Success Story: A Guide for College Finances

a quote from Joshua in Illinois that says, '[My Money Coach] was extraordinarily helpful in explaining the various college financing options available to us and guiding us to the best options.' with a blue overlay covering people's faces in the backgroundWith a daughter ready to go off to college, Joshua wanted a better grasp of the financial responsibilities he would face.  How could tuition, room and board, books, student loans and parent loans possibly fit into the family spending plan?  Luckily, Joshua’s employer offered a financial wellness benefit that included one-on-one consultations with a College Planning Specialist and Student Loan Specialist.  Together, they found answers.

When Joshua called his employer-sponsored financial wellness program, My Secure Advantage (MSA), he was connected with MSA Money Coach Katherine who had the financial expertise he needed for applicable and trustworthy guidance.

Initially, they talked about Joshua’s current financial situation and determined his primary goal around college planning.  This background information helped Coach Katherine provide relevant information and direction tailored to Joshua’s specific situation.

Joshua explained that he has a generous, 6-figure income, but his financial responsibilities already take up most of his income, which leaves little room for allocating money to college savings.  Joshua had accumulated $18,000 in a 529 Plan for his daughter, Aria, but it wasn’t enough to cover the $150,000 they expected to pay for higher education.

With college deadlines approaching fast, Joshua needed options, and he needed them fast.

Financial Aid

First, they talked about Aria’s Student Aid Report based on the FAFSA, and the possibility of receiving financial aid from either of the four colleges she was considering.  Assessing the award letters gave Aria and her father a clearer picture of how much they should expect to pay out of their own pockets.

Next, Katherine discussed the possibility of using a PLUS loan.  Unlike scholarships they might get through a college, PLUS loans are federal loans that must be paid back.  Katherine explained that both Joshua and his daughter could be eligible for Direct PLUS Loans through the U.S. Department of Education, if the colleges on Aria’s list are participants in the Direct Loan Program.  With Direct PLUS Loans, they wouldn’t have to worry about paying back the loan while Aria is in school (at least half-time), and there would be a six-month grace period after graduation before the loan would be due.

Other Options

Other college financing options might include borrowing against an asset like a home or retirement savings vehicle.  Katherine wanted to make sure that Joshua understood the ways a 401(k) loan could help meet current financial demands, while keeping in mind the impact it would have on Joshua’s ability to continue saving enough for his retirement.

Because Joshua’s MSA benefit gives him access to a whole team of money coaches with a plethora of specialties, Katherine was able to set up an appointment for him with Money Coach Derek, a CPA and Tax Specialist who could speak to the tax concerns like interest deductions and capital gain exclusions, among other things.

As with any financial decision, Joshua need to keep both short and long-term financial goals in mind, like paying for college now and funding retirement later down the road, so Derek also touched on investment allocations for retirement planning.  Discussing the options helped him better understand how to make smart choices for meeting current financial responsibilities without hindering the financial goals for his future.

Continuing Success

As they explored financial opportunities, the challenge of paying for college seemed less and less daunting.  Joshua had this to say about his experience:  “Katherine was extraordinarily helpful in explaining the various college financing options available to us and guiding us to the best options, unique to our financial situation.”

During their most recent consultation, Joshua shared that Aria finally picked a college and was looking forward to graduating high school.  They talked about using college funds to pay the check that would be due in a couple months, and they established goals that would keep them on track.

Coach Katherine enjoyed the opportunity to help Joshua and his family:

“It is a privilege to work with members during this exciting time.  The best part of working with them was getting to know them.  I know they trust me to help them, and I am very careful to think about their best interests when providing options.  My success comes when I know they are making the best informed decision possible during a confusing process.  Joshua and his wife are educated borrowers now and know what they are getting into when taking on additional debt.”

Joshua and his family now have a better grasp of their current situation and how they will move into the future feeling good about their finances – all thanks to Katherine and the MSA Financial Wellness program.

For more information about the MSA program, talk to a Customer Success Manager at 888-724-2326.