CJM hosts Cozy Wittman, College Planning Expert, from College Inside Track. This past year has resulted in some of the most significant changes to the college planning process in decades.  We discuss the changes with Cozy during this webinar recorded on October 26, 2023.

Parker G. Trasborg, CFP®
Parker G. Trasborg, CFP®Senior Financial Adviser

Parker G. Trasborg:

Hi, I’m Parker Trasborg, senior financial advisor with CJM. Thanks for joining us today to learn a little bit more about the college process beyond just where and how much to save. I have three kids myself, many years off from college still, but I’m excited for today’s event. We’ll be, as I said, recording today’s program and posting it to YouTube, so if you have to leave early at all, you’ll still be able to catch the rest at a later time. If you have any questions at all, please utilize the Q&A feature at the bottom of Zoom and we’ll make sure to get those answered for you. Without further ado, it is my pleasure to introduce Cozy Wittman from College Inside Track. Cozy is the education and partnership leader at College Inside Track, and speaks nationally. She was, I think, in Texas recently and maybe California before that, about college search, educating families and training financial advisors and other professionals who work with families with high schoolers.

College search has become increasingly complex over the years with the nuances, very difficult to understand at times. Cozy is passionate about dispelling myths that cost families money. She was featured in the Journal of Financial Planning on the subject of college planning. Cozy is very excited to connect with organizations and families interested in learning more about the complex college search project. She’s a mom of five kids, pretty amazing, with very different goals for college, so she’s no stranger to the challenges around the college search. Cozy, thanks again for joining us and I’ll let you take it from here.

Cozy Wittman:

Thanks so much. Boy, five years into Zoom you would think I could remember how to unmute myself. Thanks so much for inviting me, it’s my pleasure to be here. I’m excited to work through some of the new and interesting nuances that are related to college, college search, and applications and acceptance. And so without further ado, we’ll dive right in. If you’re not familiar with College Inside Track, we’ve actually been helping families navigate the college search process for 17 years. Our goal is always the same, to make sure that families find right fit schools for their students. Right academic fit, right social fit, and right financial fit for your family. And then I’m assuming you joined today because you have a high schooler. I’m sure you already know that college search can be very stressful, and so part of our job through the process is just to try and reduce the stress associated with the college search process as well.

So we’re going to start today with a quiz, this is a play along at home kind of thing. As a percentage, how much do you think tuition has increased nationally at our public institutions? So these would be your state colleges and universities in the last 30 years, so since 1993. Do you think those prices have gone up 73%, 106%, 180% or 213%? So I’ll give you an opportunity to think about that for a second. Last 30 years average increase nationally for our public institutions. These schools have actually increased their tuition by 213%. By comparison, their private counterparts have gone up 415%. But before you get out your wet noodles and start lashing those private schools for that outrageous increase, I want you to take a quick peek at our flagship universities, so these are our major university in our states. I live in Minnesota, the University of Minnesota has gone up 570%. Our neighbors next door at University of Wisconsin have increased their tuition by 1047%. The highest I’ve found so far nationally is UConn at 1300%. Always like to give people a little state of the state of college land today. When I sit down and I chat college with families, which I do often, I ask the students, tell me some schools you’re kind of sort of interested in. And I will tell you candidly that your kids bubble up these top four, or something that sits in that same realm, as schools of interest. So I want to make sure that you can see the numbers here. But what I want to point out are these bottom three. The bottom three schools on this list are all flagship schools for their states. And you can see that the schools today ranging in that $30,000-$35,000, so when we think about public institutions it is rare that you get to dive in under $30,000 a year today. Your flagship universities, nationally we see them in the $30,000 to $35,000, as I mentioned. Of course, there are outliers, we have UC Berkeley sitting way out there at $39,000. But the others are catching up, and so I think it’s important to make sure that you’re saving and you are aligning your game plan for paying for school, for what prices actually look like today, and not like they looked like about a decade ago. We meet a lot of families that are hoping to pay $20,000 a year for a college education, and candidly, it just doesn’t look like that anymore.

All right, so here’s another quiz for you. I hope you did well on the first one. What percentage of students transfer at least one time? So number of kids who get off to their school and discover, “Oh my gosh, this is not the right place for me.” And need to change colleges. Is that 6%, 14%, 25%, 38%, or 42%? So today, the national transfer rate sits at 38%. 38%. Of the 38%, so almost 40% of kids who end up changing schools, the number of these kids who choose poorly the second time and have to change yet again is actually almost 42%. So huge number of kids not really thinking deeply about what they want in their college experience. And so here’s why I bring this up. When your student goes from one school to the next school, you have increased the cost of that degree by about $14,000. And for the 42% of kids who make a poor choice the second time and have to go to yet a third school, they are increasing the cost of their degree by about $24,000. So today, finding the right fit school the first time is super, super important, if one of the things that matters to you is keeping the cost of college down.

All right, so let’s talk a little bit about financial aid. The one thing that I always want to clear up here is helping families really understand what colleges mean when they talk about financial aid. So when you go out to a college website and you look for pricing, you’ll usually also find information that says something like, “Oh, here’s our sticker price, but the average student on our campus pays X. Or we give away X amount of financial aid.” And so I want to help you understand what that actually looks like because I find that when families talk about financial aid, what they really mean is need-based aid. So people will kick conversations off of me that say like, “Oh, we’re not going to get any financial aid.” And what they’re really referring to is need-based aid. So that’s one component of what financial aid is when the colleges talk about it, but it is not the only component. Colleges are also including merit-based scholarship dollars in those numbers, and they are including loans. And I don’t know about you guys, but I don’t think about loan as aid. Loans you have to pay back, it’s not a gift. And so when you look at the numbers on college websites and they tell you, “The average student on our campus pays X.” You have to know that their average student is going to include a student who’s getting need-based aid, who is getting some merit scholarship money and likely has taken out loans. And so if you don’t fall into any of these categories, or you only fall into one or two of them, the number they’re showing you is really irrelevant for your student. The other thing is, you’re not guaranteed the exact amount that the average student is getting of either need-based aid or merit-based aid. And so honestly, for the numbers that they show you on the college websites, we don’t really know if that’s what your student is going to pay. So we’re going to tackle these.

We’re going to cover today, need-based aid and merit-based aid. I have a whole entire presentation on loans. We are not going to cover those today. But I want to talk about the factors that actually do influence the overall cost to your family, and we’re going to kick this off by talking about need-based aid. So there are two forms that your family may fill out to determine if you have need. Most people are familiar with the first one of course, it is called the FAFSA. But lots of schools now also ask for something called the CSS Profile. It’s certainly not as prolific as the FAFSA, so you may never run into the CSS Profile, it just depends on the schools that your student ends up applying to. When you fill out your FAFSA form or you fill out the CSS profile, it creates through their formulas, a number that is now called the Student Aid Index. The Student Aid Index today is about 47% of your adjusted gross income. And I don’t know about you, but I didn’t plan to send almost half of my income off with my students to college. Parker mentioned we had five, so every time someone went to college, with the exception of the last one, there were always people left behind who love to do things like eating. So I’m not planning to send half of my income off. Here’s the deal, this is not a fair number. I just want us to all agree that the Student Aid Index is not going to be fair, it just is the formula.

So it’s important to understand how the formula works because what I find is that people start to do mental gymnastics around trying to be need-based. And the reality is you will either be need-based or you will not, and you can almost never jigger your way into that space. So on the FAFSA formula, student assets, because on the FAFSA students and parents are assessed, and you can’t really get out from underneath that, parent, there really is no way for you to extricate yourself from this. There are a few scenarios where a student can be independent. Most of you don’t want your kids to be in those scenarios. So here’s the deal, student assets on the FAFSA are assessed at a 20% rate, where your assets as the parent, only assessed at 5.64%. So when you look at where people save money for college, most people have their money hanging out in a 529 plan. That’s going to get this little teeny tiny assessment, 5.64%.

So if you have it in your head that somehow you’re being penalized for saving for school, just get rid of that thought because you’re not. Think about a 529 plan. What percentage of a 529 plan is intended to be used for college? A hundred. A hundred percent of that 529 plan, that’s what it’s for. Yet it is only getting this teeny tiny 5.64%. I do want to point out if you have your savings for college sitting in an UGMA or an UTMA form, or account, excuse me, it is assessed at that much higher rate of 20%. And so if that’s where your savings is hanging out, that’s okay. Just use it up first and that will impact the remainder of the years that you’re going to fill out that FAFSA. There are two big mistakes that we see that people make when they fill out their FAFSAs. The first is that they assume that assets are the influencing factor here. It is not. Your assets are only assessed at 5.64%, 5%. Your income, on the other hand, assessed at 47%. So your income, not your assets, are likely going to knock you out of the space of being need-based. The other thing that I find is that people put retirement accounts on their FAFSA. Your retirement accounts do not go on the FAFSA at all. If your advisor has suggested that you should have money sitting in a retirement account for your student and that’s going to be their college savings, that also does not go on the FAFSA at all. The other major asset that people have, of course, is their home, and that also does not belong on the FAFSA. Now, if you’re going to fill out a CSS Profile, if the college is asking you for one, you should know that both of those things go on the CSS Profile. So what people find is they are much less needy if they have to fill out that CSS Profile, but not your retirement, not your primary residence. Again, income is the single largest factor on the FAFSA. So stop doing the mental gymnastics, don’t run over to Parker and ask him to move assets around for you. You really can’t do anything on the asset side of the house to impact the FAFSA for the vast majority of people. Your income, unless you’re willing to quit your job and become a popper for the purposes of college, you also can’t do anything about that. And so from our perspective, you’re either need-based or you’re not. And if the answer is not, then we just set it aside. We stop thinking about it. And we focus on other ways to reduce the cost of college for you.

I do want to cover some of the big FAFSA changes. One of the things that does happen when people have two kids going off to college at one time, for us, in the house of five kids, I had six years where I had two people in college. And so there are some big impacts coming for families who have multiple kids in college, and I want to take you through some of the major FAFSA changes. I already mentioned the one, the outcome of the FAFSA is now called the Student Aid Index. If you have older students and you filled it out before you might be more familiar with the terminology Expected Family Contribution. That has been retired, so stop calling it that. I’m trying really hard to stop calling it that. Now, the outcome of the FAFSA is called the Student Aid Index. So again, big change for families that have multiple kids in college at the same time. The discount that was applied, or the leniency in the FAFSA formula that was applied for families who had two kids in college was closed down in the new FAFSA changes. So these are rolling out on the 2024 FAFSA. If you’re joining us today and you have a senior, the 2024 FAFSA should be available starting in December. They have not released the actual date though that the portal will open, so more to come there. On previous FAFSAs, the formula did take into account the fact that you might have multiple kids in college, and it adjusted accordingly. So the way the old formula worked is when you filled out your first student’s FAFSA and you told it, “I have two kids in college.” The formula adjusted and it said, “Okay, I’m only going to assess your income as a parent at 23.5% then. And here for student two, I will also assess your income at 23.5%.” So still 47% of your family income assumed available for college, but it got divided between your students. On the new FAFSA, that division disappears. There is no division. The formula will no longer take into account that you have multiple kids in college. So student A, you fill it out, your income assessed at 47%. Student B when you fill it out, your income assessed at 47%. So now the formula assumes that you can send 94% of your income off with your students to college. And God help you if you have three kids in college at the same time. More than a hundred percent of your income assumed available for college. It’s a ridiculous number. Clearly, when these changes got made, there was glaring misperception around how the FAFSA gets used, but also how expensive college is for families. There is also changes in the divorce formula. The way you will determine which parent fills out the FAFSA in a divorce scenario, because only one is going to, is by who is financially supporting the student more. So on previous FAFSAs you determined it by where the student lived. Try and erase that from your brain. It’s not about where the student lives. It’s also not about who claims a student as a dependent. That is irrelevant for the purposes of FAFSA. So whichever parent financially supports that student more, that is the parent that is going to fill out the FAFSA. This is self-reported. Do your best. Try and figure this piece out and then have that family fill out the FAFSA. The definition or the exemption, rather, for small businesses and farmers is also disappearing. So on previous FAFSAs, if you were a small business owner and you had fewer than a hundred employees, you did not need to include your assets on the FAFSA. Under the new FAFSA formula, you will need to include all of your assets regardless of the size of your business. This is true as well for farmers. And so know that it includes any unsold merchandise, any inventory, capital equipment, if you own the building, the value of the building. Same is true for farmers, land, capital equipment, all of those things need to be included now in the FAFSA.

And then one of the few shiny spots in the new FAFSA rules is that any third-party, I have grandparents here, but it could be anybody, it could be an aunt, it could be an uncle, it could be a godparent, it could be the neighbor next door who loves your kid so much and just wants to help them pay for college. Any of those people can now assist a student in paying for college, and the student will no longer need to report that as untaxed income. In previous years, that’s what happened. It ended up reducing need-based aid, and so they did close down that weirdness. And so now anybody who wants to help a student pay for college can do so. Feel free to start picking up the phone and calling grandma and grandpa.

Okay, let’s see if we have any questions. Parker, I know you’re fielding those. Anything so far pop into the-

Parker G. Trasborg:

Yeah, there was one around the cost of college. So you showed how the numbers have grown over the last several years. What do you expect the future for college cost to look like? And at what point do you think we reach a point where it’s maybe not sustainable anymore?

Cozy Wittman:

Yeah. So I’ll try my best to get out my crystal ball here. Here’s what I’ll say. Here’s what we see now. In COVID, there was a lot of discussion. There’s a cliff coming, not as many kids going to college, what are the colleges going to do? Parents were up in arms because they were paying $50,000 a year and my kid’s in my living room doing college. And so we were all quite sure that the college landscape was going to have to adjust. Many schools froze tuitions during that time, but guess what they’re doing now? This past year, 8% to 16% increases in college tuition. 8% to 16%. So in the very near future, I don’t see this changing. What will it look like 10 years from now? I don’t know, it’ll be interesting. There’s some interesting things starting to pop up on the landscape in the public college space. The state of Minnesota, where I live, just announced a program called the North Star Program. So if you, on your adjusted gross income for your FAFSA, if you are under $80,000 a year, tuition is free at our public institutions. You still have to pay for housing, but not tuition. We see things like that popping up in the state of New York. In the state of California, they’re creating basically a feeder and farm system, if you will, through their community colleges. Allowing kids to start there and auto transferring into any of the UC system schools. And so there’s a lot of creative thinking happening, and so I would say more to come here. But the schools that are losing out are the mid-tier schools. Those super selective schools, always going to be super selective because they’re always people who want to drive the Porsche. There will always be a market for that. Our public institutions are trying to be creative and fill their seats with people of all different styles. I think the schools that may suffer in the future are those mid-tier schools. We’ll see.

Parker G. Trasborg:

Thank you. Another one came in. Can you briefly address the impact of 529 plans owned by grandparents versus parents, and which one should be used first?

Cozy Wittman:

Yeah, so this is such a good question. Again, 529 plans only assessed at that teeny tiny 5.64%. So keep in mind that as a parent, your 529 plan, do the math. If you have $30,000 sitting in your 529 plan, multiply that by 5.64% and see the impact to your FAFSA. It’s nominal at best. So I’m not a big fan, if you have high schoolers, of suddenly jumping around and like, “Oh, let’s get grandma and grandpa to own the 529 plan now.” But rather, if both are there and hanging out, I would take advantage of both, because again, your 529 plan really not impacting. Even if you have $100,000 sitting in that, the impact to your need-based data is so minimal.

Your income, on the other hand, huge impact. But if you’re a family and you have a younger student, I met a family last night who has a 17-year-old and a five-year-old, it might make sense for grandma and grandpa to own the 529 plan for the five-year-old, and you contribute to theirs. But if you already have a high schooler, I’m not a big fan of trying to jiggle through some kind of something that makes sense, because remember, your income is so much larger impact here.

Parker G. Trasborg:

Thanks. Another one, is there an approximate income level where you could just not bother wasting your time filling out that FAFSA form?

Cozy Wittman:

This is such a good question too, and I get it every time. The short answer to that question is no, and here’s why. The FAFSA is more about determining need-based aid. There are other things that it gets used for, and one of the things we’ve seen in the last year are behavior changes from the colleges for families who did not fill out the FAFSA. So in previous years, we’ve always been kind of lukewarm like, “Yeah, if you’re not going to qualify for need-based aid or don’t fill out your FAFSA if that’s what you really want.” But in the last couple of years, we’ve actually seen acceptance behavior changes and financial package behavior changes on the parts of the colleges. So our recommendation to everybody today is fill out the FAFSA. Good news for you though, the new FAFSA, starting on the 2024 FAFSA, the questions go from 108 questions down to 40 or 46, depending on your financial structure. So it’s not such a huge suck of your time today. Fill it out. It is also, by the way, the application for the federal student loan. So if you want to take advantage of that loan program, you must fill out your FAFSA.

Parker G. Trasborg:

Another one. If this will be covered later, we can wait, but do you have recommendations for parents with GI Bill benefits and multiple kids on the doorstep of college? Is it better to allocate 100% of the GI Bill to the first one, or to spread it out across the kids to potentially maximize in-state tuition benefits?

Cozy Wittman:

Yeah, this is a good question. I would say it’s philosophical to your family. Figure out what works best for you. This is a really good question for your advisor at CJM. Go off, talk about how much you have. One of the things that we talk through when we work with families is, what’s the budget for college? And so thinking about what you have available to take advantage of, and then what is the strategic outlay of that? And so there’s so many other factors like, do you have other savings for college that filter in? The one thing I will say is that your GI benefits do not impact your FAFSA, so it wouldn’t be a, use it so then you get need-based aid later. That’s just not a thing, so I wouldn’t worry too much about it. And start to think philosophically, how many kids do we have? Do I want to layer this across my kids? Think about it that way instead.

Parker G. Trasborg:

Thank you. That’s all of them for now.

Cozy Wittman:

Awesome. All right, I have one last quiz for you. What school path do you think is the least expensive? Is it choosing a four-year public college? Is it starting at any two-year school and then transferring to a four-year school? Is it starting at a public college and then transferring to a private college? Or is it starting at and finishing at a four-year private university? I’ll give you a second here to choose your answer. And it turns out it’s a trick question, they all might be true. The real best, least expensive path for you, is based on who your student is and what circumstances do you have. There is no singular right least expensive path for every single student in every single state. So today, this is one of the things that just makes college hard to think about, is you really do have to evaluate all the pathways. And really think about, what is best for me?

And one of the things I’m going to offer here in a little bit is to do a free consultation for your family, where we can explore those pathways, if you want. But you have to explore them today because your circumstances, the way that your state thinks, and who your student is all impact the potential success of your student in college, not just financially, but actually from a success perspective as well. The one thing I am going to say, and we talked about this earlier, starting at any college and transferring to any other college is probably going to be more expensive. So it’s an important thing to keep in mind, when you change schools, usually dollars go up. When kids change schools they’re usually in school longer, on average about eight months, and so you’re still paying for school but not earning. And so just keep that in mind.

Today, it’s time to really ditch old world thinking. It does not suit the college environment any longer. So if you’re thinking, started the two-year community college, changed to the local public institution, automatically cheaper. Nope, it might not be. Started our public four-year and finished at the public four-year, cheaper. Nope, it might not be. Today, you really need to think about schools as flexibly priced and inflexibly priced because there are schools in the country, thousands of them, who will make it less expensive for you because they want to fill their chairs.

So when we look at my five kids, I’m going to take the top two off, they were very non-traditional. One of my kids didn’t go to college, by the way, so I’m not a college bigot. Of the bottom three, one went to our public flagship university, one went to a private university, and one went to an out-of-state state school. It wasn’t the flagship school of the state, but it was a state school in another state. Of those three, the out-of-state state school, the private, and our local flagship, the most expensive of those three, our local flagship university, the University of Minnesota. The least expensive of those three, the private school. My daughter went for the same price as one of our smaller state schools. So today you really do have to investigate, understand gifting programs, understand how colleges think. And I’m going to tip you in here to how colleges think. Why think about them as flexibly priced and inflexibly priced? Because there are public and private schools in both of those categories. In both.

So let’s talk about scholarships because this is what people want to talk about. Where do we find scholarships? And I think you’re going to be surprised at the answer. We’re going to talk about where money comes from, from the highest rate of return for your investment of time, down to lowest rate of return for your investment of time. And the number one place you find scholarship dollars are the colleges themselves. Schools give away millions of dollars every single year. For our class of 2022, those kids garnered more than $23 million in scholarships from the colleges they applied to. 23 million. This is where the money hangs out. So we are not big fans of molding your kids into something that colleges are interested in, but rather the other way around. Figuring out, here’s who my student is, and here are schools that would be interested in them for acceptance purposes, but also for potential scholarships. When colleges give away money, it does typically last all four years. Colleges are also number two on the list, so after your student gets accepted they get a package, but they also get an email that says, “Congrats, you’re a bear, a beaver, a gopher, a duck.” Or some other woodland creature. And in that email, there’s a link to additional scholarship dollars. Why do kids miss this? Because it wasn’t text to them. They’re not email readers yet, they aren’t business thinkers yet, and so they aren’t looking in their email for scholarship opportunities. They just aren’t. If the colleges would send these via TikTok or text, they’d get it in a heartbeat. But they don’t, and so consequently, by the time the kids get around to reading these emails, the deadlines for a lot of these scholarships have passed and they’ve missed that money. So making sure your kids are on top of it after they send their applications out the door is important. Local scholarships are number three. So you’ll notice our pyramids getting smaller. Local scholarships would be things like your employer, a local bank, maybe a community club like Lions. Any of those organizations give away money. Does it move the needle of college? Not very much. Congrats, here’s $200, here’s $500, here’s $700. Your student might manage to scrape up a thousand bucks here. If they’re going off to your local flagship at $33,000 a year, it just doesn’t make that big a difference. It just isn’t really impacting. Congrats, you bought books. So are these okay? Sure. Should they apply? Sure. Just don’t count on them to actually reduce the cost of college by very much. And the other thing here is the local scholarships do tend to be one-shot deals. So you get it once and then they don’t get it again. And then bottom of the barrel, where I would suggest you spend exactly zero amounts of time, is out on the internet looking for private scholarship dollars. These will be a waste of your time. The average student has to apply to between 55 of these and 80 to win anything. And the average award amount here is about 500 bucks. $500. They would be better off just getting a job the summer before they go off to college. They’ll earn more.

All right, so if schools are your source, what are the schools looking for and what should you be thinking about? Well, the first thing you have to know is, does the school actually even offer merit aid? Not all schools do. Why? Because not all schools have to. If I’m a college or a university that has a 4% acceptance rate, 7% acceptance rate, 13% acceptance rate, 18% acceptance rate, I don’t have to give away money. Kids are bashing down the doors to get into my university. There is no money available at those very selective colleges in this country. And I know everybody knows somebody who got a full ride. That kid is urban legend. That kid is not real. Now, you might know somebody who got significant money, but guess what? It wasn’t scholarship dollars, it was need-based money. So a lot of those schools cover a big chunk of need, they do not give scholarship dollars because everybody’s smart who gets in there. Who would they give it to? So here’s the other thing, colleges are businesses. And at the end of the day, they are incentivized the same way businesses are incentivized. And if I don’t have to give away money, why would I? So first you need to know, does the school offer merit aid? The second thing you need to understand then is, what are they giving it for if they’re going to give it away? At the end of the day, schools have a bunch of open chairs, and they need to fill those chairs with kids that benefit them. Again, they’re businesses. No one’s looking at the admissions, all the applications and going, “That Jane, we’ve just got to have her on our campus.” That’s how kids think about college, but it’s not how the colleges think. So they’re looking for kids who help them with their average GPA and their average test score. So in looking for schools, you want to look for schools where your students’ numbers are above the incoming average for that college. It does not mean your kid has to be a four point student, you just need to look for schools where they’re riding above the incoming average kid for that college. Extracurricular talents matter, but more is not better here. Quality of activities is better. And doing a really good job of showcasing, kids are classic undersells, so showcasing the things that you’ve done on that application matters. And then be demographically interesting. This is super easy to do, and most of us cut ourselves off from it. I did for sure. I told my kids, “Stay in the state of Minnesota, go to a state school.” Until I learned better. You are more interesting outside of your state than you are inside of your state, and that brings extra scholarship dollars to the table, believe it or not. All schools want to say that they’ve got 50 kids, one from every state in the country, and they’ve got 37 countries represented. So this is where it’s important to think outside the box. It will benefit you.

All right, let’s take a look at a recipe card for how colleges think. This is one school’s recipe, but these categories are extremely common, so I want to help you understand how the colleges are thinking. Demonstrated interest is a category of scholarship dollars that people don’t even know exists.This is the school’s perception that your student’s pretty interested in that. So the interaction with the school matters. Following their social media, touring, this stuff is easy to do, you just got to do it. Look at this, for living out of state the school’s bringing a lot of dollars to the table for the kids they hardly ever see. This is pretty common practice in the private space, you don’t see it as often in the public space. For every A on the transcript. Again, these next few categories, they’re buying the strongest students they can find. So for every A on the transcript, $62, for rigorous classes, $400 per, an excellent letter of recommendation, 1,800 bucks. And for every point above this school’s average score that your student’s ACT score is, they’re giving 425 per point. So I think it’s important to keep in mind, the schools are looking for kids who are going to be successful on their campus.

And so the decisions you are making right now, while your students are in high school, are actually building the scholarship package that they’re going to get. And that’s why the high school years are so important and it’s important to make good decisions. Just for filling out your FAFSA form, so this goes back to the question you asked me earlier, does it matter if we fill out our FAFSA form if we’re not going to get need-based aid? We would argue yes because there are a lot of schools, one, who will just hold onto your financial award package until they see your FAFSA. And two, there are schools that actually add scholarship dollars just because you filled out your FAFSA. And then a really well-written essay can be worth quite a bit of money. The essay is not a check the box moment anymore, it is an opportunity for the student to increase likelihood of acceptance, and increase likelihood of higher scholarship dollars. We spend a ton of time with our kids on their essays because it matters.

All right, my second tip for you, testing still matters. Do not think that the test optional landscape means that schools don’t care about the test. Today, the schools see the two tests, the ACT and the SAT, as equal tests. There is no distinction from the college’s point of view. So long gone are the days where if you were going to East Coast you had to do an SAT, if you’re going to the middle of the country, ACT. You can take any test you want. And the good news is the kids can take the test that benefits them most because they’re different. The other thing is the PSAT is digital starting this fall, the SAT is going to be digital after the first of the year. So if you’re looking at the SAT, just know that it’s going to be digital and you should get appropriate test prep. The test is going to work really differently than the old fill in the bubble test, and so it’s important, if you’re looking at test prep, to make sure you’re getting the right test prep for the test you’re about to take. So if you’re going to take the SAT, make sure you’re looking at test prep companies who do digital training for test prep. And then after you get a couple of rounds of your tests, then you can decide whether or not you’re going to send it off. Both tests, when you register for them, prompt you to put in schools. Don’t do that. Hold off, wait and see if your student has a test score that you actually want to send because you might find yourself in the position where you send it to these three schools, but you don’t send it to these two. So just keep that in mind. Hold off until you know.

All right, I’m going to take another round of questions if there are any, Parker, before we dive into trends in the last two tips.

Parker G. Trasborg:

None in here so far. I’ll give it a second or so to see if we have any pop up.

Cozy Wittman:

Sure, sure. Good.

Parker G. Trasborg:

Yeah, nothing. If anything comes up I’ll ping you.

Cozy Wittman:

Yeah, sounds good. So let’s talk about some of the trends that are impacting the actual cost of college. I mentioned the test optional landscape before, test optional started as a kind of courtesy or something that was needed, because candidly, the test sites were closed during COVID. There was nobody taking tests. And that, in some states, stuck around for quite a while. But guess what the schools learned during COVID? They learned that when they go test optional, they get more applicants. And so what started as kind of a courtesy has now transitioned into a marketing plan. So as long as I stay test optional as a school, I can still accept kids who are submitting test scores at higher rates, and we see that behavior on a pretty regular basis. But I know that it’s going to drive more applicants. And guess what? Colleges love applications. Why do they love them? The more applications they get, the lower their acceptance rates are, because they’re not changing the size of their freshman class. So the more applications drives down my acceptance rate, I look more selective. And guess what happens when I look more selective? I don’t have to give away money anymore. I get to keep my endowment. So keep in mind that the colleges are all about the colleges. They are making decisions in their best interest, so I want you to make decisions in your best interest. This huge shift in volume, 30% increase in application numbers since 2020 in the last three years. Year over year, a school might see a one to 2% increase in their applications, one to 2%. And we are seeing, in the top tier schools, anywhere from 26% to 37% increases in application numbers. And then in all other tiers, about an 18% increase.

So there’s a huge drive in this application space. The volume of applications is driving decisions the colleges are making and the behaviors that they are using to make decisions. So one of the things we’ve seen as schools shift over into way more application numbers, is they are taking a higher percentage at some schools, a higher percentage of their freshmen classes out of early decision candidates. Why does this impact the cost of college? Because if you put all your eggs in a single basket and you say to a school, “I love you so much, I’m going to apply early decision. And if you let me in, I’m coming. And I’m going to withdraw all my other applications and I’m coming to you.” You’ve lost all your leverage. They’re not worried about losing you anymore. And so consequently, what you see is if you were going to get scholarship dollars, they now disappear because the college doesn’t have to gift them to you anymore. You’ve told them you’re coming.

The other thing we see as application numbers rise, is that students just need to do more to get in. In tier one and tier two schools, so these would be schools who have acceptance rates under 30%, we see students now needing to do extra projects, passion projects, research projects, something like that. Secondary factors continue to influence acceptance rates. They also, obviously, I just showed you, how they increase scholarship dollars. These are things like demonstrated interest, the rigor level of the student’s transcript, the essay, all of those things impacting acceptance. But they also impact in a really positive way for your family, the cost of college because they bring better scholarship money to the table. And then the last thing I just want to point out is that at some schools pricing is better, but I just mentioned eight to 16% increases in tuition.

So while we thought pricing might level out, it doesn’t appear to be doing so anytime soon. That does not mean there aren’t great deals to be had in college, there are. But again, I just want to point out, most people paying over $30,000 a year for a college education. All right, tip three, make college more of a business decision. I already mentioned the colleges are thinking about it that way. They are acting in their own best interest, and you should be too as parents and as the student. So diving deeper, don’t let your kid make a decision based off cool campus, great dorms, and I love the sports teams on this campus. Instead, take them deeper, assure the school teaches like your student likes to learn. Make sure there are multiple majors available on this campus so they can change their mind without having to change their school.

And then those big brand schools, I’ve mentioned this a couple times, I can’t say it enough because I meet with families every single day, they’ve got this super sharp kid, 36 on the ACT, 4.9 GPA, nothing more though. And they think that’s enough to get into the Johns Hopkins of the planet, the MITs of the planet. It just isn’t. It isn’t today. You’ve got to have a passion project, a research project. It might be an internship. You’ve got to have something more than just being smart.

And then my last tip for you today is, create a family philosophy around paying for college. What do I mean by that? You need to create your four-year game plan for paying for school. What does that look like? And in that game plan, actually play out, where is money coming from for all four years? Define expectations for everybody. So if grandma has a 529 plan, but you have no idea how much money is sitting in it, it’s time to have that conversation. “Grandma, I’m trying to figure out my budget for college, tell me how much is hanging out there so I have an understanding of what we can afford.” Same with your own 529 plan, if you want your student to have some skin in the game, you should have that conversation now. Start to lay out expectations. This is what we would anticipate you will be paying. And then talk about it early in the process. Why is this the case? Because one of the biggest mistakes we see that people make is they go and they tour the Porsche when what they want to pay for is the Chevy Malibu. So it’s important to understand, does the school gift? If not, can I afford the $78,000 price tag that comes with it? And if the answer to that question is no, don’t go tour that school. Because of course your student’s going to fall in love with that school. Of course they are. So start to define expectations, and if you have no understanding of how to do this, great conversation to have with your advisor.

It is also a conversation we would have in our consultation.

So a little bit about us and then I’ll take your final questions. College is an industry just like anything. Just like real estate, investing. There are things you need to know to do it well, you’re going to do this a couple of times. We sent 200 kids off last year to college. You can do it on your own, but lots and lots of families do leave money on the table. So part of our responsibility is to help you get through this. Help you understand what you should know and when you should know it, so that you can make good decisions. That national transfer rate of 38% drops to less than 4% when we work with families. We do ensure you get the best prices for the schools on your list. We also make sure that the schools that make it to the list meet your budget. And then we get to be a neutral third-party. This is my favorite thing that we do. I have five kids, four are girls. They have all mastered the eyeball role, and I never get to be the smartest person in the room. Never. I’m sure you’ve had that experience or maybe you haven’t, maybe your kids are kinder than mine. But just know that we get to be that neutral third-party.

So here’s the coolest thing I want to offer to do for anybody who’s on today. I do free consultations. I do them every single day. I love it. It is bar none my favorite thing to do. I love sitting down and chatting college with people. We’re going to sit down, you’re going to include your student, and we’re going to get questions answered. You bring all of your college related questions to the table and we’re going to talk about those. We will discuss goals in those three key categories, academic fit, social fit, financial fit. And I’ll give you strategies. These were great tips. They don’t fit for every single family though, so let’s chat about your specifics. I can give you a rough of the outcome of your FAFSA, so that you’ll know, am I going to be need-based or not? And if the answer is no, then we’ll talk about how you really maximize opportunities for scholarships at the colleges. So a little bit of housekeeping, I have a Google form that I’m going to drop into the chat here shortly, I will also send it off to Parker.

If you have a sophomore or junior, take advantage of the consultation. It’s free. I’m happy to sit down with you. It is bar none. I got into this to make a difference in people’s lives. That’s what I want to do. So feel free to take advantage of that. If you join today and you have a young student, you’re like, “Oh, Cozy, they are not ready to talk college.” That’s okay. Fill out the form anyway, we’ll reach out during sophomore year. Second half of sophomore year most kids should be starting to think about this. And then feel free to follow us on Facebook, we put a ton of content on our Facebook page. It’s just College Inside Track on Facebook. And then share us with people you know. If you have high schoolers, I know you know people with high schoolers, so many families stressed out, and so many students stressed out. I really want families to understand what the landscape looks like, so that you can make really good decisions for your students. Any questions, Parker?

Parker G. Trasborg:

None, again, at the moment.

Cozy Wittman:

All right.

Parker G. Trasborg:

We’ll see here in a second or two. But Cozy, thank you so much for joining us today and for all the great information and your time. Thank you everyone for joining us today, it was really neat to see people from all over the country, I see a family out in Washington, some people down in Texas. So good information for everyone and glad we’re able to bring you a virtual event so you can join in on the fun. If you have any questions beyond what we’ve talked about today, feel free to reach out to your planner directly, or as Cozy mentioned, we can reach out to her and she will help get those answered. That is all for today. Again, thank you all for joining us and I wish you all the best as we head into the holiday season. Thanks.

Cozy Wittman:

Thanks for having me. Take care.