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Jonathan West  00:00

I think parents need to get started with this earlier than high schools typically put college on the student's radar. So much of this whole process is driven by the high school's guidance office or college counseling office, and and that's usually sometime either at the end of sophomore year or the beginning of junior year, and they'll have a college night, and everyone will start to be talking about college. You want to be in front of that. So, to me, sophomore year, maybe even freshman year, is okay. You're, but not to get the kids involved. I don't think you need to do that. I don't. I think kids need to enjoy their teen years and their high school years, and not be just thinking this is all about. I got to get to college. I got to do this.

Natalie Slagle  00:51

Welcome to Money Dates, the podcast that makes money conversations with your partner feel a little less taboo. I'm Natalie Sleigel, a certified financial planner, and I'm joined by my husband and business partner Dan Slagle, also a certified financial planner. Say hi, Dan.

Dan Slagle  01:06

Hello.

Natalie Slagle  01:07

In each episode, we'll share honest stories and practical tips to help you and your partner feel more connected and confident on your financial journey. So grab your drink, get comfortable, and join us for our Money Dates.

Dan Slagle  01:21

Today on Money Dates, we have Jonathan West. Jonathan has decades of experience in the financial industry and specializes in college funding, helping families figure out how to best pay for college without breaking the bank. He is an expert with College Aid Pro and works with families across the country to solve the questions we all have about how expensive college is. Jonathan and his wife have four children, the youngest of which graduates from college next year. So he has walked the same road we are all on several times over.

Natalie Slagle  01:54

This is a really exciting show, as we talked about last time. We are doing a two-part series in college planning, college funding. Our last episode, it was just Dan and I, but today we have the expert,

Dan Slagle  02:09

the real expert,

Natalie Slagle  02:10

the real expert. We we pretend to be experts, but we have Jonathan West here today, which will be really exciting. Jonathan, you've actually met a few of our clients already via discussions, so we're excited to kind of get the conversation going on on what listeners could benefit from on when they're thinking about college funding and how to be strategic around the the selection process. So thank you so much for being here today.

Jonathan West  02:36

Thank you, Natalie, and thank you, Dan, too. It's just a topic that every year seems to get a little more complicated and a little harder to to get your head around. It just how can you make college more affordable? And so many families are are dealing with this. So glad to be here to talk about it today.

Natalie Slagle  02:56

Let's actually start with that. Like it's great because you've actually experienced this. You know, our daughter is so young. We have quite a ways until we're going to be in your boat. But you've you've sent children to college. Your youngest is still in college. What do you think about the landscape has changed over the last however many years? Like, what is making it more complicated today?

Jonathan West  03:18

It's really, to me, it's gotten so expensive that we've kind of split into kind of two systems of these very expensive schools, which are tend to be the more selective ones, and then schools that are are more affordable, which tend to be state schools, and you see that in the especially in the applications that are going on right now, kids are applying to so many schools during their senior year, and I know that our son's state school last year received over 40,000 applications. It's become crazy in that sense, and so you get this. Parents are paying, even if it means they're struggling, but they're paying the increased tuition and room and board. And as long as they continue to do that, it's prices keep going up. In the middle are a number of kind of private schools that are not getting these tons of applications, and so they're kind of trying to cut prices more to make school more attractive. So you just kind of got these different categories of things going on in the world. That when I was going to college, it was a little seemed a little simpler and certainly a lot less expensive.

Dan Slagle  04:38

Jonathan, you're you're also speaking from experience, right? You just mentioned your your youngest, who I believe graduates from college next year.

Jonathan West  04:47

Next year, right? And our four kids have gone to. I mean, we did in state, we did out of state public schools, we did private schools, did graduate. School. I mean, we've run through all the different combinations, and it's it's really depending on where the path takes you. These they're all different. You want to be flexible as you're starting out your understanding of what college is going to cost.

Natalie Slagle  05:16

Yeah, and that's one thing that we've learned from you, and why we love to have our clients meet with you or or someone else at College Aid Pro is that you you have this approach of let's be proactive, you know, before the visits, before the acceptance letter, let's actually think about this strategically instead of this reactionary decision making. And one of the things that you've you've kind of framed our thinking is, especially for our client base, tends to be high earners, maybe a high net worth compared to their peers. So the whole like, oh well, we're not going to qualify for anything, so why even go down that route? But you kind of have a different mindset of when it comes to college selection. So, could you talk to us a little bit about that?

Jonathan West  06:07

Sure, I do hear that pretty frequently, and I'll agree that sometimes it's true. You won't qualify for need-based financial aid, but the financial aid system is both need-based aid and merit aid, and the need-based aid can either come from the government or from the school itself. And not all schools have the same amount of resources to give need-based aid to students. Some are very generous with that, and some just don't have very much money, so they just offload to the government through Pell grants, and and that's about all they they can offer. And then other schools will offer merit aid, and if you, as mom and dad, don't really care too much whether the the aid you're getting, as long as it continues every year, is need based aid or merit aid, it's it works just the same to reduce the college bill, but you want to check because so many parents start out thinking, "Well, we just we're not going to qualify. We're not going to qualify until you actually input the numbers and have a better understanding of how the colleges view you. You really don't know, and it's simple to do. It's not hard. It used to be kind of hard, but now through things like College Aid Pro software, it's very easy to get an idea quickly of how colleges will view you in your both academic situation and financial situation to see whether or not you might get some need-based aid or some merit aid,

Dan Slagle  07:41

Jonathan. Can we back up a second? Can you explain to our listeners the difference between needs-based aid and merit aid?

Jonathan West  07:47

Sure. Need-based aid is based on your family's finances, income, and assets for both parent and the student, parents and the student, and it's calculated through a formula that there are two methods, two ways of calculating your need-based aid. Most all schools use the FAFSA form, which is the free form that the government puts out, and that imports information from your tax return and comes up with student aid index number that it uses. And then there are about 250 schools that tend to be more selective that also use the CSS profile, which is a different form, and they will that asks questions you have to manually enter all you all the numbers, and it asks about your home equity, which is the biggest asset for many people, and it asks a lot more questions than the the FAFSA does, but those two forms will come up with a number called the Student Aid Index, which is basically what the schools expect you to pay, expect your family to pay, and that number can vary from school to school. But it's important that you understand what that number is before you go in, because that's what they think you can pay, and you know you may have different opinion about that. But it's good to know that. It's good to know that going in. Now, merit aid, on the other hand, is based on generally grades and and or test scores. Since so many schools are test optional these days, they've kind of gone back to grades, so GPA, and but with a lot of schools, especially kind of smaller liberal arts schools, that merit aid is really automatic. If you get in, you're going to get a significant merit aid scholarship. So while if you're at the top of your class, you may get more than someone else who was the last one admitted. They're pretty much all the students that get in are going to get that merit day at those schools. So merit can be a little more selective than that, but again, that's another school by school thing, depending on the money they have. But a little bit, Dan, it's kind of like the schools raise their price each year, but they also raise. The automatic merit aid scholarship that they're going to give the students that get in, and so it's a little bit of a game that goes on. I mean, why not just say you're less expensive? I think the reason for that is is schools think that if they're less expensive, they're going to be perceived as less desirable or less worthy, and so they want to look a little pricier, but then give you a scholarship, and everybody loves getting a scholarship. I mean, you talk to families all the time, and they're like, they lead off with how much of a scholarship their son or daughter got, and really, that's that's just playing right into the college's hand because they love that. They love that.

Dan Slagle  10:39

I actually have a personal story I can share that that relates to this. When I was back when I was looking at at schools and started to receive acceptance letters, I ended up going to a private university. Thank goodness, because that's where I I met Natalie. Of of course, it was obviously the the right choice to make at at the time. But before I actually knew that was going to happen, I had been accepted to two public state schools, the University of Minnesota, and then the University of Wisconsin Madison, and then those were my top choices. And then I actually, I the school I ended up going to, the private school, I received a scholarship that basically brought the cost equal to what those state schools were. And I remember the one thing my dad said to me was, you know, I don't know if he's going to appreciate this or not, but he he basically told me he said you're an idiot if you don't take the scholarship. So that's very fascinating coming from you, the the expert, that that was a real life situation that actually I I can apply to what school was like for me or that that choice at the time.

Natalie Slagle  11:39

Yeah, there's something about the scholarship, like look at how much they want you. Look at how even if the net is the same across all three schools, the scholarship can have some emotional ties to

Jonathan West  11:52

it. So true, and you see this all the time on Facebook groups and things like that, where parents will mention the schools they're trying to decide, and they mentioned the schools that the kids got into and what the scholarship was, and what you just said, Natalie. The net is what matters. That's a term, net cost, and that is the price, the sticker price of the school, which is what the maximum they charge minus grants or scholarship, and that's you're out of pocket essentially in in that sense, and that net cost is what you really should be using to compare school to school, not the amount of the scholarships that they gave you.

Dan Slagle  12:30

Jonathan, I feel like we we've covered need based, and I want to dive deeper even into merit aid. Feel like there's a common myth out there or misconception around merit aid, and and that is that parents expect merit aid to follow their high achieving student everywhere. I'd love your take on that.

Jonathan West  12:50

I agree with you, and it is a myth. And we we really see this all the time. Some schools do not give me aid scholarships. They just it's their philosophy. They take the amount of money that they have dedicated for financial aid, and it's need-based. Other schools, as I mentioned earlier, are automatic in their in their awards of merit aid, and you can't have the mindset that my kid is smart, and so they're going to get merit aid money. Number one, because they may not. It depends on the schools you apply to or they apply to, and then number two, because they received a $10,000, $20,000 scholarship from XYZ University, they're also going to get it from these other schools because that's just not how the the game is played honestly, and it it kind of is a game in that sense. And so you want to start out with this idea that that every school's financial aid offer is going to be unique to that school based on their philosophy and their resources, their ability to to give aid. State schools, so many state schools, state universities just don't have merit aid to give. Others will use have larger endowments, which is where this money comes from because it's all their their money, and they will use it to attract out of state kids to come with high grades and test scores to come to their university to elevate the experience for everyone, and so they will give aid. So you can't even make huge generalizations that like state schools won't do it because sometimes they do, or private schools won't do it because some will and some won't. It's just so you you need to be very flexible again in how you're viewing merit aid, and and also I'll tell you this: some schools will even put on their websites the specifics of if your test scores are this or your GPA is this, you will earn X dollars. And then other schools treat it like it's Colonel Sanders fried chicken recipe. I mean, there's it's just top secret, and they change it, and they can. Jib Jag, so it's just they're just you need to be very flexible in understanding that.

Natalie Slagle  15:06

That was going to be my question for you: is when parents are navigating this, is this information they can get ahead of time? Hey, like this is the sticker price, and it's and according to the website somewhere it says we're not going to give any merit aid, and is that or is it not something you would recommend to rely on and just apply, see what happens? But obviously, you're applying with the notion of you've had these other conversations. You know what your financial means and capabilities are. Like, how do how do people not get their hopes up, but also be informed in that process.

Jonathan West  15:44

That's kind of the, I think, the essence of the question. And to me, you, as a college funding planner, you don't want to apply to any schools without having an idea of what that school is likely to cost your family. I just think it's it's a huge mistake to say, well, let's just see because your kids get their hopes up. Everybody, every this is an emotional time. I mean, we you know we're talking about the money and everything, but it's a very emotional time, and it gets more emotional as your kids get into senior year, and and parents start, especially with the oldest, realizing you know they're going to be leaving, and nobody's quite prepared for that at the time, and so now you you start to mix in this financial thing, and you want them to be happy, and then we think colleges do a great job of making us think that their future success depends on you going to this one school. I mean, if you don't go to this one school. Your life is just shot, and it silly. But we kind of get tied up in those things, so we get we're not thinking quite as clearly when it comes to dollars and cents. And are you going to deny your beloved child in this sensitive time of their life their one desire of such a school, just because you know you didn't know how much was going to cost, and it came back and it was the most expensive school. We see that all the time. I don't know why, but we see that all the time that the schools that sometimes you want to go to the most end up being the most expensive. You need to know that up front, and you need to, as Barney Fife used to say on Andy Griffith, "You need to nip it in the bud. You need to get in front of that train because it's a tough path to go down.

Natalie Slagle  17:30

Yeah, I do appreciate you bringing up just the emotional roller coaster that's happening here. There's excitement. There's a little, I mean, kind of fear because there's this big new scary thing, and it's the whole family embarking it, right? Like you, this child has been in your household for 18 years, and then all of a sudden, one day, it's just it changes over. And I'm speaking from what I know happens. You actually get to speak from multiple experiences of this, and so with you know, there's this big event coming your way, and then on top of it, there's huge financial implications, and it's very emotional.

Jonathan West  18:09

It's very hard, and I can tell you that the emotions, the emotional piece tends to accelerate, you know, kind of like compound interest slowly and then quickly. And I really think it makes the best thing you can do as parents is to get started early, and that doesn't mean you have to start the entire college process early. But get started early from the financial standpoint of understanding how the schools are going to view you. Now, granted, if your kids are in 10th or 11th grade, you're not probably, especially at the beginning of the 11th grade, you're not quite too focused on where they're going to go and things like that, probably. But the financial world isn't going to change that much over your next year or two. So go ahead right now and let's say, let's say they were going to school now. Let's come up with five schools. What would it cost us, our family. What would it cost our family? And we'll put in some test scores that we just guess how you use your child average, above average, below average, and let's see what kind of numbers we get because then you can start to frame the discussions that you're going to have with your kids coming up around and decide how affordability fits into that. I don't think schools should just be chosen based on you know go to the cheapest school. I don't necessarily think that's always true. It's not just a there are other factors, but you also at the same time you can't take the financial factor and just say we'll work it out. We'll figure it out. I mean, no, it just that's really hard because then you're. I mean, I meet with families all the time that will fortunately none of none of your clients, but that have said we wish we knew how much this was going to cost. We never would have encouraged him or her to apply. Because now that's where they want to go, and we don't know how we're going to pay for it, and and that's that's just brutal. I know, I know. At a time when everybody wants to be excited and happy and on the same page, it's this. Oh, it's really hard. And sometimes, honestly, as that can't there's money dates, so that can come between mom and Dad, because you'll see one parent will be our son or daughter needs to go where they can thrive, and the other parent is well, yeah, but we can't put off our retirement or other needs forever. I mean, we have to. This is a big expense, so how are we going to work that in too? And and that can cause some friction, and it's just not a place you want to be. And you can avoid that. You can avoid that.

Natalie Slagle  20:45

Yeah, like there's the conversations that the parents need to have with their kid, and then there's the conversation that the parents need to have with each other, likely and recommended before the conversation with the kid. And that's why it hasn't been released yet at the time of this recording. But Dan and I did an episode on what does that conversation look like. What should you talk about? So if you're listening to this, be sure if you haven't listened already to the podcast right before this, because we knew you were going to bring this up, Jonathan. We're like, we should talk about the conversations that the couple needs to have. Because what happens if mom is like, absolutely, you're going to go to this school. This is where I went, and it's a dream school. And then Dad's like, "Whoa, whoa, whoa! We need to think about the financial impact on us. And so that needs to happen before the kid gets wrangled in. And oh, just so many emotions. It's it's exciting time, but we got to be adults here, right? We got to take this responsibility. We got to manage it well and be proactive and intentional with these decisions. I want to pivot us a little bit to scholarship. So, private scholarships. We've heard clients even talk about, oh, my employer actually will give. They're known to give our kids scholarships, and you know, I've just heard about these private scholarships, but for those who haven't started to go down this venture, Jonathan, what have you witnessed or seen when it comes to private scholarships?

Jonathan West  22:13

Private scholarships are very popular, especially among parents. They, you know, have a kind of usually outsized notion that their accomplished child is going to apply for and win a number of private scholarships because you know they pick that up somewhere, and there are 1000s of private scholarships out there. There's no question; they're hard to kind of track down to find ones that fit. That's number one. I talked about that in a second, but really the majority of those are smaller scholarships, especially ones that are offered locally to wherever you might live, and they're going to be generally one time. They're going to be for seniors or graduating seniors, and they might be kind of in the 1000 to $2,500 range, which is great. I mean that that will take care of 1000 to $2,500 worth of expenses, but it's not going to pay for school. And you can certainly win more than one. You can apply to several, but it does take a lot of time, and most of these go on during senior year. So senior year is a busy time. You do the college application, Jeff. You're trying to keep your grades up, exams. You may have some AP tests and and things like that. So the kids have a lot going on, and and then when you say, well, now I also want you to apply for these 10 or 20 private scholarships. You're kind of adding to their, you know, you get a lot of eye rolling from the from the teenagers. So I like private scholarships. I think they're a bonus, and you should look for those. But I also think you should have realistic expectations. I mean the the stories of the kids that win the the Bill Gates or the Coca Cola scholarship and and receive a full tuition are rare and you know there are 1000s 10s of 1000s of people applying for those so you just want to be judicious in how you go about it and try to maximize the return for the time that you're asking your kids to put in.

Natalie Slagle  24:23

Yeah, absolutely,

Dan Slagle  24:25

Jonathan. I'm just gathering overall college costs continue to rise. We've we've talked about various ways to to to gather aid, but what happens when aid falls short? Like, what do you feel are are like are some realistic alternative paths and and some of those levers that families can pull to make this more realistic.

Jonathan West  24:44

That's a hard question. I'll say that the one that the path that is really growing in popularity is the the community college, and then transfer to state school for the final two years. So you do you do a two. Year, you don't usually do get an associate's degree, but it's a path of you're doing your gen ed requirements at usually local community college can live at home, which has got pluses and minuses, but it's it saves money, which is one of the pluses, and the tuition, of course, at community colleges is much more affordable, and a lot of the material that they're teaching, honestly, is the same as they teach it at a four-year school. I mean, pre-calculus is pre-calculus; it's not. They don't have some secret or something. So you can do, but you can do that, and then be on a path in Virginia, for example. You can transfer to any state school, and also transfer to a number of of the private schools. And the the state schools set here as part of this program, they can set like a minimum grade point average you have to have in your classes at the community college. But it's not unreasonable. And then your diploma comes from the state university that you transfer to. It doesn't have an asterisk on it. It doesn't have any footnotes. I mean, it's it's the same bachelor of arts or science as everyone else gets. So, financially speaking, that is probably the primary number one. You can also sometimes accomplish that with transferring, doing a four-year school, and then transferring. But those transfers tend to be more about a fit, like you know, you started out at the school and it just wasn't for you, and then you're going to transfer somewhere else. And it does to be kind of a financial deal.

Natalie Slagle  26:38

Yeah,

Jonathan West  26:39

that's not as good. Schools schools are a little tighter when it comes to how they view giving aid to transfer students, except through the community college pathway. So it can be a little harder to get the the merit and need based aid in the transfer. Sometimes the need based aid is okay, but the merit they're just not as generous. I mean, they're giving that merit aid out as a carrot to get you to to say yes. They they know they're too expensive, and they're given that meridae out to say, you know, we want you to feel good about us. When you're transferring, you know, you don't have quite that same negotiating power. You're just you're. Can I please get some money?

Natalie Slagle  27:18

Yeah, and then they they probably know that maybe you're trying to transfer to some other schools as well, but

Jonathan West  27:23

right, right.

Natalie Slagle  27:24

I can't help but think about. I remember one of my best friends, still a great friend of mine today. She did the. It was called PSEO. I don't know if it's still called that, but she did the college credits through the community college while in high school, and then I actually did a semester at a community college because it. I started at a four year, and then I was like, I don't want to be here, but I don't know where I want to go, so I'll go to a community college. That was me just trying to figure it out, and I, I knew I didn't want to spend too much money. I would imagine it's a little bit hard of a sell to high schooler who's their friend is going to this really fancy, cool college, and they're hearing about it, and then it's like, where are you going? You know, I'm sure high schoolers, from their perspective, and I'm thinking back too, you're just inundated with people that are asking you, "What's next? Where are you going to go? And it's, "Oh, I'm I'm going to the community college down the block. You know, there's some like I wish there wasn't a stigma because there, to your point, it's probably the same level of education for maybe a quarter of the cost. But there is this stigma. I don't know where if it's coming from the high schoolers or from us adults or everybody. But how have you had conversations, whether it's with clients you've met with or your own children, you know, how is that being addressed?

Jonathan West  28:45

It's interesting. I mentioned that we, my wife and I, had kind of done the run the gamut. One of our sons took a gap year after high school, and he said the reason that he wanted to do that was because I think it's okay to share. He he just felt like he kind of gotten caught up in the flow of, you know, college was like 13th grade. You know, was just you've been you go to school, you have a summer off, you go to school, you have a summer off, and you're just going to kind of keep that pattern going with college. And it's a bigger question, and especially with our kids that were going through COVID and all the impact that had had on them, you just you know everybody kind of needs to take a break and say at some point, is this necessarily the right path? I see a lot more kids expressing an interest in taking a gap year, and also one thing we hadn't talked about too much, but maybe it's AI driven or AI fear driven, but there's more of a understanding these days about the need for alternative education things like the trades or kind of the micro idea of do something that you're with your hands that you can do and do well, and you know you'll be set for life and. You're not going to get bumped out by some, you know, robot or some computer. There's a lot to be said for that, and that's gaining more momentum these days too. So if you just put your head down and say you're going to college, you're going to miss that either end of that, and that may not be what's best for your child either. So that's one of the things as you were saying about the parent discussion, I think is important to bring in into the mix. Like, is do we think college is four year traditional path the best thing right now for our son or daughter, and why, or why not? But do we want to explore any alternative ideas while we're at it?

Natalie Slagle  30:43

Now I'm like selfishly having all these thoughts come up for our own situation because I think about college having this six figure price tag for our daughter, and the best way for us to tackle this, and I'm saying us is me and Dan, but I know this applies to all of our clients: is to start contributing to the 529 plan, or you know, start building up an investment bucket, whatever account you choose, to tackle this. And a question we get from our clients that I kind of want to put on you now, Jonathan, is like, well, what is college even going to look like? You know, there's some people who believe college isn't even going to exist in 15 years, and I think that's one end of the spectrum. I do think there is this spectrum, this part of the spectrum we're on now. Of well, trades are really important, and it's there's jobs that are needed to be filled there. And that why are you going to go to your state university for a program that you could do two years and be an incredible electrician, or whatever it may be, for people who have younger children. Obviously, a selfish question, but like, what are you telling to them about this whole college planning? And like, we're trying to do the good thing while we're saving young, and like, let the investment do its thing. But college is changing, and thoughts. And Jonathan, what do you have to comment on that part of the equation?

Jonathan West  32:03

Well, I would say that you want to stay kind of informed about what things are going on without being too uber focused on it and hype getting caught up in the hype. I think college will continue to exist, but there there's also the this enrollment cliff that you heard about of just there's so many the number of of graduating high school students is starting to fall into a downtrend and it becomes a sharper downtrend based on the demographics. So the number of kids that will be going to college and the paying families are going to go down. That's gonna it's gonna shrink the number of colleges that are out there. Just this is going concerns. I mean that that's a real possibility,

Natalie Slagle  32:50

and that's more of just like a population. That's more from that. Just

Jonathan West  32:54

like right.

Natalie Slagle  32:55

There's just not as many. That generation is smaller.

Jonathan West  32:58

Exactly. Exactly. And that's they're forecasting that, and that's gonna. It really hasn't happened too badly yet. Had too much of an impact, but I think that's this year is kind of the first year they're expecting to see that. Kids are applying to so many schools that it kind of gets lost, but it'll take a few years for that to come through. But I totally agree that you need to consider these alternatives, and the alternatives, you know, are going to become more acceptable over time. Not everybody's set up to be an electrician. I mean, I would be a terrible electrician. I would last about 10 minutes, and then first time I had to do the wires, and I tried to do some electrical stuff at home, and out it hurts. It's not good. It's not good. So, but there are certainly other people that would be wonderful at that. And if you're just focused on taking math and history and English, you know, you'll you'll never know. You'll never know. So, it's our job as a society to encourage, especially in high school years, these alternative things, and not just make college 13th grade. I mean that we need to continue to encourage these alternative paths. But financially, as parents, I know you would say this too: that that I think saving, whether it's in a 529, even if it's in a 529 that you don't end up using for college, that's okay. But save maybe in a taxable investment account. But save. Don't let the the what if and what might happen keep you from saving for the keep this. Right now, the standard should still be our kids going to be going to college, and at least financially. That if you think that, then how are we going to be able to pay for that, and how are we going to save for that? And if something else happens, okay, you'll have the savings, and you'll be very happy. We thing we hear all the time is, "I wish I'd started sooner. Talk to parents all the time, and they're they're well, we've been saving, but we got started late, and we couldn't save it. Much as we wanted, and you know how that that works. It's true. I mean, it's just it's very hard. But if you can start, the sooner you can start, and and then you have more to show. I've never heard anybody regret that. So

Natalie Slagle  35:12

that's such a good point. Like the the bigger complaint is I didn't save enough. I'd much rather be in the I saved too much camp than the I didn't save enough camp, and with the 529 plan, I mean, you can still take a distribution for whatever you want. It's just going to have more taxes. I mean, you're still going to net a better outcome. There's, you're just going to have to pay more taxes, and yes, penalty. But you had enough money, right? If the kid ends up not needing it for school, there we all have big life expenses as young adults, so they're going to need it for something. So, to your point, you're like saving should, regardless of the landscape of what education looks like for our kids in the future, saving is still important. And I really like how you said that to just not get distracted by all the noise out there because it is distracting and it can be discouraging. Why would I put money aside that for something that's not even going to be there? Maybe it just looks different when our kids end up going to college. And yeah, I think to your point, I don't think we're going to all be sitting here regretting this savings balance that we have. I appreciate that context.

Jonathan West  36:20

And I would add to that that the rules around 529s have changed a lot since they were first, you know, they first came about 30 years ago, and they very you know now they include student loan and pay $10,000 of student loans. They include private school tuition as permissible expenses. You know, very easily as we get the right focus as a country. The rules could be to pay for or to get you started on a trade or apprenticeship or something like that. So things that might be taxable today or might have more taxes because they're not qualified expenses. Those rules could change. So it's still a good idea to save.

Natalie Slagle  36:59

Absolutely. Now, the reason why we met you is through College Aid Pro, which we've mentioned on this platform. I think it'd be really helpful if you could give us kind of a summary. I mean, the platform's incredible, and I'm sure it's hard to give a summary because there's so many cool things about it. But I'd love to have our listeners hear a little bit more about it because I know our clients are starting to use it, and so talk to us more about College Aid Pro.

Jonathan West  37:25

Sure, College Aid Pro is company that has developed software to do kind of all these things that I'm I've been talking about, and to do it in a very user friendly way, where you enter the same information you do on the financial aid forms about your family's income and assets, and then also about your child, your family, and you know their grade point average and test scores if they have those, and it will just instantly tell you that that student aid index number that I referred to earlier, which is what schools expect you to pay, and then as you build a school list by entering schools that you're maybe considering that that you're thinking your child may consider, it will tell you what those schools are likely to cost your family. So that net cost number that are referred to, and that's the main aspect I think that's so helpful in doing that. It's we're looking at the awards that other families have received from these schools because it's a nationwide program used by families all over the country, and that also allows you to be able to sometimes negotiate a better financial aid award when you're ready to do that. So that's kind of the power of being part of something bigger than just your family. You get the award from the school. You think it's that's their final offer, and that's all you're going to get. Schools don't let you know that they encourage this type of behavior, but depending on a number of circumstances, and the software helps you with this to say, here are some things. You know, there are a number of special situations that can come up. Not everybody is makes a gets a w2, has a couple investment accounts and a simpler profile. You have business owners, you have divorce and separation, remarriage. It can have a number of of more complicated situations that really don't fit into a nice cookie cutter thing, and the software or the College A Pro software is very helpful at being flexible with those different situations and still giving you a good idea of what the college is going to cost. And it's easy to use. And as you add schools, you'll start to learn. I'm starting to see a pattern here. These types of schools are much more affordable. You can search for schools across the country based on cost or based on scholarships that they're likely. You can do a search and sort by which schools are going to give me the most money, which. We were talking about before is misleading, but you can also search and say which ones are going to cost the least,

Natalie Slagle  40:06

and that would be a net cost. Yes, okay, net

Jonathan West  40:09

cost.

Natalie Slagle  40:09

If you know, okay, where our budget's 35 grand a year that mom and dad are willing to pay, we could just put that in, and then you could say, here, kiddo, anything that's not on the list could be something that you know, again, it depends on how the parents want to have that conversation. Which have you talked to clients who encourage or who bring their kid in to look at the analysis and the software with them? Do you hear of that happening, or is it typically just the parents utilizing it to help their conversations with the child?

Jonathan West  40:39

It's both, but it's more the parents utilizing the information to to. But I do think exactly what you said happens when the parents get this idea of, and that's really the key. What's your budget? And every you know, this is as financial planners that people say, well, what can we afford? Or and that's hard. That's a moving target. You know, I mean, there are a lot of pieces to to try to come up with numbers, but you want to come up have a budget for college, a range maybe, or a target amount that you're going to be able to fund as a family, and that's where the software can be very helpful. Then, okay, these schools you can enter that information. This is what we're good with as parents, and then it will kind of color code the schools for danger or or this is good green, you know, or yellow that you're on target. You get a very quick readout of what might happen, and then you can have those conversations with your son or daughter. I remember with our kids, sometimes they came home from school with an idea. We just throw out, "I'm thinking about so and so, and we're we're as parents, we're like, "Well, where did that come from? But with College A Pro, okay, great, sit down, type it in. You go like, "Well, that's twice as expensive as UVA, so that's sorry, you better stop thinking about it now, but just do it right away, and not let's say, oh well, let's go tour, and maybe we can rearrange our vacation and do this and do that, and then you're like, but it's way too expensive. So let me just do these things up front.

Natalie Slagle  42:16

Do these things up front,

Dan Slagle  42:18

Jonathan. Last last question I have for you for our listeners who have high schoolers, what grade or age do you recommend them to start looking into things like College Aid Pro and and what you all provide?

Jonathan West  42:30

Well, I think for parent, I think parents need to get started with this earlier than high schools typically put college on the student's radar. So much of this whole process is driven by the high school's guidance office or college counseling office, and and that's usually sometime either at the end of sophomore year or the beginning of junior year, and they'll have a college night, and everyone will start to be talking about college. You want to be in front of that, so to me, sophomore year, maybe even freshman year, is okay. You're, but not to get the kids involved. I don't think you need to do that. I don't. I think kids need to enjoy their teen years and their high school years and not be just thinking this is all about. I got to get to college. I got to do this. But as parents, sit down with something like the software, like the College A Pro software. Enter your information, put in some grades for your kids, and then put in some sample schools. Put in your own alma maters and put in your state schools and some private schools, and see what these kind these schools are thinking you're going to be able to pay. And that's just kind of the starting point for this entire conversation, and then talk to you guys, talk to your financial advisor, and say, "Okay, we've got these expenses coming up, and they're looking. I mean, if you have multiple kids, you know, you might be paying for college for a number of years. So, for you know, schools are the cost of a car. I mean, it's just you're going to buy a car every year for the next 10 years. I mean, who planned on that?

Natalie Slagle  44:06

Right.

Jonathan West  44:07

So that's the reason I think you want to get started a little early. You can bring the kids in when the schools start to, you know, get a little more focused. All the kids are different. Some kids are a little more driven early, or maybe they have sports that they want to be recruited for or something. But so they might be in a little earlier time frame. Others we meet with lots of families that the the kids in senior year and they're still not sure what they're going to do, which is okay too. But you can bring the kids in based on a little bit later. But I think it's important as parents to do that and have the conversation together that you two have been talking about to get mom and dad on the same page before you're getting too far down that the path.

Natalie Slagle  44:49

Absolutely, Jonathan. This has been such a pleasure. I've learned so much. I hope our listeners have equally taken some really valuable information. That you shared with us, and just the being proactive and using the tools and the people and the resources that are available. Of course, I'm going to put information that we talked about on this podcast. Whatever Jonathan will let me share about your information. If anyone wanted to follow up with you directly, this has been really incredible. We really appreciate your time, Jonathan, and all of your wisdom. It's been a true pleasure.

Jonathan West  45:24

Thank you. It's been a been a great time talking with you too, and and thank you for all you do for your clients.

Dan Slagle  45:29

Thanks, Jonathan. Hey, if you've enjoyed this episode and are looking for personalized financial guidance, schedule a free complimentary consultation using the link in the description below, Natalie and Dan Slagle are the founding partners of Fyooz Financial Planning, a registered investment advisor. The information provided in this podcast is for informational purposes only, and should not be considered investment advice or a recommendation to buy or sell any securities. Investing involves risk, including the potential loss of principal. Advisory services are offered to clients or prospective clients where Fyooz Financial Planning and its representatives are properly licensed or exempt from licensure. For more information, including our disclosures, please visit our website at www.fyoozfinancial.com.com.

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