00:00Well, it's 30 years now. Can you believe it's 30 years since legislation came out for 529 accounts?
00:05I can't believe. I think I've been in the business 24 specifically with 529s. The biggest
00:10holdback is flexibility. People are concerned that it's inflexible, and 529 accounts have never
00:16been as flexible as they are today. You know, it's not just, you know, it's not just two and
00:21four-year institutions. They changed it. Absolutely. It's not just the traditional,
00:26you know, college. You could start with kindergarten if it's a, right? I mean,
00:29if you have to pay for kindergarten. Yes, K through 12, expenses, tuition, tutoring,
00:34credentialing, and now that's it on the federal level, so you got to check with your state to
00:38make sure the state approves it as a qualified withdrawal. Cooking classes when you travel abroad?
00:42You bet, cooking, golfing. Golfing? Golfing. Golfing schools. You just got to make sure the school's
00:49accredited. Don't get all excited. Be careful. Well, hello. No, can I ask you a question? What's
00:56new Trump account that I'm hearing about? Oh, so I actually love the thought of the Trump
01:00account. I hated it at first because I thought people were going to say, you know, oh, I'm going
01:04to do a Trump account as opposed to a 529 account. You do them side by side. The difference truly
01:08is
01:08that, well, A, it's free money if your child is born between 25 and 20, 2025 and 2028, you get
01:15that
01:15thousand dollars, and then you have the ability to put in that $5,000 in a Trump account. 529 accounts,
01:21you could put in a heck of a lot more than $5,000. So you actually have that ability to
01:25do a
01:25five-year upfront gift if you're so blessed to be able to do it. So the true difference is one
01:30is
01:31tax-free. You're growing tax-free, withdrawing tax-free for a qualified withdrawal on a 529
01:37account. But I love the idea of the Trump account. I'm sorry, I must say. No political sides, but I
01:42love it. Okay, fair. Tricia's got a lot of JP Morgan with this. What I get in my emails when
01:48this topic
01:49comes up, and Janet Lauren driving all of our coverage brilliantly, is, Tricia, people go, okay,
01:54my kid can't put the puck in the net. I don't have a FAFSA where they're going to give me
02:00money.
02:01There's all this help, help, help out there. Why am I paying full boat? What percentage of people
02:08are paying full boat at whatever school? It's about 40%. Some of it is that people just don't do the
02:16FAFSA. You know, some of it. Now, it's so interesting because some states are actually
02:21requiring you to complete the FAFSA to get the high school diploma. Why is that? Because that's
02:27a big debate even in the schools that I'm dealing with in New York State. Some people go, well, I'm
02:30not going to get anything, so why am I going to fill out the FAFSA? So why is the government,
02:33because I'm sure they're getting some type of benefit from the government, right, to encourage
02:37people to do it. It's more data for the government to have. The one thing I'll say about the FAFSA
02:42is a
02:42lot of scholarships you have to complete the FAFSA for anyway, and even though they're not
02:46need-based. So I kind of hold the philosophy, fill out the FAFSA. Who cares? It's 30 questions now,
02:51or 20-something questions. It's quick. Why not? Loaded question. In the suburbs today, across this
02:57nation, are public schools keeping up with the prep schools or the prep schools keeping up with
03:03the public schools? In which way? What do you mean? Preparing for college for a four-year legit study.
03:09Yeah, I tend to think that they are both doing just a fine job. I think what the-
03:16That came right out of JP Morgan compliance.
03:19I'm sorry. I do. You know, my father used to say to me all the time, I send you kids
03:23to private
03:23schools. Aren't these public schools teaching these kids anything? I think public schools are great.
03:28So I have to ask you, because look, I mean, I don't know what the right answer to this is,
03:32but through the first wave, I'm talking about the saving on a valuable education program,
03:36right? And through the first wave of these borrowers, I think there were 3.4 million of them.
03:39They hit the market. It appears to have crusted, but I'm hearing that another 7 million people are
03:44going to have to start paying their student loans again or go into default. So is that really
03:49happening? Is that going to happen within the next 12 months?
03:52That's what they say. But I mean, you've seen it how they, you know-
03:56Kick the can.
03:56Kick the can. So what, and people ask me all the time, like, what do you think about forgiveness?
04:00Are they going to bring it back? I have no idea. It changes every day.
04:02Wow. Yeah.
04:03So, you know-
04:04I can't imagine the risk to financials in the broader economy if that actually really hits,
04:07you know, household balances.
04:08Here's the thing. It's dead.
04:10Yeah.
04:11And I was always taught, you need to get rid of debt.
04:14So I'm just not of that school of thought to keep kicking it down the can in the hopes.
04:19I just don't, I just don't think that's a good-
04:21Tricia, when you and your troops do seminars nationwide, and frankly, with the international
04:25build out of J.P. Morgan, what's the emotion in education where the room heats up?
04:32The parents are in the room, they're talking to you, you're experts, you've got guests,
04:37J.P. Morgan, further experts. What's the emotion right now that heats up the room?
04:42I think you hit it when we opened it up, when you opened it up, saying the cost. And the
04:46most
04:46common question I get is, when is that going to, when is it going to start to come down?
04:50And I really try to encourage families to not bank on that. Like, instead of focusing on,
04:55when is it going to come down? Focus on, how much can I start to plan today? That's a real
05:00big one.
05:01I will say, the flexibility, and then now the Roth IRA, which I know, Alexis, we talked about
05:06the last time, that's a big question, too. Family is wide open now with the Roth IRA.
05:11The Wall Street Journal, Ann Turgerson, has a brilliant article today on this. That's great,
05:17except if I use my Roth IRA at 52, because Ignatz got into William and Mary, the answer is,
05:24it's not there for my retirement.
05:26No, it is not.
05:27Ignatz, Damien, is for Ignatius.
05:29I just can't believe that short game school is actually, can you put that in a 529?
05:34I mean, I'm just, I'm looking at golf schools.
05:37Here he goes, accredited university, go to the U.S. Department of Education. You'll be able
05:41to see if your school is approved.
05:44The Jim McLean Golf School, that's where I want to be.
05:47The person that takes the Roth IRA out is eating up their retirement plan to pay for
05:52the kids' school. You're looking at it.
05:5341%, Tom, last year, in one way, shape, or form, barred against their retirement, because
05:59parents will do anything to pay for their child's education.
06:02Alex, Alexis, jump in here.
06:03I mean, aren't we supposed to put our own oxygen mask on first?
06:07A thousand percent.
06:08So, what's, I mean, this just seems like a misguided decision.
06:12I mean, the heart is in the right place.
06:14I get it.
06:15Got to help the kids.
06:16But at the expense of your own retirement.
06:18Absolutely.
06:19Because who's there to help you?
06:20Where's your safety net?
06:21That would be my question.
06:22Why do you think I'm sitting here?
06:23Tom's going to be working forever.
06:24Mike wanted me to retire.
06:25Couldn't agree with you more, Alexis.
06:26Mike Bloomberg came up to me, he wanted my bag of Cheez-Its, and he said to me, I was
06:32like 59 years old, he goes, when are you going to retire?
06:35I said, Mike, I can't retire, because of your world, Tricia.
06:39I'm sorry.
06:40So, to her question, I mean, this is vital.
06:43It is, and that's why the earlier we talk to people, the better.
06:47We are missing a whole segment of population with children from zero to six.
06:51Most families do not start until their child goes to kindergarten, first grade.
06:55That's when they're thinking about education.
06:57Because then it's top of mind.
06:58We need to get them at birth.
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