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What's Your Financial "Safety School"?

College Funding Melissa Sotudeh

by Melissa Sotudeh, CFP ®

I’m a planner. It’s who I am, and it’s what I do—and it’s what my daughter does too. She’s the type to assign herself homework to make sure she is on track to finish her summer reading, which is a great thing because this past summer, she’s also had college applications on her plate. So we’ve teamed up to create a plan—not just how for how to apply to college, but how to pay for it.

Too Many People Aren’t  Saving Enough

I often speak to clients and other parents about saving for college, and my impression is that people just try to wing it. The statistics from Sallie Mae back that up. In 2015, only 48% of parents were saving for college, and of those parents, the average amount they had saved is at the lowest level in three years—just $10,040. That’s only enough to cover one year of tuition at a public four-year university.

 In my experience, these saving habits (or lack thereof) are even common among families with higher income. Partly it is because people don’t realize how expensive college has gotten, or they anticipate (incorrectly) that they will qualify for financial aid.  Particularly where I live in the D.C. metro area, what appears to be a good income according to college aid calculations doesn’t realistically account for the high cost of living—or the fact that college costs increase every year.

Include Financial Safety Schools

So what do you do? Well, for my daughter and me, we did what came naturally: we made an Excel sheet.


It included:

  •          Names of schools
  •          Tests required
  •          Admission deadlines
  •          Common App or not
  •          Supplemental essays
  •          Merit aid availability and deadlines
  •          COST! (tuition, books, fees, room and board)
  •          Safety, target, or reach academically
  •          Safety, target, or reach financially

You might be wondering about that last item. Just like when she and her school college counselor discussed her college list with the reach, target, and safety schools academically, we talked about reach, target, and safety schools financially. They’re not always the same schools.  We talked about the cost of the school compared to the potential value (various programs or opportunities available at different schools), and for “financial reach schools,” what amount of merit aid would be needed to make up the difference between what my family has saved versus what the school costs. Whatever scholarships are offered when admissions letters start rolling in will have a major role in her decision to attend one school over another.

It’s a Teachable Moment!

Too often, the discussion of cost is left until the end of the admissions process rather than at the beginning. It can be so tempting to want to reward your children’s hard work with the opportunity to attend whatever college they want, regardless of cost.  Remember: you can borrow for college, but you can’t borrow for your retirement. Don’t let your dreams for your children limit your own financial security.

Instead, take the teachable moment to discuss the value of various schools and budgetary limits. The reality is that there are ways to manage the costs. There can be very good merit aid awarded with just the admission application, particularly if your child applies Early Action.

photo by H. Michael Miley. Used under CC BY-SA 2.0

Learning to live within a budget is a valuable skill your children will appreciate once they leave the nest for college—and particularly after college when student loans have to be repaid!

Melissa Sotudeh, CFP® is a wealth advisor for Halpern Financial, a fee-only independent Registered Investment Advisory firm. She is committed to empowering clients with a solid actionable financial plan to ensure they are confident in making informed financial decisions. 

She serves as a subject matter expert for the Certified Financial Planner Board of Standards, contributing to the development of examination questions for the CFP® Certification Examination. She is also an Advocate for the CFP Board’s Women’s Initiative (WIN).  She lives in Bethesda, Maryland with her husband and children. 




Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Halpern Financial, Inc..  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Halpern Financial, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Halpern Financial, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request


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