Please note that this transcript was auto-generated. We apologize for any minor errors in spelling or grammar.

Angie: [00:00:00] And then whenever you’re ready to start letting people in works for me. So.

Julie Shields-Rutyna: All right. Yeah, we’re good. We have, we have people joining and I’m sure a few more will come, but it’s, yeah, we’re ready to go. Awesome.

And would, would you, do you, I don’t know if you want to say hello first or how are we doing?

Angie: Absolutely. Yeah. Let’s see.

Just changing my view here.[00:01:00]

Hopefully we’ll get a few more people to sign on.

Hello, everyone. Thank you so much for joining us tonight. We’ll get started in just a few minutes. Just want to give everyone a chance to log on and get settled. Grab a cup of coffee if you need it.

Julie Shields-Rutyna: Actually, I’m just going to fill up my water. I’ll be right there.

Angie: I know. I don’t blame you.[00:02:00]

All right. And just so everyone knows we are recording this. Um, so if you need to cut out early, we will be sending the recording out, um, probably within a day or two, usually it comes out pretty quickly. Um, but I wanna take a quick moment just to welcome you all and thank say, thank you so much for joining us, this, us this evening.

[00:03:00] Um, my name is Angie and I am the young adult librarian at the East Bridgewater Public Library. Um, and I’m very honored to be joined tonight, um, by my friend Julie, who is the senior director of college planning, education and training at MEFA. Um, and she joined MEFA in 2007. And in her role provides expertise related to planning, saving, and paying for college to families, colleges, and other organizations.

Prior to joining MEFA, Julie worked for the College Board, Nellie Mae, and American Express, and was the Director of Financial Aid at the Harvard Graduate School. School of Education. Julie has been involved with MASFA in a variety of positions and committees since 1993. She holds degrees from the University of Massachusetts in Amherst and the Harvard Graduate School of Education in Cambridge.

And so I’m going to turn things over to Julie and have you kick things off for us.

Julie Shields-Rutyna: Thanks so [00:04:00] much, Angie, and welcome everyone. I’m going to share my screen so we can have the presentation here.

Let’s see.

Okay, and let me just make sure everyone can see that. Um, so tonight we’re going to talk about college planning and early college planning really at whatever stage you’re at of college planning. Um, so I have a number of slides that will sort of take us, take us through whether you have. You know, younger children, uh, middle school children, children, students getting into high school, and, um, feel free to ask questions along the way.

Um, if you want to, the best place to do that is in the Q& A section, and we’ll be able to see, see your questions. If you [00:05:00] need a live transcript, you can hit the CC button, and that will allow you to get closed captioning and read the words that we’re speaking as well. And as Angie said, we. We’ll be sending a recording and we’ll send you the slides after the fact too.

So you’ll have those and I’ll just share a little bit about MEFA. So MEFA is a state authority and we were created in 1982 to help families plan, save and pay for college. And back then we were created with a loan program because at that point there really weren’t. As many options for families to be able to pay for college outside of the federal financial aid.

So that’s how we were created. And then we’ve just grown over the years where now we have the state’s college savings plans. We have a free web portal. called MEFA pathway for students in grades six through 12. So I’ll show you that. And we have all kinds of free [00:06:00] resources for you. So, you know, you can, you can have MEFA as one of your resources in this, in this college planning time.

So tonight we’re going to talk about how, how do you research? Post secondary options. Hopefully that’s kind of the fun part. Um, talk about why college is an important investment, um, and how much it might actually cost for your family. And we’ll get into some of the details about how you pay for college.

Um, we always encourage you to Begin saving for college. And so we’ll talk about some of those strategies for saving and sort of what you can be doing at different points. So to start with, you know, with the high cost of college, sometimes you see headlines that are, you know, is college even worth it?

That’s a, that’s a big one. We see often. And I say, I like to say a couple of things to that. One [00:07:00] college is, is so many things. It’s college doesn’t look good. One way it doesn’t have to be the four year college a couple of hours away with a leafy green lawn. It can be and that is for many students. Um, but it can also be a lot of other things, um, that we’re going to talk about two year and four year public and private.

And, um, so we really like to encourage students to find a post secondary plan that that works for them. And if. In that way, then college is definitely worth it. So I’d say just kind of have a mindset of an expanded view of what colleges. And then secondly, these statistics still hold where it does mean that the higher level of education that a student attains, there are monetary benefits to that as well.

And so you can just see that, um, say students who have less than a high school diploma [00:08:00] or just a high school diploma, uh, Have, you know, ability to earn income, but as you get up into. There’s a big jump with an associate’s degree and with a bachelor’s degree, and then with advanced degrees on top of that, where the average income tends to be higher the more education that you have.

But again, it’s important to, um, to find a career that You know, a program in a career that you’re going to enjoy and love so that you continue on with it. And I think all of that is really important as well. But there are monetary benefits. And so, in general, people seem to think college is still worth it.

I like to show this slide with, which just really shows that again, there are many different types of colleges at many different price points. So when we see those headlines of X number of colleges in the Boston area have hit [00:09:00] 90, 000 and that was a headline last year, there are a number of colleges that have that 90, 000 cost of attendance, but that is private.

Not for profit colleges. Um, some with that very high price tag. And when you see that price tag, that includes everything. So it includes tuition and fees and housing and food and books and supplies and transportation and personal expenses. So that’s, that’s sometimes why you see that big cost. Um, but you can also see that there are public four year colleges.

Which tend to have a lower cost than that. Um, and then if you go to the public colleges in your own state, uh, you tend to have an even lower cost than that. And then there’s a whole strong community college program. Um, where students can start out at a community college, receive an associate’s degree, go on to a four year, and in that way, keep costs down.

And you’ll hear us talk about it [00:10:00] tonight, but actually, community college in Massachusetts is tuition and fee free at this point. For everyone, which is huge. I’ve been doing this work for a long, long time and, um, really always hoped there’d be some options like that. And we are finally there. So that’s a, that’s a great thing.

But this slide is to show you that you have so many options. Please don’t be scared off by those, those big numbers, um, for so many reasons. And here, this again, is just another slide to show you there are, there are many, many options when you’re thinking about. College or post secondary choices. And here are the different costs with these.

All right. And then I mentioned already that one of, one of the great, uh, tools that MEFA has is called MEFA Pathway. And this is a free college and career planning tool for students in grades 6 through [00:11:00] 12. And it’s really terrific. I don’t know how much you can tell from just the colors, seeing the, the front page there, but it’s very colorful, it’s interactive, um, it’s, almost fun.

Um, and students can go in and create a free, a free account. And then you can start out and do some things like take some little quizzes, skills and interest assessments, and they’re fun. They’re like games, um, where it asks you questions, you make some choices, and it will tell you, you know, you’re this type of a learner.

Um, you seem to lean toward these skills, um, these interests. You can set goals. Um, and then there’s a whole wealth of career options in here. And, um, so you can explore careers, see what a path would be to a certain career that you might be in, interested in, or see many paths. There’s also a college search in here, lots of financial aid and scholarship information.

Um, but the best part is you [00:12:00] really get to. Um, you know, set your goals and play around and everything is saved in here for you so you can continue to go back and work in here. Uh, it’s a, it’s a, it’s a great tool and I highly recommend, um, this as a way to. To do some exploration in a fun way for yourself and what else is fun in researching colleges is to You know really keep an open mind and Throw it all out there and see see what you want to explore and as you start to narrow things down Here are some websites so you can start without even leaving your desk um college navigator is a website college scorecard a big future from the college board And how these work, they all are a little bit different, but they work in a similar way where you go in and you, you put in some information about [00:13:00] yourself.

So you say, you know, I am interested in nursing. I’d like to stay in new England. I. Also have an interest in soccer. Um, and then it will narrow down a search so that you’re not looking at hundreds and hundreds of colleges. It will, it can narrow it down to some choices that you might want to start.

looking at. And then when you go and look at these, um, options online, you get a lot of really good information. You know, the graduation rate, right? The average annual cost that you might pay versus just that big sticker price of, you know, the 70, 80, 90, 000. It will say, well, you know, with financial aid and all, this is the average that a family pays coming here.

And then it might even give you information about the median earnings that a student who graduates from this college, um, can receive. So you can play around with [00:14:00] all of these websites, um, without even, again, leaving your, leaving your desk. But then you probably do want to leave your desk at some point, and you probably want to visit some colleges too.

And, um, visiting colleges can be. Super fun. You can do that at any point at whatever age you are, just to walk on a college campus, maybe go to a sporting event or a theater event or a dance event and just get a sense of, you know, do the students look happy? What are they doing? You know, all of that. Um, but then when you get into high school, sophomore year, junior year, At that point, when you go to visit a college, it’s probably a good idea to make it a more formal visit, register with the admissions office, maybe go on a tour, hear an information session, talk to some students.

So make it a little more formal, but again, let the college know you’re there. Um, and here are just some of the factors. [00:15:00] You might want to start considering, you know, the institution size and location. And you might not know that if you’re a freshman in college, in high school or sophomore even, and someone says to you, do you want to go to a big school or a small school?

Do you want to go to school in the city or the? A rural area. You may not know. Um, but as you begin to explore and as you make some visits and sit in on some information sessions, talk to some students, you’ll see that it starts to come together for you. Where you’ll say, Hmm, I guess I liked what I heard at this college from the students versus this one and things start to narrow down for you.

So you can just make it a fun exploration for yourself. So, um, some of those things like institution size and location will. Um, you know, you’ll start to make sense, um, for your own preferences. You’ll also want to go to a college that’s going to be a good academic [00:16:00] fit. So that means you want to go to college probably with students who are somewhat like you.

And I don’t mean like you in every way, but who sort of like to study like you. Um, are you someone who likes to, uh, be studying all the time? You’re really, you know, academic minded. You want to sit in the cafeteria and you want to Talk about what just happened in your class. Um, then you probably want to be at a college where you’re going to find students like that.

Um, or are you a student who likes to, you know, take your classes, but when the weekends come you, you’re hoping to go to a sporting event and there, and let’s say you’re at a college where there’s a every Saturday. And that’s what you want to do. You want to make sure you have some fun like that. So again, those are the type of things you want to, you want to be in a place, um, where academically you’re somewhat like, like the other students.

Um, and then you just want to think through things like, do you have an [00:17:00] intended major in mind? You might, you might not. Um, and what is that campus culture? Um, is it, does it have a religious bent? so much for joining us. Is it very sports focused? Um, and so again, you get to know some of those things from visiting.

Most colleges that I see have lots of activities, have study abroad programs, have career and internship services. Um, but if any of those are very important to you, you’ll want to ask questions about those. And you do want to make a choice that’s affordable because, um, you have lots of options and you, and you want to feel good about that.

So you don’t want to leave college in more debt than you hope to take on or something that’s going to force you maybe to take a job and you would have preferred to take another. So you want to think about that affordability on the, on the front end. [00:18:00] And so, yep, we talked about the informal versus formal campus visits.

Depending on what grade you’re in and where you are in this process, you should do both. Another place you can find out information about colleges is at a college fair. And college fairs are, you know, held in this area. A couple of the organizations that hold them are NACAC and NEACAC. So those are listed on this slide.

And there’s a big one that’s from NACAC down in the seaport in Boston in March this year. Um, and NIACAC has a number of them, but what’s a nice benefit of one of these college fairs is they get colleges from all over the country to come, hundreds. And so you don’t have to travel if you’re interested in a college in California.

Well, you know, it’s so much. easier to be able to meet someone, um, [00:19:00] local, a representative from that school, ask a lot of questions, um, because you can’t visit every college upfront. Um, you know, that would get so expensive. So these college fairs really allow you to connect with college representatives.

Early on and right in your backyard.

And then we can talk a little bit. Well, I’ll stop because we’re getting into affordability. Any questions yet, Angie, that have come in or

Angie: no, we just had one question about will it be recorded and I already responded and said we have the recording and the slides probably being sent out within the next couple of days.

So other than that, no questions at the moment. But if you have any questions, feel free to put them in the Q and a

that’s great. So then let’s talk a little bit about the cost piece because, you know, that’s always a big deal. So we talked about the headlines. You might [00:20:00] hear that a college costs 80, 000.

But really what you need to understand is what it’s going to cost you as a family. And so that means that many students receive financial aid. How much is it going to cost you? And you know, all that can be as an estimate up front, but there are some calculators that can give you some information on that.

So there’s something called a student aid index. Calculator and we have one on the me for website where you can go in and put in some information about your family finances as you will on a financial aid form when it comes time, and that will give you a sense of, you know, you might be expected. Your student aid index might be 10, 000 or 12, 000.

Um, or 1000. Um, And so that will give you a sense of, okay, this is what we as a family are probably going to be expected to pay toward college per year. [00:21:00] And that could just help you in your, in your thought process about how to plan for that. Also, every college has something called a net price calculator on their website.

And those net price calculators not only give you that student aid index number, they also can give you an estimate of the financial aid you might be able to receive at that college. Again, just an estimate, but that can be helpful as you’re thinking about. You know what colleges you’d like to apply to what colleges you’d like to have on your college list.

You might find that some colleges are more generous with financial aid, um, and some a little less. So and that just again is helpful with your planning. Um, some of these net price calculators. are better than others. I guess what I’d say is those that ask more questions tend to be a little more accurate because they’re gathering more data to be able to come out with this estimate for you, but all [00:22:00] helpful.

And again, these same websites that you could use to search for colleges, scorecard. Um, those will also give you some estimates of, um, in certain income, if you’re in this income band, this is the type of aid you might be able to expect, things like that.

And this is just another example of a scorecard for Boston College, which shows graduation rate, annual cost, median earnings, things like that. And then it also shows, um, that it’s medium sized for a year, private, not nonprofit, it’s in the city, things like that. And this is what those net price calculators can look like.

So let’s just take one moment to talk about all the new and great financial aid in Massachusetts. [00:23:00] Um, so. There’s there’s always been something called mass transfer, which allows students to start at a two year college and then go on to a four year college, thereby cutting the cost of college here in Massachusetts by a lot.

But now that community college is free. tuition and fee free in Massachusetts. Um, that is even more true than it’s ever been. So to be able to go to a two year community college, tuition and fee free, and then transfer to a four year, again, can make college very affordable here in this state. So Mass Educate is the program that makes community college free for all students in Massachusetts.

Um, one thing I’ll say we’ll get to applying for financial aid, but the one thing you have to do is you do have to file the FAFSA. That’s the Free Application for Federal [00:24:00] Student Aid. Even though community college is free for all students, you do have to file that form. And that was a little bit of, there was a little bit of confusion around that, so I just want to make sure students know that.

Um, also, There’s a program called tuition break, and that’s actually for public institutions in New England. And if you go to, if you just Google tuition break, you’ll get information on that program through the New England Board of Higher Education. And that program. Allows you to look at literally hundreds of programs in New England, and many times you can go to a program in a neighboring state and still pay in state Massachusetts costs.

Some states will allow you to do that for all of their colleges and all of their programs. Um, Maine has a lot of programs and a lot of colleges where you can pay. In state Massachusetts [00:25:00] tuition and fees, but still go to Maine. Some of the other programs, you have to be in a certain program to be able to take advantage of that in some of the other states, but it’s a great list and something to look into if you’re trying to think about you know, affordable ways to pay for college.

And lastly, I’ll just say, this is also new, and that is that currently, under the Mass Tuition Equity Law, Um, students who are not eligible for federal aid, say undocumented students or student students in certain immigration statuses actually are now eligible for in state tuition and state financial aid.

And so that’s just an important thing to know as well that it was it was much more difficult for someone who couldn’t receive federal aid to be able to attend college. But now there are these programs in Massachusetts, where it’s much more possible. So. You [00:26:00] can, you know, Google the mass tuition equity law, too.

So, I mentioned that one of the reasons, you know, you’re not paying those sticker prices all the time is that there is a lot of financial aid available for students. Um, and financial aid is really any money that is going to, uh, help a student pay those costs, those current costs. And usually falls under three categories, the first being the best, which is grants and scholarships.

That’s money that is just awarded to a student and the student never repays. But then there are work programs, and the big one is federal work study, where a student doesn’t get that money up front to pay a college bill. But gets a job on campus and can use that pay, whether you get paid once a week, every other week to pay for your miscellaneous type expenses that might be shampoo that might [00:27:00] be pizza that might be bus fare.

So all of those kind of personal expenses can be paid with that. money that you earn from your work study job. Um, and I, I’ve seen students go a couple of ways with that. Um, sometimes a student can get a job. Let’s say the student is a chemistry major, maybe gets a job in a chemistry lab and really gets to know some of the faculty.

And, um, that could be a great place to work. That’s very much aligned with your career goals. So that’s a great way to have a work study job that. You know, gives you some experience there. I’ve also seen students not do that and just decide to take a job, let’s say, sitting at the front desk in the library with a clicker and just clicking the number of people who are entering the library and exiting the library to make sure the numbers stay fine.

Or you could do that also in the gym. The fitness center. Um, so sort of a very easy job, but that allows [00:28:00] you to sit there and study and read and all of that. So, um, I think either one of those can be a great addition to your college education. And then there are student loans, and I mean student loans get a bad rap.

Nobody likes loans. That’s money that you do have to repay, but there are very specific federal student loans that are in the student’s name only and have have some benefits. That make them a little bit better than a regular loan. Um, so that’s why they’re considered financial aid too. And I think my next slide is going to show you these student loans.

Nope, but I’m going to find them. There we go, and I’ll go back. So, the federal direct student loans, um, the reason they’re different than other loans is that the student is the sole borrower. There’s no credit check. And there are loans that can be subsidized. Portions of them can be subsidized, meaning the [00:29:00] federal government pays the interest while you’re a student.

So that’s, that’s a positive. They usually have a fixed interest rate. And the other big benefit is they have different ways that you can repay. And one is that can be tied to your future income. So if you get out of college and want to take a certain job that’s going to be good for your career, but that’s not going to be enough to allow you to pay.

Your student loan, you can, you can have a payment that is a percentage of your income and a small percentage to allow you, um, to pay less than you normally would. So things like that are different than regular loans. Um, and these have limits too. So the most that a student can borrow as an undergraduate is 27, 000 in these loan programs.

So, um, I will tell students that if you need to borrow, this is the, this is the place to go to those federal student loans first with, with some of those [00:30:00] benefits. All right, but now we’ll go back and just talk generally about applying for financial aid. So when you’re a senior in high school, you’ll apply for financial aid in the fall.

And the main financial aid form is called the FAFSA, the free application for federal student aid, and all colleges require that. So you’ll want to make sure you keep that in your In your timeline that senior year fall, you want to complete the FAFSA. Some colleges sort of the, some of the high cost private colleges, um, do require an additional form called the CSS profile.

And so if a college does require that, then you need to do both. Um, but that’s also available in the fall of your senior year. in high school. So just remember those two. And when you’re applying for financial aid, um, it’s coming from a number of different sources. So that one, those [00:31:00] forms that you fill out are going to be applying for federal aid, state aid, aid from the colleges and universities themselves, all in that one form.

So that really takes care of a lot. Um, and then the only type of aid that’s kind of outside of that one big process is if you want to apply for some private scholarships. So, um, you could go do an online search. There are a couple of, um, private scholarship searches here. I listed the MEFA pathway one.

There’s also one called FastWeb. That college board site, Big Future, also has a scholarship search where you can, again, put in some information about yourself and get a list of possible scholarships to apply to. Um, you can also look. What I like to say closer to home, look at your school, look in your town, look for parents, employers, uh, my dentist used to have a [00:32:00] little note on her counter that said she gives two scholarships to, uh, students who do a lot of community service each year.

So just keep your eyes open for outside scholarships like that, but that will probably be a smaller part of the financial aid you’d receive the main. financial aid you’d receive would be through applying with those financial aid forms. And again, you can see here 177 billion of financial aid goes to students.

This was 22 23 year. And a lot of the financial aid is need based and that’s why you’re filling out these financial aid forms. putting information about income and assets. So a lot of the financial aid is awarded to you as a family based on financial need. But there is also aid, especially from the colleges and universities themselves, that’s based on merit.

[00:33:00] So we always hear of maybe like, you know, a big football scholarship or something. Um, and those do exist, but that’s not what most merit aid is. Most merit aid. is just awarded in recognition of your achievements, mainly academic. So the bottom line is, when you get into high school, the higher your grades are, the higher your GPA is, um, probably the more merit aid you would be able to receive at some of these colleges.

So, um, I guess the message there is, You know, work hard, do well in high school, and there is a chance for a little more money based on your, your achievements.

And if we pull that all together financial aid wise, um, the cost of attendance of a college, that big cost. minus your family’s student aid index, which is determined from those financial aid forms equals your financial [00:34:00] aid eligibility. And that’s the amount that colleges then work to fill in and give you a financial aid offer to hopefully meet that financial aid eligibility, or at least toward that.

So some colleges have a lot of resources, a lot of money, and they would give you a financial aid offer that met that financial aid eligibility. And maybe others are, um, less, um, well resourced, but they’re all the colleges are working to try to give as much money as they can toward that financial aid eligibility.

And so then in general, these are all the ways that. Families pay for college. Um, financial aid is a big one. So you want to make sure you apply, but also past income. So if you have any savings, um, that students and parents, and we’re going to talk about savings in a minute, but that is a way that, um, You can [00:35:00] use your savings toward college.

Um, also your present income. So, you know, does your family during the year have any money in the budget that’s freed up, um, that a little bit could go to pay college on a monthly basis? College, while most colleges have the, have families pay in August for the fall semester, And in December for the spring semester, all colleges have payment plans that some will allow you to pay over 12 months or nine months, 10 months.

So you have some choices there, um, to break that, break up that cost. And then the other ways family, families pay are through future income, which would be loans. And we mentioned the student loans, but sometimes parents, um, will borrow loans to, um, to help a student as well. And. You know, in general that me for [00:36:00] we talk a lot about the fact that families end up paying for college over time, it seems.

And so you sort of have some choices. And this is just a very simplified example. But to show you if you’re going to have a 10, 000 college cost, for example, if you start saving and you’re able to save and earn interest while you’re saving, maybe, um, if it’s, you know, Just in this example, it’s you earn a 7 percent interest rate over 10 years.

Maybe you could save 6, 900, earn 3, 000 income, uh, interest, and that’s how you would pay for your college cost. So that’s how savings could work toward helping you. If you don’t do that, maybe you’ll need to borrow 10, 000, but then you’ll be paying interest afterwards, so you’ll be paying a little more, and that’s how you would cover your college costs.

It’s not quite as simple as that, but just [00:37:00] I guess this is just showing you that if you have the ability to save some toward your education, it could be really helpful when it comes time to pay those college bills. And some of the big myths out there when I talk with families are a big one that always gets brought up is when I start saying you should save, people will say, but if I save, won’t that just hurt me and I won’t get any financial aid.

That is a big myth, but many, many people think it and it makes sense why you would think that. But the truth is in that financial aid formula that I explained from filling out the FAFSA. And the CSS profile. Um, really, income is a huge factor. Parent income especially is a huge factor in applying for financial aid, how much your eligibility will will be, whereas savings.

And assets are counted in a [00:38:00] much smaller way. Um, and so for that reason, your savings is actually going to help you a lot more than it’s going to hurt you. It is not going to mean you won’t get any financial aid, and it’s going to be a much smaller factor in how much financial aid you receive. So that’s, that’s one thing to just feel comfortable about saving, that that’s going to be a good idea.

And the other, I guess the other statement I hear people say is, you know, they see those big costs. of how much college costs these days and maybe have, maybe parents have a couple of children and say, there’s just no way I can save enough to cover those costs. So why am I even going to bother? I should just forget about that and save for my retirement and not worry about it.

And I understand that one too, but the truth is. Even saving a little bit can help when those college bills come in, they can be daunting and to have a little bit [00:39:00] saved to get you going to, um, know that you have some flexibility when it comes to, uh, buying books, doing an unpaid internship one semester, things like that, just every little bit of savings, um, is going to be helpful.

Did a presentation the other day, and we were saying that in all these years working with families I’ve never heard a family say I wish I hadn’t I wish I didn’t say in fact everyone says the opposite of I wish I saved a little more if I had known or started saving a little earlier. So, um, it just, it can just open up options for students.

And so, yes, here are all the, all the positives about saving for college. So, um, you can have more education options open to you. Possibly different types of colleges. I, I mentioned. You know, all the great resources of the free Community College and the [00:40:00] extra money at the state level. Um, but, but if you have some savings, maybe you, you know, could attend, um, a college that costs a little bit more that you receive a little less financial aid, something like that.

Also, your savings hopefully will allow you to reduce or eliminate the need to borrow loans, and it could allow the student to work less and study more. Um, actually working a little bit in college has been proven to be a real positive. Say working 10 to 12 hours a week is a total positive for a student’s academic experience.

But, if a student’s starting to have to work 25, 30 hours a week, they might have to start making other decisions about how many classes they can take in a semester and all of that, and that could slow down the progress. So, working too much can start to get in the way of being able to move quickly through your college program.

So, [00:41:00] maybe having some savings. would allow that not to happen. Um, again, we talked about minimum impact on financial aid eligibility. And the last piece I’ll say is that it has been proven. There’s some research. Um, and I always bring up his name is William Elliott out of the university of Michigan has done lots and lots of different studies, but all around.

Students who know that their parents have a college savings account for them, um, and it doesn’t matter how much money is in that college savings account, just knowing that there is a college savings account tends to have a positive sort of aspirational effect on the student where the student tends to do better in school.

Um, students who know they have a college savings account end up applying to college and going to college and graduating from college in slightly higher numbers. Um, so that just that idea of. [00:42:00] you know, this is available to me. This is what’s expected, um, tends to be a motivating factor. So, and then some strategies for saving are just, um, start saving as early as possible.

Sometimes it’s good to have a goal in mind. Maybe, um, parents, I’ve seen parents who Maybe look at the cost of, uh, UMass, for example, and say, okay, well, I’m gonna, I’m gonna put that as, as my goal, or look at the cost of any college that might be, uh, maybe their own alma mater or something, um, just to have a goal in mind and start saving toward that.

And again, by saving earlier, um, you just take advantage of all that. Compounding interest. Um, one thing taking advantage of unexpected funds. You know, there are different points in in our lives where maybe we come into some money. Like, let’s say, um, [00:43:00] if your child is in daycare, and then they go to kindergarten, and there’s no more daycare costs.

Maybe you can use some of that use some of that. newfound money to save a little for college. Or maybe, maybe children get gifts at birthday time or holiday time. Um, and so those kinds of things could be put into a savings account. And it is, it does tend to be, um, Help towards saving more if we just set it up and forget it.

So, for example, if we open a college savings account and have a certain amount, and it could be a small amount, but withdrawn from our checking account every month. To go into that without having to think about it every month and thinking about, do I have any money left in my budget the end of the month to put toward college savings?

Um, you never, you almost never do, or you never think about it. So just to have it going automatically tends [00:44:00] to allow people to save more. And, um, again, I mentioned the gifts. I think that, um, allowing, you know, an aunt or an uncle, a grandparent to, um, contribute to a college savings account for a student is, is a great thing as well.

And actually, here in Massachusetts with our U Fund that I’ll mention in a minute, which is the, uh, Massachusetts 529 plan, we now have Gift cards called the gift of college in CVS. So when you go into CVS and you see all those gift cards for Starbucks and Home Depot and whatever else we have gift of college cards that, um, you can give to people for a baby shower or, uh, um, you know, first communion or something like that.

Um, so that’s another nice way to let other people help you save. And when your student is [00:45:00] babysitting or, um, mowing some lawns or whatever, they can start saving, um, as well.

Angie: Julie, while we’re on the subject of the 529 plans, we do have a question. Um, someone wants to know, does it matter what state a 529 plan is set up in?

It’s such a great question. So no, it really doesn’t. Most states have at least one. I think it’s Wyoming. I hate to say it. If it isn’t Wyoming, I apologize, but I think it’s Wyoming that does not have their own 529, but most other states have a 529 plan and some have two or three. And so really you can save in any 529 plan across the country.

Um, and there is a website called, um, saving for college. com. And that site has lots of information about these plans all over the country. And you can compare them as well. And we’ll give you [00:46:00] all the detailed information. So that’s a great website. Um, and no matter what 529 You can use it at any accredited college or university all over the country, even some international colleges.

So you really have a lot of flexibility. Um, however, there is, um, I’ll just, when I get into the benefits right now, um, there is good reason to look at your home state’s plan because you might have the benefit of a state tax deduction. So, for example. Um, in a lot of states, I think it’s 30 states. have some kind of a state benefit for their own plan.

So here in Massachusetts, if you save in the U fund or U plan, and we’ll talk about the difference between the two of them, then you are eligible for a state tax deduction, possibly depending on your taxes and all [00:47:00] that of, um, Up to 2, 000 for a married couple, 1, 000 for a single person. So that might be a reason, or you might still love the program manager of the Virginia plan or something.

You might still want to save in the Virginia 529 plan. Um, but you might not, you might say, Oh, that pushes me over the edge to, um, go with the Massachusetts U fund plan that I would also get that state tax deduction. So that might be a reason to look at your own plan. Awesome. Thank you so much. Thanks. So then let’s talk.

I will go to the right here. I’ll talk about the U fund first. I find that a little easier. And then we’ll talk about the U plan. But the U fund is the Massachusetts 529 plan. And I’m just going to explain how it works because basically All 5 29 work similarly. They might just have a slightly different combined account.

Maximum that you see here is [00:48:00] 500, 000 for Massachusetts, but they might have slightly different, uh Transcribed tiny pieces, but they’re, they basically all operate the same. So you would open an account and then you would start saving, um, in that account, uh, for qualified higher education expenses. And, um, all the way along as you’re saving, let’s say your student is in fourth grade and you start saving, then all the way along as you’re saving and hopefully earning some interest, you never pay taxes.

On any of the interest that is earned the whole time that you’re saving. So it’s called sort of deferred taxes because you’re not paying, you’re not paying. And then when it comes time to send your student to college, when you take the money out little by little, as long as you use the money for qualified higher education expenses.

Then you [00:49:00] never pay taxes on any of that interest earned. So it’s a way to, you know, earn interest over many years, possibly with never having to pay taxes like you would on a regular savings account. And the qualified education expenses that. Would qualify you for never paying that interest. Our tuition fees, room and board books, supplies, any required equipment, and you can use 10, 000 a year toward any K through 12 expenses.

So like a private high school, you can use 10, 000 one time for, to help a student repay a student loan. Um, you can also use it for, uh, registered apprenticeship programs. And the newest qualified expense is if you end up not using this money, your student doesn’t go to college or something, you can roll it into an IRA for that student.

And [00:50:00] that’s the new one that’s new this year. So, um, really, it’s very flexible in how you would use, um, this money. And again, we mentioned that, um, you can use it at any accredited college or university nationwide. As well as some international colleges. Um, for the Massachusetts plan, you’d go to fidelity, fidelity.

com slash you fund and open it up. It’s a pretty quick process, but there is one piece that you just have to think through that I find is the one thing that just makes a family, makes it not take three seconds, which is. You need to pick an investment option. So you get to choose when you put your money in the U Fund or in any other 529 plan how you want to invest your money.

And 529 plans usually have a number of options and the program manager, in our case Fidelity or whoever else in any of these other plans, can ask you some questions that help [00:51:00] you think about how much, how you want to invest. So do you want to invest? You know, you have a lot of time before your child is going to college.

You’re okay with taking a little risk and investing more in stocks that have a chance to, you know, Make more money, make more interest, but could also fall, you know, so there’s a little more risk there. Or would you prefer to be in a safer investment? So those are, that’s really the only big choice you have to make when you’re putting your money into one of these plans.

And one of the most common choices is something called aged based funds, which if you choose them, you sort of say, I plan that my child will go to college in 2031. And what happens then is your money starts out in funds that are riskier and have the potential to earn more interest, but could also lose.

And then as your, your student gets [00:52:00] closer and closer to college going age, it becomes more and more conservative automatically without you making any. So that’s the most common type of fund that that families use when they put money into 5 29 plans. I think we saw it was upwards of 80 percent of families choosing that type of a fund that they can sort of set it and forget it.

And know that that it’s going to get more conservative as the student gets older so that when the student is a sophomore or junior in high school, um, hopefully they’re protected enough that it’s not going to have a big drop, you know, right before they would need the money. So that’s, that’s the 529 plan and I love the flexibility of the 529 plan.

I feel like there’s so many options. Um, the parent usually is the owner. And they choose, um, the student as the beneficiary, but a grandparent could open one of these and choose the student [00:53:00] as a beneficiary and whoever is the account owner is really the one who can manage the funds and who is in charge, but it’s also good that it’s, um, it’s the parent or the grandparent because these are considered parent assets in the financial aid formula.

Which means they get treated at a really low amount. And, um, so anyway, that’s a good thing too. And I’ll quickly just talk about the MEFA U plan. Because that’s a little different, but it’s another savings plan. It’s a prepaid tuition program. And this, this is kind of unique. There are prepaid tuition programs across the country in many states, but they all really operate a little differently.

So each one has its own unique features. So the way the U plan works in Massachusetts is that there are about 70 colleges that are part of the U plan. And, um, so you would decide to put some money into the U Plan, prepaid tuition program, [00:54:00] and you, you would be locking in a percentage of tuition at those 70 participating colleges when you put the money in.

So I’ll try to give an example, and this is a fictitious example, but let’s say today you have a young child and let’s say UMass Amherst tuition and fees are 10, 000. They’re more than that, but this is just to make it easy. Um, and let’s say you had 5, 000 to put in the U plan. Well, then today you could lock in 50 percent of the tuition at UMass Amherst.

And then when your student goes to college, let’s say tuition and fees. are 20, 000. Your five would become 10 because you locked in that 50 percent when your child was young. So, and you don’t have to pick a certain college. Each year you get a report that says of these 70 colleges, here’s the percent that your [00:55:00] money is, is worth at these different schools.

Um, and you can keep, doing this on an ongoing basis and seeing those percentages grow. Um, so this is another option that some families like, um, you know, some families think, well, I don’t know that my student will go to college in Massachusetts. If they don’t go to college in Massachusetts, you do get your money back with consumer price index.

interest back. So you still get this money back with interest, and then you can use it to pay for college elsewhere. But you don’t get that real benefit of that lock in of tuition unless they go to one of the 70 colleges. So there’s much more information about that on the MEFA website, but I thought I’d just get started in letting you know about that one as another good option.

And they can work hand in hand, too, because the U Plan is just for tuition and fees, where the U Fund allows you to use it [00:56:00] for all of those other expenses. And here are the participating colleges for the U plan.

And I mentioned then also that there are the additional state tax benefits for putting money into one of these savings plans here in Massachusetts. And then. Receiving a possible state tax deduction. So then these last slides, it’s, um, are just a timeline of, you know, staying on track as you get a student gets closer to college and some of the things that, uh, the tasks that they can do at different points, like in spring and summer of junior year.

All of that researching colleges, visiting campuses, college fairs, um, asking teachers for letters of recommendation, maybe taking. One of the standardized tests, the SAT or the ACT, writing the college [00:57:00] essay. And then in the fall, students tend to retake some of those tests, um, you know, finalize their essays and their letters of recommendation.

Um, MEFA has more detailed webinars on the financial aid process. So learning how to. Complete all of that. Completing admissions applications, submitting those forms, and then submitting your applications in the winter of senior year, applying for any of those private scholarships. Um, and then spring of senior year, it’s a big time where you You’re receiving admissions acceptances, maybe financial aid offers, and you really have to compare and contrast what that all looks like to make that big decision by May 1st.

So, um, there are also webinars that can help you, help you make that decision. And so you’ll, you’ll have this slide or you can download, um, that this timeline on the MEFA website as well. [00:58:00] And here are other resources we have on the MEFA website. You can use these QR codes or just you’ll have this presentation and be able to find things later.

But we have other webinars and recorded webinars, live webinars. We have also an email curriculum. Where if you sign up for it, then twice a month, you will get an email that’s targeted to the age of your student. So if your student is young, it might talk about savings. Uh, in middle school, it might talk about all the resources within MEFA pathway.

And then, um, as you get into high, as students get into high school talking about the admissions process and more about financial aid and all of that, and you can also connect on social media. Everyone receives their information differently these days right and so many, so many options. Um, I know say on Instagram, we post a lot of [00:59:00] scholarship information so if anyone sends us information about a scholarship, we post that out on social media, so that’s.

That’s a good one. Um, but we also run on YouTube. We have a podcast, uh, the MEFA podcast, um, another fun way to get information and you can always call or email our college planning team as well with quick questions or longer discussions you want to have. Guess that’s it for now, but we can. Answer any questions.

Angie: That was great, Julie. Thank you so much. So much valuable information. Are you on the podcast at all? I’m just curious.

I am. So I am, I am the co host, but I like to say that. John Hughes, Jonathan Hughes. He’s our host and he’s the host of the most, you know, he really, um, he does a lot of work with the [01:00:00] MEFA podcast, but, you know, as, as, as we see with podcasts, it’s always good to have a, um, you know, like a sidekick.

So on the, on the. Side,

Angie: side. Oh, that is so cool. Wow. I’m gonna have to check it out. Check

it out, .

Angie: So if anyone has any other questions, please feel free to put them in the q and a. Now is the time to get all your questions answered. If you have any comments for Julie, you can put those in the chat down below if you’d like.

We’ll stay on as long as you need to get your questions answered.

That’s great.

Angie: And I was wondering,

so you must have, do you have some students in your library do some of this work toward college, I would think. Oh yes, definitely. Yeah.

Angie: Yeah. It’s so exciting to hear all the changes each year, you know, especially like with the community colleges being free now, and it’s just great to kind of see the way things are changing and evolving.

Yeah. [01:01:00] In fact, one thing I didn’t say, um, because I noticed it wasn’t on that slide, but I’ll just say this as well, um, because there’s been a splash, probably not even as much of a splash as there should have been, about community college being free. That’s really important news. but also the four year public colleges.

in the state have received more state monies because there’s another program called mass grant expansion, which just means that, you know, low to middle income families may be able to have their students also go to the four year public’s tuition and fee free. So I just, I just like to say that. And then what I’ve been hearing from the private colleges.

Is, you know, the, everyone’s competing for these students. So the private colleges are really putting a lot of additional financial aid out there too. So it is, it is a good time to be going [01:02:00] to college in Massachusetts. So,

Angie: that’s good to hear. And, um, I have a coworker who has. Some kids who are right about that time where they’re going to be applying for colleges soon.

Um, and she heard that the FAFSA has kind of gotten a little bit simplified. Maybe it’s a little bit easier to fill out than it might’ve been in previous years. Would you agree with that? I’m so

glad you’re saying that. Yes, because the FAFSA has a bad reputation and for good reason. Um, it is the easiest I have ever seen it in my, do I dare say, you know, 30 years of working.

Um, It is very easy for most families. I mean, sometimes a family could have a glitch, but for most families, we’re seeing families completed in 10 minutes, which is, has never been the case. So yes, don’t fear the pop song.

Angie: Oh, that’s great. I’m sure that’s reassuring for a lot of, a lot of families. We do have a question.

Um, someone [01:03:00] says, If your child was in foster care, do they get help, and does it interfere with other things like financial aid and other benefits students receive?

Oh, such a great question. Um, yes, there is, there are additional scholarships for students who are in foster care. So, um, I would, I would point to the Department of Children and Families, DCF, website and to look at the foster care grant.

Um, all of that there, there is more money. We also did a webinar with the DCF folks. So you can find that, um, as a recorded webinar on our website. Um, but Also, no, it does not interfere. It kind of works in conjunction with other financial aid. So, um, many students in that circumstance can receive, you know, federal, state and institutional aid along with the foster care additions.

So it ends up being a really [01:04:00] great thing.

Angie: Wonderful. That’s really good.

Yeah.

Angie: See, and we do have someone who wanted to say thank you so much for the opportunity to join in on the webinar. Anyone else have any questions, feel free to put them in the Q& A at this time. We’ll stick around for a couple more minutes, see if any other questions come in.

You know, I’ve done this three years in a row now, and I feel like I learn something new every single year. So, it’s just so beneficial to be able to hear everything.

That’s great.

Angie: Of course. Do you have any final thoughts or comments you want to share with our viewers?

No, I guess I would just say thanks so much for joining and these, you know, good questions and, um, probably because you are joining, you, you know, this, but just know there’s, uh, there’s, there’s so much help people to be able to answer your questions.

[01:05:00] So many resources. So, um, uh, don’t hesitate to, to stay connected and all of that.

Angie: Excellent. All right. Well, if there aren’t any other questions, we can probably close out for tonight, if that’s okay with you. That’s great. Thank you so much, Angie. Of course. Thank you so much. And thank you so much again to everyone who joined us tonight on this chilly January evening.

We’re glad you were able to make it. And, um, as Julie did say before the recording and the slides will be emailed to everyone who registered within a couple of days. So check your emails for that.

Right. Thank you. Thank

Angie: you so much.