College Planning Jason Arsenault, CPA

By Jason Arsenault

“T rillion-dollar blackhole that is hurting the financial system” is how experts are referring to the student loan problem. Student loan debt is now bigger than our nation’s credit card debt by billions. If your student decides to attend the University of New Mexico, the costs exceed $22,000 per year, and only about a third of the next incoming freshman class will graduate within four years. Half of that incoming freshman class will take six years to get their bachelor’s degree. Four years of paying $22,000 per year is a total of $88,000, add another 2 years and now the degree cost is $132,000. Let’s not even talk about the costs if your child wants to attend a private college or go out-of-state.

The reasons to go onto college are numerous. However, many students want to earn a degree in a profession that will give them a financially secure future. College graduates earn on average almost $20,000 a year more than a non-graduate. That is pretty sweet and will help pay off those student loans. You have to feel for those that didn’t get a degree. NPR reported only 58% of students who started college in 2012 had earned a degree by 2018. Those guys have big student debt hanging over their head and have some college classes, but without a degree are still going to be left on the outside.

Why am I thinking about this? Next year I will have a high school senior and she very much wants to go onto college. She even talks about schools far from her mother and father, but I am sure that has more to do with the mother. That means we have to get the ACT or SAT test out of the way, hopefully with an acceptable score. Her senior year we will need to complete the Free Application for Federal Student Aid (FAFSA), narrow her choices to which colleges she will apply to, then figure out how we are going to pay for it all. Let’s just say we have a lot to get done in a relatively short time.

The FAFSA is a very important piece of the equation. Every year the federal government provides more than $150 billion in financial aid for school. What is important about this application is it will provide us with free monies if we qualify. One of the biggest mistakes is not filling out the FAFSA. Many schools don’t consider you for scholarships based on academic achievement or other talents if you don’t fill one out. Don’t worry if you don’t believe you will qualify for aid.

My sister had her first child head off to college a few years ago and talked about what a big deal it was to fill this form out. After she had completed the FAFSA, she was informed that she wouldn’t receive any financial aid, meaning the total cost of college was her and her husband’s responsibility. That was because of the assets she had to list when filling out the application. If she would have done a little planning a couple of years

College Planning FAFSA

out, the story would have been completely different. The FAFSA requires you to use the two previous years’ tax returns when completing it. Since her debacle with the FAFSA, I have attempted to learn the system.

Being a Certified Public Accountant (CPA), I naturally want to learn more about what is involved with something that requires me to submit financial information. Over this time, I have learned that people that have considerable income can still qualify for free monies to send their children to school. I mean lots of money, reducing that $22,000 a year to just a few thousand or to almost completely free. Like everything it just takes some education and learning ways to make changes to how you report your income on your yearly tax return. Everything I am talking about is legal and just takes some tax planning.

Sending a child off to college can be very stressful. Forget about the SAT/ACT, grades, or just deciding what school is the best fit. When it comes to your child leaving home and being away from you, that can be overwhelming. That is why you need help to make sure this is the experience you hoped it to be. I have the training to help you and your child reach their goals. A system that is proven to get you the free monies available to make college about getting an education, not about the stress of how to pay for it. If you are interested in learning more, get in contact with me at jason@payrollbookstaxes.com, and we can arrange a time to talk about this program.

College Planning FAFSA

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