Good morning, and welcome back to College Coffee Talk. Pearl and Andy Lockwood, Lockwood College Prep. Good morning, Pearl. Good morning, Andy. Hi, everybody. Welcome. This is the show that's all about helping you figure out how to get into college, how to pay for college, thinking about whether you should even go to college, whether it's worth it. Fair. Anything goes. So we'll get into today's show, but first, join us in a synchronized sip of your coffee or whatever else you may have. Pearl, good morning again. Cheers. Hope everyone had a wonderful 4th of July. I just want to know for the record that Pearl is battling a tremendous case of golfer's elbow right now. She's playing in pain. So thank you for your service. Thanks. Thanks for sharing. Well, I mean, you know. For our interested listeners. People don't know what goes on behind the scenes, the level of commitment you have. I'm quite the soldier. You didn't even wear one of those compression things or. No, there will be no attention seeking here. Okay, good. No apparatus. Okay. All right. Well, so today we have a few things to cover. First of all, we're going to talk a little bit about student loans and some updates to what's happening. We'll spend a little bit more time talking about the college essays and applications. Tonight is actually the first night of two where I'm going to be doing two lectures, one tonight and one tomorrow night for everyone enrolled in our boot camp, which also includes our one-on-one private advisory, college advisory clients, class of 2025 specifically. So I have some, I guess some highlights I want to just share today to everyone who's, you know, even if you're a client or not a client. And I also saw something that I thought was worthy of bringing up. It's a news story. I guess it was a press release put out by Fitch Ratings, who rates many institutions, including colleges, And their story was that in 2023, fiscal 2023, private colleges were actually profitable. They saw a net increase in tuition revenue. And I believe they defined that as the tuition less any discounts that they have to give. But the story went on to say that the colleges are still under tremendous amounts of pressure. They're cutting costs. We're seeing signs of colleges closing down, usually the smaller ones, or combining like we just saw with Marymount and Northeastern, who's been quite inquisitive in the last year or so. So what I think this means for people sending kids to colleges next year, maybe even this year, is that there might be more leverage for negotiating better deals because colleges are under pressure. So that's my hope. Right. All right, so let's talk a little bit about your student loan updates. Pearl's an expert on not only the financial aid process, but also the student loan repayment plans, the ever-changing shifting sands of student loan repayments. Precisely. And the ever-changing is the proper emphasis for where the student loan and parent loan and graduate loan repayment world is as of today, July 2024. So basically we've seen the attempt initially for loan forgiveness in the amount of $10,000 and $20,000 respectively if you have parent loans that was started in the works and then it got halted because it was struck down as unconstitutional. Then there was a new Biden-Harris loan repayment plan put in place to try to circumvent that unconstitutionality, which basically has elements of the SAFE program that are now currently being litigated. I know of at least two different state courts that have, two different states, not state courts, states, probably federal courts, states that have struck down now the new portions of save that were attempted to run around the initial loan forgiveness plan. Specifically, although none of this is settled yet, it has been my suspicion that the save plan in most of its differing parts from other income-based repayment plans would get struck down. In the save plan, the amount that you, it is, first of all, your repayment is tied to your yearly income. So if you have a low income, your monthly payments are going to be set according a percentage of that adjusted gross income and every year your income resets and your repay, I'm sorry, your payment will reset for the year that then follows, again, tied to your income. However, if you were ordinarily under paying back the loan supposed to pay, let's just say $4,000 a month, but under your saved plan, your income-based repayment plan, let's just say you only have to pay $1,000 a month, the $3,000 that you are not paying, you are not being penalized on currently with the saved plan, yet you're not paying it and nobody's paying it, but your loan balance, is not going to be affected as a result. So that doesn't really make sense math wise. And so too, a couple of courts have agreed and have found that I suppose unconstitutional has not run up to the Supreme Court yet. So we're kind of in a waiting plan. What you should know, the net net is if they end up striking down in most parts, the same plan, they're gonna revert to the, repay plan, which is another income-based repayment plan that does allow you to seek loan forgiveness after the loan period. However, the amount that you do not pay that you would otherwise have to pay under a loan repayment plan, as opposed to a income-based repayment plan, would get added to your loan balance and the interest would accrue from there. So the overall loan balance that you'll have and ultimately be seeking forgiveness on will be larger, but more in line with like proper math. Anyway, here are the other loan repayment, loan forgiveness, loans altogether happenings, if you will. The Department of Education is also taking over for the loan servicers, which there are a handful of, some anywhere between like five and 10 loan services, typically that the government assigns your loan to, and that's from there, you know, you're dealing with that loan servicer. The Department of Education is centralizing this and is taking over. During that transition, everything is kind of up in the air. Specifically, you actually, do not need to make any payments on your loan right now and don't have to until September 2024 with no repercussions. This is according to the government and right embedded in, if you go to studentloans.gov, you'll see it right there. If you click on, you know, tell me about the state plan or tell me about repayment now. It is a so-called on-ramp plan while all of this centralization of the loan plan and litigation, I suppose, of the repayment plans that have been proposed and which have been applied for and taking up lots of time and bureaucracy. And as a result, there are lots of questions as to what the accurate and proper monthly payment should be for the loans, et cetera. I mean, this is just, I'm just giving you an overview of like, what's going on in that world. So I'm expecting a lot of like, nothing and confusion and treading water for a few months, I might time it to like maybe after the election, just a guess. But that's my prediction. It's just going to be in this messy state until we get through probably mid-fall. What's your election prediction, speaking of predictions? It's going to be interesting. Wow. You know, there was a press conference and they asked Biden about these changes and what's happening. And I think his comment was... Oh, my God. It wasn't... I'm not pandering for votes with these... Well, that's what I was saying. It just came out more like... If it's too good to be true... Capisce? So if you're just joining us and you have some questions or comments about anything, not just student loans, anything related to college admissions or college financial aid or anything, pop them in the comments. We have a bunch of people with us live, but if you're watching this on replay, stick them in the comments section also and we will address them. Yeah, the whole financial aid thing and the student loan thing is just a big mess. There's going to be, I think, the same prediction that because of the centralization, there's going to be all sorts of mistakes and incorrect information about what your payments are, how much you owe, anything related to that. So the duty or the burden is on you to the extent possible to figure out what the correct amounts are. And I shudder as I say that because that's pretty hard to do. and double check. Because the very way they're evaluating what you pay is changing in real time. That's the other part of this. There's an article that I sent to you right before we got on here. It was in the New York Times, I think, right around July 4th, maybe right before. Something like 19 million borrowers have not made a payment in three years still. And I think some are being penalized, some are not. Right. But it's, you know, it's a big problem. It's a big problem. And one thing I did want to add, one thing that's not complicated, you can borrow all the money you want for paying for college for the given year. Meaning, I don't mean all, you can borrow as a parent the entire cost of attendance with ease, unlike any other loan you would seek out there for any purpose. The ease at which, and the lack of scrutiny with which that a parent can borrow the entire cost of attendance, which is room, board, tuition, the whole kit and caboodle for a year of school, happens still effortlessly. So continue to borrow, continue to jack off the loan debt repayment issue. So this is why colleges have absolutely no incentive to change their price point. It doesn't affect them because the ease at which families can borrow and get this money and get this expense taken care of without actually coming out of pocket. I think at this point I should insert a disclaimer that nothing in this show is, is, uh, intended to be financial advice. You should always, you should always consult a financial advisor. We are not financial advisors. I'm just saying what happens to be available in our current working rules of, uh, Yeah. Student loans and parent loans. And you have to understand sarcasm also to watch this show. Sarah says, very timely topic on loans since we just got our first bill today for a freshman daughter starting college in August. I love your show. Thank you very much, Sarah. And if anyone has any comments, I see Rob and Tracy, Christy, and a bunch of other people are watching. Feel free to pop in your comments and questions. OK. Switching gears? Sure. Unless you have any more loan financial aid wisdom? I think we've been off a bit. Okay. So one of the things I wanted to talk a little bit about were the applications and essays. Another thing that I think would be a good segue that I wasn't intending to talk about, but I think we should, is the financial aid process. And I'm talking specifically to a class of 2025 families. So much of what we cover normally on shows like this or our webinars is probably our books too, is that the formulas, how they work, how to get more money, how to hide your money, tactics, and things like that. But something that gets overlooked, probably even by me, or at least de-emphasized, is that it really matters where you apply. So at the beginning of the show, I spoke about how colleges are seeing a growth in net tuition revenue. and define that as what they charge versus how much they give away. So the average discount for a private college is over 56%. So if you are looking for aid, whether that's merit aid, because you don't think you'll qualify for a need-based aid, which is a different discussion, or any type of money, you need to target, number one, colleges, that are generous, which tend to be not the big state universities. That seems to surprise a lot of people when they apply, the kids get in and they get a financial aid award and they're like, where's the beef? Private colleges are far more generous than state universities. And by state, I mean out of state as well as in state, wherever you live. So you've got to target the generous colleges, but also the ones that will be generous to your child, which is a whole nother I think pretty egregious, massive mistake that gets made in this process when, and we see this all the time, particularly Pearl, who files financial aid applications for like 400 families every year. And a lot of them are shocked when the kid gets in to a school that was, you know, maybe a reach, you know, they had to beg, borrow and steal and scratch and claw their way to get in. And then they get a very light, financial aid award that looks a little bit less than what we would have predicted in a vacuum. And the reason for that is this concept that we talk about from time to time called preferential packaging, which basically means that colleges will favor, in terms of their financial aid awards or merit aid awards, the kids that they want the most, not the ones who barely got in. So it really matters overall where you apply and how your child stands relative to the competition above and beyond all the other stuff we talked about, the income, the savings, how to shelve their money, et cetera, et cetera. Don't you see a lot of surprises that way? Yep. But that is usually the glaring answer as to, well, why not? Why didn't I get any money? Right. Yeah. I should have gotten money. Right. I was stunned that I didn't get money. Right. Right. And then... You know, we'll scramble around and look at the awards ourselves. And usually it's like, no, I think that's a fair award. Right. It's just your expectations were not set properly through no one's fault. You know, you say, what do you say all the time? The land of should. The land of should does not exist. I think this morning. I should have gotten this. I should have. Right. They should have. This morning, I think it was the island of shoulds. It was. It still is. Okay. Is the continent or? It's an island. But land also. Land of. I don't like to limit. No. She was espousing that to our son, our daughter, and our daughter's boyfriend is this thing. Really dropped a good one today. So anyway, that's important. When you're compiling a final list of colleges, you need to go beyond just, oh, I saw that school on someone's rear window sticker drive around the neighborhood. They have a great football team. Let me apply there and hopefully I'll get enough money to be able to afford it. Now is the time to start thinking about this stuff. I'll tell you, the students that I'm working with in our boot camps, which run from a couple weeks ago, we started our kickoff meeting and we'll wrap up in the middle of September. We want to finalize the college list before September. My advice to anyone watching this is you always want to have at least two or three colleges on that list that are chosen specifically as um, you know sort of what what's the right word not a red herring but A straw man something along those lines just to get financial aid offers in order to be able to use against the other schools on your list That that may be a better fit for you in terms of your other criteria besides money that that you're looking for because with this um this warning by Fitch Ratings to these colleges who are struggling, even though they're seeing some tuition growth, that there's going to be more competition among colleges. It's not just about kids chasing the colleges around. It's about these colleges battling for your kids. So if you can engineer that and play the colleges off against each other by including schools on your list that are competitors of the other colleges on your list, the more desirable ones, then you're going to be setting yourself up potentially for a good negotiation position. You'll be in a position of strength as opposed to waking up and seeing hardly any award and thinking, oh my God, where's the beef? To the extent that you can avoid surprise in this entire process, you should. The more planning, the more tethering of thyself to reality, the better. You say thyself. Yep. Like a biblical banger. Oh, yeah. Yeah Yes, I mean there's there's the way you want to see things and then the there is the way things actually are and You know, I'm just thou should heed her word All right, you know Let's get to the essay. Okay, as long as I'm quibbling over word choice Whilst you talk and biblical I love saying whilst I don't know why it makes me happy so would you use it in an essay then we'd never use that in a college exactly the old slaughter thesaurus word well I just have to draw the line somewhere you want to go with traditional language I think not I'm trying to impress the heck out of you and I may not have come up with this word on my own word okay So just basic comments about the timeline. So what I'm urging all the students that we work with to do is to get the main essay, the personal statement done this month, July. And then when the common application actually comes out and we get most of the supplemental essay questions from the colleges on our list, which means by necessity we need to finalize the colleges on our list. know october september then turn your attention to the supplemental essays but but to get the main one done or as closely done as possible and then august I would say at minimum do the supplemental essays for the top five colleges minimum on on your list and you can probably do more than that because these supplemental essays tend to overlap Once you've answered a question about what extracurricular activity is important to you and expect to expand on in college or continue with in college, for one school, you can probably talk about that. For another college, it asks you the same essay question. Or if you've figured out how to answer the supplemental essay question, why are you interested in applying here? There's a very specific template that we use in our boot camps and one-on-one with our students. There's an increasingly popular essay topic for supplemental essays about what community do you come from in response to last summer's Supreme Court outlawing of affirmative action to be able to be used in college essays. I'm sorry, in college applications. Colleges will no longer see the box that you check off your race or ethnicity, but they can still ask about things like that, related to that. in order for them to promote diversity on their campuses. That was a loophole that was sort of created by Justice Roberts and his majority opinion in 2023. So that's the timeline. I think it's important also just to note the purpose of the essay. I think the best way to conceive of the purpose of the personal statement is as a replacement for interviewing because most colleges do not do admissions interviews anymore. There's a few colleges that do. Sometimes it's the small liberal arts colleges like the NESCAC, the New England Small Clouds Athletic Conference colleges. Wake Forest does an admissions interview. But for the most part, if you apply to an elite, an Ivy or similar type of school, you will get an interview, but it's not from admissions. It's from the alumni. And they don't count. I did it. I did it for Cornell as an alum. Your friend Cindy also. And my friend did it. My friends from Cornell did it. And it's really an opportunity for alumni to market the school to the student. Well, the school's also keeping you guys in the fold and hoping that you'll donate more. Yes, of course. And of course, you know, sell our school to this prospective student. But there is absolutely no weight, no interest in what my opinion is of this student. Zero. The conversations I have a lot with people like Pearl who did alumni interviewing was that they would get, I was talking to a dad who's a Georgetown alum two weeks ago, and he said application after application, resume after resume, all these kids who he was just blown away by. I never would have gotten in compared to these kids when I applied 30 years ago, and none of them get in. Because they're all like the same on paper. Same grades, same scores, same extracurriculars, etc. So that's another thing really to be thinking about. Not so much for class of 25 because your extracurriculars are sort of in the books at this point, but for younger kids, 26, 27, even 28, you need to be thinking about what can you do that's not the same as everyone else. So if your whole application is about, well, let me list my honors. Okay, I have five spots and I'm in National Honor Society and And that's it, right? So number one, 70%, 75% of kids at any given high school get into National Honor Society. So that's not going to get you into a big school, a great competitive college. And number two, you have four other empty spots to fill up. So those are ways, those are opportunities to stand out. So our daughter, applied to a couple of what I would consider random contests for poetry a couple years ago. And she won something out of state somewhere. And I think she got some other accolade like that. Published. Yeah. Well, that wasn't an award, but she did other things as well. But there are opportunities to seek out these other contests, which tend not to be overly competitive also. and um you know so ask your teachers if you're a writer ask your your english teacher ask guidance counselors sometimes they have lists of of awards that you can or at least scholarships and things like that that you can apply for and sometimes those count as awards for that activities I'm sorry for the honors section in terms of activities you want to be thinking about not just doing the same stuff that everyone else does but a atypical type thing so It's great to be in a club, but it's atypical to be a leader of that club, an officer. I think everyone understands that. But those things are important. But that's not the only thing you can do to stand out. You can start your own enterprise. It doesn't have to be a formal 501c3 charity that clearly was created by a mom or dad, but it can be some sort of informal entity. that shows that you took some sort of initiative just to start up. It doesn't have to be sanctioned by the school. All these things count. They all paint a picture. I always call it the thread of continuity that should run through this application and communicate your value, what you could potentially bring to that college community. Because there's a tendency, which I understand why there is, in college applications to brag and make it all me, me, me, me, me. Of course that's what you're doing. But it's more than that. You've got to show a bigger picture. It's not just about how great you are. It's about how you impact others against its values. How you impact your community and how you might impact your college community one day. And that's the same thing as a job interview. Awesome. So one of the segments I'm going to be teaching tonight for our clients is how to write an essay so compelling that it compels admissions officers to practically crawl naked over broken glass to admit your child, even if you haven't lived in some unpronounceable third world country or cured a pandemic. And I'm going to be talking about some of the biggest mistakes that kids commit that you want to avoid. So one of them Pearl mentioned already is overuse of big words or strange words, you know, acting like you swallowed a thesaurus. Another one is not letting the essay breathe in between drafts, which is why I go start their essays now, even when they're not ready. Just stare at that blinking cursor and get something done. Too many chefs in the kitchen. That's a big one when mom or dad, let's face it, mom is looking at all the intermediate drafts, not just the brainstorming session. My advice is always brainstorm with your kid and then let them go do their essay. If they're working with us or someone like us, let us finish because it could be four or five drafts. And then at that point, have the discipline to then wait until then to review the final essay. And then I'll conclude today with forcing it. This is a big mistake. So here's an example that's maybe embellished a little bit, but here's an example from an essay from a few years ago. As I reached the mountaintop, I was struck not only by the new perspective I achieved, but also by the texture and formation of the large, moist snowflakes that caressed my cold, windswept cheeks as I later explained to Bobby, the club-footed, spastic-coloned, ADHD, aboriginal child whom I've mentored through my 5-1-C-3 nonprofit every Tuesday and Thursday afternoon since I was nine years old that, like him, Each snowflake is unique, beautiful, and endowed with special characteristics for the world to appreciate. So that is based on a line from a kid who basically went skiing. And he went to the top of the mountain and he looked down and he tried to say that I couldn't see everyone's differences anymore. I realized that we were all the same. I'm like, yeah, who was going skiing with you in Vail? Were you really all so different? Is that where you go for diversity? So these essays don't have to be monumental, lifetime TV movie types of dramatic bits of prose that can be about regular things, about things that are important but small and interesting. There's no such thing as being original on these essays because the average admissions officer reads at least 1,000 applications a year. Each application might have two or three essays. So you're not going for original, but you have to go for interesting, and you've got to be revealing about yourself. It's got to be a personal statement. So I think we can wrap up here. I don't see any other questions that came in, so thank you guys for participating. Oh, Pearl. Yes. Pearl Chisner-Lockwood is watching. She is. Nice. Just got notified. I'm glad you're watching. You need more than one. All right, so any bits of closing comments? Yes. I do have one other closing comment because it's something that a lot of families deal with right now at this time. If you have a student who is starting college in the fall, I want you to be aware most schools will ā€“ assign health insurance coverage. They will force school health insurance on your student and charge you about $3,000 for the year for it if you don't need it because you have other insurance that will cover your student. You have an opportunity now. to waive it. But you need to reach out to your school, probably the bursar's office or the health department at the school to find out precisely what the procedure is for waiving the health insurance. I can share with you that there's usually an independent website that you'll have to log in to create an account to actively waive it. And you will, of course, have to show proof of alternate health coverage for that student as well. And there's definitely a deadline for this. And it's coming soon. So if this is something you're interested in, take a look at your bill. They slip it on in there. It's just kind of in there. It's an extra three grand that you may not need to pay. But you've got to get it waived now. Yeah. And they put the burden on you to waive it. So we've suffered with this ourselves. It's not cool at all. Right. One more comment. Talk about the limited power of attorney. Right. So also, as you also may know with FERPA, that's something you actively have to help. Privacy. It has to do with privacy. Exactly. So if you want to be able to still be involved in your students' health care decisions or be made aware, you're going to have to affirmatively now get this, have a limited power of attorney. a healthcare proxy, you know, created, and this document you have on file so that if anyone's telling you, I'm sorry, but students, it's a student, we can't talk to you, the parent, you can present this and say, oh, but I have this, and you have to talk to me now. Conversely, if you have to pay tuition, you don't need to do anything, you can just pay. And they'll still charge you, right? Right. You have the privilege of that. But if your kid is sick and you want to be involved in that discussion, unless you have a affirmative piece of permission paper, which is this limited, I guess, power of attorney or health care proxy or whatever you call it, you've got to get that done. All right. That was important. All right, guys. Well, thanks for watching. We'll be back next week. We always enjoy having you on and listening to your comments and responding to them. So pop them in there if you're watching this on replay, and we'll see you next week. Bye-bye.
