“ Parents are price sensitive and sending children to less expensive schools ,” says

Mark Kantrowitz , an expert on student debt and author of How to Appeal for More College Financial Aid . “ The schools that were struggling before the pandemic are going to be struggling more . Colleges that probably would have closed eventually will have to close now .”

Lincoln College in Lincoln , Ill ., for example , is one such school . The small private college , which was reported to have had record-breaking student enrollment in 2019 , has announced it will lock its doors permanently in May , ending a 157-year history of higher education in the Midwest .

A dip in birth rates and the financials of the business are simply making it impossible for smaller schools to survive , and the pandemic only accelerated the inevitable , Kantrowitz says . “ Originally I predicted at the start of the pandemic that 100 colleges would close .”

“ A dip in birth rates and the financials of the business of higher education are making it impossible for smaller schools to survive , and the pandemic only accelerated the inevitable .”

— Mark Kantrowitz

It will be fewer than that now , he says , but the demise of even 50 to 75 schools means increased pressure on high school students and their parents to compete for fewer openings , and this is one area where financial advisors can really help their clients .

First , helping clients accurately complete their Free Application for Federal Student Aid ( FAFSA ) is the best thing an advisor can do , sources agree . And in this case ,

2020 might show a silver lining , according to Karen McCarthy , vice president for public policy and federal relations at the National Association of Student Financial Aid Administrators .

“ Aid applications for the current academic year , which is 2021-2022 , were based on income in 2019 . The applications for this fall are looking at 2020 income ,” she says . “ For a lot of people , 2020 represented a real drop in income , and whether they ’ ve recovered or not , that may provide some relief .”

Second , advisors can give their clients a reality check and some guidance on how to run an effective and efficient college search . For that , Kantrowitz has a formula .

“ Apply to five to seven colleges , tops ,” he says , suggesting that for most applications , the student ’ s GPA and test scores should fall between the school ’ s 25th and 75th percentiles .

“ Then they can have one or two reach schools , and one safety where they can afford to go even with no financial aid ,” he says . After all , not all careers require a pricey school . Here it ’ s important , he says , to keep in mind a rule of thumb : Total debt from all four years should not exceed the student ’ s expected salary for the first year of employment .

Third , Joe Messinger , a co-founder at Capstone Wealth Partners in Dublin , Ohio , says advisors should stay aware of their clients ’ needs .

“ Whether they ’ re saving for college , paying for college , or paying college off , they all face different challenges ,” he says . “ If they ’ re saving up to pay for college , understand your state ’ s 529 plan matching program . A lot of states have them . And it ’ s never too late . If their kid is a high school freshman and they ’ re aggressive , they can save a lot . But they need to think of it less as investing for college and more as earmarking for college .”

— Jenny Lea Reed

14 | FINANCIAL ADVISOR MAGAZINE | MAY 2022 WWW . FA-MAG . COM