Looking Back: College Planning and Decisions Made

userpic=ucla-csunLast year at this time we had just finished up with college application season, and were starting to deal with the craziness that is college financial aid applications. I mention this because a few days ago, a little bell went off in my head regarding this, saying (in effect), “Hey, you haven’t heard from College Planning Advisors (also here) in a while? Shouldn’t they be contacting you regarding the FAFSA?”. So I dropped them a note.

Their reply, essentially, was that I had only paid them for the freshman year; if I want their help for future years, it’s $497 per year, buddy. They sent me a copy of the contract to remind me. Of course, they were right; I’ll do the FAFSA on my own from now on.

However, this interchange reminded me of one of the few bad decisions I have made: to pay for and use College Planning Advisors (CPA) to help with the college application and financial process. Way back when my daughter was in 10th grade we contracted with these folks for just under $2500. Our hope was that they would help us navigate the college financial aid process, and hopefully make college more affordable. Did this happen? Well, our daughter ended up at UC Berkeley with no financial aid, which I think answers the question.

I think organizations such as this may be useful if you have unmotivated students who aren’t on top of the application process. Students that need help getting applications polished and done; students that need guidance to make themselves look stronger on paper. Organizations such as this are also useful if you have lots of assets (but still want to get financial aid); in such cases you have the liberty to play with hiding money in annuities and insurance policies that are viewed as retirement funds.

But when you are a family that is squarely middle class (for Los Angeles, which is upper middle class anywhere else), with a motivated student, there is little these folks can do. Part of this is due to the rising problems of private and public college costs. I’ve noted before that this puts you in the situation where you make too much to get any need-based aid, and you make too little (and housing is too expensive) to be able to pay without worry or being able to easily play with funds. Ah, but you say, there is “merit based” aid. My experience is that merit-based aid really isn’t; merit-based aid is a way to get some aid to the middle-class while not calling it need based. If it was truly merit-based, then every private college wouldn’t have given almost exactly the same amount of “merit” based aid, nor would merit-based aid be reduced if you got additional scholarships. In our case, we applied to a load of private schools, and most offered about the same amount, which brought a $60K bill down to about $45K (almost exactly in all cases). This meant that a UC education, even at full ride, was cheaper.

So how is the system gamed? In short, most of the financial aid profiles exclude retirement funds, so if there is a way to find an investment that is considered a locked-in retirement fund, but is actually liquid, you’re golden. Hence, annuities and insurance policies. The problem is that I didn’t trust the liquidity of these options — I couldn’t find it in writing — in fact, what I found in writing often contradicted what I was told. Other people may be more comfortable with these approaches, a word, and a handshake. But I’ve been in the skepticism and “prove it to me” business for too long (my mom was from Missouri, and consider the work I do at “the ranch”), so unless I can independently confirm it, I don’t believe it.

So, the financial advice that CPA provided (and the financial options they offered) didn’t end up that useful — the main service we got from them was filling out the financial forms. Adding to the problems was the fact that CPA did not (and still does not, based on their latest mail to me) understand privacy protection. This is something I’m well aware of because of what I do for a living (and those five letters after my name, CISSP). They were having clients submit financial information (such as scans of tax returns) unencrypted to them via email (something I never did — I always delivered paper copies). They were equally cavalier in their emails (when they sent me a copy of my contract yesterday, for example, it still plainly had my credit card number on it (which luckily has both expired and been changed).

On financial aid, their focus was the financial aid provided through the FAFSA and CSS profiles. They didn’t help find other external scholarships for which she might have been eligible after she didn’t get enough from the schools. They seemed to be of the impression that applying for those would actually hurt in the long run. Of course, none of this was made clear back in 2009 when we signed up.

So they didn’t help on the financial end. They also didn’t help on the college selection end. My daughter ended up picking which colleges she wanted — they forced her to add some to the list that supposedly had easier admission requirements (which added to the application cost), but those weren’t necessarily realistic choices. They were not able to actually advise on particular colleges and their strengths, other than the financial aid aspects and likelihood of admission aspects. They actually didn’t want Berkeley on the list (too hard to get into, and she already had too many “hard to get into” colleges); they were happy with UC Santa Barbara and UC Santa Cruz on the list to satisfy them (and she added Berkeley when she submitted the application just to see if she could get in).

So, looking back, I think what we spent for them was money mostly wasted. They supposedly had a guarantee that they would get you more than you could have gotten without using them, but try to prove what “could” have happened. I think they might work for some families — and do, based on their testimonials. But for us… looking back: given my nature as a skeptic and our daughter’s drive, combined with the specific nature of our finances — they weren’t worth it. But it is a sunk cost for us — money that I won’t get back. I wanted to write this for the other parents out there — parents looking into services such as this. They may not be worth it. Look at your situation carefully — how you are, how your child is, and how much you want to play the games — before you plunk down the money.

In the end, I think we ended up OK despite using CPA. Our daughter is at a great school that is ending up to be perfect for her — the diversity and the challenge is far better than she would have gotten at a more homogenous private liberal arts college. She’ll make connections that will be useful, and in time she’ll get used to the size of the campus. Of her experience to date, she has written, “My academic experience at Berkeley has been nothing but superb, it’s more than I could ask for.” As for price, it is what it is. At least we are state residents, so it is somewhat more affordable (and the passage of Prop. 30 helps with things). She’s certainly getting to go to one of the best state universities in the country without the price tag of a discounted private university.

(even if UCLA is better 🙂 )