Late-Stage College Planning [video]
How to Think About Cost, Fit, and Strategy
I recently spoke with Heidi King, a college planning expert I met through a NAPFA study group. As financial advisors, we often do a great job helping families save for college through 529 plans. But when a child is actually preparing to choose a college, many families realize they may not have enough saved to cover the full cost. At that point, the question becomes: how do we pay for this, and what are our options?
College Inside Track
Heidi specializes in helping families think more strategically about the college search process and identify schools that are the right academic, social, and financial fit. One of the most important steps families can take is developing a plan for what they are comfortable paying before the college acceptance letters arrive. Without a plan in place, students may fall in love with a school that ultimately does not fit the family’s financial situation. Establishing expectations ahead of time can help families make decisions more confidently and avoid difficult tradeoffs later.
FAFSA Loans
For families who have a gap between what they have saved and the cost of college, loans may be part of the strategy. Not all loans are bad loans, but it is important to understand the options. Federal student loans, accessed through the FAFSA, typically offer the most favorable terms. Undergraduate students can borrow $5,500 as freshmen, $6,500 as sophomores, and $7,500 as juniors and seniors without a co-signer. These loans often represent the first funding source families should consider, as they provide relatively favorable rates and allow students to share responsibility for the cost of their education.
Can Kids Pay for College like you did?
Many parents remember paying for college themselves and wonder whether their children can do the same today. However, tuition has increased dramatically over the past 20 to 25 years, rising more than 200% in many cases. The federal loan amounts available to students today often do not come close to covering the full cost of attendance, making it increasingly difficult for students to fully fund their education independently.
Is College Still Worth It?
Despite rising costs, research still shows that a college degree can provide strong long-term value. While college is not the right path for every student, data suggests that undergraduate degrees continue to provide meaningful return on investment over time, particularly when aligned with a student’s goals and strengths.
The Community College Strategy
Some families consider beginning at community college before transferring to a four-year institution as a way to reduce costs. This can be an effective strategy, especially when community colleges have strong articulation agreements with state universities. However, statistics show that while many students intend to transfer, fewer ultimately complete a four-year degree. Having a clear academic plan and transfer pathway is critical for students who pursue this option.
The Cost of Transfering
Another key consideration is the concept of “right fit.” Choosing a college involves more than rankings or prestige. Academic fit, social fit, and financial fit all play an important role in student success. Many students change majors during college, so flexibility in academic programs can be beneficial. Visiting campuses can help students better understand the environment and determine where they feel comfortable. Simple visits, even informal ones, can provide valuable insight into campus culture, size, and overall atmosphere.
Transfer rates also highlight the importance of finding the right fit early in the process. Approximately 38% of students transfer colleges at least once, which can increase both the financial and emotional cost of earning a degree. Transfers may extend the time needed to graduate and can add thousands of dollars to the overall cost of education. Taking time upfront to carefully evaluate schools can help reduce the likelihood of transferring later.
Families should also consider how college costs fit within their broader financial plan, including retirement goals and planning for multiple children. Understanding how different college price points may affect long-term financial security allows families to make decisions aligned with their overall priorities.
College admissions have also become more competitive in recent years, particularly for popular majors such as business, engineering, nursing, and computer science. Application volumes at many flagship universities continue to increase, making thoughtful college list development increasingly important. Strategic planning can help students identify a range of schools where they are both competitive applicants and likely to thrive.
Working with an experienced college planning professional can provide families with guidance throughout the process, helping them evaluate options, understand costs, and make informed decisions. The goal is not simply admission to a highly ranked school, but admission to a college that is the right fit academically, socially, and financially.
Families who start conversations earlier in high school often have more flexibility and more opportunities to optimize both admissions outcomes and financial aid opportunities. Having more time allows students to build strong academic profiles, explore interests, and create thoughtful college lists aligned with their goals.
If you would like to learn more about Heidi’s services, you can visit College Inside Track or reach out directly at hking@collegeinsidetrack.com.
Linda Rogers, CFP®, EA, MSBAis the owner and founder of Planning Within Reach, LLC (PWR). Originally from New Jersey, Linda services clients throughout Virginia Beach and nationwide. She leads the design of PWR's investment portfolios which utilize broad, low-cost investments that integrate environmentally, socially, and governance (ESG) factors.
Planning Within Reach, LLC (PWR) is afee-only and fiduciary wealth management firm offering one-time comprehensive financial planning and ongoing impact-focused investment management in Virginia Beach and nationwide. PWR is a woman-owned firm that specializes in busy professionals and impact investors. Planning Within Reach, LLC and their advisors do not receive commissions and do not hold any insurance licenses or brokerage relationships.