Summary

In this conversation, Mike Hunsberger and Amy discuss college finances specifically for military families with expert Kate Horrell. They explore the intricacies of the GI Bill, the importance of financial fit in college planning, and the role of school certifying officials. The discussion also covers the Yellow Ribbon Program, maximizing financial aid, and the impact of student loans. Through case studies, they illustrate how strategic use of benefits can lead to significant savings, emphasizing the importance of engaging students in the financial planning process.

Chapters

00:00 Introduction to College Finances for Military Families

04:53 Understanding Financial Fit in College Planning

08:05 Navigating the GI Bill Process

10:41 The Role of School Certifying Officials

13:48 Exploring the Yellow Ribbon Program

25:59 Maximizing Financial Aid and Scholarships

31:03 Strategic Loan Management for College Funding

33:28 Understanding the Long-Term Impact of Student Loans

36:04 Evaluating Loan Affordability and Financial Planning

37:56 Leveraging the GI Bill for In-State Tuition Benefits

45:13 Case Study: Optimizing GI Bill Benefits for Twins

51:38 Engaging Students in Financial Planning for College

Takeaways

• Understanding the GI Bill is crucial for military families.

• Financial fit is essential in the college planning process.

• The role of school certifying officials is often underutilized.

• Yellow Ribbon Program can significantly reduce tuition costs.

• Maximizing scholarships can alleviate financial burdens.

• Student loans should be approached with caution and understanding.

• Strategic use of GI Bill benefits can save families thousands.

• In-state tuition benefits can be a game changer for military families.

• Engaging students in the financial planning process is beneficial.

• Planning ahead is key to successful college financing.

Links

Kate’s Book: College Finances for Military Families

Kate’s Website: https://www.katehorrell.com/

Schedule a consultation with Mike: https://nextmissionfinancialplanning.com/contact/

Schedule a consultation with Amy: https://www.instarfp.com/contact

Transcript

Mike Hunsberger (00:07.964)

All right, welcome, everybody. Today we’ve got a very special guest, Kate Harrell, who recently wrote the book, College Finances for Military Families, is our guest today. So we’re going to be diving deep on all things college finance and specifically GI Bill things. Kate, mind giving us a brief intro and how you got into the space?

Kate Horrell (00:32.494)

The short version is that like many military spouses, I had to reinvent myself every time we moved. And I happened to have a few jobs in a row in the financial field. And so I became very interested in it. And that led to the job writing about personal finance. So of course, when my kids went to college, I really dug deep into what are the resources out there and how can we use those best to help serve our family. And as I started teaching other people how to use what I’d learned,

they would say to me, please, is there a book? Because it’s a lot and you need to go back and reread it and make sure you understand. And so finally, I got some help to keep me on a timeline and put together this book.

Amy (01:17.287)

And broadening the scope a little bit, mean, so you’re spot on and I can completely relate to all of your clients. I decided that I was going to, as a financial planner, wade through all of the GI Bill stuff on my own. And it was a lot, like you said. I went looking for a book and didn’t find one. And I recently read yours and immediately wished I had your book. But in your intro, you know, you’ve

dove deep into a lot of things. So on your website, you go deep, not just in your book, but your book points to other resources on your website. And so the point there is, you know, just to pat you on the back a little bit for how deeply you’ve gone.

into things that military families really care a lot about. But bringing that back specifically to the GI Bill stuff is everything touches everything else. So what’s so awesome about your book isn’t that it’s just a standalone. It refers back to all of the other research that you’ve done for military families. before we get too far into this, I just wanted to thank you for doing all of those kinds of things. And really, for those who want to go check out your website and definitely read the book.

It’s a great starting point and you sort of start with a disclaimer at the beginning of the book and maybe you can tell us a little bit about the disclaimer.

Kate Horrell (02:45.646)

One of the things that was hard about writing this book, first of all, is that things change constantly. And second of all, every family is in a unique situation. So it’s very important to understand that this book is designed to give you the background, the information, the tools that you need, but that nothing that’s said in there, right, is going to be applicable to necessarily to your specific situation. And I was a little uncomfortable

Well, with that, because one of the reasons I don’t do as much face-to-face coaching and client work as you do is because I don’t like giving people answers because the answer is almost always it depends. So I had to put that upfront and center when I wrote the book.

Amy (03:34.141)

And I think that’s completely fair. And that’s why I kind of wanted to hit that right at the beginning. Mike and I spent a lot of time telling people that, you know, this isn’t advice, it’s general, but you made some really good points in the intro. So, Mike, you want to dive into maybe the beginning of the book and your favorite takeaways and have Kate expand on those.

Mike Hunsberger (03:54.943)

Yeah, yeah, definitely. So, you know, I appreciate the, you know, big first part is starting with the financial fit. And that’s definitely something I try to work with clients on and just understanding the whole college process. And Amy and I have done a couple other podcasts on both the GI Bill and just college in general. But why is it so important that you really understand the numbers and how college works? You know,

at the beginning versus, we’re going to apply to our favorite school. And if we get in, we’ll figure it out.

Kate Horrell (04:34.478)

Those last words I think are some of the most dangerous words in the college. Excuse me.

Kate Horrell (04:43.736)

I hope you can edit that out.

Mike Hunsberger (04:45.5)

You’re good.

Kate Horrell (04:47.832)

Those last words are some of the most important words in the college planning process. We’ll figure it out is a very dangerous place to be. And it’s dangerous because college is very expensive. And one of the exercises I do with my planning clients very early on is to say, hey, let’s just get a sense of what school costs in 2025. I want you to go out and just do some research and find out

What’s your state school cost? Real money out of pocket. And then like a really big name fancy school and find out what’s that cost out of pocket to reset your expectation of what college is going to cost. Because a lot of families come to all of us thinking that college costs what it cost when we went to school. That’s just a very uncomfortable starting point. The other.

thing about finding a good financial fit is that the worst case scenario here is that the student or the parents spend all of their resources and or take out debt and they don’t finish the degree or the educational credentials that they are working towards. And they’ve wasted a lot of money, but they’re not going to get any financial gain out of it in the long run. That’s not to say that education doesn’t have value by itself.

But that’s not what we’re talking about, right? This is a book about college finance. So we want to make sure that that investment is going to pay off in the long run. And we do that by making sure that we have a plan to pay for four years of college or five years of college for an engineering degree or an architecture degree or a medical degree, whatever that ultimate goal is. We want to start the game with a vision because none of us would go by it. Well, that’s not true.

I was going to say nobody would buy a car and not know how to make the car payments, but I think we’ve all also seen people who do that and it doesn’t work out well. But the consequences for a car payment are, I don’t want to say low, but they come take your car away and maybe you have a little debt at the end. But the consequences for a college education can be astronomically huge and they can have a negative impact on the rest of your life. Whereas if you have a good plan upfront,

Kate Horrell (07:10.784)

It can have a hugely positive financial income, not only for the rest of the student’s life, but for the rest of the parent’s life as well.

Amy (07:19.093)

Yeah. Somebody likens, you know, the idea of letting your child just go pick a school without considering financial fit for the overall, with the overall financial situation for the family to just, you know, telling your, you know, 16, 17, 18 year old, Hey, why don’t you go buy a house and then just let us know which one you pick. Um, which is insane. It’s insane. Parents wouldn’t do that. Right.

Kate Horrell (07:42.584)

So true.

Amy (07:46.869)

But somehow, you know, that’s essentially what you’re signing up for. You’re signing up for something that’s almost as expensive as a house for four years, depending on where the child goes. And, you know, I love that you started with, you know, sort of this idea of financial fit and the big overarching concept of college planning as a reminder for folks. And, you know, this book was centered on the military family kind of journey.

So using GI Bill and things like that. So there’s other books that come in and kind of expand on the chapter that you had about financial fit and working through financial aid packages and negotiating and all that kind of stuff. So maybe we can skip to what I think is probably like the meat, maybe not the most important part, but probably fundamentally it’s where we have to start. Like how do you use the GI Bill?

just you know the the nuts and bolts of how you use it.

Kate Horrell (08:47.998)

So there’s there is a little bit of a process, but it’s simple. It’s just not necessarily intuitive. Which is why I have two or three articles on my website, one of them’s how to get a certificate of entitlement, one of them’s how to actually use the GI Bill. Right. So the first step is to get that certificate of entitlement from the VA. You request it online. It comes via snail mail. Typically, there are

options to get it electronically. Say you’re stationed overseas and you have bad mail or you’ve gotten yourself into a time pinch. Sometimes the VA can hook you up with an electronic copy. And then you submit that to the school. One thing that’s not intuitive to families is that this VA does not pay the school immediately. Now, every school that I know of will kind of put a little asterisk next to that tuition balance.

and they’ll defer it until the payment comes in. But the room and board payments, if your child is living on campus, are going to be due up front, and that’s money coming out of your pocket. Yes, you do get a housing allowance that may or may not cover the cost of that room and board, but the housing allowance is paid in arrears every month. So August to freshman year, you’re gonna have a bill to pay before your child enrolls.

and then those payments will come in over the course of the semester. Many families take that money and put it in a special savings account so that they can pay spring semesters room and board, and then they just roll it over the course of a career. There are other ways to do this. There’s always better options for one situation or another, but gently speaking, that’s how the process works on a super surface level.

Mike Hunsberger (10:40.784)

So on the COE stuff, I think it took us longer to get my daughter the account because now getting on the VA website and the account, they verification and you need to have an ID that they can… It took us a while to do that. She was at school, didn’t have her passport with her.

And so that was a little bit of a challenge. But the COE piece, you know, they do say, it can take months. And I’ve seen people online waiting and waiting for that. Mine, like, I don’t know, two, four hours after I submitted, I got an email saying, hey, you can go download your COE. So I don’t know if process is different, but just for folks to know, sometimes, you know, mine came like almost instantaneously.

And then the snail mail followed up a couple weeks later. But yeah, was interesting, just the whole process. getting the account if they’re over 18 can be a little bit of an adventure just for the verification pieces of that.

Kate Horrell (11:55.534)

I’m fascinated to hear you got an electronic copy because that’s the first I’ve heard, but it makes sense. I did request a COE for myself a couple weeks ago because I wanted to verify some screenshots that I have in my article. So I went through the process again and I got my snail mail copy in under a week. So I was super duper impressed because the standard they tell people is 30 days and in the past when my family members and clients have requested it, 30 days has been pretty common.

Amy (11:55.573)

And.

Amy (12:13.108)

Mm-hmm.

Kate Horrell (12:25.014)

right in that range. So I was flabbergasted. I got something from the VA and I opened it and it was the COE.

Amy (12:33.811)

Yeah, I had the exact same experience, Kate, the kids, both the kids requested their COE and it came snail mail. Now, I did read on the VA website that it’s supposed to be switching over to the electronic download, which is nice. But I also do want to highlight your article, which you point to it from your book. But even before I met you in person, I went out on the website and Googled, you know, how to get this thing. And I followed your article.

for how to do it. So for folks who are trying to figure out the COE for the very first time, that article is very helpful.

Kate Horrell (13:09.934)

Maybe I need to make a video.

Amy (13:11.559)

Ooh, the video would be amazing. I know, I know people would appreciate that. Yeah.

Mike Hunsberger (13:12.723)

Yeah, yeah.

Kate Horrell (13:14.21)

wouldn’t be hard. They’d hear me saying bad words at my computer though.

Amy (13:18.997)

I think that’s forgivable. There might be a few people who say bad words on the VA website.

Mike Hunsberger (13:28.639)

So, Kate, can you talk a little bit about the school certifying official and what role they play that if folks have questions, you know, they’re going to tour a school and they think they’re going to use the VA benefit?

Kate Horrell (13:44.906)

Absolutely. The school certifying official is the liaison between the college or university and the VA. And I believe they’re an underutilized resource. They may also be an overworked resource depending on the school. Some very smaller schools, this might be a collateral duty. There’s only five VA students using VA benefits at a college. Clearly that’s not going to be a full-time job.

But if it’s a really big school like University of Maryland with a lot of students using VA educational benefits, there may be a handful of school certifying officials. They may be located depending on how the school is set up. They might be in some sort of veterans office. They may be part of the financial aid office or they might be part of the registrar’s office. I suppose in theory they could be some other random place, but those are the places I have found them.

And this person, when you submit the COE, they transfer that information to the VA. And then once the drop add period is ended, they verify with the VA, the students enrollment, how many classes they’re taking, that they’re all classes that count towards their educational program, which is a whole seminar on that. But basically, right, it’s a class that makes sense for your program.

And they manage questions. really good resources for if you don’t know what’s going to happen in a situation. Maybe your kid’s going to fail a class. Maybe you’re thinking about using the GI Bill in the fall and not in the spring, which can be a powerful planning tool. We had one semester because I recommend people reevaluate their

their financial plan for college at least annually and sometimes every semester. So we had one semester that I was just really on the fence, are we gonna use some GI Bill benefits this semester or not? So I sent an email to the school certifying official and just said, I wanna make sure I absolutely understand if we use the GI Bill, this is how much it’s gonna cost me out of my pocket at the end of the semester. And if we don’t use the GI Bill.

Kate Horrell (16:08.568)

Here’s the cost, here’s the grants, here’s the scholarships, here’s how much it’s gonna cost me at the end of the semester. And they came back and said, yep, your math is dead on. So now I have data to work with, Not just my own, I say back of the envelope, but obviously it’s a spreadsheet because I’m Kate. But I needed to verify that my spreadsheet was right. So I always tell people, get to know your school certifying official. It costs you nothing to be nice to them.

Amy (16:25.961)

you

Kate Horrell (16:36.77)

They are frequently very underappreciated and they are serving our community as a whole, even if you don’t personally get much benefit out of them. Do be aware though that they can be in different levels of expertise. And if you get a school certifying official that isn’t really giving you what you need, there are a couple of ways that you could handle this. You could ask them, hey, could you reach out to your friends at the VA and ask them for some guidance?

Because they have access to paths that we don’t have as individuals as beneficiaries. The other thing is sometimes you could call school certifying officials at another school and ask them a question and see if they’ll get an answer. My local community college has a really good school certifying official and sometimes I’ll just call and say. Question. There are also a couple of Facebook groups, one of which I forget what it’s called. But it’s a it’s a.

group about the DEA benefit for 100 % disabled veteran family members. And they’ve got a school certifying an official in there that knows everything in this Facebook group. And if you put a post in there, she’s probably going to come answer it. And she’s brilliant.

Amy (17:55.507)

Yeah, and I appreciated that when you said, you know, you could take them a box of donuts or something. I think that’s completely fair. I have not visited our school certifying officials. I’ve got two kids in college now in person yet, but I’ve found them very helpful over the phone. So just want to foot stomp using them as a resource so that you understand how things are going to work.

If it’s okay with you, I’d like to turn to some things. So this is kind of beyond the basics at this point. One of the things that I encountered as a parent preparing to send kids off to school was this idea of yellow ribbon. And I didn’t understand it at all until I left my previous firm and started working specifically with military families. So can you just…

walk through what Yellow Ribbon is, how it works, how it can be an advantage, and how you should use it to consider how you’re going to maximize the use of GI Bill for your entire family.

Kate Horrell (18:54.968)

So Yellow Ribbon is an add-on program to the GI Bill. And I want to emphasize that they’re tied together because sometimes I hear people have the misconception, they say, we’re going to use our GI Bill benefits first, and then we’re going to use our Yellow Ribbon benefits to save the rest of our GI Bill. We’re just going to roll on Yellow Ribbon and not spend our GI Bill. And that is not how it works at all.

Yes, sequentially when payments are made, sometimes it looks like you’re using the GI Bill first and then you’re using Yellow Ribbon. By the nature of over the course of time, all those two programs pay over the course of an academic year. So they kind of look on a timeline like it might work that way. But the reality is that if you are using Yellow Ribbon benefits, you’re also using GI Bill benefits. You don’t turn off the GI Bill and

turn on the yellow ribbon. So I just wanted to say that upfront because that is the number one misconception I hear about yellow ribbon. What yellow ribbon does is it covers some or all of the cost of tuition that exceeds what the GI Bill will pay. So the GI Bill has an annual cap. This year it’s roughly $29,000 that it will pay this year for tuition.

Many colleges and universities are more than $29,000 a year. One of my kids went to a school where tuition, I think this year is about $64,000. So if the school chooses to participate in the Yellow Ribbon Program, they will cover some or all, well, some or all of the difference will be covered by the Yellow Ribbon Program. And it gets covered by the school agreeing to pay a part, maybe $5,000, maybe $10,000, maybe half of the difference.

And then the VA matches whatever the school contributes, which as you can see can be a lot of money. In my example of my kid’s school, she’s graduated, goodness, but it was $64,000 a year for tuition.

Kate Horrell (21:01.294)

the VA would pay 29 out of the GI bill money, which would leave a $35,000 gap. The school would pay 17.5, the VA would pay 17.5. Because that school is what’s called an unlimited school, the school agrees to pay up to half and then the VA matches that money. Now it’s important to know that not every school agrees to pay up to half. Some schools might

As I said, only pay $5,000. So if we have a $35,000 gap, in the example of my daughter’s school, and the school pitches in five, and the VA pitches in another five to match what the school has paid, that still leaves $25,000 remaining for the parents to pay out of pocket, or the student, or whoever is paying for this, right? So it’s important to know that not every school pays the full yellow ribbon.

Also, it’s important to know that not every school offers yellow ribbon to every eligible student. Many schools have, again, we call it unlimited, unlimited. So unlimited amount of money, unlimited number of students. But some schools may only offer 10 slots or 20 slots. Now, if you go to the VA website and you discover that this school offers 10 slots, but only five students use VA education benefits there,

maybe, you know, this might not be a concern for you. But if you go to the VA website or you talk to the school certifying official and they say, no, we only offer 10 slots and they’re highly competitive.

What competitive means in this sense is that the VA requires them to allocate these on a first come first serve basis. So that the people who bring the donuts don’t get the yellow ribbon program. I mean, it makes sense. Now they do allow them to have students keep the slot from year to year, so. It should slash good always verify be that if your student is allocated a yellow ribbon slot as a freshman.

Kate Horrell (23:13.068)

they could slash should slash always verify, keep that slot until they graduate. But if there are nine out of 10 slots taken and you have an incoming freshmen and 10 people apply, you need to have a plan like is this college gonna work for you? That get off your question.

Amy (23:35.453)

Yeah, no, no, that’s exactly what I wanted you to cover. you know, the point there that I think is really important for people to understand is…

It doesn’t matter if your kid has a 7.9 GPA and they’ve been the president of everything and they said, know, and I think I like basically using your words out of your book, cured cancer, that sort of thing. Just because they did all of those things, depending on the school, they may not get the yellow ribbon scholarship because it’s first come first serve. It’s not academic achievement.

Kate Horrell (24:06.638)

So it’s important to know one, how many slots does the school offer? Two, how much money do they offer? And three, how competitive is it to get one of those yellow ribbon slots?

Amy (24:17.801)

Yeah, I think that that makes a lot of sense. Mike, I’m sorry I cut you off.

Mike Hunsberger (24:23.593)

No, no, no, that was great. And Kate, can you talk a little bit about other scholarships and how the VA is the last payer and how that can sometimes confuse people like, you know, I’m going to make money by sending my kid to school.

Kate Horrell (24:40.802)

What a tricky question, Mike, but it’s ultimately possibly the most important question. There’s a lot of important questions in this process. So the way the post-911 GI Bill is set up, and I specifically say the post-911 GI Bill because this is not true for other VA education benefits, but the post-911 GI Bill is set up to be the last payer of tuition. What this means in reality,

is that if your child goes to a school with $20,000 of tuition and they have no other financial aid at all, the VA will pay $20,000 in tuition under the post-9-11 GI Bill. If your student goes to a school with $20,000 in tuition and they get a $5,000 scholarship from the school, it’s a tuition-only scholarship. It’s been restricted for use. Sometimes it’s called fenced.

Sometimes it’s called earmarked or designated.

then that would reduce the amount that the VA pays to $15,000 because the VA is only going to pay what’s left of the tuition bill. Now in practicality, what’s probably going to happen is you’re going to say, hey, I’m using the GI bill this semester and the school is going to take that $5,000 scholarship away because from their accounting perspective, it doesn’t make any sense whatsoever for them to give you $5,000.

to reduce the amount that the VA is going to pay for you. So that is very important to understand, but not all scholarships are tuition only. So if your student has any other form of financial aid, whether that is a scholarship, a grant, a loan, a employer benefit, money coming from grandmom and granddad, which is probably highly moveable.

Kate Horrell (26:41.294)

If those things can be put to other costs, then you can maximize how much the GI bill pays for tuition and you could use your other resources to pay for things like room and board and maybe books and maybe travel back and forth to school and maybe a new laptop depending on how the aid is coded or structured or restricted.

Mike Hunsberger (27:07.573)

Yeah, that’s great. Yeah, my daughter had gotten a merit scholarship that they allowed to be moved over to room and board, which is just awesome because you’re getting that and then you’re still getting the housing allowance type thing. So it definitely helped.

Amy (27:30.175)

these lines, can you also talk, because you know, hopefully we’ll get into to at least a case study. Can you talk about how people might also think about using any sort of federal loan money when they have more than one child that they have to send to school? there, so presumably they don’t have enough GI bill benefit to spread around to everybody. Can you also talk about how that stacks in there as well?

Kate Horrell (27:55.022)

Yes, this is definitely just like every other question we’re talking about, very, very unique to every family situation. There’s first the philosophical question about how you feel about student loan debt, and there’s no right or wrong answer here. I do think that people are doing themselves a disservice when they take out an excessive amount of debt. Doesn’t mean it’s wrong. It is gonna limit your choices in the future. And if that’s a trade-off that you…

have made with good information, then maybe that’s a fine trade-off.

But the student loan program is changing a little bit right now. And so what is important to know is that your student can get a limited amount of debt in their own name without you signing off on it. I hear a lot of parents say, I’m not going to co-sign on a student loan, which is a fair, that’s a completely fair take, but you need to be aware of the fact that that means that your student can only take out $5,500 their first year, $6,500 the second year.

$7,500 for subsequent years to a max of maybe one of you can remind me $31,000 I think.

Amy (29:07.527)

It’s in the neighborhood. Yeah.

Mike Hunsberger (29:07.899)

Yeah, that’s the ballpark. Yeah.

Kate Horrell (29:09.804)

Yeah. So if loans are going to be part of your long-term strategy, you may need to take out the loans in years that you don’t need them and put that money aside to pay for years that you do need them. Because if you pass up on that $5,500 freshman year, because let’s say they got the BAMP scholarship from their high school, right? Super generous, but never going to come around again. It was a scholarship just for a high school senior.

You don’t take out that $5,500, the option to borrow that money goes away at the end of that academic year. The other thing to consider is that yes, there are these parent loans or private loans that require cosigners. They can be useful tools in some situations, but you need to be acutely aware of what these are going to cost you in the future. And I will tell you, because of the nature of my job,

We allowed our students to take out small student loans, the ones that they could take out in their own names, as part of their contribution to school. It’s a little complicated, but we said, you need to contribute X amount to school. X amount happened to be the amount that they could take out in a student loan. And they could pay for that with their job. They could be an RA. They could get a better scholarship, whatever. They could pay for that, their contribution, however they wanted. And the ones that chose to take out student loans,

I did like a whole mini counseling session. Hey, okay, we’re gonna sit down. We’re gonna talk about what does this mean? What does interest look like? Here’s an amortization table. What are your loan repayments gonna look like? And two out of the three of my students that took out student loans when it came time to start repaying said, I didn’t realize it was gonna cost me this much. Like we had this.

Amy (31:03.606)

You

Kate Horrell (31:06.552)

So that’s something that is very difficult for students and parents to understand, that this borrowing can be expensive in the long term. It’s not expensive in the, what is the word I’m looking for? Like the mathematical equation, right? Interest rates are now around seven or 8%. Like that’s kind of an average interest rate for the world over the history of time.

But the fact of the matter is if you’re paying $500 a month in student loan payments as a new college graduate, that is going to put a crimp on your spending plan. And if you are a parent paying $500 a month for three kids after they get out, that is going to put a crimp on your life, right? So I want to encourage people to use loans as the valuable tool that they are, but be incredibly cognizant of how they will.

impact your life going forward and to think about also the emotional side of it. One of my kids got out of undergraduate without any debt. She did all the things right. She had the job. She was an RA. She did everything. Went to grad school and borrowed $10,000 for grad school and for her the emotional side of having that debt was overwhelming. She hated it.

And so the first thing she did when she graduated was like, okay, now I need to buy a car. But then as soon as I pay for my car, I need to pay off this student loan because I want this monkey off my back. Mathematically correct? Maybe, maybe not. But you know, we can’t discount the burden of debt.

Mike Hunsberger (32:50.37)

Yeah, that’s all great. Yeah, I talked to folks with 200, know, parents that are, you know, have 200 plus thousand dollars in Parent PLUS loans and, you know, looking to eventually retire, but they’re, you know, in their 50s. And it’s like, that’s a lot of money. And some of the options that were available have been closed with the one big beautiful bill act. So, yes.

If you’re looking at loans of any flavor, really understand and like we talked in the beginning, you get in, we’ll figure it out, is not a great strategy and can have some real consequences down the road. So now all great, Kate.

Kate Horrell (33:40.462)

think to your point, I want to throw out there a phrase that I have found useful in my own life too, not just when working with clients, is that when we talk about the loan question, sometimes people say, we totally swing a $500 loan. That’s cool, right? So I say to them, okay, tell me what’s changed in your current situation because you haven’t been saving $500 a month for college. Now, if they have been saving $500 a month for college, great, we know how this is going to happen.

But if they have not been saving $500 a month for college, I do say, what’s going to change in your situation to make this $500 a month payment possible? Now, they may have a really good answer for that. Maybe their mortgage is going to be paid off in three years. Beautiful. Now we’ve answered the question of how you’re going to pay for that student loan payment. Or maybe a parent is also in college and they’re going to step up their career at some point in this.

this timeline. But I think that’s an important thing for people to understand. Yeah, and I’ve been guilty of this when I bought my first car as a 18 year old, I was like, a $200 car payment. I can and the reality was, I had no demonstration of having $200 a in my budget.

Mike Hunsberger (35:06.21)

Yeah, that’s an awesome way to frame it. One of the really strong things in the book is a couple of case studies that you have in there. if you don’t mind, I’d love to just pick one. I really like the, know, how depending on how you split the GI bill, you know, it can make sense to give it all to one kid and you can end up saving a lot more money than if you did.

you know, kind of the peanut butter spread 50-50 split across. So, you mind kind of walking us through that example?

Amy (35:41.216)

And actually, if we could, because I desperately want to get to a case study too, but I think one of the biggest benefits that’s offered by the GI Bill, and I’d like for you to talk about it for just a minute if you would, is how in-state tuition works with, yeah, because I think that’s a huge savings for military families. So if you don’t mind touching on that quickly before we get to the case study.

Kate Horrell (36:03.402)

Because this is one of the things that is helpful and also complicated about college planning for military families is that you can’t say this is the one thing that is really super duper important. Like in-state tuition is a thing that’s super duper important. The Yellow Ribbon Program is a thing that’s super duper important. The amount of your housing allowance is a key factor. There’s multiple key factors. But to your point, Amy,

where you can get in-state tuition using VA education benefits could be a deciding factor for your family. it can be, it might sometimes be the biggest bang that you’re going to get out of using these benefits. So federal law says that if, I’m going to say this very complicated and then I’m going to simplify it. The federal law says that if a student is using VA education benefits,

The college must not consider their physical residence when determining whether or not they are an in-state or out-of-state student. That’s a little weird and nebulous to think about. Most people shorten that to say the federal law says that schools have to give you in-state tuition if you are using VA education benefits, regardless of which benefit you’re using. That is close to

It’s not exactly accurate because they have to give you in-state tuition, but they can still require you to jump through a few hoops. They just can’t require you to jump through the physical presence hoop. So what this means in practicality is if I am a student and I live, my family is Florida residents, very common for military families, and I want to go to school in

I want to go to Penn State. If I am using any VA education benefit at Penn State.

Kate Horrell (38:11.608)

Penn State, they can say, show us your driver’s license, show us your voter registration, show us that you quote unquote live in Pennsylvania, but they can’t ask you to demonstrate that you’ve been there for a year. Now in practicality, almost every school uses the simple definition, which is you’re using VA education benefits, we’re gonna give you in-state tuition. It might actually be in-state tuition.

Or it might be we’re going to charge you out of state tuition, but we’re going to give you some sort of grant or credit or something to make you have the equivalent of in-state tuition.

So let’s work with this concept. You’re using the GI Bill, you get in-state tuition. That was a lot to say that, right? But it’s important for people to know that there might be other hoops because there are schools that can and do require those other things to happen. And so you don’t want to miss out. You don’t want to make a mistake in this decision-making matrix. If we go back to, yep.

Mike Hunsberger (39:13.035)

And Kate, me if I’m wrong. If you only are using it part of the time, they can revert you. So if you use it for a semester, but you go to another, some schools will say, OK, use it once. We’re going to continue to give you that. But others say, no, it’s only while you’re actually using the benefit. And then if you only have half the time,

the other half of the time you could be paying out of state.

Kate Horrell (39:44.622)

So that’s sort of the next kind of the next chapter of the story, right? When it comes to using in-state tuition with VA benefits is as Mike said, some schools either because they just don’t reprogram their system or maybe they’ve written their laws in such a way.

They will allow you to keep that in-state tuition once you stop using VA benefits. And that’s where it can become very, very powerful. So I use the Penn State example specifically because at Penn State, if you use one semester of VA benefits, as long as you remain continuously enrolled, which typically means fall, spring, but you want to verify that with your school, what does continuously enrolled mean at your school? They will allow you to keep instant tuition.

Sub-schools, maybe you don’t even need to be continuously enrolled. My local community college classified me as an in-state student three tours ago based upon military orders, and I’m still classified as an in-state student, and I’ve not verified that ever since, right? So if you have multiple students and one of the students is considering a school that will let you keep in-state tuition,

after using a small amount of GI Bill benefits, you can do, I use the phrase buying in-state tuition for the duration of a college career. Your kid goes to Penn State, you use three and a half months of benefits for the fall of their freshman year, and then you use your family’s other resources to pay for tuition for the rest of the college, but you’re paying in-state rates. And you’re not burning any more GI Bill benefits.

Now you’re not going to get the housing allowance, so you need to have other resources. This isn’t a panacea to pay for a whole bunch of college, but that might be the best use of your family’s resources. And then let’s say sibling can use the other 33 and a half months to go to Notre Dame. They need to have the benefits and it’s a yellow ribbon school and that becomes super powerful then.

Amy (42:04.983)

also point out there’s some schools, my son goes to a school like this, some schools that you only have to demonstrate that you’re eligible for benefits. So we grabbed the COE for him, we showed eligibility, and actually I’m in a situation where my daughter goes to Penn State. And Penn State is more expensive than his school. So we demonstrated eligibility, but we’ll actually have her use her benefits this semester. So super powerful.

Kate Horrell (42:34.722)

great example of how every family is unique and every combination of schools, every combination of resources that the family brings to the table. You literally could have two families in housing side by side, have, you know, a high school senior and a high school junior, and it could look like they should do things the same way. And that could absolutely not be true.

Amy (42:58.795)

Yeah. And I think that’s the power of the case study. So even though we’re going to go through something, the family might look a little bit like your family. You could come up with a wildly different conclusion for what’s better. But to demonstrate how things kind of stack together, do you have a case study that you would like to walk through specifically?

Kate Horrell (43:20.046)

I think best one to demonstrate what you guys are talking about, hold on, I’m pulling up the book, is the one of the twin, Anna and Zoe. And so I’m just, I’m not gonna like read, read, but I’m gonna give people a little background. So this case study that’s in the book is twin sisters. They’re the only kids in the family. And so the parents come and say, kids are gonna go to college. We’re gonna use 18 months for each student.

And in this example we compare does that make sense? And to make it a simple comparison, I I mathed out kind of long, won’t fit on one page, which is frustrating, but I math out what is it? What is the financial journey look like? If you use 18 months for each kid and what does the financial journey look like if you give 36 months all to one student? And obviously you could do something totally in between, right? These are just this is.

Mike Hunsberger (44:03.421)

Thanks

Kate Horrell (44:20.85)

so complicated you couldn’t make a case study that hits on all of the nuances. So I tried to have each case study hit on a different aspect of how benefits can be used to really get the brain juices stirring, right? So in this example, Lana is going to New York University, which is a full yellow ribbon school, and it’s in a location that has a very high housing allowance. It also has a high housing expense.

which is important to consider because typically the places that have high housing allowances have them because housing is expensive there. That’s how the process works, right? And her sister Zoe is going to the University of South Florida. Parents are stationed there at MacDill. They want to live at home. So two sisters going to school the same year, very different situations and very different ways the GI Bill can work for them. So in the first example,

We have the families do what is very common. They use the GI bill for the first two years for each kid. First two years for Anna, first two years for Zoe. And in that, and then they pay out of pocket, however, is not really relevant to this example, right? Somehow they’re paying out of pocket for the last two years for each girl’s educational journey. And the total out of pocket that they pay for tuition

in those two expenses added together is about $165,000 and then $100,000 in room and board.

That’s exhausting, right? Well, we just said $250,000. The total, but they do get some GI Bill benefits, right? Some housing allowance benefits. So their total out of pocket to put these four kids through these two schools is $166,000. But what if we say, there are benefits to using all of it at NYU? Higher housing allowance, more tuition covered, yellow ribbon benefits.

Kate Horrell (46:32.142)

So instead they pay for all of Zoe’s expenses using their other resource. They use all of the GI bill to pay for Anna’s expenses. And the total out of pocket cost is about $156,000. $56,000. $110,000 difference to put these two kids through school. And that’s just mind blowing. I if somebody gave me $100,000 right now, I would be…

through the moon excited. I have lots of things in my financial life that I want to do with $100,000. So if we all can find a way to help families not spend $100,000 on college, this impacts their life today. And if the way they were gonna pay for it was with the debt, this impacts their life potentially for decades into the future. Like that’s crazy for families not to know that they can do this.

Amy (47:30.251)

Yeah, I mean, I think what’s so shocking is that you didn’t go find more benefit. You didn’t go find another scholarship. You didn’t do any more work other than understand how the benefits work and be open to the possibilities of something other than 50-50. That’s just mind boggling to me. That’s amazing.

Kate Horrell (47:54.06)

And I think your family is probably having a pretty, you maybe not quite to that extent, but a pretty similar situation given the two schools that your kids are going to.

Amy (48:04.117)

Yeah, 100%. It’s made a big difference to just rethink maybe 50-50. That’s how we started. And maybe that’s the way that your family wants to think about it philosophically. It’s quote fair to spread it around like that. But once the kids start making decisions and start going to school, it’s better to zoom out and look at the big family picture.

Kate Horrell (48:24.622)

think to your point, right, it’s important, I found it important to explain to my kids that the only thing that’s fair about this process is that you all reach your educational goals at the lowest overall cost to the family and that you all are asked to take on a relatively equal share of the costs and not even necessarily equal. I have a child with some health issues and so

What was fair was not equal, but the goal was to move the family forward, not the individual. And we started impressing that on kids pretty darn young. Hey, team Horal needs to get through college, not kid A, kid B, kid C needs to get through college.

Mike Hunsberger (49:17.068)

Yeah, that’s a great overarching principle to look at it. Fair may not be equal. And if you set it out like that, it can make a lot of sense to do something to help the whole family. So yeah, that’s great. So Kate, as we start to wrap up, anything else you want to hit that we haven’t covered?

Kate Horrell (49:45.176)

We could stay on here all day, guys. I enjoy your company. It’s a fascinating and very in-depth topic. Just I want to encourage families to become as knowledgeable as they can be, to use ForThought. I want to throw out there one of the free resources on my website is a template. It’s a downloadable spreadsheet to map out what four years of college looks like, maybe at multiple schools. You know, if you’re down to

Mike Hunsberger (49:46.756)

We could, we could.

Kate Horrell (50:14.424)

two or three schools and engage your students in the process to the degree that you know is gonna work for their temperament because that’s very individual. In the book, I talk about one of my kids applied to an expensive university and when she applied, said, listen, I wanna encourage you to apply. I think you’ll probably get in even though it’s competitive.

I think there is 0 % chance that we can afford for you to go there. But I knew that she could manage that expectation. Not every student can, right? Some students, literally the world is going to come to an end if they get into their dream school and you can’t afford to pay for it. So that is an important part of the process. But I will say mapping out the cost from year to year to year is very, very critical.

And if you can engage your students in the process, that’s important, right? And it can influence some of their behavior along the way, but it also gives them the opportunity to put input into the process. And sometimes their input is really smart. Dash three at my house, I don’t know if you guys all know, military people, Started the process. Dash three, because we were shopping for financial fit,

Didn’t love the school that gave her the best package But she came back to me and she said number one if I go to that school I have to have a car look at where the school is located and I was like, ooh Way to speak your mother’s language, right? number two she said and Here are some things that I can do to make up that five that five thousand dollar a year difference I can live in a triple instead of a double I can

Amy (51:56.791)

you

Kate Horrell (52:11.31)

You know, she made up a couple of things. She really got me with the car thing, but I would never have thought of that if she hadn’t been part of the process. And she was absolutely right. Like we saved way more money by her going to a school with good public transportation than we ever would have saved by the $5,000 cheaper that the school was that was in a more rural area. plan, plan, plan, bring your kids into it when you can.

Amy (52:39.733)

It’s a team sport. I mean, I think for sure, you know, it can’t be, you know, your child go pick any school you’d like to, but also hearing them out. Those are great stories. You know, your daughter being so creative. So, you know, I…

Kate Horrell (52:55.278)

He knows her mama.

Amy (53:02.143)

I was so pleased with the book that you wrote. I wish, again, I wish I had had it before my first daughter and here’s mine all tabbed out and highlighted and whatnot. And it is on the list of, yeah. And it’s on the list of books. I like to give books away as gifts. It’s on that list. But for listeners who are interested, where can they find your book?

Kate Horrell (53:17.55)

I’m blushing.

Kate Horrell (53:30.552)

Well, it’s available on Amazon and it’s actually available now. I think both Mike and Amy know that it was out of stock for a ridiculously long time, like six weeks. But people are telling me that they’ve gotten emails that it is shipping. And when I looked last night, it says it is shipping in like three weeks, but you can order it on Amazon right now.

Amy (53:34.775)

sweet.

Kate Horrell (53:56.59)

There is also, I need to put a link on my website, there’s a way to order it directly from the publisher, but you don’t get free shipping. And so even though I make more money if you order it from the publisher, I don’t think that’s the best benefit to most families who can get free shipping through Amazon. The other option is if you hit me up, I mean, I could mail out 100 books this weekend, I totally could. Shoot me an email and we will work something out.

Mike Hunsberger (54:24.005)

And Kate, what’s your website?

Kate Horrell (54:27.743)

It is Kate Horrell, spelled exactly like my name, which I think will show up on the video.com.

Mike Hunsberger (54:35.237)

All right, and yeah, we’ll put it in the show notes, but definitely, know, Amy plugged it, but great, great website for all things, you know, military money, but especially the school stuff and military scholarships definitely go there. Kate’s got it by month. The scholarships are due and I can’t plug that highly enough. had…

We use that extensively when I getting ready for my daughter to go to her freshman years to look through all the scholarships. And there are a lot out there specifically tied to military service. So definitely take advantage of that resource on Kate’s website also.

Amy (55:20.491)

Thanks, Kate. Thanks, Kate, for your time. I know how busy you are. We really appreciate you giving up some time to spend with us here today.

Kate Horrell (55:20.59)

guys are so kind.

Kate Horrell (55:29.998)

I’m thrilled to be here with you guys. I wish we could hang out in person more often.

Amy (55:33.192)

Yeah, for sure.

Mike Hunsberger (55:33.921)

know who probably guess next spring again once we figure out where where Lacey’s gonna poster poster conference but yeah looking for looking forward to that.

Kate Horrell (55:42.382)

Well, I’ll put a little plug for that here, right? For those of you who don’t know, we all get to see each other each year at a conference called Mill Money Con. And it is typically at the end of April, beginning of May each year. And I have reason to believe that the date and location will be announced pretty shortly here.

Amy (55:44.436)

Yeah.

Amy (56:00.892)

forward to that. I’m excited.

Mike Hunsberger (56:01.74)

Awesome, awesome. Yes, it’s always a.

Kate Horrell (56:03.406)

I’ve been telling people that even if you are not a professional financial professional like we are, I still think there is so much valuable content at Mill Money Con that even if you’re just a service member or a family member, and I don’t mean just to be like, you know, saying anything bad, this is not your wheelhouse. You can still get benefit from this and you would still get your money’s worth out of this conference. Even if just one session.

taught you how to do something in your financial life better. Because I walk out of that conference every year, not only knowing how to help my community, but I learned something that I can apply to my own life.

Amy (56:42.785)

Yeah, and the group that congregates there is just so incredibly passionate about being, you know, learning more facts and details about how to help military families. And most are military families themselves. I just, love going in there. I’m an introvert by nature. It’s the one people you event that I go to that I walk away with more energy.

Kate Horrell (57:09.462)

It is super special.

Mike Hunsberger (57:12.944)

Well, until then, yeah, thanks again for joining us. I really appreciate you diving deep on all things college planning and GI Bill. As you said, we could probably go for another two hours, but we’ll wrap it up with that and definitely encourage folks to go. If you’re using the GI Bill or even financial planning for college, pick up the book. You’ll be glad you did. thanks again, Kate.

Kate Horrell (57:42.862)

Thank you guys, bye.

Amy (57:43.009)

Thanks, Kate.