Scholarships and Other Ways to Pay for College with Zach Gautier

Welcome to the BiggerPockets Money Podcast, show number 64 with Zach Gautier from Triple Fit College Counselling.

Really helping your child figure out school and really figure out a love for school early on, it sounds like a basic thing. And it doesn’t necessarily sound like financial advice. But the rewards that it reaps for six years later as the students look into college, it really is profound.

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Scott: How’s it going everybody? I’m Scott Trench and I’m here with my co-host Miss Mindy Jensen. How are you doing today Mindy?

Mindy: I’m doing fantastic Scott. I am so excited for today’s show. I know I say this every week but this one I really am excited for this guest. Outside of Richard Marcus from Pay Checks and Balances, this is a show I was most looking forward to recording and the one that I am most excited to share with our listeners. Today’s guest like you said is Zach Gautier from Triple Fit College Counselling.

He reached out to me a couple of months ago and he wanted to share some tips for financing college. And when he reached out to me he gave me just a list of tips that I’ve never heard before. And granted I haven’t been in college since you were a baby Scott but, my oldest is 12 and it hasn’t come up before. But she is 12. So it’s going to come up and it’s going to come up in a big way.

And I don’t have a 529 plan, I know I’m a terrible financial independence seeker because I don’t have all these things optimized. So this show was hugely helpful for me, and it’s going to be hugely helpful for anybody who has kids who’ve not yet graduated from college. It’s going to be most helpful for people in a similar situation to where I am, where their kids haven’t started high school or are just starting high school.

But there’s tips in here for people with kids in high school and college as well. This is the episode to bookmark and listen to with your kids before they start high school. It’s the episode to listen to with your kids when they’re in high school. And it’s the episode to share with your kids even if they’re already in college.

Scott: Yeah I love it. I mean one of the things to note before you listen to the episode is that this is all about the college planning process and figuring out how to set yourself up for success to one get into a good college, two, get a potential merit scholarship. And then three fund college as efficiently as possible from there and a bunch of tips and tricks about that.

So if that’s not applicable to you, this may be one that you can pass over and come back next week, or listen to and share with somebody who it is going to be relevant to. But we want to give you fair warning that this is a very specific audience. And if you’re in your 20s and not going to have kids, this may not be applicable to you.

Mindy: So share with somebody, don’t just say don’t listen Scott, share with somebody that this could work with.

Scott: Well of course it’s a great episode. It’s going to provide a lot of value, right. I don’t have kids, it’s very valuable to me because when I do have kids, then I will apply this learning.

Mindy: Yeah this was fabulous and we’re going to get a note from today’s show sponsor and then we’re going to jump in with both feet with Zach.

Scott: Sounds great.

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Mindy: Okay. Huge thanks to today’s show sponsor. Dr. Zach Gautier from Triple Fit College Consulting, welcome to the BiggerPockets Money podcast. How’s it going today?

Zach: Wonderful. Thank you so much for having me.

Mindy: Thank you so much for being here. Like I said in the intro I am super excited to bring this guest on today because Zach reached out to me to- gosh it’s been 100 years since you reached out. But you sent me this note about how to pay for college for people who aren’t actually in college yet and even not in high school yet in some cases. And this was just so interesting I’ve got a 12 year old, so I do have to start thinking about paying for college. Why don’t we start off with how you paid for college Zach?

Zach: Yeah. Absolutely. For some reason the way that my mind’s wired I hate wasting time. So as I started looking at my own undergraduate and what I wanted to do, started finding a couple of unique ways to expedite that process. And so went through it like many kids do today, ended up taking some AT courses.

But more importantly I ended up doing a semester or a college campus before I went to the actual college as part of my high school. So ended up going into undergrad carrying like 24 credits into college. And then I found out about this kind of magical thing called the CLEP test where you can just take a test and they give you a college credit.

And I’m like I like that more than studying the classes. So ended up CLEPing out of like another 36 hours of my undergrad. And so because of that, ended up graduating a year early and could have really graduated in two and a half years but stretched into three. And just started to realize that by having levels of efficiency in how you approach undergraduate, you can save an incredible amount of money.

So that really birthed that ending of that desire and then over the last 15 years I’ve worked in high schools, worked with families and have just been able to walk alongside families that have been going through their own journey and trying to share some of this information with them so that hopefully they can dive into the things that they really want to learn about very quickly. And hopefully that that’s a benefit for them both in time and in money.

Scott: That’s awesome. And we’re very lucky to have you because you’ve devoted so much of your career and time and energy and thought and passion into helping people make college more affordable and prepare themselves for that, right. Would you mind starting off on what are some of the first things you should be thinking about if your child is maybe just coming into high school or about to start this planning process?

Zach: Yeah absolutely. So part of the reason that I reached out to Mindy in the first place is just because I think a lot of times, families hear these kind of unicorn type stories where this student dedicates a year of their life. They find a million dollars through all these scholarships and that transforms their lives.

And while that is an option and that is an approach that people can take and realize benefit from it, the reality is I think there’s a more systematic approach that can start to really transform college options. And one of those biggest factors that can happen is to make effective choices in students elementary and middle school years.

So that then when they get into high school, they’re really putting themselves in the best positon possible. So a couple of thoughts that I had is if a student is before high school age, the reality is that the money that’s given and the scholarships that are given to students, the vast majority of that money is really dictated on two things; a student’s reading and English ability and then their math’s skills.

So if we think about that and kind of reverse engineer where we want a student to be at 18 and when they’re receiving financial aid, all of that starts in really early elementary. And so it sounds so simple but one of the best financial choices that somebody can make is usually to take time to read with their student.

And when they’re with them and being able to birth in them this desire for lifelong learning and being able to really engage in school because the student that is successful in those early years, statistically it shows they’re going to be in a really strong place and in a place of a lot of options once they get to their high school years.

So establishing that incredibly solid academic foundation in those early periods and being a parent that’s invested in that, and really helping to guide that early skill. And if there is a challenge, different kids learn differently and there’s different struggles. As a parent really trying to not kind of just hope that that fixes itself, also being able to intervene and help a student if they’re struggling in school early on.

Mindy: Yeah I have two kids, one is 12 and one is nine. And it wasn’t really until the nine year old started going through elementary school that it really clicked, oh all of these math skills like stack on top of each other, so if you’re struggling in first grade, second grade is not going to be easier. Third grade is not going to be easier.

And when you start in first grade, it’s easy. Here’s addition and going through basically even like flashcards with your kids it’s so important. And I remember my oldest daughter I think in second or third grade, and the dean actually sent a note to everybody and said, “Please continue on your basic math facts with your kids.”

This is because they graduated from the addition doesn’t mean that they can forget it now. So keep going through the flashcards, doing those with them. And then now she’s in sixth grade and I’m seeing the little third grader doing all of these things again. And reading is another huge thing. If you can’t even understand the problem you’re never going to be able to answer it.

Zach I like that you’re starting pre-junior high even because you can’t be an F minus student all the way through fifth grade and then all of a sudden you’re A pluses in sixth grade. And these little things really add up and I’m seeing this in my own kids now and it’s really helpful.

Zach: Yeah it’s incredibly true. I mean I’ve spent most of my time as a high school educator. So obviously I like to think that my work with high schoolers is really important. But the reality is so much of their educational foundation and their educational trajectory is established by the end of eighth grade.

So not neglecting that component and really helping your child figure out school and really figure out a love for school earlier on, it sounds like a basic thing and it doesn’t necessarily sound like financial advice but there are rewards that it reaps, four or six years later as the students look into college. It really is profound.

Scott: What are some interventions that you’ve seen from your experience that have been very effective? Kids who maybe have been struggling and then here’s how the parents stepped in and actually corrected that problem.

Zach: Yeah so I mean probably the biggest one I see is the attitude and approach that the parent takes towards school. Because there’s one category of a challenge that a student has or if they have a diagnosed learning disability or difference and just they’re going to approach learning in a very different context.

But I feel like the majority of situations that I see, students can learn and they can access the information but it becomes more about the attitude that they have. So as a parent trying to be an encourager in that of yeah school may not always be fun but here’s why it’s good.

So I think as a parent and I have three young boys, so I even have to check myself sometimes of not approaching it in the sense of badmouthing school or being kind of cantankerous of, “Oh yeah that’s totally lame you’re never going to use that,” that’s the kind of advice that doesn’t instill inspiration into the student.

So I think that attitude piece is a big fact. If it is a more severe kind of clearly identified learning disability, I think really reaching out and having an active engagement with the educators at the school or trying to get clarity from them, because they’re the ones best equipped to speak into what the particular situation is for that student.

Scott: How do you do that without being a helicopter parent?

Zach: That’s actually a really astute question. It’s a fine balance. I mean I think some of it is if as a parent, if you’re approaching a teacher or a learning specialist at the school, really approaching with a sense of humility of, “Hey, here’s what I’m seeing at home. I don’t know if teachers are seeing that, but have some concern and we just want to dialogue through it.”

So I think addressing it from a stance of partnership and not necessarily kind of a finger wagging type moment of, “This is how you should be doing your job.” And when it’s your own kid and you care about them so much, it’s easy to fall into that place.

But I think just trying to approach it in a professional manner and approach in a way of, “Hey I think there’s an issue here, let’s work together.” Because the educators and the parents they’re seeking the same thing. They want to see the student succeed and so just continuing to remember that as you approach teachers and learning specialists in the school.

Mindy: As a parent I will say that sometimes I definitely not even sometimes I definitely fall into that helicopter parenting when it comes to homework. But like you said, you care about them so much you want them to succeed and it makes me very sad when I see kids who’re obviously struggling and they’re obviously not getting the help at home. And if you want you could think what college you need to encourage them from grade school and then middle school.

Zach: Yeah. And I guess the one disclaimer that I would give is the reservation that I have even of starting to talk about the funding of college this early on is I don’t want it become the kind of thing where it ratchets up stress for kids or it creates anxiety and panic in the parent. That’s really not where we need to be.

But instead just in a place of hopefully loving the process and really learning how to love education and schooling. So that’s my one caveat I mean that’s the challenge if you start talking about this place and it’s students in first or second grade that does feel like overkill so I don’t mean it for that.

But just to have a sense of understanding that like you’re saying Mindy, where are students at early on unless there’s external correction, they’re probably going to continue on that same course. So if the student hasn’t learned those effective habits earlier on, then when they get to high school and transcripts and GPA matters, it’s hard to turn that ship at that point.

Mindy: That is very true. I didn’t turn my ship around but I still did okay. But I could have done a lot better if I would have had my ship turned around. I’m not really sure why I didn’t. This isn’t about me. So what are some things that parents could be doing pre-high school age to be saving for college? Because not everybody is guaranteed a scholarship and maybe you do all these things right and it doesn’t work out.

Zach: Yeah. I think from a financial perspective the biggest avenue that is looked at is 529 plans. And I’m not necessarily an expert on those and each state has different regulations that guide the 529s. I think that that issue of having a tax sheltered avenue to be able to save money, put it aside, it think it can have a lot of merit. I think it really depends on individual situations.

So the secondary kind of approach and honestly the one that I’m moving into and I have 529 plans for my sons moving more to an approach really from Brandon Turner and what he advocates. But I think it makes a lot of sense to think about an income producing asset and to try to identify are there ways that you can, whether it is real estate or some other avenue where you can use that same money and still -have that same level of intentionality.

But ultimately put it into an asset that will help pay for college when the time comes, rather than having that money just go to the institution itself. So that’s the challenge I think for a 529, is at the end of the day those funds can only be used for accrued educational expenses.

So if you give all of that money to the institution you don’t have that resource. The only resource you have on the backend is the degree itself which is really worthwhile and I think has value. But if you can maintain an asset, while getting the degree as well I think that’s the better tax.

Mindy: So what you’re referring to is Brandon bought a four-plex and when did he close on that Scott? When his daughter was like six days old or something?

Scott: It might have been like around the day that she was born yeah.

Mindy: Yeah. He bought a four-plex and got a 15 year loan on it. So by the time she is ready to go to college or almost through high school, the property will be paid off and then he could either sell it to fund her whole college degree or he can continue to have the asset for her to just generate money. And that’s really cool.

Scott: Yeah or- sorry to chime in here- or he can refinance the property, pull all the cash out, not have a taxable event, put it on a 30 year mortgage, on his daughter’s education and the next generation’s college education. I’m a big fan of this approach.

Zach: Yeah.

Mindy: I love this, I just love all this. It would never would have occurred to me to buy a four Plex for my kids. I’m getting ready to by a triplex so yeah I could fund college for my kids at least on my triplex. But that is a good idea.

Scott: But basically if you’re listening or you’re following there’s kind of two options that were kind come up here sounds like, right. One is use the 529 plan which is get a tax-sheltered, tax-deferred way to save for college, and invest through that.

But again you’re not left with anything besides a plan that can pay for higher education there. Use real estate as a means to do that or use some other after-tax means to save for college that will help you kind of save up those assets and pus aside money there. Is that right?

Zach: Yeah. Absolutely. And I think that part of the challenge is the best thing that you can do is they could be in a strong financial position and having really been intentional in whichever choice you make, but of what we’re going to talk about is that if somebody really follows through with a lot of the principles that you talk about on this show, and you’ve identified and find yourself in a place of financial independence or retiring early, congrats that’s awesome.

But that also creates a separate set of challenges because of how colleges evaluate financial aid, evaluate assets and determine kind of scholarships and aid that a student’s going to get when they get to college.

Scott: Can you kind of go into some more detail there? How would being an early retiree affect some things like FASA?

Zach: Yeah so kind of skipping to that, I mean the reality is schools look at so FASA itself the Free Application for Student Aid is a federal tool that’s used that is really dictated just based off of your tax returns. And it’s a pretty blunt instrument that kicks out this term Estimated Family Contribution or your EFC.

And that’s based on everything that’s showing on your taxes, here’s what we think you can distribute to school. The challenge with that is the schools that are giving the highest amount of need-based aid, so aid that’s based off on the family’s income and financial situation, they’re going to use a secondary tool called the CSS profile, is going to be much more precise.

And I think ultimately for most of your listeners if they’re in a financial independence state they’re going to get hurt pretty significantly by going through the CSS profile, because all of their assets, all of the places that their income comes from, most schools are going to identify that and say, “Looks like you have been really diligent and you have a lot of cash reserves.”

“You can pay for college we’re not going to give you money to recruit your kid to come here. So they’re not going to give a lot of need-based aid. So then the second category of aid that I think most of listeners really should focus on is the merit based aid. So the majority of that merit-based aid is based upon academic strength of a student.

So that’s why starting so effectively early on, is going to ultimately put them in a position where regardless of the family’s financial circumstances, they’re still going to be able to access scholarships and grants, that are going to be used as a tool to recruit them to come to the college.

Scott: So you’re saying that if I’m looking to achieve financial freedom and I build up a solid 401(k) plan, I’ve got a couple rental properties and some after-tax brokerage account funds, that I may have a very low income which would show up as which in theory you’d think that it would help me qualify for FASA on a low income basis. But because my assets are large, the secondary tool, what was it called the C-.

Zach: CSS profile.

Scott: The CSS profile is going to expose my net worth and make sure that I am excluded from need-based aid. And so I need to plan through other avenues in order to get there. I’m I reading that correctly?

Zach: I think so. I mean obviously this is very general advice and each person’s situation is going to be different. But for the most part the CSS profile is really designed to be able to slice through kind of different tax shelters, different things, and get a true sense of do you or do you not have the resources to be able to pay for college.

So the schools that you see sometimes you’ll see and typically it’s the highly selective institutions where they’ll say, “We’re going to cover 100% of demonstrated need.” That’s kind of a big term that you’ll see sometimes as you’re reading articles on this. And that’s an incredible commitment from these schools.

But they’re really trying to then determine is this a family that everything is protected and kind of their assets are distributed in a way that the FASA is not going to see if. And if that’s the case they don’t necessarily want to give significant aid to that student, because they feel like the family has the resources to be able to pay for college.

Scott: Okay so it sounds like if you’re a family that is kind of moving toward financial freedom and kind of getting there by the time your kids are going to go to college, that we’re going to focus on the merit based thing. Suppose some of our listeners are not going to get there and are going to potentially qualify for that need, I don’t think we’re going to get into that discussion too much today. But is there resource or place they can go to look to find more information offline?

Zach: I mean I think the biggest place is really with the financial aid office at a particular school that they’re thinking about. Because the reality is there’s not a one singular approach that colleges and universities use to determine the aid the aid that they’re going to give.

So because of how divergent those policies could be, if you know, “Hey my target institution is Vanderbilt,” then you want to go and look and say reach out to the financial aid office and get a sense. Because for some families even upper middle class families, they may be able to go to a school but does cover 100% of need cheaper than they could go for their local state university.

I mean I had a family that student started at CU Boulder and he was essentially paying full price is an in-state resident at CU Boulder, and even though both parents worked, they had a good upper middle-class income, he went to school cheaper at Vanderbilt because of the way that they cover need. So every situation is different but I would say if you have a target school that you’re looking at, address the financial aid office there first.

Mindy: So a couple of things I want to point out. Thank you Zach for saying this is kind of an overview of the different ways to fund college. Obviously if you know everything there is to know about funding college you’re probably not even listening to this anymore but this is really for people who don’t have a lot of information about funding for college.

These are different things for you to look into. Like the 529 plan I think was a cool plan. I’ve never set one up but then I see here that a grandparent can set up a 529 plan. And that money isn’t counted against my income or my asset or my kids’ income or asset.

So that’s another thing to look into. I didn’t even know grandparents could… 529 plan. Is my retirement account, my 401(k), my IRAs, all of those things, those assets counted toward my assets for the CSS ship, or is it just like my real estate holdings and my after-tax investment accounts?

Zach: So generally those retirement assets are not a consideration of it. If functionally if there’s going to be a penalty to access it, generally the schools aren’t going to look at that particular piece. But the components of the assets their after-tax, and that you do have access to, they’re going to make a judgment as to what percentage of that could you leverage to be able to fund college.

So there is a distinction there again I think getting that specific answer from that particular college, because some schools are going to interpret those things a little bit differently.

Mindy: Okay. That’s good to know. So let’s say somebody was the co-host of a popular podcast and they didn’t max out their 401(k), they would be doing themselves a disservice by not maxing out their 401(k) if say they wanted to have eight kids and put them all through college. Completely hypothetical 100% go…

Okay so we’ve covered a little bit about the preparation for pre-high school. To be clear all my grades from eighth grade and before mean nothing to my GPA, my high school, my college applications that sort of thing. That’s just preparing you to be a good student in high school. Is that correct?

Zach: Almost completely. There’s some schools, if a student is taking let’s say if they’re taking Algebra I in eighth grade and that’s considered a high school course in the school district, that particular course may show up during the eighth grade year onto the high school transcript, and may factor into the GPA.

But I would say the vast majority of schools that it’s exactly true. What happened before August of ninth grade year, is irrelevant to the academic record. And colleges are only going to begin looking from fall freshman year on through their senior year.

Scott: But that said what you said earlier is a critical piece you nobody gets straight Cs all the way through eighth grade and then becomes a straight As student all through high school. I mean it happens it’s really you got to set that trend in place, in that sixth, seventh and eighth grade, it sounds like going into high school and keep that going. Is that right?

Zach: Correct, yeah absolutely.

Mindy: Okay so let’s switch over then to high school students. They’ve done grapes throughout grade school and middle school because they’ve got great parents who’re really involved, and help keeping them on track, and doing their math facts. Daphne we’re going to do math facts when I get home today. Every once in a while she’ll listen to the show. She hates doing her math facts.

Zach: My boys as well.

Mindy: Yeah. What are some things we want to start off with in high school, maybe even just in freshman year of high school?

Zach: Yeah. So I think it’s important even though again is not expressly tied to the funding of college, understanding how colleges are making a determination to grant admissions sneakers into this conversation. So understanding that the most important thing that a school is going to look at is going to be a student’s high school transcript.

And part of that is the grades associated with it but it’s also the rigor of the courses that are selected. So just meaning that 4.0 GPA is not the same as another 4.0 GPA if one student is taking all elective courses and the other student is taking multiple honors for AP classes. Those two transcripts are not to be viewed the same by most schools.

Some schools are just can have a purely numerical review where they say, “You’ve graduated from high school, here’s your GPA and then we’ll determine admission based off that.” But if a school’s diving into the details of a student’s academic records, the rigor associated with it, and the relative rigor compared to the other students in their school, that matters a lot.

So when you’re going into ninth grade, starting to think about what are the courses that we want to pursue, and then what’s the right balance. I think as I’ve worked with families, ninth grade year is a really challenging year because you have to be able to evaluate. You don’t want to be overzealous parent that’s like, “Man my kid can do it all.”

And they go and totally load up. And then we get the middle of fall semester and it’s like there’s way more tears than we want, and the student’s pulling straight Cs. Now you’re like, okay over corrected. We need to tone it back a little bit. So finding that sweet spot of an appropriate level of rigor for the student, and then also giving them the opportunity to maintain a really solid GPA.

Because that ninth grade year is really important. For many students, if they’re applying early, so they apply early in their fall semester of their senior year, there may only be six semesters worth of grades that are being evaluated to dictate that GPA. So you don’t want to neglect that ninth grade year. And I tell families, I err on the side of being conservative when it comes to ninth grade year.

Because I think ninth grade year your job one, is you want a solid GPA foundation. And then sophomore and junior year, then as appropriate for the student beginning to ratchet up the level of rigor. And if the school has a weighted and unweighted GPA, then that have a positive benefit to getting them a higher weighted GPA once they get to the point of having their high school transcript reviewed.

Scott: Yeah I have an anecdote about this from my high school. I went to public high school but it was pretty competitive in terms of who was going to be able to graduate near the top of the class. I was not in the running for this. But amongst the people who were, one kid managed to put gym in his senior year. Right and because all these kinds of classes are weighted, so elective might have been a 4.0 GPA, you got an A in that class.

But an honors class an honors class might have been a 4.5 possible weight, and then a gifted and talented or advanced placement course would have been a 5.0, right. So this kid to all 5.0 classes from freshman year, sophomore year and junior year and got straight A’s. 33 other kids also all got straight A’s but they took gym as a freshman and he took it as a senior.

So he was valedictorian because when they declared that before the end of senior year, he had the higher weight of the GPA. So it’s like that was a huge controversy, right. Sorry I’m going to off on a tangent here but that’s the kind of stuff that parents probably don’t know going in after high school right. They’re just like unaware of these ways to gain these things.

And all those other kids could have done the same thing and potentially graduated at the top of the class co-valedictorians, but because they didn’t know that rule or kind of plan ahead, and kind of have that going in even probably into eighth grade. And that summer before high school there kids were unfairly at a disadvantage.

Zach: Yeah. And I think especially, that dynamic of valedictorian and if you’re number one in your class or if you’re not, I think yeah exactly at that high-end that could become hypercompetitive and you’re making a lot of choices. And some of that my encouragement would be the other 33 kids, they put themselves in an incredibly strong position relative to going to college. So I think still being in a good place even though they didn’t have to be the one maybe they… so they didn’t want to be the one having to give the speech at graduation.

Scott: Yeah that’s a way of thinking about summer before eighth grade. I would like to be valedictorian but I don’t really want to give that speech for…

Zach: Taking that off the table.

Mindy: I’d like to say good for him for thinking ahead and doing that. That was really like an actual plan that he had, it’s kind of smart. He deserves to be valedictorian if he’s going to think like that.

Scott: Well sorry for taking us all off-track here but.

Mindy: It was a good story.

Scott: I had to put that out there. Okay so let’s suppose you’re not going for valedictorian, you’re thinking how does my child, who is an above average student, how do we kind of help them put them in a really good position? You said take a really good set of foundation courses and prepare for that rigor going into sophomore and junior year?

Zach: Yeah absolutely. And then I think the other component we’ll get to more of this in a minute as far as how we think about the college process and being able to buy cheap credits as it were. But in most schools you can do that in high school, based on if there’s a dual credit or dual enrollment course, if there’s AP course.

Typically those classes are going to come with an additional wait for a lot of high schools. But those classes also pay dividends later because if they can be used for the general Ed once you get to college, I think that ends up being a really smart thing. So the course side of it and being really intentional on building the transcript is kind of step one.

The second step when it comes to prepping is the vast majority of colleges are still going to look to the ACT or the SAT. So having a really intentional approach on how you manage that and how you prepare for that, I think that’s one of the things that if the family is not well informed, I think that ends up being a place where they don’t do enough to really or put enough stock in the influence that that has.

So my general guideline is a student on both the ACT and SAT, it is going to test through Algebra II math information. So that really indicates when a student should be taking the ACT or SAT. If they are not getting to Algebra II until junior year then they need to wait and not take it until maybe the end of their junior year or going into very early of their senior year.

But if a student is taking Algebra II as a sophomore, then they can look to take the ACT or SAT really early in junior year. And again some of that depends on where they’re in their English proficiency, but that’s generally true for most students.

And then I think based on when you’re going to decide to take the test, my recommendation is most students don’t have a need to take the ACT or SAT more than three times, but they should plan on taking it multiple times, because we see positive results for those students that do.

So then having a calendar of saying, here’s where we anticipate taking the ACT or SAT, and then kind of looking six months or so before that and starting to layer in some test scrub so that a student goes in really to give themselves the best chance possible on those tests.

Mindy: Okay I’ve got a couple of questions, ACT and SAT when you take it multiple times I didn’t take the SAT, I did take the ACT. And there’s like three or four, it’s been a while since I did this. Three or four-

Zach: Four sub sections.

Mindy: Yeah so I got really awesome grades in three, and then in one of them did not. I got a six in the math part. If I took the test again, would I keep my three high scores and then have the opportunity to improve my math score? Is it an all or nothing thing, or do they take the highest of all the ones that you did?

Zach: Yeah so what you’re talking about is a term called super scoring. Sounds as cool as it really can be. And where if you’ve taken it multiple times do they take the subsection scores, and you just get your best? So ACT has been pretty clear that they don’t desire for the ACT to be super scored, however some colleges still do.

So like Baylor is an example of a college where they’ve said, “Hey if you take it multiple times we’re going to use your best sub-scores and that’s what we’re going to dictate your scholarships off of. The goal is they want to recruit kids. So if they can use the math to say, “Hey this is your best possible situation and now that qualifies you for a $4000 higher scholarship that makes the difference of you coming to our school, that’s a win-win.

So some schools will super score. The SAT is more commonly super scored, and that just as two subsections now so it’s out of 1600 points. And there’s a math section and an English writing reading section, each of which is 50% of the composite score.

Mindy: Okay and then a couple minutes ago you mentioned dual credit courses. Where are you finding the information that this is a dual credit course? Does that come from the high school or from the college?

Zach: So in most situations you need to talk to your high school counselor and understand what the program is at your local high school. Most high schools are going to have partnerships either with an area school or some school that’s maybe tied to their association if it’s a faith based school or something like that.

And they’ll have a program where typically they will have maybe endorsed certain, so like the college will say, “We guarantee this high school class is really functioning like a college-level class.” And there will be some college, maybe an area community college that’s actually giving a transcript for the courses taken at the high school.

So it can be a fantastic thing for kids because and the other benefit is, unlike AT, AT has one test at the end of the year, and even if the kid is fantastic all year long, if they tank that test on one day in May, they may not get college credit. Whereas with dual credit is an evaluation of the grade that a student earned in the class.

So for different students AT, may be better for one, dual credit might be better for the other. And many schools will have both programs. So you just want to make an informed choice about which might be the right situation for your student to pursue.

Scott: And this would give an advantage I would presume to trying to find a way to send your child to a large public high school, versus a smaller one right. Because they’re going to be more likely to have some of these programs and deals with the other community colleges. Is that accurate or is that?

Zach: So I think that probably was accurate. I feel like I’ve seen the trend that unless honestly it’s probably more rural schools that have less of that, but if it’s in a metropolis, most schools are still going to have these partnerships. But again if a family is in the process of evaluating what school do I want my student to go to, and if they’re having a keen eye towards how are we going to plan this high school phase, to give us the most options or most flexibility come college, that may be a factor that informs choosing one school over another.

Scott: Okay.

Mindy: Okay. Do you recommend paying for test prep courses like these SAT and ACT? I didn’t prepare at all clearly for my test, but on the one hand it seems like a great idea how much is the cost. And it’s been so long I don’t even know how much it cost my parents paid for it. But like what does the SAT cost and the ACT to actually sit and take the test? And then what would some of these test prep courses cost?

Zach: Yeah. So the tests themselves I mean it depends on ACT and SAT is a little bit different, and they each have an optional writing section that is a little bit more expensive because it’s more expensive to score. So roughly plan on $50-$70 for each time that you take the ACT or SAT. But as far as the test prep goes it really depends.

Some of that as a parent is making a really wise decision and knowing your son or daughter based on who they are as a student, and how they can study. If a student is self-disciplined and really bought into this process of they want to do the very best that they possibly can, I really don’t think that you need to pay for test prep.

There’s enough resources out there. One of the biggest ones is a couple years ago SAT piloted a partnership with Khan Academy, which Khan Academy has a ton of online resources. And essentially think about it like as a database of on-demand tutorials, so everything from Algebra I to Calculus. But they also rolled out a specific SAT test prep that’s free.

So if a student is really self-motivated and can be disciplined enough to work through that, that’s an incredible resource. But also your local library. I mean almost every library is going to have test prep booklets. They’re full books that are maybe 600 pages long. And the reality is SAT and ACT, it’s a discrete set of information that’s being test.

So if a student works through that even though that feels like a daunting process of working through a 600 page prep book, if they are disciplined enough, you just check it out go through and you’re ready to go. Most kids in my experience they need a little bit more structure.

So part of what the parents are paying for is having a coach that’s really guiding and maybe alleviating the parent riding the kid and creating stress at home. And the tutor or if it’s in a class, they’re the ones that can help motivate the kids and kind of inspire them most. Yes, you need to be studying and prepping for this.

Scott: I got a crazy question here, but is the SAT something that you see is best done in a binge right before the test for two, three, four weeks maybe a month or two, or is that something you have to really prepare and keep going after for years of study for these kids?

Zach: Yeah. So I mean again it kind of depends on where the kid’s at, but if a student is a strong student, consistently showing positive results in high school, and on other standardized testing that they’re taking, then probably it’s more you need to focus on what is the test itself and test taking strategies for that particular test, it’s not so much the content.

If a student is way behind on the content, then that’s going to expand the amount of time that they need to dedicate to it. Because this is a place where yeah that student may be able to kind of turn their ship relative to their test score much quicker, easier than they could turn their academic ship relative to their GPA.

Because you can’t go back and change what happened in freshman and sophomore year, but you can influence and make significant gains if a student is motivated and attempts to reteach themselves. Ultimately that then becomes more intrinsically motivated, and if they’re invested in it, I mean I see incredible gains with kids. But that means stretch it out over six or nine months dependent upon how far behind they are.

Scott: How do you find kids who are not motivated? What are effective ways to motivate them to take to if nothing else, the grade? Hey grades, whatever but this test, so much of their future, kind of rides in some ways on the results that you kind of get out of this. Is there ways to get them just on board for this test, and then back into the high school flare or whatever?

Zach: Yeah so honestly I mean this is maybe one of the places that I see the most stress and tension that gets created in the parent-child relationship, is over this issue. Because I think mom and dad who are potentially paying for this, they see the consequences of the decisions that the student is making, and they would love to see the student make a different set of choices.

They’d love to see them be more motivated. I think it’s one of those things that I think you really have to tread lightly at that point, especially when I see families the kid’s now 16/17 years of age, most kids are not respond super favorably to the parent that kind of swoops in and they’re like, “You have got to go do this.”

They’re going to kind of revolt from that and say, “Screw you, I’m not really in the mood for this right now. So I think the biggest way that I see it, is that the kid has to have a vision for their future, in understanding why college is a component of that process.

Because if the student doesn’t have that intrinsically, then all of this kind of signing a kid up for test prep and just maybe putting them in the best schools, if they don’t have that vision for their future, they’re going to ultimately think flounder a little bit. And so part of what I recommend is in the ninth and 10^th grade year, having- I worked with one family they called it a vision trip very specifically.

Where ninth grade year they wanted to get their kids on really good college campuses and to just kind of start dreaming and thinking about, okay what could college look like, what are your strengths, what do you want to be when you grow up? And really cascading that big vision. And then once the student gets excited about that, then when you’re like, “Hey, here’s one for better or for worse this is a portion of the process, so let’s think intentionally about that.”

And now the kid understands how test prep fits into that, it doesn’t just feel like this ancillary thing that gets layered on top of their teenage life. But instead it’s something that has a purpose. And they say, “Okay, I’m ready for this and I’m willing to put in the work because now I have a picture of what I hope to be when I grow up or what I hope to have this next phase of my life look like.

Mindy: That’s really awesome advice. I didn’t go to my first college visit until I don’t know 12^th grade. And it was just me and my parents didn’t go with me. And I liked it I thought it was really cool, it was on the shore of Lake Michigan right outside of Chicago. Kind of difficult to not fall in love with that school.

Zach: Hopefully you weren’t taking that tour in January. There’s probably a little different perception at that part of the year.

Scott: I have another question here, and then I would love to dive into okay now that we’ve got all this covered, how do we actually apply for the scholarships themselves and sort of the financial component? But before we get to that, extracurriculars, right that was huge when I was in high school. Would that kind of still be an essential part of the planning here outside of grades, your transcript and your SAT, right?

Zach: Yeah. So again it depends on the school. So really colleges fall into two batches when it comes to their application review process. You’re going to have schools often times is maybe second-tier public state schools, or it’s going to be really large schools that they’re only going to look at GPA and test score. That’s essentially going to be all that they’re going to factor and whether or not they admit a student or not.

So if that’s the case, they may not care at all about extracurriculars. I don’t think that’s license then say don’t be involved in anything, and only do test prep for three years. I don’t think that’s good advice just to make good human beings. I think extracurriculars carry a lot of value in just the character development work ethic dealing with adversity. Which just pays a lot of dividends in who we want the students to become.

So the second set of schools, their admissions processes is going to be what they call a holistic review, where they’re evaluating, they’re taking into account the GPA and test score. But they’re really look at the counselor letter recommendation, they’re going to look at the teacher letter of recommendation, and the overall resume of where has the student invested their time?

So that is going to be a factor for those schools. That’s typically going to be those schools that especially if they are granting a high-level need-based aid, almost all of those schools are going to be more of that holistic approach. So I think it does still matter.

The other thing that I’d say is there’s- it’s not a huge pot of money, but there’s money at different schools for leadership based merit. So often times the way the kids are demonstrating leadership skills at the high school level is through extracurriculars of some sort whether it’s sports or Boy Scouts or Girl Scouts or some kind of community service activities.

And so that especially would play most significantly in those leadership scholarships or if there is kind of a full ride scholarship that’s a competition based scholarship that the school offers, those are really important differentiators of kids at that level.

Scott: Awesome. I mentioned earlier in the show here that I went to a very hypercompetitive public high school, and then I wasn’t in the top running for valedictorian but I did fairly well, and studied all of these things. Studied my butt off for the SAT, was highly self-motivated. I played football, wrestling, lacrosse, all that kind of stuff. And I wasn’t unusual in high school.

This was like a lot of the kids there. And then I went to a brand name expensive college, right. And I think that was influenced by my high school experience. But I think you mentioned that you might have a different perspective on the pursuit of a brand-name college, and it might influence some people on how they’re thinking about that approach.

Zach: Yeah so I think your situation is one that a lot of parents aspire to for their kids. They see, I don’t necessarily want to list all of them off but I mean you’ve got these schools that just have a level prestige associated with their name. And I think it’s easy for as a parent to kind of project your hopes onto your kid, that that’s where your kid is going to end up.

And for some students, that’s absolutely a right fit for them, and they have an incredible experience and it’s really beneficial for them. But I think what I see so much of the time is so a couple of things, in the last 10 years the landscape of college admission has radically changed. So schools that may have even been brand-name schools if we look back statistically 10, 15 years ago, they may have had a 30 or 40% acceptance rate.

Meaning if you applied you had a three in 10, four in 10 chance of getting in. and now that same school may be all the way down to single digits and they have so many qualified kids applying, that it’s I mean incredibly difficult to get into these schools. And they are looking for very specific things. So a kid can be perfect in their academic record, and still get denied to some of these brand name schools.

So if in the process we’ve put such a level of emphasis on that school, then I mean it can really be debilitating to a kid’s identity that they don’t get in. So I think it’s is important to frame this process around I don’t think it’s a bad thing to say, “Hey I want to shoot for that, I want to make myself eligible for admission in some of those top schools.

But I also want to think about there’s this huge gap below kind of these ultra-rich schools and your state University, there’s a lot of other private schools. There’s about 4500 colleges and universities nationally. So identifying and getting well informed about the landscape so that you’re building a college list that’s really well-rounded.

Maybe you have two or three that you targeted, that may be highly selective, but then you also have maybe another five, six, seven that still backed out and are going to be places where you’re going to get maybe a lot more money. Because maybe you get in, but if it’s going to be a $65,000 price tag for that school that might not be great.

But there’s a guy Frank Bernie he’s done a lot of work on this. He wrote a book called Where You Go is Not Who You’ll Be. And I think that’s an important resource in this conversation to say, there is a place for those highly selective schools, and you don’t want to discount it. They’ve transformed America in a lot of ways from the research they’ve produced and the influence they’ve had on students’ lives.

But there’s also that’s really maybe 100 schools. So there’s 4,400 other institutions that are doing similar work. And I think it’s important as parent not to discount those just because maybe they don’t look as good on placard that goes on the back of your car when you’re driving. So I don’t think is the rationale for why we want to pick a particular school. But we want to identify what is the right fit for each student.

Mindy: What are some things that people should looking for in a school?

Zach: Yeah I mean it is and again that part of the reason that I encourage engaging in the college process starting in that ninth and 10^th grade year, because if you’re leaving it up to the kid and they’re 16/17 years old, and you’re like, “Where do you want to go to college?” they’re going to say California or Arizona or someplace where it’s warm.

They’re going to say someplace that’s got a really cool football team or basketball team. I mean they’re making decisions not necessarily based on factors that as an adult we’re like, “Yes clearly that’s the way that you need to make this critical life choice.”

So if you start engaging in that process during ninth and 10^th grade year, then the student can start to recognize, “Well hey what’s the value of a smaller liberal arts community? What’s the value of a research institution? What’s the value of, hey I want to be an engineer and I know that, so I’m going to go to school that actually has engineering.

So you’ve got to be able to be well-informed about the landscape of colleges to then be able to make a well-informed decision. Because if not, then you’re just going to go based on your common knowledge. And oftentimes that’s sports and geographic location, which I don’t think are great factors.

Mindy: No, that’s while going to the University of Honolulu would be really great today, we’re recording this during that horrible polar vortex at the end of January that half of the country is in negative digits. Yeah that would be a really great place to be today. But yeah you’re right that’s not the best choice for how to choose a college just based on location unless you’re majoring in surfing, in which place you’re probably not going to college.

Zach: Or if you’re majoring in Marine Biology, middle of the country might not make sense. Maybe that to coastal city is a good choice for that. But again you don’t know that you might just be kind of guessing.

Mindy: Okay so let’s talk about the college application process. I didn’t realize that it costs money to apply to a college until sometime last year, I heard on the radio that today is free apply to all Colorado Colleges Day. I was like, “Wait, what? You have to pay to apply?” So really I am starting best at zero as I’m sure Scott already knew and he doesn’t have a kid yet. You have to pay to apply.

So let’s talk about the application process and do you have any ways to save money other than Free Colorado Colleges Day?

Zach: Yeah so I mean that is one. The other piece is especially not highly selective schools, but a number of other schools they will actually part of their recruitment process of a student is they may send emails, or they may send a mailer that says, here’s a waiver and it doesn’t cost you any money. And maybe we’re even waive the essay because they have ways on the backend to see a kid’s PSAT or other testing.

So that may have pre-identified a student to say you would be a really good academic fit in our school, so you may get something in the mail that says apply for free. So that oftentimes will happen. There’s also a process where a student can get a fee waiver. So this likely isn’t going to be for a family who has reached financial independence.

But if a family struggles financially and looking at the different challenges that they have with their student, the school’s guidance counselor can help determine, so like if they’re eligible for free or reduced lunch, they’re likely eligible for tuition labors. And so they say, “We don’t want that expense to be an impediment to our student applying.

So again it kind of depends on the student’s financial situation. But when you sign up or kind of demonstrate interest in a college and say, “Yeah I’m interested in your school,” then dependent upon the school, they may send you a waiver that says, “Apply for free, we want you to come and learn more about our school.”

Scott: Alright, so you’ve done everything you can in high school to get good grades, maybe did some extracurriculars but really focusing on grades and those test scores. And you’ve gone to a school that maybe is not awarding you any merit scholarships at that point. Are there any other avenues to approach prior to entering college to attempt to get excess funding? You don’t qualify for any of merit scholarship. Any last minute things to be thinking of while going through a transition?

Zach: Absolutely so let’s say the scenario is I do want to go to the name brand school, I’m not qualify for need-based aid and the school philosophically doesn’t merit aid state. There’s a lot of schools that fit that profile, they only want to use their resources for low income or medium income families and make college affordable for them.

Then that is the profile of the student that probably should go look at external scholarships. So there are a lot of free resources that a student can go into and search online to be able to identify and typically they’re going to be smaller. I mean they may be as small as $100 up to a couple of thousand dollars.

So you end up having to stack all of these, think about it as like extreme couponing but for college, where you’re going to identify all of these different sources of aid. And then you’re really going to attempt to put all of that together.

Scott: Can you give us some of those resources so we can put them in our show notes?

Zach: Yeah so when a student is attempting to move down this process, a couple are fastweb.com, capex.com, scholarships.com, college boards use the same company that puts out the SAT and AT. They have a thing called bigfuture.collegeboard.org. So there’s all of these different free resources.

In general I would say I don’t think scholarships and looking for external scholarships that if you’re doing searches online, you’ll see that there’s a lot of places that want to charge you to help you find that money. I personally haven’t seen that work really well with kids, and I think the issue is they want to open up access to higher education. So I don’t think it’s something that you really need to keep paying money for, with one exception.

There is an app that is call My Scholly S-C-H-O-L-L-Y and it has like a $3 a month charge, but it’s almost like match.com but for scholarships, where you go in and you put in all of your biographical information, and then they kick out and say, okay based on potential major based on maybe your ethnicity, your geographic background, all of these other factors, here’s a list of scholarships that you may be eligible for.

And they make it really easy to apply online, so that’s one but the expensive of it is so cheap that that to me isn’t a big deal, but like these other services they’re charging hundreds of thousands of dollars to help find it, I think that might not be the best return on investment for families.

Scott: So if I’m thinking through this, I’m pursuing financial independence my kid’s about to go to college. They got into a pretty good school, it’s going to be very expensive and we’re not going to qualify for aid. My next step is son or daughter here’s a list of hundreds of places that offer small scholarships, anywhere from one to $5000.

You’re going to be writing about 100 essays over the next month, and you’ll be applying for every single one that you meet the qualification for and you’re going to do a really good job, because this is going to make a major difference in the financial profile of what this is going to look like for college, and get to work. Is that what you’re saying is basically the path there?

Zach: So I think it can be. I think that’s one path. I think the second or maybe an alternate path to that in some ways I think may be more attainable or replicable for families, is maybe you look at I like to talk with families about buying cheap credits.

So I think when you look at the school’s transfer credit policy and trying to understand there are some schools that if an undergraduate degree is 120 credits they will allow you to transfer into their school up to 90 credits. Now that’s kind of rare but many schools will allow you transfer 60 credits, some schools will also restrict it to 30 credits.

Some of the high end exclusive schools may not allow any transfer credit. But if it is a school that has a lenient transfer policy, then I think you start to evaluate how can I really establish the ways to be able to buy the cheapest credits possible? So that’s where you go back to the AP the dual credits.

One that I’m a total fan of is CLEP Test. So with a CLEP Test you go $87, you take a test. And dependent upon the test and the school’s policy for CLEP you may be able to get six credit hours for one test. So a couple hours of time $87, I mean that is about the cheapest possible credit that you can buy.

I think about buying college credit at $14 per credit as opposed to hundreds if not thousands of dollars for different state universities or private colleges, that’s the kind of place where you can start bundling and you’re reducing your overall cost and potentially reducing your overall time in school that makes a huge difference on the bottom line. And essentially as a way to buy college for a discount.

Mindy: Is the CLEP Test a test that you take at the end of a course or do you just say, “I want to take a CLEP Test,” and they’re like, “Here you go.” Do you have to study? Is there a way to study? Clearly I didn’t take all of these.

Zach: Yeah. So it’s kind of all the above. So if a student is in let’s say a high school that’s preparing them really well, and maybe they’re not in a dual credit or AP course, but the rigor of that class is really high, they may have a significant amount of the knowledge that would show up on that CLEP Test, and then you can identify there’s guides online that say here’s everything that’s covered on this test, or the domains of the content area that you need to study.

And that’s the kind of thing where for a lot of kids even if it means they’re studying five or six hours a week for a couple of weeks and to get other information on the topic area that they didn’t get in the class. They can go and access it themselves and go in and test. Some of this is also if a kid is really good at test taking, CLEP is a good option.

If a kid’s not good at test taking, and by this point… career, we know is they’re much more, maybe they’re a better writer or presenter, they’re not a great test taker. If they’re not a great test taker don’t force it with CLEP there’s other avenues that you can go down.

But if they are a great test taker, this is a way of like potentially eliminating years of college just based on investing in this short test that you take to demonstrate that I already have this knowledge, and I don’t need to spend an entire semester or years’ worth of time in class.

Scott: And another thing, I didn’t have CLEP, I wasn’t aware of it and didn’t do any of that. But I did take a lot of AP credits in high. And what that allowed me to do transferring them into college was dual major and double minor in a couple of units that I was interested in. And that made that a lot easier on that.

One of my big regrets is that I didn’t knock out Spanish in high school, then I went three years out studying Spanish and taking a senior year in college was brutal. But if you can get that done, you can take the relevant course that are relevant to the career you’re focusing on as well and stack up more and more in a four year degree if you just want to go to college for these four years I think.

Zach: Exactly. And I think a school like Vanderbilt often that profile of school usually won’t take the CLEP Test so you have to look at the individual school. But I had a student that went to Georgia Tech and they carried in with them a ton of AP courses a ton of dual credit courses I think in the neighborhood of like 50 hours when they got to college. And it was the exact same thing.

They were able to study abroad, they were able to do a prolonged paid internship. I mean you give yourself more flexibility. So for some students they’re going to want to use that flexibility as cheap and as quickly as possible. For other students it gives them the flexibility to not be constrained by their graduation outline that they have to do for the school. But they’re able to have a great level of flexibility.

Mindy: This is awesome. And Scott I want to correct you. You said that you will tell your children to write 100 essays, my cousin Julia is in her first or second year of college, and she sat down with her mom and her mom would say okay the requirements for this are a 400 word essay on X. you already wrote a 500 word essay on that so go and edit out that and we’ll submit that.

So you don’t always have to write 100 essays. But one really great essay can be like you could just use that over and over again. And one of my favorite stories for paying for college was this girl, her came to her in ninth grade and said, “If you want to go to college you’re going to have to pay for it on your own because I have no money.”

And the girl my ninth grade I couldn’t have done this but she said, “Okay this is now my job for the next four years my job is to get as much money for college as possible. And she ended up with something like a million dollars in scholarships which itself is just amazing. But she said, “Every time I write an essay and it takes me three hours to write this essay, but I just got myself $3,000, I just made myself $1000 an hour.”

And pimping your mindset and having your kids really understand how awesome this is, it goes back to that tip of going to the college and seeing what your life could be like a just encouraging them also around the whole course and starting early is fantastic.

Scott: And I’ll call myself out here. I was a jerk, my parents encouraged me to do that and I did not do nearly half of it and I’m sorry. So put that out there.

You look back in your life and feel very bad about that if you don’t do that. If you’re in high now do it now or in college even.

Mindy: Yes to all you kids that are listening now because your parents are making you. This is going to change your whole life and go back and listen to Travis Hornsby in episode 22 where he’s talking about people who have soul crushing amounts of college student loan debt, that they can’t ever pay off. And a few hours out of your life is going to change your life dramatically, and you’re not even not going to remember those few hours being terrible.

Zach: Yeah. One quick note I mean kind of as another avenue of that, then a real resource for scholarships is there are a lot of places where we would just consider maybe kind of starter jobs that are also going to have educational benefits that come along with it.

So even during high school or into college, being intentional of where do I want to go and work and what are the criteria that maybe I could use some of this part time employment or if I take a gap year or don’t immediately go into school, use of my workplace as an avenue to be able to access more money. So companies like UPS, Home Depo, Verizon, Starbucks, Lows, they have these places where pretty accessible places to go and work.

They’re going to have pretty significant educational benefits. In my opinion one of the ones I have recommended to a lot of kids is with UPS, you can be a part time package handler and I think of working as low as like 12 or 15 hours a week. So not super significant hours to kind of impact to your time, and it ends up coming with $5,250 annually in scholarships dollars, up to $25,000 for your lifetime.

So if it that student that their parent says, “Hey we can’t provide for college or we’re not going to be able to and we want you investing, this is the kind of thing that I think has a really significant potential for a lot of students to say this is a way where I can make a really strong return, I can be invested in my education through the work that I’m doing.

I even think things like choosing to be a resident assistant if you’re living in a traditional four year college that has dormitories. I mean there’s different outlets like that where you can significantly defray the cost of education. And it’s a way really of being invested in that process, and I think that’s helpful for a kid. I think that gives them a level of ownership about their education process that bears a lot of dividends.

Scott: That UPS job is way outside the box thinking, sit all day people.

Mindy: All the time. Okay what about community colleges? I went to a community college just because my grades were terrible and I needed to bring them up in order to get into my fashion design college. Because community colleges are like, well I know I’m going to beat myself horribly they’re lie $50 of credit.

Zach: They’re incredibly cheap. That’s very much dependent upon the state and different states have different philosophies as far as how well they fund community colleges and public colleges. So all across the country you’re going to see wide range as far as what the expense is.

But that’s the place, if a student is not a great test taker necessarily, community college could be a fantastic outlet to start building that credit, demonstrating that they’re performing well and then being able to transfer into another school. Or dependent upon what your goals are, some of the community colleges and local technical colleges that may be all you need.

And you really need an associate’s degree and maybe it’s I want to start down the track of being an electrician, being a welder. I mean some of these jobs where you can be 25/25 years old and maybe making eighty some thousand a year dependent upon market and job.

And you’re not having to spend four years sitting in classes learning about whatever your particular subject matter is that you hate the most, you don’t have to do that. And you can dive right into maybe a vocational career that community and technical colleges perform an incredible service to be able to open up jobs for students.

Mindy: Okay so we’ve talked about scholarships we’ve talked about need based scholarships and merit based scholarships. Let’s say that your kid is a terrible student and you’re rich and your kid is terrible, or let’s say that you don’t qualify for need or merit based and you’re just getting loans and grants. First of all let’s define what a loan and a grant is. A grant is somebody that gives you money, it’s like a scholarship right, and you don’t have to pay that back.

Zach: Right. Grants you’re not having to repay, loans you do have to repay. So understanding that difference, so typically when a student goes through the college application process, with most schools they’ll get admitted or denied, they’ll get that information first. And then maybe a few weeks, maybe within two months or so then they’ll end up getting the financial aid package from the school.

That letter especially as a parent, that’s a much more important letter than just being accepted or not. The kid’s excited about being accepted and denied, the parent really cares about the financial aid package. Being able to understand, okay what is the federal grants so things like PEL Grants or the GI Bill, as a parent you’re going to know that based off of the FASA or if you have prior military experience.

But the merit-based aid from the school that will show up on there. So if it’s a- some may call it the Provo scholarship or whatever the school’s colors are. It’s like here’s the crimson and gold scholarship, they’ll have different names, and it’s got a value amount with it. Typically those scholarships that are going to come from the school, the student has to keep a certain GPA, maybe it’s a 2-5, a 3-0, a 3-5.

It’s going to depend on the school but that money is typically good for four years. You need to look at and know is this renewable, or is this a one-time scholarship? Sometimes those one-time scholarships most schools don’t do this in my experience, but some schools will kind of frat mode the aid package and give a really nice package for freshman year.

And then sophomore year certain money goes away and as a family you’re left totally frustrated. So really slice that award letter and understand what’s grants, what’s the money I’m not going to have to pay back and really just cuts the cost of education? But then what are the loans? Some schools and really I would almost say most schools are going to bundle loans into that aid package. So it’s is a little bit deceiving and you can’t just look at that bottom line number and say, “Okay this is how much it’s going to cost for my kid, because for most families they’re going to make a critical decision of do we want to take that loan or not take that loan. So you’ve really got to examine where’s the money coming from?

Is it renewable? So is this good for four years? And how are loans factored into it, also how work study factored? Because sometimes they’ll list the federal work-study program, and that can be in my opinion it’s oftentimes going to be better for the student maybe to go work for a place like UPS or some other company that’s going to give an educational benefit than it is to do the work study where it’s just going to be probably a minimum wage job at the school.

Mindy: Okay and I want to clarify subsidized and unsubsidized loans because I didn’t know this was the thing either my sister-in-law had a mix of both. I just want to glance over this quickly. What is the difference in that and where does it say that this is a subsidized or unsubsidized loan?

Zach: It should list it, it should be line itemed in the package that says here’s the maximum subsidized loan that you could qualify for. Here’s the maximum unsubsidized loan that you qualify for. So subsidized, that’s a federal loan product. So when we hear and think about Fannie Mae and Freddie Mac, those are not that I’m sorry, with like Department of Education loans they are going to subsidize a portion of that interest rate.

So it’s going to be at a lower interest rate that the student is going to repay in the long run as opposed to an unsubsidized loan meaning it’s going to be calibrated to prime, and it’s going to be at a higher amount. So subsidized I think right now is maybe those loans that are about 6% and unsubsidized loan might be a little bit higher like a seven or 8% interest rate.

Mindy: And doesn’t that start accruing instantly versus waiting until the end you’ve graduated?

Zach: So yes. So different loan products have different guidelines around that. Some won’t start accruing interest until you’re done with school, some you will be accruing interest. So even if you borrowed $10,000, even though you’re not making repayments on it, the interest for that time period that you’re in school and not making payments is building on that.

So you get done with school and maybe your principal balance now is actually $10,500. That may be some of what you see, depends on whether the loan’s in deferment or not, those sorts of things.

Mindy: Okay.

Scott: Actually one thing that I do want to ask about is all this presumes from the first place that the goal is to get a college education, and that’s in there. We haven’t bothered to take any time talking about that. I obviously believe in the college education, path that I took and all that kind of stuff.

Have you noticed there’s any shifting in that thinking lately, or do you think that’s going to continue to be in place, that clearly the goal of middle school, high school, all that is to prepare for average and above average students to get them into a college in an affordable way so they can go into the workforce? Is that foundational assumption correct?

Zach: I think that is a foundational assumption that most people have. But I think the emphasis that has been placed on college specifically being college ready and historically that has been an incredibly effective tool of moving people out of poverty, out of low income and providing a level of opportunity that they may not have had.

I think the challenge for a lot of folks is that the increasing costs to be able to access that opportunity, starts to change the calculation for some people. Because if it’s going to saddle me with debt for decades, then the marginal benefit of that may not be there. I’m also taking four years out or longer and I’m not going and being in the workforce.

And I think the other piece, and this is the challenge is that I think dependent upon the student, a vocation. So I mean the traditional skill trades are incredibly valuable right. I mean my wife and I built a house recently and I was talking with our electrician and we had an electrician was 24 years old. And he was making $83,000 a year.

That’s ridiculously good money, and he’s not stuck behind a desk. They were joking being an electrician they were saying is better than being in these other trades, because they’re like we’re inside, we don’t have to work in bad weather nearly as much as these other guys. Now potentially if you don’t do your job right you get electrocuted.

So there’s some risk that’s associated with it but there’s really value in that or being a carpenter, being a plumber, I mean there’s all of these other trades, auto mechanic that have a lot of value. And especially if somebody is entrepreneurial, if they have a good sense of business, it may be that an associate’s degree from that local community college, is going to set the student up incredibly well.

So I think your point is really astute that we don’t want to just drive that process and say it’s college or bust. But my goal with families is I want them to get to senior year and they have all options open. If a student makes an informed choice at 17 or 18 and says, “I want to go this path and I think this is what I’m really geared towards, that’s awesome. That’s a great choice.

What I don’t want to have happen is you get to the end of high school, things haven’t been put in place and now you don’t have an option. You feel like that’s the only thing you can go do. That I think is the place that breeds resentment that ultimately they don’t want to be in the long run. But if it’s a willful choice, I think that’s a great option.

Scott: That’s it. I think this has been a fantastic discussion and my takeaway all the way back to the beginning is like the starts as in the early days even before you even have a child, right it is really where it begins. Like if I can pull a Brandon Turner and buy that four Plex and finance it in a 15 year note, I’ve taken care of all of this before they’re even born.

Right, and it’s going to be a huge luxury when it comes to decision-making down the line. Fast forwarding, it’s taking an active role in your child’s education, teaching in math and reading right, and getting all that kind of stuff. And then going into all the tips and tactics that we get into in high school.

But it really seems like this war whatever the journey really needs to be begun in elementary school and into middle school and really kind of get force there. It’s much harder afterwards to kind of get the wheels turning but not impossible of course. Is that a kind of good way to think about it?

Zach: Yeah very succinct summary.

Scott: Awesome.

Mindy: Zach this has been amazing and I’m personally very excited that you sent me this note, because I’m going to use all of this stuff. I’m going to go home and make my daughter listen to this, and she’s going to love it, hi Claire. And I know we’ve discussed a ton of things today and we’re going to put links to all of these fabulous programs and websites and… you commented on the show.

We’re going to put them on the show notes which can be found at biggerpockets.com/moneyshows64. Okay I think it’s time now for our famous four. The same four questions and demand that we ask all of our guests. Zach, are you ready?

Zach: Oh I’m so prepared.

Mindy: That’s good, oh that means that you probably have a joke. What is your favorite finance book?

Zach: Yeah so I gave this a lot of thought and ultimately I went back to a book that I haven’t read in probably 20 years. So I really can’t speak to whether or not it’s good any more or relevant or not. But I just know it was impactful for me and that was The Automatic Millionaire by David Bach. It was really the first finance book that I read when I was really young.

And I feel like its most simple lesson is make it all automatic. Your retirement deductions, put all of that away, which I feel like is great because then I could be an idiot with my finances, and I’ve already protected myself by paying myself first. So I’ve been thankful for that advice that I received early on.

Mindy: It is still a valid book.

Zach: Okay, good you’re the expert on that, not me.

Scott: What was your biggest money mistake? And I’m going to throw in a second one here, what is the biggest money mistake that you see families maybe of the type that we were just about making?

Zach: Yeah. So as I was thinking about this, I would have to say that I think my biggest money mistake ultimately I ended up buying a car on payments when I was in high school. And I think that set up just kind of an approach for how I used debt that was that even in some ways still working to unravel. And so I think just it set in process some habits for myself that I probably shouldn’t have had or wasn’t as efficient as I could have been with my money.

Second it kind of ought to be to be on that as far as how to be able to what I see with families, is I would say it probably goes to this issue of name brand colleges. I think it’s the families that identify schools that are probably priced too high and that maybe it’s tying too much identity or too much pride in a particular school, and then making a choice that ultimately they’re taking a level of debt that’s maybe not the best choice for them in the long run.

Scott: Awesome.

Mindy: Yeah that’s great advice. Who was it- Scott I’ve been trying to think who it was, I think it was Travis Hornsby who said that he had gotten this amazing scholarship from somebody from a college. But then it turned out to be even cheaper to go to his other college that gave him less or even none because the original college was so expensive. It might have been Travis.

Scott: I can’t remember that one.

Mindy: Maybe I just made it up then. Zach what is your best price for people who are just starting out?

Zach: Yeah. So when I was a high school student I don’t feel like I listened to my mom nearly enough. But I would give my mom this credit of I feel like I’ve come back to this advice and counsel that she’s given me and I give to families that I work with all the time. It’s that every decision that you make opens or closes doors. Every decision you make opens or closes doors.

So the wise person makes decisions that open doors. I think as you go through this educational process this is really true, right. The choices that you’re making in elementary, in middle school, high school, college beyond, all of those provide more or less opportunities for you as you get older. And so just really being intentional on how are you making those choices and living a wise life in that regard.

Mindy: That is a brilliant.

Zach: My mom.

Mindy: Mrs. Gautier, that’s awesome.

Scott: Alright, what is your favorite joke to tell at parties?

Zach: Okay so I have three little boys, they’re not little anymore, 13, 11 and eight. And they were so excited about this particular question and they have been giving me nothing but jokes. So my favorite dad pun is- so I’ll give you a dad pun and an actual joke. I had a step ladder, I never met my real ladder. So I always liked that one, it made me laugh.

My kids’ favorite joke that I tell though, is a man’s hiking through the forest, ends up going into this cave. Inside the cave he finds a magic lantern. So he rubs the lantern, out pops the genie. And he’s like, “My day is made, this is so exciting.” So the tells him, “Here’s the rules of this lantern. You get one wish but there’s an exception.

Whatever you wish for, your mother-in-law is going to get double.” The guy’s thinking. He’s like, “Man this is, what I’m I going to do?” So finally he thinks he’s got it and he turns to the genie and he’s like, “I want to be scared half to death.” It’s called a mother-in-law joke and a math joke.

Scott: Perfect. That’s what you can work on with your children when you’re preparing them for the SAT. There you go you’re obviously…

Mindy: Okay, well hello little Gautiers.

Scott: Yes thank you for the awesome joke. What was the runner up though? What was the next joke?

Mindy: Yeah you’ve got three jokes and you told one joke.

Zach: Yeah. So I found this one funnier than they found. They were kind of like, “Dad that’s not that funny.” What did the janitor say when he jumped out of the closet? Supplies!

Scott: That’s awesome.

Mindy: I side with your boys.

Zach: I find that hilarious.

Mindy: Okay Zach, that was fabulous.

Scott: So this guy by the way, I just thought of this one. This guy is asking to take off so he can visit his mother-in-law, right. And the boss says, “Certainly not, you cannot do that. You know what the guy says, “Thank you so much. I really appreciate. Thank you for understanding. I’m a mother, that’s all

Zach: To be clear I have a great mother in law. I feel like that needs to go on the record.

Mindy: Yeah. You had a great relationship with your mother in law until she hears this.

Scott: These jokes are so relatable to all of the high school and middle school students that are going to be listening to this episode.

Mindy: Yeah all the high school students.

Zach: They’re going to relate directly to mother and father in laws.

Mindy: They’re all looking at their parents, mom I can’t believe you made me listen to this. Okay Zach, tell us where people can find out more about you.

Zach: Yeah so I would say the best place is probably at my website so triplefitcc.com or [email protected] just shoot me an email. Because really when I think about the college process it’s an issue of there’s three factors that I think are incredibly important. It has to be the right financial fit, social fit and academic fit. If those three things aren’t aligned for a student, they may get into the best school or get into any number of different schools that are great for some kids but not great for them and their family.

Mindy: That’s really important. It’s like you done this before.

Zach: Yeah few times.

Mindy: Awesome. Okay we will put links to that in the show notes as well again you can find the show notes at biggerpockets.com/moneyshow64. Zach this was huge, this was so helpful. I know that we’re just starting middle school in my family I am going to be taking these show notes back with me and listening to the show again in a couple of years when it’s time to start thinking about college. God I feel old. Scott like just graduated from college and I got a kid who is getting ready to go into college.

Zach: I know. Well honestly it is my joy to be able to share this resource that I have but I so appreciate you all. It’s been spends a fun journey for myself of getting to listen to every episode and so I feel like a total fan boy. But I appreciate the opportunity to get to share this little section of it that I really know.

Scott: Well we’re glad you love the show and thank you so much for adding so much value to today’s show we appreciate it.

Zach: Yeah absolutely.

Mindy: Okay we will talk to you again soon then Zach thanks so much.

Zach: Thank you.

Scott: Alright that was Zach Gautier. Wow I thought that was pretty impressive. He’s obviously the subject for an entire career and knows everything you can want to know about this.

Mindy: Yeah. It’s like he’s done this before. One of my biggest takeaways from this actually several of my biggest takeaways from this is look at transfer credit options. I would even go a step further and say if you have a couple of colleges that you’re considering look at the transfer credit options, and see if one only allows like Zach said some allow like 30 or even zero, and others allow up to 90.

If you’re like kind of on the fence and you’ve got a college that offers 90 credit courses to transfer in maybe that could be the deciding factor especially if you’re having trouble like really deciding. Also intentionally choosing where to work can give you scholarships. Intentionally choosing as a high school kid frankly it didn’t matter to me that I was working at Dairy Queen or McDonald’s.

I could’ve worked at Home Depot and that would’ve given me a better start off on my house flipping anyway. But just the amount of options available if you just a little thought into it, is really one of the biggest takeaways of this whole episode.

Scott: Yeah and the other thing is just a tangible dollars and cents that result from studying hard, getting good grades and acing these ridiculously important tests the ACT and SAT. Right I mean like that is real dollars and real stakes for those of you listening that are in high school or as entrant, if you don’t apply yourself there that’s going to limit your options. It’s going to close doors and all that kind of stuff right.

I mean we spend a lot of time on that because it sounds like that’s the fundamental here. Everything else is a tactic. Right everything else is a tip ad a trick and a way to mitigate some of these costs and kind of come up through there right, that is the fundamentals that you got to apply over the course of that time to figure this out and have that shot to get started on a really good playing field and achieve financial freedom.

Mindy: Right and it starts in grade school. If your kids are in grade school and you’re thinking, oh this doesn’t really apply to me, yes it does. Work on their reading, work on their math. If you can’t help them with their math in grade school in junior high in high school and I’m so glad my husband can help with the Algebra because that’s not my thing.

But if neither of you can help then get extra help outside of your family because this is the thing that’s really going to determine how much money your college is going to give you. And you nobody is clamoring for those D- students.

Scott: Yeah. I mean you got to take 100% accountability for your student’s grades and your student has to take 100% accountability for his or her grades.

Mindy: Yeah so at the end of this show we said goodbye to Zach and then we continued to talk to him for a few minutes and he offered to answer questions in one of our forum threads. Just kind of a Q&A, he’s going to pop on for the rest of this week and answer any questions that you have, or try to answer any questions. I can’t promise that he’s going to be able to answer your questions. But so if you go to biggerpockets.com/collegequeue, that will take you to a forum where Zach will answer your college questions.

Scott: Yeah that’s a new thing we’re trying out I think it would be very exciting. So excited to see what people come up with.

Mindy: Yeah I’m really excited.

Scott: And we’ll start off with what the third joke was that he was going to tell us.

Mindy: Probably another bad one.

Scott: Great, you’re insulting his kids not him.

Mindy: The kids’ jokes were great. I actually did like the stepladder joke that was kind of funny okay. Okay Scott this went a bit long, so we should get out of here. Are you ready?

Scott: Let’s do it.

Mindy: From episode 64 of the BiggerPockets Money Podcast, he’s Scott Trench, I’m Mindy Jensen and we are gone baby gone.

[End of Recording] [01:33:31]