Life Happens

June 1st, 2024

Episode Transcript

(00:00):
Good morning everyone. Welcome to LifeHappens Radio. I hope it's to welcome

(00:04):
back. I hope you are alongtime listener, and if you're a first
time listener, Life Happens is ourprogram to try to bring you ideas for
aging, properly, planning your future, retiring well, making sure your money
is protected, making sure your familyis protected, and looking at ways to
enhance your planning. So many peopleput this off until it's too late.

(00:27):
So we're here and we've been herefor twelve years on WGY to try to
get you to do the things youneed to do to make sure that whatever
life brings your way, you areprepared. And today we're very fortunate to
have a special guest who is goingto talk about preparing for college. So,
if you have children, if youhave grandchildren, if you just have

(00:49):
a general thirst for knowledge, collegeeducation has become an enormous business. You
have college athletes now who are forthe first time, I'm going to be
on the payroll of the college.You have admissions tests that have continually fluctuated
and changed over the years. Youhave new financial standards and financial tests to

(01:11):
get financial aid and scholarships, andthe good news is because I don't know
anything about any of those things thatI have an expert with me this morning,
doctor Dean Scarlets, the College Advisorof New York, who has been
a frequent guest on the show overa multitude of years, and who has,
thank god, gotten my three childrenthrough three different colleges in four years.

(01:34):
Each. Good morning, Dan,Good morning Lou. Good to be
here. It's great to have youhere as always. And things seem to
be kind of tumultuous in the collegeeducation world right now. Definitely the FAFSA.
I'm sure a lot of people haveheard about the FAFSA challenges. They
had three years to prepare for it. It came out late, and then
there were many bugs in it,and there are in I just got an

(01:57):
email from a client who still needsto do it, and this is extremely
late for his student who's going tobe a freshman in the fall. So
that's a big concern for a lotof people. The other issue is applications
at the popular schools and many selectiveschools have gone through the roof because of
the test optional admissions environment that we'rein. So yeah, so let's break

(02:21):
all this down, because it isvitally important and the facts just if you
want to tell our listeners a littlebit more about that, because it's only
one of a couple of different testsfor financial aid. So what does that
stand for and how do you useit? It stands for Free Application for
Federal Student Aid and the government isin charge of putting it out. And

(02:46):
what happens is you submit that form. It looks at family's income and their
assets and some other issues, andit calculates a number which is now called
the Student Aid Index. They usedto be the Family Contribution, right,
the dreaded expected ef c C.Yeah, I remember that number and it

(03:07):
was way too high. It wastoo hot. It's high for most families.
Even if you make five hundred thousanddollars a year, you can supposedly
afford college, which is almost onehundred thousand dollars a year now exactly.
So the FAFT study determines that StudentAid Index number, and then that is

(03:28):
compared with the cost of the schoolthat your child's going to, and that
determines whether you need aid. There'sanother financial aid form called the CSS profile
that has the same effect. That'srequired by some but not all, private
colleges. Yeah, the ivs.I think some of them use the CSS
because I remember filling out the factsand you help me and we'll explain what

(03:49):
the College Advisor of New York doesfor you folks, and how important it
was to me and my family.But going through this financial disclosure process,
I got through the FAFTS and itwas a laborious process, and then okay,
now you have to do the CSSbecause your kids are applying to these
schools and these schools required and thatwas it was just ten times harder because

(04:12):
if you own a business, theyget into the finances of your business.
What is the valuation of your business? The FAFSA is a much more veneer
type test. It is, butthey did change that aspect of it that
you just mentioned. They are nowconsidering the value of a family or closely
held business on the FAFSA, sothat's a brand new issue. There were

(04:34):
other adjustments made to the formulas inan effort to try to get more low
income students more aid. Unfortunately thathurts a lot of middle class and upper
middle class families that have other assetsthat own a business. But you're right,
the CSS profile extremely long, verylaborious, and it's required by schools,

(04:57):
even Union College, Hamilton, skidMore or RPI, they all use
the CSS profile. SIENA does not, so it's kind of confusing as to
who requires it and who doesn't.But eventually it puts forward a different student
aid index that will probably be higherthan that of the faft SAE. Yeah,
and they're looking really at taxable incomeadjusted gross income is the big thing.

(05:19):
Certain assets, retirement assets thankfully arenot included in the formula. As
we talked about, the FAFSA andthe CSS profile do look at the value
of a business. The CSS profilevalues your home as if that money was
sitting in the bank, the equityin your home. So that's a negative

(05:40):
for a lot of people, aswell as bank accounts, brokerage accounts and
other things. And Dean, let'stake a step back for a moment,
because I dove right into all ofthat technical stuff and the facts in the
CSS The College of Advisor of NewYork, how long have you been in
advising students? Twenty years this fall, twenty years and before that you were

(06:00):
in academia. Correct. I workedfor ACT, the testing company, and
I worked a couple different universities andbeing part of the University World. You
learned what's behind the curtain and what'sshown to the people in front of the
curtain, which is a very differentstory, which I learned first time I
met you. I think I'll tellthat story in a minute. But you

(06:23):
work with students throughout this process,and importantly you work with their parents and
try to keep the parents out ofthe student's hair when they're doing all other
things that they're supposed to be doing. But just talk about the College Advisor
of New York. How many peopleyou have there that guide and council students
and why it's so important. Thereare seven of us now, so we've

(06:44):
grown over the years. Our officeis right in Corporate Woods in Albany.
We've been there for about sixteen years, and our goal is to help students
and families navigate what's become a verycomplicated, expensive process, helping them find
a school that's a good fit socially, academically, financially, and programmatically,
meaning in terms of major If you'redoing four year private universities today, what

(07:13):
are we looking at for the twentytwenty three, twenty twenty or twenty twenty
four twenty twenty five school year.Unfortunately, so that the increase in college
costs have gone up double the rateof inflation over the years, and even
close to the current rate of inflationthat's been happening for the last three years.
So you literally are looking at ninetythousand dollars a year for schools like

(07:36):
RPI and Boston College and Boston University. And you could go on, where
does Skidmore fit into that? Skidmore'sin the mid eighties. Yeah, so
I don't even want to look atwhat my university, Lehigh University is,
but I'm sure it's in all thehi eighties, also in the mid eighties.
So think about that the next timeyou write them a check for a

(07:56):
donation. I do think about thatall the time. And when you think
about, you know, and whydo ds why do people not have a
lot of children anymore? Not alot of people have the wherewithal to do
this. Now, this is wherethe financial aid becomes so important. But
when you're looking at ninety thousand andif you have young children now and you're

(08:18):
listening to this program, and you'rethinking, well, I want my kids
to go to Harvard Yale, andit's ninety thousand today based upon the historical
rate of inflation by the time you'reeight year old is now eighteen years old
and going to Harvard, we're lookingat one hundred and twenty thousand dollars a
year correct, maybe more. Imean the average rate of increase each year

(08:41):
is five and a half percent,so you multiply that out and it's probably
more than one hundred and twenty.Yeah. I'm just thinking there's got to
be a cap on this somewhere.Lou I said that thirty five years ago,
sitting in my boss's office at DuquanneUniversity. We were talking about the
issue and he said it we haveto do. Something's going to happen,

(09:03):
and it hasn't happened. Even thepandemic didn't cause an adjustment in those fees.
You would have thought that it does. And what's happened is there's the
halves and the have nots. Thehalves are places like Hamilton and Colgate and
Villanova and Boston College who can continueto increase their costs. And then you're

(09:24):
seeing a lot of colleges on theother end of the spectrum that are closing.
College of Saint Rose, Wells Collegejust closed, and a dozen others
just this year. Actually, sothe smaller schools, for a variety of
reasons, struggle, but applications,as you said earlier, are increasing.
And when you're looking at ninety thousanda year, three hundred and sixty thousand

(09:50):
dollars investment, by the time you'redone, it's four hundred thousand. So
and if you have three kids,you're putting out one point two million dollars
if you don't get that right contributionnumber to get some financial aid for three
kids to go to one of these, and not just Harvard and Yale,
folks, it's RPI, it's Skidmore, it's Lehi, that whole tier of

(10:13):
schools. It's a million two AndI don't know how parents cope with that,
but there are things that can bedone and little tricks of the trade.
And I'll tell my little story ofwhen you and I first met were
I think we were co presenting ata seminar and I happened to be there
for your presentation, and I hadnever heard the story before. And you

(10:37):
put up a financial aid application withthree schools and how they considered it.
And there were three schools that wereall supposedly using the same formula and one
school came up with thirty thousand dollarsin financial aid, one school came up
with twenty thousand dollars in financial aid, and the third school came up with

(10:58):
zero big gooseg for financial aid.And that was my university Lehi, and
I just was shocked. And howdoes that happen? Every school uses slightly
different tweaks of the formulas, andthey also have this concept of enrollment management,
which is shaping their enrollment with theright mix of students. So a

(11:22):
lot of schools are looking for fullpays, they call them full pays.
Other schools are looking for more lowincome students. Other schools need certain amount
of athletes and female athletes and femaleengineering students and so on, and so
that's what causes those differences. Inother words, for example, a female
engineering student applying to a school isprobably going to get more money than a

(11:46):
male engineering student because there are fewerwomen engineers. So colleges structure their payments
much like airlines through their pricing,and they're trying to leverage who they want
to come in. And that's oneaspect of enrollment management. And so that's
why the number one thing that familiescan do is know what their student aid

(12:09):
index number is before they even startlooking at colleges, because if they're not
going to get aid, if thatnumber is too high and they don't get
any need based aid, maybe youdon't want to look at Boston University in
Lehigh and Boston College because those schoolsdon't give very much, if any,
in merit scholarship money. So thenyou will pay ninety thousand dollars a year

(12:31):
for the privilege of having gotten admittedthere. On the other side, if
that student aid index is low enough, we can help families understand strategies that
will lower that number a little more, that will get them more financial aid.
So you have to very deliberately,very carefully understand where you are in

(12:52):
that spectrum to control your costs.So that investment of four hundred thousand dollars
to get to that top tier schoolone point two million for your three kids
to go to the top tier schools, think about all the things you do
to save money, you know,going to the grocery store, buying gasoline,
driving past three gas stations to getto where it's three cents cheaper.

(13:16):
You need to be aware of thefinancial landscape and what you can do as
a parent, as a student,as a grandparent. How do you prepare
for this? How do you savefor this? How do you play the
game so that you get the besteducation, the best fit, and the

(13:37):
best value. And Dean Scarlets isgoing to come back after the break and
tell us how to navigate the worldof higher education, something that is all
encompassing when you have those students,and I know from my experience looking at
it as a parent, there's alot of trepidation. But we're gonna come

(14:01):
right back and walk you through thesteps and what you need to be thinking
about to prepare your students, prepareyourself for that college future. We'll be
right back after the short break.When some loud bragger tries to put me
down and says this is great,I tell him right away, Now what's

(14:24):
the matter, buddy. Ain't youheard of my school? It's number one
in the state. Hey, thanks, thanks so much that experience. We've
done this show Dean several times now. We've had my son Cameron on several

(14:48):
times with us, who started theprocess with you. He was the third
mind coming through. I had mydaughter Victoria and my son Jordan, both
went to find schools Quinnipe University mydaughter, and University of Miami my son,
and then my youngest who went throughthe process with you. And the

(15:09):
process to me was so important formy kids because coming out of a large
high school and they went to alarge public school and the guidance counselors.
And I remember going to meet withthe guidance counselor and we had about twenty
minutes and Okay, here's the schools, here's and it was just you go.
You left, and you said,all right, so what am I

(15:31):
supposed to do now? Because yougot no guidance. I mean it was
a counselor, but you really gotno guidance. They're so overwhelmed, they
have so many kids to service,and they can't give you the personalized attention
that in many cases you need.Talk about the process you go through with
students from the very beginning when youstart with them, and how that progression

(15:52):
occurs throughout their application process. Sowe will meet with a family and first
thing we do is look at thehigh school transcript and give the students some
honest feedback about how an admissions personwill view that and what they can do
to improve. And I seem likeI give that speech to almost every student,
which it boils down to do betterin school. You're gonna have more

(16:14):
options if you work hard, putthat phone away, put a little more
time in the books, exactly.And you know, they the parents kind
of, you know, sigh andsay, boy, that's what I've been
telling her for years, and nowit's great to hear an expert tell the
student that. And it does makea difference that they don't understand how important

(16:36):
it is to get a strong GPA. We give the students a couple of
personality and learning assessments. I remembergiving Victoria that and I think it kind
of validated who she was, andI think that really helped her understand that

(16:56):
she had a path forward. Shewas probably not the best of their three
students. The other the boys,I think, were better students, but
that sort of validated who she was, and that helped her, I think
excel in college, which she did. She's doing exceptionally well right now.
I couldn't agree more and she ofthat. You're right, she of the
three and the tests. Just talka little bit about the testing because the

(17:22):
things that you talk to her about. And I remember sitting next to her,
just watching her face as you weretalking to her and telling her about
herself, and her eyes just gota little wide, and her first comment
was, you mean there are otherpeople like me? So what are those
tests? Well, one of themis a form of the Myers Briggs Personality
Inventory. It's geared and designed forhigh school students, and it helps them

(17:47):
just understand a little more about themselves, whether they're organized or not so structured,
whether they're extroverted or introverted, andso on, And along with that
is a learning style, and thathelps us understand how to best work with
the student. It also helps usunderstand what kinds of academic programs are better,
maybe a more pre professional program versusliberal arts and sciences, and a

(18:11):
wide range of other things, thesize of the school, where the school's
located. So that's one of them, and then there are other assessments that
we've developed over time that just helpus get at do you think you'd be
better in a small learning environment whereyou can have discussion oriented classes versus do
you think you learn better in alecture course where you can just listen and

(18:33):
observe. And we ask them allof those questions and then we begin to
build a college list for them basedon all of those things. And the
students have different trajectories in high school. They have different friend groups, they
fall into different patterns, whether it'sa sports group or a social group or
a party group. And sometimes they'relearning is not the primary focus during those

(19:03):
high school years, and a lotof times I think it's because they're not
in the right place. So alarge public school, where you're in a
class with thirty thirty five kids,you may not be getting that attention that
you need. And that's important.It is, and totally depends on the
student. You know, some kidscan show up in class, pay attention,

(19:25):
read a little bit, and doextremely well, whereas some students really
need more handholding and a little moreguidance and maybe more accountability. There's a
lot of great inflation in our highschools now. I just saw a study
that basically said what was in eightyfive today was probably an eighty when I

(19:47):
was in school. And so that'sone of the reasons why the test optional
thing SATACT being optional for admission hasbeen a problem because that used to be
a barrier for applying to college andnow it's no longer so if you want
to apply to Harvard with your ninetyfive GPA, which probably used to be
a ninety GPA, you can doso without your test score, and that's

(20:10):
actually made it more competitive. NowHarvard's one of the schools that's going back
to requiring the SAT and the ACT, but many most schools have not at
this point. And let's come backto that because it is important. They
haven't gotten this right yet. They'restill working on it. It's not a
formula, it's perfect. But fromthat initial meeting with your students once they

(20:33):
and this is at what point intheir career, usually late tenth early eleventh
grade, but people find us atdifferent times. So but that's one of
the best times, Like right now, if a student is finishing his tenth
grade year, would be a goodtime. That would be a good time
to sign up. And that's whenmy kids started the summer of their sophomore
year, so rising juniors in highschool, and they take the tests,

(20:56):
they come in for the meeting,the parents take it off, and then
what's the progression from there. Sowe do a couple of meetings around majors
and careers and help them understand what'sout there. Most kids don't really know
and what may be a good fitfor them in terms of who they are.
Then we build a college list forthem, who usually include fifteen to

(21:18):
twenty schools on that. We arrangethe schools as you know, these ones
are reaches, they'll be tougher toget into. These are mid selective,
these are less selective. We showthe family how to research those schools and
then we want them out visiting,and as they visit, will revise their
list. We ultimately help students withtheir essays and their applications and keep them
on track, help them understand howto approach those things. The essays have

(21:41):
become a lot more important. They'rethe third most important factor. They're the
second most important factor if you don'tsubmit your SAT. So we spend a
lot of time just teaching students howto present themselves in the best light in
a very authentic, honest way,and we review all of their applications before
they submit them. We help momand dad with the financial aid and scholarship

(22:04):
process and really get them through tothe end, to the point where they
pick, hopefully what's the best schoolfor them. So here's a topical question,
because I just had a call thismorning. I'm on a scholarship foundation
and we were grading scholarships and wenoted that in the scholarship essays, the

(22:26):
same words were popping up in everyone'sessay. And I'm of course talking now
about generative AI and the use ofchat GPT in these kinds of things.
Is that creeping into this process?It is we try to make sure that
kids are just writing from their heart. Interestingly, what I've found from our

(22:49):
current college students is a lot ofthem are writing the paper and then using
chat GPT or whatever AI they useto grade the paper for them. It's
make suggested changes. That's a reallygood use of that system. But I'm
I'm certain that at least one ofour students tried to use chat GPT last

(23:12):
year for his essay and we mixedit. And if we notice it,
the college admissions people will notice itas well. They just want an honest
essay about who you are as aperson, and the more personalized and detailed
and specific it is, the moreit's going to resonate with the admissions offices.

(23:33):
So the students come in, theygo through the process, they take
their aptitude tests, they have theyou have the conversation they in my in
my kids cases. Some really tookit seriously, some it was just another
pat part of the path. Victoriawas, Oh my god, I'm I'm
gonna be okay. Then you startand how many colleges are there in the

(23:57):
universe of universities. About four thousandin terms of two year colleges, there's
a little more than two thousand.I'm sorry, four year schools. It's
a little more than two thousand.So it's a big universal places. And
we take that list and we narrowit down to fifteen to twenty to start,
and then we help them revise thatlist. So I just did a

(24:18):
student's list yesterday and they felt veryhappy that we had narrowed it down already
to fifteen to twenty schools, andthat gave them some places to begin visiting
and thinking about. So, howmany schools have you personally visited. It's
probably around four hundred and fifty now, and so I still do that.
Just went down to the University ofScranton a few weeks ago. And that's

(24:42):
an important part because I can tellstudents the difference between X and Y school
that you know your big rival LaFayette there's somewhat similar schools, but they're
very different, and so I cantell them the difference between Lehigh and what's
better than the other. Of course, if you say so anyway, I

(25:02):
always will. Once you get thatuniverse and four thousand schools, two thousand
and four year schools, that's adaunting challenge. And you buy your books.
You know they have the different readingsystems for colleges and who's the better
school and what's the better fit.But knowing what's on campus and knowing what
that school's philosophies are and how dayto day life that in that school operates

(25:25):
is a big advantage to the studentsin winnowing down that list. Yes it
is. And you know, oneimportant thing is kids and families know the
names of schools that they know.We know Villanova, we know Boston University,
et cetera. But there are hundredsof other schools that could be a
better fit for them that they justdon't know about. And that's why it's

(25:45):
one of the things that we canbring to the table to help them understand
what other schools would be a goodfit for them, and that may be
easier to get into and may beless expensive. So how do you find
the right school, how do youfind the right fit for the student,
how do you prepare to pay forthat fit? And we're talking now almost
four hundred thousand dollars for a fouryear education for some of the better schools

(26:08):
in the country. We're going totalk about all of that and more and
how to go through this process ofplanning, preparing, and executing that plan
to get to the right college.So it isn't seven years of college down
the drain. We'll be right backafter the news. Get ready, summer's

(26:45):
coming school. Don't be out herewe go. Welcome back to Life Happens
Radio. I'm Louppiro, your hostfor this morning from Pierre O'Connor and Strauss.
I am very fortunate to have todayDean Scarlets, the College Advisor of
New York, in studio with me, and we're talking all things college.

(27:06):
But i'd like to tell you aboutsome educational opportunities, and one of them
in particular, if you'd like tolearn more about long term care planning kind
of the opposite of today's topics,but long term care if you need care
at home, assisted living, nursinghome again, preparing planning how to get
it, how to find it,how to pay for it. That is

(27:26):
what we do at Pierre O'Connor andStrauss. We work with our clients to
construct plans. So on the secondMonday of each month we do something called
Medicaid Mondays, pretty appropriately titled twelveto twelve thirty PM. Our attorneys take
you through all the rules, strategies, techniques to qualify for federal and state
benefits and to obtain long term care. June tenth will be our next program,

(27:52):
and Frank Hemming and I will explainhow to qualify for Medicaid in a
nursing home. So this is somethingno what he ever wants to be in,
but something once you're there. Talkabout cost. You're looking at about
one hundred and sixty thousand dollars ayear a year for a nursing home.
Almost two hundred and some nursing homesfifteen sixteen thousand dollars a month, and

(28:14):
many of them. How do youprepare, how do you plan? How
do you access it? Medicaid Monday, second Monday of the month, this
time June tenth, at noon.You can always register on our website at
pyrolaw dot com or just email usinfo at pyrolaw dot com and that's pie
rr law. So Dean, myadvertising is done, and let's get back

(28:41):
to it. Students have come in, they've met, they now have from
this universe of four thousand colleges,they have twenty on a list, and
where do they go from there?They start visiting and they provide us with
feedback after each visit. So thisplace was a little too small for me.
I think I've decided I want largerschools. This place is a little

(29:03):
farther away. A lot of studentsinitially want to go twelve hours six hours
away, and what I find isthey very often come back much closer to
home. So we revise their listbased on those things and others. And
I also want to make sure thatthe parents are either getting a lot of
financial aid or getting a lot ofscholarships, and maybe put a Sunni school

(29:26):
or two on their list as well. Even those Sunni schools, though,
are going to be over one hundredand ten hundred and fifteen thousand now they're
up between twenty five and thirty peryear. And so you know, back
to the three child analysis. Ifyou have three kids, even a Sunni
school will cost you three hundred andfifty to four hundred thousand, and that's

(29:47):
just beyond what most people can afford. So knowing how these forms work,
and we led the program with thefinancial aid forms, the FAFSA in the
CSS how they work and it usedto be the dreadity FC expected family Contribution.
Now it's something different Student Aid IndexSAI SAI. So you got your

(30:08):
student Aid index and this is goingto determine what financial aid your student or
you are eligible for. And thereare a lot of factors. What are
some of the things that people missin planning for college? Because we get
questions from clients all the time,well, if I create a trust for
my child, does that trust counttowards the financial aid formula? If I

(30:32):
do a five to twenty nine plan, We're going to talk a little bit
more about that as we go.If I do a five twenty nine plant
college saving account, does that countin the financial aid formula? What are
what are some of the rules there? So trust is a no no because
you do have to report that.The biggest factor is a family's income.
But as the cost of college hasrisen, you can have a much higher

(30:56):
income and some decent amount of assetsand still qualify for aid. You also
are likely to get more aid whenthere's two students. You're the two siblings
overlapping in college. So a lotof people with fairly large incomes think they're
not going to get need based aid, and they will, So it's certainly
the income. A big myth outthere is don't open a five to twenty

(31:19):
nine plan because it's going to causeyou to get less aid, and I
couldn't disagree with that more. Themoney in a five twenty nine is only
counted at about five and a halfpercent of its value, So if you
had one hundred thousand and a fivetwenty nine, that's only going to raise
your student aid index by about fiftysix hundred dollars. So it's just not

(31:41):
a big issue. And I wouldmuch rather have people save more money and
therefore have to take out fewer loansthan to save little or nothing and try
to rely on loans, because tryingto get loans for sixty seventy eighty thousand
dollars a year is just not agood idea for either the student or the
parent. That's what God is.Student loan debt is now one point seven
trillion dollars. It's greater than allcredit card debt in the United States.

(32:06):
That's pretty amazing. Think about thatnumber, one point seven trillion. What
are you saddling yourself with to getthat education and the value of the education?
Is it going to be able topay off that loan? Are you
in the right field, You're goingto get the right job, You're going
to have the right salary. Butfive twenty nine plans, let's just open
up that can a little bit andtalk about it. I've got an email

(32:27):
this morning from our own comptroller,mister Thomas P. Di Napoli, and
it was announcing saving for college witha five twenty nine account. And that's
the New York five twenty nine,which does have some very unique features.
And I think New York's five twentynine is pretty well run. But some
people like to have better investment returnsin other states. So just what are

(32:50):
the advantages of doing a five twentynine in New York? What are the
limits on what you can put in? And how do you save for college?
So I agree that New York planis a good one. There are
other plans out there. Most everystate sponsors won and they're run through fund
companies like Van guard. I believeVanguard is the one that runs a New
York's plan. The benefit to NewYorkers if you live in New York State

(33:13):
and you open a five to twentynine account, the first ten thousand dollars
that a couple puts in married filingjointly will get them a New York State
income DAX deduction up to that tenthousand dollars mark. So that might save
a family five six eight hundred dollarsper year, But if you're doing that
over fifteen or twenty years, that'sgoing to add up. And I would

(33:35):
rather that the parents have the moneyand not the state of New York.
So from that perspective, the NewYork Plan is very good. But again
you should look at the performance ofthe various state plans. You should talk
to a financial advisor and make thateducated decision. You can even super fund
these five twenty nines. You canput fifty sixty thousand dollars a year into

(33:55):
them. So people, and that'sin my world because that's based upon gift
tax limits, and you can giftinto a five twenty nine eighteen thousand dollars
now per year, but you canfront end load it with five years.
You'd be using your five years ofgifting for that individual student. And if

(34:16):
you do that all up front,it's ninety thousand dollars that you can invest
all at once that's going to earna rate of return. And this is
where people start to shop. Soyou can start with the New York five
twenty nine, but you can actuallyroll to another five twenty nine, right,
correct. If you see a statethat's really outperforming the others, you

(34:37):
can move to that state and geta better return. So if you do
this when a student is say fiveyears old, and you've got thirteen years
of compounding and your rate of returnis six seven percent, that ninety is
going to double to onet eighty.And there's no tax on that. And
that's the big advantage of the fivetwenty nine. Correct, when you take

(34:57):
it out, as long as it'sused for tuition, room board ease for
college, there's no you don't paytax on it, and that's a big
benefit. There are other benefits tothe five twenty nines as well. A
lot of people, a lot offinancial advisors will tell O their clients don't
overfund it. I don't like itbecause it's too earmarked for college, which
I again vehemently disagree with. They'revery flexible accounts now, they can be

(35:21):
moved among siblings, you can useit for graduate school. In terms of
estate planning your world, you couldleave it there if there's anything left over
in it for and then change thebeneficiary to your grandchild and all of a
sudden, that money is going togrow tax free for twenty years and you're
helping to fund your grandchild's account.And then one more really great benefit is

(35:45):
brand new. If there is excessfunds in the five twenty nine, they
can be rolled into a roth IRAfor the student. And so you can't
overfund a five twenty nine. Youcan only underfund it and then probably have
to take out too much in loansto pay for college. There's certainly other
ways to pay, but that's onereally excellent way. Well, I just

(36:07):
learned something today. Sometimes I dothat on radio. I just learned that
you can roll a five twenty nineto a roth for the student. That
is incredible. That's brand new.Now there's many iffans or butts and stipulations,
but maximum of thirty five thousand,and it's not really rolling it.
You have to have earned income likeyou have to do for a WROTH,

(36:28):
and then do it over a fiveyear period. I think the current limit
is seven thousand. Yeah, rock, so you're cut. So it can
it can be your annual contribution tothe ROTH, provided you have seven thousand
of other earned income. Correct,Still a really good deal. Great deal.
You get thirty five thousand in there. And there's other stipulations like the
account the five twenty nine has tohave been opened for at least fifteen years,

(36:52):
so it's another reason why just toopen an account now, and if
there's money left in there, thenthat money. You know, the student's
twenty six years old, they justbegan working, and they already have thirty
five thousand in their retirement account.That's going to come out tax free in
thirty five years when they retire.Yeah. The ROTH is, folks,

(37:12):
the greatest investment vehicle that the governmenthas ever given us. And I started
my children on roths as soon asthey started earning income. And you know,
they would earn a few thousand dollarsin a summer job. So that's
the max you can contribute. ButI wouldn't make them put the three thousand
dollars into the wroth, I wouldmatch that. So if they earned three,

(37:36):
I'd put three into a wroth.And you can start doing that when
there's once y're fourteen and start fundingthat wroth because they're legally earning income at
that point in time. I didthe same thing, and it's very beneficial,
tremendous and over time, by thetime those kids are sixty sixty five
and they're ready to retire, thatis tax free money, and you can
invest your roth any way you wantto invest your wroth and grow it.

(38:00):
But fifty years of growth on atax free account is enormous and you can
run numbers on this. Financial advisorsdo it all the time. It is
tremendously powerful. So the roth isa gift that we have today. They
have changed rules for traditional iras andnow the back end of a traditional IRA
is much less beneficial because the kidshave to take it out when you die

(38:22):
and they inherit it over ten years. Called the Secure Act, we do
a lot of education on that andthere are options to try to mitigate that
someone is a roth rollover if youcan do that. But the college savings
account not as negative in terms ofthe financial aid if only five and a
half percent is countable to that student, and tremendously beneficial over time because of

(38:43):
that tax free investment. And therewas an income tax benefit in New York
if you were in New Yorker anda parent contributing, is that still there?
It is. It's first ten thousandyou put in is deducted from your
New York state income each year eachyear. So it's a big benefit and
people should take advantage of it.The other thing I'll throw out, you

(39:05):
probably have some grandparents that you workwith and who listen to the show.
That's a great way for a grandparentto help out. And they they would
get the tax benefit if they putthat money into the five twenty nine.
It's still their money, grandma's money, so that you know, little Johnny
can't run away with it with thatmoney on his own if if it were
in an UTMA or an UGMA accountand so, and it doesn't hurt financial

(39:30):
aid if it's at grant in grandmaor grandpa's name. So that's a great
way for grandparents to help because grandparents'children are paying much more for college than
the grandparents did when those kids wentthrough school. Absolutely. And I'm going
to give out a website which isthe New York State website. It's New

(39:51):
York Saves nysave e s dot org. And they have all these rules.
But think about it. Ten thousandif you're married, ten thousand, it's
five thousand individual. But if you'rea married couple, you can put in
ten thousand dollars a year and deductit from you New York State income tax.
That money then grows tax free forthat student and they pull it out

(40:13):
they use it for college, youpay zero tax on it. If they
don't use it, all you havenow other options. You can roll it
student to students. So I haveanother child going to college, they can
take it and roll it and useit for the other child. And now
they can pull it out and makeit their contribution to their roth IRA.
So these are very highly beneficial accountsand a great way to start putting money

(40:35):
aside to keep up with that inflationaryfactor in education. As we talked about
earlier, the Harvard's and Yales ofthe world going to be about four hundred
thousand dollars for four years if youstart today, and if you're starting ten
twenty years ten twelve years from now, it's going to be more so five
twenty nine savings paying for college.We're going to come back and we're going

(40:59):
to talk about the experience of shoppingfor college, that application and the selection
what is that selection day? Andthat's kind of the koudigraph of the process
finding the right school, getting tothe right school, and having a successful
four year college education. You're listeningto Life Happens Radio. I'm Luke Piro,

(41:20):
your host for this morning. Thanksfor joining us. We'll be back
after this short break. Welcome back. Life is happening out there, blue
sky's sun is shining. Heading upthis afternoon to Lake George. I'm lucky

(41:45):
enough to have a boat on LakeGeorge and we're going to take some of
the family out and do a littleboating. What's your day look like,
Deane. I will be going upto Glenn's Falls to watch my son play
in his summer baseball league, theGlen's Falls Dragon And it's a collegiate league,
and he just finished his first yearin college playing ball, and he's

(42:06):
playing a lot more ball this summer. They have about forty five games and
he's going back for his sophomore yearand going to play at Catholic University.
Yes, fantastic. So I followedhis career, and you followed my kid's
careers. Now working off the payrollto my son's living in Manhattan, my
daughter up in Saratoga, and theyhave benefited from this process, folks.

(42:29):
And I wouldn't be here selling thisunless I really believed in it. When
my daughter had that aha moment withDean, she started to look at schools.
We toured probably a dozen schools withher. I don't think any of
my boys either. My boys ratherdid as many, but we did about
a dozen schools. We got thefeedback you teach the parents well. So

(42:51):
the song is teach your children well. Well, teach your parents well.
And one of the fundamentals was kindof hard and talk about that, how
do you keep parents out of thekids? Here, we do a whole
parent workshop on that issue because itbegins. This is the stage when their
student is fifteen, sixteen, seventeen, That begins a different kind of parenting

(43:14):
and it's hard. It was hardfor me personally. That's where we come
in. The student can take directionfrom us. They don't give the eye
rolls to us like they do tomom and dad typically and oh, students
give eye rolls to parents. Theydo. And so we ask you to
be involved in the process, buttake a step back and let your child

(43:37):
do the work. And if they'renot doing the work, if they're not
researching colleges, for example, letus know, give them a little rope
to hang themselves. Hey, Deansaid, you need to be researching these
schools. Have you done that yet? No, Mom, I have a
test. I can't give them aweek and then go. You know what,
Dean said, we should sit downand do this together. So you're

(43:57):
still getting it done, but you'regiving them. You're sending the message that
this is their process and they needto find the school that's best for them
and they need to be empowered todo so. And once they're vested in
the process, it takes on awhole new meaning. I would never and
I've let my children make their decisionsand tried to stay and I'm a hands

(44:19):
on parent, but try to stayas far from it as I could.
And getting in the car, onceyou've toured the campus and you've met with
the dean and you've done all ofthat, and you get in the car,
the first thing you want to askis what did you think cam exactly?
And the urge to do that isso strong, and you have to,
okay, where are we going forlunch? To change the subject,

(44:39):
bring something else up, Let themprocess, and I think that was so
important. Let them process, andthen you know, you start talking about
other things and they might ask you. That's typically what happens, Dad,
what did you think? And yousay, doesn't really matter what I think?
What did you think? And theymay not really understand the differences among

(45:00):
schools until they've made four or fivevisits, and then they start to get
some perspective and they start to understandwhat might be a good fit for them
and what might not. And inthat regard, you know, I only
got in one argument with my son, and I think he ended up to
be right, but I had himworking with one of my staff members,
and that, you know, I'llnever forget. He were sitting there as

(45:22):
he normally did, doing homework onenight, and he gets up and he
gives me his laptop and he says, do you want to look at this?
And I said what is it?He said, it's my applications in
my essay, And I said,did my staff member look at it and
he said, yeah, she saysit's good. Yes. I said,
do you want me to look atit? And he said, I don't
know, because that's what he saysto everything. I said sure, and

(45:44):
I looked at it for about fortyfive seconds. It looked fine, and
I gave it back to him.That's the situation I want to create.
Too many parents are the opposite.They're like, we have to do this.
We're applying to Lehi, We're doingand you're not applying to college anymore,
and so it's your time to beginstepping because that helps your child build
some independence. And being an Englishmajor and an editor and someone who is

(46:07):
in the legal field editing documents allthe time, I wanted so badly to
edit their essays and I didn't seethem until they were already submitted. And
it was a good thing. Itwas theirs, and it was their work
product. And some of the essaysthey amazed me, the things that they
came up with and the topics thatthey chose because we didn't even have input
on the topic selection. So letthem do their work and find the right

(46:32):
fit and talk just talk a littlebit about fit. Once you narrow the
twenty to six and then three,and then it usually comes down to two.
And I like these two, andI'm weighing out these two. How
do you find that fit that youhave a good feeling that that student is
going to have a great four yearsand come out with a meaningful education.

(46:52):
Where your son Cameron was a goodexample of that. He had it.
He wanted to study business. Hehad it down to Fordham and Syracuse and
I said to him, Hey,Fordham and the internships you can get in
New York City, that business schoolis pretty sick. I might have said
the same thing, and he thoughtabout it. We talked about a little

(47:13):
bit more, and then he ultimatelysaid, you know what, Dean,
I want a very traditional college experience. I want to be involved in fraternity
life, I want to go tosome football games. I want to study
hard. And Fordham doesn't quite havethat. Being in New York City,
it doesn't quite have that very traditionalfeel, and Syracuse certainly does. And
that ended up to be, youknow, that was his version of fit,

(47:36):
and on the social front, butjust in general, he wanted that
very traditional experience and that's what Syracusegave him. And he did mighty well
there. He had great four yearsat Syracuse. Jordan had a good four
years at the University of Miami,And after I toured that campus, I
looked at him, I said,do you think you could really study here?
You look at the Olympic Pool withthe bar overlooking the pool. I

(47:58):
said, wow, I don't knowif I could have made it four years
at the University of Miami. ButCameron at Syracuse, you know, followed
in his father's footsteps. In onerespect. He became the president of his
fraternity and Greek life. And Iwent to some of his fraternity parties,
which a lot of flashbacks going on, and we had some great times there,
as did he. But now mostof his friends from Syracuse, most

(48:20):
of that group has stuck together,and it was that kind of a unity
and an experience where the whole fraternityhas kind of kept in touch with each
other. And that's what Greek life'sabout it. And that was important to
him, not to every student exactly, not to every student, and that's
what he wanted and that's what hegot. And so those are the kinds
of decisions, and you know,he wasn't ready, He didn't fully understand

(48:43):
how to make that decision until theend of the process. And I want
every student to have several options onthe table from which to choose, and
he had the right ones on thetable, and he made the best choice
for him. As you said,he graduated in four years. He became
a leader on campus, and he'sdoing very well in New York City.
I brought all of my children.For those of your parents out there who

(49:04):
are saying, wow, I wentto I brought all of my children to
Lehigh University. We toured the campus, we met the dean as soon as
we got in the car. No, not for me. It was off
the scratched off the list immediately.Okay, that's that's great. But they
all have different experiences. So oncethey make the selection, then it's it's

(49:28):
a process that the parents and thestudent have to work together. And the
line that I liked the best wasat Quinnipiac, which is where Victoria ended
up. And she didn't know whatshe wanted to major in. She just
it was the right fit. Shewas going to go to Loyola in Baltimore,
and at the last minute chose Gwinnipeakand it was for her the right
choice and the Dean got up andgave the speech, and you know,

(49:50):
the rah rah this and rah rahthat, and okay, parents, it's
time for you to leave, andwe have a tent set up behind the
pavilion here and you can go getyour fifth five thousand dollars Hamburger. I
thought that was a great line,and I kind of put it in perspective
back then it was fifty five.And so we all went out and the
students took it from there. Andthen, you know, Victoria was to

(50:13):
me the biggest surprise when she calledme in the beginning of her sophomore year
and she said, Dad, Ithink I'm been a major in accounting.
And I fell off my chair andI said, accounting. Huh. I
wouldn't have predicted that one. Andthen she ends up graduating magna cum laude
in accounting and some of the professorsthat the things that they said and emails
to her were just amazing transformation anda lot of that, folks. Was

(50:37):
that process so kind of sum itall update, We got about two minutes
left. What should parents be thinkingabout now school's out? Saving preparing?
What are the important points save moneyno matter the age of your child,
even if they're still in college.I would put money away in whatever vehicle

(50:57):
you think is best. I likethe five twenty nine, but there's certainly
other things you can use. Understandyour affordability early in the process. Go
to someone like me and have thatstudent aid index calculated so you know for
certain whether you're going to get eightor not. And then start to identify
colleges and where your student might dobest. And that's a hard process,

(51:22):
but there's a lot of resources online, and again you could contact us certainly
our our web addresses College advisor NYdot com. Our office number is five
one eight five one two three ohtwo one. So please just reach out
and at least have a conversation withsomeone to begin the process, because again
it's gotten very competitive, very costly, and very complicated. Website and phone

(51:46):
number one more time, College advisorny dot com where you can just google
Dean Scarless and phone number is fiveone eight five one two three zero two
one. For those of you whohave graduates who are coming up graduating colleges,
so a lot of them now havehad their graduation ceremonies, high schools

(52:07):
will be coming up shortly. Congratulations. The journey is a tremendous one.
I hope you've enjoyed it as muchas I have, and I know Dean
has, and we hope that youare here every week listening to Life Happens
Radio. Doctor Dean Scarlets, thankyou so much for sharing all of that
information and your talents with us today, and we will be back next week.

(52:29):
Hope you can join us. Asalways, our website is a font
of information. Join us at pyrolawdot com for our videos. Join us
Medicaid Monday, June tenth at twelvenoon and be on the lookout for our
upcoming seminars and webinars. Thank youfor joining us, enjoy this beautiful weekend,

(52:49):
and we hope to see you allback here next week on the radio.