Tuesday, November 1, 2011

College Planning and the Financial Planning Professional

It has become cliche that the United States has transformed from a manufacturing to a knowledge-based economy, and that the jobs of the future will require advanced education and critical thinking skills. The assumption is that this will continue to place a premium on, at the minimum, college-level education and ideally, a college degree with on-going professional education, whether in the form of an advanced university-based certification or degree e.g. MBA) or a professional designation (e.g. CLU).

If price is an indicator of demand, then it would appear that the value -- indeed, the necessity -- of a college education is recognized in American society. Mary Mederios Kent, senior demographic writer at the Population Reference Bureau, notes in a recent article that the cost of two-year college in the 2009-2010 academic year ranged from less than $8,000 (for a public college with the student living at home) to an average of $20,000 per year for a two-year for-profit colleges. A degree from a four-year private university averaged $24,000 per year for students living at home, and $34,000 for those living on campus. Advanced degrees cost even more (or rather, "require a larger investment.")

Needless to say, college is not cheap in America. Nevertheless, despite the cost, most U.S. students go on to college after high school. Kent notes that in 2009, 70 percent of high school graduates ages 16 to 24 were enrolled in an institution of higher education -- the highest percentage ever, according the Bureau of Labor Statistics. This is certainly a different picture than that from the 1950s through the 1970s, when barely one-half of high school graduates went to college.

Data from the U.S. Census Bureau demonstrates the financial value of completing higher education, as noted in the figure below. According to Kent, "In 2008, a man with a professional degree, typically in law or medicine, earned about $100,000, compared with about $31,000 for a male high school graduate...Even a two-year associate degree confers an income advantage for both men and women, and seems to validate the entreaties by teachers and parents for U.S. schoolchildren to work toward college, even if they are not destined for the Ivy League."

With the need to fund college education a given, and numbers of enrollees growing, it is not surprising that the professional planner should gain some familiarity with techniques for meeting this challenge. To this end, the National Institute of Certified College Planners (NICCP) exists with the mission to provide recognition and support to the thousands of experienced professionals around the country who devote a significant portion of their practices to helping families plan financially for college, and offers a range of resources.

Firstly, the NICCP promotes the Certified College Planning Specialist (CCPS) designation program. While effective planning for college funding is closely linked to retirement planning. However, while most financial advisors have backgrounds in retirement planning, they lack the in-depth training needed to acquire and maintain an expertise in the field of college planning. The NICCP provides the education and public recognition to distinguish and empower CCPS designees in the college financial planning marketplace.

The NICCP also offers The College Doctor Program, which their website states "gives you all the software and college planning tools that you need to get the job done right!" and claims that "this is the most complete and powerful college financial planning program on the market today."

Lastly, the NICCP also offers educational webinars and a business building program. Some resources on the site are free, but most require a paid membership to access.

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