With 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 an MSA Money Coach who had the financial expertise he needed for applicable and trustworthy education.
Initially, they talked about Joshua’s current financial situation and determined his primary goal around college planning. This background information helped the Money Coach provide relevant information 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.
First, they talked about Aria’s Student Aid Report based on the Free Application for Federal Student Aid (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 might expect to pay out of their own pockets.
Next, Joshua’s coach 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. Joshua’s coach 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 college financing options might include borrowing against an asset like a home or retirement savings vehicle. Joshua’s Money Coach explained the pros and cons and wanted to make sure that he understood the ways a 401(k) loan could help meet current financial demands, while keeping in mind the potentially negative 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, his coach was able to set up an appointment for him with another Money Coach – a CPA and Tax Specialist who could speak to the tax concerns and possible tax implications of the options he was considering.
As with any financial decision, Joshua needed to keep both short and long-term financial goals in mind, like paying for college now and funding retirement later down the road, so the Tax Specialist also touched on retirement planning. Discussing the options helped him better understand how he might make smarter choices for meeting current financial responsibilities without hindering the financial goals for his future.
As they explored financial opportunities, the challenge of paying for college seemed less and less daunting. Joshua had this to say about his experience: “[She] was extraordinarily helpful in explaining the various college financing options available to us…”
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 of months, and they established goals that could help keep them on track.
Joshua’s Money Coach enjoyed the opportunity to help him 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 can move into the future feeling good about their finances – all thanks to his Money Coach and the MSA Financial Wellness program.
For more information about the MSA program, call 888-724-2326 today.
Information provided in this article is for informational purposes only and is not intended to offer specific personalized investment, financial planning, tax, legal, or accounting advice. We recommend that you consult an attorney, tax advisor, or accountant regarding your unique circumstances.
This testimonial was provided by a member of MSA. They did not receive compensation of any kind for their statement.
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