College Planning Insider - Solutions for an Expensive World

September, 2010

Dear Bill,

I wanted to highlight for you important CFS news, updates and upcoming enhancements that will be of interest and benefit to you and your clients.

Important News:

CFS's latest strategic alliance is with The National Association of Personal Financial Advisors (NAPFA), the country's leading professional association of Fee-Only financial advisors.

Why is this important for you whether or not you are affiliated with NAPFA?

Even if you are not (and most of you aren't), this strategic relationship with NAPFA solidifies CFS as THE market leader in delivering comprehensive, objective and value-added college planning and funding solutions to financial services professionals. This should inspire even more confidence in you about the value of your college planning service through CFS.

If you are a NAPFA advisor it means discounted access to CFS' services as well as the integration of the CFS Prospecting System with NAPFA's frequently visited Find An Advisor tool. Here is an example: click here

Other good news: CFS and education finance technology provider CampusDoor have entered into an institutional business partnership. To learn more about this partnership read their press release.

Important Updates

The latest version of the CFS College Planning Expert System was deployed in late July. Two highlights include:

  • Updated Education Tax Credit Strategies. New and updated strategies were included for both financial aid candidates as well as families that are not candidates for financial aid. These credits can mean as much as $10,000 in tax savings over four years. So, knowing strategies for maximizing the credits is very important to helping the family reduce their college costs.

  • Updated The Financial Aid Reports. Income and asset protection allowance information has been added to the reports generated for financial aid clients.

    First, let's define income and asset protection allowances:

    Income protection allowance: A family is "allowed" up to a certain amount of adjusted gross income before it is assessed in the EFC. For the FAFSA, the income protection allowance is determined by the family size and the number of children in college. For example, if the parents' income is $80,000 and the income protection allowance is $30,000 then $50,000 of income will be included in the EFC calculations. Knowing the parents' income protection allowance is important to helping them plan for financial aid.

    Asset protection allowance: A family is "allowed" up to a certain amount of assets before the amount above the allowable limit is assessed in the EFC. For the FAFSA, the asset protection allowance is determined by the age of the older parent (for a dependent student). For example, if the oldest parent is 48 years old, the asset protection allowance is about $50,000 (married couple). The value of assets above the allowance will be assessed.

    Why is this an important update and valuable for you and your clients?

    For families below the protection allowance limit, shifting the assets will not improve financial aid prospects. It will have no effect. But shifting those assets could negatively affect some other part of a financial plan. The problem occurs when a financial services professional assumes that shifting income or assets will change the EFC.

    By showing the allowance information in the reports, CFS is helping you to avoid making the mistake of recommending strategies that will not benefit the client.  

Important Enhancements Coming Soon

Two significant add-on services will soon be available:

  1. Coming in September - The CFS reports will include scholarships (free money) the student is eligible for at the school of choice and how to obtain them! Why is this important and valuable for you and your clients? Because it enhances your ability to help the client leverage merit-based (based on academic performance) scholarships (free money) from the school to minimize their out-of-pocket costs! With this optional add-on content in the reports, you can further help your clients save ON the cost of college.
  2. Coming in October - CFS will make a BETA version of the CFS College Funding Cash Flow model available! In polling a number of CFS licensees over the last year, we determined there was strong interest in having access to a cash flow model for certain scenarios. For example, what to do when a client is looking at the need to pay $20,000 for college that starts in the next few months and has limited cash flow and doesn't want to rob their retirement account OR burden the student with crushing loan debt?? Sound like a familiar scenario? The CFS College Funding Cash Flow model will help, in many cases, solve the problem!

CFS continues to progress in its relentless pursuit of excellence and in fulfilling its mission to be the premier college planning and funding solution provider to financial services professionals.

Regards,

Roger Lorelle
President
Collegiate Funding Solutions