And what, I’m, what I’m thinking of. And I want us to move to grants and scholarships in our conversation. And what I was thinking of with this is I think, and you may know this better than I do or know this answer for me. Christine is that, that’s where I, financial troubles start. I don’t know about people who don’t go to college, but I think that’s where financial troubles start, because it’s kind of like, going online, do you want to be on this site, but you have to agree to that, to the terms in order to go to this site. So you don’t read the terms, you just know I’m going to get to go to this site. So you don’t read the terms or understand the terms of schooling but I know I have to sign the stuff so that I can go to school.
So I’m glad that we’re able to have this conversation so that they don’t have to do what we did or do what I did, with not understanding the terms and being set up to where you don’t have to fight with financial aid, you know, to prove how bad you want to go to school. Cause it shouldn’t be that much trouble. We just want to make it, make it, I don’t wanna say easy because easy sounds like you’re not gonna have any obstacles, but Christine’s already let us know. And we already know we’re gonna meet difficult people in difficult situations. And the one that we’re tackling is being able to get you in school or get your student in school, without it being a financial burden. So my question is Christine, to you, do you feel like, financial problems start when someone goes to school, not understanding what they’re filling out.
Exactly! And, and think about it in terms of this way, look at it from the student’s perspective, you know, your son, Johnny is 18 years old. He has no idea about any legal contractual obligations. And when you signed the FAFSA and when you signed for student loans or sign up to go to school, you’re signing contracts, legally binding contracts. And you know, as well as I do, when I went to school, I never read it. What do you want you want the college degree sign here. Do you want to do that Good sign for this And you have no idea what you just bought except, you know, you want a college degree, so you’re going to do whatever it takes to get there. And that is a huge problem. That’s also part of what I suggest in the planning. I think, and I wish our, you know, I think our entire education system needs to be revamped based on what we know today and lack of education on financial issues and financial literacy, in the United States is at an all- time low.
So here we are educating them, with financial literacy information. So Johnny who is 18 years of age, wants to go to college needs to have some concept and some conceptual understanding of legal contractual obligations and how the contract binds him or her and how they, the student loans work. And that’s the big issue. They don’t even know what they got. Right! And one of the examples in the book, I talked to a woman one time and she says to me, I need your help and understanding my students loans, I borrowed $20,000. Why do I owe 40,000 right after graduation what happened I had to explain to her what an unsubsidized student loan was and why that loan accrues interest while the student is in school. And when she figured that out, she was floored and she was stuck with it. And there was nothing we could do about it. And that’s what people don’t get. You borrow 20 grand for college on an unsubsidized loan. It’s going to accrue interest from the moment you sign on that loan. And that’s what it’s going to do. Accrue interest even though no payments are due, you’re not even graduated from college yet. And that’s how it went from 20,000 to 40,000 was $20,000 was added as compound interest on the loan before they even got the degree.
Wow. So it would give you interest from day one. So it sounds like, other than making sure That’s right outside of making sure our student looks for on paper, it sounds like grants and scholarships is going to be the way to go. And so our next topic, Christine and I want to lure you into is on grants and scholarships and how to get the most out of the FASFA. So you’re going to do, you were going to share with us is the, who, what, when, where and why of the grants and scholarships.
Yeah. Grants and scholarships, you know, come in on, you know, we’ve got sporting events, scholarships, right Some of our students are being groomed from the age of, I don’t know, two years old for sporting events, soccer, scholarships, there’s music, scholarships, there’s dance scholarships, you know, and I was talking to a friend of mine. Who’s got three kids that are about to go to college. And, yeah, I tried to talk her out of putting money on the table, but she did anyway and she, her son is going to an Arizona college. He is approved for full ride for the first year. So here’s another game. They play this. The schools are actively recruiting for students all the time, right so they want the best students. They’re going to reel you in. They’re going to tell you, they’ve got slides into the pool and all kinds of fun stuff on campus.
And we’ll give you a first year full ride. Well, what they don’t tell you is the next three years might cost you another 80 to 100,000. What they don’t tell you is what the total cost is and what they don’t tell you is what’s not included in that beautiful offer. Right And so I would ask that every prospective college student and parents ask a lot of questions, get your answers, understand what you’re putting your kid into, understand what you’re getting yourself into before you start signing for them, and understand what it is that you’re buying. What is the total of this education, right so they will lure you in on a first year free ride scholarship and then the rest of it is fleecing and that’s where they just reach into the pockets for the next three years and take as much as they can out of the family.
But the scholarships are there. So there, I, I would encourage some due diligence and some searching online for the various scholarships. It doesn’t have to be sports or music or skills. It could be other things like civic duty or volunteerism, or other activities that might be eligible for scholarships. There are corporations out there that want to give money for scholarships. There are a lot of different opportunities and that’s why, I mean, it, it’s probably even a more than you’re planning because you want to look into that. What are you eligible for what are you not eligible for that you might want to work on being eligible for so that you have time to do that and the grant money comes in like the Pell grants that’s one that I received, that is from poverty. That is from lack of financial ability to pay for school. That is, that comes from being financially independent you know, and maybe being, you know, toward the end of my college education was my graduating semester is when I got my Pell grant so those, that money comes in when you….
Christine, pardon Hold on one, hold on one second cause the sound is getting, the sound is going out. I don’t know what’s happening.
Can you hear me okay, because I can, I can hear you just fine. Can you hear me?
I can, it was getting… it was scratchy. So I didn’t know who it was. I wanted to stop this. I can cut this piece out, but I’ll make sure you’re hearing what you’re saying. It got scratchy. Right! That is the last part, when you were saying that the pale grant, I believe you were saying it was for financial need and that’s the purpose of being poor on paper. That’s not exactly what you said, but what I think you were saying when I, when it started sounding funny.
Perfect. I’ll pick that back up. Yeah. So the Pell grants are, you know, a grant based on financial need. And that is based on the student’s lack of financial ability and where the parents don’t have to participate in the fast bust. So there’s no expected family contribution and the once the student is eligible for those free grants, a Pell grant is free money that never has to be paid back. Scholarships are generally also free money. The scholarships will come with certain conditions, either being, you come to school for a year, there are some programs where cities and governments will offer, scholarships for work later there are some work for, for scholarship offers out there. Be careful. I’ve seen some people come through those programs once they graduate. They’re telling me, well, I don’t want to work for them or can’t work for them, or what happens if I get fired from that.
Because what happens is sometimes if you breach the conditions of those scholarships, they might want that money back. And so there’s some traps inside of those, offers so it’s always, always, always beneficial to read the fine print, even though it might put you to sleep but also ask a lot of questions so that you have a clear understanding of what you’re getting yourself into in terms of the contracts and the legal obligations. Once you signed on the dotted line, if that’s what you are willing and ready to search for and get into, you know, I always say where there’s a will, there’s a way. And I think, you know, scholarships and grants are great also just depending upon the source and whether or not they have to be paid back, whatever those conditions are, you want to make sure that you can comply with that. Other-wise it could get expensive later if they want their money back.
So we have talked about pre-planning for school, sending your student up on, I just love the name of that. The PPP! The new PPP program, I love it. I’m getting your students set up. And I think a lot of times our emotions and I say all the time, our emotions make us feel like we have to stress out and we live in a country where they say education should be free. Christine. And after talking with you, not just today, I was like, wow. I just see a lot of times we, we don’t know. We don’t know that we already have it. If you would set your child up for that, then they would be able to get the free education. And there are lots of organizations out here. No, you won’t, you won’t receive everything you apply for. So don’t think I applied and I got tired of applying and because I wasn’t getting any responses, I just quit.
Don’t do that. Persistence is what Christine talked about early on. That is also, that is going to help you win over everything else, but setting our students up to be independent. I just remember how upset I was when my mom set me off to be independent. And it was the way she did it. So I hope that the parents listening will choose a different way when they are setting their children up to be independent. You want them to be able to get that education. And it really, isn’t a good thing to try to play with their mind to say, well, if you really want it bad enough, you put yourself in debt because whether you take out the loan or they take out the loan, if there’s a loan needed, once you set them up to be independent, it’s not going to scare them into doing it right.
Or understanding it better, don’t make it. Don’t make them feel like they’re making a bad decision because they’re, without you, in fact, cheered them on that. They are an adult and that they are getting ready to be set up for success. And especially if this is your first kid going to college, they’re going to be your Guinea pig one more time. But it’s going to set you up with knowing how to get your children ready for college and giving them that opportunity. And if we don’t do anything to improve ourselves, we won’t make the world a better place. So I don’t care if you go to college, go to military or start a job or a business right after high school, but whatever you do be productive with it. And I just encourage parents to be, supportive and, and really help set the kids up in the direction that they want to go in.
Yeah, especially a kid and let me add two to that, to what I say also to parents is it’s not that you’re not going to financially help them by making them pour on paper. Doesn’t mean you’re abandoning your children. What it means is you’re setting them up for success for the free money, for the scholarships, for the grants and for the student loans on themselves. And the w the best advice that I can give parents that are listening today is you let your children take on the debt in their own name. I find a lot of parents who have signed on student loan, dotted lines later have financial problems themselves, and then they can’t afford to pay the debt back. So you’re, now, if you don’t have cash saved, if your parents don’t have a 5 29 college savings plan and your mom and dad don’t have money to put you through college, okay, the problem is they’re going to be forced to take out loans to finance it.
If they have, if they don’t pass the FAFSA and they make just a little bit too much money for free grants and scholarships, and now they’re having expected family contribution, and they don’t have the liquid cash for that expected family contribution. Now they’re going to be forcing the parents to take on student loan debt when they can’t afford it. And that’s the problem. So the best way to do it is let your children take on the debt all in their own name, because if you’re in the financial position to help them go add, pay for their student loans. But guess what? You are not legally on the hook for it, mom and dad, when it’s not in your name.