#103 Advice on the FAFSA Delay for College-Bound Families with Beth Walker Transcript


Lisa Marker Robbins  01:04

Are you anxious about filing for federal student aid to help pay for your teens college? If you have a senior, the process has been delayed by months this year. Beth Walker is the author of never pay retail for college. And she’s a registered investment advisor helping families slay the college cost dragon. She has advice for our families with seniors in the class of 2024. And what they should do now, right now, January 2024, when this is going live, and for those with younger students don’t do now stay with us. She’s going to discuss how to avoid the pitfalls of letting the FAFSA lead your college decisions. I’m Lisa marker Robbins, and I want to welcome you to College and Career Clarity, it flourish coaching production. Let’s dive right in to a great conversation. Beth Walker, welcome back. I literally have lost count. I think in my head. This is your fourth episode.


Beth Walker  02:05

I think it may be. And I’m really delighted to be back. So thank you.


Lisa Marker Robbins  02:11

Well, you are besides being such a good friend, you are all already like known by our listeners, and have been known by me for years as just one of the authorities on all things with paying for college. And so that’s why I keep having you back on because you’re no nonsense. You and I have I think great strategies that fit well together and solving different problems of this college bound equation. And my friend, you know, back in September, when we were talking on episode number 85, upcoming changes to the federal financial aid forms with Beth Walker. We were we got in there we talked about was changing, we knew things were changing, they had already told us it’s not gonna be available on October 1, and it’s gonna Hey, sometime in December, this is going to drop. And, yeah, they’re gonna just come in under the wire, you and I are recording this heading into Christmas weekend, and we’re gonna drop in January 2. So we don’t 100% know what’s going on January 2. So instead of talking about the changes to the form, and how it affects aid, let’s talk about the application or just getting into the application. And I think you told me many of your families that you’re working with feel like the tails wagging the dog. And so what do you mean by that?


Beth Walker  03:41

Well, the tails wagging the dog in that parents and their students have so much anxiety about I’ve got to hurry up and get my financial aid forms done. And this year is so unusual because of the deadline. The deadline was imposed actually by legislation. And what is that


Lisa Marker Robbins  04:03

legislation? What does it say? It’s the Higher


Beth Walker  04:06

Education Act that governs the facile legislation. When they went and made the revisions that we talked about in September. It said, This will open in December. And in classic government inefficiency. We expect that it’s going to open for about two hours on December 31 and then come down and then reopen on the second of January so that they can meet their legal obligation to have opened in December. Now the reason this is so complicated is because it’s been difficult for all the rules to be programmed into the new formula and literally every year when they deliver the new formula or the new version of it in October. We’ve already told our clients don’t be first in line to file because this is new software. There are inevitably things that are not working and functioning properly. And so for the first seven to 10 days that it’s available, they’re still working out the kinks. And that those normal routine annual releases, where it takes seven to 10 days to work out the kinks, pale in comparison to what’s going to happen with this version.


Lisa Marker Robbins  05:23

Okay, so because you know me, finances not my valuate. So I might be a little closer to this than some of our many of our listeners. But I’m far enough away from and I want to ask couple questions. So what we this is gonna go live this episode on January 2, we bumped some other episode because we thought it was that important because of the timing. So we are recording on December 22 2023, we expect that it will go up live for two hours on the 31st, it will come down. They’ll work on it on January 1 Some more. This is hilarious to me. Because we’ve known for years that this change was coming years people, you as parents probably didn’t know it because you weren’t in the college bound journey far enough yet. And then they’re going to we expect so when this goes live, parents, you might go over to student aid.gov It may or may not be live, they’re telling us. Yes, it should be. They


Beth Walker  06:31

are telling us that now, again, because your listener base is more informed, I would just caution them to wait at least 10 to 15 days to get into the month of January before they even try to take this on. Now what could


Lisa Marker Robbins  06:49

they encounter if they don’t I mean, that’s what so it’s like, because I’ve already had students and our college major career course launch Career Clarity, reaching out when we have our monthly live q&a, or I’m getting some emails from our clients. And they’re like, uh, you know, colleges are wanting our stuff. And I know you and I have always said, when it goes live October 1, we always say, don’t do anything for seven to 10 days, that’s in years with minor changes, right years with major changes, wait two weeks, but we always say get it done by the end of the month. So if we applied that same timing to this, it would be don’t do anything from January 2 to January 15. And then get it done by February. And so what could go wrong if they do it on January 5?


Beth Walker  07:45

Well, the fact of the matter is, it just may not function, meaning data fields that you enter data in might not take things that you believe are connected, like perhaps you’re going to sign off and say, Yes, you have my permission to coordinate with the IRS so that I don’t have to enter the tax data, you’re just going to retrieve that from what we’ve already filed with the IRS. It’s just it’s a buggy code. It’s new software. And so we just want to be cautious of the fact that number one, it’s a new release of FAFSA, which happens every year. But number two, it’s the first release of this FAFSA with these formulas. As a perfect example, they already know that it’s flawed, there was a mistake that was made in the inflation index, that’s part of the income protection portion of the calculation. And the Department of Education has already admitted Yeah, we blew it. But we don’t have the time or the resources to get it fixed. So most families are going to get a little bit less aid eligibility than they will in subsequent years because there’s a flaw in the formula. It’s a known problem. They’ve already said we’re not going to fix it. It’s not something that you can go back to the colleges and appeal for because of flawed formula does not represent special circumstances that are up for appeal. So the thing that’s really different this year, is the fact that the colleges are much more aligned with families in that they’re scrambling with this last minute deadline to and so you know, you may be applying to a college that’s telling you hey, my hard deadline for financial aid is January 10, or January 12. I would encourage families and students to reach out to those schools and really ask them, Is this truly a hard deadline? Or will there be some grace? Are you going to penalize me if I don’t have it done on your mandated deadline? Are you going to give anybody a grace period because if they are it’s worth the weight if they’re not, then you do it, but you just have to understand it might not be as easy as if you had waited a couple of weeks.


Lisa Marker Robbins  10:04

Yeah, I you know what I want to say to our listeners, because that might feel scary what you just said, first of all money’s involved. So we all get lots of emotions going when we’ve got the money part of this involved, but deadlines are involved in is their kids future. Right. So it’s right, so many feelings about this. You know, I had dr. Abigail assessment from the University of Chicago, Booth School of Business on back in, I think August of 21. And she studies the intersection of finance in psychology and economics. And she would call this a hot state. So emotions are running high, because we’re right up against the deadline. And what you just said to us was, well ask if that deadlines got any wiggle room, and I want to assure the parents that, you know, if your student applied to a January 1 School deadline for early action, let’s say last fall, and they got everything in on time. What most families don’t know is the student pieces. Yes, they they want everything by November 1 at 11:59pm in your timezone. But they do have leeway of like counselor Rex getting in and AC T scores making their way over. And so they’re often best not telling you to ask something that never happens in college admissions. There’s often wiggle room, you guys just our listeners don’t always know it. Because in take that away, apply it to all of the things as it relates to the deadlines. Ask your questions, Beth and I always preach be good consumers. This is another way you can be a good consumer is to ask the questions, because that might be a soft deadline and not a hard deadline.


Beth Walker  11:55

Exactly. Now, you asked the question, the tail wagging the dog, I want to give you a perfect example of that I got I spoke with a family about two weeks ago. And they had been to like a college planning night. And then they had talked to some other people and they were frantically trying to get organized to make some money moves here at the end of the year in order to optimize their FAFSA. But as we kind of unpacked their situation. The fact of the matter is we could have been ourselves into a pretzel and gone through all these things to try to move things around on their balance sheet, only to discover it really wasn’t going to make a difference. And I think we’ve given over the planning power to this government formula. As if the outcome of that formula should dictate how you’re going to handle paying for college, under your own roof. And it’s backwards, we should be thinking about what’s my strategy, and game plan? How am I going to create the cash flow for college, all kids all yours, and then figure out where the financial aid part of this fits in. So we can’t let the government formula dictate how we’re going to spend money. That’s kind of like saying I’m putting them in charge of telling me what house I’m gonna buy, or what car I’m gonna drive. No, no, no, no. We need to figure out what am I pre qualified to spend on college? What’s my spending range? Which ZIP Code of schools should we be shopping in? And now let’s talk about the appropriate place that the whole financial aid system plays? Am I going to be eligible for work study for Pell grants for unsubsidized student loans? What role should that play in the overall strategy? Because those are all things that are beneficial? What role does filling out the government mandated forms have in securing merit based aid that go along with the resume of my students? Those are the important ways to think about it, but it’s only one piece of the recipe. And I think so often, we’ve just been trained to think, oh, my gosh, it’s all predicated on how I fill out these forms. It’s really not. It’s a piece of the puzzle, but it shouldn’t be driving the bus. Well,


Lisa Marker Robbins  14:38

yeah, it’s, you know, I sit here and I, as I hear from people are panicking over this. I go, I understand the emotions again, we’re in a hot state with this. We’re up against deadlines, and we’re entering second semester of senior year. But I’ve said over and over if you’ve created the college list proactively and with great thought and being a wise consumer, I don’t think the people who’ve done it that way are panicking right now over thinking about when they’re going to fill out the FAFSA, when they’re going to hear about their aid, because it’s it’s not dependent on that. That’s


Beth Walker  15:23

exactly right. And you know, human psychology, we crave certainty. And the college project plan is fraught with uncertainty. I mean, we’re applying to anywhere from five to 12 schools, we don’t know who’s going to say yes or no, we’re not sure exactly how much it’s going to cost. If we haven’t done the work before, we don’t know how we’re going to pay for it. So I mean, this is just, this is uncertainty on steroids. And we just need to take a breath. Now, for those of your listeners, if they’re listening to this on January 2, or later, you know, we can make some lemonade out of lemons on the student that’s going through this right now. But it should really help you understand if they’ve got younger siblings, there’s a much more proactive way to approach it for the younger siblings so that you’re not stressed out and wondering, gosh, what should I be doing right before the deadline? Nobody wants to be in that place. And we don’t have to be.


Lisa Marker Robbins  16:21

Yeah, you know, and that’s I was actually just getting ready to say like, if you have a senior, and it’s after January 2, like what do we do? And if you’ve got younger students, because we’ve got kit, listeners who they don’t even have a senior and they might, if they’ve gotten this far, and they’ve stuck with us, they’re going glad that’s not us, and Hera. And if you have one of those seniors, you’re like, oh, gosh, I should have done it differently. Which, you know, that first kids always our guinea pig, right? Absolutely. And we pay for their counseling later. What are we going to do? We’re human right. But there is a better way to go about it. You know, one of the resources we have that I’ve shared with you is we have a tutorial around building college lists, where literally, it says, I give them a 10 minute video, I give them a worksheet to fill out as a family, as a family, everybody hear me? That’s parent and students together. And it gives you conversation cues to guide a healthy discussion, so that maybe emotions don’t get too high. And gosh, if you do that, in sophomore year, or early junior year, before you’re applying to college, emotions aren’t nearly as high. They can find that at flourish coaching co.com, forward slash list. But yeah, that’s just one tool that we have. So what any other specific advice for people who have younger kids?


Beth Walker  17:54

Absolutely, the key to all of this, is thinking about buying College, like you buy a house. I mean, if I, if I google or I chat GPT how to buy a house, I’m gonna get like a seven to 10 point checklist. And it starts with understand what you can afford. If I if I google or chat GPT How to Buy College, literally nothing comes up. Because in our culture, we don’t view it as a major capital purchase. But that’s exactly what it is. So if you think about what you do, when you’re going to buy a house, you’re really clear on your must haves. And you also have a list of nice haves must haves would be what am I going to major it must have should be what am I pre qualified to purchase. It’s interesting that in our consumer culture, we’ve literally outsourced the qualification process for making big purchases, like cars and homes. It’s a root canal. Yeah, I gotta give that lender all his financial information. But they’re very good at crunching the numbers and coming back to you with a ceiling for spending. Why? Because they have a vested interest. They want to make sure you can pay them back. colleges don’t operate that way. But they should. We should have a spending ceiling because once I’m pre qualified, and I know this is as much money as I can spend. Now I can go shop in the college zip codes that are affordable for me. I mean, I can get that four bedroom, three bathroom, two car garage corner lot. It may not be in the neighborhood I was originally looking in. But I’m still going to get a really nice house that’s going to function well for me. And I’m not going to go broke in the process, because I know what those parameters are. So I think establishing those guardrails before the oldest kid goes off to school is the greatest gift any family can have.


Lisa Marker Robbins  19:58

You know, it may makes me think of just when you qualify for a mortgage, let’s say to purchase a home. And we’re, I’m not going to say we’re in unprecedented times, because my father, also an entrepreneur was a home builder in the 70s, and 80s, much higher interest rates than right now, even though this feels painful, right. But in my adult years, I think I bought my first home and 92 when I gone to purchase a home, you get pre qualified, you know, how much are approved to take out on that mortgage. And I and most people don’t max out what they’re approved to do. This is one thing that I think is fascinating that psychologically really different. Cars maybe are a little different. Because it’s a it’s a smaller purchase, but I’ve never for a car or a home, but what I was approved, but we but I’ve also known people who have on the home, and then have empty rooms in their house that they couldn’t fill with furniture. And so they were house poor. And I mean, the reality is, there’s a lot of people that are making themselves college poor. Mm hmm. Because,


Beth Walker  21:21

and they’ll do that with their oldest child. And then they have to look the younger kids in the eye and be like, Yeah, well, I get a lot of clients that come to me after the oldest was in college. And what they’ve realized is, you know what, we can’t keep doing it this way. And we’re going to have to have a different solution. And so it’s really just having a paradigm shift. And you’ve hit on this a couple times today. This is the most emotional purchase I think any family will ever make. What parent doesn’t want for their kid to have the greatest start in life and believe that college could be that kind of Springboard. But it’s also such a wonderful opportunity to teach them how to be make financially responsible decisions. I mean, we didn’t drop them off at the car lot when they were 16 and tell the car salesman, hey, let them pick out whatever they want. But that’s exactly what we’re doing with college. And then we think that all of that rests on filing these financial aid forms, and nothing could be further from the truth.


Lisa Marker Robbins  22:31

Absolutely. So families do not let the tail wag the dog. rethink how you’re doing this. If you have a senior who’s graduating in 2024. Don’t fill out the FAFSA on January 2, or third or fourth or fifth. If at all possible, wait till the 15th if a college tells you that their deadline is earlier than the 15th contact them is that a hard deadline or a soft deadline? And wait as long as you can and then get your forms and on time as always, but be wise consumers. Thanks, Beth.


Beth Walker  23:14

Thank you.


Lisa Marker Robbins  23:21

Fantastic advice from Beth once again. Okay. Your college bound homework this week depends on the age of your team. If you have a senior check with the colleges on the hard deadline for filing for financial aid. If you have a younger student, join our college list building tutorial at flourish coaching co.com forward slash list so you aren’t left feeling like the tail is wagging the dog when senior year emotions are running high. We have a lot of great topics in store for 2024. So be sure to follow the podcast and what do you share with a friend who could benefit as well? They’ll thank you later. Now, I want to thank you for listening to College and Career Clarity, where I help your family move from overwhelmed and confused to motivated clear and confident about your team’s future.