Pure’s Principal, Marc Horner, CFP®, demonstrates how strategic families navigate the college funding landscape to achieve meaningful tuition savings.
Transcript
For many families, college is one of the largest expenses they’re gonna face. And what makes it especially difficult to plan for is how fast costs continue to rise. For decades, tuition has outpaced both wages and inflation. But the sticker price isn’t necessarily what you’re gonna pay. Schools have significant flexibility in what they actually charge, and families who understand the system tend to pay a lot less than those who don’t.
As a financial advisor, and more importantly, a father of four, I have experienced this firsthand. Today, we’re gonna walk through four areas where smart planning can make a real dent in that college tuition bill.
So let’s start with the FAFSA, because there have been some meaningful changes in recent years that families need to know about. But before we get there, I have some kind of weird mental block with the term FAFSA, so for the rest of this video, I am renaming it the Fajita. So the simplified Fajita, I said that way better, rolled out with a new formula that changed how aid eligibility is calculated.
One of the bigger shifts, the number of children you have in college at the same time no longer automatically increases your aid the way that it used to. So if you have two kids in school at the same time, don’t assume that doubles your aid package.
What hasn’t changed is the base year income lookback. The Fajita still looks at your tax return from two years prior to when your student enrolls. Your income in that base year, that is the biggest factor in your expected family contribution.
You heard that right. Someone else is gonna do the math for you about what you can afford to pay if you let them. Decisions like when you sell investments, take retirement distributions, or realize capital gains, they can all affect your aid eligibility. This is where the conversation with your financial advisor before your student’s junior year of high school, I want you to put that date on the calendar.
Assets also play a role, but they’re weighted differently depending on whose name they’re in. A 529 plan owned by a parent, for example, is factored into your aid calculation at a lower rate than one owned by a grandparent. The recent Fajita changes have softened the grandparent impact as well.
The bottom line: treat the aid process as something you plan for, not something you react to or just blindly follow. If you haven’t started a 529 plan yet, the best time is right now. And if you have one, make sure you’re using it strategically. 529 funds can be used for tuition, room and board, books, and certain fees.
And thanks to recent legislation, unused funds can now be rolled over to a Roth IRA for the beneficiary, subject to some limits. That’s a significant change. It removes one of the biggest hesitations families used to have about overfunding a 529 plan.
Also worth knowing, many states offer a tax deduction for contributions, so check what’s available in your state before you contribute elsewhere. Start searching in your student’s freshman or sophomore year of high school for scholarships. Local scholarships in particular are often under-applied for and can add up fast.
And don’t overlook merit aid directly from the colleges themselves. Schools frequently offer significant merit scholarships to attract students, even to families who wouldn’t otherwise qualify for need-based aid. I know someone who went to college on a full bagpiping ride. So if there is bagpiping money out there to pay for college, who knows what else might be available.
So don’t be shy with colleges. Go ahead and ask. How else can we make money less of a factor in our college selection? College is a major investment, and the families who come out ahead are usually the ones who planned ahead. So if you’d like to talk through your specific situation, our team is always here to help. You can schedule a free assessment at PureFinancial.com.
Source:
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Education Data Initiative. “Average Cost of College & Tuition.” February 14, 2026.
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