In today’s episode of “College Admissions Real Talk”, Dr. Legatt interviews Sam Mikhail, President/CEO of Financial Strategies Group, and they discuss financial aid and how to save for college.
VO: Welcome to College Admissions Real Talk with Dr. Aviva Legatt, a podcast for students seeking to get admitted to top-tier colleges. Each episode will feature an important tip for your college admission success, delivered with candor and love. If you’ve ever wanted to take a peek inside the mind of a college admissions officer, this is your chance. Have a question? Text Dr. Legatt at 610-222-5762. So, what’s your dream school?
AL: That makes a lot of sense. I think that goes back to what you’re saying about liquidity, right? And liquidity plays a role in the perception of your ability to fund college.
SM: That’s correct. And we get a lot of families that will then try to figure out a solution to that. Maybe they have assets and they’ll pay down their house. They’ll try to put that money in some other kind of vehicle that sometimes will cause more problems because they look at the whole equation and how taxes play a part. Penalties play a part. College plays a part. Sometimes there’s confusion between retirement accounts and contributions. The retirement account itself may be exempted by some schools, but every college in America considers the money that’s contributed that you’re into a retirement account as income.
AL: There’s certainly a lot to consider, right, as we’re approaching the college process. So it sounds like we definitely want to be thinking about these questions ahead of just like the FAFSA due today where we’re putting our money. We want to try to get ahead of it and figure out some of these questions ahead. Obviously, working with you and Smart Track would be a great solution. But do you have any advice? Let’s say somebody’s a little earlier on and has maybe children in middle school. What are some tips and tricks that they can think about when they’re looking at this whole college funding issue?
SM: That’s a great question. But outside of just funding college itself, I think one of the most important things is to make sure that the student is working at their highest potential and learning how to learn so that they don’t approach high school, then starting to learn how to learn because it’s competitive out there. We all know that. But if that child was able to flip that B into an A or that C to B starting in middle school, elementary school, and they get a habit of chasing after good grades and learning how to learn more efficiently. You’re not only going to have a better chance of getting to more schools, but more merit awards at certain schools. So starting early with that approach, and the other, I would say, is don’t be afraid of saving money. We’ll deal with it as we get closer to college, and timing plays an important factor, which I’ll get into in a minute. But making sure that if you can put aside 500 dollars, 200 dollars, 1,500 dollars, now is the time to do it, because every dollar that you put aside is less money you need to borrow. And even if you don’t like borrowing, remember, paying money from your pocket is borrowing from your future. So anything that you’re able to kind of put aside and save and amount maximize any grants and scholarships or financial aid is going to be less money that you have to give up later for retirement.
AL: Thanks. That’s really great advice. I’d love to hear a little bit more about Smart Track, and I’m somewhat familiar with it because we Ivy Inside are affiliated with Smart Tracks. I’ve had a chance to go inside a platform, but I love to hear from your perspective. How do people use Smart Track to help with college funding and college affordability planning?
SM: So Smart Track has been developed for the middle income family, middle, and I would say upper middle income. And the reason why we’re focused there mostly is because if you’re low income and low asset, you’re going to get financial aid at most schools, especially if you choose the right colleges that are more generous versus others. Every college in America wants you to believe they’re super generous, but not every college is, so that that’s where we come. There’s a focus on that, and you can use software to deliver that information to help with your decision making. So that’s a very, very important part of which clientele we choose. If you’re uber rich, you’re probably going to be okay because you can pay for college pretty easily. But everybody in between is going to have a difficult time paying for college. So we primarily fix the financial piece for college in three areas: Number one is going to be to pay for college in the most cost effective, most efficient manner with the money you already have with the resources you already have so that you’re paying in the least expensive way. Number two is looking at ways to possibly reduce the cost of the school itself, maximizing grants, scholarships, aid, and other resources so that maybe we can save 5, 10 or $20,000 or more per year. And the third is maybe not, as I guess obvious, but how do we send 1, 2 or 3 kids to college today? And it doesn’t derail our retirement choices or retirement plans that we have in the future, which is the next biggest expense after college. So those are three areas. We have 192 different strategies, depending on a myriad of things that are in your profile. If you own a business, your properties, your tax structure, your business structure, your asset structure, and many other components, and we’ll calculate the best way to approach this.
VO: College Admissions Real Talk is hosted by Aviva Legatt, edited by Stephanie Carlin, and produced by Incontrera Consulting. I’m Caroline Stokes and this has been your daily boost of college admissions insight. Have a question? Text Dr. Legatt at 610-222-5762. For more information on Dr. Legatt and Ivy Insight visit www.ivyinsight.com. And you can pick up Dr. Legatt’s book, “Get Real and Get In”, at major retail outlets across the world. Insight out.