self-assessment fit in navigating college?  

As students make big college-related decisions at such a young age, there are small things they often overlook, but they can turn out to be very important. Therefore, it is very important that they become aware of what they’re lacking and be proactive in addressing these.  

Some small but very important things to know include:  

• What to do when you’re having trouble sleeping  
• How to stay healthy when studying late 
• How to keep eating healthy on campus (e.g. knowing the place that serves healthy food, knowing where to get healthy food at odd hours)  
• Staying hydrated at all times 
• Maximizing rest for light sleepers 
• Doing their laundry (Note: This is very small, but believe it or not, there are students who have never done laundry) 
• What to do when feeling homesick 

Ask yourself: can my student readily do these things?   

If they can’t, what can they do to start learning about these things?  

What are the college services that can help students manage their overall health?  

Colleges these days are way different than they used to be—but for the better. They now offer better facilities and more student services. Hence, it’s important that parents are aware of them in order to maximize their use. Available help includes:  

• Alumni and career centers  
• Mental health centers 
• Exercise facilities  
• Tutoring services  
• Resume services  
• And more  

“When a student graduates college, theoretically they should be ready to take on that job or grad school or med school or law school, and they should be in a space to do it in a way that’s going to be happy and healthy, that will reflect in a positive way on the university and our students.” – Casey Barneson 

What do you recommend to parents of college-bound students?  

1. A huge part of your college preparations should go into ensuring that your student goes to a place where they will feel:  

• Safe 
• Happy  
• Challenged  
• Successful  
• Happy to grow  

One big university could be fit for one student, but not for the other. That student may thrive instead in a small liberal arts school. As we’ve discussed in many previous episodes, the idea of the good-fit school is not one-size-fits-all.  

2. Encourage your student to be open to possibilities rather than the idea that there’s only one great school.  

Students—especially the competitive ones—will often be glued to aiming for one school. This often results in disappointment as the school they’re eyeing will probably only have about a 12% to 14% acceptance rate.  

To avoid this, parents should be actively involved in encouraging the exploration of a wide array of potential colleges. Parents can arrange tours or vacations that would allow the student to be more open and see the college search in a different light. College tours should involve all types of colleges, including:  

• Local colleges  
• Small and big universities  
• Public and private schools  
• Colleges in the city and suburbs  
• Etc.  

“There’s no sense in going to one of the top-ranked universities in the world or a program if you’re so anxious, so stressed, it’s not a good fit, and it’s not a good campus environment that’s conducive to your learning style.” – Casey Barneson 

3. Help your student understand that rejections happen. Careers and life pathways aren’t always a straight line, so it’s important that the student is in an environment where they can “fail forward,” meet challenges and roadblocks, and rise above them.  

4. Be involved in a parent community. Letting go of your student can be harder than you expect it to be. It can be great to turn to friends, peers, or parents of other students to connect with and support each other.  

5. Remind your student that high school is a wonderful opportunity to try new things and take great opportunities to learn and prepare for what’s ahead of them. Encourage your student to:  

• Join new classes 
• Join clubs  
• Join school activities 

If none of these are of their interest, that’s fine. Let them explore and do what they’re passionate about. Every student is unique, and their strengths should be celebrated. After all, your goal is to present them with opportunities rather than limit them.  

How can The College Wellness Guide help my student deal with problems as they navigate their college life?  

Casey’s book, The College Wellness Guide, provides tools and activities to help students solve problems that may arise as they navigate their college life. Here are some items to expect: 

• As the student begins to read the book, they will encounter a short questionnaire that self-surveys their physical, mental, and social health.  

• There are exercises, tasks, assessments, and other activities that would help them create goals and hone in on the idea of navigating college.  

• When a new chapter begins, there are usually 3 scenario vignettes that help students visualize how to deal with their physical, mental, and social health. Relating and resonating with these scenarios ultimately help the student once they face their own battles. 

• There are also action items that would aid students to self-reflect and help improve their problem-solving skills.  
• And more!  

The book would be a great guide for college and college-bound students, but it could also be a great guide for parents and counselors in the college space.  

Links and Resources

Helpful Articles and Resources 

• Taming The High Cost Of College 
• The College Wellness Guide: A student’s guide to managing mental, physical, and social health on campus 
• Casey Barneson’s Contact Info:   
• Website  
• Instagram 

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Brad Baldridge 0:00
This episode is all about managing mental, physical and social health. Stay tuned.

Presenter 0:06
You have kids, they grow up, and before you know it, it's time to plan for college. Where do you start? How much is it going to cost? Will you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? The list of questions is never ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College podcast. Here is your host, certified financial planner, Brad Baldridge.

Brad Baldridge 0:36
Hello, and welcome to Taming the High Cost of College. I'm your host Brad Baldridge. Today we have an interview with Casey Barneson. She is the author of The College Wellness Guide: A Student's Guide to Managing Mental, Physical, and Social Health on Campus. And we're going to talk a little bit about what the book is about and talk about managing mental, physical and social health. There's a big push going on and lots more understanding about the whole process of managing health at school. And I think this book is a great tool for families to start understanding all the various aspects that they might need to deal with. As always, we have show notes available as well as links to the book on our website at tamingthehighcostofcollege.com. Let's go ahead and jump into the interview. Today we're talking with Casey Barneson. She's the author of The College Wellness Guide. And she's also a school counselor and college counselor in Beverly Hills. Welcome, Casey.

Casey Barneson 1:36
Hi, Brad, thank you so much for having me.

Brad Baldridge 1:39
All right. So obviously, you're wrote a book around college wellness. And can you tell us a little bit about your story and why you got involved in writing this book and kind of the backstory so to speak?

Casey Barneson 1:52
Yeah, absolutely. So I've been in the school space working as a school counselor and a college counselor for the past 10 years. And I've worked mostly in the public school system, with students preparing for the college admission process. And then connecting and traveling and seeing alumni at college campuses all over the world, which is a really exciting industry to be in but you very much as you might be aware of, it can be a little bit stressful for students and for families, just navigating that entire space and preparing. So I've worked with students, grades 9 through 12, and then seen our alumni flourish and go on after graduation. So in the number of years that I've worked, it's been really fun for me, and also really interesting for me to see the dynamics of students and families preparing for college. And then ultimately, what defines success once they get to college. And that's something that always is, is a component to me that I find really fascinating and really important, as counselors preparing our students to be successful when they when they graduate. So the book was really born during the pandemic, but very born, it was born with this idea that our students are researching and looking at colleges and applying to colleges. You know, for reasons such as that it's a top major, it's a great program, and it's a phenomenal institution. But really making this large life decision on factors that can be very anxious or, or just external, externally focused and driven. And my goal was to help students take a step back and really think about the types of institutions that would be really good fits for them. So that when they get to that phenomenal institution, they're supported and ideally in a safe space to where they can be challenged to take risks and create new experiences, but also feel supported. So I started out and I do work at a school so you might hear the bell ringing in the background. So I started kind of researching this topic, and I was fortunate enough to work with Rob Franek, the editor in chief with Princeton Review, in collaborating and coming up with this idea to publish this book, The College Wellness Guide, A Guide to Managing Mental, Physical, and Social Health on Campus.

Brad Baldridge 4:27
Right. So let's talk a little bit more about that then. So obviously, you just mentioned mental, physical and social health. I think most of us understand physical health, right? Getting enough sleep and all that type of thing. And if we're, and obviously some students are very healthy and don't deal much with health issues, the whole college process, because they're young adults, but occasionally, you know, quite often someone will go with an ongoing chronic condition, diabetes or ADHD or where maybe they're already needing to participate in seeing doctors and having prescriptions and that kind of thing. But then you also mentioned mental and social health

Casey Barneson 5:08
Yeah

Brad Baldridge 5:08
Can you expand on those two ideas a little bit more, I think those might be a little unique and new for parents.

Casey Barneson 5:16
Sure, absolutely. You know, mental health is not necessarily a buzzword, but mental health and, and it's awareness is becoming more and more prevalent. And that's incredibly wonderful for our students. And it's great that we're having these conversations and providing resources, but there also is this larger component of wellness. So in discussing what topics to implement in the book, or what topics to bring to the forefront of students and parents, the umbrella wellness really spoke loud, was really the appropriate fit for mental health for physical and social health. Because really, we're talking about our students going on and living essentially four years on a college campus. And with that, you will run across needs for self care and getting sleep and healthy exercise and diets and creating communities and social communities with like minded individuals. So our kids feel connected and supported, but also being a part of healthy conversations with students who aren't within like minded communities. So and then even navigating, ultimately, they're going to head off to careers. So handling finance and career and the stress of a schedule-building strategies to implement a weekly schedule that gets ebbs and flows throughout the semester. So as they get towards finals, and are needing to manage cramming in for study sessions, but you still need to sleep. And then you still are wanting to be a part of a social network that you feel connected to, so that you're not stuck in your dorm room, feeling this weight and not being able to get out and participate in the larger community. And that's really what we navigate as adults in life is all of these wellness spaces. So it's really starting that conversation with our students while they're in this pivotal time in college.

Brad Baldridge 7:12
Right? Absolutely. So can you tell us a little bit more about, like, who should be reading the book? And is it full of like strategies and tactics or research or what? What would we find if we actually read the book?

Casey Barneson 7:27
Yeah, absolutely. The book is really cool, because it has assessments at the beginning, essentially a very short questionnaire within the different units, mental, physical and social health, where students can go through and respond to some statements and get a self survey of which sections would be more helpful to them. Within each of the chapters, there's exercises and little fill in the blanks that help students create goals or complete tasks just to help them hone in on the idea. The book itself, I would say students who are in college can really utilize that they're having the experience, they can walk through the assessments, they can do this in real time. However, I would say that students preparing for the college process, it can be a phenomenal resource in helping them not only assess the different areas that might be important to them, but also help them figure out what types of colleges in their college search, what types of schools will fit their needs. So if a student is finding that they need more support within counseling services, for example, in the mental health unit, they might then in their college research, find a few institutions that do a really phenomenal job or prioritize meditation, meditation spaces or counseling services, or you know what not so, student-driven book. And of course, with all of our students, student driven books, it's helpful for parents to pick it up and read because I think it's a really good perspective to get a window into what students are experiencing. At the beginning of the chapters, there are three kind of scenario vignettes, that help paint a picture of a student who might be dealing with a mental physical or social health component, whether that's lack of sleep, or anxiety or depression. So kind of helps set a framework for really, students, parents, counselors in the college space.

Brad Baldridge 9:33
Okay, so I guess as a parent, sometimes it's we feel like things are just going fine. And then we get that call, eight weeks into the semester with a student that's maybe struggling in a class or two or all the classes are, needing to come home or wanting to come home and sometimes it's, they're just homesick and sometimes it's truly an issue that you know, they need some help, or it might be an actual emergency. How do parents understand those different options and how things kind of fit together? Especially parents that maybe didn't go to college or went to college a long time ago when we didn't really talk about most of this stuff?

Casey Barneson 10:21
Yeah, absolutely. There's healthy amounts of stress and anxiety that a student and adults and us as individuals will face on a day to day basis. But it's a matter of when and how much is too much. And helping students identify the tools to be able to ask and know if their stress or anxiety is something beyond what they can control. So part of us preparing our students to go to college is empowering them to know the resources. So similar, if they're in high school, and they're having an issue with their teacher, they're having trouble with a friend. And, you know, as an on some level parents, we will interject, but there is a moment where we instill these tools to help our students advocate for themselves, which ultimately will provide them with more confidence, maturity, and growth and resilience. So that when they deal with those bigger items, you know, later on in life, they feel comfortable and confident. I don't know if I mentioned this before, it may be worth mentioning. But a recent survey of over 500 colleges and universities, was done by the Association for University and College Counseling Center Directors. And they found that anxiety is the biggest concern among students seeking services at college campuses, followed by depression, family concerns, relationship problems, and academic performance. Our students are navigating life at college. So with that, of course, we will see mental health challenges, but that doesn't necessarily mean that it is an ongoing counseling or a crisis per se. It can simply mean helping our students figure out if they've stacked too much on their schedule, and they're feeling a lot of anxiety, is there a counselor? Is there a tutoring center or an advisor that can help them pull back and feel comfortable managing their workload and their work life balance?

Brad Baldridge 12:18
Right? Absolutely. Yeah, I think with the pandemic, a lot of people got stressed out at various levels from high school and grade school students, and certainly college students all the way through, our parents and grandparents have, there's just a sudden and overwhelming change for many. So I think it brought a lot of things to the forefront. And some of this stuff is not new, I think it may be it was ramped up a bit during the pandemic, but I think it's also maybe been growing in society in general. I mean. Right? It seems like when I went to college, part of the solution was less people went to college. So they didn't have the support for people that needed support in certain ways. So they just didn't learn a lot. No, they didn't come because they knew they weren't gonna get supported, they knew they, they wouldn't be successful. Today, I think a lot more campuses are welcoming a broader variety of students, whether it's physical disabilities, mental support, physical support, all the different areas where they're trying to get more diversity and be more inclusive. And so that's one piece of it, where they're more people are coming with diabetes, and they have to figure out how to get insulin without parents around, that might have kept the student home and 40 years ago.

Casey Barneson 13:39
Yeah, absolutely. I think the conversation is definitely, you know, the doors are open for conversation, and certainly the pandemic and global events are propelling those conversations. But as you mentioned, when you look back through generations there, significant events, and anxiety and stress, and all these have been prevalent, but I think the conversation is at the forefront, and certainly, universities and institutions are investing their time and money into building wellness programs and support programs for students. Because, again, when our students graduate from these institutions, what do we want, we want successful, healthy, happy alumni, right? So when a student graduates college, theoretically, they should be ready to take on that job or grad school or med school or law school and be in a space to do it in a way that's going to be happy and healthy, that will reflect in a positive way on the university and our students. You know, there's no sense in going to one of the top ranked university in the world or program and you know, if you're so anxious, they're so stressed or it's not a good fit. And it's not a good campus environment that's conducive to your learning style, for example. It doesn't matter where you are. So there has to be that framework. Similarly, if you were to move as an adult and buy a home in a neighborhood, you're probably going to research, the local schools, look at parks, look at safety, you're looking at all these components to see if it's a good house for your family to move in and a good foundation. And that's very similar to when we approach the college process with our students.

Brad Baldridge 15:25
Right? Absolutely. So I'm looking in the book. And there's a number of different self assessments out there, you know, primarily targeted to the student.

Casey Barneson 15:36
Yes.

Brad Baldridge 15:37
And there are things around like study support, and self care and community and campus. And, you know, again, some questions that, that you might ask them, that kind of stuff. So once we take this assessment, and then switch to the finance section, or the career section, or whatever, are there solutions there or ideas there or what, you know, first we take an assessment, and it says, oh, you know, maybe the campus survey that I just took pointed out a couple of concerns. So then I flipped into the book, and then what, what am I going to find, once I move to the campus section, the problems I just discovered, or?

Casey Barneson 16:19
We're going to exacerbate the problems now, I'm kidding. The, yeah, the assessments are helpful starting point. And, and, in the intro, we remind students, you can jump around the book is really meant to be picked up, you can take the assessments, or you can simply jump around as your needs change. But if I'm a student, and let's say, I'm feeling particularly anxious about my career options, for example, let's say, you know, these are kind of the extra sections that we threw in there. What's helpful is, as students are reading this, they can identify, first and foremost, those are those kind of vignettes at the beginning, they can identify similar experiences that other students are going in. And what's helpful about that is that they can be reminded that they're not alone in facing some of these challenges. And then there are active tools, activities, little fill in the blanks, and then quotes from students who are in college currently that they can relate to. So for example, in the career section, at the beginning of the chapter, it's 'write down all your classes, extracurriculars, activities, and jobs from a semester of your choice and find the link between those activities and the connection between the career that you're beginning to think about.' And then there's some action items. So there's a section on resume service, so or what's one thing that you can do to help move forward in your career search, for example, is that attending the college for this, or I'm sorry, the career fair that's happening on campus? Is that attending a lecture series, so the part of the solution is not as providing solution for the students, but providing activities and tools that help a student implement, and find that solution for themselves. So whether that's if they're having trouble sleeping, or they're realizing they're staying up too late studying and not eating as healthy? Is there a map that they can draw where they know where the healthy foods are nearest to their dorm? And there's tools for strategies? If I'm in the library, and it's late, and everything's closed, and I don't have access to food? Did I have something that I could prepare before I got to the library? Am I having a water bottle with me at all, all times? You know, they seem simple, and they seem small. But these are all daily habits, daily wellness habits that really when you're piling on finals, and you're far from home, and you're meeting your peers for the first time and trying to build a community, lack of sleep, and food and all those all those things can really steamroll.

Brad Baldridge 19:01
Right? Absolutely. And I think as a parent, we see this as you were raising our kids, where sometimes kids will, you know, ignore a problem or just live with a problem or whatever it might be until you start coaching them through it a little bit sometimes, like, 'You're late for school four times this week. Why is that?' Well, whatever, right? It's like, well, you know, do you think we should change it? Yes. Well, what have you done to change it? Nothing?

Casey Barneson 19:33
Yeah, and that's it, the one word answer, nothing. Fine.

Brad Baldridge 19:39
But, you know, eventually we send our children off to school, and hopefully they can start doing some self assessment and self awareness and because mom and dad aren't necessarily going to be there to ask the question. So I think that's some of what's in this book would be good for parents to kind of learn about is a number of different issues that going off to college demonstrates. One is, colleges are big places with lots of services and stuff to do and all kinds of things. And but you got to spend the time and effort to explore what's available and take advantage of it. A lot of times you've are paying for it. So you should take advantage of it. You know, alumni, career centers and mental health centers and exercise facilities.

Casey Barneson 20:26
Gym facilities

Brad Baldridge 20:27
Tutoring services, resume, so, just the list goes on and on. There were a lot of people in my generation as we're starting to think about it going well. Wow, I wonder if that was there when I was there? Because I didn't even think to look. And

Casey Barneson 20:41
Yeah, absolutely.

Brad Baldridge 20:43
Then there's other issues around well, knowing and understanding well, what's going to work for me, if I, you know, I have a one of my kids is a lighter sleeper and has to work and sleeping. I can't really relate to that. If I want to sleep I close my eyes go to sleep.

Casey Barneson 20:59
Yeah, yeah, you bring up a good point to parent, you know, with each child, there's different needs, there's different interests, there's different needs, and colleges are very much set up in that way to one a large university may be perfect for one student, while a small liberal arts will be phenomenal for the other child. And so it's, you know, each each student's unique and as a parent, you see, you see the differences with your kids, and not to say that you're sending them off, and here you go, just go to the counseling center if you need help, because students may need a little encouragement and being proactive about opening this conversation of what what colleges have. And, and then also, I think it's helpful for parents when you have a sense of a parent community, you know, because when your kids are off, and you've created a boundary, perhaps not to call every single day, you know, or maybe every hour of the day, that can be hard as a parent to then just relinquish, send your child off to college, especially it's your student, you're invested in all, you know, it's your child. So I think having a parent community, similar friends, or peers, parents with students on that campus, so that you you feel you have a voice in this as well.

Brad Baldridge 22:20
Right? Exactly. So a lot of my listeners are going to be parents have high school kids that are just exploring, somewhere in the college process, you know, maybe they've got a senior and they're wrapping things up, or maybe they got a sophomore or even younger, and they're just getting into the process. So what are some things that you feel family should be doing? Maybe even in high school, I always use, or not always, but I bring up the example sometimes, I had a college roommate that didn't really understand how to do laundry, and he literally put folded all his clothes wet and put it in a drawer and said, 'Oh, they'll probably dry.' We had to tease pretty hard to get them to take it out and put it the dryer. But teasing didn't sue for sure. And that, you know, so obviously, what's the moral of that story? Well, maybe your student needs to learn how laundry works, before you send them off, because they may be in charge of it someday. But there's other things, and so what do you see, as a school counselor today? Obviously, you're in high school dealing with high school kids, so here's your chance to talk to a bunch of parents and say, well think about these things are here's some ideas, or what are you recommending these days?

Casey Barneson 23:40
Yeah, I love it. First and foremost, you know, there are 1000s of colleges and universities nationwide, not including international universities, with a myriad of programs academically, but also with all of the services that are discussed in the book, support services, but even just the campus environment, and they can differ so broadly. And so a huge component of the college prep process in getting our students to a place where they can feel safe, happy challenge, successful ready to grow, is the college research piece researching the college list and where a student ideally should be applying. And that conversation can start very well early on in high school and even really encouraging touring some local colleges, even if it's a university that they end up not applying to, if you're on vacation, or if you're in an area where you're close to a couple universities, one big one small, one public, one private, one in the city, one a little bit suburban or on the outskirts, for example, just helping your kids see the different types of colleges and institutions in a space that's not so, 'Okay. I'm a ninth grader and I want to go to this university and that's my goal. It's all or none thing. So my focus for the next four years is to study hard take all the APs I can to get into this one university.' Because what happens is we're applying to these universities are accepting, essentially, you know, 12, 13, 14% their applicants, you've now instilled a story that there is one a few components where your student can thrive in. And if they don't make it there, well, then that's it, let's pack up, we're done, right. So I think early on helping to tour campuses just get to know colleges in a space. That's not as cutthroat meaning we're not in the thick of the application process. And if you are in the thick of the application process, I would just recommend really building that college list in a strategic way. So looking at the academic components, but also looking at the personal and social components of a college campus, and making sure that list is balanced. So you have at least two or three schools that a student feels confident that they can succeed there and get them excited for it. In high school, our principal always says this, so we really want our students to fail forward, this is a safe space, they will make mistakes, and it's our job to help them find the tools and understand that it's okay to fail, where you can fail forward, it's, you will have challenges, you will have roadblocks, and you will be told no. And a huge component of the college admission process is can be rejection. So as parents really starting that narrative early on that of normalizing the different types of colleges. And, you know, if we think back to even our own careers, and if you asked your friends, the different types of colleges and pathways to where we as adults got our, you know, it's not a straight line, it's all over the place. So remembering that if they don't get into one institution, that's not the end of their road.

Brad Baldridge 27:01
Right, absolutely. I think that's where, again, if you did that survey with parents instead of students and asked, 'Well, how did you get here?' Well, there's a lot of different stories. And if you said, 'Well, would you have done it differently?' You know, a few would say, yes, but many of you people would say, 'Yeah, I went and studied this, and it didn't work out. But I don't know, if I put it in the failure column. But I needed the failure to understand this or that so that I could go on and do this.' You hear that a lot. So absolutely, most pas aren't going to be you know, paved and wonderful and smooth. And, again, we're you know, as parents, we're hoping to minimize the bumps, to some extent. But we also have to remember that bumps are a learning opportunity that, you know, unless you plan on being around your student for the rest of their lives, they're going to have to learn eventually how to self advocate and drive their own life at some point.

Casey Barneson 28:04
Yeah, absolutely. I mean, you know, high school is such a wonderful opportunity to try new classes, join clubs, join activities, if they don't like it, and they want to give it up and try something else. And attending a college fair and touring colleges and really celebrating the, the unique strengths that each student has. We have so many phenomenal institutions, art institutes, again, large public state universities, honors programs, small liberal arts school, like there's so many opportunities for our students to thrive, that our job is to educate them and celebrate them and get them to those options rather than set up a limited amount of options at the end of the road, I guess.

Brad Baldridge 28:52
Right? Absolutely. All right. Well, it was a great learning experience. I appreciate you putting the hard work into actually write a book that's crazy, overwhelming idea to me, but if people want to learn more, how can they find you? Or you have websites or social if they want to get in touch?

Casey Barneson 29:11
Yeah, absolutely. So I can be found on my website barnesoncounseling.com. I have an Instagram @collegecounselorbarneson, and the book can be found really anywhere Amazon, Penguin Random House, on Princeton Review. And then wherever books are sold

Right. So it's called College Wellness Guide. And it's out there in Amazon, for sure. I'm looking at it right now. We do appreciate it and let's stay in touch.

Thank you so much for having me. Thank you.

Brad Baldridge 29:47
All right. That was a great interview with Casey. If you're interested in the book, I would recommend you get out there and pick one up. It is useful for both your student and for parents that are trying to organize things and understand how mental fit physical and social health play a factor in the overall college process. That's all we have for you today. We look forward to talking to you next week.

Presenter 30:12
Thank you for listening to the Taming the High Cost of College podcast. Now it's time for you to take action head to tamingthehighcostofcollege.com for show notes, bonus content and to leave feedback for Brad. The next step on your college journey starts now.

Brad Baldridge is a registered representative of Cambridge Investment Research and an investment advisor representative of Cambridge Investment Research Advisors, a registered investment advisor. Securities are offered through Cambridge Investment Research Incorporated, a broker dealer and member of FINRA and SIPC. Brad owns two companies Baldridge Wealth Management and Baldridge College Solutions. The Baldrige companies are not affiliated with Cambridge Investment Research.

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The post THCC Episode 163 – The College Wellness Guide appeared first on Taming The High Cost of College.

Today’s Guest:

Sydney Montgomery, CEO of S. Montgomery Admissions Consulting 

Sydney Montgomery, CEO of S. Montgomery Admissions Consulting, specializes in helping first-generation and minority college and law school applicants. S. Montgomery Admissions Consulting produces two YouTube channels, two podcasts, and hosts a free Barrier Breakers® Facebook group.  

A graduate of Princeton and Harvard Law, Sydney works to dismantle systemic racism in education, pushing counselors and universities to be culturally competent through published articles, speaking engagements, and the College Equity Index.  

Sydney also empowers women, especially women of faith, to be ambitious in their pursuits of higher education and entrepreneurship that benefit social good. She began consulting in 2012 and left practicing law in 2020 to grow her business full-time.  

Sydney has been awarded the Making a Difference Award (IECA), was named a 2021 Counselor of the Year (PCACAC), named to Kappa Alpha Theta’s 35 Under 35, and was named as one of the 21 Leaders for the 21st Century by Women’s eNews.  

Questions Answered Today:

Do I need to get into a great college for undergrad in order to get into law school?  

Not necessarily. The truth is, the name of the school only helps if you perform well academically. Take this scenario as an example:  

Student A who went to a flagship university got a 4.0 GPA. Student B, who goes to an Ivy League school, got a 2.9. If both of them got a 4.0 GPA, it would’ve worked well in favor of Student B. But since student B is not performing well despite being in a ‘good school’, the name of the school doesn’t help at all.  

Another reason Sydney shared is that pursuing a law degree may cost a lot. If you’re not careful, you might incur too much debt in undergrad resulting in serious financial problems in law school. 

Decide wisely. But if you know you can get good grades in a great college and you can afford it at the same time, why not?  

“High GPA is really important for law school. You want to go to a school where you’re going to succeed.”

— Sydney Montgomery

If there’s ‘pre-med,’ in college, is ‘pre-law’ also a thing?  

Absolutely not! If you want to pursue law, Sydney recommends that you find something you’re passionate about. This is mainly because there are so many different areas/expertise of law to choose from. Studying law is tedious, but picking a subject that you’d have fun exploring will make the experience more meaningful. Look at these examples:  

Sydney has a friend who had a successful dance career for 18 years. She worked for celebrities such as Britney Spears and Beyoncé. Hence, when she decided to pursue law, she picked entertainment law.  

Student A was inclined in the sciences, but he ultimately wanted to become a practicing lawyer. In undergrad, he majored in molecular biology. When he got into law school, he chose to focus on working on scientific patents, and his background in molecular biology helped him a lot.  

Now, while there are no specific recommended majors, Sydney puts huge emphasis on the importance of honing the following skills:  

• Research 
• Writing 
• Critical thinking 
• Analytical thinking 

Hence, you have to be on the lookout for opportunities to sharpen and put these skills to frequent use. Here are some examples:  

• Attending a literature class 
• Attending a class that requires writing and research 
• If you’re a dance major, write a paper on the history of dance, or something similar.  

The idea is to have something on your transcript that translates these critical skills.  

Picking a college for an undergraduate degree seems critical. Are there recommendations on what to look for?  

Although there’s no such thing as ‘pre-law,’ you can still gain an advantage and pick a better college by asking the right questions:  

• How many of your students actually get into law school? 
• Which law schools have your students gone to?  
• Do law schools come and visit and do info sessions here? 
• Do you provide application sessions?  
• What support do you have for alumni (helpful especially if you’re not pursuing law school right away and you’re taking a break)?  
• How do you help you pick law schools? What support do you give those who declare that they’re going to law schools?   
• What schools do you have relationships with? 
• How much help do they offer on the application essays and meetings?

What are the requirements for law school applications?  

Earlier, we emphasized how important your GPA is, so look to follow these requirements: 

• GPA. Try to get at least a 3.5 to 4.0 GPA 
• Recommendation letters. Forming great working relationships with your professors will allow you to secure these letters of recommendation, which will only be possible if you perform well academically.  

• Law School Admission Test (LSAT) or General Grad School Exam (GRE) scores. Most law schools prefer the LSAT, although there are schools that accept both. In order to do well, you must give yourself at least 6 months to prepare.  

Tip: In your senior or junior year in college, take a diagnostic test to measure the probability of passing the LSAT. This helps you identify the help that you need in order to succeed (e.g. signing up for a test prep program for strategies on how to take the test). LSAT Demon is a great resource to check out.  

• Essays. This is probably one of the most important parts of application. Your ability to write critical essays dictates how well you present your narrative as well as how good your research and reasoning abilities are. These are all important skills if you’re pursuing a law degree.  

• Personal and diversity statement. How authentic are you, and what makes you different? Note that very few law schools do interviews, so it’s important that you get to tell your story, tell who you are, by writing these statements.  

• School interviews. Not many law schools do this, so make sure not to waste your chances. There are experts (such as Sydney and her team) who specialize in helping students ace applications and interviews.    

• Resumé. Internships and experiences greatly matter in law school. This allows you to show the impact you made and the impact you’ll make on the kind of law you aspire to practice.  

Resumé especially matters if you’re a returning student and it’s been a while since you’ve been in school.  

Another thing to remember is that most law schools have rolling admissions. This means that the earlier you apply, the more likely you are to secure a spot. The application starts in September and ends in March.  

Once I get into law school, what do I need to know?  

Duration 

• Full-time programs take three years 
• Part-time programs take about four years.  

Types of Law Schools  

• National law schools – Graduating from these schools allow you to practice law anywhere you want (e.g. Harvard Law graduates can practice outside Massachusetts).  
• Regional law schools – Graduates can only practice in specific regions. 

Does this mean that regional law schools are worse than national law schools?  

Absolutely not! These questions may help in deciding:  

• Where do I want to practice law? 
• What are some geographic areas that I would be okay living in? 
• Does this law school cater to my academic needs? Which school has organizations, clinics, and other facilities that would help me maximize my stay?  
• Which would help me get a job and a network that would give me a good head start?  
• Can this school give me scholarship money? Is this affordable for me?  

The Bar Exam  

The bar exam is a two- to three-day (depending on state) extensive exam that law graduates need to pass in order to get a license. The exam’s components usually include:  

• Multiple choice (includes questions from courses taken in your first year in law school) 
• Essay and other written response-type  
• Practical (e.g. writing a memo)  
• State-specific subject (e.g. Maryland has commercial papers and securities) 

The bar exam can be state-by-state or uniform.  

• State-by-state would allow you to practice in one state.  
• The uniform bar exam, which has been adopted by some states, would allow you to practice in multiple states depending on how much you’ve scored.  

Therefore, in order to get ‘multi-barred’ or licensed to practice in multiple states, you may need to take the state-specific bar exam more than once. The bar exam is usually administered in February and July.  

Sydney also mentioned the bar loan, which is basically financial support that test takers can get while preparing for the bar exam.  

The Cost of Law Schools 

The sticker price for most law schools ranges from $50,000 to $90,000 per year. The more expensive ones usually brag about having high passage rates and a more competitive median salary.  

There are some ways to lower the sticker price:  

• About 95% of law schools give merit-based aid, which means that you have to perform excellently in order to qualify (e.g. high GPA, high LSAT) 
• About 80% of law schools grant need-based aid, which depends on your income.  
• Scholarships. Scholarships may be open for negotiation, so make sure to explore what options you may have. Remember that these schools continually aim to increase their rankings. If you have a high GPA and high LSATs, you can use that to your advantage.  
• In-state discounts. The cost to pay may be lower if you reside in the state the law school is in.  
• Federal loans (e.g. Grad PLUS Loan) and private loans (e.g. Sallie Mae or Discover).   

Loan Repayment Assistance Programs (LRAPs) after Law School  

There are law schools that have LRAPs in order to help their students pursue what they originally came to law school to do.  

In Harvard, they have an LRAP that would allow graduates to pay off their debt in 10 years, which greatly reduces the interest. They take your status into consideration, like whether or not you have children or a spouse. Other law schools may also have corresponding programs.  

If LRAPs are not available, you may want to check out the government-initiated Public Service Loan Forgiveness, which can potentially forgive your loans granting that you’ve worked in the public sector for 10 years and made 120 qualifying payments.  

For Graduates of Law Schools Outside U.S.  

• If you’re a lawyer from a foreign country and you want to practice in the United States, you need to get a Master of Laws (LLM) degree, which takes about a year. You can also get a Juris Doctorate (JD), which takes two years.  

Do you offer any resources for students who want to pursue a law degree?  

The Law School Admission Council (LSAC) has law school forums and is a good resource to tune in for law school-related events, especially if you’re a returning student.  

Sydney also has her own company, S Montgomery Consulting. She works with a trustworthy team of associate law school consultants. They help undergraduate, graduate, and law school students. 

Working with over 200 students, 78% of their students have gotten into top-30 law schools while over 56% of their students have gotten at least a half-tuition scholarship.  

They help students mainly in: 

• Preparing for the LSAT 
• Writing essays and personal and diversity statements  
• Getting scholarships  
• Preparing for interviews  

They also gave really great resources for students:  

• Free student and alumni platforms to help everyone connect with a mentor  
• Mental health and wellness resources  
• Bootcamps 
• Unlimited email and text support  

Check these free resources:  

• Check the Break Into Law School Show live on YouTube 
• The Break Into Law School Podcast  
• Essential Guide To Applying to Law School 
• Brainstorming For Your Diversity Statement 
• Guide to Writing an Impactful College Essay 
• Guide to Organizing your Scholarship Search 
• Scholarship database for students 
• Watch out for their FREE two-day annual conference 
• Resources for high school students/college applicants 

Links and Resources

Helpful Articles and Resources 

• Taming The High Cost Of College 
• Law School Admission Council 
• S Montgomery Consulting 
• The Break Into Law School Podcast 
• Sydney Montgomery’s Contact Info:   
• Instagram 
• TikTok 
• Barrier Breakers®: Law School Edition – Facebook Group 

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The bottom line is that we care what you think and want to help you out, so we’d appreciate you reviewing us on your favorite podcast platform. Even better, receive automatic updates by subscribing to the show through your preferred podcast service. 

Transcript Email Download New Tab

Brad Baldridge 0:00
Getting your law degree. Everything you need to understand to go from high school all the way to a practicing attorney.

Presenter 0:06
You have kids, they grow up and before you know it, it's time to plan for college. Where do you start? How much is it going to cost? Will you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? The list of questions is never ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College podcast. Here is your host, certified financial planner, Brad Baldridge.

Brad Baldridge 0:37
Hello, and welcome to Taming the High Cost of College. I'm your host Brad Baldridge. Today, we have a great interview with Sydney Montgomery. She's a lawyer and she also specializes in helping students become lawyers. She understands the process that you need to go through in order to get your law degree and pass the bar. She also understands the undergrad process. As far as getting accepted to a law school. There's a lot of great information in this program. If you have a student that's considering attorney or lawyer as their education goal, this is a lot of great information. It'll help both parents and students understand what it really takes to get all the way to a lawyer. You know, it's been my experience that most students don't really understand the process, especially if they're still in high school. And of course, there's many steps. And if you're not an attorney yourself, it can be challenging to understand the whole process. So go ahead and plug in and listen, this is a great episode. As always, show notes are available at our website at tamingthehighcostofcollege.com. That's all for now, let's jump in to the interview.

Today I'm talking with Sidney Montgomery, she's the CEO of S. Montgomery admissions consulting. Welcome, Sidney.

Sydney Montgomery 1:53
Thank you, Brad. Thank you, I'm excited to be here.

Brad Baldridge 1:56
Right. So and I'm really excited to talk to you because you've got some expertise that I'm looking forward to learning more about. But so let's talk a little bit about that one of the things that you work around or work in is not just undergrad admissions, but also law school admissions. And can you tell us a little bit more about, how you got involved in these various admissions consulting roles, and a little bit of your history?

Sydney Montgomery 2:23
Absolutely. So I was the first student from my high school to go to Princeton. And I have always had a background in educational organizations and touring and writing, writing is a very large part of what I believe spurs upward mobility. And when I got into Princeton, I learned that there were so many misconceptions about the admissions process, and about affordability, especially Princeton was the most affordable school that I got into, they were very generous with their financial aid. And people always said, 'Oh, you won't be able to afford to go,' but I could afford to go anywhere else, sorry. And so I started giving back to my local church, to my school to dance studios in the area, a phenomenal pre law advising at Princeton. But unfortunately, the Princeton pre law advisor left my first year of law school. And there were a number of Christian and black and brown students who didn't have any guidance even if you go to a top school, it doesn't necessarily mean you have that cultural, institutional capital and knowledge to advance yourself to the next stage. So I ended up helping students in the law school process, realize the privilege that I was in, the circumstances that I had, and how it kind of changed my life and my ability to create generational wealth. I clerked for a judge, I practice family law, but ultimately decided to pivot to educational consulting. And we really do focus on law school admissions. We help all kinds of students, but especially non-traditional students, first gen and minority students. But we have a ton of students that are in college as well, really focusing on helping make sure they make a good investment, helping make sure that they are choosing a school that is going to help them thrive and their career and their future, but also that they are not creating a source of debt for themselves. Because unfortunately, while we hear that lawyers make a ton of money, there are a lot of people who are in a worse financial position because they went to law school. And so it is my job to make sure that not only are you happy, you're going to become a great lawyer, you're going to impact your community. You're going to tell your story authentically through your essays, but you're going to be in a great financial position when you're done.

Brad Baldridge 4:28
Right? Absolutely. I think the rules change when you go from undergrad to graduate school. And a lot of our listeners are just starting to maybe understand the undergrad rules and then to throw a law school on top is a big ask in some cases. So let's kind of start at the beginning then. So I understand the very basics of I want to be a lawyer, the basic steps, you get accepted to an undergrad, you do well, you get accepted to a law school. you do well. And then you go pass a bar, which I'm not exactly sure what that means. But let's talk about each step and drill into it a little bit. Because I think for a lot of students out there that say, 'I want to be a lawyer when I grew up.' First of all, they, they're not really sure what that means, potentially, because their exposure to law is law and order on TV or whatever it might be. And they think that they're gonna go get involved in the dramatic lawyering in some important case, and spend their life arguing with judges and counsel and that kind of stuff. Whereas, a lot of lawyers do other things. So why don't we start there? So you start with undergrad and do well, what does 'do well' mean? And undergrad? Does it matter what college you pick? How do you quote unquote, ;do well?'

Sydney Montgomery 5:47
Yeah, no, I love that question. Because people ask all of the time, like, 'Oh, my God, what do I need to major in to go to law school? Or what school do I need to go to to go to law school?' It is not like medical school in the sense where pre med means something and it's important. While many schools do have pre law programs, it's not required. I mean, you have to know how to write and to read. And you can study and do whatever you want. And really, as long as you have good reading and writing skills, I always say one of my close classmates in law school who I love dearly. She danced for Britney Spears, and Beyonce, before she came to law school, she's fantastic as a human. But she went to study entertainment law, right, she had a very, very successful dance career for 18 years, and then came to law school, you can do a number of things and go to law school, because it, there are so many different areas of law, and so many different expertise that will inform that. So I tell students, and we work with college, you know, undergraduate applicants and law school applicants, go to school, it's gonna make you happy, that's gonna be a good fit, right? You probably have heard other people say, the fit in school is really important. And it is because your GPA is very important. You want to go to the school where you're going to be able to form relationships with professors who are going to write those top letters of recommendation for you, you want to go to a school where you're going to be able to have 3.5, 3.7, 3.9 GPA, and where you're going to be passionate and interested. So most most lawyers actually aren't trial lawyers or litigators. It's not like everyone's out here. In courtrooms, it's a very small percentage of lawyers that are actually trial attorneys. There are a lot of different areas of law. And so the first thing I always tell kids or even adults, if they're thinking about going to law school is have a couple conversations with some lawyers. Like that's probably step one, make sure it sounds like you actually like the type of work that they're doing. And then really just focus on being a great college student, you figure out if you want to major in molecular biology, major in molecular biology, that's fine. Right? Maybe you want to work on scientific patents for law school, that's pretty cool. That background would be really helpful, I would be useless, I'm allergic to science, I can't go into that kind of law, they would not understand anything anyone brought me ever. So you know, just go to college, choose a good fit school, choose whatever majors are going to excite you. Because if you're in a school environment that you love, and you're studying something you're passionate about, you're going to get better grades. And that high GPA is really important for law school. You want to go to school where you're going to succeed.

Brad Baldridge 8:21
Righ. Now does it matter if as far as the undergrad school, if I go to my, say, flagship state school, University of Illinois, University of Wisconsin, University of Virginia, or do I need to go to Yale in order to get into Harvard? What are the kinds of pecking orders, is that as critical as some people think, or?

Sydney Montgomery 8:44
No, it's really not. I mean, I know I'm biased because I went to Princeton for undergrad. But at Harvard, there is a wide variety of schools. I mean, honestly, I feel like most students at Harvard Law did not come from an Ivy League. I feel like most students, most of my classmates came from state schools or smaller liberal arts colleges or women's colleges. And like I said, people tend to take more time off with law school. So you will see some people took one or two years off, some people took 20 years off before they went to law school. And I think that reasoning, there's a lot of priority, put on work experience. If you're applying straight from college, it's okay. But you want to make sure you have good internship experience. But it's the experiences themselves that are more important than necessarily the name of where you went. Now, yes, if you were able to get a 4.0 at Yale versus a 4.0 at your sunnyside university safety school, and you were able to get those top letters of recommendation from Yale then I mean, yeah, probably at Harvard and Yale, let's say 'Wow she can really handle that high academic rigor,' but I think a lot of schools would rather that 4.0 from sunnyside state university than that 2.9 from Yale because he went to Yale and it was really hard and you didn't thrive right? Because at that point, the Yale name is not helping you so much, because that 2.9 is really hurting you.

Brad Baldridge 10:03
Right? Yeah. So grades matter. Okay. So then the next step is you need to get accepted to and go to law school. So what is, how long is law school? And tell us more about that as far as...

Sydney Montgomery 10:19
Yeah, absolutely. I wanted to add one other thing in that whole like Yale-Sunnyside university thing. If you have to pay full sticker for Yale and your family is going to take out $100,000-$200,000 in debt for undergrad, that's like not a great idea if you're then gonna go to law school because you're most likely going to have loans. So it's probably better to try to minimize your undergrad debt if you know you're going to try to go to law school. But if we're talking about, 'Okay, so I did, I did great. What are those next steps?' Your law school application composes of your GPA, which we've discussed your letters of recommendation from your professors, your LSAT, or GRE score. So that's the law school admission tests or the GRE is the general grad school exam. Most law schools still prefer the LSAT, although more and more schools are accepting both exams, you're going to want to study for that usually, probably the summer before your senior year, some students need as much as 6, 9 or 12 months to study for the LSAT exam. It's unlike any other exam you've ever taken. There's it's not knowledge base, it's really like you have to learn how to take this test. And so I usually say students in their junior or senior year of college would be great to take a diagnostic, you know, sign up for a test prep program, you're gonna need to give yourself at least six months really. And then you're gonna have essays, you're gonna have your personal statement, you might have a diversity statement, you might have some optional supplemental essays, only a handful of schools interview, you'll have your resume, you can have a two page resume, you really want to make sure that you're showcasing the impact that you've done, the internships, the experiences, that's really important for law school. And it should relate ideally, to what kind of law you want to practice. And then any agenda or explanation statements that you might need. That's, that's your law school application process. And so you want to make a plan for your LSAT exam, you want to get good test prep for that. And then you want to make a plan for your essays. Your essays are actually really important. Some people will say, 'Oh, your essays don't matter. It's only your GPA and your LSAT score.' That's not true. We work with a number of students that have lower LSAT scores, your GPA is especially, you know, if you're a non traditional student, if you're going back to law school, like you might not have done super well in undergrad, but now you're a different person, you've grown and you've matured. So your essays are really important to help tell your narrative.

Brad Baldridge 12:36
Right? So when you're shopping for law school, so to speak, either substantial differences between programs, as far as I mean, I don't know how long law school is, as an example, are they all just a two or three year program? Or is there differences from one to the other.

Sydney Montgomery 12:54
Most law schools are three years if they're full time programs, a lot of part time programs are four years. If you're coming abroad from another country. Let's say you are a lawyer in another country, you can get a one year LLM, which is a Master of Laws which will allow you to practice in the US. Or sometimes you can get an accelerated two year JD for international attorneys. If you want a full JD, but you're already an attorney, foreign, foreign trained, most people listening, your kids are going to get a three year law degree. In terms of programs, the top maybe 30 schools, according to like US News and World Report, those would be national law schools. What that means is that you can go to that school and you can go practice law anywhere you want. Employers will come from around the country to job fairs, it's very easy. You know, most students that go to Harvard, they don't stay in Massachusetts. But then most law schools, right, but 163 other law schools are usually regional law schools, because you're taking the bar exam. I mean, granted, they have the uniform bar exam now. So it gives you more flexibility. And that bar exam is like a test. It's like the tests of practice. You know, you can graduate from law school or not pass the bar, and then you can never practice and that's my fate. So we want to make sure one of those things that you're shopping around is you want to look at the law schools bar passage rates, you don't want to go to a law school that only has a 30% bar passage rate because you then you're never gonna be able to practice law and you're just gonna be stuck with these loans. But you know, most of those law schools are regional law schools, and that doesn't mean that they're worse, right? They could have incredible connections and employer relations just in that state or in that area. And you want to think about, well, where do I want to practice law? What are some geographic areas that I would be okay living in. Even if you are putting national schools on your list, you always want a couple of regional schools just in case they could give good scholarship money. And then if you're really interested in a certain area, if you're interested in domestic violence or animal rights, you want to see if they have like a clinic or or journal? You know, what are the clubs and organizations that they have at that law school that really speak to your ability to get experience during law school, which will help you get a job and also their ability to help you network to get a job?

Brad Baldridge 15:12
Right. Okay, so typical is a three year degree. So you do the three years. And then you just mentioned the bar, which I guess is the last step. So what is the bar exam? And is it, I think it's state by state, but can you expound on that a little?

Sydney Montgomery 15:27
Right? Yeah, so the bar exam, I'm not a huge fan of I mean, I didn't pass the bar. But I think that as a concept, it doesn't make sense, really. But basically, it is a two or a three-day exam, depending on what state you're in, California has the hardest parts, three days, some states have adopted the uniform bar exam, which means you take one exam, and depending on your score, you can practice in certain states. But traditionally, it's been a state by state exam, you usually study for about three months, two to three months after you graduated law school, so a lot of students will take either a bar loan as it's called, so that they can live or if they have parents who can help them support them for those three months, you will take the, you will study for the bar, like maybe easily May through July, you'll take the bar exam in July, you'll usually start your job in August, September pending bar results, and you'll get your results in November. And then it's kind of up to your employer. What happens if you don't pass the bar? It can go either way. A lot of employers will extend your grace to take it again in February, and then you don't have to worry again, sometimes you will not have a job anymore. But it is there's a multi-state exam, which is the multiple choice portion of it. And it covers all of the classes that you take in your first year of law school, everyone in law school takes the same classes their first year. So it's torts, it's contracts, it's constitutional law, it's maybe some legislation or regulation. You know, it's civil procedure, all of those kinds of fundamental classes. And then depending on the state, there may be some additional, like Maryland had commercial papers and securities, Maryland had family law, there might be a couple of different other subjects that are state by state. So there's the multiple choice portion which everyone takes. And then there are these written responses, a professional type exam, like so essay answers, and then maybe even like a practical kind of write a memo based on this information, it's, it's long, it's like eight hours. It's, it's a very like, it's two to three days. It's grueling, but it's necessary to then be a barred, licensed attorney.

Brad Baldridge 17:41
Right? So you mentioned you mind sharing what state you you did your bar exam in?

Sydney Montgomery 17:46
Yeah, yeah, I took the bar in Maryland, I knew I was gonna come back home to Maryland. So I'm a Maryland barred attorney, Maryland didn't have the uniform bar exam, the year that I took it, they now do. So unfortunately, I'm only barred in Maryland, although there are, if I wanted to practice law in a different state, after certain number of years, and I think I'm at this point, I could take an attorney's exam at another state. If I, if I wanted to practice law in a different state, but I'm only barred in the state of Maryland. I can't practice law in DC. I can't practice law in Virginia, I can only practice law in Maryland.

Brad Baldridge 18:17
Okay. So, in essence, you can't work in other states, so to speak, or do lawyers that do multi state thing? It was it? I mean, his their lawyers that might say, well, I need to be? 12 states, so they go through this process 12 times or...

Sydney Montgomery 18:37
No, that's not, that's not likely. With the uniform bar exam. Like I said, it did make it a little easier, because you have more states, if you get a high enough score, there are more states that you can kind of wave into. There are some attorneys that are multi-barred. When I was at my family law practice, we were on the border between Maryland and DC. So a lot of lawyers in our group, were also barred in DC, that's pretty common, or maybe also barred in Virginia, because we're in the DC, Maryland, Virginia area, you will often see, sometimes a lawyer might be barred in New York, and California, the bar exam is given at the same time. So before the uniform bar exam, it's like impossible, right? You can't take Maryland and California at the same time, because they're the same days, right? So you would have to take Maryland, maybe in July, and then you take California in February, or something like that. A lot of employers will also pay for your bar prep, which is helpful. Like I said, if you're barred in one state getting barred in the second state is easier than just the first time you could get barred because depending on your level and your experience, you can take an attorney's exam, which is a much shorter exam, just on the new state. And you don't have to go through all of the like that first section again, but no, most firms just have people who are barred in multiple states. But they don't necessary, one lawyer is not usually barred in like 10 or 12 states, that would be an exorbitant amount of money. And time.

Brad Baldridge 18:37
Right. All right. So then once you're, you pass the bar in a state, then you can practice in that state, you know. So what happens in, like, for corporations that have locations across the country or whatever, and they're trying to deal with issues that pop up all over the place? How does the world deal with, let's say, a retail store that has to deal with slip and fall and all 50 states? Because they're a Walmart and they have locations in all 50 states? Do they have lawyers or I mean...

Sydney Montgomery 20:38
So there are some things that you need to be barred on, like to do research and write a memo, like I don't necessarily need to be barred, right. But to represent you in court, if you're being sued, like Walmart wouldn't ever get sued in all 50 states. So if someone like had a slip and fall case, they would usually probably, Walmart would probably have some venue, preferences, but it would go to one state. So most of the big like the top law firms, we talked about lawyers make a kind of money at those top law firms where they're making over $200,000, those firms have locations in every major city, and even on some non-major city. They're everywhere, right there internationally. So if, you know, if you're working with the scattering office in New York, I don't actually know, I think they have a DC office, and something happened in DC, then, okay, then someone from DC would pick it up, right. So they just employ enough people and enough states where if they have a big client that has multistate issues, someone will be able to serve you.

Brad Baldridge 21:38
Okay, that's how it works. So they did, a lot of the bigger firms have multiple locations, or probably relationships in the states that they don't necessarily have locations and whatever. So that leads you to the concept, I guess, of the national law firm versus the regional law firm. is, yeah, that's part of it. Okay. All right. So a lot of parents out there, I deal a lot with families in the kind of the undergrad, the the sophomore, junior, seniors in high school that say, 'I'd like to be a lawyer someday.'

Sydney Montgomery 22:10
Right, right.

Brad Baldridge 22:12
They're trying to figure out well, what do I do in undergrad in order to make law school work? And you mentioned, any major will work and that type of thing? Is there any sort of prerequisites or anything I know, unlike medical school, you got to take a physics sometimes, and you got to take a certain amount of lab sciences and biology, you can be a dance major, but you still have to have some lab sciences, and that type of stuff. Is there something similar in law where you have to have a certain course not really classes?

Sydney Montgomery 22:43
No, not really. I mean, they will want to see that you can write I mean, obviously, you'll be writing your application, but research and writing and critical thinking and analytical thinking those are what law schools really prioritize. So while there is no prerequisites, I would say that, you know, sometimes students ask me, 'Well, you know, I have an option to do a thesis and my junior or senior year, but like, is that really worth it?' And I would say, like, yeah, for law school, it is because it shows that you can do a substantial amount of research and write high quality academic paper, if you're a dance major, or a science major, like that's fine. Maybe at least those one literature class or one class where you had to do research or write, even if it's research on dance, you know, like a dance research seminar, and you've produced a 20 page paper on the history of dance or something like that would suffice. But something in your transcript has to have reading or writing or research in order for them to feel super confident with that GPA, right? If you have a 4.0. But it's literally all in movement. I was a dancer, right? So if you had a conservatory and you're doing ballet and jazz, and whatever you're talking, you have a 4.0. But at no point, have you done any writing research that 4.0 is basically worthless.

Brad Baldridge 23:59
Right? Okay, so you want to do some academic version of things. So then, is there colleges that offer more support or help or, when I pick a particular undergrad school because of their, quote unquote, pre law?

Sydney Montgomery 24:18
I don't think it should be the driving. Yeah, I don't think it should be the driving factor in your undergraduate college search. There are some schools like for example, we have a partnership with Dillard University. It's an HBCU, Historically Black College and University in Louisiana. And if you were a first gen underrepresented student in that area that really wanted to go to law school, Dillard would actually be a really good choice because they have grants for things like LSAT tutors for their students and admissions help for their essays, right. So the school is providing a lot of in kind resources that maybe you wouldn't be able to, maybe you don't have the family background are there circumstances where you can pay for test prep. But if your school is going to offer it, that would be really helpful for you. So I would say that there are some times if you're a first gen or minority student, or just even an under resourced student, regardless of background, where a strong pre law program that provides some of those supports that prep that you don't have to pay for that could be helpful. But if you are, and test prep usually runs you, I would say somewhere between 1000 or 2000 dollars, just so listeners kind of understand what I'm talking about. So like the thought of, at some point, I'm gonna have to spend up to $2,000. And applications are expensive to write. So if that they feel like, 'Man, I really don't know how I'm gonna afford to apply to law school, it's like to $3,000 a whole application process, I don't know how I'm gonna do that.' Maybe you do want to look at some schools that are going to cut down on that cost for you, because they're providing it to their students. But if you're listening, and you're like, 'You know what, four or five years from now Johnny wants to be a lawyer, it's gonna be $3,000 the process, maybe we're going to pay for admissions consulting, that's another couple 1000s, we got that.' Then I would not prioritize the pre law support as much, because you will be able to do it on your own. I think that there are there are some fantastic pre law advisors, but also pre law advisors change. And I think that's kind of my caution with choosing a school for their pre law program. Because at Princeton, I loved my fellow advisor, Ryan Jobs, he was amazing. Then there were a couple of years where there was no pre law advisor. And they like it goes like that, you know, they just had another pre law advisor was amazing. But then she went on maternity leave. Right? So it just really depends. And I can't tell you five years from now, what the pre laws gonna look like at Princeton like yes, this Princeton upgrade pre law sometimes when they have a great pre law advisor.

Brad Baldridge 26:57
Right, exactly. So, at least at Princeton, it sounds like it was a one-person office, essentially.

Sydney Montgomery 27:03
Most schools have one pre law advisor, it will be housed within Career Services. Now, some schools do have maybe a pre law director and a pre law advisor or pre law department. So that could be helpful. But the majority of schools, it is one person, some schools don't have any pre law advisors. And that can be that can be really hard because they are supposed to help you figure out your applications and that stuff. The other reason why I try to tell parents not to prioritize that too much is that most students take time off. Most students work between undergrad and law school. And so your pre law adviser, your undergrad is not necessarily going to be that helpful to you after you've graduated or a couple years down the line, so it's not always the thing that I would hinge that decision on. Right.

Brad Baldridge 27:55
But I just like it, I'm just trying to figure out if there's things we should be looking for that. So what about...

Sydney Montgomery 28:01
I would ask if you're if you're going to, if they have a pre law department, I would ask where have your students gotten in? That's a great question, right? Where are your students going to law school? How many of your students actually get into law school? Or how many students start pre law and actually apply to law school, I think is also a really good question. Because there are a lot of students that come in pre law, and then for whatever reason, they don't do it. Now, there are some schools that have three plus three programs, which would be three years of like, you could get your undergrad in your law school degree in six years. And they would sometimes waive that if you let go, you will go to the same school for undergrad and law school. And if that's a law school that you would want to go to that might be also a good option. But sometimes it's too premature to make that decision, because you could end up with more choices, right? Like, Harvard doesn't have a three plus three program. So maybe you want to apply to Harvard, who knows, right? But I would say, you know, a strong Writing Center is probably going to be the other thing to look at, because those are going to be the people that will help you with your essays as an undergrad. So you want to make sure that they have strong writing center support.

Brad Baldridge 29:06
Okay. So then again, so pre law is not really a major, per se, you're going to pick an actual major, and then you kind of but you are potentially declaring yourself in pre law in some way to get involved in things at that college.

Sydney Montgomery 29:21
It depends on the school.

Brad Baldridge 29:23
Okay. So, right. So I guess that's something that maybe you can compare a little bit as parents and students that are just getting involved in.

Sydney Montgomery 29:34
Yeah, they should ask more. They should have more than just like you've said, your pre law because like, that doesn't mean anything. Like if you're looking at pre law programs at colleges, ask them, do you provide tutoring? Do you provide essay support? Do you provide application sessions? Like, what do I get besides just saying that my kid is pre law? If it's just like, 'Oh, we have a mock trial program and all of our students want to go to law school.' And then like, that's basically nothing. But if it's like, yes, like your junior year, we spoke with these tutoring sessions and you meet every month with the pre law advisor to help pick your law schools and we have all these information sessions. I think that was probably the most helpful thing about Princeton is that so many law schools came to Princeton, like to do info sessions, I didn't have to go places like the admissions officers came to me. And I loved that they were usually very small, I can meet the admissions, I could talk to them, I can ask me questions, forming relationships with admissions is really important. So I would say like, that was really, really helpful. So as like, 'Do schools come and visit and do info sessions here?' What support do you have for alumni is also a really good question as well, because not all schools give continuing support to alumni. But those are the things that would make a strong pre law program, if they're giving support to alumni, it's called a lot of schools are coming to visit and interact with your students if there's any kind of tutoring, or how much help do they do on the application essays and meetings? And how do they help you pick law schools? Like what is the actual support they're giving you?

Brad Baldridge 31:09
Right? Okay. So if I reached out to a law school, say in my region, or whatever that I think might be a good target? Would they share with me where they send their reps and that kind of stuff, kind of like where they tend to recruit? You know, obviously, some law schools went, decided to actually go to Yale and recruit, they probably don't go to every college in the nation, they have the top 10 or 20, or 50, or 100? Or I don't know, can you give us a little insight into that?

Sydney Montgomery 31:41
Yeah, so I think it's probably easier for you to ask the colleges, what schools come than to ask the law schools, especially with COVID, that answer is probably a little bit more in flux. They may say, they they may not say, but I think it's probably a better question directed to the colleges. Look what schools do you have relationships with that come and talk versus asking the law schools themselves?

Brad Baldridge 32:07
Right. Now, what about like information sessions, do law schools do information sessions like they do in undergrad where...

Sydney Montgomery 32:14
Yes, they do

Brad Baldridge 32:15
You know, a law school says, 'Well, I'm gonna be in the Chicago area,' you know, they might do something on campus at two colleges in the area. But then they also say, 'But we also have an open session for anybody in the Greater Chicago area that wants to talk to us, you know, we're available.'

Sydney Montgomery 32:29
Law schools will have, there's a centralized place it's called. So if you go on the Law School Admission Council, LSAC, that is kind of your first stop, because the LSAC will have law school forums. So they're like college fairs but for law schools, there'll be digital ones. And there'll be in person ones based on area. Again, I mentioned that most students do not go straight from undergrad to law school. So the these forums help capture working professionals, right, there might be in Atlanta, one in New York, one in DC, one in LA one. And then some digital ones, as well, in some schools will do smaller ones. So LSAC has a calendar of all these events. So it's kind of nice, because it's set, it's like one place where you can go and find all of the places where law schools are least open, like the open places where law schools are traveling and doing these info sessions. A lot of the law schools also have info sessions on their on campus. And also they have virtual info sessions. So there's a lot of information sessions, but those forums through LSAC. Again, that's the Law School Admission Council, you can go under Events, you'll be able to find all the places that law schools are traveling and open forums.

Brad Baldridge 33:36
Right. Okay, well, great, we'll put a link to that information in our show notes, so that people that didn't get a chance to write it down, you can always hit the show notes and get all this information. But so let's talk about something that I talk a lot about, which is what does it cost? I mean, that's another, I guess, elephant in the room of, I'm aware, but a lot of people are not aware that there's a big shift between undergrad in the way the financing works to graduate school, law school being a version of graduate school. So can you talk more about what it costs? What are we typically seeing for prices these days?

Sydney Montgomery 34:15
Yeah, so the sticker price for most law schools ranges from $50,000 to $90,000 a year.

Brad Baldridge 34:22
And what you that include?

Sydney Montgomery 34:22
And that so that would, that would be the total cost. I think Harvard is probably around 92 or 93,000 for the total cost. That will be tuition, and what you will see when you are looking at law schools, you're not gonna see room and board, but you will see a personal allowance. And that personal allowance is to cover getting an apartment and remember living your life, right? Like you have to be a person. And so depending on the cost of living, like Cambridge was very expensive. My apartment was very expensive, even though I lived in university housing, so I borrowed the max of that personal amount and then, they just give it to you and you as an adult, because you're an adult, when you go to law school, you budget your money, figure out, 'Okay, this is my rent or I want to like get a roommate, or I'm gonna eat out every day, or I'm gonna cook.' Right? Like, you get to figure out how you're going to spend your personal allowance. I'm gonna get my nails done all the time, whatever. And sometimes they will have a separate books fee as well. But again, they're they're giving you the money and you figure out what kind of books you want to get. It's definitely a shift from undergrad and we've started managing most of that right be like mostly they're just taking tuition, and then you do the rest. I think that there is a there's a there's a very big difference between how financial aid works on an undergrad and law school side. So most families would may be saying, well, college is expensive, we do financial planning, we might not qualify for aid. Most, there's a lot of need based aid and merit based aid for undergrad, but you're not for them. A lot of people feel like financial aid is not something that they would get and that sort of thing. For law schools, most law schools do not give need based aid. Harvard, Yale, only kids need based aid. So that's a caveat, right? They only give me based aid, they do not get merit-based aid. But the majority 95% of law schools mostly give merit aid with I would say probably 80% of law schools, not giving any need based aid, like exclusively giving merit based aid. And that merit aid is directly correlated to your GPA and your LSAT exam. So even if you are a millionaire, or super wealthy, pay cash for college, right? Your child could still get a full ride if they do very well on the LSAT and the GPA, right it's there's a really great scholarship estimator, and I'll send the link on LSAT, demon LSAT, space demon has a scholarship estimator, you literally put in your GPA and LSAT and I mean, take it with a grain of salt, it's not mean 100% accurate, but it will basically break down, okay, you're likely to get 30%, you're likely 50%, you're likely to get full tuition, you're likely to get more than full, there is also a level of scholarship negotiation that happens with law school admissions that doesn't really exist in the undergrad world. And which, you know, they're kind of expecting you to negotiate your scholarship to some degree, if you get into a school, ranked 50, and they give you $30,000 a year, and you get into a school raked 52 and they give you $20,000 a year. You can you know, you can basically say, 'Well, hey, this school, that's pretty similarly in rank to you gave me this, can you can you come up and match it?' Right? That is a thing that happens if you're if you kind of are strategic, in where you apply, you want to make sure that you have schools where you can get that scholarship money. You almost should never pay full sticker for law school unless you don't qualify for need based aid and you're paying full sticker for Harvard. But for most students, there's really no reason why you should be paying full sticker for law school, you should be able to get some kind of merit money. You know, unless you're really searching for a school that is high on the rankings list. Right?

Brad Baldridge 34:48
So is that relevant as well similar to undergrad where the top notch schools that have the strongest students tend to offer aid to you to just really the top notch at that school? So it depends on the school, if you're above average at a particular school versus across the board?

Sydney Montgomery 38:45
Yeah, I would say that they are going to be looking at, so law school admissions is holistic and comparative. Right. So and it's unrolling admissions, which is really important to understand. So basically, with rolling admissions, it is easier to get in in September than it is in February, even though the deadline might say March so items and there are many schools that give scholarship money out on a rolling basis. Like I've spoken to schools who have said, you know, we literally have no money left in January like you could be salary but we've given all our money out doesn't matter. But so they're looking at schools are trying to raise their median LSAT scores, they're trying to raise their median GPA they want to raise in the rankings rankings play a much larger role in law school admissions than they do an undergraduate admissions and so schools are trying to get higher up in rankings. And so they are giving scholarship money out to students who will help them have higher medians. And there are some fellowships and there are some scholarships based on public interest are based on being first gen, but majority of merit based scholarships are going because you are going to help them raise in the rankings. And they know they might take a student that says this is a kid that's probably going to get into Georgetown. Sure, but if we give them a full ride, maybe he will turn down Georgetown to come, see American, because we have given them full ride and his parents like take the free. You know, and there are tons of students who would take the free over going to Georgetown, for example, that helps American out they've gotten this stellar kid with a 172. Never, never would have easily picked American. And they were able to lure them away from the you know, fine Enos of Georgetown.

Brad Baldridge 40:24
Right. So, okay, yeah, so that's interesting that now, is there a big difference between public and private law schools as far as price or any other? You mentioned, a kind of a wide range? I think you said somewhere between 60 and 90.

Sydney Montgomery 40:41
Yeah, I would say public schools do tend to be priced a little bit lower. The like pricing also, translates correlates to rankings and a lot of ways, right, the lower rank schools are generally priced less. But it's, again, like law school, there are some numbers that you can look up, right employment score, bar passes, score, median salary, there are some law schools where the median salary is $55,000 a year and their bar passage rates like 50%. Like they're just not charging $90,000 a year, because that will make no sense. Right? And then there are some law schools where the median salary is $200,000 a year, like the median salary. Okay, like, if the median salary is 180, or $20,000 a year, your passage rate is 90%, then it's like, yeah, it's worth that money. Right? It's all relative. And so what people feel like, they're going to pay to get that return on investment.

Brad Baldridge 41:37
Right. Okay. And then, is there such thing as in state and not a state rates for law school?

Sydney Montgomery 41:46
Yes. Some public schools do have in state and out of state rates for sure.

Brad Baldridge 41:50
Okay. And then obviously, if you're in state, that would typically be the lower cost versus... Okay, so then that's a, you know, again, if we're hypothetically. So a typical pattern might be the school we chose, let's say is kind of in the middle of 75,000. And we got to kind of it in the middle scholarship. What, what that might be they say, 15,000, 20,000?

Sydney Montgomery 42:16
Yeah, 20,000 is very, very high per year.

Brad Baldridge 42:19
So it started at 75. We got 20 off, we're down to 55. Then what have, where does all that money come from? Then we get federal loans?

Sydney Montgomery 42:30
We get loans.

Brad Baldridge 42:31
You get loans. Okay.

Sydney Montgomery 42:33
Then we get loans. Yeah, it's very exciting answer. Yeah. So most students would probably get you you have options, right? You can get a grad plus loan, a federal grad plus loan, you know, you can your parents can take out a loan, you can get sometimes loans directly from the school, or like, that's what we're looking at maybe like Sallie Mae, or Discover or all of those kinds of private loans. But, most, I mean, I graduated Harvard with like, 200, and something thousand in debt, like I had, I had a little bit from Princeton, but it was mostly from Harvard.

Brad Baldridge 43:09
Right. Okay. So then you take out the loans, and obviously, you got to then pay them back. I guess. I've seen situations where doctors that don't want to be doctors anymore, and lawyers that don't want to be lawyers anymore feel trapped because of those huge loan payments that, 'Well, I can't really change careers. I need a high paying career to cover this debt.' Anything happening as well?

Sydney Montgomery 43:37
I mean, I'm one of those lawyers who don't practice law anymore. Listen, I think that schools have tried to do a lot to help with that pressure. So a lot of the top schools will have loan repayment assistance programs, which I was in when I practice law, actually, you don't even have to practice a lot to qualify, it's based on income. And there are certain job qualifications, but and those loan repayment assistance programs, I think there's probably 20 really good ones in the country. They will actually based on your income, give you a check twice a year to help you cover your loans, right. So the year that I clerked, I clerked for a judge locally, Harvard sent me a check it covered all of my loans that year. When I started practicing family law, I wasn't really rolling in it, and Harvard still covered like 90% of my loans, right? So based on your income, you pay a little bit, Harvard pays the rest. And there are a number of loan repayment system programs like that the goal of those programs is to give you the freedom or the feeling that you have the freedom to choose maybe the job that you really came into law school to do, if you wanted to be a public defender, right? If you wanted to work with asylum seekers or refugees, or whatever it is that you have flexibility in your career options and your loans aren't like strangling you. They are giving you those it's different from the Public Service Loan Forgiveness Program, because in the Public Service Loan Forgiveness Program. First off, you have to work in public service, which, as a family attorney with private divorce and custody that does not count. So it's a limited a smaller subset of jobs. And you have to stay in it for 10 years, as opposed to, like, I know, at least Harvard's program, and Yale's and Stanford, some others opt in or opt out. So I'm not in it right now. But I still have seven years of credit, if I wanted to go back and do that, right? It doesn't have to be 10 continuous. But with a lot of the Public Service Loan Forgiveness, it's 10 continuous, you have to make 120, qualifying payments, and then they will forgive the rest, which is different from your loans, being on a 10-year term with the school sending you a check to help you cover your loans. Right, those are very different things. So there are

Brad Baldridge 45:45
Do the guarantees that you mentioned that am that Harvard, or whatever school is providing, and the forgiveness work together, if you by chance, meet all those rules where my income is low? So Harvard is giving me money to help pay, and therefore I'm qualifying for 10 years of repayment, because I'm paying but I'm just using Harvard's money?

Sydney Montgomery 46:07
Theoretically, yes, you would qualify. But I know that at least for Harvard's well, that program, they do put your lives on a 10 year payment. So the theory is that at that 10 year part, you can, you will be done with your loan. So there's nothing left to forgive. But like actually COVID has presented an interesting situation, because just because of the way that loans were paused and that kind of thing, there will be a cut, I think there will be some people for whom, at that 10 year mark, they might still have a balance because they weren't paying during COVID. And then they can get it forgiven. So theoretically, yes, but most of those LRAP programs are going to, I think it's in your best interest right there, they're going to help you aggressively pay your loans off in 10 years, because it's an aggressive payment schedule. To minimize the amount of interest rate, if they're giving you a check, they would rather most of it go to principal and not interest, so that you are debt free, ideally, in those 10 years. And I will say that some programs like Harvard rolled in my undergrad debt for which I'm very grateful. And sometimes they cover part time work as they take into consideration if you have a child, there's different ways that they handle having a spouse 10 years is a long time a lot of life happens between the ages of like 25 and 40. So you know, there are different things there. But that if you're going to a school that doesn't have a Loan Repayment Assistance Program, and the only thing that you have is Public Service Loan Forgiveness. I mean, I don't really trust the government as much as probably I could. So like you can roll those dice and hope that 10 years from now, they will actually forgive your loans. But there are a lot of people who do feel like they have to work a corporate job, they have to get a high paying job because of the loans. They're not in a position to get things forgiven or or it's just too much, right. They have other family responsibilities. So unfortunately, that is the reality is that a lot of people do feel trapped in their in their legal job.

Brad Baldridge 47:55
Okay. So you mentioned the government gives the loans or you can go to the private sector, what kind of interest rates? Are they, you know, like credit cards at 18%? Are they capped? Or how do those work typically?

Sydney Montgomery 48:10
The Grad PLUS loans, I believe, are I think there's somewhere between I think they're about 6%, they somewhere between five and seven, but I think there are about 6.6%, that depending on your credit and your situation, you might be able to get a lower interest rate from like Sallie Mae or Wells Fargo, but you equally could be at a higher rate. So, you know, I know that there are a lot of people that refinance their student loans. Of course, you know, we had that 0% and the interest pause with the federal loans that didn't necessarily apply to your private loans. So I think that COVID has shown that sometimes there can be benefits to having most of your loans be federal, just because when they do things like pausing loans for national crises, or that 0% interest rate, most of the private loan companies did not follow that, they do not care, right, like most of your loans were held federally, then you did actually feel that relief. So I had some friends that had most of their loans privately, and it was definitely like a conversation during COVID, where they were feeling more than they would have if they had taken the loans out in a private loan.

Brad Baldridge 49:18
Right. Okay, is there? Let's talk a little bit about what you do them and how people can learn more about you. Because obviously, this is, for many, a challenging process. And you tell us a little bit more about your services around, I guess, would be a college student that's looking to look into going on to law school. I mean, when would you like to work with them? Or how do you work with them? Is it freshman year in college? Is it senior year in college? What types of things do you help with that type of thing?

Sydney Montgomery 49:50
Yeah, absolutely. So yeah, we do both undergrad and grad and law school consulting. You know, so for my like little kiddos, who are in high school, maybe we're helping them find local internships, so that sort of thing. But for the most of our law school students, I would say junior year, we have worked with students, sophomore second semester, if you they were really, really early, but most students are just fine in junior year like either in the fall or the spring. We want applications to be submitted in September. So I think part of it is a conversation between you and your child about their time management skills. Because, you know, as I mentioned, you're going to need at least three to six months to study for the LSAT exam. And the essay so we really come in with the essays I have worked with over 200 students, 78% of our students have gotten into our top 30 law school, over 56% of our students have gotten at least a half tuition scholarship. You know, we're very big, like I said on scholarships and reducing debt. And the essays are a large part of that. So we have a proprietary brainstorming method and a patent pending writing software, actually, which is pretty cool, that we use to help you brainstorm your ideas, figure out what pieces of your story authentically are gonna go in which essays, really maximizing all of your optional statements, diversity statements, even if you are like a white Anglo Saxon male. Usually there are kind of diversities broadly defined, especially in the law school context, they're really looking for diversity of experiences. And we want to show as much as we can for law schools because so few of them interview. And so we will help you with a strategy of choosing your schools, building your list, of course, writing your essays, brainstorming, helping you with scholarships, and fellowships and outside scholarships as well. Because I should mention like you can apply to outside scholarships law school, just like you would for undergrad and there are sometimes outside scholarships for graduate school generally, which can be used for law school. So we help you find some of those scholarships, if maybe your LSAT or your GPA, I'm not gonna get you that high merit dollars. And then we help with interview prep, should you get an interview scholarship negotiation, which I mentioned, it's kind of a larger thing and law school waitlist, help because waitlist move and are more active than they are in undergrad. So writing those letters of continued interest helping you form those relationships with admissions, so much of law school admissions is strategy and timing, and just making like smart decisions throughout the process. And so we, we have some private packages, we also have small group boot camps and quickstart essay plans if you just want hourly essay help. But if you want comprehensive guidance, those small group boot camps or those private consulting packages, I really meaningful and then we have unlimited email and text communication, one of the things I'm really proud of is that we have free student and alumni platforms. So we connect our high school, college, law school, lawyers, we keep them connected in a platform. And so it's really great for our high school students, because we're able to give them a mentor. So if they think I want to be a lawyer one day, we can give them a mentor to speak to, we give all of our first year law school students, a mentor who's in the field practicing as well. So that or just an older law school students so that they have guidance and support as they go through. We have a job board, we have mental health and wellness resources and events. We have a directory. And so we try to do a lot. And this is something that students don't have to pay for. It's just they have it for the rest of their life. And the parents do as well. So that they feel connected. And they feel like they have a place where they can ask questions. They have a community that is believing them and supporting them, because we have found that that is really related to success, and that we can help you get your first job after law school so that you can be successful, and do the thing that you set out to do.

Brad Baldridge 53:38
Right. And then I know you've also got some free resources like podcast and others. Can you tell us about those things?

Sydney Montgomery 53:45
Yes. Absolutely. So we do have our free Facebook group, Barrier Breakers Law School Edition. For all of those looking for support and law school process. We have two podcasts. I go live every Friday for the Break Into Law School Show. It's live on YouTube, LinkedIn, and Facebook. And then it's also spun into the Break Into Law School Podcast, which you can find on Spotify, Apple podcasts, Google, Audible wherever you get your podcasts. We also have the podcast mindful prayers for students. I'm Christian, although our students of every faith and have no faith but we do you know believe in infusing mindfulness and calming techniques into the process. And so the prayer podcast is there if you want I should mention I have a team. I also work with an assist other associate law school consultants who are former assistant directors of law school at large schools, and we even have a former admissions officer from Harvard Law School on our team as well. We have free guides we have like a 50 something page essential guide like 'How to Apply to Law School,' which you can download on our website, we have a guide to brainstorming your personal statement, your diversity statement, we try to put out as much free content as possible and we have a very active YouTube channel where we're posting one to two videos a week.

Brad Baldridge 54:57
Wow. Sounds like you keep busy!

Sydney Montgomery 55:02
I do stay busy.

Brad Baldridge 55:03
All right, so and then all that stuff is accessible at your main website, which would be what?

Sydney Montgomery 55:10
Yes. So if you go to smontgomeryconsulting.com. S for Sidney. So smontgomeryconsulting.com, you just click on 'law school,' you'll be able to see all of those resources, you can even go to breakintolawschool.com. That is the name of our podcast Break Into Law School. So we actually have a free two-day conference next month, June 25 to 26th, you can register for that conference, right on that break into law school website. We're gonna have sessions on how to apply to law school financing your legal education, equity and law school admissions, but also like becoming a law professor climbing the corporate ladder, getting on the bench so that you can see different legal paths. So that's a free conference. And like those with the podcast Break Into Law School, right.

Brad Baldridge 55:55
Is that conference going to happen again in the future?

Sydney Montgomery 55:58
Yes, it's an annual conference.

Brad Baldridge 56:00
Annual conference. Okay.

Sydney Montgomery 56:01
So that's June 25 through 26th. It's completely free. So we have some good sponsors. We're really proud of that.

Brad Baldridge 56:09
Unfortunately, this podcast won't be live before that date is probably not going to go live till June or July.

Sydney Montgomery 56:16
They can watch the replays.

Brad Baldridge 56:18
Oh, okay, great.

Sydney Montgomery 56:20
Yeah, we'll have it available. So you can watch the replays as well.

Brad Baldridge 56:24
So it's a virtual conference?

Sydney Montgomery 56:26
It's a virtual conference.

Brad Baldridge 56:27
Oh, okay. Okay, well, then there you go. You can get out there and, and watch the live.

Sydney Montgomery 56:32
And I would also say that people can also submit questions to bit.ly/breakintolawschool, we answer any and every question live on our podcast about law school admissions. So if you just have questions, and you want to ask me, I will answer them for you.

Brad Baldridge 56:46
Right. So yeah, again, sounds like you're putting a lot of stuff out there free. You've got a lot of consultants and help. And, of course, you've given us a lot of great information here for the last almost an hour now. So I really do appreciate it. And we will stay in touch. Thanks for spending time with us.

Sydney Montgomery 57:06
Of course. Thanks so much. And one more thing, definitely follow us at S Montgomery Consulting on Instagram and Tiktok if you haven't already.

Brad Baldridge 57:13
Okay, sounds good.

Sydney Montgomery 57:15
Awesome. Thanks so much.

Brad Baldridge 57:16
Thank you. Bye bye.

Sydney Montgomery 57:18
Bye.

Brad Baldridge 57:19
All right. That was a great interview. I know I learned a ton. If you want to look up Sydney and learn more about her, all the information is available in the show notes at tamingthehighcostofcollege.com. We appreciate you listening. If you're enjoying what you're hearing, we'd appreciate a review wherever you get your podcasts, especially if you can go to iTunes, or Spotify and leave us a review that helps us get found by other parents that are looking to help with their kids to college. That's all we have for today. I appreciate you listening. We'll see you next week.

Presenter 57:55
Thank you for listening to the Taming the High Cost of College podcast. Now it's time for you to take action head to tamingthehighcostofcollege.com for show notes, bonus content, and to leave feedback for Brad. The next step on your college journey starts now.

Brad Baldrigde is a registered representative of Cambridge Investment Research and an investment advisor representative of Cambridge Investment Research Advisors, a registered investment advisor. Securities are offered through Cambridge Investment Research Incorporated, a broker dealer and member of FINRA and SIPC. Brad owns two companies, Baldridge Wealth Management and Baldridge College Solutions. The Baldridge companies are not affiliated with Cambridge Investment Research.

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The post THCC Episode 162 – Getting Into Law School  appeared first on Taming The High Cost of College.

Today’s Guest:

Mary Morris, CEO of Virginia529 

Mary Morris, CEO of Virginia529, brings more than three decades of financial and tax services experience to her role as an industry authority. She possesses expertise in some of the timeliest issues of the day, including higher education access, education savings, student loan debt, disability savings, financial literacy and more.    

As a knowledgeable and trusted voice, Mary is regularly featured by the most respected national and local media outlets for her honest, direct and unbiased insights about topics that matter most to consumers today. Her experience as the CEO of the nation’s largest 529 plan, as a private lawyer in a national law firm, and as a public servant (having served as the Treasurer of Virginia and Virginia Senior Assistant Attorney General for Tax and Finance), uniquely qualifies Mary as an exceptional resource for financial, taxation, social and legal matters. 

Questions Answered Today:

What does the government’s new loan forgiveness program entail?  

There is about $1.7 trillion in student loan debt in the U.S., and about 90% of that is federal loans. To address this issue, in August, President Biden announced that the government will be forgiving some of these student loans under certain qualifications. This plan entails forgiving: 

• Up to $10,000 in federal student loan debt 
• As much as $20,000 for those who receive Federal Pell Grants (families with lowest household incomes.  

Here are some details on who qualifies, how to apply, and more about what may happen with this program: 

Income Thresholds (the income you need in order to qualify): 

• For individuals – $125,000  
• For those who married – $250,000 ($125,000 apiece)  

How do I apply?  

1. To check if you’re qualified, visit studentaid.gov. 
2. There should be an application form that you need to fill out.  
3. Wait for updates. 
4. You can submit an application until December 31st of 2023.   

What else do I need to know about this new loan forgiveness program?  

• If you have been doing an income-based repayment with studentaid.gov before, they may already have your information. But, just to be sure, make sure to fill out the application form again.  
• There are organizations out there who are fighting for this forgiveness program to be abolished. Hence, there’s no telling what happens—there’s no certainty if these loan forgiveness applications will actually be granted.  
• The loan/s to be forgiven may or may not be subjected to tax (depending on the state) 

Disclaimer: The rules for the new loan forgiveness program are subject to change, so make sure to always tune in for updates.  

Does the government offer other loan forgiveness programs that we might know that much about?  

They do! They have tricky qualifications, but loan forgiveness is not a new concept. It’s been available for years. There’s the Public Student Loan Forgiveness (PSLF), which is granted to those who have been serving the public for more than 10 years. Some of its qualifications include:  

• Working in the public sector (e.g. first responders, teachers, nurses, etc.) for 10 years and paying for your loans diligently during those years. 
• Paying for your loans on time.  
• Etc.  

As mentioned, in order to be successful in getting your loans forgiven, it’s important to learn the nooks and crannies of these tricky programs. Some of the problems people have encountered were that their years of service were not credited and thinking that they’re enrolled when they weren’t, which ultimately led to denial of their applications.  

While there have been efforts to improve these programs and make them as transparent as possible, it’s your responsibility to know everything you need to know—especially when these rules continually change.  

What’s a way to pay for education and not end up in too much debt?  

“We just want people to succeed. We believe in the power of education, a very broad definition of education, and that everyone should have access to it.”

— Mary Morris

Mary is a believer in lifelong learning. She believes that there are many ways to earn enough for your family, and college is only one of them. College may not be for everyone, but education is.  

Mary offers some ways that you could pay for education without breaking the bank. More importantly, these ways promote getting education in ways that fit the student’s learning styles and needs.  

For parents of students who want a four-year degree, consider this important advice: 

Save. Mary runs Virginia529, one of the biggest 529 college savings programs in the U.S., but 529 plans are available nationwide. 529 programs are ways to save for qualified educational expenses tax-free. While 529 programs are mostly used to save and invest for college, coverage has expanded through the years to K-12 educational expenses in some states. 529 programs are a good and popular way to save for college without getting taxed.  

The rule of thirds. Talk to your family and plan how you want to pay for college. One great idea Mary shared is to split college costs into three parts and pay for each through:  

• Your current income  
• Your savings  
• Debt  

That way, even if you incur some debt, since you’re also using current income and savings as part of your plan, you won’t end up with as much debt.  

Ask for help. A lot of families may be missing out on opportunities to help them pay for college because they have no idea that help is available. This happens to families that don’t usually talk about college and sometimes with those who didn’t have anyone that had a college degree. Here are some places you can go to and people you can ask:  

• Local colleges’ financial aid offices  
• Community colleges’ financial aid offices  
• High school counselors 
• Family friends  
• Etc.  

The Free Application for Federal Student Aid (FAFSA) may be intimidating to fill out, but you’ll reap enormous benefits if you’re qualified. So make sure to seek help!  

For those who want to take a different route than college:  

Some kids may feel that they’re ready to take on the world after graduating from high school,  but that’s hardly the case. Mary thinks that, in order to get a decent-paying job and a lifelong enjoyable career, students must still pursue post-secondary education.  

Mary shares some vehicles to get to these jobs and careers:  

1.Training programs. These programs are often offered through community colleges. These often last from 8 to 10 weeks, usually with a job waiting at the end of the certification because community colleges partner with local employers. Students who pass the certifications can get jobs in:  

• Commercial driving  
• Information security 
• Cybersecurity 
• Data management 
• Etc. 

The pay range of these jobs is from $50,000 to $70,000. Some may want to make these jobs their lifelong career, while some may not. But that shouldn’t be a problem as they can get as many certifications as they want while acquiring different skills.  

2. Virginia programs. These programs are exclusive to Virginia residents, but that doesn’t mean other states don’t have corresponding programs. Look for similar programs in your state: 

• G3 – for high-needs skills programs. The tuition is either free, or two-thirds of it is shouldered by the state, and a third is paid by the student.  
• Fast Forward – for adults. This is for workforce development and offers training and educational for certain types of skills. Tuition is free.  

I can’t say this enough: Help is available. You just have to look around! 

What’s the best thing parents can do to help their kids get the best education?  

1. Talk to each other. Talk to your kids about money and financial goals. Don’t be embarrassed about not having enough money or having too much money.  

2. Know what’s important to them. Talk to your kids about what’s important to them because this helps you make your case as to why post-secondary education is a must.  

3. Do your calculations. Most parents forget this! Remember that college costs aren’t the way they used to be. They’re way more expensive, and forgetting this often results in too much debt.  

4. Support their passion. Some parents push their kids into STEM because that’s where the “most money” is. You don’t want them to end up miserable pursuing something they don’t want.  

Do you have any recommended resources that could help with college finances?  

Mary shares the following resources:  

• Virginia529.com – for those in Virginia. They also have a mailing list that regularly sends out new information. Virginia529 also offers the state’s ABLE Disability Savings Programs and in 2023, they will open up a state-facilitated retirement program.  
• SavingForCollege.com – a guide to 529 plans, college savings, student loans, etc.  
• College Savings Plans Network – a guide to 529 plans for all states.  

Links and Resources

Helpful Articles and Resources 

• Taming The High Cost Of College 
• Studentaid.gov 
• SavingForCollege.com 
• College Savings Plans Network 
• Mary Morris’ Contact Info:   
• Website 
• LinkedIn 
• Facebook  
• Twitter 

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If you find our podcasts helpful, please share us on social media and tell your friends!

The bottom line is that we care what you think and want to help you out, so we’d appreciate you reviewing us on your favorite podcast platform. Even better, receive automatic updates by subscribing to the show through your preferred podcast service. 

Transcript Email Download New Tab

Brad Baldridge 0:00
Details on the new loan forgiveness and what it means for parents. Coming up next.

Presenter 0:06
You have kids, they grow up, and before you know it's it's time to plan for college. Where do you start? How much is it going to cost? Will you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? A list of questions is never ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College podcast. Here is your host certified financial planner, Brad Baldridge.

Brad Baldridge 0:36
Hello, and welcome to Taming the High Cost of College. I'm your host Brad Baldridge. Today we have an interview with Mary Morris. She is the CEO of Virginia529. And we talked today quite a bit about the breaking news around the loan forgiveness where President Biden has put together a program that will pay off 10,000 or 20,000 dollars of student loan debt. For many borrowers, again, if your income qualifies, etc. We'll talk a little bit more about the details of that program. And then we also talk a little bit more about kind of the philosophy of education and how families might think about planning and paying for college. One good idea where we mentioned maybe we 1/3 could be paid by the parents' savings and investments, a third in current income, and a third by loans as one way to think about how college might be covered. As always shownotes are available at our website tamingthehighcostofcollege.com/ 161. We'll put all the links and other information from this interview on that page. So you can go directly there. So if you're driving or exercising, you can just go get the notes later. Alright, let's go ahead and jump into the interview. Today I'm sitting down with Mary Morris. She is the CEO of the Virginia529. Welcome, Mary.

Mary Morris 1:57
Hi, good to be with you today.

Brad Baldridge 1:59
All right. So today we're gonna talk primarily about kind of the breaking news around loan forgiveness and that kind of stuff. But before we get into that, do you mind sharing a little bit about what a CEO of a 529 actually does, and kind of what some of your history is?

Mary Morris 2:15
Sure, I've been doing this for a long time, my career goes back to the beginning of 529s in Virginia, and I will not go all the way back there. But I've been in my current job for about 15 years. And I have the privilege of running what is the largest 529 program in the country. And 529 programs are simply tax-advantaged ways for families to save for mostly for higher education expenses, although what a 529 can be used for has been expanded a bit in recent years. And we can talk about that some other day probably but it helps families all around the country. We have several about two and a half million accounts across the country in Virginia529. And we also do we have moved more into maybe holistic financial wellness at Virginia529 we also offer the state's ABLE Disability Savings Programs, and in 2023 will open up a state-facilitated retirement program to be made available through employers who don't already offer retirement options. So it's really about helping families wherever they are with whatever their savings goals are to do that in an efficient and cost-effective way.

Brad Baldridge 3:24
Right? Absolutely. So well, great. So let's tap some of that experience then. So obviously, the breaking news. So it's middle of October right now, just to kind of put a frame of reference on this, because people might be listening, later in the in the year or whatever. But they've just opened up the form that helps people with loan forgiveness. So it sounds like you've looked at the form, it's relatively easy to do. And can you tell us a little bit more about what the broad scope of what loan forgiveness is going on? For those that have been under a rock or haven't heard anything about it?

Mary Morris 3:59
Yeah, well, it's been discussed for years, really, it has been sort of campaign talking point. It's become quite political, as as many things do these days. And I try to stay away from that. So I'm not talking about the policy part of it. But I've been hearing for years, particularly through the pandemic, about the problem of student debt. I never use the crisis word, for going through volatile markets or whatever. So I don't see it as a crisis. But some people use that terminology, but it's a problem. You have 1.6 to 1.7 trillion dollars in student loan debt across the country, about 90% of that is in federally guaranteed or federal loan balances. So it's a problem. And it's something that in 529 programs, we try to help families avoid that problem by planning and saving early so they take on either no debt or less student debt, but we are where we are today. Right. And we're coming out of a pandemic and a time when millennials in particular and younger graduates and folks who have been to school, had some school maybe didn't finish, that's one of the biggest student debt issues are people who take on student debt, but don't complete their degree or their credential. And so they end up with debt, that they don't have a good way to repay, because they're not making enough money to do that. So that's where all the discussion comes around debt. And so there have been proposals to eliminate debt, some debt. And that's where we're down to now. And so yeah, we've had lots of people Virginia529, and I said, 'Well, I worry about it, they're just going to forgive it.' And we hear that sometimes, should I, why should I save for college? And I would always tell people don't take anything to the bank until it's actually there. Whether it's student debt, I'm talking about free college for years as well. And we haven't really seen it, you see more close to free options, at least on tuition in community college, that has been a trend, in differences states. But it's not universal. So unless you know exactly what you want to do, and you're all set, don't count on things like that. It makes you not think about planning for yourself and learning and talking as a family about what you want to do. So on the student debt front, the latest and greatest, I guess, is that President Biden, I guess, back at the end of August, so about two months ago, announced after thinking about it, since his presidency began, I guess, that there would be a plan to forgive up to $10,000 in federal student loan debt, and then the parent federal loans as well are eligible for this for certain individuals. And as much as 20,000, for anybody who receives Federal Pell Grants. And that just means for those those families, those individuals who had the lowest household incomes, and were eligible for Federal Pell Grants, then if they also took on some debt, which does happen, even if you get that federal financial aid, they could actually have more forgiven. And there's some income thresholds, I think, if you're an individual applying for relief, your household income today has to be under $125,000. And if you're married, then it can be up to $250,000. So pretty, pretty generous and civil loan forgiveness will cover most people, I guess, are a great number of those who have outstanding federal debt. And yeah, just this week, the portal at studentaid.gov. That's where I would send people go to studentaid.gov. And there's a lot of information on student financial aid, generally, on this forgiveness program, who's eligible, who isn't, there is what appears right when you open up that site, there is a one page form to complete with some basic information, name, address, social security number, household income, your income, things like that, to qualify for the forgiveness, the most recent I read is that if you have already been in an Income-Based Repayment, or you had some other activity with the federal loan program in the last few years, and they have all of your information, you shouldn't have to do the form, it'll happen automatically. But I would suggest going ahead and doing the form, because then you know that you've got the information in, and it's all up to date, and you've done what you can do, and then sit back and wait.

Brad Baldridge 8:14
Right,

Mary Morris 8:15
Because the other breaking news is that there are some challenges to this loan relief program in court in federal court, I think most recently, it may, who knows if they'll accept it, if it is, in good form. I'm a former lawyer as well. So I'm not a practicing lawyer. So I don't know all the ins and outs. But there are some challenges in federal court across the country, some attorneys general, who were state-elected officials are challenging the debt elimination program, debt reduction program. There are some I think federal loan servicers who are challenging it. So there are a number of types of court challenges, I assume they're on a fast track, they're going to try and get that done quickly. So it does put some uncertainty. But from an individual's perspective, if you have student debt, I know most of your audience, you do tend to talk more to families with high school aged kids, unfortunately, what I know is that a lot of those parents are still carrying student debt themselves. So if you're in that boat, and you're worrying about what to do about your kids, but you've also got your own issues to deal with, then certainly, I would go to studentaid.gov. See if you're eligible, fill out the form. And you've done what you can do, and then the rest of it will play out, as it will play out.

Brad Baldridge 9:26
Right, exactly. So take action, fill out the form, do the best you can on it, and then wait and see if this actually comes all the way to the end. And again, it could get stopped because of these lawsuits or other political or judicial or whatever, procedural things. So we don't know but you certainly could do that. But another interesting thought on that process, right? So I have a son that's in college and his freshman loan was issued and on the books soon enough that he can get it forgiven. So he took out a sophomore loan so as he's receiving his software alone, he can turn around and get as freshmen, forgiven. So I think there might be a lot of parents who are, some kids are in college, and some kids are still in high school, and they're saying, 'Oh, okay, so some of my kids get their loans forgiven. And some of them unfortunately, don't have their loan yet, so they can't get it forgiven,' which is my situation, I also have a freshman whose loans aren't actually issued yet. So he's, unfortunately gonna miss the opportunity to get anything forgiven. So let's talk a little bit about...

Mary Morris 10:31
Well, you don't have to receive it. I mean, I'm looking on on their site. And some states, it looks like, would my tax that forgiveness. So if you don't want that, you don't have to accept the student debt relief. I know, in Virginia, they've said it will not be taxed, we sort of follow the federal rules there for how you mark income, and it's definitely not going to be taxed at the federal level. Although I would point out generally, when you have forgiveness of debt, that is a taxable event. So you have taxable income, to the extent you don't have to repay that debt. There are some exceptions to that if you're insolvent, or what have you. But in this instance, a part of this whole deal is that it also will not be subject to federal, and in many instances, state income tax either. But that is something

Brad Baldridge 11:21
And if you're in a state where they will tax you, again to knock 10,000 off, and they might say, well, because we forgave 10,000, were going to tax you 500 or 600, or 800, or whatever, 5% or whatever.

Mary Morris 11:36
Right? Right.

Brad Baldridge 11:36
So it's still gonna be well worth it, to accept the forgiveness in most instances, but just have to plan on the fact that taxes will be different. Coming up, depending on again, when this forgiveness actually happens, it might happen in this tax year or next tax year. So who knows exactly? I think that's one of the big points is, nobody knows a lot about details, even still, I mean, we're getting more information

Mary Morris 12:01
They're evolving, for sure.

Brad Baldridge 12:03
And so a week from now, it might be drastically different than what we've already explained today. So always go to the websites and get the latest information.

Mary Morris 12:14
Right. And I will say, for one thing, for those who are paying now, or most likely aren't, we've had sort of a hold or a waiver on making student payments, and no interest has accrued, really, since close to the beginning of the pandemic, I guess. And that has been extended again through the end of 2022. So everyone can at least wait until the end of this year to see what's sorted out, you can apply for the debt relief through December 31 of 2023. So you've also got some time to apply for that debt relief as well.

Brad Baldridge 12:45
Right, exactly. So there is a lot of, again, moving rules and so forth, and they announced it, and now they're starting to come out with some details and get a better understanding, it's also important to realize that students can get some of their loans forgiven and parents that have federal loans for their students can get some of those forgiven. And parents that just happen to have debt carried over from when they were in college, they could get some of that forgiven. So there's a lot of opportunity, depending on what the types of loans and and your balances and all that type of stuff. So it's probably worth hitting the website and trying to figure it out.

Mary Morris 13:22
Spending some time on studentaid.gov and reading about it. Yeah, absolutely.

Brad Baldridge 13:26
And then doing what needs to be done. So I think all that stuff is relatively important. But if you got kids in high school, let's talk a little bit about what does that mean, what are your thoughts? I mean, my philosophy is you probably don't want to bank on loan forgiveness in any way. Right? There's loans for teachers that will be forgiven, if you ultimately teach, there's loans for nurses where if you ultimately stay in the health profession, they'll ultimately be forgiven. And now there's, if you work for charities and nonprofits, there's ways to get loans forgiven. The challenge, I think, with a typical parent of a sophomore, junior, senior in high school, is you're making very big assumptions on what their career is going to look like 5-10 years from now.

Mary Morris 14:14
You can always find, right, yeah, we've seen this and the public student loan forgiveness program PSLF, that program has been around for a long time, more than 10 years. And the nasty little surprise that many people had during the pandemic, in fact, is when that story really broke, was that some 90% of people who thought they were qualifying for it, thought they were enrolled, thought that their public service was being credited, was not. And they were denied forgiveness. And that was huge shock. And so more recently, that's something else that in the last year, they've tried to correct, there have been some improvements to that program to make it more transparent, to make it easier to understand how it works, what types of loans qualify, but it still requires, as I understand that they've talked about lowering this threshold, and we'll see, to be to be determined, I guess, TBD. Whether that changes, but right now you have to work 10 years in the public sector, in order to get that forgiveness, and you need to be paying on your loans at the same time. So one of those things that can catch you is that you have to make your payment on time every month. If you're not on time, then you don't get credit for that payment. So unless you're a real stickler, a lot of people don't do that you don't even pay attention, 'Oh in the grace period,' or whatever, well, nope, that might make you not qualify, or if whatever you're working doesn't qualify for that public sector. And it's pretty broad, to be working, as you said, nonprofit teaching anything that's in the public sector. And 10 years is a long time to do anything, right. Most people don't stay in a job that long. So it's just not a sure thing. It is a way to maybe make those loans manageable if you know, you want to work in that sector. And again, I think that's why they have that program. They want to encourage people to work in those public sector jobs, whether it's first responders, as you said, teachers, nurses, in some instances if they're working for a nonprofit, so you want to encourage people to do that. If they have student debt, it's a way to say, 'Well, at least I'll be able to pay off my debt sometime in the future.' The best thing I tell people, and we talk to families all the time, and not that I make all the best choices, and I've had my boneheaded moves, I just get smarter with age, and I've got a little bit of age on me now, is to say to families, one talk, talk to each other. So many families, I'm sure you hear this all the time, because you're talking to families, parents don't talk to their kids about finances. It's been one of those taboos in this country, that you just don't really talk about it. You don't want them to worry or you don't, you're embarrassed that your money, you have too much income or not enough or whatever. And you don't have to overshare I don't think you have to open up a vein and share everything. But you can talk about what's realistic with your kids. And as they get into their middle school and high school years. Talk to them about what they want to do talk about your experiences. If you're a parent who didn't go to college and you wish that you had or you aspire to that for your kids. Tell them why, tell them why you think your life's been harder because you didn't have specific training. And I'm a big, big, big proponent of community college education, of certificate and credential programs, I don't think that every single person has to have a four-year degree.

Brad Baldridge 17:46
Yes, I think that's right. Right is there's a school counselors, I don't know, I shouldn't throw them under the bus? That's not fair. I think there's a large swath of the population, that their solution for education has always just been college for all, that if everybody just goes and gets college education, then we'll solve a lot of these problems. The challenge, of course, is not, a lot of people out there or college education is not a good fit. And they've made it, it's been kind of ostracized almost to the point where if you are taking an alternate path, it might be a great fit for you and lead to a fantastic career. But you don't want to talk about it at the dinner table, or Thanksgiving. So then you're afraid the aunts and uncles are going to say, 'Well, why don't you go into college or...' And again, I think education for all is what needs to be said not college for all. And education can be, as you mentioned, certificate programs, community college, internships, apprentice programs, college, I mean college is a good fit for a lot, but not all.

Mary Morris 18:55
Absolutely. And the current title for the strategic plan for the State Council of Higher Education in Virginia, is pathways to opportunity. And I really liked that. And we talk a lot about pathways, stepping stones, just because you get a certificate when you come out of high school, you're not ready, you know, you're 18, and a lot of 18 year olds aren't very mature, they really had, their brains haven't developed. I think, in some part in this country, we figure well, that's what college is for, you spend four years and you get to mature and live on your own and you'll learn something but you also learn how to live in society and to be an adult being really expensive way of doing that if they're not ready for it. So, again, you have to know your kid, your kid has to know what's important to them, what they want to do, and I really do think that encouraging some form of post secondary education is important. Some kids won't do that, but also say, hey, if you go out and work, and that's not that much fun because you find that you can't get a job that pays you enough to rent an apartment and buy groceries and have any kind of a life, then maybe that sends you back to the community colleges to a four year school to some kind of a training program. But there are millions, millions of highly skilled jobs in this country that employers are begging to hire people for, workforce development is just such a huge buzzword almost. That's where opportunities lie. And again, the the community colleges, there are other ways to get into this programs. But the community colleges are the real delivery vehicle, I guess, for those types of programs because they work with local employers. And they say, we have this neat, we have a steady pipeline of jobs for as many students as you can turn out, who will and it can be a medical technology, it might be in construction field, it might be an information security, cybersecurity, data management, those are such, there's so much need for so many people in those areas, commercial driver's licenses, there's a need for more of those, they simply cannot get enough people through a pipeline to take the CDL course. And I believe it's a eight-week, ten-week course not very long, offered through community colleges. And generally, there's a job waiting for you at the other end of the line. And for a lot of these very technical programs, it is the employer in the community who is providing the instructional materials, sometimes the instructors, the competency tests, they know what they need. And if you can complete the course, and complete the competency test, there's a job waiting, and sometimes that's for an 18, 19, 20 year old, that's a 50, 60, 70 thousand dollar job waiting for them, may not be what they want to do forever, that's fine. Go back and take another course, take another credential. Again, I'm a big fan of lifelong learning, you go back for a new certificate for something new as technology changes as your needs change. As your interests change. You can go back to school, you know, you can go back and get a business degree that lets you be your own boss, you know, if you're a you went through, I have kids that I talked to several years ago at a Junior Achievement Career Center discussion. And he just knew he wanted to be an HVAC, heating, ventilating air conditioning installer. Mechanic, basically, you had a friend whose dad did that. He liked working with his hands he liked not working in an office, you know, just driving around and installing this equipment. He wasn't that impressed with what he could make, ultimately, because we have all these charts, and you can look and see what's median income, working on your own, wasn't bad, but it wasn't where he wanted to be maybe in 20 years, I said, 'Well, you know, you do that for a while you go back and you get a business degree. So you become the boss, and you have other people who work for you. But you keep putting in that HVAC equipment, or plumbing or you know, you name the trades.' I don't know about you and where you live, but where I live in Virginia trying to find somebody to come and do work that I don't know how to do and my house is not that easy, plumbing in particular, that is an aging profession, and you can make really good money, there can be their apprenticeship programs, as you said, for that all different ways to get those skills. And those are all perfectly valid, wonderful ways to take care of yourself and your family. So talk to your family about what works for you. And then when you think about paying for any of that, what's it gonna cost and with most families, we say, if you can think about saving a third of the cost, paying for about a third of the cost from just current income, because you're already paying for room and board for your kids anyway, generally, or they're paying for it themselves. And if you have to take on debt, no more than a third of what your expenses are going to be. And find those lower cost options, if you haven't been able to save for the cost, and make sure that whatever they want to go into will support the debt repayment if they take it off. That's another thing.

Brad Baldridge 24:06
Exactly. I think that's a challenge that a lot of families, you know, 10 and 20 years ago, as colleges got more and more expensive, they stopped, they didn't really do the calculation, it was out there that you know, the college was the golden ticket, you just go get a degree, and life will be good. As college get more expensive now all of a sudden, there's loans and the debt that are associated with it, all of a sudden the math doesn't work as well as it used to. And just like many, you know many things in life, right? The prices go up with demand and etc. And eventually there's a disconnect. And now the word kind of in a reset mode where again, it used to be people say that all the time. Now there's plenty people that say college isn't worth it. And I think, my opinion of it is you gotta be careful. There are situations where it's obviously not worth it. And there's a lot of situations where it obviously is. And there's a lot of situations that kind of fall in the middle where maybe the math isn't quite as good as it should be. But if it's your passion, well, then maybe you're gonna do it anyway, or not, right?

Mary Morris 25:08
So yeah, I don't think you push every kid into a STEM program, right? Or looking where you can make the most money because I also don't think that's the most important thing in life. And if you hate it, and you're miserable, then you're going to hate it and be miserable. And there's just no point in that. But you know, I'm an example, I have benefited tremendously. And I followed a pretty traditional path, I went through high school, I went to William & Mary, I actually finished up at Christopher Newport, personal choices, I had to work. And that made more sense for me, I was out for a couple of years, I went back to law school, got my law degree, I got an additional degree on top of that, a master of law and taxation. And it's, I haven't practiced law for most of my career, but I've used those degrees, right. And I've been able to do a lot of different things and have the life that I wanted to have. So I'm certainly a beneficiary of a more traditional trajectory, and those schools aren't going away. And for our doctors, for lawyers, for you know, those with professional aspirations, you have to have the four-year degree to get on to the graduate degree, but they aren't all created equal. So you just have to know if you're going to have a brilliant daughter who came out with an English degree and got a graduate degree in Shakespeare and Renaissance Literature, still a little bit more of a challenge, and she worked for a nonprofit, don't pay very much money, you know, she didn't have any debt for undergrad we took, we were able to take care of that we'd used our 529, but she took on some for graduate school, but didn't go into a profession that was likely to pay out as higher rate. So it's been a little bit more of a challenge. Still, she's smart, she's hard working, she'll be fine. You know, she did complete that credential. And it'll be fun, it might take a little bit longer, it may not be as easy as it might have been had she been a lawyer or a doctor, but she's following her passion. So that's fine. I have a younger daughter who's really still figuring it out. And education really wasn't the path for her. So spending time with my kids and seeing others and talking to them. And this job that I've been in has really made me understand more and be much more empathetic to the fact that there is no one right path for everybody. You got to make the best choices you can, and in families and again, I really see it a lot with families, if you don't have a history of education being important. If your parents, they may be embarrassed even to talk about it. You know, you see that a lot with families, they don't talk about it, because they don't really know how to talk about it. And that's just a shame. And sometimes the kids have to open up to their parents and say, 'Hey, we understand, you've done great, we know you didn't get a college degree, but you've made a nice life for us. But how can we talk about finding someone that can help us?' We work in Virginia a lot with college access providers who are in many schools, most states have them, I think they're fabulous. And they work with students, and particularly some at risk. Kids who don't maybe have a role model at home, don't have that financial educational level at home, to know how to complete the FAFSA, the Free Application for Federal Student Aid, which everyone should complete because it's not just federal Pell Grant eligibility, it helps you get all kinds of financial aid at the state and federal level, but it's pretty intimidating form to fill out. So find a mentor, find somebody in your high schools, you know, find a family member, find a friend find somebody, if you as a parent aren't comfortable talking with your kids about this, to help you through the process. There are people out there, talk to you schools, any local college, community college, they'll have somebody in their financial aid office, who can help walk you through it and go how do we make this manageable? What are the programs out there? And again, in Virginia, at the community college level, we have a thing called G3, a lot of the programs and they're particularly high needs skills programs, tuition is free, or it's a cost share between the student in the state, the state covers two thirds of the cost. And the student covers a third. There's another program called Fast Forward, which is for more adults. That's more in the credentials arena. And again, for high demand, workforce development types of skills, tuition is completely paid for. So there's a lot of support out there, you just have to do a little bit of work to find it sometimes. And I often worry that that those who have the most need, also have just that they have less ability because they just aren't aware of what's out there. And they haven't been tapped into some of those resources to find a way to make it doable and to make it affordable. And our whole mission. You know, I'll go back to what we do at Virginia529 is to make education more affordable and more accessible for all Virginians. And because we're a national program, I'll take that nationwide. We try to find ways to make educational pathways more accessible and more affordable to everybody.

Brad Baldridge 30:02
Right, absolutely. All right. So if people want to learn more about Virginia529, or anything that you're involved with, what what's a good way for them to reach out or websites or what you know what might be available for you.

Mary Morris 30:15
It's so easy, Virginia529.com, just go out there, tons of information. And I'll even throw out a few others, my guys, so that's one if you're in Virginia, and again, we'll send you, we have lots of information you can get on our mailing list, because we do a lot more than just tell people to save money in our accounts. SavingForCollege.com has a lot of good information, CollegeSavings.org, lists, College Savings Plans Network, they have a ton of information as well. And you can get information about all states programs, or wherever you are. Basically, if you put in your state name, and 529, you will find a lot of information. A lot of that will be Virginia, because we do a good job with digital marketing. But you can get information on 529 programs, we always tell people to start with their state. Again, we have many people from all over the country in our programs. But every state has 529 program. And because they are run by the states, we don't have the profit motive in there. We just want people to succeed, we we believe in the power of education, a very broad definition of education, and that everyone should have access to it. And so we just try to get the word out. And for those who are able to plan for it to save for it, because there is a cost, then we provide vehicles that allow you to do that federal and state tax-free.

Brad Baldridge 31:35
All right, well, great. I really do appreciate all the good information. And I think we will probably have you back in a few months. And we'll talk a little bit more about 529 specifically,

Mary Morris 31:45
Be happy to do that. Always like to talk about this stuff.

Brad Baldridge 31:47
Yes. All right. Thank you.

Mary Morris 31:49
Thank you so much.

Brad Baldridge 31:51
All right. That was a great interview. As we've mentioned many times you need to go to studentaid.gov to get all the latest and greatest details on what's going on. But hopefully by the time you're listening to this, maybe the programs are in full force and things are moving along. That's all we have for today. We look forward to talking next week.

Presenter 32:11
Thank you for listening to the Taming the High Cost of College podcast. Now it's time for you to take action. Head to tamingthehighcostofcollege.com for show notes, bonus content, and to leave feedback for Brad. The next step on your college journey starts now.

Brad Baldridge is a registered representative of Cambridge Investment Research and an investment advisor representative of Cambridge Investment Research Advisors, a registered investment advisor. Securities are offered through Cambridge Investment Research Incorporated, a broker dealer and member of FINRA and SIPC. Brad owns two companies, Baldridge Wealth Management and Baldridge College Solutions. The Baldridge companies are not affiliated with Cambridge Investment Research.

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The post THCC Episode 161 – Accessible Education for All  appeared first on Taming The High Cost of College.

Today’s Guest:

Suzanne Davis, Founder of Academic Writing Success 

Suzanne Davis is an online academic writing tutor. For Suzanne, academic writing is an art and a skill anyone can learn. With practice, anyone can become a great writer who informs, persuades, and teaches the world new ideas. 

To help students feel confident in their writing and research skills, she provides one-on-one online academic writing tutoring sessions, writing feedback, and revision of her students’ written work. She also teaches all phases of the writing process from brainstorming to completing a final draft. Moreover, she helps students develop writing and researching skills for all college-level writing assignments.  

Suzanne believes that when students have confidence in their writing, they have the power to change their lives and change the lives of others. 

Questions Answered Today:

What do colleges really look at when they ask students to write essays?  

The real purpose why colleges ask students to write essays is that they want to see the student’s:  

• Writing ability  
• Content  
• Writing voice  

According to Suzanne, among the three, the hardest to replicate is the student’s “writing voice,” as it is highly personal and entirely dependent on the message the student wants to convey. This is the reason why it’s never advisable for parents to write their kids’ college application essays.  

As a parent, how do I help my student become a better writer?  

Parents are often frontliners in their students’ college applications. However, as we already know, writing is one of the things parents can’t do on behalf of their kids. Doing so is dishonest, unethical, and is likely to be a disservice to the student if they get accepted to college without having the required writing skills.  

Suzanne laid out some advice on how parents can actually help their kids become better writers without breaking ethical boundaries:  

• Provide feedback for the student. Note that this is only applicable for parents who actually know the nooks and crannies of writing. 
• Ask someone else for feedback. “Someone else” has to be someone familiar with the technicalities of writing. It could be a teacher, guidance counselor, or other professionals with relevant background such as Suzanne. 
• Look for legitimate resources and recommend them to, or learn from them, with your student. Suzanne mentioned a good resource—College Essay Guy, where students can look at essay formatting, instructions, and samples of good college essays and personal statements.  

Whether or not parents are good writers, it’s important that they’re involved as their students attempt to sharpen their writing skills. Looking at some terrific writing examples and then discussing them with your student greatly helps. Questions that are as simple as the following could go a long way:  

• What do you think about this piece of writing?  
• Why do you think this is a great writing piece?  
• What is neat/what is unusual about this?  

What does a good scholarship/college application essay have?  

Suzanne helps students craft creative essays that not only get her students into top colleges but help them earn scholarships. These scholarships are usually available through colleges themselves, and she talked about how to win scholarships by writing great essays.  

The most common rule, of course, is to personalize the essays. The student should not submit one generic essay for every scholarship application. Simply tweaking them in an attempt to make each of them different may not work either.  

Here are some characteristics of a scholarship-winning college application essay:  

• It should tell a unique story. Contrary to what many think, the story doesn’t have to be grand or tragic for it to be unforgettable. This unique idea should then be connected to why the student chooses the college they’re applying to. 
• It should address the question asked. Colleges and scholarship application essays usually pose a question that serves as a writing prompt. It is vital that the content of the essay doesn’t miss this.  

How long does it usually take to write a good essay?  

The entire process from brainstorming to making revisions and editing takes about a month. It’s not like a usual essay that a student writes in an hour or two. There are writing phases that are commonly followed.  

Suzanne works together with her students to go through the process of:  

• Brainstorming. This usually takes a long time because coming up with an idea that stands up matters. In this process, students can use different brainstorming tools such as: 

1. Lists 
2. Mind maps  
3. Virtual sticky notes  
4. Much more 

• Freewriting. With an idea gathered from the brainstorming, the student has the freedom to write according to how they want to explore the initial idea that they have.  
• Revising and editing. After the student writes a draft, Suzanne once again becomes involved to help the student improve their current piece. The editing process involves helping the student organize their ideas better by coming up with:  

1. A good introduction that captures the audience’s attention 
2. Thesis statement  
3. Supporting ideas 
4. Conclusion  

In this editing process, Suzanne also helps oversee the essay’s technicalities, such as: 

1. Punctuation  
2. Grammar  
3. Sentence fragments 
4. Spelling 
5. Etc.  

Writing a college and scholarship-worthy paper is not easy. But as long as the student is willing to learn, cooperate, and put in effort, it is certainly doable!  

Brad Recommends

Today, I’d like to talk about The Scholarship Guide for Busy Parents. This is a quick four-video course that I made to help busy parents learn basic but vital information about scholarships.  

The Scholarship Guide provides information on:  

• Scholarships that may or may work for your family  
• Scholarships colleges offer  
• Scholarships outside colleges (e.g. charities, local corporations, school districts, etc.)  

Why I think you should give The Scholarship Guide a go:  

• It increases the odds of your student winning scholarships. It’s best to use it along with the help of professionals like Suzanne and me.  
• It’s quick and designed for busy parents.  
• It’s free!  

Get it now by visiting my website and clicking on the ‘Resources’ tab!  

Links and Resources

Helpful Articles and Resources 

• Taming The High Cost Of College 
• The Scholarship Guide for Busy Parents  
• Ethan Sawyer, the College Essay Guy 
• Suzanne Davis’ Contact Info:   
• Email – [email protected] 
• Website 
• LinkedIn 
• Facebook  
• Pinterest  

THANKS FOR JOINING US!

We’d like to extend an invitation to our listeners to share their feedback and questions. Contact us to submit a question.

If you find our podcasts helpful, please share us on social media and tell your friends!

The bottom line is that we care what you think and want to help you out, so we’d appreciate you reviewing us on your favorite podcast platform. Even better, receive automatic updates by subscribing to the show through your preferred podcast service. 

Transcript Email Download New Tab

Brad Baldridge 0:00
Today we're gonna talk about essays and personal statements.

Presenter 0:04
You have kids, they grow up and before you know it, it's time to plan for college. Where do you start? How much is it going to cost? Will you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? The list of questions is never-ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College podcast. Here is your host, certified financial planner, Brad Baldridge.

Brad Baldridge 0:34
Hello, welcome to Taming the High Cost of College. I'm your host, Brad Baldridge. Today, we have an interview with Suzanne Davis. She's the owner of Academic Writing Success. And we're going to talk a lot about personal statements and applications and supplemental essays, and all the things that students need to write in order to complete their applications for college, and also perhaps pursue scholarships as well. So on the scholarship theme, in Brad Recommends, I'm going to get into The Scholarship Guide for Busy Parents, a great resource you can learn a little bit more about right after we have this interview. So as I mentioned, the challenge with writing for many families is understanding what it's going to take to actually get accepted, and how to recognize good writing when you see it. I've been working with my son, and one of the challenges that we had was I'm not a writer, and I can't really coach and deal with the writing side of the application. So we worked with a family friend who spent a few hours with my son, probably more than a few, it's probably six or seven hours to work out how to write the essays and come up with a good topic and that type of thing. So if you're looking to learn more about the writing process, Suzanne is going to give us a great overview, and talk a little bit more about how she helps families in the writing process. And then stay tuned for The Scholarship Guide for Busy Parents. Let's jump into the interview.

Today we're talking with Suzanne Davis. She's the owner of Academic Writing Success. Welcome, Suzanne.

Suzanne Davis 2:04
Welcome and thank you for having me today.

Brad Baldridge 2:08
All right, so you own a company called Academic Writing success. Can you tell us a little bit about what it is, and why you decided to launch the company?

Suzanne Davis 2:19
Okay, so Academic Writing Success is a coaching center, this combination of coaching and tutoring where I help students that want to excel in their writing classes, if it's to get into college, or in college, or even some students down the road with graduate school. And really, I came into this because I had been teaching at the university level. And I had been teaching academic writing and academic writing combined with ESL there. And I really believed in that one on one connection that I had with students. And so I would have that office meeting with every single writing student for 15 minutes every week, and I realized my office hours were longer than any other professors. And I was going almost 15 office hours. And I couldn't keep that up. But I felt like students really needed that. And so I knew I wanted to go into working one on one with students. I learned about doing it online, and I thought this is the way I can help people from all over the world.

Brad Baldridge 3:41
Okay, so can you tell us a little bit more about what coaching is versus say what an editor might do or other writing professionals?

Suzanne Davis 3:52
Okay, so with coaching, I'm really guiding students from the beginning of the whole writing process. So how do you brainstorm, how do you come up with ideas? Things like how do you find research or evidence to prove your ideas, write that thesis statement. And all of those pieces, plus I do some teaching, as we're doing that. So I might notice in this writing piece that they really struggle with sentence fragments, right. So that's something that has to be solved going forward. And so as a coach, I'm helping them go through that entire process, but I'm also pulling out from their writing. Okay, here are some sentence fragments. This is what a sentence fragment is. And then how can we fix that and do that in your own writing. So it's more personalized than editing where I do have people in the past who've wanted editing and they just send me a piece and they say, exit. And that's very, very different.

Brad Baldridge 5:08
Right? So I guess when the if, where you're relevant to the folks that are typically listening to this podcast, which is, parents of high school kids looking at college, I think, and it's things like scholarship essays and personal statements and their applications and that kind of stuff. But can you help parents understand? You know, I think sometimes parents think that, 'Oh, I'm a good writer, I'm going to just jump in there and help my student do this.' And I think a lot of times, they're not really coaching the student to write something, they're just writing it for them, or what the students sitting next to them. How do you you work with a student? How do you draw that line to make sure that it's still the students work and that your work, so to speak? That's part A, and the reason I bring this up is I've hear from a lot of college side, you know, people that read the the writing, that say, they can very easily tell when it wasn't written by a student. So the idea that it will mom or dad is just going to knock it out and get it done. And it'll be good enough, and then we don't have to worry about it generally doesn't work very well.

Suzanne Davis 6:16
No, it doesn't. Because one of the things that colleges are really looking at in that application process is not just the writing ability and the content, but kind of this elusive thing called writing voice, they want to have a sense of that student through that piece of writing. And they want to understand the students' values too which come through in a personal statement just based on some of the questions that they're asking, and parents can't quite replicate that. And I can't replicate that either. So when I work with a student, and I'm coaching them, it's, yes, we're looking at the prompts. But also, while I'm doing that process with them, I'm designing what we call 'free writing activities.' And so these are writing activities where we just start off for 5 or 10 minutes. And they have a prompt, it's usually something that's related in some way to their topic, or to the whole situation around going to college. And it's no pressure, I'm not going to create it, I'm not saying like that, but their voice is coming through, and their ideas are coming through. And that's really a great starting point for every time we coach. One of my clients, what she said she loved about me was that I didn't change who she was in her style when we were going through. Now I could give feedback on the content and how it's organized. And I could point out, there's things here that really are clear. But I also could say, here's some things we could do. But this always depends on you and what you want to convey. Because you have your own way of expressing things. I never want to be the person to take over just by applying certain writing rules.

Brad Baldridge 8:40
Right. Okay.

Suzanne Davis 8:42
And that students do end up doing really well. Because it was her own work.

Brad Baldridge 8:48
Right. So, and I think that's important, as again, I know very little about writing personally, it's not my area of expertise, obviously. But when we're, I guess, needing to do writing, how does a parent understand when maybe the writing isn't up to par? And again, I believe that I can recognize some writing from a maybe a technical standpoint of 'You don't understand common rules, obviously, you need a lot of work on this.' But how do you recognize if it's a good topic, or some of that more broad and broad thoughts for parents, if they're, they're kind of the frontline here. They might see the problem, or they might not. So how do they recognize, well, this truly is a problem or not.

Suzanne Davis 9:35
Okay. There are a couple of things I would suggest and that's getting feedback outside of the parent, whether it's your your child is at a school where maybe the guidance counselor will look over something or a teacher or some other adult that's more familiar with what's expected. You know, I have the free consultations where I look and I can give that that feedback. And the other piece is, there's books on how to write personal statements out there, where they give you sample ones. There's one written by, oh, I can't remember his name, but he goes by the College Essay Guy And so he has examples like that. So kind of sewing through.

Brad Baldridge 10:26
Ethan Sawyer?

Suzanne Davis 10:27
Yeah, it's Ethan...

Brad Baldridge 10:29
The essay guy.

Suzanne Davis 10:30
Yeah

Brad Baldridge 10:30
Sorry. Yeah. That's Ethan Sawyer, yes. And we'll put, I'll put a link to his book and his website as well.

Suzanne Davis 10:38
He's very good with it. You can even go on his websites and look at some of the examples and how he's explained certain things. So that will help give the parent a better eye. But I also recommend have your your child read through this with you start talking about that piece of writing? And why do they think it works? You know, what's really neat, and unusual and working about that?

Brad Baldridge 11:06
Right? Absolutely. So I think there's a challenge. And I this is kind of an observation that I've made. You know, if you had a student that said, 'Hey, Mom, I'd really love to learn how to play the piano.' If you happen to know how to play the piano, well, then you theoretically could say, alright, well sit down, I'll start teaching you. But if you don't know how to play the piano, like, and most of us don't, the first thought is, 'Okay, well, piano lessons.' Or, and then you might go beyond that and say, 'Well, okay, in-person piano lessons,' but but maybe there's the online piano lessons now and that type of thing, where, and my son taught himself guitar, by using online courses, so it certainly is possible. But when we get into writing, kind of, we're in the same boat, I think, but people don't think of it that way of, 'Wow, I'm in over my head, when it comes to coaching on writing. I could learn the mechanics of writing, and then learn how to be a good writing coach. Or I could just outsource it to someone that does this all the time.' I mean, I think those are the real decisions that parents need to think through of, if I can't handle it, do I want to spend the time and effort to be come good enough at it? And or, like I said, just to hand it off. And find the resource, the book, the product, the coach, whatever is appropriate for the situation. So I guess getting back to things like the personal statement and scholarship applications, you mentioned a few things while we were talking about that you do that are kind of above and beyond sort of the idea of not being generic, right? You write one essay, that might be really good, but then you would use it for 23 scholarships is probably not the right process. So can you speak to that a little bit?

Suzanne Davis 13:00
Right? Well, I do a lot with students who are going towards those smaller, more specific scholarships, or the scholarships that are available through their college. And those places, those unique places have different values and different reasons for why they're offering scholarships. And so you want to be able to speak to that every time you apply. So maybe your story is similar. But you want to make sure that when they're reading it, the sponsors, they're not feeling that this is something everybody has written and sent off. And I find for, for most, they actually do have very different questions. I do a lot with credit unions and businesses and those types of things. So it's not just a matter of, 'Here's my basic essay, let me tweak it.' And, okay, it's set, I really want them. And I offer a course where I help them do this, to, to study a sponsor, to look at their website, their values out of them. It's really great because they have the winners, and the winners essays and things like that can talk about those. And you can see how, how everything is very different.

Brad Baldridge 14:26
Right. And I always use the example of if you're getting a scholarship from the little old lady knitting club. That might be a completely different essay than the skateboard company. That's the edgy, crazy risk-taking kind of website or company. And so I think, again, all this stuff kind of has been taken to the next level of maybe 20 years ago or 30 years ago when parents were doing this. Well, he just knocked out something that was reasonably good and prove you could write and you just submitted it everywhere. I don't think that works anymore. And what are you, I guess, as far as successes, and what are you seeing that's helpful than and kind of turning the corner for, for students these days?

Suzanne Davis 15:14
With the personal statements, I find, really, what's helping them is pulling out stories that are really unique. And thoughts that are really unique to them are working. I had one student, she came to me, and she was like, nobody died in my family, nothing tragic is ever happened. Like, that's okay, we can write a really great essay together, you've got all of these different experiences and different ideas. And I had worked with her before. And she, she wrote a really great essay. And she got into Cornell, her first choice, and so I've worked with a lot of other students who once they understand that, and their points of view and the experiences that they had, even though they're not like these, I don't know, big, tragic experiences, it really works well, because they're being very specific to these colleges, they were really good understanding of why they want to go to a particular college. And I think that helps a lot with, with what they're picking out, what they're writing about.

Brad Baldridge 16:32
So what's the process when students are working on this. My son is a freshman in college, and he had to write some essays. And we actually worked with a family friend that does a lot of writing and so forth. And, you know, again, because I wasn't able to help, mom could have perhaps helped a little more, but because we're parents, sometimes I think the parents not being involved, because just because of the parent-child dynamic at 17-18 is challenging sometimes. So a family friend helped my son, but they worked on it a couple hours, here and there, probably six meetings. So, again, kind of setting expectations for parents that maybe haven't seen this process before. When a student says, I sat down on Sunday afternoon, and two hours later to say it was done, I'm gonna go submit it now, it's probably not their best work, it might be good enough, depending on the challenge, the types of schools you're applying to, and that type of thing. But I had to spend a lot of time with my son and talk about, this is an important thing, this is something that you're going to write and rewrite in scrap and revise and think about, and it's not something like a typical English paper where you say, 'Well, it's due tomorrow at noon, and I haven't started it yet. Therefore, it's going to be what's going to be and then at noon, I'm going to submit it, then there's no, there's no looking back.' Can you speak to that a little bit more about what colleges expect an essay, how essay s how that process works when you're working with students?

Suzanne Davis 18:07
Well, the process that I go through with students is really starting with that brainstorming process really trying to find the story, or the topic idea that's really going to emerge. And we actually spend a lot of time in that brainstorming process. And I use different brainstorming tools. Some of it's just, somebody just wants to do a list. Somebody wants to do a mind map and think, and there's other tools like jam board, which is virtual sticky notes. And going through that, and I'm asking a lot of questions about each one, to kind of give them something to think about so that they can evaluate, but it's always their choice, kind of after that discussion, which one, they're picking. Again, we look at the college, we look back at that prompt to really make sure that what they're picking is going to be that. And then so when I work with them, we organize what they're going to write, 'Okay, so this would be a good place to start with an introduction. And here's what you can do with the body.' And I'm guiding them through this, I'm asking them a lot of questions. And then if I see it's like, wandering or going, so far off topic, that's where I'm kind of asking more of those questions and referring back to the prompt to kind of bring them on track. And then once they have that idea, it doesn't have to be like this formal outline. But this idea and this shape, it's really up to them to do the writing and then get the feedback from me and I call that like revising feedback. And then also editing and, and really that finalizing proofreading piece. But I find going through all of these steps and kind of asking questions at different points, really helps make the essay more sharp. And it feels like, it's not like it has to be an exact match with the specific question in language. But it does help really make it something that's very unique addresses the question and is going to really stand out.

Brad Baldridge 20:43
So I guess what I'm kind of hearing is, in the process, it's the kind of the broad topic is the first challenge of this is kind of what we're gonna write about. And then somehow you need to come up with some sort of outline, or, again, you might say, I'm gonna write about the challenge when I played in sports, which is probably cliche, not something you want to write about, but assume that's the topic, then you might need to talk about specifically, these are the some of the outlined items, right? These are the bullet points that we're going to cover, and that, but then from there, you still have to make it entertaining or, good writing, per se.

Suzanne Davis 21:22
Right.

Brad Baldridge 21:22
And then from there, you have to make sure your spelling's accurate and your punctuation and other things that I probably don't know anything about. But can you kind of speak to what each of those phases and what you'll what students might look for or parents and broaden that a little bit?

Suzanne Davis 21:38
Okay, well, I look for a really good introduction, something that's going to capture somebody's attention. So we do spend a lot of time thinking of what might be a really good entry or kind of hook into this. So a lot of times, it might be something where it is a story, or it is an experience, it might be something like some sort of description kind of leading into that, or some kind of reflection, not something that's going to sound like, this was the most meaningful thing to me, no, and then lead in, and it's just, here's my thesis statement, and all of that. So, I do look for things that are different. And that's what we try and come up with, the students really find that fun. I mean, they love coming up with different types of introductions and thinking about ways to write it and trying it a few different ways. And coming back. So in a conclusion like that, and then just different points in the writing, where they might have a metaphor or some turns of phrases that are really unique and interesting that they like to do.

Brad Baldridge 23:09
Okay, so, again, it seems like you're very focused on the content a lot more than the run-on sentences grammar.

Suzanne Davis 23:19
Well, I certainly am when we reached the editing.

Brad Baldridge 23:22
Right. Okay, so there is an editing phase as well.

Suzanne Davis 23:25
Yes.

Brad Baldridge 23:25
Okay.

Suzanne Davis 23:26
Oh, there definitely is, because some of the common problems that I see are, are sentence fragments, which I was surprised, it seems like, it's become more common to see sentence fragments over the years when I first started, but a lot of them are things like, somebody will start with like this really long kind of flowing clause. And then they just kind of forget, they've got this whole noun, but then there's no actual action that they've finished with, or they put the period and it's next sentence that actually would make it a real sentence. So we have that editing process that is really needed. Because we have sort of the fun creative process. There's this saying from a lot of fiction authors, like write hot, we kind of do that and do that and that excited phase, but then edit cold. So we have that break. And then we've really got to think like, I have a list of questions and like an editing checklist that I teach some of the different things, they're spotting things and I'm spotting things and then I help them proofread like crazy, because they do want that grammar, that spelling, and that punctuation to be perfect.

Brad Baldridge 24:52
Right. Okay, so start to finish. If it's a high stakes, if we're looking at other high end schools, like you mentioned Cornell and that type of thing. How long did that process take? I mean, you started working on Tuesday, and by Friday afternoon, it was done, or we started in August and by October it was done, or what, what's a good timeline or whatever that apparent might, you know, again, in coaching the student a little bit about, you know, this is something my son, to tell him, this is not, you're gonna write it and rewrite it and re-rewrite it, and then you're going to edit it, and then maybe you'll start over and, and he didn't like to hear that, because writing the essay was not something that was high in this list of fun, but that is what happened. So what do you typically seeing as far as timelines or

Suzanne Davis 25:44
Timelines, I usually see, well, depending upon the student, I might see somebody at like, four lessons. But we do spread that out. Because I do want to give them time to write a draft, I don't want to just say, 'Okay, Monday through Thursday, we're going to write this,' Because they need the time to actually sit down, write, and probably give feedback as they can rewrite it. So I usually find like, four lessons, five lessons, perhaps based on that particular student in their writing, brainstorming process and what, what they might need, it might take just a little bit longer than that.

Brad Baldridge 26:35
Okay.

Suzanne Davis 26:36
But I find, if you can start in that summer, like, August, and do it over a month, I think that's a really good time.

Brad Baldridge 26:47
Okay. So I think there's a, I know, when I work with parents that, sometimes we're going to delve into a topic, where it's going to need to be two or three meetings. And if those if you do delve into it in January and say, alright, we're going to reconvene in June, you're going to start over, because by June, everybody forgot everything that happened in the first meeting. So spread it out too far, either. So what do you think is ideal? Is it a month or month and a half ideal? Or,

Suzanne Davis 27:18
I would say a month.

Brad Baldridge 27:19
Okay, and then four or five meetings in there, where you might do some coaching and editing and all that type of thing. So, okay, that's helpful. Now, and that's typically for one piece, like a personal statement, or that's, we do multiple things in parallel at the same time, I want to do for scholarships and a personal statement, and we're gonna do it all in parallel, or should, it's better to do one at a time?

Suzanne Davis 27:53
I like to do their first choice first.

Brad Baldridge 27:56
Okay.

Suzanne Davis 27:56
And then after that, we start working on their, their other ones, because a lot of them their first choice is like an early decision. But after we've done it, that first time, it doesn't take a month. Because they've already gone through the process. So maybe it's just one time working on it, and then maybe going ahead and spending some time and revising it, and doing that editing and meeting with them one more time. So it's different, but that first time, I really do like, a month.

Brad Baldridge 28:32
Okay, so let's talk a little bit more about your, your services then and how people, you mentioned that you offer a free consultation? Can you explain a little bit more about how that works? And what you'd want up front? I mean, do you need to have some writing in hand for that consultation to be useful as an example? Or where would you start?

Suzanne Davis 28:53
They certainly don't need to have a piece of writing there. I really want to get at what their goals are, but also start asking them tell me what you want, tell me what your your struggles are. If you're, if it's somebody who's applying to to school, okay, what schools are you applying to, what are you worried about with the deadlines, things like that. And if we have time, it's usually about half an hour, and they want me to look at like a small piece, I can give feedback on that. Or afterwards, if they have a short piece of writing, they can send that to me. And I'm not going to edit it or any of that, but I can give them just a little bit comments and things like that.

Brad Baldridge 29:43
Right? Can you describe the type of student that you work best with? Is there I mean, I you you like to work with the writing kids, the ones that write for fun and think writings cool, or do you like to work with the kids that, like I'm a math and science guy I add my son's a math and science guy, we don't, English is not something we enjoy something we tolerate, or does it matter? Or can you kind of speak to that a little bit?

Suzanne Davis 30:09
It doesn't really matter. I like working with people, though, who who are willing to learn, they don't have to be people who are, 'Oh, yes, writing my favorite part of the application process is that personal statement.' I wasn't even that person, you know, I spent time looking at colleges where I wouldn't have to have a personal statement, like, that's how reluctant I was. So yes, never quit those students. I love working with them, too. And it's kind of like, we're gonna go through this together. It's not as scary as you think. And here's what we're going to do. Here's how we're breaking it down. And bringing out their strengths. So their ideas about the content and what to put out. And what's going to excite them?

Brad Baldridge 31:01
Right. Okay. And then, I guess on the flip side, though, the student needs to have some reasonable motivation. If, and that's me, we see this in a lot of areas around colleges, if mom was making me do it, my heart's not in it. It's often a waste of time. And a lot of areas, I would assume your area as well, have you?

Suzanne Davis 31:25
It is, not so much with the personal statement, because the personal statement, if they've already made that decision to go to college, they may not be thrilled about writing, but they want to complete that process. But there are other people who, maybe the student isn't even sure how they feel about college, and they don't feel great about writing. And I do ask a question, on a scale of one to 10, how motivated are you to, to learn writing, or to write a personal statement, whatever it is, and people are pretty honest with that 1 through 10 scale. I don't have like, the parent is sitting right there, as I'm asking that question. And so they're really honest with me, and I explained to them, well, this, this works best if you are motivated, and you are willing to do the work, because I do ask you to do work outside of the session. Right?

Brad Baldridge 32:34
Exactly. So, okay, so if people want to get in contact with you and learn more about your services, and that type of thing, how can we find you?

Suzanne Davis 32:45
Okay, well, definitely, you can contact me through my website, which I think we'll have in the show notes, but it's www. academicwritingsuccess.com. So you can request a consultation through there, you also can email me. And email is pretty quick to reach me. So that's just [email protected]. And social media, like I'm on my Facebook page. And so I checked messenger and all of those things, and I never mind if anybody just messages me.

Brad Baldridge 33:27
Okay. Oh, great. Now, I guess you mentioned Facebook, and some of those things that are you actively putting out material that students or parents might be interested in receiving like to they follow you on Facebook and that type of thing, or I do a blog, at least on your, on your website?

Suzanne Davis 33:47
There is a blog, I tend to write longer blogs. And it's not every week, because they're very detailed. But I do try and post content, whether it's a blog, or not on my Facebook page every week, and I have videos, older videos, their Facebook lives, I'm going to be doing another one this month.

Brad Baldridge 34:14
Okay.

Suzanne Davis 34:15
And so that will be about scholarship writing.

Brad Baldridge 34:19
Right? So if they're not ready to just jump in and get to work, there's a lot of resources and, and help that might get them started and then they can reach out to you once they get stuck or need to edit

Suzanne Davis 34:31
Right? Yes, yes. And there's a lot on my blog. There really is. I've been blogging since 2017. So you can search that website and you will find a lot there.

Brad Baldridge 34:45
Right. Okay. Well, I really appreciate it. It's been a great learning experience for myself, at least, and we'll stay in touch.

Suzanne Davis 34:53
Thank you for having me today.

Brad Baldridge 34:55
Thank you. All right. That was a great interview with Suzanne I know I learned a ton. As always, all this information will be in the show notes including links to Ethan Sawyer's book and his website as well as links to Suzanne's website and contact information. Stay tuned for Brad Recommends where we talk about The Scholarship Guide for Busy Parents.

Presenter 35:18
The latest tips, tricks and tools you can use today. This is Brad Recommends on Taming the High Cost of College.

Brad Baldridge 35:28
Today, I'm recommending The Scholarship Guide for Busy Parents. Now The Scholarship Guide for Busy Parents is a resource that I created, it's available on our website at tamingthehighcostofcollege.com/scholarships. Or just go into the 'Resources' tab. Now The Scholarship Guide for Busy Parents is a quick video course that helps parents understand the different types of scholarships, and which types of scholarships may work for your family. So in the interview with Suzanne, we talked a little bit about the local smaller scholarships, which I think is a great strategy for many families. But really understand what we're talking about, I think The Scholarship Guide is a great resource to kind of get you up to speed because there are scholarships available at the colleges. And there are scholarships available from outside sources like charities and local corporations and school districts etc, etc. So there's lots of different ways to get scholarships. And this scholarship guide will go through the basics of what types of scholarships and that type of thing. And it's pretty quick, it's four short videos that will, like I said, get you up to speed so you know what you're getting into when it comes to scholarships. And then you can work with someone like Suzanne, if you're going to pursue scholarships and need to improve your essays and applications for the scholarships to again, increase your odds of actually winning a scholarship. Because that's the ultimate goal. We don't want to just apply we want to win the scholarship and then use that money for college of course. So again, The Scholarship Guide is a free resource, it's available on the website, you can go check it out at tamingthehighcostofcollege.com/scholarships. Alright, that's all we have for today. I really appreciate you listening. As always, we appreciate any sort of reviews that you can provide. And feel free to check out the website and look at all the other things that we've got going on as well. That's all for this week. We'll talk to you next week.

Presenter 37:27
Thank you for listening to the Taming the High Cost of College podcast. Now it's time for you to take action. Head to tamingthehighcostofcollege.com for show notes, bonus content, and to leave feedback for Brad. The next step on your college journey starts now.

Brad Baldridge is a registered representative of Cambridge Investment Research and an investment advisor representative of Cambridge Investment Research Advisors, a registered investment advisor. Securities are offered through Cambridge Investment Research Incorporated, a broker dealer and member of FINRA and SIPC. Brad owns two companies Baldrige Wealth Management and Baldridge College Solutions. The Baldridge companies are not affiliated with Cambridge Investment Research.

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The post THCC Episode 160 – Writing Great Essays for College Admissions and Scholarships  appeared first on Taming The High Cost of College.