Jonathan Hughes: [00:00:00] Okay, share my screen.

Okay. So again, thank you for coming. Uh, just to let you know how you interact with this, uh, zoom webinar here. The, uh, if you have a question as I said, please, uh, note it through the q and a, not the chat. The chat will be disabled for this presentation, but we will be monitoring the q and a a. My, my colleague will be, uh, searching through that.

And she’s a great person to answer these questions because she works on our MEFA Pathway team, which we’ll talk about during the presentation. Um, but if you don’t understand anything or if you have questions about something I said, or something I didn’t say. Um, and, and, you know, question you came in with maybe, um, just note it and aila if you, um, wanna share it.

Or if you, I’m getting like a lot of the same questions that you think should be addressed, just let me know. Um, if you want to see a transcript, you can click the live [00:01:00] transcript of this presentation, which I know someone has done already. So, um, you know, a lot of people are familiar with this, but that’s how that would be done.

Um, and otherwise let’s go on. Before we get started, I want to tell you about MEFA. MEFA is the Massachusetts Educational Financing Authority. We are a state authority created by the Commonwealth of Massachusetts back in 1982, with a public service mission to help families to plan, save, and pay for college and career readiness.

And so when we were created, the first thing that we were created to do was to offer a loan, which is, uh, something that we still do. We have a fixed interest rate educational loan. Uh, however, since 1982, as the cost of college has continued to rise, uh, you know, we, we sort of thought that that wasn’t really all we could be doing.

And so we started two savings programs, the U plan, uh, tuition, uh, prepaid tuition program, and the U Fund, Massachusetts 5 29 plan. And we’ll be talking about those specific. Um, [00:02:00] programs in this presentation as well. And then a lot of what we do is free guidance, free outreach, educational outreach on, you know, processes like this, how to get to college, um, the value of college, how specifically middle school families can save for college.

When you get to your, you know, high school years will have college admissions, presentations and, and programs and financial aid as well, comparing college, um, financial aid offers and, and comparing college loans. So basically what I wanna impress upon you is that, uh, throughout this process, but between now and the time that your child goes to college or do whatever they do after high school, uh, you’re bound to have some questions.

Everybody does. MEFA is a free resource for you to consult with any questions that you may have. So think of us that way. What we’ll talk about tonight. Um, specifically thinking again through that sort of middle school lens. [00:03:00] We’ll start with some just very basic academic planning information. So, you know, I have a middle schooler, um, and this is the time of, of their schooling that, you know, you’re just starting to look at high schools and, and high schools.

The time is when you start choosing classes and, and plans become maybe a little bit more defined. So we’ll talk about that a little bit. We’ll talk about some basics of college admissions. So, you know, what are we seeing in terms of college admissions? What are some things that you can be thinking about in the early processes of, you know, looking for colleges, applying for colleges, what are colleges looking at, et cetera.

We’ll talk about the value of college specifically, uh, as an investment. Um, now the thought is not that everyone has to go to college, but uh, we do, since this is a college. Planning presentation, we will be specifically talking about college as an investment. Um, so that investment is cost and return on cost, right?[00:04:00]

And so the big question then becomes how much might college cost for my family? So it’s a very, um, uh, heavy topic. It’s a, it’s a topic that a lot of people are interested in. And then once you get there, how do people pay for college? So that’s the most common question I’ve received throughout my years at MEFA.

How do people do this? A lot of people, most people really don’t know until they get there how other families do. And they have questions and then we wanna sort of. And on savings, because saving is something that you can do now to prepare for college when the time comes. So we’ll talk about, uh, some strategies for savings.

So some things that folks have done that have worked for them. And again, we’re gonna talk about those two specific Massachusetts plans through Mefa, the U Fund and the U plan. And then finally, just a little bit on what you can do now as parents and students to prepare for college. Okay. So the first thing we wanna talk about is academic planning.

As I mentioned, you know, [00:05:00] you’re in middle school, your children are in, in middle school at the moment. They may even be picking a class here and there in middle school. Um, when they get to high school, you know, this is the springboard to high school. And high school is when they really start picking their courses.

And so when they start picking their courses for high school, they’re going to be leaning on the, uh. You know, advice and, and the guidance of the high school counselors. So that’s where the majority of, of that is going to take place. You shouldn’t probably have to worry too, too much about it as parents, uh, students will work with their guidance counselors about that.

But just so that you know, there are guidelines to graduate high school in Massachusetts, they’re called Mass Corps, and you can find them on doe.mass.edu. They’re essentially, you know, you need to complete a certain amount of units per category or per subject. So for example, a student in order to [00:06:00] graduate from a high school in Massachusetts needs four units of English, four units of math, three units of science, three units of history, et cetera.

These are listed on doe.mass.edu and again, they’re the requirements to graduate. From a high school in Massachusetts, so the counselor is gonna work with your students to make sure that they have all of those lined up. Um, in addition to that, there are admission standards for public colleges in Massachusetts.

Um, so when I’m saying public colleges in Massachusetts, I mean like the UMass system or any state university or state college. So, you know, Bridgewater State, for example, Framingham State, et cetera. There’s a set of. Standards that students have to meet in order to be approved for admission. And so in terms of courses and subjects, they pretty much, uh, mirror the mass core guidelines, but students should have a 3.0 GPA to be [00:07:00] admitted to a state university.

Now, there’s a bit of a sliding scale there, and that is, uh, if a student, you know, for example, tests very high on their, on their SAT or a CT, they may be able to be admitted with a lower, uh, GPA. Uh, so there’s a bit of a sliding scale there, but the review, uh, the admission standards can be found on mass.edu.

So you can just go there, you can google what the admission standards are and it’ll take you there. Um, as your student is moving through high school from freshman and sophomore year, when they get to junior year, they may have the, uh, ability to pick. Other types of courses, right? So, AP courses, IB courses, AP iss probably more familiar to most folks.

That’s the advanced placement courses, and those are advanced college level prep, uh, courses, uh, for, for, uh, college prep level courses for college. And so for the AP uh, program, [00:08:00] there are about 40 different subjects you can choose to take. Uh, for AP courses, they’re more challenging than regular courses.

They end in an AP exam. And, uh, you know, like the ib, which I’ll get to in a minute, it looks really good on college, uh, transcripts. If you’ve taken AP courses and if you earn, you know, a, a certain amount, like, uh, this, the, the scale for the AP exam is I believe, one through five. Um, your score, if it’s good, it can be sent to the colleges and some colleges may actually take.

Though that score and apply it as college credits. Same thing with the IB program. IP is short for International Baccalaureate. Uh, it works in a different way than the AP program, but it, it operates the same way in terms of admissions. So, um, IB is international in scope. Uh, it is, it’s not subject based.

There’s a, there’s a sort of curriculum that you choose and you can take one or more [00:09:00] courses within. It’s kind of project based. There’s no tests, but you’re graded on a similar scale. I believe it’s one, one to seven for ib. And again, some colleges will take that score and, and apply it to your college credits.

Um. So those are both great programs, and again, students should work through their high school counselors to see if they, uh, may want to try those, if they’ll qualify for it, if they are not taking on too heavy a load for those things. Um, dual enrollment is a program where high school students can enroll at the same time in college level courses.

And, uh, that can certainly earn them college credits and it can get them experienced, uh, as college students even before they graduate. So those are great programs too. Um, so just things that you should know about, things that you should be aware about, that you may want to talk to your kids about, that your kids will probably talk, be talking to their high school counselors about.

So if you have questions, we do have a resource here. It says, follow our [00:10:00] academic success tips at MEFA.org/article. Navigating high school academics. Um, so just a very high level, this is what you may be looking forward to when your student goes to high school. A little bit on admissions. So, you know, I generally think of the, the college sort of prep, um, or the application process as two parts admissions and financial aid admissions is getting in.

Financial aid is, you know, obviously how much financial aid are you going to receive and, and how can you pay the college bill. Um, but just to give you an idea of what we’ve been seeing in college admissions over the past 10 years or so, um, perhaps more. So I’m 47, so this is a lot different from when I started applying to colleges.

So, uh, I don’t know how old I am in, in relation to most parents here, but um, certainly as when I was applying to colleges, I was applying, you [00:11:00] know, handwritten applications, mailing them out, it online applications wasn’t even a thing. Um, but since it is now, there’s something called the common application.

Um, and it’s an online application. There are other applications like it that you can apply to a number of different schools at once. And because of that and because of other factors as well, students are applying to a greater number of schools. The evidence of this. There’s a, a, a form called the fafsa, the free application for federal student aid.

It’s a form that everyone has to file to get aid from the federal government, state government, and most often the colleges. And basically, you used to be able to fit 10 colleges on the fafsa. They’ve changed it so you can now fit 20 colleges on the fafsa. It’s very unusual for someone to be applying to 20 colleges.

I don’t wanna give you the impression that, uh, that they are 10 is, is kind of a lot, but sometimes folks do more than 10. Uh, but generally speaking, students are applying to more [00:12:00] colleges. And so that means colleges are getting way more applications than they used to get. So in order to sort of make their decisions, one of the factors that they may consider is something called demonstrated interest.

And so demonstrated interest means, um, how. Interested is the student in coming to this school. And so why I mention that is, um, and some colleges may use it to a greater extent than others and some might not. Um, basically any contact with the school that a student may have, whether that’s emailing the admissions office, whether that’s talking to an admissions officer at a college fair, whether it’s booking a tour and actually going on tour to a college campus.

Um, colleges will note this and so when they get an application from that student, they may check and see, has the student reached out to us before? Um, how interested are they likely to be in this [00:13:00] college if we admit them? Because they want to admit students that have a good chance of attending. ’cause they wanna know what their, what their, um, class will be as as soon as they can.

So, demonstrated interest may be a factor. So if your student. Is really interested in a, in a college, and I know maybe even middle school students have particular colleges that they’re interested in already. Um, make sure the student reaches out and has documented contact with that college. ’cause it may sort of buttress their, um, case to being admitted to that college.

One way they can do that is over social media. Um, and social media, of course, as it does in every facet of our life, plays a big role in college admissions these days. Um, you know, I think when I, when we first had this bullet point on here, I took this to mean social media. Watch what you put on social media.

Uh, if you’re a student, and that’s still a good idea. Um, you don’t want to get in trouble for something you have posted on social media. [00:14:00] It does happen sometime that co sometimes that colleges, um. Might rescind, uh, an acceptance from a student if something damaging comes to light and, you know, that would cast a, a, a bad light on a school.

Uh, so just make sure you know what’s out there for the student. The student should do a social media audit to make sure that nothing embarrassing is out there, nothing that’s going to, uh, hamper their chances of being admitted to college. But, you know, most admissions officers, most people don’t go out looking for those things.

Um, so I think it’s just as important to say, perhaps more important to say that social media is a big, uh, conduit for information for students and perspective students. And it’s a great way for them to, you know, converse with a college, um, talk with the admissions office, find out what it’s like at that particular college, demonstrate interest.

It’s a great way to open those communications. And of [00:15:00] course, as I mentioned, the cost of college. It does continue to go up. And because there are so many colleges that, um, have a high sticker price, uh, especially in our area of, of Massachusetts or New England or Northeast, really in general, cost is a factor when people are beginning to look at colleges.

That’s always been the case. It’s just more of a case now. So what we recommend, uh, two things actually. Number one, don’t let a high sticker price dissuade you from applying to a college, um, because there is financial aid available and you know the sticker price. Most families are not going to pay the full sticker price.

Most families are eligible for some level of financial aid. So apply if that’s the school you wanna apply to, or if it’s a school you want to apply to, apply for financial aid, see what you get. Um, however, there should be a range of different prices reflected in [00:16:00] your college list. The list of colleges that you’re applying to should have, you know, some schools that you are confident that you can afford.

Some schools that are, you know, maybe you can. And then some schools that you would need to get a good financial aid offer to apply to. So you have choices. And I would say that just like an academic list where you have lists that, um, colleges that you are pretty sure you’ll be admitted to ones that are 50 50 and ones that are a bit of a reach, um, you should really put a lot of work into those ones.

At the lower cost end, just like you should put a lot of work into the ones that are, um, you’re like likely to be admitted to those schools just because you want to. If you do have to go and you do, if you do have to make that choice, you wanna go to a school that you actually want to be at. So, um, you know, don’t, don’t sort of just throw colleges on their willy-nilly.

Um, [00:17:00] there are more test optional schools than there used to be. And what that means is that you used to have to sort of always take the SAT or a CT and submit your scores as part of your application. Uh, many colleges have gone test optional in recent years. Uh, they were starting to before the pandemic pandemic when the pandemic hit and people couldn’t li literally could not go and take the test a lot when, uh, test optional.

Um, so that means you don’t have to submit your test scores if your test scores are really good. You can. Uh, and if it’s gonna again, um, sort of buttress your case to be admitted, send them. Um, if not, you don’t have to do that. If you’re not a good tester or not test taker, um, you don’t have to do that at a test optional school.

So this is something that you can check at a particular college. Do they require SATs or acts? Are they test optional? The only other thing I’ll say is if they are test optional, um, the weight that they were going to put on your SAT [00:18:00] score in the application will have to go somewhere else. So your GPA, for example, may be more important than it would’ve otherwise been if you don’t include an SAT or at a CT score because, um, you know, they, they don’t have that to look at.

They just have the GPA and, and the other parts of the application. Um, and of course, you know, since colleges are getting more applications from students, um. Especially ones at, at test optional schools, they are being more selective. So colleges are, uh, certain colleges are getting more selective, making it more difficult to be admitted.

And another thing that we’re seeing is longer wait lists. So, um, the number of schools putting students on wait lists has tended to to increase. Um, and more students are being put on wait lists. And so it’s a tough position to be in if you’re waitlisted and you want to attend that school that you’re been waitlisted at.

But just know that, um, it doesn’t mean you’re not [00:19:00] admitted there. Uh, you can let the college know that you still want to be considered and you can still kind of make your case to that college. Um, but just know that this is something that is happening to more students, that they’re being put on wait lists.

And sometimes if you’re on a wait list. You just might not hear back from a college. So that’s something you need to know as well. So what we do recommend is that people make other plans, uh, if they’re waitlisted at, at their top choice schools, and maybe it will work out, but you don’t wanna be, um, without a school when you have to put a deposit down.

So those are kind of the high level trends that we’re seeing in college admissions and have been over the past few years to give you an idea of sort of the lay of the land. Um, you know, the first part in this whole process when you’re thinking about colleges is trying to find out what colleges you may want to go to or what colleges your student of course, may wanna go to.

And there are a lot of tools to [00:20:00] do that nowadays. Again, I’m 47, so when I was in high school, we sat in the. Guidance counselor’s office had those enormous phone book type things, and he is just leafed through books. It sounds amazing even to me, but that’s, that’s kind of what we had. Of course it’s different now.

There’s a lot of online tools that you can look at. I think the problem actually is that there’s maybe a little bit too much information you can feel overwhelmed. So we’re gonna talk about a couple of different, um, tools that you can use to kind of get started. Um, the first one is College Navigator.

That’s the image right there on, on the right that you see. And it’s a federal tool. It’s run through the National Center for Education Statistics. And, um, it is a really exhaustive sort of trove of information about. All the colleges in the US right? Um, and that’s great. It has all sorts of information, really a [00:21:00] ton of information.

You can search schools, you can save your searches. You can sort of find out all sorts of information. You can search by area, you can search by um, degree, you can search by institution types. I dunno if you see here, but it says, you know, you can search, you can check off public schools, private, nonprofit, private for-profit, four year, two year, et cetera.

You can search by majors, you can search by zip code, you can search by state and save your searches. They have all kinds of information, class size, male to female ratio degrees, um, anything you can think of. It’s all there on college navigator. But again, it’s a lot of information and it kinda looks like a site with just a lot of information.

It has looked the same for a really long time. Um, so, uh, it’s a great site, but it’s, it’s very heavy on. Text and information. So, but you know, it’s a good place to start. The other place you can start is College Scorecard. College [00:22:00] Scorecard is a newer site from the federal government and it, what it aims to do is to sort of provide the same function in terms of search as college navigator.

So you can search area, you can search zip code, you can search major, you can search types of public or private or religious, et cetera, size. Um, you can do all that stuff and you know, it will filter your search and get back to you with some information. But the information that they have and the way that they have laid it out, it’s supposed to be so parents and students and families together can.

Make a determination as to whether or not a particular college is a good investment. And we’re gonna be talking about this in a minute. So, um, you know, is this a good financial investment for the family? So the information that it will return is things like, um, [00:23:00] size. So if I, if I’m looking at a particular, actually I think I have it.

Oh, I don’t, I’m sorry. I thought I had a, a, a image of it. Uh, but they’ll give you the size, the type, the, um, whether it’s, you know, public or private, uh, if it’s urban, if it’s rural, if it’s suburban, and then they’ll give you the size and they will give you, um, a couple of important figures. Number one, the graduation rate.

So how well does this college do graduating the students that it, that enroll in it? Um. The second is the average price. So again, that’s price after financial aid. Uh, so there’s a sticker price and then there the price that families actually pay. And we’ll get it more into that in a few minutes. Um, but what is the average family pay at this particular college?

And then what is the average salary [00:24:00] 10 years after enrolling? Uh, so again, looking at those things, trying to make a decision as to whether or not this college is good. If my student goes there, what’s the chances they’re going to graduate and how well will they do once they do? So, um, are, is this college a good investment?

So just things to give you an idea. And of course, uh, another great resource to begin the college search is MEFA Pathway. This is MEFA a’s college and career portal. And this is something that Aleah works very intimately with and, and can tell you a lot more about it than I can. But, um, but essentially it is for students beginning in middle school and all the way through high school where they can begin this search.

So students in middle school start by doing quizzes and playing games and sort of identifying their skills and their interests and what they may want to do for a career and what they may want to study. And so they can sort of do that and learn about themselves as they [00:25:00] go, excuse me, through high school.

Um, you know, you can continue to use it as a student just at home, um, or. Certain schools and school districts use it within the schools themselves and are able to sort of keep track of student courses that they’re choosing. Um, they can search for colleges, they can search for scholarships, they can get financial aid and scholarship information.

They can create resume, they can search for careers. They can line those up with their, uh, college interest in colleges, um, and all sorts of things that can be done on MEFA pathway. Uh, so free college and career planning tool for students in grades six through 12. Um, so that’s Mefa Pathway. You can see here, that’s our, our, our website with, with the governor and her support there.

So, uh, definitely wanna check that out. Now when you’re looking at particular [00:26:00] colleges, how can you tell which colleges you may. Be interested in, um, what are the factors to consider when you’re looking at colleges? And so again, me with my big book, flip To California, flip to Hawaii, flip to Florida, I didn’t end up going anywhere near there.

I stayed in Boston. But you know, that’s the first thing I do. And that’s kind of, you know, not too far from where students begin typically, but the important things to consider is institution size and location, right? So, are you comfortable at a big school or at a smaller school, at a medium sized school?

Um, do you want to go far away? Do you wanna go someplace sunny? Do you wanna go to a city? Do you like being in a big city? Do you like being, um, you know, in the woods somewhere? Do you like a, a traditional sort of very collegiate atmosphere? Do you not? Um, and this is, you know, can be hard for students to figure out because for instance.

I wouldn’t know. I mean, when I was in high [00:27:00] school, I didn’t know if I went to a big high school or a small high school. Seemed big to me, but I didn’t know. So college visits can be a really good thing. Um, and, and the answer might not be, I like this one and not this one. It may be that, that a lot of different things can fit.

Um. But again, you know, I remember going to, my brother was a year older than I, and he went to Syracuse University. So I remember going up to see him at Syracuse and I thought, this is not for me, because I wanted to be in a city. I wanted to be surrounded by things that were not the college that I was going to.

And so that’s how I learned that that’s what I wanted to do. I wanted to be in the city and I wanted to go to that type of a college. So, you know, that, that’s one of the first things that I think students have in mind. What type of environment do I want to be in? And do I wanna be close to home or do I wanna be far away from home?

Um, academic fit is a really important one. So, you know, is this a college that you’re going to be [00:28:00] able to succeed at academically? If you go to every college’s website, they will have the, um. The sort of profile of students that they admit, and there’ll be a range of GPAs and possibly SAT scores. So you wanna take a look at those and sort of assess where your likely schools are to be admitted, where your 50 50 schools are and where your reach schools are, um, intended major, of course, if you are lucky enough to know what you wanna major in and know what you wanna do by the time that you’re, uh, applying to colleges, uh, how well does this college fit your intended career path learning style?

Are you happy with lectures? You know, uh, 200 students sitting in a lecture hall? Do you like smaller classes? Do you like project-based learning? Uh, all sorts of different learning styles when it comes to colleges. Campus culture is really important. So, um, what type of campus is [00:29:00] this? Is this a. Really big sports school.

Again, like Syracuse, is it an art school with a lot of sort of artistic minded students? Is it a very political school? Is it, uh, a very sort of, uh, academic school? Is it maybe an engineering school or, or science-based school? So these types of things are important. Um, activities, if students have activities that they want to continue in college that they’ve been doing in high school for sports, for example, or other types of social activities.

Um, the availability of study abroad programs. So something that you can inquire at the admissions office about. There’ll be, you know, sort of flaunting those programs. Um, again, going back to that career path, uh, most colleges have a, uh, career and internship program or, or sort of continuing, uh, program that way.

Uh, how is that for your intended career choice? And then finally, affordability. So these are all things that you want to consider when looking at colleges.[00:30:00]

Okay, now we get to the cost, right? So we know what college is, is, uh, is an an investment that, you know, you people who graduate from college tend to earn more than those who don’t. Um, so that’s great, but of course there’s a cost to that. And so a lot of people, um, understandably worry about the cost of college.

And it’s very common, uh, to see every sort of summer what the most expensive college tuition, price, or, or cost of attendance is in your area. So it happens every year. I think this year we have crossed the first $100,000, uh, a year college, uh, in our area. And, um, you know, people definitely hear that and it stays with them.

So that’s understood that colleges or at least can be. Uh, expensive, right? Very expensive. But what isn’t as understood [00:31:00] is, um, you know, that’s not representative of every college. There are lots of different types of colleges and they all have different costs associated with them. And this is even before financial aid gets, um, granted.

So to let you know, those sticker prices that you hear, like the one I just said, about a hundred thousand dollars a year, those the most expensive yearly tuitions typically belong to private four year colleges. And so this graph that you see in front of you is from the college board. They’re the organization that runs the SAT and the AP programs, but they also do research, and this is from trends in college pricing.

This is something that they put out. It’s a national, um, survey of college prices. And so this is from the year 2025. So the most recent one. And so I wanna start at the bottom here, and that is your private nonprofit, four year cost for an [00:32:00] on-campus student. So those are the most, typically the most expensive colleges by type.

And you can see here, when I’m talking about cost of attendance, I’m talking about not just tuition. That dark blue bar section, there is tuition. Um, that’s national average, $45,000. That light blue is food and housing. So if you’re a commuter student, you won’t be paying that. But if you’re living on campus, that’s the average of how much that costs.

The other associated costs, books and supplies, transportation to and from college, and then other sort of living expenses throughout the year. Um, so all of that together is what’s called the cost of attendance, and that again, is the national average. For one year of a private nonprofit, four year college for a student living on campus, 65,470.

National average, meaning in our neck of the woods in [00:33:00] Massachusetts, in New England, in the Northeast private nonprofit, CO four year colleges are going to be more, on average, more expensive, a little bit more expensive than that. Um, okay, so that’s the private, but there are also public colleges, as I mentioned earlier, right?

So if you go to a public college or university in the state that you live in, you pay a discounted tuition. So I’m gonna skip that third one. Go right up to the second one. That’s the public four year college for an in-state resident who’s living on campus. And already you can see the national average is less than half.

And just in terms of pure cost, uh, less than half of a private nonprofit, four year college. And, you know, in Massachusetts we may be a bit higher than this as well, but I think we’re probably closer to the National Average Republic. Um, I’m not sure I, I, I believe that’s true, but, um, if you look at that, that’s 11,950 for tuition, 13,900 for room and board.[00:34:00]

Uh, and then the other cost, they total up to 30,990. Now if you go to a public college or university outside of the state that you reside in, you lose that in-state tuition discount. And that’s that second number from the bottom there. So that’s 50,920, still less expensive than the private, but you know, you, you lose the in-state tuition.

Uh, and then of course, the least expensive options are the public two year colleges or community colleges. Um, this has the cost here of 21,320 for everything. Um. Altogether that may be so nationally. Um, again, Massachusetts, uh, actually, you know, I, I think that these are less, well, they’re less expensive in Massachusetts because first of all, there aren’t any.

Um, I believe all of the community colleges in Massachusetts are commuter colleges, so you’re not paying room and board there. And then there are also free community college programs in Massachusetts. So things like mass, uh, [00:35:00] educate and, uh, mass connect or mass reconnect, uh, where many students can go.

Most students really can, can go to a community college tuition and fee free. So that’s a, an amazing, it just makes it definitely, you know, the least expensive, uh, option for many people. So lots of different types of colleges, lots of different costs associated with it. It’s not this big monolithic cost of college costs 70, 80, $90,000 a year.

The other thing, the other really big shoe on that to drop that a lot of people don’t think about is financial aid. So as it’s very easy to say, okay, college is very expensive, but what’s not as easy to understand is most families aren’t going to be paying that full sticker price. So the question really is how much financial aid are you going to be eligible for, and how much financial aid will you get?

And that’s not gonna be known for sure until you’re applying to colleges and you’re filling out your financial aid forms and you get your financial aid [00:36:00] offers back from colleges. But there is a way that you can sort of estimate now and see what you might be on, you know, responsible for to pay at these colleges after financial aid.

And so, um, there’s a couple of different ways. First one is through an SAI calculator. SAI is something called it. It stands for Student Aid Index. And what that means is that is a number that the financial aid formulas calculate. You put in all of your information, uh, family size, parent income, student income, parent assets, student assets, all that stuff.

It comes out with this number, the Student Aid Index. And what that is is a dollar amount that the form calculates that you are responsible for as a family. So, um, you can use an SAI calculator on mefa.org, um, and, and do that for the federal [00:37:00] methodology and institutional methodology and get a good idea of what your student aid index is.

Now, that’s not necessarily the amount that you’re going to pay. If the formula calculates that your student aid index is $5,000, it is the most natural thing in the world to assume, oh, well I’m gonna pay $5,000 then for college. That’s unfortunately not it. What that means is that, uh, that’s at least the amount that you’re going to pay.

So basically the, the financial aid formula works if. A college is $20,000 and your student aid index is 5,000. They take that 5,000, subtract it from the 20,000, and then whatever’s left. So the $15,000 is what you’re eligible to receive in fin need-based financial aid from a college. Um, so a low SAI is good, but unfortunately it doesn’t mean that that is the, the number that you’re going to get if just ’cause you’re eligible for $15,000 doesn’t mean you’re going to get all $15,000.

[00:38:00] It’s up to federal and state government and the colleges to, to grant you financial aid. You may get up to that 15,000, you may not. Um, so. It’s, it’s good to know your SAI if you want to take it a step further and see what you’re actually likely to get for a financial aid offer at a college. Every college is required to have a net price calculator on their website.

And, uh, every nonprofit college is required to have one. And so what that will do is it works in a very similar way to the SAI calculator. It should only take you about five minutes to do either one of them. You put in your income, you put in your assets, et cetera. Um, and it should come up with a, a sample financial aid offer at that college based on the information that you put in and your resulting balance.

It’s only an estimate. Um, and so, you know, it’s not set in stone and it’s only as accurate, of course, as the information that you put into it. But I think, you know, generally speaking, if you wanna get an idea of what you might be eligible for, for aid and what you might be responsible [00:39:00] for after aid at a particular college, net price calculators are a, are a good place to start.

Also a college navigator and college scorecard can help you with these questions. MEFA has a college cost projector. So if you have a student who’s on the younger side and you wanna know how much tuition at a particular type of college may be based on the rate of increase over the past years, we’ll show you that.

But it just be aware. That’s before financial aid. So if you see a really big number, don’t panic. It’s before financial aid. Here’s our, we had it. Here’s our college scorecard. Uh, slide. So you can see here what I talked about earlier in terms of college scorecard. Uh, we’ve done a search, let’s say, and come up with UMass Boston, and this is what it tells us about UMass Boston.

It shows us where it is, shows it’s a four year public college in a city. It’s a medium sized institution. So 11,848, uh, 57% graduation rate. Uh, and the average annual cost. So the average [00:40:00] cost to, to, uh, the student here or family here is 18,282. That’s after aid. And you may be on one side of that or the other.

That’s the average cost. And remember, you can go and do net price calculator on UMass Boston’s site and the median earnings 10 years after enrollment, so, which you put at about five years after graduation is 65,865. Uh, and I believe that, you know, it used to be that they used to just sort of put it as a monolith like that for schools, but I think you may be able to divide, sort of drill down by program on that.

But I’m not, I’m not a hundred percent sure I know a, if you know that or not. Uh, if you do, just let me know. But, um, but this is again, to show you, sort of give you an idea if this college is a good financial investment, uh, as a family. And here is the net price calculator. So you can see here, this is from Framingham State University.[00:41:00]

This is what it would look like after you put in all of that information. Your parent income, parent assets, student income, student assets, all that stuff. Some colleges may put, uh, may have customized their net price calculator to include things like asking you about a GPA or SAT scores to calculate if they have any merit scholarships that you might be eligible for.

Some colleges may not do that, so there’s a bit of variance there. And in terms of, uh, college net price calculators, I’m using more sort of. Uniform, kind of bare bones one and some, some really customized. But you can see here, it gives you the estimated net price. The amount you would pay as a family is 15,340 and it breaks down those sort of fees.

So tuition and fees, 11,920, food and housing, 15,000 books, transportation, miscellaneous expenses. And then it starts totalling [00:42:00] up the aid, right? So you have a $3,000 Merit, merit scholarship and a FI $13,400 need-based grant. Um, so, and it shows you the resulting balance. So a really good tool to use, I think net price calculators.

I’ll tell you that I used one when my wife went back to school. It’s about 10 years ago now. Um, and it ended up being. Pretty accurate to what we ended up paying. So, um, you know, if you’re not sure, go to different schools, go to different types of schools, get a good range, see what you may be eligible for at all different types of colleges.

Do we have any questions that, um, you know, you think would be good to answer? Eula? Are we. Okay. Just kind of talking. So

Apelila Joseph: no questions right now. Okay,

Jonathan Hughes: thanks. Um, wanted to highlight a couple of different options in Massachusetts. I mentioned a few already. Um, I’ll, I’ll go ahead and talk about this is Mass Educate.

This is a program that covers tuition and fee costs for [00:43:00] all community college students in Massachusetts. Uh, they need to file a fafsa, they need to, you know, they need to not have had a, a degree before now. Um, but it’s, that’s the intent is to, to cover costs, uh, tuition and fee at, for, for all students in Massachusetts, almost all students in Massachusetts.

But that’s a great development. Um, so I wanted to mention that one first since I talked about it earlier. Um, the Mass Transfer program is a, a program that’s been around for a long time. We’ve talked about it whenever we can. It’s basically, and it can be used in conjunction with the Mass Educate program.

So essentially it’s. Was designed for students to be able to earn a four year degree at a public college or university in Massachusetts with as little debt as possible. And the way it starts is you start at a two year community college and earn your associate degree there. And through the mass transfer program, you know, you can sort of take all of those [00:44:00] credits and they can be honored at a four year public college or university in Massachusetts.

Then you can go, you know, essentially, uh. Get your four year degree after only two years. This is a tiered program, so it has benefits, uh, sort of at each tier. Um, it, the second tier is I think you can be a guaranteed admission to your four year particular, uh, to your four year college or university.

There’s a tuition freeze. The next tier up, you can actually get tuition rebated to you up 15% of your tuition rebated to you if you maintain your 3.0 GPA through your program. Um, so it’s just a, a really great program to use, uh, and to graduate with those little debt as possible in four years. And as I said, you can use your mass educate free, um, community college to start that off with use mass transfer to transfer those credits into a four year college and then essentially, um, you know, get that four year degree for two years of the cost.

[00:45:00] Tuition break is another program that is a regional program. It’s not a Massachusetts specific, it’s specific to New England. It’s, it’s run through the New England Board of Higher Education. And this program works in, in this way. Let’s say that you want to, you live in Massachusetts, you want to attend a public college or university in Massachusetts to keep your costs low as many students do.

But let’s say you wanted to study a major that was not. Offered at a public college or university in Massachusetts, but let’s say it was in Vermont or New Hampshire, uh, or Maine, you know, at a public college there, well then you could study that particular program in that college for a reduced rate. And you don’t even have to do anything for that program.

They’ll know that you’re, you’re eligible for it and apply for it and apply it to your, your bill. So that is the tuition break program. And then the mass tuition equity law is something that allows. Uh, some undocumented and immigrant students to receive [00:46:00] Massachusetts state financial aid and pay in-state tuition rates.

And so there, there’s a couple of caveats there to be eligible. Um, but that’s run through the, um, office of Student Financial Assistance and, um, it is called the, there’s a form associated with that called the sfa. So if you can’t file a FAFSA, because only US citizens or permanent residents can file that under certain circumstances, you would be eligible to file a SFA and be eligible for some in-state aid programs and in-state tuition.

Now I’ve been talking about financial aid a lot lately and, um. This is something that we have conversations a lot about internally is how do we talk about financial aid so people understand what financial aid actually is. At a very simple level, financial aid is just money to help students pay for college, and it comes in three main varieties.

The first being grants and scholarships. So grants and scholarships are the best kind of financial aid because it’s gift [00:47:00] aid, it doesn’t have to be repaid, right? Grants are placed against bills or scholarships. You don’t have to pay those back. Um, so hopefully when you get to this point and you’re doing your financial aid forms, you see grants and scholarships there.

So that’s the first kind of financial aid and hopefully we all get a lot of that. The second is work study. Work study is money set aside at a college so that a student can earn it by working a job on campus throughout the year. And when you think about work study, it’s typically, you know, not a huge amount of money because it’s, it’s basically just kind of a job, right?

So again, when I went to college, I had a work study job, uh. I can’t remember what my work study award was. Surely the amounts have gone up since I was in school. But, you know, think like maybe 1500, $2,000, $2,500. Again, my wife had a work study job that allowed her to earn $500 throughout her school year, but she took it.

Um, and essentially what that is, is you, you, if you’re awarded a work study amount and you want it, [00:48:00] you have to find that work study job, apply for it, get the job, work the hours, and you’re paid in a paycheck just like any other job throughout the year. And that’s that work study amount is the amount that you can earn up to in the year.

Now I use that as kind of living money when I was at college, and I tend to think that most students do it that way, but people say, can you pay tuition with it? Sure, you can pay whatever you want with it. Um, but that is the second type of financial aid that there is. So we get grants and scholarships, work study, and then finally student loans.

And when I say student loans, I don’t mean that any loan that you might get to pay for college is an example of financial aid. The Mefa loan, as much as we like, it is not financial aid. Only one particular loan program is considered financial aid, and that is the federal direct student loan program that’s run through the federal government.

Uh, and it has benefits associated with it that other loans don’t, which make it financial aid. The first being that that pretty much, uh. Well, in many cases, um, [00:49:00] you know, people think that students, since we, again, we talk about student loans and about students graduating with, with a lot of debt, a lot of people tend to think that students can just borrow whatever amount of money they may need to pay for college.

Uh, as long as they promise to pay it back afterwards, that’s not the case. They typically need Loans typically need to be credit approved. Students typically need a co-applicant to be credit approved. These ones do not. So the federal student loans, you essentially file your federal financial aid forms and you qualify for some of these federal student loans.

And they have benefits associated with them, like generous repayment options, public service loan forgiveness. Options that are not eligible, are not available with other types of loans. So that’s the only type of loan that is considered financial aid are the federal direct student loans. So those are the three types of financial aid.

And again, just ’cause it’s something that’s not as easily understood as the college expenses. Um, there, there’s a lot of financial aid granted every year, uh, the most recent year that we have [00:50:00] numbers for $205 billion awarded to students in financial aid. There’s two ways to award that. We’ve been talking about need-based financial aid, the, the types of financial aid that they look at your income and your earnings and they go, okay, you’re eligible for this.

That’s most financial aid. You can also get merit-based financial aid. This is scholarships. These are awarded in recognition of student achievement. So think academic scholarships, athletic scholarships. These are typ typically given up by colleges. Um. You know, colleges have different practices on this, so some colleges give out a lot of merit scholarships to their students.

Some colleges don’t. Some colleges don’t give, give out any, so it’s something that you can ask a college. It’s something you can find out on their website. Do they do merit-based aid? And then, you know, you apply for financial aid every year and you’re given an award every year. And so if there’s a merit scholarship, ask the college, can I renew this from year to year or is this just the first year?

[00:51:00] And if I can renew it from year to year. What do I need to do in order to, to do that? Do I have to maintain a certain GPA? What is it? So we don’t lose that scholarship going forward, although, as I said, most financial aid is need-based. Everything that the federal government does is need-based. Most of what the states do are, are need-based as well.

And colleges also give out need-based grants. So, um, this is again, awarded on the family’s financial need as determined by the financial aid applications. And even though most aid is need-based financial aid, students still need to be making satisfactory academic progress in order to qualify from year to year.

So they wanna see that you’re moving through your program. Now after you

Apelila Joseph: do your Jonathan.

Jonathan Hughes: Yes.

Apelila Joseph: Oh, just to, sorry to interrupt you really quickly. Yeah. But we had a question come in just to clarify a little bit more. Mm-hmm. Um, will colleges give merit-based aid to students who do not otherwise qualify for financial aid?

So those [00:52:00] families who might think they’re outside of need-based aid, can you speak to that please? Yeah,

Jonathan Hughes: yeah, thank you. That’s a good question. Yes. Yeah. So typically colleges, yes, they, they, they will grant merit-based aid if that students meet, meets their requirement for merit-based aid, even if they don’t qualify for need-based aid.

And that’s important to know. So I’m glad you asked it. So, a lot of times, you know, students might do, or families might do a SAI calculator, or they may just think, you know, I make a lot of money. I’m not gonna get any financial aid. Uh, you know, you don’t know that because there is also. The, there are also these merit-based scholarships that you can qualify for from colleges and, and from other institutions as well.

So there are outside scholarships. They’re typically not given in the amount that, uh, that college scholarships are, but, um, but you can still apply for them as well and should. Thanks. Um, okay. And again, thank you for asking that question. So once we get to this [00:53:00] point where families do have a, a financial aid offer and they have a resulting balance, you know, how do they pay for college?

So we’re taking that financial aid off the table there. Once that’s applied and there is a resulting balance, there’s really only three avenues that that families can use to pay for college. The first being past income. So any savings that you may have saved up, you know, until the student goes to college or any other assets that you may be able to, to leverage.

Um, so what you have present income, so your salary. After all your other bills are paid, um, you know, if you can pay for your college bill with a month with your salary in total, that’s great. I tend to think most people, I don’t know most people, a lot of people can’t. Most people probably can’t, but even if you can’t pay the entire balance with their salary, it’s good to pay what you can.

A lot of people don’t know that colleges tend to offer interest free monthly payment plans. So you can sign up for one of these plans, [00:54:00] pay a small fee anywhere from 20 to, I don’t know, $120 or so, uh, somewhere around along those lines and sign up for this feature. And, you know, you can calculate how much you can pay every month that goes, every dollar that against tuition.

Um. So, you know, if, let’s say you can pay $200 every month over a 10 month monthly payment plan, that’s $2,000. That’s $2,000 you’re paying right off the bill. That’s $2,000. You don’t have to borrow and you’re not paying interest on, because once you’ve exhausted financial aid, your savings and your current salary, the only thing left is your future income, which is loans, right?

So again, I wanted to stress this point that students have their own loans in their own name if they’ve applied for financial aid and taken their federal student loans already for their federal student loans, and they have loan limits associated with them. So you know, that’s the amount that they can borrow in their own name and no more if there is an amount [00:55:00] that they need to borrow.

In addition to that, as there often is, those loans are going to be approved based on credit. Credit and income, and most students don’t have the credit or the income to be approved on their own without a co-applicant. Meaning, you know, somebody has to act as one. Usually the parents, although not always, and you know, if you’re on a loan as an applicant or a co-applicant, you are equally responsible with that student to repay if the, if the student is there as well.

Um, so that monthly payment is gonna be, you know, of course largely determined on, uh, how much you borrow as well as your interest rate. And so using all those other things before you get to borrowing that loan means a lower monthly payment. And that will be important not just to the student, but to, to you if you’re a co-applicant on that as well.

’cause you’re, you’re liable to pay that loan back. So, um, that is sort of. Our [00:56:00] big picture of how families do pay for college. It’s good to just not just borrow everything, but to take as much from each of these categories before you get to borrowing, uh, as you can. Just to show you the saving versus borrowing figure.

Here. This hypothetical example assumes a 7% interest rate over 10 years. That comes to us from Fidelity Investments, who manages our U Fund 5 29 program. And so let’s say we have a $10,000 college cost that we wanna meet, uh, if we’re investing again over 10 years at a 7% interest rate, to meet that $10,000, it would take us 6,096 to put away and earn that $3,000 interest.

Whereas if we borrowed 10,000, the entire cost, which you can do, uh, you would be paying back at 7% over 10 years, 3,920. So your overall cost 6,960 for saving. 13,920 for borrowing. And I know this is a hypothetical example, [00:57:00] but just to give you the idea, the idea of course, is that it’s better to save and earn the interest than it is to borrow and pay the interest.

And now we’re gonna move into our talk about savings. Um, just wanna say, you know, savings is always good. Um, I love talking about savings because, uh, it just helps. There are some myths out there that we know can stop or delay people from savings. So we want to address those right up front. The first being my savings will hurt my financial aid.

So a lot of people think that if they have, you know, let’s say in that example, $10,000 saved, that means they’re gonna, a college is gonna look at that and say, oh, okay, well then I’m not gonna give ’em this $10,000 grant or this $10,000 scholarship. That’s not how it works. Um, you know, merit based scholarships, typically they don’t have anything to do with your, uh, need based fi your how much you have saved or you know, your finances at all.

So that that won’t. Take, be taken into account that way. And even for need-based financial aid, income [00:58:00] is the biggest factor in determining your financial aid eligibility and how much you’re expected to pay for college. So, um, assets, particularly parent assets, get taken at a very, very small percentage as to what you’re actually expected to pay out of those savings, uh, to attend college.

So having that asset there to pay for college, uh, in no way comes close to, to wiping out the benefit of actually, um, you know, the, the effect on financial aid that it, that it has, doesn’t come close to wiping out the benefit of having the money. So, um. It, it just won’t, it has a very, very minimal impact on financial aid eligibility.

The second being, it’s not worth saving for college if I can’t save the entire cost. And hopefully, you know, I’ve, I’ve, I’ve gotten across now that you probably won’t be expected to pay the entire cost. You will be eligible in most cases for some level of financial aid. That, that, that, that full sticker price of a [00:59:00] college, um, is probably not the goal that you should be setting.

And even still, everything that you save is something that you don’t have to borrow. ’cause if you’re not saving, you know, how are you planning to pay for college? So your savings will help you. It’ll give you more educational options. It’ll open up different types of colleges and different types of programs that might not have been available to you without them.

Really, the biggest thing to me is it reduces or eliminates, hopefully even. But reducing is good to the need to borrow loans, um, allows the student to work less and study more. It has, again, a minimal impact on financial aid eligibility, and it will motivate your child. So if a child knows that money is being put aside for him or her for college, there have been studies on this, they’re far more likely to attend college and to graduate, no matter the amount saved.

So strategies for saving. What are some effective ways to do this? First of all, start saving [01:00:00] as early as possible. So if you haven’t started saving, now would be a good time to save. If you have started to save, continue to save and perhaps save more. I would never say it’s too late, but starting early and using time to your advantage is always good.

Start with a goal in mind, but don’t let that hang you up or delay you. In starting, we have a tool that can help you sort of try to figure out what that goal might be that you wanna have. Um, we’ll talk about it in a second, but, but again, I wouldn’t let it sort of de delay you in starting your, um, savings.

Take advantage of unexpected funds, so tax refunds, any sort of unexpected windfall that you might s see, save some or all of that in, in your college savings using automatic transfers. So, you know, having money automatically deducted from bank accounts. Um, I always tell this story, I, when my son was like eight or nine months old, I said to my wife, God, we really have to start putting money in his 5 29.

And she said, we have been doing that for [01:01:00] like the past eight months. I just didn’t know. I hadn’t seen the money. It was coming out automatically, uh, from my bank account. I just didn’t know. Uh, so we know that that’s the way that people tend to save more using automatic transfers. My favorite, get the word out and ask your family and friends to contribute this graphic here on the right is a gifting page that is set up and we’ll talk about our youth fund account.

But, um, this is Fidelity investment has set this up for, uh, the Massachusetts Youth Fund through Mefa. And this is, uh, something that you can set up if you have a u fund account for your child or your beneficiary, whoever they may be. You can put the picture of the child there, the age, the date that they should be entering college and what they wanna be.

And then you can sort of. Take that link and email that out to family and friends and they can gift directly in. Uh, we also have gift of college cards available at CVS Cumberland Farms and Stop and shop throughout Massachusetts, as well as a virtual gift card on MEFA.org. So you can give that [01:02:00] as a gift.

Um, also, you know, there are other ways to contribute. So, um, there are, you can we have programs that you can Venmo or PayPal into our, our u plan account. Again, as a program we’ll talk about, uh, or I remember I had a u fund account at 5 29. My aunt would give me a check for $25 every time I saw her. Take a picture of the check with the phone and, and mobile deposit it right in.

Very, very easy for everyone to sort of contribute. Uh, parents do not have to take this saving for college off on, on their own and, and they shouldn’t. Um, and finally, involving your child in the process, make them. Aware that you’re saving for them. I mentioned that fact earlier that if a child knows that money is being set aside for him or her, they’re much more likely to attend and to graduate college.

And you know, I always talk about this story too, but there was a, a financial aid. Uh, worker that I had talked to who said she always made her [01:03:00] daughter save half of everything she got in her college fund, uh, which was great, not only for her college fund, but also it became a habit that she just had for the rest of her life that she just saved half of everything that she got, which is amazing.

It’s something that I wish I started. Um, I see a couple of questions here, I believe. Is any you want me to take or you got ’em?

Apelila Joseph: Um, yes. So we have just a couple questions coming in about 5 29 accounts.

Jonathan Hughes: Oh good.

Apelila Joseph: So I thought these would be good to answer live.

Jonathan Hughes: Yeah.

Apelila Joseph: Um, so one question still in the vein of some of what you were talking about.

Can you just clarify a little bit? Mm-hmm. You said parent assets are only a small factor. Yeah. Financially is a 5 29 plan considered a parent asset or a student asset? And what is the impact on of a 5 29 plan on financial aid?

Jonathan Hughes: Yes. Thank you. Um, yeah, and I know I, I, I was weighing how much detail to go into there ’cause it’s tough to talk a little bit about these things.

But, um, so a a a fi a 5 29 plan is a parent asset if it’s owned by the [01:04:00] parent. Um, if it’s owned by another relative, it typically, it’s not typically considered, not considered on the fafsa. Um, so it’s not viewed at all, but that it’s, it’s, if it’s in someone’s name, they control the account. So just be aware of that.

So, um, it, but I, I can’t think of an, an instance of when a 5 29 would be a student asset, except if it’s A-A-U-G-M-A or A-U-T-M-A account in a 5 29, but a regular individual 5 29, I can’t, uh, think of when it would be a student. So basically. The percentages are his fault. The, the total, the, the most they will take of parent assets.

So they’ll, they’ll ask the parent to list all their available assets on the fafsa, which is the free application for federal student aid. And now colleges can do things differently. Colleges have another form that they may ask you to fill out and, and they can view things through their own lens.

Typically it mirrors the fafsa, but I can’t [01:05:00] speak in absolutes for, for the colleges. But, uh, so I’ll stick to the fafsa, but the FAFSA will ask the parents to list all their available assets. That’s any sort of non-retirement assets or, um, it doesn’t include retirement. Doesn’t include the value of a small family business.

Doesn’t include life insurance. Um, doesn’t include the value of your primary home, but it will include things like investments, secondary properties, um. You know, what’s in your banking, uh, your checking in and savings account the day you filed. And five 20 nines will be part of that if, if parents are on the 5 29.

So all those assets together, they will take at most 5.6% of that as to what the students, what the, what the, um, family is expected to pay. So if you have $10,000 in available assets, that’s going to increase your expected contribution by about $560. So it may impact it a little bit, uh, but certainly nowhere close to having [01:06:00] wiped out the advantage of having this $10,000 to pay for college.

So that, so that’s what I meant. Does that answer the question?

Apelila Joseph: Perfect. Thank you Jonathan.

Jonathan Hughes: Okay. Yeah.

Apelila Joseph: And then one other question about using 5 29 accounts. Mm-hmm. Can you use one to pay for study outside of the US.

Jonathan Hughes: Yes, you can if that, if that institution outside the US is eligible to take us federal funds.

And so there’s, you can google that list and there’s a list on the, on the federal FSA website that’ll show you which colleges are, so there’s lots of different ways you can use the 5 29, and I know where late, I’m sorry, I, I’m gonna try to rush through as, as quickly as I can. So we’re gonna finish talking about two Massachusetts savings options.

One of them is the U Fund 5 29. Um, so the way that program works, it’s a 5 29 plan. You put funds in, it’s invested in the market. It grows without taxes. When you take the funds out, as long as you use them for qualified educational expenses, you pay no taxes [01:07:00] on the earnings. Qualified educational expenses are tuition fees, uh, books, supplies, room and board and equipment.

This can be used at any accredited college, as I said, in in the US or. Outside the US as long as they’re set up to take us Federal funding, it can be used for, um, vocational training programs as well. It doesn’t have to be used for college, can be used for up to $20,000 in K through 12 expenses, up to $10,000 in apprenticeship programs and up to $10,000 to pay off, uh, federal, uh, student loans.

Uh, so a lot of different uses for five 20 nines and a new ruling. If you have saved and can’t use them the way you intended to, you can roll them over at least some of the, the balance into a Roth IRA retirement account for the student. So every state has a 5 29 plan. The youth fund is the Massachusetts 5 29 plan through MEFA.

It’s, uh, we’re partnered with Fidelity Investments to [01:08:00] service the accounts and handle the investments. Um, and there’s, you know, some, some of the features there, the combined account maximum being $500,000. The other program that we have is the U Plan prepaid tuition program that does not work in the, in the same way as the you fund.

It’s not a 5 29 plan. It is a prepaid tuition plan you put money in. It is not invested in the market. It’s placed in general obligation bonds that are backed by the full faith and credit of the Commonwealth. And the way that works is the minimum is $300 to, to prepay tuition. But depending on how much you actually put into the plan, you buy a percentage of this year’s tuition at each participating college and university in the U plan.

All of those colleges and universities are in Massachusetts. Um, and so let’s say you put in a thousand dollars. You’re gonna buy 10% of tuition at a college that costs $10,000 this year. Now by the time your child goes, let’s say they go to that [01:09:00] college and it’s now $20,000, well then you have 10% of 20,000 or $2,000.

So your percentage, the value of your percentage grows at the same rate that tuition grows, and you can continue to put funds in and and add to your percentage. Now obviously the question is what happens if a child doesn’t end up going to one of those colleges? If that happens, you can transfer the funds over to another beneficiary within the family, which you can also do for the U fund too, by the way, if, if the student can’t use the funds, you can transfer, transfer them over to another student.

Um, or you can always cash out and get what you put in plus the interest back. And there’s no tax penalty for doing that for the state of Massachusetts or federally. These are the participating colleges and universities in the U plan, and I’ll leave that out there for just a second. You see, there’s a good range of public and private colleges there.

E each of these programs, both of these programs that is carry an extra tax benefit from Massachusetts [01:10:00] taxpayers. Your contributions to the you plan and you fund are state tax deductible up to $2,000 of your, uh, contributions for married filers filing jointly and up to $1,000 for individual filers. And that limit is per filer, not per account.

And then finally, I just kind of wanna close up here and talk about NIFA’s college planning tool. This is the tool that I was mentioning that can give you an idea of what your target may be or maybe should be, um, for savings. So, you know, it’s not unusual that I would get a call from somebody who has a newborn child and they say, I wanna make sure that college is paid for, you know, my daughter, by the time she gets to college, how much do I need to pay every month?

A lot of things we don’t know, right? We don’t know what college she’s going to, we don’t know what kind of financial age you’re eligible for, et cetera. So these things. Are important to now, and this is something that you can do on this site here. You can, you can create a profile. You can search colleges, save colleges.

What [01:11:00] this will do will sort of chart out the projected increase of tuition between now and when the child goes to college. So you can see in this example here, we have a college that is slated to be about 59,995 by the time the child goes to that college. If you put your income in, they’ll assess your eligibility for gift aid.

So how much financial aid in the gift aid way are you going to be eligible for? And then based on your current level of saving and the market sort of performance, and you can adjust that, what are you likely to have saved by the time you get there? So you can see here cost is about 60,000 gift aid, about $7,000, and you’ll have about $32,000 to spend by the time you’re going to that college.

So you’re looking at a 20,000, almost $21,000 shortfall. So you’ll be able to tell at this point, I need to start saving more money. I need to [01:12:00] look at some other schools, or I need to start applying for scholarships. And you can do all of those things here. Okay? Now, uh, some things that you can do between now and.

The time your child goes to college, sign up for me for emails. We’ll send you one or two a month based on the age of your, with information based on the age of your child that’s gonna be relevant to you. If you haven’t started saving, start saving. If you have started saving, take a look at how much you’re saving every month and see if you can add to that.

You can of course view all of our webinars by clicking on that QR code there and visiting MEFA.org/save. Close As always, with our social media information, we’re posting all sorts of information here. We’re posting scholarship information. There’s our Facebook, Instagram, X, LinkedIn, YouTube, and podcast.

If there’s any more questions, I see one,

Apelila Joseph: um, just one question, Jonathan, I actually can’t answer. So do you happen to know the average amount saved in a 5 29 account? [01:13:00]

Jonathan Hughes: I don’t, I really don’t. Uh, I think it depends, you know, every state has their, their five 20 nines and I, I, I don’t know if they vary per se, but I even in ours, I’m not sure.

I’m sure that there’s information that we can get somewhere. I’ll tell you in my very anecdotal experience, what I hear mostly from people who call me is that like a lot of people call me, and this is, again, just take this as my experience. It’s not, but, um, a lot of people are like, I have enough for the first year or the first year and a little bit more.

Um, but, you know, other, other people have less. Other people have more, but, but yeah, I don’t know the exact amount, but if you’ve written, if you want, we can see if we can figure it out.

Apelila Joseph: Thank you.

Jonathan Hughes: Thank you. Well, thank you everybody. I’m sorry I ran long. Um, but um, I thank you for your attention and for your, for your questions.

And um, if you have anything else, you know MFA’s always here. Thank you, Aila.

Apelila Joseph: You’re welcome.