One thing that I haven’t seen mentioned: What any one parent does might depend upon what affordable options are available, and specifically how strong and how good a fit the affordable options are.
If the affordable option is U.Michigan in-state or McGill in-province, and if these schools were a good fit for the student, then the answer might be different than it would be if the affordable option was less desirable.
Of course Michigan and McGill are not a great fit for every student, which is a different issue.
We were lucky to have very good affordable options. If we did not, then I would have also been okay with paying full price (assuming we could do so without debt).
Agree with the above, @pishicaca. IMO, if this family has the means to be full pay for their only daughter’s top choice college and it doesnt involve loans or changing their lifestyle, then why not? If they have their retirement well funded (sounds like they have a very comfortable asset cushion and they have a very ample pension, IMO their daughter’s education is a wonderful gift and a far better investment than, say, a fancy sports car.
@DadTwoGirls makes a great point, primarily about fit. You have the resources so funding the right fit is really the issue (to fund or not fund). Not about “best school” as that varies per person. You are fortunate (as we are). You have the funds and you/ your child know the right fit. So you can take care of that.
In our case the right fit meant full pay at a great school in a different state. Our Flagship, which is on the rise in the rankings, would have been essentially a full ride but it was very much the wrong fit. Most people we know who attend love it. But S didn’t care for it at all (nor did we). OK. So we changed our focus to fit and found several fine schools he loved and chose one. Doing the same with D now and her fit guide is far different than his. But we’ll be able to do the same funding for her. Her’s will likely be far less expensive than his because of the nature of the program. We saved the money long ago, so now we have it to use for that purpose.
I am sure you have worked very hard, but you are very fortunate. Maybe you got where you are also by being frugal so paying for college poses a new kind of behavior.
It makes sense to pay outright without loans (unless you are in a state with a top notch state school). If you had more kids, it might be more of a dilemma.
Sounds like she can go to her preferred school (if she gets in) AND you will probably still have the retirement lifestyle you want. Feel good!
I think this is just down to the school options, would you pay OOS full freight for e.g. UCI and turn your back on instate rates in Uminn? Would you turn your back on instate UT for Case Western? It isn’t always going to be sensible or straightforward, so you just accept it is purely emotional, not logical. Best not to ask for opinions here IMO. LOL. Overpaying for the same outcome without tangible benefits is something only you can feel comfortable justifying. And people do it all the time as successful branding and marketing will indicate. I assume there is no merit money in the game.
I was in the same situation as OP: our only child but had a higher Net Asset figure. On one hand, had an Honors College with merit money (meaning total cost of $5k per year) vs. Stanford at $70k per year vs. UCLA/Berkeley at $45k per year. For me, it wasn’t about trying to save money but whether I was helping our kid by spending $300k on his college education vs. investing that money for him. But I was saved from thinking too much by two factors. First, my wife said she would kill me if we didn’t send him to Stanford after he got in. Her reasoning was money will come and go but the Stanford degree would remain with him. Second, a great gap year opportunity arose, and only a private college would hold a spot for our kid next year as a deferred admission, whereas public colleges made him apply again, and we would lose merit money. Every quarter when I wire $24k to Stanford, I tell myself I am going to get an expensive car after our kid graduates. Good thing he doesn’t want to pursue Masters or Ph.D.
I think this is a big assumption (overpaying) that hasn’t been shown on this thread. Just because you pay more for a certain college doesn’t mean you are necessarily “overpaying”. Fit is very important IMO.
OP doesn’t have Stanford in the equation. Top 40 is broad. IMO it is totally incomparable, and if it was Stanford on offer, this thread would not exist.
It saddens me that so many on CC are willing to tell other people how to spend, or not spend their money. Its not like this is the first full pay family on the planet.
You’re not crazy for the concern but no need to worry in the big picture.
120k pension is the economic equivalent of 3mm at 4% forever. Another 35k for SS. 150k a year and your low debt before you wake up.
Then your additional 2.5mm in assets. If it is in the form of home equity. Retirement may include a downsize. However the assets are still there.
So the economic equivalent of a 5.5mm family and two more years of work at the high income level.
These are certainly within the top .5 percent on a global basis.
The question is valid. The premise is not. If this child can not attend an elite university as represented by top 40 US uni in the real world - no one can.
However it would not be crazy to go to a great instate flagship or a merit granting uni either.
OP, we were in the same shoes (or a version of them) several years ago. We had saved for college, knew that we had stashed away enough to be FP, and were aware of how privileged our kid was to have his choice of schools.
And still, we had that OMG moment when we realized that although we’d always planned to make this “purchase”, it was one of the largest chunks of cash we’d ever laid out and would the school that offered all that merit aid in fact be so much “less” than the first choice school that did not. I get it. It seems like planning to pay for college happens in the abstract, and then there is the shocking reality of it. (We, btw, supported DS’ top choice without merit and have been delighted with the opportunities he’s had. But who knows what another path might have offered?)
If you are paying for a good fit for your D and she appreciates it and can get the most out of those 4 years, and if you can afford to pay, it’s a tremendous gift to your child. Not everyone is so lucky. I would make sure she’s engaged in the process and thoughtful about it, so if your misgivings are coming from that, have a heart to heart with her.
No, it doesn’t have to be Stanford to “justify” full pay. We are also one of those families that had the money set aside, D19 got into her top choice, no it’s not Stanford but so what? It was a semi reach for her (more of reach than we realized when we saw the latest admit stats actually) and she’s not far into her first year but so far it seems undoubtedly the right choice for her. She has also watched her schoolfriends have to make compromises on their college choices to fit budgets and realizes full well, and is grateful for, how lucky she is.
@Sybilla I respectfully beg to differ that OP’s situation and our situation are vastly different. The key point I got out of OP’s initial post is that his/her kid REALLY wanted to attend the expensive private college, and OP wanted to make it happen. That was the same situation for us. It was not so much that so and so college was awesome etc. It would have been the same thing if our kid REALLY wanted to attend UCLA or Pomona or Rice University. Initially, I tried to persuade our kid to apply to Pomona because I thought he would fit a small liberal college better, but he said Pomona was too small for him.
You may not believe it, but I would actually have been more proud to tell people that my kid is attending so and so Honors College on a merit scholarship, and in some sense, I might even have been more proud of my kid, had he chosen to attend the Honors College because it would have been an indication of certain level of maturity. However, I am glad to say that as a Sophomore, he now realizes why sat him down and gave him a talk on why it may be a better choice to go to Honors College on merit money and invest $300K.
Our kid is also very grateful to us as well, and also realizes he’s very fortunate. His respect for his parents went up a notch after he went to college.
My D20 would say ‘yes.’ We are in a similar financial and life stage situation. He narrowed down his schools to 2, loved them both. $50k difference in annual price tag. He could not convince himself that one school was worth a $50k premium. We urged him to not consider the cost, and he told us that was crazy. He added, too, that he would feel a lot fewer at the state flagship, where he wouldn’t feel as much pressure to LOVE it. Just one data point, from or 17 year old.
Same position in this family too. Both of our kids did not choose their less costly acceptances. One chose the most costly acceptance…and it wasn’t Stanford. We were happy to support their college years, and don’t regret one bit that we were able to do so.
We got two through private colleges at full pay (small NMS for one of them). One year was an overlap – two kids in college.
Three main sources: our long-term savings (not in a “plan”); current income; some money contributed by the grandparents, equivalent to about 1 year of costs for each one; and delaying retirement a couple of years. That delay also allowed me to continue contributing to my 401k. One can also file for Social Security early but I don’t recommend that.
So the kids graduated without having any debt, nor did we. The surprise came later when one of them decided to go back to school for an MBA after having worked in the economy for 5-6 years.
Haven’t read the entire thread. For a Top 40 school, no way. For a major university/college with international name recognition, definitely. I would sit down with a financial advisor and do some long term planning ( You may have already done this). You need to consider not only how much $ you have but also where you live. If you live in an expensive state, that is going to be a very different calculation. Also, think about the health of your parents and your husbands. Are there chronic illnesses in the family?
We thought long and hard before deciding on private schools ( Pre-college). We were very honest about our kids in terms of metrics. And we thought about what are the potential paths to get from A to B. There are always options.
With almost a dozen nieces and nephews, we have a number of data points. Many of these schools are not worth the $. At all. The results are not good. Paying the same amount to go to X as some major U isn’t worth the cost. Some in our family sunk themselves into debt because they couldn’t say no to their very average to above average children. Some of the kids are also in debt. The kids who were at the higher level academically worked harder in both high school and college and that seemed to carry through into their careers. The debt for them seems to be lower. So I think the difference depends on honestly assessing potential of the student.
Let’s face it. That’s hard to do. But there are real differences. Look at the metrics.
Agree with @pishicaca. There was a similar thread started by @carlsen. Have private colleges gotten so expensive that multi-millionaires are thinking twice about paying for their children’s higher education?
Why is it sad? The OP opened this discussion and can take or leave it. No one knows the ins and outs of their finances. That sounds like a nice pile of money, but retirement in a HCL area can be expensive and unpredictable. The advice to confirm with a financial advisor to confirm they are well positioned for retirement and being full pay is a good idea. I also thought the advice that if you decide to do it, just find your zen with it and let that money go without complaint. There’s no use in stressing over it after the fact if you really have made a comfortable decision for your family.
I do know families who hem and haw all 4 years but I suspect most of them really weren’t making sound financial decisions to make a college “dream” happen.
I will say we are a full pay family. My spouse is approaching 60. We have 2 kids. We live pretty modestly in a HCOL area. My high stat kid applied to a huge range of schools. Going through the process made things clear for us. Sometimes the school that shows you the most love is the school that is cheaper. We are actually 8-10K under what we thought we’d pay at a minimum and 20K+ less than we thought we’d be paying. After talking to faculty and retouring facilities and campuses, the cheapest option really was the best option for what my kid was looking for. And he’s at a top 50 school. My kid is also considering grad school too so that gives us some flexibility to help on that end too. We will see how the process goes for the younger kid. My kid did hope at times he was in a larger city, etc. But some of those extra funds could help launch him to one of those cities after graduation.