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college2Okay, down the home stretch on an eye-opening primer on college planning. In Part 1, we discussed how the FAFSA process can result in an unnecessarily high Expected Family Contribution (EFC), and some of the ways your EFC can be optimized, saving you thousands each year, for each child.

In Part 2, we talked about the hidden code of college gifting policies, and how you can leverage the most generous schools your child may qualify for. Today, we’ll look at the final piece of the puzzle – getting schools to compete with one another.

Does that sound strange?

It shouldn’t. Think of a college like you would a car dealer. Competing car dealers sell essentially the same product – and all those dealers want your business.  Colleges sell essentially the same product, and they too want your business.  But one may need a ‘sale’ more than the other – and make some additional pricing concessions to win you as their customer, “What can I do to get you out the door in that shiny new car – today?”

A college is a business. You are a potential customer. You represent 4.5 years of tuition, room, board, books, and an economic participant in the college community. Even at a modestly priced school, chances are you represent a $150,000 “client.”

Colleges will compete with one another. But just as Lexus doesn’t compete with Kia, Notre Dame is not likely to match the offer you have from Tuscaloosa Community College. Notre Dame does however compete with Northwestern, Penn State, Vanderbilt, and others. So if Johnny wants desperately to go to Notre Dame, he needs to apply – vigorously – to competing schools – even if Johnny has no interest at all in those other schools.

Having gone through the process, let’s say this is what you discovered.


College Sticker Prices are not actual – for illustration purposes only

Now you can send your offer letters from Vanderbilt and Northwestern to Notre Dame and you may find that they’ll match your better offer. Yes – it’s a bit of extra work to apply to a couple of schools, but wouldn’t it be worth the $12,000 a year to do so?  That’s nearly $50,000 more of savings over Johnny’s school career.

Getting colleges to compete is largely a matter of ‘packaging’ a student worth competing over. So start early. Document your kids academic, athletic, extra-curricular, and religious activities, accomplishments, and awards. Build a portfolio that can be transmitted both electronically and a paper version. Keep it up to date.

Important sidebar: Mom and Dad – this whole college planning discussion is more about you than it is your kids. How? Because of the impact of poor college planning on your retirement. If you’re a typical family, you’ll have kids in college beginning in your early to mid 40s – and won’t be done until your early to mid 50s. That’s a critical time to set up your retirement. Remember, overpaying by $8,000/year for 3 kids (12 years) is a $100,000 drain on your personal economy that will have a huge impact on your retirement lifestyle. That $100k would mean nearly $250k in retirement assets.

College planning is a bit like flying on a jet liner. When the flight attendant instructs you in the case of an emergency – to put your oxygen mask on before helping your children, the same thing applies. It is not selfish, or unloving to consider yourself in the equation. Everyone wants the best for their kids. You can have both – but you’ve got to become an informed consumer, and this is just the start.

So there you have it. A three-part primer on how to get your kids into the best college they qualify for – at the lowest financial impact on the family possible. While this may be about your kids – it is definitely not child’s play. My recommendation: Don’t try this at home. There is college planning expertise out there that can help you navigate the treacherous waters.

While I have nothing to gain personally, I work with a nationwide group that does college planning – and they do it absolutely free. It is through them that I’ve learned what I’ve shared with you in this series, and felt it was important enough information to warrant a three-part series. Just let me know if you want a referral, and I’m glad to make the connection.