Bearing the same name as a beloved musical icon, John Lennon, the founder of the Pottstown, Pennsylvania-based College Planning Center (CPC) has the perfect icebreaker for everyone he meets. From store clerks running his credit card to travel specialists helping him book vacations, everyone’s a bit taken aback. They may joke about Paul or Yoko, and some ask him to sing for them. If they’re disappointed that he’s from Pottstown, Pennsylvania and not Liverpool, he’ll lift their spirits by telling them he once played guitar before switching to trumpet later in high school.
But over the past 13 years, over a thousand families in his region could care less if this John Lennon can play an instrument or carry a tune at all. They’re just happy that he’s worked diligently with them to navigate the tricky waters of college financial aid and helped them pay for their children’s college educations as painlessly as possible.
Lennon started his firm, Lennon Financial, in the late ‘80s as a full-service tax and accounting company. Since 2001, he has devoted the majority of his time as an advisor to college planning. His ability to save clients tens of thousands of dollars each year by sharing the fine details of the often labyrinthine financial aid system has earned him a Top 10 national ranking by the National Association of College Funding Advisors.
Parents typically seek out the College Planning Center’s services based on their concern as to how they’re going to be able to afford to send all of their kids to the colleges of their dreams without going broke. CPC distinguishes itself from other similar organizations with its in-depth knowledge of taxes, investments, and financial aid strategies. Most planners create a makeshift plan by disregarding one of these crucial elements, which could create a significant blind spot or issue in the future.
Effective and comprehensive planning requires coordinating all three components to avoid a Band-Aid type approach. Lennon realizes that parents are dealing with this struggle. He and his team aim to assemble a comprehensive plan to send all of their kids to the schools of their choice, not just the school that they thought fit the budget.
Our mission is simple,” he says. “We approach financial aid from the parents’ perspective, as we seek to arm them with as much information as possible to make informed fiscal decisions when preparing for and paying for the often overwhelming cost of a college education.
For over 13 years, Lennon has been a popular “Financial Aid Expert” speaking at universities and high schools throughout the region. He has been featured on CBS Radio outlet WPHT 1210 AM’s “The Big Talker” with Temple University for Financial Aid Guidance during their Virtual Education Fair. He is also author of the book “There is Absolutely No Reason to Pay Too Much For College,” and a co-author (with Pamela Yellen, President of Bank on Yourself) of the 2013 Amazon Bestseller “The Secret to Lifetime Financial Security.” Lennon’s chapter is titled “Imagine…A Road To Future Security Through Strategic College Planning.”
Early on in the life of the College Planning Center, Lennon realized the value of educating people, with the hope that his ability to shed light on the process would lead some people to become clients. His educational workshops outline the many ways, largely unknown to average parents and advisors, to make college as affordable as possible. As he details on his website www.collegeplanningofusa.com, he helps families:
- Prepare for the significant out of pocket expenses to get all their kids through college.
- Find strategies to ensure they will get out of debt.
- Supplement their retirement.
- Minimize their tax burden.
- Develop a contingency plan, should something happen to one of the parents.
In my seminars, I touch on various issues that really open the eyes of parents wanting to send their kids to college,” says Lennon. “I talk about how different assets owned by parents are calculated into the financial aid formulas. Beyond adjusting parents’ mindsets about preparing as early as possible, I teach about how universities sometimes count assets against you – including the money the prospective student has in his or her college fund account that was established in childhood. Sometimes there is a penalty for having a savings account in a child’s name. It’s also important that they know it can be illegal to move those assets incorrectly to avoid the schools’ finding out about them.
Lennon’s seminars offer real life stories of different families he has worked with and the difficulties they have encountered. One typical issue is receiving a letter from a college awarding financial aid; after the stated award, the institution may suggest that the family covers the gap by taking out a PLUS loan. According to Lennon, this is a progressive high interest Federal loan that can rapidly get out of hand. i.e., if your first-year payment is $400 a month and you decide to finance a second year, the payment doubles to $800 a month. Colleges often recommend these loans to parents who don’t know the hidden costs, high interest rates, points, and stacking nature of them.
Often,” he says, “parents won’t realize what a bad deal this is until they’re knee deep. A family may qualify for freshman year but they later, unfortunately, realize this is going to get out of control.
In his seminars, Lennon also starts to delineate the expenses people can expect beyond tuition and fees – including books, transportation and housing. This all inclusive number is officially referred to as the COA (Cost of Attendance). He also teaches you how to interpret your personal results that come from a potential savings exercise. These personal results often times change the way people look at affording post secondary education. Once people see a side by side comparison of two schools, they realize it’s not always about the retail price.
When Lennon’s team first meet in his office with prospective clients, he asks them to fill out a one page document summarizing their financial information and top three financial concerns. They look at a family’s resources to see if there are better ways to look holistically at how they can meet their retirement goals as well as pay for their children’s college education.
During that meeting,” he says, “we determine how much they can take on. We take their financial information and calculate their Expected Family Contribution (EFC), which is the amount that represents the minimum that a family will pay for one year of college. What’s ironic is that more expensive schools with higher available endowment funds may actually cost families less than they might pay for a less expensive school with a smaller endowment fund. There are two different types of aid – gift aid (scholarships and grants) as well as self-help (loans and work study). Endowments from colleges often provide some of the resources for scholarships and grants where larger endowments mean greater potential resources. A family applies for financial aid by filling out the Free Application for Federal Student Aid (FAFSA), which helps colleges and universities determine a student’s eligibility for financial aid, including the Pell Grant, Stafford loans and Federal Work-Study.
Through his work with many families over the years, Lennon has emerged with the three most common mistakes parents make when applying for financial aid.
- They think it’s all evaluated the same way, so it doesn’t make a difference where they have their money.
- They believe all institutions operate by the same rules and will therefore have no problem offering families the same amounts of money (endowments, private funds and state and federal funding all vary)
- They are under the impression that it’s fine to wait till the middle of their child’s senior year of high school to get to work on securing financial aid.
Lennon says that since financial aid is based on the previous year’s income and assets, it’s crucial to start this planning process much sooner, preferably no later than the child’s sophomore year.
Lennon’s career has taken some interesting turns over the past 25 years. In 1988, he began working for the U.S. government, doing financial and criminal investigations. He worked with a team whose task was to resolve congressional inquiries. Shifting to private industry, he enjoyed a less demanding lifestyle – but ultimately it hit him that his true passion was helping people. He worked in various positions in the financial world before opening Lennon Financial, whose initial clientele was individuals and small business owners.
Lennon’s next transition into the world of college planning began with an unexpected request. One of his tax clients had twin boys that were applying to college and asked him to help them fill out the financial aid forms while he was doing their personal return.
Once he guided them through this process, the couple told their friends and soon he was flooded by people calling him for his assistance with college aid applications. “I did my best to keep up with the demand for these services, but I was nervous that perhaps I wasn’t filling out the forms properly, and that could be a big liability,” he says. “I was still running my tax business, but embarked on a several year journey researching the college funding process. I learned some interesting facts about the way different schools deal with applicants for aid.”
From his research, Lennon realized not only how little he knew about this detailed process, but also just how wide a gap there was between how much applicants and advisors think they know but don’t. When he realized that most families had no idea how to pay for college, he made it his mission to help them. The most astounding thing he discovered was the fact that most people paid more to send their kids to college than the cost of their last home.
Learning about this process is an ongoing endeavor,” he says, “and I continued to do research and learn important facts and concepts that I could pass along to clients via workable strategies. This aided our clients with advice and strategies that most parents don’t think about or have access to when saving for and paying for college. I found that working to help families solve these problems was far more rewarding than just doing their taxes. I enjoyed taking their seemingly impossible tasks and helping them achieve their goals.
I’m very proud to say that we’ve grown to such a great extent that I am now training other college planners to do this work so that we can open College Planning Center satellite locations. I am currently transitioning to be able to focus all my time conducting workshops so that the planners I am hiring can help more families than I ever dreamed possible. It’s very gratifying to know that so many families and students have benefited from our hard work and individualized attention.