Zach Gautier: Ask Me Anything About Paying for College

20 Replies

BiggerPockets Money Episode 64 features @Zach Gautier , discussing multiple ways to fund your child's college education. This space is for follow up questions for Zach, who has graciously agreed to answer your questions.

Hey Zach, thank you for all the insight you provided on the podcast. My question is for those in a different situation. If I am an adult looking to go to school to get my bachelors or go back for a masters or other higher degree, are there different things to consider when applying? Would the app you recommended for scholarships still be a good resource?

Thank you for your time in advance. 

Best,

Greg Farkas 

Hey Greg - good question. So in my assessment, the landscape looks different depending on whether you are pursuing degree completion with a bachelors or if you are working on a graduate degree. 

For an adult doing degree completion, I've found there are a lot of additional resources and pathways to get that completed. Some schools will provide "career" experience that will allow for some credit. Many of the schools that are geared toward adult students have some of the most lenient transfer policies. A driven adult student may be able to take advantage of the CLEP options and bring in any other credits they have from other institutions over the years. These schools are typically very willing to work with an adult in their current situation and help them. If that's you, I encourage you to go for it. A good degree course plan will be really helpful because then you can figure out if there are CLEP tests that can count for specific graduation requirements. 

In my opinion, masters degrees and other graduate degrees are a tougher sell from a financial perspective. There are some outside scholarships available but not nearly as many. The school's graduate financial aid office can help point you in the right direction. When I went back to school, I used the Scholly app just to see what was available. There were some scholarship options but I had missed the deadlines. If you start early, you may have more luck. 

The last note on graduate degrees is that I would really consider the return on investment. Understanding your particular industry and seeing how the salary may change and/or a new position would be available is important. For some industries, it seems like where you get the degree matters. For other industries though, the institution isn't important but having the degree is. If your industry is the latter, then I would make sure to not over pay for more degree than you need. 

Hope that helps and thanks for the question. 

Hey Josiah - so I think that is a worthwhile question...and a hard one. Without knowing a lot of other information, I don't feel comfortable making a definitive recommendation. However, I'm happy to outline some of the things that I'd discuss with my kids.

  1. College doesn't have to be immediate - I do think that too often students feel a pressure that they must go from high school to college. For many kids this is a good track but for some it isn't. If there isn't clarity about why college serves a particular purpose, then that is a really expensive way to explore future options.
  2. In some industries the value of college is declining. Some industries are still very degree centric. Part of growing up is figuring out the rules that govern parts of the economy. If you don't go to college, just understand what the possible trade offs might be. 
  3. What type of learner are you? For me, I needed the structure of school for much of my learning. For others though, they are intrinsic learners and do not need formal schooling. 
  4. What type of real estate? I'm not a real estate expert but have listened to hundreds of the Bigger Pockets episodes and all of the Bigger Pockets Money episodes. Part of my take away from those is that there are some aspects of real estate investing that are not dependent on a college degree at all. There are some other areas where I could see it being helpful. I've noticed a trend in successful real estate investors who were trained in finance, accounting, engineering, business, or law and then apply those skillsets to real estate. I wouldn't say that it is a prerequisite to being a successful real estate investor but it seems to give those folks a competitive advantage.
  5. Do you have a built in network and/or mentor? As I've thought about getting started in real estate, especially for someone who is young, having an apprenticeship would be really helpful. If you already have the contacts where you could learn from someone who has been at it for a long time, then this could be a viable replacement for some of what you'd get from college. 

I hope this thinking helps. A lot to reflect on and process as you think about your future. Good luck with it. There are a ton of resources on Bigger Pockets to help jumpstart those options. 

@Josiah Patrick Zebarth Zach makes a lot of really great points about the benefits college can offer, depending on your long term investment strategy.

I would also add that it depends on what state you live in, and if you are still in high school. For example, Tennessee offers free two associate degrees and technical certifications for those that pursue this path immediately after graduating from high school. 

If you happen to be a TN resident, the program is called TN Achieves. https://tnachieves.org

My son has been taking Chinese since the 6th grade. He is currently a sophomore and is now in Chinese Level 4. The high school requires only 2 years of a foreign language and does not offer any higher level (or AP) Chinese . He is not planning to take any more foreign language classes junior or senior year. I have heard that many exclusive colleges "require" 3 years minimum of the same language. I would hate to limit his options , at no fault of his own. Any suggestions? Should he start a new language in Junior year? ie Spanish? Sign Language?   Is there a way to explain his situation in the application process?

@Darien Chrostowski Good question. This is a pretty common situation. In my experience, colleges do not want to see multiple world languages but rather progression in one language. Because of this, I don't think picking up a new language as a junior would be helpful. 

The simplest solution is to see if the 8th grade Chinese class posts to the transcript. If it does I think you'd be in fine shape. However, most high schools I've worked with do not put any middle school courses onto the high school transcript even if they have supported advanced standing in high school. 

The counselor letter of recommendation that will be sent with your son's application should explain that he maxed out the available courses. Typically colleges will essentially excuse this 3 year requirement because it was out of the control of the student and it wouldn't count against him. The best way to know for sure though is to ask the admissions rep at two or three schools that he is considering. 

The last thought I have is that if he has enjoyed Chinese and thinks he might want to continue it into the future, you could opt to take an online third year. In this instance, you'd want to work with your high school counselor before hand and have them approve placing it on the transcript as a transfer course. Depending on how selective of schools he's considering, this might be a good signal to the college that he is passionate about the subject and takes initiative in his own learning. Both things are positive. 

Hi Zach,

I have a bit of a different question since it's more about funding a current student rather than a future student:

I wanted your financial opinion and possible academic opinion on living on campus vs off campus.

As of right now, I am taking a year off school working internships and accumulating some wealth that way. I just graduated from my 2-year community college and will be going to a four-year college.

Now, I can live at home, with parents for essentially free rent (though since my time of working internships I've been paying 1/3 of bills and 1/2 of groceries). However, the time of travel is about 50 minutes from my home (IL) to the school (IN, Purdue Northwest Hammond). Travels costs are estimated to $2400 with gas and tollway and vehicle degradation costs for 2 semesters.

Living on campus is estimated to be $5,600 per year. Of course, it's close enough to walk to the school to no gas costs are needed. 

The difference is $3,200 I will be saving per year, for a 2.5 year time at my college.

I have been told that it's better to live on campus since there are less travel time and more time for me to study (of course the college wants money). 

I have chosen to live home since $3,200 per year much more preferable than not having it at this point in my life. 

I do also work a part-time job all-year around but make about only $4,000 per year. Not a lot. 

So what do you think? Do you think my decision living off campus is a better one or would living on campus and saving the 50-60 minute drive be better academically? 

Hello @Keanu Vasquez - honestly, I think it is personal preference and what you are comfortable with financially. 

I would see an argument for both sides but as anecdotal perspective, when I was in school, I saw students who lived off campus missing out on much of the intangible aspects of school. I think it is likely that your social connection to peers and professors will be less if you are that far off campus and having to travel so much. 

The other option might be to live on campus for just one year to establish that connection and then determine if you can live back at home for the balance of the time to save money. 

There are various researchers who try to determine if a student will persist to graduation. There are some who think that living off campus can decrease the connections on campus and thus are at an increased risk of not graduating. Here is one article that discusses some of these factors. 

My biggest encouragement to you is make sure you graduate. Whether you live on campus or off, your worst financial position is if you invest in some of the classes and don't finish. 

Best of luck. I hope it goes well.

@Zach Gautier

Thank you for the info. I have seen that argument of establishing connections on campus. Though, I have had experience of being active on campus at my community college (approx a 25-30 minute drive) by being involved with various organizations and holding Executive board positions on them. The same with my classes. 

I am hoping this attitude will translate there so I can finish my B.A. in EE. I also have been churning scholarships recently, so if I do get enough to cover tuition and most of room+board, it should be a no-brainer to live in the dorms. 

Thank you again for the response, it's making me think more about this.

Hi, Zach, thanks for a very interesting and timely podcast.

Are you familiar with a site called RaiseMe - they describe it like this "...offer micro-scholarships that recognize your everyday achievements and allow you to start earning money for college beginning in 9th grade..."

My question to you is are you familiar with RaiseMe and if so do you see benefits in signing up for their on-line service? My concern is that it's just another data collection site that doesn't really provide any viable benefits.

Thank you in advance,

Andrew

Hi @Andrew Holden - So I have heard about Raise.Me. It is an interesting site. They've been gaining traction with a number of different colleges. On the issue of data collection, I haven't read their privacy policy or how they handle student information but that is a consideration.

In my experience, it can be a really helpful thing for kids for two reasons:

  1. I find it helpful, especially for the kid who is not motivated by the day-to-day aspects of school. Having a program like Raise.Me where a kid puts in the grades from their 9th grade report card or the fact that they made it into NHS and then seeing the dollar values that schools place on those achievements can be helpful for kids. This seems to speak the language of kids who rank up in different video games and then to make the financial connection to the every day tasks they are faced with in school. It can be helpful. I also like that many/most schools incentivize things like visiting the college and talking with the college admissions counselor. I've found this can be uncomfortable for kids, especially first generation students, and so having a specific incentive can be helpful.
  2. The other big reason I like it is because it can be so hard for a family to understand the real cost of a college. Having micro-scholarships allows them to see much earlier in the process what their aid package will look like. This can help add financial fit colleges onto a kid's list that might not have been there before and then potentially save the family money in the long run. 

Hope this take is helpful. Thanks for the question. 

Hi Zack, thanks for the input on the podcast. I am in a little unusual position. I am 30 years old and I am going back to school part time to pursue my bachelor degree while my wife is full time finishing her bachelor but then will be going to grad school as well. I currently have a great job that pays well enough that I don't get any financial aid. My question is would I be better off paying down my mortgage, putting my money into retirement, or simply saving and paying for school out of pocket? Are there any tips you have to perhaps be able to get aid besides making less? I will eventually need to quit my job to go full time. 

Hey @Darrel Plank - thanks for the question. So on the first part about how to make the best use of your money, I think it depends on personal choice. Most subsidized federal student loans right now are about 5-6%. Making the choice of paying for school as you go or using the money for investments likely depends on what kind of returns you'd see. 

As far as tips on aid, I think that part can be very difficult. I think there are some outside scholarships that are focused on helping adults go back to school and pursue degree completion. Pursuing these would be good. Otherwise, my biggest advice would be to think strategically about "buying" cheap credits through CLEP, community college, or online classes and then make sure that these would transfer in to whatever school you hope to get a degree from. 

Hope that helps. Let me know if you have other questions.

Hi Zach. I would like your financial opinion on a decision that I have been trying to make for my future. I am currently wanting to pursue another graduate degree, but I am also interested in getting started with real estate investing. Both would require quite some investing. So far I have a decent amount in my savings, but I'm afraid of it becoming completely depleted.  My question is should I focus on completing school first (would be a 3 year program) or should I still try to get started with real estate during the time before I start school. I probably would not be back in school for another 2-3 years since I still have to apply and take prerequisite classes. Thanks for any advice you can provide.

@Cyniah McClurkin. It's been four days maybe I can take stab at your question? :) IMO yours is a financial question: what is the breakeven point of the two scenarios? How much do you make currently? How much do you reasonably expect to make with your desired degree? Assume markets continue as they are in one version of the breakeven analysis then another set if we hit a recession, in one year, three years and five years. Will you be graduating with debt? Knowing nothing about your situation and assuming the general avg scenarios and knowing graduating INTO a depression job market is aweful, IMO: Save money for now get CC unit credits for transfer if possible (or study your desired field on the side if not CC) for a year or two. Then act. Idealy: realestate crashes you can pick it up cheap and try it on for a time. If no good get out and go to school during the recession. The school then realestate is much less likely to work IMO. Cheers!

Hi @Cyniah McClurkin - I apologize for the delay getting back to you. I agree with @Robert Eversman 's thought that this is a financial scenario that you could probably forecast. I would be hesitant about taking on another graduate degree first unless you felt it would significantly alter your earning potential. If you think it would likely have a marginal benefit to your earning or promotions, then I would likely do the real estate investing first with the hope of creating a portfolio that could fund your school as you went. In this way, I'd approach it much like I'm planning on funding my boys' college education. I hope that helps. Good luck with either venture. 

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