An Entrepreneurship's Journey

By: Amy Irvine, CFP®, EA, MPAS®, CCFC 

Five Years of Independence and Entrepreneurship!
June 1, 2020 celebrated FIVE years of independence and becoming an entrepreneur.  I can hardly believe it's been that long.  It's been an interesting journey to say the least.  For those of you that were with me at the start of the journey, the words, "thank you" don't seem sufficient enough words.  For those of you have have joined us along the way, we are so honored you've selected us.  

Starting your own business is hard work, I new it would be when I set off on the journey.  Typical to my personality, I planned for "what could go wrong" and worried about it all the time.  I will admit, it certainly started out a little rocky with significant challenges, as some of you may remember the flash crash of August 2015. 

This was then followed by a decision in early 2016 to create Irvine Wealth Planning Strategies (spinning off from the partnership I had started initially)  This was a hard decision, but was one of the best pivots I made early on and 2016 and 2017 were major growth years for the business, moving from 66 clients at the end of 2016 to 118 clients at the end of 2017.  Yes, that is a 44% growth rate in one year.  I remember being on a podcast and being asked how other's could replicate my "success" and my response was "don't."  That was too much growth and all I did was work VERY long days.

It was also in 2016 that "Monday Morning Quarter-Buck" was "born."  Yes we have over 4-years worth of blogs out in the world, for which I'm very excited and never would have thought possible.

In 2017, we launched the Wine and Dime Podcast, with the first episode releasing on September 22!  It was an episode with my mom.  We've come a long way from those early episodes and with the release of episode 116 this past Friday (see below).  

That's why 2018 was a big hiring year, with the first addition being Kate Welker in February of 2018.  I'm sure Kate would have some funny "stories" about those early days!  As would  Becky Eason who joined us shortly thereafter in April of 2018, and then Kerrie Beene in August of 2018.  Hiring people is one of the most stressful parts of running a company, the realization that their success is dependent on my success.  It's one thing to be a financial planner and understand how clients are leaning on you for guidance and advice, but when you put that business owner's hat on, it's a completely different grape you are tasting (yes, I had to get at least one wine related metaphor in here).  But, helping develop people certainly has made some awesome wine (okay two metaphors).

With the expansion of the team in 2018, we decided to re-brand in 2019 and Irvine Wealth Planning Strategies began doing business as Rooted Planning Group.  If you are a small business and ever want to re-brand, give us a call, we will tell what not to do!  We thought it was going to be an "easy" process.  We were WRONG.   Our growth in 2019 slowed a bit, growing at about 6% for a total client count of 137 at the end of the year.  However, the later part of 2019 was really picking up momentum and both Kerrie Beene and Kate Welker attained their CERTIFIED FINANCIAL PLANNER designation.

Then came 2020.  When I said I planned for what could go "wrong," I left out a pandemic scenario, a major economic correction, one major Act from Congress (but 4 in total, so far), all in the first 5-months of ONE year.  Thank goodness we had the ability to work remotely already, as I can't image trying to figure that out too.   To add "drama" to all this going on, Becky Eason sat for Certified Financial Planner exam in March (which turned out to be the day before they shut down testing) and successfully passed the exam.  It was a bit of a Hallmark ending in my opinion.   We are also thrilled to have added Rachel to the team earlier this year too, and many of you have started to receive meeting reminders from her already.  

Here's the one thing I hope anyone reading this understands, I planned for what could go wrong and I think that is important, but it was a recent podcast guest that got me thinking, what if I had approached this with "What if I Fly" instead.  So in 2020, we want to plan more for "flying" with all of you.  It has been an amazing journey, we are honored to be part of your lives.  Thank you for being the critical part of our success journey and for giving us the wings that will now give us the ability to fly.

CARES Act Part 3 - Unemployment Benefits

By Kerrie Beene, CFP® and Amy Irvine, CFP®, EA, MPAS®, CCFC 

Those who are unemployed or cannot work for coronavirus related reasons will be eligible for benefits under the new Cares Act passed on March 27, 2020. 

What is Unemployment?

There are several terms being passed around that all meet the qualifying definition:

1. Termination of employment

2. Layoff

3. Furlough

Who qualifies for the Pandemic Unemployment Insurance?

There are 3 qualifications that must be met

1. Ineligible for any other state or federal unemployment benefits

2. Unemployed, partially unemployed, or cannot work due to the COVID-19 public health emergency

3. Cannot tele-work or receive paid leave

4. Self-Employed individuals who have had to “close their doors” and are unable to qualify for the small business loans offered through the CARES Act

This will include employees who have tested positive for the corona-virus, as well as, those who must leave their job to provide full time care for a family member or other relative but do not have access to paid leave benefits. 

The new law has 2 approaches to assist the normal state-based unemployment programs:

1. A pandemic unemployment assistance program which matches the normal state unemployment rate plus $600 for unemployed workers who would not normally be eligible 

2. An extension of unemployment compensation by 13 weeks beyond the eligibility time states provide under current law

Differences from Regular Unemployment Benefits

Includes workers who are:

• Self-Employed

• Independent Contractors

• Gig Economy Workers

• Those who do not have sufficient work history to qualify for regular benefits

Waiting Periods:

States normally have a one week waiting period and there is now federal financing for states without the waiting period.

Benefit Amounts and Time Frame

The amount varies by state, is subject to a minimum, and is increased by $600 from the Federal Pandemic Unemployment Compensation Program.  

Unemployment benefits are based on prior wages, often on the last 4 quarters. 

If you are already receiving benefits at the state level, the $600 weekly increase will be provided as a supplement.  

Self employed workers will have to have proper work and pay documentation. The benefit amount will be calculated using a formula from the Disaster Unemployment Assistance Program.

CARES ACT Part 1 - Recovery Rebate

By Amy Irvine, CFP®, EA, MPAS®, CCFC
FINANCIAL PLANNER

I started with this section because we feel it is important for our clients to know if they are or are not eligible for this rebate.

Over the weekend, I've noticed a great deal of confusion regarding this provision.  Let's start with what it is.

It is a rebate provided to those with eligible income (see below).  The bill actually uses the language "credit" for the first taxable year beginning in 2020.

What are the amounts?

• $1,200 single

• $2,400 joint return

• $500 per qualified child (under the age of 17)

Who is eligible?  

• $75,000 Single (and in my interpretation, married filing separate, since it states "as not described in paragraphs 1 or 2" listed below)

• $112,500 Head of Household

• $150,000 Joint

• If your income is above that limit, it will be reduced by 5% for each $100 of income over those thresholds.  Complete phase out:

  • $99,000 single

  • $146,500 Head of Household

  • $198,000 Joint

What tax year is this based on?

• 2019

• 2018 if you haven't filed your 2019 tax return

• If you haven't filed, the legislation states that they may use alternative information such as your SSA-1099.

What if my income is more in 2018 and 2019, but less in 2020?

• You will receive the credit when you file your 2020 tax return and benefit at that time.

What if my 2018 income was lower and I haven't filed 2019?

• As noted above, the rebate will be based on your 2018 income. 

• Interestingly, the language seems to read that if your 2019 income would have reduced your benefit, then you won't be subject to refunding the rebate.  

When should you expect to receive the rebate?

• "As soon as possible" is the language used.

• Our guess, Mid-May

Will these checks be taxable?

• No

Cares Act Part 2 - Small Business Provisions

By Amy Irvine, CFP®, EA, MPAS®, CCFC and Kate Welker, CFP®

With all of the closings that have been mandated as a result of COVID-19 along with requirements to stay in, many small business owners are worried about their operations. If you are a small business owner you are probably wondering how you are going to keep your business sustainable long term, provide for your employees, and provide for your own needs. Thankfully there has been a lot of legislation passed and the CARES act expanded and added benefits for small business owners. There is a lot of information out there so we wanted to summarize what these different benefits are, who qualifies, and what the effect is.

Unemployment
Who is eligible: 

• If you are self employed and have had to close your business due to the pandemic you will be able to file for unemployment benefits. 

• Self employed individuals who were generally not able to collect unemployment benefits  are now eligible. 

How to file: 

• You will file with your state’s unemployment division.

How much?  

• You will receive the payment you are eligible for under your state’s guideline, plus the $600 weekly benefit from the federal government. 

More details:

• You will need to login in weekly to provide an update on your status.

• This is taxable income so keep that in mind as you keep your books throughout the year and prepare for filing the 2020 tax returns.

This topic will be further explored in Friday’s blog release.

Employee Retention Credit

What it is:

• A credit against the employer’s portion of payroll taxes 

Who is eligible: 

• A business that has had to close or suspend operations or has had a significant decrease in revenue and continues to pay employees. A significant decrease means your quarterly gross receipts are down 50%.

• If there are over 100 employees the credit only applies if the business has been mandated to close. 

How to file: 

• We are waiting on final details as to how this will be claimed.

How much?: 

• The credit is 50% of compensation paid up to $10,000 per employee. It will be a refundable credit against payroll taxes.

More details: 

• The credit will be determined on a quarter by quarter basis as long as the business remains closed or gross receipts continue to be down by 50%.

• This also allows employers to defer payment of the employer’s portion of payroll taxes. Half would be due in 2021 and half would be due in 2022.

• If you take the Small Business Administration Paycheck Protection Loan you are NOT eligible for this credit.

SBA Paycheck Protection Loan
What it is: 

• A forgivable loan to cover payroll and basic operating expenses. 

Who is eligible: 

• Employers with under 500 employees, including self-employed sole proprietors, IF you retain the same number of employees.

• This includes the “gig economy” workers as well.

• Sole proprietors and Independent Contractors - wages, commissions, income or net earnings from self-employment is included and capped at $100,000 on an annual basis

How to apply: 

• These loans will be done through local banks who are approved with the SBA.

• Check with your normal bank and if they do not participate check with others in your area.

How much: 

• 8 weeks of cash-flow

• 250% of average monthly wages and salary (calculated monthly average over the past 12 months).

• Seasonal employers use the 12-week period beginning February 15, 2019 (or March 1st if elected) to June 30, 2019.

More Details:

• The funds are to be used to pay for payroll expenses including healthcare benefits, rent, mortgage interest, and utilities, Rent/lease, and utilities. 

• All or a portion is forgivable if the business uses the loan funds to pay for the covered expenses in the 8 week period after the loan is taken. 

• Updated 04/01/2020 - Unforgiven amounts have a maximum term of 2 year term and 1 year deferment, but interest accrues during that time.

• Updated 04/09/2020 - Interest rate may not exceed 1% on Non-Forgivable portion 

• The fees for this loan are being waived

• The fees for this loan are being waived

• Personal guarantee and collateral requirements are being waived

SBA Economic Injury Disaster Loan  
What it is: 

• A small business loan to offer financial assistance due to COVID-19

• Also known as EIDL

• Immediate advance of $10,000 - provide advance within 3 days of request; never has to be repaid, even if you’re denied a SBA loan.  

  • Update 04/09/2020 - this will be limited to $1,000 per employee, with a maximum of $10,000.  Sole Proprietorship will be considered 1 employee.

• Use of Funds - Overhead/Operating Expenses

  • Payroll (including owner payments)

  • Insurance

  • Rent

  • Utilities

  • Phone/Internet

  • Office Expenses

  • Repairs and Maintenance

  • Fixed Debts

Who is eligible: 

• Small business owners who have suffered economic injury as a result of the virus.

• 501c3 or 501c19 non-for-profit

Who is not eligible:

• Agricultural Businesses (Farms)

• Religious Organizations

• Charitable Organizations

• Gambling Concerns

• Casinos and Racetracks

How to apply: 

• For the immediate advance, apply at https://covid19relief.sba.gov/#/

• Through the Small Business Administration. The application can be found at https://www.sba.gov/disaster/apply-for-disaster-loan/index.html. There was an online application but due to high demand it seems to be requiring a paper application be submitted.

How much:

• Up to $2 million with a guaranteed rate of no more than 4%.

More Details:

• 6-months of working capital

• Maximum Loan $2M

• 3.75% interest rate

• Up to 30-Year Term

• 1-Year Deferment 

• Funds are to be used for payroll including paid sick leave, rent, mortgage, debt payment, accounts payable, and other bills.

• You will need to prove economic injury

• Funds come direct from the US Treasury

• There is authorization to approve based off credit score alone

• Apply directly to the SBA

Other Notable Small Business Provisions

• Employers and self-employed individuals can defer payment of the employer share of the social security tax - half due by 12/31/2021 and the other half due by 12/31/2023

• If you have a current SBA Loan - 6 months deferment principal and interest - talk to your lender.

• You can’t take a loan under multiple programs for the same expenses.

• Want more credible information - watch this webinar: https://www.uschamber.com/co/events/national-small-business-town-hall-inc-us-chamber

• Sole Proprietorship Options

  • EIDL

  • PPP (for your income)

  • Unemployment

  • Can not receive Unemployment and Loans

  • Can apply for both loans, but can’t use the funds for the same expenses

• January 23, 2020 the business must have been in operation

• Active Payroll prior 2/15/2020

SECURE (Setting Every Community Up for Retirement Enhancement) Act of 2019

At the very end of 2019 the SECURE (Setting Every Community Up for Retirement Enhancement) Act of 2019 was signed into law.  It gave this weeks blog author and Financial Planner, Amy Irvine, CFP®, EA, MPAS®, CCFC, flashbacks to the 2017 tax law changes that happened at the very end of that year too. There are a lot of little nuggets in this Act, below is our interpretation of the Good, the Bad, and the Weird …

The Good

• If you are turning under the age of 70½ this year, you can now push the required minimum distribution down the road.  The new age is now 72.

• Beginning this year (2020), if you continue to work past the age of 72 (was 70.5), you can now make a contribution to your Traditional IRA.  Prior to this Act, even if you had earned income, you couldn’t contribute once you reached the “magic” age.

• This does not change the Qualified Charitable Distribution age though, that is still 70½ 

• If you receive a stipend or fellowship, that is now considered qualifying income for an IRA (or Roth IRA) Contribution.

• Small businesses will be able to join a pooled employer plan (called a MEP or Multiple Employer Plan), which is meant to reduce the cost to small employers  And if the employer plan has an automatic enrollment feature, they get a small tax credit.

• If you are a volunteer firefighter or EMC, then you will have a one-year repeal of the SALT limit on your federal tax return.  Remember SALT stands for State and Local Tax.

• If you are planning on having a baby, or adopting a child, in 2020 you can now take a $5,000 distribution from your retirement plan WITHOUT penalty.  Of course you have to pay tax on it, but if you redeposit it within 60-days of withdrawing it, then it would not be considered taxable.

• We are thrilled that you can now withdraw up to $10,000 during your lifetime from a 529 plan to repay student loans WITHOUT tax or penalty.

The Bad

• If you turned 70½ in 2019 but elected to defer the RMD until 2020, sorry, but you still have to take it before April 1, 2020.  Also, only those that turn 70½ in 2020 can defer until age 72. If you’re 71, sorry, but you still have to take yours.

• Stretch IRA’s won’t be able to stretch as far in the future.  Historically, your beneficiaries have been able to elect to take the remainder of your IRA over their life expectancy.  That has been nixed in the SECURE Act and the maximum number of years they can defer the account is 10-years. This does not apply to spouses, disabled beneficiaries, chronically ill beneficiaries, certain minor children (until they reach age of majority) and existing inherited accounts.  Based on this, we will be looking at our clients situation to determine if it makes sense to convert taxable retirement accounts to Roth Sources.

• Employers will now be able to add annuity options to their retirement plan programs.  This was fought for very hard by insurance companies and we are very concerned about how this is going to play out. We are not the only ones that feel that way.    Read Rick Kahler’s commentary in an article published on December 30 - “Accessing the Damage Done by the Secure Act.”

The Weird 

We think these are weird considering the Act is called Setting Every Community Up for Retirement Enhancement and the following have absolutely nothing to do with retirement.

• The credit for installing an electric car charger has been restored

• Anyone under the age of 21 will be prohibited from purchasing cigarettes and e-cigarette products (i.e. vaping)

• The medical expense deduction was set to go up to 10%, but the Act has it at 7.5% once again in 2020.

• 529 plans can now be used to pay for Apprenticeships

We will be looking at each of our clients' individual situations to determine how this new Act will fit into their financial lives...so more to come!

Your Wealth, Your Health, and The ABCD’s of Medicare

In this weeks blog, Financial Planner Amy Irvine, CFP®, EA, MPAS®, CCFC explains (at a high level) the alphabet soup of Medicare A, B, C, D and the Supplemental Plans. There is real confusion (understandably) around all the options available.

The ABCD’s of Medicare

This time of year you can’t turn on the TV without hearing an ad for a Medicare Advantage Plan that is “perfect” for you.  I noticed when I was flipping through the Directv guide that there are even infomercials on this topic!

For those of you that are clients, each year we always ask you about your coverage for both medical and prescription needs and we use the online Medicare “find a plan” tool to make sure no major changes are happening in the coverage and formulary’s from one year to the next.  In Steuben County alone there are over 20 Medicare Advantage Plans, some with prescription coverage, some without. There are over 20 Part D plans too. Then there is traditional Medicare with potential supplement plans! To further the confusion, some clients have supplemental plans through their employer, or as a retired military member, they have tricare.  

All this reminds me of that Susan Powers commercial from the 80’s - STOP THE INSANITY!  Although many of our clients are under Medicare age, your parents or grandparents may be struggling to understand the various parts, so feel free to forward them this article.

What is Medicare?

Often I will have people ask if they (or their parents and grandparents) are eligible for Medicaid, when what they really mean is Medicare.  The two are very different systems. Today I’m writing solely about Medicare, as each State administers the Medicaid programs and is an income based program.

Medicare is a health insurance system for individuals over the age of 65 and for those under 65 that have been deemed disabled.

When should I sign up?

If you are already receiving Social Security benefits and become eligible for Medicare, you are automatically enrolled in both Part A and B, but NOT D or any supplemental plans.

If you are not yet signed up for Social Security benefits, then you will need to sign up. We recommend that you sign up 3 months in advance for the age 65 effective date; this gives time for you Medicare cards to be delivered and some wiggle room to sign up for a supplemental plan.  However, according to Medicare.Gov, your window “starts 3 months before you turn 65 and ends 3 months after you turn 65.”

IMPORTANT NOTE: If you don’t sign up during the enrollment period, the may be subject to a late enrollment penalty of 10% for every 12-months that you should have been enrolled.  There are exceptions that apply to this rule, such as if you are still employed and you have coverage through your employer that has 20 or more employees. However, you might still need to sign up for Part A - make sure to ask your employer.

Traditional Medicare - The “Parts”

Part A - Hospital Insurance

• There is usually no premium for Part A.

• There is a deductible for each benefit period ( this is not an annual deductible, you could have several benefit periods throughout the year) of $1,420 for 2020.  This covers the first 60 days of inpatient care.

• Days 61 - 90 have a co-insurance of $355 per day (for 2020)

• Then it moves into what is called lifetime reserves and the co-insurance is $710 per day (for 2020)

• Skilled nursing facility services are covered at a different rate and is only for the short-term, this is not to be used for the long-term

• There are more moving parts to Part A, so be sure to look at the 120 page guide they send out each year for specific details.

Part B - Medical Insurance

• Premium - this is not cut and dry.  The premium depends on your income.

  • The base premium is increasing from $135.50 to $144.30, so if you are having the premium taken from your Social Security, you will see the deposit go down in January.

  • If your modified adjusted gross income is over $85,000 for single or $170,000 for married, your premium is subject to both a Part B and Part D “income Related Monthly Adjustment Amount” aka IRMAA.  Read more here if you are in that situation: Medicare Premiums: Rules for Higher-Income Beneficiaries

• The deductible is increasing from $185 in 2019 to $197 in 2020.

• You pay 20% of the approved services and Medicare covers 80%

• This part is for doctor visits, lab work, ambulance services, durable medical equipment, mental health services, you get the jist of it.  

• Note, some preventative services are covered fully, while others still have the 20% co-insurance.

Part D - Prescription Drug Coverage

• These plans are offered by private insurance companies such as BlueCross, United Healthcare, Humana, etc.  The premium varies widely, as do the copays and coinsurance amounts.  

• The plan you elect should be reviewed EVERY year, as the formulary’s can change.

• If you don’t sign up for Part D when you are first eligible, there is a penalty that will be added on to any premium.  As of 2020, the monthly penalty is 1% per month for EACH monthly you should have had it, multiplied by the national premium average (for 2020 that is 32.74).

• As stated below, there is no supplemental plan that can help with these co-pay / co-insurance amounts, but different States do offer programs to assist with the cost, usually there are income limits on these plans.

Part C - Bundle of A, B and D (sometimes D is still separate)

• These plans are through a private insurer (like Part D).  They can be an HMO (health maintenance organization), PPO (preferred provider organization), PFFS (private fee for service plans), or SNP’s (special needs).  

• You will often find them described as “bundled” plans because they combine the hospitalization services of Part A, medical services of Part B, prescription services of Part D, and sometimes add in vision, hearing, and dental services.

• The private insurers get paid a fixed amount by Medicare for your enrollment.

• Premiums will include the above Part B premium cost, plus there may be an additional premium charged by the private insurer.  Each plan has its own design for the out-of -pocket expenses and may have an in and out-of-network variance.

Supplemental Plans (AKA Medigap Plans)

These plans are offered by a private insurance company as a supplement to traditional Medicare parts A and B.  They have nothing to do with Part D and if you selected a Medicare Advantage Plan, you cannot select a supplemental plan.  As you can see by the chart below, the supplemental coverage varies based on the plan you select.

To add to the confusion, the supplemental plans also use letters of the alphabet - A, B, C, F, G, K, L, N.  As you can see by the chart below, each plan has slightly different coverage:

Photo Credit: AARP.org

10 Essential College Selection Criteria Most Students Ignore

In this week’s blog, Financial Planner and Financial Wellness Coach, Amy Irvine, CFP®, EA, MPAS®, CCFC digs into selection criteria often overlooked when selecting a college.

1. Does the school really matter? — Unless you’re planning to enter a highly specialized field, the school may not be as important as you think it is. As long as the school has a good reputation — like many state colleges and universities — why pay more than necessary to obtain a degree? Caution: No matter which school you select, make sure it’s accredited and that the credits will transfer if you need or want to switch to another school or obtain a higher degree.

2. Do they offer the right degree program? — The degree can pay for itself over and over again...or be worthless to employers. While you may have a strong interest in the historical events of the 1700s, it may be difficult to find a job that pays for this type of knowledge. The greatest current demand is in one of the STEM (Science, Technology, Engineering, and Math) fields, but of course, there are other rewarding areas of study as well. Go to PayScale: Majors That Pay You Back to learn more about salaries in your chosen field.

3. What’s the cost? — CNNMoney’s Cost of College Estimator will provide the estimated annual cost, including tuition, fees, and room and board. It also provides the estimated cost after grants and scholarships — both for one year and all four years — based on family income. Looking at the estimated costs both before and after grants and scholarships can have a huge impact on your ultimate choice. Another source is the Department of Education’s Net Price Calculator Center.

   Caution: Many schools include access to student loans in their financial aid numbers and sales materials. Dig a little deeper to find out if it’s truly free money or simply the ability to incur more debt.

   Caution: Most students are unaware that subsidized (the government pays it) student loan interest doesn’t last forever. For first-time borrowers on or after July 1, 2013, the clock is ticking on the time the government will pay interest on their loans. Switching majors, taking too long to graduate, etc., can trigger thousands of dollars of interest on top of the loan amount borrowed.

   Solution: Follow the new guidelines at Federal Student Aid Loan Subsidy [PDF] and New Rules for Subsidized Loans.

4. What’s the graduation rate? — The ultimate objective for most students is to complete their education in the shortest amount of time, and with the degree needed to secure the best job. Plus, if students don’t graduate, it will be hard for them to repay their loans.

   Yet, the National Center for Education Statistics reports that it took six years for 59% of first-time students at four-year institutions to complete their degrees. Obviously, being able to graduate in less time — ideally four years or less — illustrates the school’s commitment to helping students keep costs down and move into the workforce sooner.

   There are two factors to evaluate in this category:

   1. The number of years it takes the average student to graduate — College Results will help compare multiple colleges’ four-, five-, and six-year graduation rates. Also, consider the Pros and Cons of ThreeYear Degree Programs. Example: Rachel failed to research her school before she attended. Due to the schedule of when classes were offered, it was virtually impossible to graduate in less than six years. She is now struggling to repay $65,000 more in student loan debt than friends who graduated in four years.

   2. The percentage of students who actually graduate — College Completion is a site that identifies graduation rates for two and four-year schools. PayScale is a similar site that highlights graduation rates, college costs, and overall value.

5. How much is the student loan balance for new grads? — As CBS Money Watch highlights, student loan debt continues to rise. The level of debt ties back to the cost of the school, how long it takes students to graduate, and how much of the total cost is covered by grants and financial aid (other than student loans). Locate the best and worst states with student debt at WalletHub, but ask about the actual debt levels at specific schools of interest as well. Some of the lists in #8 include this important data.

6. ROI: Will the numbers work? — The bottom line for all students is how much they’ll be able to earn once they graduate...and if it will be enough to repay the cost of the education. For example, the Center for College Affordability reports that engineering and economics graduates typically earn almost double what social work and education graduates receive by mid-career.

   When comparing potential salaries, there are two criteria to evaluate:

   1) The average salary per graduate of a specific school: PayScale.com: College ROI Report (click on the specific school for details)

   2) The average salary paid for specific degree programs: PayScale.com: Salaries per Degree

   Before applying for a student loan, estimate the costs of the college(s), how much you’ll need to borrow, and the projected income in your chosen field. Then go to FinAid.org to calculate monthly payments and determine if the numbers will work.

7. What’s the student loan default rate? — Schools with a high student loan default rate (often referred to as the cohort rate) send a big red flag to prospective students that the school may be too expensive, the students may be borrowing too much, it takes too long to graduate, or that students can’t find a job upon graduation. To check a school’s three-year cohort default rate, search College Navigator or the Department of Education’s Cohort Default Rate Database.

8. How are the schools rated? — Another step is exploring the myriad Best Of rankings. There are all types of comparisons in these lists, from generic ratings like the Best Schools in the Midwest (best regional schools) or the ones with the prettiest campuses to more specific lists such as the Top Undergrad Schools for Video Game Design (best schools for specific fields/industries).

   Carefully review the scoring system used to create these lists. In some cases they are so subjective, they may not be of much value, but any information will help you become a more informed consumer. When thousands of dollars are at stake and your future career is at risk, it will pay to dig into the details. For more details on the validity of lists, see Do College Rankings Mean Anything?

   Here are just a few of the lists and sites to help compare schools. Some are free or provide only limited information, but others charge a fee for complete access. Many of these 10 questions can be answered by several of the following comprehensive rating lists:

   ▪ Money’s Best Colleges (free basic info; full access $24.95/year)

   ▪ U.S. News: Best Colleges (free basic info; full access $29.95/year)

   ▪ Princeton Review’s Best 380 Colleges (create a free account for basic info; buy the book for $23.99)

   ▪ 50 Best Online Colleges (free)

   ▪ 100 Best Colleges & Universities by State (free)

   Caution: Again, evaluate rankings carefully. These lists are all different, so it’s important to look at the methodology each list uses to rank schools, their rating criteria, and if they allow “featured” schools.

   College Navigator — While this site won’t provide an external rating of the quality of a school, it’s a free government source to build your own table of preferred colleges to compare fees, financial aid, net price, programs and majors, and student loan default rates.

9. Will the school survive huge debt obligations? — In recent months, new regulations and overwhelming debt loads have caused more private and for-profit schools to struggle to stay afloat. Shark Tank’s Mark Cuban warns that this is just the start of the college implosion. This dramatic trend will not only affect current students but graduates as well. A degree from a school that is no longer in operation can lose its value quickly.

   The Department of Education has compiled a list of schools with questionable finances or that may lose access to Federal Student Aid. Consider avoiding schools that don’t meet the 90/10 Rule, where more than 90% of their income comes from Title IV (Federal Student Aid) sources.

10. What’s the mean SAT or ACT score? — This may sound like a trivial reason to select a school, but it’s actually an important stat to consider. If the mean (average) SAT score is 1600 at the college or university, and yours is closer to 1200, what’s going to happen when professors grade on a curve? While ambition is important, barely qualifying to get into a school could set some students up for failure, and could be a major reason they eventually drop out. Go to CollegeSimply: Colleges by Test Score or CollegeBoard: Test Scores & Selectivity to find a school that matches your scores.

This article is shared under the expressed permission and collaboration with Fiscal Fitness Clubs of America. Copyright 2017, Fiscal Fitness Clubs of America. This in an unpublished work of authorship protected by the laws of the U.S.A. It may not be reproduced, copied, published or loaned to other parties without the expressed written consent of Fiscal Fitness Clubs of America, LLC.