Guidance Counselor’s Advice to Parents

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These articles were prepared for the July 4, 2001 edition of U.S.

1 Newspaper. All rights reserved.

Financial Aid: What the CPAs Say

Applying for college financial aid can be daunting —

not only for parents and their children, but financial professionals

as well. More and more parents are looking for professional advice

to navigate the pitfalls of educational tax laws and financial aid

rules to maximize possible benefits. Meanwhile, CPAs and financial

planners are looking to educate themselves about college funding as

a way to earn premium fees for providing comprehensive advice to their


College finance expert Rick Darvis is a CPA who works with other


to help them take advantage of the growing market for financial aid

planning. "Have you ever wished that you could have bought a


of Microsoft stock back in the early ’80s? If you did, life would

be pretty easy today," says Darvis in an invitation to


to attend his conference. "If you’re in the financial services

industry, a similar opportunity is staring you right in the face."

Darvis speaks on "College Financial Aid: Planning at Any Income

Level" on Wednesday, July 11, at 8 a.m. at Mayfair Farms in West

Orange. The seminar, aimed at finance professionals, is sponsored

by the New Jersey Society of CPAs. Cost: $245. Call 973-226-4494.

The principal of a Plentywood, Montana-based accounting firm that

bears his name, Darvis gives seminars nation-wide in conjunction with

College Funding Incorporated (CFI), also based in Montana. He is the

author of "College Financial Aid — the Best Kept Secret in

America," "College SOLUTION," and "Financial Aid


He is also the developer of College Procedures Software, and the


of College QuickPlan Software.

Darvis has been giving seminars for about five years, and finds that

many of the professionals come for information on their own children

and then realize it’s something they can help their clients out with

as well. "There’s a lot of seminars out there, like estate and

retirement planning. Those others are a dime a dozen. This is an


area. Especially in Northeast where you can’t get a private school

education for less than $30,000. People are desperate for help."

Darvis says he went to college at a time when costs were much less

and the need for financial aid was not as pressing. He attended


State University for two years and the University of Montana for three

years, graduating in 1974 with a bachelor’s degree accounting.


then it cost much less to go to college," says Darvis. "In

my first two years, I took out a $15,000 student loan and had money

left in the bank."

Darvis says the demand for college financial planning has grown


On the CFI web site, Darvis tells professionals: "The very topic

of college will help you start up conversations and develop


with clients who might totally ignore your sales pitch for


Few people can ignore an opportunity to find out how to reduce today’s

high cost of college."

The so-called "grandparent market" is another area to be


"More grandparents than ever are providing assistance in the


of their grandchildren’s education," Darvis says on the CFI Web

site. "Do you know how to help them make these gifts and reduce

their income and estate taxes, without jeopardizing the student’s

opportunity to receive grants, scholarships and tuition discounts?

The grandparent market is a financial advisor’s dream, because it’s

the grandparents who hold the majority of wealth in this country


According to Darvis, there are two types of clients who can benefit

from financial aid planning — the financial aid market and the

affluent market.

The financial aid market consists of families with incomes

under $70,000 — perfect for fee-based tax accountants and


education consultants. "Tax accountants are more adapted to


form filing," Darvis explains. "Their bread and butter


is providing a commodity service. Their `perfect’ client is the W-2

wage-earning family with a standard IRS 1040 schedule. Accountants

can build their financial aid service and fees into their tax


The affluent market encompasses families with incomes

over $70,000 and assets over $200,000. This group, Darvis says, fits

the financial planning and investment services field best because

their livelihood depends on developing relationships with clients

who have assets. "The average financial aid client has few assets,

which is the reason they are desperately searching for financial aid.

When you deal with clients who do not qualify for financial aid, your

probability of success in the financial planning and investment


industry increases dramatically." He adds that if the client is

in the 50 percent tax bracket (federal, state, and Social Security),

every additional $1,000 in tax write-offs equates to a $500 increase

in cash flow for college, which is comparable to a $500 scholarship.

"Although there are limited financial aid opportunities for the

affluent family, there are many little-known tax strategies that we

have specifically designed for education, which can provide the


family with additional cash flow for college expenses," he says.

He says his seminar works to dispel many of the college financial

aid myths, such as: "I earn too much income to qualify,"


can’t afford to send my child to an expensive private college,"

"Scholarships are only for the good students," and


aid is only loans and work-study."

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Guidance Counselor’s Advice to Parents

For families not interested in the services of a finance

professional such as Rick Darvis, profiled in the story above, there

are other options. One is as easy as making a phone call to the


school district’s guidance department.

The West Windsor-Plainsboro School District, where 95 percent of the

graduating seniors go on to higher education, conducts a seminar


a financial expert every January. One of the tools offered to parents

is a financial aid handbook assembled by David Prutow, director

of guidance at WW-P High School North. The handbook details various

college financial aid options.

Prutow, 47, holds a bachelor’s in social studies education from the

University of Delaware and a master’s in counseling psychology from

Rider. Prutow funded his education through a combination of limited

financial aid, loans obtained by his parents, student loans, and


from a part-time job. "I was like most kids, who lean on their

parents and are naive about the process," he says. "But back

then, it was less complicated. The process now has just gone off the


"We need to be on the cutting edge with the type of knowledge

we provide," Prutow adds. "The college admissions game changes

every year and, you really have to keep your hands on the pulse of


Prutow’s handbook begins with a list of tips for parents pursuing

funding and also explains financial aid eligibility and the types

of aid available, including grants, local awards, scholarships, loans,

and work study. Also outlined are the steps of the financial aid


and major financial aid programs. Tips offered by Prutow include:

Get your application in early . The Free Application for

Federal Student Aid (FAFSA) should be sent in as soon as possible

after Jan. 1 of the year the student is entering college.

Accuracy counts . Make sure you do not make any errors

when filling out your financial aid form.

Keep an close eye on where funds reside . Make sure your

high school senior does not have any savings in his or her name. The

formula that determines need expects a student to spend 35 percent

on a year at college, but takes only 12 percent of parent’s assets.

No direct gifts from grandma and grandpa . Money from


should be paid in the student’s name directly to the college. This

avoids gift tax liability.

Income doesn’t matter . Apply for financial aid no matter

what your income is. You never know when your family’s financial


might change (job loss, death in family). You must have a FAFSA on

file if you need to have aid eligibility reconsidered. Also, being

rejected for federal aid is sometimes a prerequisite for private


Everyone should apply. Any student can qualify for aid

— at a minimum, an unsubsidized Stafford loan.

Apply everywhere . Don’t be afraid to apply to expensive

schools — many students do not pay full price.

Housing value may not matter . Home equity is not a factor

when state and federal aid are considered. It may be an issue when

private institutional aid is sought.

Less money will come out of savings . Colleges expect you

to spend 5 percent of your savings on tuition, but the percentage

is larger for salaries. A rough estimate — expect to spend 10

to 20 percent of annual salary on tuition and fees.

"No" is not always final . Decisions of financial

aid officers can be appealed, especially if your financial need has


Private schools may have different requirements . Some

private institutions use a form called the CSS Financial Aid Profile.

File the "profile" form as soon as possible, even if only

one school requires it.

It doesn’t matter where the child lives or on whose tax


he or she is a dependent. For government aid programs, only the

custodial parent must report income and assets. Some colleges will

insist that both divorced parents report their incomes.

Don’t dodge the draft . If you are applying for a son,

be sure that he has registered for the Selective Service since he

will not be eligible for any federal aid programs if he has not done

so by the age of 18.

"If you are not afraid of doing the grunt work, there is

much untapped aid available," says Prutow. "Check various

scholarship publications and Internet search services. Utilize school

resources (counselors, publications, computer fund finders and


planners). Periodically check for local scholarship information."

Prutow also says that the Internet continues to develop new and


information opportunities including scholarship search services.


include the New Jersey Education Assistance Authority at,

and a directory of colleges at

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