Important Dates for College Planning

College affects the daily lives of Gen X parents, either through children who have just graduated from college with student loan debt or through children who will soon be attending college. As their careers become settled and they earn higher incomes, parents with toddlers also focus on college. The idea of funding college moves up their list of goals.

As an industry, financial planning still has room to improve in terms of college planning. While financial services communicate the dates for retirement planning, the opposite seems true for college planning. Here, we discuss many of the dates and explain a few of the ideas associated with college planning.

FAFSA and Associated Timeline

FAFSA is an acronym for Free Application for Federal Student Aid. Parents and students complete this form every year to determine eligibility for financial aid. From the information listed on this form, an Expected Family Contribution is established to help fund the student’s education. For this article, students and parents should know that to file for the 2017-2018 academic year, the FAFSA must be filled out by June 30, 2018. However, the earlier you file, the better your chance of qualifying for grant, scholarship, and work-study money (1). Ideally, you would have filed on October 1, 2016, for the 2017-2018 school year.

Families should complete the FAFSA as close to October 1 of their senior year of high school.

States and colleges have their own deadlines for the FASFA filing (1). You can find the date by visiting (2). The dates will not necessarily agree with the federal deadline already discussed. For example, Indiana’s deadline for the 2017-2018 academic year was midnight on March 10, 2017

When checking your desired university’s deadline, make sure you define the deadline. Is it submission of the FASFA or the date when it has been processed (2)?

As you can see, the FAFSA-related dates complicate the situation. The simplest action is to file your FAFSA form as close to October 1 when the application opens for the academic year in the following calendar year. In other words, for the 2018-2019 academic year, file the FAFSA on October 1, 2017. Many states and universities give out money on a first-come, first-served basis.

College Application Deadlines

While families stress about the financial aid they may receive, it is easy for them to forget about the college application deadline. As with the FAFSA, a few deadlines may apply to you. The result of not applying on time may lead the university to not even look at your application (3).

First, understand that the college application can be an early application or regular application. Colleges divide early application into early action or single choice early action. For purposes of this article, send an early application to the university during the first semester of the student’s senior year of high school, typically October to mid-November (3, 4). Early acceptance announcements may occur from November to early February (5).

Universities typically accept regular applications between January 1 and February 1. Students who plan to fill out a regular application should have letters of recommendation and essays completed by mid-November. Students should receive acceptance letters by mid-March or April (4).

SAT and ACT Tests

The ACT and SAT tests cause strike fear in many high school students. A high score means getting into the student’s dream college … or so many think. Many colleges now take a holistic approach to admissions and look at civic engagement, secondary student activities, and work experience as factors influencing admissions. However, the ACT and SAT are still important factors in the admissions process.

As a best practice, students should take one or both tests a couple times starting their junior year of high school. Students can take test several times throughout the year. The best time to take the tests will depend on your needs; typically, a study time of at least 40 hours is recommended for ACT and SAT preparation (6). Depending on class load, extracurricular activities, and scheduling, a student may take one to four months to prepare. Some do not recommend starting too early because the student may forget some of the material.

For general planning purposes, start with two months of lead time for test preparation and then adjust your schedule as the date gets closer.

Parents and College Planning

For parents, college planning will involve time spent reviewing and analyzing assets, as well as cash flow for account contributions.

College Savings Accounts

Parents typically save money in one of three types of accounts for college.

Custodial account- Money placed in this account is the child’s  asset(s). A custodian, typically a parent, oversees and invests the money. Contributors do not face deadlines for but funds will be considered higher on the list for college funding. The account also has a greater effect on funding expectations versus, say, a 529. The upside to a custodial account remains the flexibility with which the funds may be taken out. The money must be used for the benefit of the student. On a side note, some states require that the money is turned over to the child (i.e., the custodian is removed) once the child reaches the age of majority – a situation some parents do not favor. No tax advantage may be realized in funding these types of accounts.

Coverdell Educational Savings Account- This type of account is also known as the Educational Savings Account, or ESA. It focuses mainly on college with a cap on the contribution limit of $2000 each year until the student reaches the age of 18. The contributions are not tax-deductible but grow tax-free as long as the money is used for qualified expenses. Contributions can be made until the due date of the contributors’ return (April 15) without extensions (7). Income limits apply to the account. Individuals may contribute if their modified adjusted gross income is below $110,000 ($220,000 for married filing jointly) (7).

529 College Savings Account- The most popular college savings account is the 529. The deadline for most 529 contributions is December 31. However, seven states allow contributions up to mid- to late April for the previous tax year. These seven states are Georgia, Iowa, Mississippi, Oklahoma, Oregon, South Carolina, and Wisconsin (8). Many states offer a deduction or credit for account contributions. Please see your advisor for details related to your specific state.

Tax Returns

As we know, April 15 remains a dreaded date for most Americans, as tax returns are normally due. The date does adjust every once in a while, when April 15 falls on a weekend and to accommodate Emancipation Day (normally on April 16), which celebrates the end of slavery in Washington, D.C.

Some parents do not complete their taxes on time and file an extension. When this happens, the taxpayer must complete the filing by October 15. Filing an extension affects the FAFSA. Parents need to send a copy of the 4868 (extension form) with the FAFSA. Often, the university wants copies of W-2’s and a signed draft of your tax return. The institution may offer a temporary extension on the financial aid award until the FAFSA has been updated and completed.

 Shifting Income

Strategic planning for recognizing income or shifting it from one year to another may have an effect on your capacity to receive aid. In the same way, parents may look at shifting income for other reasons; many of the same tactics apply.

Gifting appreciated stock is one example which shifts income from a parent in a high tax bracket to a child (who sells the security) in a lower tax bracket at a young age. Parents need to gauge how this income shift affects financial aid. The focus should be on the income allowance and trying not to exceed it.

Understand that your income from this year will not affect aid for two years. For example, in the new changes on the FAFSA filing, the form asks for the “prior prior year’s” tax information. A 2015 tax return will become the basis for the 2017-2018 academic year.

Avoid recognizing large amounts of income through retirement account distributions or exercising stock options or capital gains. Offset capital gains with losses.

All the activities listed above normally have a deadline of December 31 at the close of the tax year. Please see your tax advisor for specifics about your situation.

If you have questions or would like to talk more about your student’s college funding, use the “contact us” section to let us know what you would like to discuss and when you are available.


  1. Nykiel, Teddy. “When Is My FAFSA Deadline.” NerdWallet. N.p., 13 Sept. 2016. Web. 19 June 2017. <>.
  2. “Student Aid Deadlines.” Student Aid Deadlines – FAFSA on the Web – Federal Student Aid. N.p., n.d. Web. 19 June 2017. <>.
  3. Services, University Language. “College Application Deadlines at US Colleges and Universities.” The Campus Commons. N.p., n.d. Web. 19 June 2017. <>.
  4. Services, University Language. “Early Application: Applying to US universities early or regular decision.” The Campus Commons. N.p., n.d. Web. 19 June 2017. <>.
  5. Blank
  6. Zhang, Dr. Fred. “SAT / ACT Prep Online Guides and Tips.” How long before the SAT should you study and prep?: 3 Factors that Affect the Hours. N.p., n.d. Web. 19 June 2017. <>.
  7. “Coverdell ESA Contribution Limits & Deadlines.” 2016 and 2017 Coverdell (ESA) contribution limits and deadlines. N.p., n.d. Web. 19 June 2017. <>.
  8. Flynn, Kathryn. “7 States Where You Can Still Claim a Prior-year 529 Plan Tax Deduction.” N.p., 21 Feb. 2017. Web. 19 June 2017. <>.
  9. “Office of Student Financial Aid.” IRS Tax Transcript FAQ | Office of Student Financial Aid – University of Wisconsin–Madison. N.p., n.d. Web. 19 June 2017. <>.


The traditional investing world is shrinking as younger workers face the hurdle of saving for retirement, servicing student loans, buying homes, and starting families. The shrinking isn’t in the

Understand how crowdfunding works

number of available choices (like mutual funds or exchange traded funds) but in the number of publicly traded stocks. The number of publicly traded companies decreased roughly 46 percent from the middle of 1996 to the middle of 2016 (1).  Crowdfunding may change how we invest.

Let’s look at one of the broadest domestic indices, the Wilshire 5000. In August 2016, the index had 3,607 stocks, while in 1998 it had 7,562 (2). Ironically, the number of public companies outside the United States has risen by roughly 8,700 since 1996 (2). The lower number of public stocks today can be attributed to the fact that large companies are merging or failing to meet listing requirements, and fewer companies want to go public (2).


As the Wilshire example shows, this is happening now. Consequently, on the larger company side, equities like Apple play a more important role in the markets. Remember when Apple was not a major player for the top position in the S&P 500? Today, the stock occupies roughly 3.5 percent of the S&P 500 and over 11 percent of the NASDAQ 100. An article from CNBC discusses how this may negatively affect the popular trend of passively investing in index-based instruments (3):

“Some have gone a step further, arguing that passive investing leads already-overvalued stocks to become even more overvalued, as new money is allocated on the basis of existing (relative) sizes.”

For active mutual fund managers, a shrinking pool may mean holding onto well-known names longer than they would have otherwise. This point demonstrates the influence on mutual managers and investors as the number of stocks decreases. Less flexibility exists for mutual fund managers because money is leaving the arena and there are fewer stocks in which to invest.

This movement plays out like a game of musical chairs, in which the companies are the chair and the investors (including the fund managers) are trying to grab a seat. In our case, the number of investors does not decrease as the number of chairs becomes smaller. We end with people sitting on each other’s laps.

What is an investor to do?

You should continue with a normal course of saving and investing regularly, but you will need to make a few adjustments.

  1. Pay attention to your holdings. Know what you own and how to use it in your portfolio.
  2. Notice where you save money. How much goes into your 401k versus IRAs or Roth IRAs? Do not forget about your emergency savings. IRAs at large firms like Schwab, Vanguard, or TD Ameritrade typically have more investment choices than does a 401k. The point is to make sure you have the flexibility to access the best investments.
  3. Be ready to change as the financial markets change. Two movements are taking place that may change our investing landscape. The first is socially responsible investing, which has captured much press recently. The second change stems from crowdfund investing or the private equity movement.

What is private equity?

Private equity covers many types of investments, though its main characteristic involves not listing on a public exchange like the New York Stock Exchange or the NASDAQ. Private equity typically involves an investment in a non-listed business. Profit, management, and other traditional metrics matter, as they do with a listed business, but you do not have the reporting requirements of listed companies.

Some analysts propose that investing in private equity forces people to become “real investors” because of the lack of liquidity and the longtime horizon needed for the investment to provide returns. Private equity may also include bonds or other forms of debt.

Most closely associated with private equity is the venture capital firm, or VC. VC firms invest mostly in small companies or startups they believe have growth potential.  The institutions receiving the money typically do not have access to enough traditional funding through banks, public markets, and other places. Most of the investments are high risk. Consequently the terms of VC funding do not follow a traditional path.

A new and growing way to access private equity involves raising money through crowdfunding.

What is crowdfund investing?

Think Kiva, Kickstarter, and Go Fund Me; these are popular examples of crowdfunding. It is like a public version of Shark Tank. People put their ideas out there and potential investors can pass,

Understand how crowdfunding works

invest, or sometimes become actively involved in the presented opportunity. One of the key features of crowdfunding is that it allows securities to bypass federal securities laws (4).

Crowdfunding sprang into action with the JOBS Act of 2012, signed by President Barack Obama. The idea behind the act had the “SEC to write rules and issue studies on capital formation, disclosure, and registration requirements” (5). It opened the door for more participants to fund companies or investments that were previously available only to accredited investors.

Who are accredited and non-accredited investors?

In simple terms, accredited investors are high-net-worth or high-income individuals who have access to private investments that do not have to be registered with the Securities & Exchange Commission (SEC). To become an accredited investor, one must meet one of the following criteria:

– Have a net worth greater than $1 million. This value cannot include the value of one’s personal house.

– Have an income of greater than $300,000 for couples (or $200,000 for individuals) for the two previous years. Also, the couple (or individual) should expect to meet the criteria in the current year.

A non-accredited investor does not meet the needs listed above. As we can imagine, accredited investors make up a small percentage of the population. This is where the JOBS Act enters the picture with crowdfunding.

What are the rules for crowdfund investing?

In a press release dated October 30, 2015, the SEC outlined four areas for rules and regulations for crowdfunding, which include (6):

  1. Capital limits on funds raised by the company.
  2. Disclosure requirements on issues of specific information for the security offered.
  3. Investment limits on the amount investors buy.
  4. Framework for broker-deals and funding portals that engage in crowdfunding.

A brief summary of each area

Capital Raising Limits– Companies may not raise more than $1 million through crowdfunding in a 12-month period. Some companies, such as non-US companies and Exchange Act reporting companies, will not be eligible for crowdfunding campaigns.

Disclosure Requirements (as taken from the October 30, 2015 press release)-

  • The price to the public of the securities or the method for determining the price, the target offering amount, the deadline to reach the target offering amount, and whether the company will accept investments in excess of the target offering amount;
  • A discussion of the company’s financial condition;
  • Financial statements of the company that, depending on the amount offered and sold during a 12-month period, are accompanied by information from the company’s tax returns, reviewed by an independent public accountant, or audited by an independent auditor. A company offering more than $500,000 but not more than $1 million of securities relying on these rules for the first time would be permitted to provide reviewed rather than audited financial statements unless financial statements of the company are available that an independent auditor has audited;
  • A description of the business and the use of proceeds from the offering;
  • Information about officers and directors as well as owners of 20 percent or more of the company; and
  • Certain related-party transactions.

In addition, companies relying on the crowdfunding exemption must file an annual report with the Commission and provide it to investors.

Investor Limits– Investors are divided into two groups: income or net worth below $100,000, and those above $100,000.

  • Permit individual investors, over a 12-month period, to invest in the aggregate across all crowdfunding offerings up to:
  • If either their annual income or net worth is less than $100,000, the greater of:
  • $2,000 or
  • Five percent of the lesser of their annual income or net worth.
  • If both their annual income and net worth are equal to or more than $100,000, 10 percent of the lesser of their annual income or net worth; and
  • During the 12-month period, the aggregate amount of securities sold to an investor through all crowdfunding offerings may not exceed $100,000.

Broker-Deal and Portal Framework– Some funding platforms should register with the Commission a new Form Funding Portal and be registered with FINRA. Additional requirements taken from the same press release are as listed below:

  • Provide investors with educational materials that explain, among other things, the process for investing on the platform, the types of securities being offered, the information a company must provide to investors, resale restrictions, and investment limits;
  • Take certain measures to reduce the risk of fraud, including having a reasonable basis for believing that a company complies with Regulation Crowdfunding and that the company has established means to keep accurate records of securities holders;
  • Make publicly available on its platform the information a company is required to disclose throughout the offering period and for a minimum of 21 days before any security may be sold in the offering;
  • Provide communication channels to permit discussions about offerings on the platform;
  • Provide disclosure to investors about the compensation the intermediary receives;
  • Accept an investment commitment from an investor only after that investor has opened an account;
  • Have a reasonable basis for believing an investor complies with the investment limitations;
  • Give investors notices once they have made investment commitments and confirmations upon or before completion of a transaction;
  • Comply with maintenance and transmission of funds requirements; and
  • Comply with the completion, cancellation, and reconfirmation of offerings requirements.

The rules would also prohibit intermediaries from engaging in certain activities, such as:

  • Providing access to their platforms to companies that they have a reasonable basis for believing have the potential for fraud or other investor protection concerns;
  • Having a financial interest in a company that is offering or selling securities on its platform unless the intermediary receives the financial interest as compensation for the services, subject to certain conditions; and
  • Compensating any person for providing the intermediary with the personally identifiable information of any investor or potential investor.

Could crowdfunding change the way we invest?

One of the most noteworthy trends in crowdfunding right now focuses on impact investing and socially responsible investing. As we look forward, though, crowdfunding may solve the problem posed earlier about the declining number of publicly traded securities.

Perhaps we will see a trajectory in packaged products similar to the ETF or mutual fund for the smaller investor. This would create economies of scale while providing diversification and reducing business risk.

Where do I look for crowdfund investing opportunities?

Here is a link for portals regulated by FINRA:

Next steps:

  1. Educate yourself on crowdfund investing. As with other risky investments, the potential to lose money exists. Make sure you have the capacity to lose the money. If not, crowdfund investing is likely not suitable for you.
  2. What are you looking for as an investment? Is it to have an impact locally or “own a dream business” like a brewery without the stress of running it?
  3. Talk to a knowledge advisor on the topic. Be careful when engaging in this conversation, as many “advisors” are really salespeople. Ask how the advisor receives compensation. If the advisor receives commissions, he/she is a salesperson.

Check out this related article on investment performance.