Women's Retirement Radio

Jim Anderson, Owner of Making College Worth It - How to Navigate Planning and Paying for College - Episode 40

November 15, 2021 Russ Thornton Season 2 Episode 24
Women's Retirement Radio
Jim Anderson, Owner of Making College Worth It - How to Navigate Planning and Paying for College - Episode 40
Show Notes Transcript

In this episode of Women's Retirement Radio, I'm joined by Jim Anderson.

Jim is the founder and owner of Making College Worth It. He's an expert in all things college planning, and can help your student select the best college for their situation and improve their odds of not only graduating, but getting a job after college.

Beyond the college selection process, Jim also works with clients to figure out the best way to cover college costs which continue to rise at a healthy clip.

For more on Jim, please check out these resources:

Get in touch and let me know what you think or if you have any questions.

And thank you for listening.

Visit my website to learn more.

Disclosures

Russ Thornton:
Welcome to Women's Retirement Radio. I'm your host Russ Thornton, and today excited to be joined by a friend and colleague of a few years now, Jim Anderson. Jim is the founder and owner of a college planning and funding consultancy called Making College Worth it. Jim welcome to the show.

Jim Anderson:
Hey Russ, thanks for having me.

Russ Thornton:
Yeah, I'm glad you could join us. I'm excited to have this conversation and share it with our listeners. I'm kind of preaching to the choir here when I mention what a complex and expensive proposition college can be for folks.

Russ Thornton:
So, I'm really, really happy that you're here to share a little bit of your wisdom and experience and expertise with us.

Jim Anderson:
Well glad to be here and yeah, there is a lot of things. It takes time to learn about the college learning process. I really got into it kind of like everyone else, as a parent.

Jim Anderson:
And I have four kids and my first two were my learning experiment kids. So, I learned a lot about college planning through them. And when I got to my third it was like why does everyone have to have the same learning curve to understand all the schools that are out there, where the money is hiding, and it hides in different places depending on your family's financial situation and also on your student's abilities.

Jim Anderson:
It can be academic, it can be athletic, artistic, whatever they are. There's different money out there that I try and find for folks. But I've been doing this for a little bit over 10 years now and I have a ball doing it. It's never boring.

Russ Thornton:
Yeah. We'll I'm always blown away every time you and I speak just because I just get another little glimpse into the both breadth and depth of knowledge you have around college planning.

Russ Thornton:
So, I know you've just shared a little bit about kind of your background and what led you to where you are today. But if someone asked you at a cocktail party or whatever the scenario and says, "Hey Jim, nice to meet you. Can you explain to me what it is you do?"

Russ Thornton:
I'd just be curious to hear how you explain it in your own words because I know what I think of when I think of you but I think it would be helpful for our listeners to kind of hear how you explain what it is you do.

Jim Anderson:
I help typically families with a high school student plan, go through the college search process, figure out how to pay for the college, actually have that be a part of the search process is how much is this going to cost to go to this school.

Jim Anderson:
But more than that, I found that the finish line isn't getting them into college, it's actually getting them out of college and off of mom and dad's payroll. Actually just recently like three weeks ago, my youngest started her career path. She had just finished up with her Masters in Environmental Engineering and she is working now for an engineering consulting firm over in Los Angeles.

Jim Anderson:
So, yeah they're all ... Actually she's been off payroll for a while because she was able to fund her masters program through being a teaching assistant, so I didn't have to pay anything. So, there are little opportunities like that.

Jim Anderson:
But the finish line is getting them off of the payroll, letting them start there. Productive careers and being independent. That's what everybody wants. So, that's where the goal is.

Jim Anderson:
But making sure that they're ready for that first job is a critical piece. So, understanding the coursework that they need, the skills they need to attain so that they can match up basically with the job openings for what they're wanting to do.

Russ Thornton:
Well my congratulations on your youngest getting launched into her professional career. That's fantastic for her and for you and your wife. I guess a followup question I have, and I'm asking purely out of ignorance, based on my experience, some people ... Well I shouldn't say some. Different people take very different approaches to college for their kids or even their grandkids.

Russ Thornton:
Some it's like where do you want to go, let's go make some visits, let's send out anywhere from three to five or more applications and once we get to a short list of where you've been accepted, then we'll decide where we're going and we'll figure out the financial component later.

Russ Thornton:
Others kind of fall in the other extreme where it's very much driven by the financial component, the cost, not just tuition but room and board and things like that if it's going to be away from home.

Russ Thornton:
And you just raised an interesting, a couple of points where it's not just figuring out where to go and it's not just figuring out how to pay for it either out of your own pocket or utilizing funds that may be available from various sources, but it's also thinking about where is the best school to align with your interests, what you want to study, maybe where you want to pursue a career in.

Russ Thornton:
So, it sounds like you take a much more holistic approach to college planning than simply saying, "Where do we think you can get in and how can we afford to pay for it?" Would you say that's accurate?

Jim Anderson:
It is, it is. What I try and do is in the questionnaires that families fill in, the kids list basically the classes that they're good at and the ones they like ... And I kind of go with that in addition to the areas that everyone thinks that, that parents think their student should go to and the students think a career they should go to also.

Jim Anderson:
But what I've run into is a lot of students either have no idea what they want to do, literally none. Or they have a specific singular thing they want to do.

Jim Anderson:
And what I want them to do is to be able to keep looking around. They are 16, 17, 18 years old. They haven't experienced a whole lot. Their core curriculum makes them take basically five of their six classes are set. So, they really haven't explored a whole lot.

Jim Anderson:
So, I'd like to help them explore a little bit. And that's really part of the fun of doing this job. I found a school up in Hartford, University of Hartford. I have a Major in Acoustical Engineering. So, if you have an interest in music and engineering, that might be something to do.

Jim Anderson:
There is New Mexico Tech has a physics degree where the concentration is studying lightning and electrical atmosphere conditions. There is so many really cool things out there that they have no idea, I didn't even know was out there until I found it, and I'm a little bit older than 18.

Jim Anderson:
So, it's just so much fun to present these ideas and maybe that's the thing that drives them to being maybe a little more focused in their schooling. Some kids really are kind of lost especially over the last year with them learning online. That's been a challenge for a lot of kids, they haven't had the ability to experience a lot.

Jim Anderson:
But yeah, I like the students to understand themselves and what they're looking for before I even start looking at the colleges. I do it kind of backwards. I try and find the schools that fit the student rather than trying to make the student fit to go to the school. I think it's a little more natural way to do things. And a lot of the hiring managers that I've talked to over the years, they don't even look at where you went to school, they want to make sure that you have the skills and can you work with the people around you.

Jim Anderson:
And if you can do those things, you have a really good chance of having a great professional career.

Russ Thornton:
Yeah, that's an interesting perspective and one that I think actually aligns very much with the work I do in financial planning. But that's maybe a conversation for a different time. So Jim, having introduced some clients to you in the past, having seen at least indirectly your work with them and some of the success and progress you've made, I think it would be helpful for our listeners if you could at least at kind of a high level, give us kind of a walk through of the process.

Russ Thornton:
And what I would love for people to understand, and you've already started to talk about some of the elements, but I'd like for people to understand both the breadth of what's involved and I think based on maybe some of the things you'll share, there may be some opportunities for us to dig in to some of the details a little bit further.

Jim Anderson:
Sure, sure. So, the first thing is getting questionnaires filled in. It helps me, first of all, to have something on paper so that I can reference rather than just strictly a conversation because believe it or not, when you start talking to a couple of families a week, they kind of blend together so that I like to have the written word as a reminder.

Jim Anderson:
So, I get those filled in from the family. I review them with them when I'm going over my whole process of what I do. So, it's kind of one big meeting. I'll go through my process. If they're comfortable with my process and my price and all that and they say, "Okay, let's go through the questionnaires," we'll go through those and I'll look for some inconsistencies.

Jim Anderson:
Sometimes I'll have families that say they're pretty well off, they can afford a $70,000 or $80,000 school but they say, "I only want to spend $30,000." But the schools on their list are going to cost them $80,000. So, I ask them, "Do you want me to be looking at $30,000 schools or $80,000 schools?" And kind of get those type of things out of the way so that I'm actually looking in the direction that's in their best interest.

Jim Anderson:
All of this is about being in their best interests. And the way I know that is one of the pieces of the questionnaires is a ranking system. So, I have 11 different factors that families rank and that's what I use when I start my search process to find the schools and the programs and all that kind of stuff.

Jim Anderson:
So, when I go through those and I build, basically now it's up to about a 250, 260 page book of personalized information for that student. And then on the financial side, different funding opportunities for that family.

Jim Anderson:
I always include borrowing because you never know when borrowing makes the most sense to do. In my personal example, I should have borrowed more back in 2007, '08, '09, and '10 when the stock market was hitting lows. And then pay it back once it recovered.

Jim Anderson:
So, I want to make sure families understand those things. I have mistakes from my experiences and I want to make sure that the families I work with don't make the same mistakes. That's a critical piece I learned from all my families and passed that information onto the other ones.

Jim Anderson:
So, I build the plan, it goes all the way through the career. I present the book, I actually present it backwards. I start with the career searching and I work my way back to the name of the school.

Jim Anderson:
The least important part in most cases is the name of the school on your diploma. The most important name is your name, that you've gotten that degree, that you have that skillset, that you are now ready to tackle that career that you're heading on.

Jim Anderson:
So, I'll review the whole book with the family. It takes roughly an hour and a half to two hours to go through. And then the ball is in their court. They review the schools that I've selected, which tend to start up being a bit of a shotgun. And as we go through the process of refinement, it'll get to be a closer grouping of schools. They'll learn a whole lot about the whole process and what different schools have to offer and that can adjust the school selection that they have.

Jim Anderson:
They might actually even be changing their major. So, that could be a part of the whole process. But we go back and forth. Usually right before senior year starts, I like to actually have a sit down with each family and go through what schools that they're selecting to apply to. I want to make sure that they have a good negotiating school, their dream school, whatever that turns out to be.

Jim Anderson:
If there is a natural competitor that might offer more aid, we want to include them in the list so that maybe we can get a little bit better price for them down the road. So, we get that set in usually August ourselves, July or August.

Jim Anderson:
October 1st the FAFSA comes up. That's the free application for Federal Student Aid. I've started doing Zoom calls for that last year. It worked out really well. So, I'm going to continue to do that in the future. We'll go through all the questions which that's going to be changing over the next couple of years.

Jim Anderson:
We'll also do, if they need to, there's another financial aid form for some I guess more prestigious colleges that offer a lot more of their own money. So, that's called the CSS Profile. I'll set up. I maybe do one-to-ones on those, it depends on how many families are going to be looking at those particular schools. So, we do that, get everything submitted.

Jim Anderson:
And then we wait for all the acceptances to come in. And we'll get a bunch of acceptances because most of the students that I work with are not applying to the uber elite schools, some of them are. But they're also going to be applying to ones that are a little more safety school. The ivy leagues, it's not a safety school for anybody these days when the acceptance rate is usually 10%, all the way down to 3% for Harvard.

Jim Anderson:
So, then once they all come in and the Financial Aid Awards come in, we can sit down and we can evaluate, make sure we're looking at apples to apples on the money side and then they make their decision, and then they're off.

Jim Anderson:
Now I am still always available for families who I've been working with even when they're in college. If they changed their mind on something or they need further help on another FAFSA, or CSS profile, I am here to help. So yeah, that's basically the whole process.

Russ Thornton:
Well there's a lot there and I appreciate you walking us through that and there's a couple of things I want to come back to. But it sounds like you typically begin working with families and students when they're rising seniors in high school, did I hear that right?

Jim Anderson:
Actually the best time to start, and especially this year, is if you have a sophomore right now. And the reason I say that is because on any regular year, January 1st of the sophomore year of your student is when the FAFSA and the CSS profile start accumulating your income numbers for the forms you'll fill in senior year for freshman year of college.

Jim Anderson:
But this year is even more critical because right now, they just put in, I guess it was in one of the stimulus packages that came out in December or the one that came out last December.

Jim Anderson:
They are simplifying the FAFSA, which is a good headline click bait. What they're really doing is making it where yeah it's a little bit easier, they're going to get rid of a lot of questions people answered no to anyway.

Jim Anderson:
But another part of it is they're making it a little more difficult for families with multiple kids in colleges at the same time, with families with divorce. A few different areas are really going to be challenged and none of the calculators they have actually show those changes yet, so they might be thinking here's the cost of what it's going to be, but it could actually be a totally different cost, a higher cost.

Jim Anderson:
Now there is going to be a good thing that's coming out of this, and that is if students get money from outside of their parents, like grandparents or aunts and uncles or whoever, they are not going to be having that money included on their FAFSA as unearned income. So, that's going to be a critical piece too.

Jim Anderson:
So, funding from grandma and grandpa is not going to impact their potential financial aid, need-base aid the last two years of college. But this is a critical year because it's going to be the pivot year, it's going to be the first year that happens.

Jim Anderson:
So, it's critical to know what those rules are going to be and then how to adjust and see if we can make it where we're not going to get hit in the side of the head from one year to the next.

Russ Thornton:
Yeah. Well and I certainly don't want you to give away your secret sauce or anything like that.

Jim Anderson:
No.

Russ Thornton:
That certainly people are going to reach out and discuss their own situation with you if they're interested. But could you speak maybe a little bit more to some of the FAFSA changes that are forthcoming especially those related to maybe divorce. As you know, a lot of my clients are women, many of whom are dealing or have dealt with divorce over the years.

Russ Thornton:
So, how could that impact let's say a woman that's going through divorce or is recently divorced?

Jim Anderson:
Right. So, a couple of things. One is they're making a switch from it being the parent that fills in the FAFSA instead of being the one that has the child reside at the residence that extra day of the year, they're switching it to be the parent who gives the most financial support. So, that will kick in, as of now, the 2024 school year, but that's the 2023 FAFSA which is the 2022 income year. So, that's why it's critical for that.

Jim Anderson:
And I have one family where they're going to be in the middle of it. So, they have one year where it's going to be one parent is going to be filling in the FAFSA and unless they're able to, I'm guessing, talk to their divorce attorney and maybe figure out a way to have it be where the lower income parent is providing more financial support, I don't know how to do that, I am not a legal professional.

Jim Anderson:
But if there is a way for everyone to agree and have it work that way, potentially they keep the one parent, the lower income parent as having both hats basically. They have the student that extra day of the year and somehow they're providing less income. That's going to allow their financial numbers to be included rather than their ex spouse's numbers included.

Jim Anderson:
And sometimes it's a big difference between how much one parent makes than the other. And in this one family's case, it was a $20,000 a year difference. So, if you assumed it was going to be the same all four years, it could potentially be a $60,000 difference than what you were thinking by the time you get through with four years. So, that's a critical piece.

Jim Anderson:
On the good side, they are changing child support from being considered income, to being considered an asset. How that helps is income can be counted up to 47% of the amount onto the ... Well it's expected family contribution now they're changing the name to Student Aid Index. I guess it's a little more, it's better descriptive.

Jim Anderson:
But it's changing. So, it will go down to 5.64%. So, that could be a large potential savings in that area. So, there's different little things like that. Throw in if this family with divorce in their rear view mirror or in their current situation, if they're going to have more than one student going to college at the same time, they are taking away ...

Jim Anderson:
Right now the FAFSA allows you to take your expected family contribution. And if you have two in college at the same time, you take whatever that number is and you divide it by two. If you have three, you divide it by three. Well they are getting rid of that division, so that will potentially mean you're paying more than you would otherwise have paid.

Jim Anderson:
That's going to depend on the mix of the schools and that is something that I will take into consideration when I am researching and finding schools. Public schools is probably not going to make a whole lot of difference. There might be some exceptions. Private schools it's going to impact on a varying degree depending on the selectivity of the school and how much need-based money they would give because if your expected family contribution normally would be 60,000 for one child and now you have two, and that would cut it to 30,000, that could be a significant need-based package that you are giving up by now being 60,000 instead of 30,000.

Jim Anderson:
So, those are parts of the equation that I take into consideration on my researching of various colleges. So, that's kind of what goes on for families with divorce.

Russ Thornton:
Yeah, well that's interesting. So, if I understood you correctly, so with this new, then doing away with the division by number of children, if you've got two or more children in school where previously you would divide by the number of children to get the expected family contribution, that goes away. So now if you've got two or three children in school, to use your example of $60,000, that would now be considered $60,000 per child instead of being divided by two, let's say for two kids and it would be $30,000 a piece?

Jim Anderson:
Right, right. So, if let's say you're sending your kids to UGA, that's not going to be an issue.

Russ Thornton:
Right.

Jim Anderson:
Because 30 is not going to get you anything, 60 is not going to get you anything. But if you were sending your kids to Emory, then that could make a difference. Again, it all depends on the school selection as to whether it makes a difference or not and part of that's going to be the academics of the student and then part of it's going to be the finances of their parents.

Jim Anderson:
Plus you also have the kicker of parents getting remarried and then step-parents having their income and assets included on the FAFSA. And if they have kids, who's the custodial parent for those kids and are they going to school at the same time?

Jim Anderson:
Yeah, so it can get really confusing as especially families who have been divorced for a little while and they've been remarried and yeah. So, it can get kind of confusing to figure out who's on first basically.

Russ Thornton:
What I think that's a great example of the benefit of reaching out and getting some assistance from someone like yourself that can know the questions to ask and know the things to look out for and be a little bit more cognizant of some of these hoops that may be necessary to jump through if not now, in the nearer future with some of these forthcoming changes. Like most things, people don't know what they don't know, and I would say the same of myself.

Russ Thornton:
So, when it comes to really getting into the specifics of college planning both from selecting the right school or the best school, I should say, and then figuring out how to get it paid for in the best manner possible.

Russ Thornton:
I think, again, I'm just always blown away by all of the intricacies and details that you bring to bear when we talk about this sort of thing, Jim. It's amazing.

Russ Thornton:
One thing that came to mind hearing you talk about all of this is I hear more and more or have heard more and more that undergrad is no longer the typical four years. More and more students are taking five plus years to get through undergrad.

Russ Thornton:
And I suspect there's a variety of factors that could contribute to that, but I would just be interested to get your input and is that something you've seen or do you think that is largely addressable through better planning up front to figure out where student's interests lie, what they want to study, what they maybe want to do post college. How do you see that kind of factoring into your work as well as kind of the bigger financial planning picture for the families you're working with?

Jim Anderson:
Yeah. I would say over the past few years I have started to see the four-year graduation rates go up. Some of them have, like Louisiana Tech a couple of years ago was 35%. They're up to 42%.

Jim Anderson:
Locally I would like to see them go higher, case in point Kennesaw State, which is close by here, they are up to 18%. A couple of years ago they were 14%. So they're making the right ... They're going in the right direction.

Jim Anderson:
I think they have, in my opinion, I think they have a hard time getting classes for all the kids that need the classes that they need to get through. I have one student who was going to go there, went to the orientation and she only got one of her five classes that she had requested. She was wait listed on four of them. And that is a recipe for not graduating in four years.

Jim Anderson:
So, I think that's probably part of it. Another part is I think there are a lot of kids who may not quite be college ready. And I know people are saying that the test scores are flawed and all that, they're weighted towards the wealthier families.

Jim Anderson:
But ACT typically stated that a 20 or better and you are pretty much ready for college. There are a decent number of schools in Georgia where a lot of their kids, 25% or maybe more don't even have a 20 on their test score. So, they're maybe starting out in some remedial classes and those are going to count as credits especially against, let's say they are still HOPE Scholarship eligible, they're going to burn through their HOPE Scholarship credits on some remedial classes that aren't going to count towards graduation, so they'll take more than 120 and that will make it where they will take longer to graduate.

Jim Anderson:
Most majors are 120 credit hours. Engineering and then there's a couple other random ones that can be more in the mid 120s up to mid 130s even. So, it can be a bit of a challenge to get through but a lot of it is are they ready and are there too many kids going to the school that the support staff at that school faculty and any other administrators do they have enough bandwidth to handle the number of students coming in.

Jim Anderson:
I think those are the primary issues. I've seen bigger jumps in four-year graduation rates at schools that kind of keep their head counts steady. So, I think they know how many kids they can handle and they kind of stick to their plan and they seem to do a little better.

Jim Anderson:
But yeah, graduation rates is critical because it's not just how much you're paying per year but it's also the number of years to get through.

Russ Thornton:
Right.

Jim Anderson:
Did I say that right?

Russ Thornton:
Yeah, just I find that ... Yeah, you would know better than I would. But your perspective is helpful and appreciated because whenever I have college planning discussions with my clients whether it's for children or grandchildren, one thing I always bring up is do we want to assume undergrad in four years, undergrad in five years, or some other number.

Russ Thornton:
It always makes for some interesting discussion. So, I was just interested to get kind of a little big more experiential feedback based on your work with families and what you've seen. And it does. I'm happy to hear, it sounds like some of the numbers are getting better, but it sounds like they've got a long way to go too.

Jim Anderson:
And the numbers are actually kind of flawed because there can be kids who ... There's another thing they have called freshmen retention rate. So, that's how many students complete their freshman year and come back for their sophomore year.

Jim Anderson:
And those students kind of fall out of the calculation. So, if they transfer to a different school and they still graduate in four years, they don't end up on anybody's number because they're not at the school they started at and so they're not on the originating school and they're not on the transfer school as being four years.

Jim Anderson:
So, the numbers might be low especially schools that have a retention rate in the 70s. That can be kind of hard. You compare them to retention rates at a Vanderbilt or an Emory, in the 90s, mid to upper 90% stay at that school. So you don't ... Those kids are all going to be counted.

Jim Anderson:
But the ones that transfer to a different school, they kind of fall out of that calculation. So, it's really kind of hard to really figure that out. Another number that's a really tough one to figure out that I provide for families is what kind of crime happens on campus? And the federal numbers that are put out, they include every student that's there, not just the ones who live on campus but the ones who live off campus and the graduate students.

Jim Anderson:
So, if it's a big school, a school let's say a Harvard where they have under 10,000 undergrads and they have over 10,000 graduate students, they're counting both of them together and that really I don't think should be that way.

Jim Anderson:
So, I look at ... I was a math major. I look at numbers all the time and I try and put them in proper context for families. So, that's just an observation I've made over the years.

Russ Thornton:
Yeah, yeah, super interesting. Jim you shared a lot and I think our listeners are getting a pretty clear idea of what it is you do and how you help families. But I'd be curious to hear in your words, what do you think is the biggest challenge that you help the families you work with address or solve?

Jim Anderson:
I would say setting expectations. I have a lot of families who well they're kind of biased. They think their child should go to the most difficult school possible. I've had some families where the students are getting a low three point something GPA and the school that they want them to go to is MIT, and that's just not going to happen.

Jim Anderson:
So, I have to kind of reset the whole process as far as academically are you going to get in. But it's not just are you going to get in, are you going to graduate. I probably can count on my hand the number of kids that I've worked with who have transferred to another school unintentionally. The ones who had not planned on transferring schools.

Jim Anderson:
And I've worked with hundreds of kids. So, it happens very infrequently that they transfer. Usually it tends to be homesickness, they went too far away from home. It's not the major unless they make some radical departure in the major.

Jim Anderson:
But really trying to get them to start thinking the academics of where they're going is more important than the athletics of the school where they're going. They get enamored by the marketing and the peer pressure and I try and get them to be in their own world with their priorities and what's important to that family. And then finding the schools that fit what they're really looking for and peel away all that extra who's playing football on a Saturday night or my friend Billy is going to this school or my girlfriend Suzy is going here and trying to get past that and realize they don't even offer a major in what you want to do. So, how can you go to that school?

Jim Anderson:
I get to ask the hard questions that parents might have a hard time getting their students to listen. I get to wear the college planner expert hat as opposed to the dad hat. And I can ask the dad questions as the expert and hopefully you get an answer and I kind of take on some of that ground for families where it can be a tough conversation to have with your student, but I'll lay it out.

Jim Anderson:
I've actually sat down with a couple of students and said, "You can't go here, you're going to take on too much debt, you're going to be living at home. You're going to make $30,000 a year and you're going to have $100,000 of student debt, this is not going to work. The numbers don't work for you to be independent. And I'm sure independence is something that you want. When you graduate you don't want to come back home and live at home and only have your job be within 25 miles of where your parents live.

Jim Anderson:
So, let's find a way to make it work where yeah, you're going to have an affordable amount of debt to pay off and you can live where the job is. So, this is some really great opportunities that maybe aren't located in the Atlanta area for a student.

Jim Anderson:
So, it's hard, those are hard conversations for families to have but I can kind of stick my neck out and have those conversations and not have some of the pushback that I know I've had as a parent and I'm sure most other parents have had with their teenagers.

Russ Thornton:
Yeah, hearing you reference that makes me think that you're helping with college planning but also a compassionate but tough guide and maybe a little counseling and therapy thrown in there as well.

Jim Anderson:
A little bit.

Russ Thornton:
But clearly important work. You mentioned earlier, Jim, you've worked with hundreds of kids and their families. Is there a favorite success story that comes to mind for you?

Jim Anderson:
Yeah, I would say, and it kind of fits in with your audience. There was one family where dad had passed away when the daughter was in high school. And mom could only work part-time or she would lose her social security. Now they had insurance that paid out, so there was a good nest egg available, but obviously not wanting to spend it where you don't need to because mom is in her 40s and hopefully she's got another 40 years left to go and enjoy life.

Jim Anderson:
So, we were able to ... She ended up going to UGA and I know the first two years when I helped them with the FAFSA that they were paying $500 for tuition fees, room and board, to go to UGA.

Jim Anderson:
So, sometimes you can take a horrible situation like losing a parent and make it be a little bit easier for everyone. And basically what that entailed was kind of having an idea of what the school would charge although it ended up being way lower but it ended up lower because we got the FAFSA in in October before all the financial, all the endowed scholarships are handed out. So they knew that this family was considered a high need family and they were considered even in spite of their assets and that's because there's a part of the FAFSA calculation that if you earn under a certain amount of money or you are considered a displaced worker, which would be in this case the mom not being able to earn her full wage because she would lose her social security. They had a zero expected family contribution, and that allowed them to be a very high need family. She is a very good academic student, and it worked out perfectly for their situation.

Jim Anderson:
They don't always end up that good. But I do what I can to cut costs wherever possible either by planning ahead, knowing what sections and what textbooks to get and getting them early and not waiting until you get on campus to get textbooks. That could save 500 bucks a semester.

Jim Anderson:
If you're not taking a car, check your auto insurance. If they're far enough away, they're an away student. I had one family save $600 a year doing that. So, there's little things that add up that can make it be a less financially strenuous for everyone, less student debt for the student to pay off or the parent if they take parent plus loans or they borrow from somewhere else or they spend their assets and have to work longer.

Jim Anderson:
So, my goal is to have it be the lowest cost and the least financial impact to everyone involved yet get the skills you need to perform the job that you want to perform.

Russ Thornton:
Yeah, thanks for sharing that. That's an interesting and clearly a challenging situation. What a great outcome. So, this podcast and these conversations ultimately I want to kind of tie them back to retirement for women.

Russ Thornton:
And with that in mind, I'd like to first maybe start, Jim, and get your thoughts on retirement. So, when you think of the word retirement, what comes to mind for you personally?

Jim Anderson:
Well let's assume it's a job you want to retire from because right now I'm in a job that I don't want to retire from. Maybe I can downsize the amount of time I spend doing the job, but just making it be where you have the opportunity to do what you want to do.

Jim Anderson:
If you want to be able to volunteer and you have a passion to do something like that, to have the money that allows you the flexibility to do something like that, I think is a critical thing.

Jim Anderson:
And I kind of look like I am on the path to that for a lot of families because the less money they spend on college, obviously the more money they're going to have as they approach and go through retirement.

Jim Anderson:
And that could mean that maybe you can retire earlier or you end up being a little more well off and you can take that extra vacation that you weren't going to take otherwise. Who knows what it could turn out to be.

Jim Anderson:
But yeah, I think it's the ability to be able to do what you want to do whether it's visiting relatives, traveling abroad, moving to an area that you want to retire in, well whatever it is to get you that flexibility to be able to experience things that you've been putting off because you've had that full-time job that required a commitment that didn't allow you to do those types of things.

Russ Thornton:
Well first of all, congrats. I think it's fantastic that you're doing work that you enjoy and find rewarding. And arguably when you're doing that it's maybe not quite the same as work, work.

Russ Thornton:
But I heard you talking about being able to do what you want, when, and with whom. So, to me that sounds like this idea of choice or independence which come up a lot when I discuss retirement with people.

Russ Thornton:
So, that's a common thread that I've been able to see carried through a lot of these conversations. Tying it back to women specifically, I'm just curious both as someone that's in a longterm marriage, someone that works with families, the story you just shared a moment ago is indicative of one. What do you see as the biggest challenge that women face when they're planning for their own retirement?

Jim Anderson:
I think it can be understanding all the financials. From what I've read, men tend to kind of dominate on that side of things with the knowledge base and then if that knowledge base leaves them, it kind of leaves them high and dry.

Jim Anderson:
Women also tend to live longer, so that can be a bit of a challenge that the same dollars are going to have to be stretched further. And in spite of the Equal Pay Act, I think it's from 1963, there are some discrepancies in salaries between the sexes that can make it more difficult to save a similar amount of money in the same timeframe.

Jim Anderson:
And then there's also, I think part of it could be the level of risk women can feel comfortable taking compared to the level of risk that men feel comfortable taking. So, that could mean a difference in their retirement amount.

Jim Anderson:
So, there's a lot of different little factors that all tie in to make it be where it can be more challenging for a woman on her own in retirement.

Russ Thornton:
Yeah, all great perspectives and thanks for sharing that. And to bring it kind of back home to what it is you do and I think you kind of touched on this just a moment ago, but I'd be curious to hear your thoughts on the impact that your work in college planning for families makes as these families are planning for or transitioning into retirement.

Jim Anderson:
Well, so the area that, the demographic where student debt is increasing the quickest is the 55 to 65 year old demographic. So, that typically is parents helping take on student debt so that their students, their children can go to the college of their dreams.

Jim Anderson:
And then that debt obviously it's treated differently than a mortgage debt. It can be very difficult to get rid of. You have to pay it, at least as of today. So that can be a challenge when you're looking to retire and all of a sudden you have this extra, however many hundreds of dollars a month payment that's going to stick with you until either it's paid off or 20, 25 years for the loan forgiveness to kick in.

Jim Anderson:
That can be a challenge to your retirement. It could extend your number of years working, maybe significantly. It depends. I've seen some debts that are rather high and that can be a definite headwind towards getting to those financial independence goals. And I think that's where my services come in handy is I can be the pragmatic one to say, "You don't want to be taking on this kind of debt. I found these other schools that are going to cost half as much for your family. You might not have to take the student debt out as a parent."

Jim Anderson:
Or actually one thing I did find out, there are some private student loan companies where if you have parent plus loans, you can have, and you refinance them unto the private side, you can have the owner of that debt switched over to the student.

Jim Anderson:
I'm not saying it works for everyone, that's something that you would want to talk to your financial planner about. A lot of these issues that I talk about, I talk about how they are related to the financial aid forms and various other opportunities, but it's really up to the family with their financial professionals to make the determination as to how it fits into their big picture plan.

Jim Anderson:
I look at a narrow slice of the finances and I do not give out the financial advice, I explain opportunities and I try and make it be where I'm also talking to the financial planner involved or the wealth manager to make sure that everybody understands okay here is how this affects the financial aid form, so you see how it fits into the big picture, like in my case.

Jim Anderson:
So my father-in-law passed away when my youngest was a senior in high school. We got the inheritance and all of a sudden we were going to look wealthier. Since my daughter was going to a school that only required the FAFSA, they don't count home equity. So, we paid off our mortgage. It saved us $7,500 a year for her to go to college by doing that based on the school that she went to.

Jim Anderson:
But that's something I would say is like if you do this, pay off some, all, whatever, of your mortgage, you're going to get an increased amount of need-based aid. But that's not always the case because you might have an income that's too high.

Jim Anderson:
So, you got to look at the whole picture to make sure that what you're saying is going to happen, could happen and I'm not going to tell people to, I'm not going to suggest things to people that aren't going to help them.

Jim Anderson:
So, if there was no benefit for us to pay off the mortgage, I wouldn't have paid off the mortgage. Only when you know there's going to be some kind of benefit is it even potentially worthwhile to inform the family of that.

Jim Anderson:
So, it's kind of a big tie in how can we get the cost to be lower and less of an impact on the parents and their retirement plans, and student debt is a big one. So trying to eliminate debt.

Jim Anderson:
And the student debt on the parent side, the parent plus loan is a couple of percent higher than it is for the student. So, instead of looking at three and three quarters percent, you're looking at 6% to 7%. And that's going to cause the payment to be higher and just have a little more financial strain on paying it off. So, I guess that's how it ties into retirement?

Russ Thornton:
Yeah, no that's actually a super thoughtful and helpful perspective. I really want to underline something you said that you described that you kind of focus on working a very narrow slice of a person's overall financial picture.

Russ Thornton:
But I think you also gave some really great examples of how a decision in the college planning arena could have meaningful impacts in other areas of a person's financial life. Whether that's using money to pay down the mortgage, to preserve existing financial aid or other things like that. Frankly that's not something that maybe would have crossed my radar, so that's why I see such value in getting input and guidance from someone like you along the way when it comes to playing forward and figuring out the best way to fund and to keep the funding as reasonable as possible when it comes to college. So yeah, that's super helpful.

Russ Thornton:
As we start to wrap up the conversation today, Jim, something I always like to ask is I know you love what you do, it sounds like you stay super busy working with parents and their students, but how do you most enjoy spending your time when you've got an hour or two to yourself?

Jim Anderson:
Oh boy. Well I have three grandchildren that are in the area. And actually my wife's out of town and my daughter and her husband went to a wedding. So, I babysat my four year, two year old, and four month old.

Russ Thornton:
Wow, and you lived to tell about it. Good for you.

Jim Anderson:
I barely lived to tell about it.

Russ Thornton:
Wow.

Jim Anderson:
So yeah, the grandkids is one. Another thing that I really I'm into is I guess it's a habit I picked up in high school, it's I have a turntable in my office here and I am spinning vinyl while I am making my plans for families. So, I have part of my collection of vinyl here and it goes anywhere from, I don't know, Jimi Hendrix, to Buddy Guy, to Black Keys, Arrowsmith, Miles Davis. I have quite a variety of music and whatever the mood asked for, I can put it on and listen to it while I'm doing my thing here. So, always looking for good vinyls to purchase.

Russ Thornton:
Yeah, well I'm not a vinyl guy but I do love music. I maybe have an unhealthy love of music because I'm always listening to something. When you're working, what's your favorite background music to have on when you're working?

Jim Anderson:
My latest artist that I am really focused on is Buddy Guy. He's a blues guitar player who influenced Eric Clapton and Stevie Ray Vaughan and Keith Richards and Jeff Beck, some of the greatest guitar players ever.

Jim Anderson:
So, it's pretty cool. He's got a bar up in Chicago where he plays still. He's almost 85.

Russ Thornton:
Wow.

Jim Anderson:
Yeah, and this ... Okay. So, they had a PBS documentary on him and growing up as a young man, young boy actually, he was picking cotton in, was it Mississippi or Louisiana, I forget. But he went from that lifestyle to when he actually got to play in front of the President of the United States, play guitar. So quite a story for this gentleman.

Jim Anderson:
It's just unbelievable that somebody from such meager means was able to make it to, I would think, one of the pinnacles of being a musician, to being able to play in front of the sitting President of the United States.

Russ Thornton:
Wow.

Jim Anderson:
So, he's one of my heroes right now in the music industry.

Russ Thornton:
Yeah, that's pretty cool. You might have to share a link to some Buddy Guy music in the show notes for this episode.

Jim Anderson:
Sure. Yeah, he's really good.

Russ Thornton:
Yeah, so we covered a lot today Jim and we maybe need to have a part two at some point because we didn't get into the supposed plans for student debt loan forgiveness by the current presidential administration and things like that, which not to be political but I'd just be interested to hear your thoughts on that and some other things as well.

Russ Thornton:
But wrapping up today, we covered a lot of ground. If there were one thing that our listeners could take away from our discussion today, what would you want that one thing to be?

Jim Anderson:
I would say that yeah it sounds like I do a lot and I hope I do a lot for the families I work for, but I don't charge a lot. I have purposely made it be where I make it where it's affordable. So, I have some families that are on a payment plan. I have a little initial price. I charge $2,000, the average price for my range of experience is $3,500. And I actually read there is some guy, a Yale grad who his company charges $85,000 a year.

Russ Thornton:
Holy cow.

Jim Anderson:
Yeah, so that is not my clientele. My clientele, if I had families, the ones that I enjoy working with the most are the ones who need me the most. And if you're making $400,000 and $500,000, okay I enjoy working with you and helping you solve all the different problems as far as the academics and everything go and finding the schools that fit the price range that you want. But I really, really helped. My heart string tags at those families that are going to have a really hard time paying for college and showing them here's how it can work, you can go. Maybe it's a little bit different than you thought or maybe it's a school you haven't heard of, but they have a better four year graduation rate. They're going to cost less than going to a school in state.

Jim Anderson:
So, whatever it is, it's the families that really need me that I enjoy working with the most.

Russ Thornton:
And since our first conversation however many years ago that's been, I could immediately identify that you had a real heart for this and that's fantastic both for you because of the joy and fulfillment you get from doing this work, but also from the families that you get an opportunity to work with and serve and I'm glad you shared that.

Russ Thornton:
And I should have asked earlier but I do want people to know that yeah, you're accessible, affordable, and happy to help. One followup question about, I know you're in the Atlanta area like I am, do you work just with people here locally or do you work with people regionally or across the country or what works best for you as far as where people are located?

Jim Anderson:
Most of my families are local but I do have a family right now that's up in the Philadelphia area that I'm working with. I have a family in the Chicago area. I have some in the West Coast. I have had Texas, Louisiana, Florida, North Carolina, Virginia, Ohio. I've been all over the place.

Jim Anderson:
So, it's not an issue especially now that most of us are getting comfortable with the Zoom process that we don't have to actually meet in-person. I do end up mailing the books that I put together to them, and then we review them over Zoom. So yeah, I think it works pretty well. But yeah, I can do that.

Jim Anderson:
The rewarding part, and going back to that a little bit, is it's amazing to me how different some of these kids are in what they want to do. I have one who is a concert clarinet player, a clarinetist. I have one who wants to manage a horse farm, she's a D1 equestrian rider. They just ... I have another one who's interested in zoology, one that is looking at astrophysics. They're not just ...

Jim Anderson:
Then there are some that are cybersecurity. They didn't really understand cybersecurity when we started working with them, but I kind of explained it to them and they think, "Hey, that's pretty cool," because they want to do computer programming, so I stretch them out and show them how many different ways you can use computer programming.

Jim Anderson:
But just seeing what their interests turn into is so much fun, and no family is alike to another family. Everyone has their own fingerprint and it's just fun helping them through their progression to that finish line.

Russ Thornton:
And based on some of the examples of schools you gave earlier too, it sounds like there is literally a program for everyone out there if they just know what it is they want to do and maybe get some help from someone like you to find the right place to pursue what's important to them.

Jim Anderson:
Right.

Russ Thornton:
So, I applaud you. I think it's fantastic, meaningful, important work and clearly it has a positive financial component when you can help a family save money. But I think even more importantly then the financial component is, as you mentioned at the outset of our conversation, helping put a student on the path not just to a college degree, but more importantly to successfully launching into his or her career and getting off the family payroll as you said.

Russ Thornton:
And helping them become independent, productive adults, which I think is what most students want and I think that's what most parents want of their students. So, I think it's fantastic work, I think it's fascinating interesting work and I always enjoy talking with you Jim and we need to probably do it more often than we have been lately.

Russ Thornton:
But clearly people are going to hear this and they're probably going to want to reach out and learn more or see if you can help them or their family or maybe they know a family that could use your help. What's the best way for people to either to learn more about you or to get in touch if they'd like to discuss their own situation further?

Jim Anderson:
Yeah. Well there's multiple ways. I have a website. It's Makingcollegeworthit.com. On there is my contact information which my phone number is 404-545-1369. And my email address is Jim [email protected] And I do free consultation, so you can decide whether you want to work with me after we talk more. I don't know how much more I can say than what I said in his one-hour podcast. But yeah.

Jim Anderson:
Maybe as it relates to each family's individual circumstances rather than just in more generalities.

Russ Thornton:
Yeah. Well clearly if anyone listening to this wants to reach out to Jim or learn more, feel welcomed to get in touch with me, I'll be happy to connect you or you can reach out to Jim directly. We'll include his website, phone number and email address in the show notes for this episode. So anybody that's interested should not have any trouble at all getting ahold of Jim.

Russ Thornton:
Jim thank you again. This has been great. I'm really happy we could share our conversation with our listeners today. So, I wanted to say thank you.

Jim Anderson:
And thank you for helping me get the word out to all the families out in the Atlanta area and beyond.

Russ Thornton:
Yeah. Well and to all of you out there listening, thanks again. This is Russ Thornton. This has been Women's Retirement Radio and we look forward to catching up with you again on our next episode.