Vuefolio seminar for Intuit November 2015

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SAVING SMART FOR COLLEGE

Intuit, Mountain ViewNovember 30, 2015

Oindrila Ray

[email protected]

Vuefolio is a SEC Registered Investment Adviser

Do not distribute without permission

mailto:[email protected]

www.vuefolio.com

Disclaimers


• All materials, graphs and analysis are solely for educational purposes.

• This is not a pitch for any investment product.

• Please do not consider this as financial or investment advice.

• We are not tax lawyers or accountants.

• We do not represent nor endorse any college, educational institution or

any funds that may be mentioned in the presentation.

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Content


• Cost of Attending College

• Financial Aid

• Saving for College

• 529 Plans

• Smart Planning for College

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College Desirability, Aspiration and Expense


College Rankings

Acceptance Rates

Financial Aid

Elite Private

Private Colleges

Public Colleges/Community College

Flagship

Public

Colleges

Alumni Network

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Cost of

Attending College

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Average Cost of Attending College


Excludes books/supplies/transportation costs.

Includes room and board.Data: College Board and Dept. of Education

Analysis: Vuefolio

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Cost of Attending College at UC


Source: Data from UCOP

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Public

Flagship Public

Private

Elite Private

20,000 30,000 40,000 50,000 60,000 70,000 80,000

Out-of-State Range

Current Annual Cost of Attendance


UCs $34,000

Cal States $22,000


NET PRICE

“personalized prices”

Families pay

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Your Price Tag for College


Family Income# of kids attending college

Non Retirement Assets

Financial Aid available

Your “Actual Cost of College” or NET PRICE depends on:

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Paying for College


Source: Sallie Mae “How America pays for College 2014

Parents

Student Loans

Financial Aid


FINANCIAL AID

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Financial Aid


Need based Aid

Merit Aid

Athletic Scholarships

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Financial Aid


Federal Grants:

Pell Grants

State Grants:

Cal GrantsInstitutional Aid

Federal Student Loans

Sources of Need based Aid

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Ex: Harvard vs. UC Berkeley estimated 2014-15 cost


Net Cost: Harvard

Aid: Harvard

Net Cost: UC Berkeley

Aid: UC Berkeley

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000E

sti

mate

d C

ost/

Aid

Family Annual Income

Typical California family with one child in college.

Besides income, the cost of attendance will also depend upon the asset level of the family.

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Financial Aid



Merit Aid from

Universities

External Scholarships

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Financial Aid


“Our scholarships are based entirely on need, not merit”

“Our financial aid program is need-based, meaning that

all aid eligibility is determined by your family’s financial

circumstances.”

“Families with incomes at higher levels (typically up to

$200,000) may also qualify for assistance, especially if

more than one family member is enrolled in college”

“Financial aid is awarded based on need only”

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Financial Aid


Student Profile

Family Income

College Brand Name

Enrollment

Rates

Tuition

Group

Public

vs.

Private

Merit Aid:

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Financial Aid


Merit Aid:< 1%

students

10-40% students

70% of students

Out of Pocket Cost

for Parents

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Financial Aid


Impact of External Scholarships

Does not reduce parental contribution

Unless parent is covering 100% of costs.

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Financial Aid


Grant AidStudent Loans

Impact of External Scholarships



High Income:

60 -100 %

Middle Income:

25 – 50%Low Income:

0 - 20%

Parent’s share of College Costs


SAVE

for

COLLEGE


SAVING FOR COLLEGE:

LONG TERM

IMMEDIATE

PAYING FOR COLLEGE:

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The strategic way to pay for college


Financial Aid Eligibility

Aid beyond first year

Tax efficient Investments

Sufficient Income

Student Loans

SiblingsRetirement

Savings status

Home Equity

Parental Loan Impact

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Saving for College


529 Plans Investment/ Savings Accounts

Custodial Account Roth IRA

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Saving for College: 529 Plans


Pros

Earnings grow tax free

Only 5.64% of assets are assessed towards aid

Withdrawal does not affect next years aid

Cons

Non education withdrawals: 10% penalty

and tax on earnings

Not all plans are the same!

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529 Plan Portfolios


Age Based

Preset Funds

Preset Glide Path

Most Popular

Individual

Flexibility

Self Managed

Maybe more expensive than age based

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529 State Plans: Metrics


Fees/LoadsExpense Ratios

Asset Allocation

Diversification Glide PathsUnderlying

fund quality

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529 State Plans: A Primer


Direct Sold 529 Plan

48 statesDirect

transaction

Advisor Sold 529 Plan

Only through an advisor

Rarely beats a good direct

sold plan

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Fees/Loads

Asset Allocation

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Fees/Loads

Glide Paths

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Late to the game?


How much college will

cost you: NET PRICE/

FINANCIAL AID?

Grade of your student

529 plan tax break or

capital gains tax hit?

Loans vs. Choice of

College

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Public University

Private Elite/Private University


529 Plans

529 Plan Savings


Hyper Local

Placements

REALITY CHECK: COLLEGE ACCEPTANCE RATES

SMART PLANNING FOR COLLEGE

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Smart Financial Planning for College


Hyper Local

Placements

Family College

Savings

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Why HS placements matter


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Why HS placements matter


College

Metrics +

Statistics

Between 2007 and 2014, admission rates at

UC’s for California residents fell significantly,

dropping from 87 percent in 2007 to just 62

percent in 2014. Rates were even lower at the

UC’s flagship campuses in Berkeley, Los

Angeles and San Diego.

http://www.sacbee.com/opinion/op-ed/soapbox/article19963500.html#storylink=cpy

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Public

Flagship Public

Private

Elite Private

20,000 30,000 40,000 50,000 60,000 70,000 80,000

Out-of-State Range

Current Annual Cost of Attendance


UCs $34,000

Cal States $22,000


GAMEPLAN

Pre-Elementary School

Head Start/Stay on Track/Race Ahead

Middle School

Public-Private Price Differential & Funding/Stay on Track

High School

Reality Check on Finance & Aspirations, Pay for College


The best gameplan: Just do it!


Thank you for your time.

To learn more, check out our website

https://www.vuefolio.com/

Disclaimer: Vuefolio does not render legal, accounting, or tax advice. This presentation is solely for informational purposes and is not a

solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Vuefolio is not responsible for any

college costs, financial aid, student or any other kinds of loans, investment performance of the 529 state plans. Any data quoted

represents historical information. Any past performance quoted is no guarantee of future results. Vuefolio is a SEC registered Investment

Adviser.

Economy & Finance

Vuefolio seminar for Intuit November 2015