@PurpleTitan brings up a good point. Unlike mortgages, which were representative of a US economy (yes I understand their of foreign buyers in residential real estate as well, but most of them aren’t getting mortgages from US banks), the US universities do play in an international economy. The top (most in-demand) universities may outstrip the ability of almost all middle/upper-middle class Americans to attend without crushing debt) even really noticing it. Perhaps they already have.
Count me in as the parent of a child who had to turn down her first two choices because a budget was set and it was pretty firm. In the end, she gave up the next two choices as well when she found out a school near the bottom of her list came in so under-budget she just couldn’t say no lol. Even if I had all the $$ in the world, I’d still set a budget and have my kids work within it and it would not include $70K tuition bills. Real life.
That being said, your daughters are very lucky and sound like good girls who understand the value of the dollar and will forever be thankful for this gift you are giving them. Best of luck to them and best of luck to you with your Ramen Noodle Casseroles.
I think it’s important for the kid to have some skin in the game, especially if they choose to turn down a scholarship and the school they do choose isn’t clearly better (e.g. Stanford vs ASU). Some small amount of debt, like 5k/yr, helps them to understand the consequences of their decision and also makes them more invested in succeeding at their chosen school.
I think that when some people claim that debt or high cost was “worth it,” they’re responding too soon. I’ve heard parents who are borrowing or cosigning huge loans for their child’s fave school and they’re pronouncing that it’s “so worth it” because they see that their child is happy. Well, that is assuming that the child wouldn’t be happy elsewhere, and that’s debateable. Furthermore, fast-forward 5-10 years…how many will still be saying it’s “so worth it,” when that debt is an albatross around their necks?
IF that debt is an albatross around their necks.
Not every story of debt ends in catastrophe. Not everyone will lose their jobs, not everyone will die or become disabled, not everyone will have a bleak financial picture in 5 or 10 years.
The OP has put one child through college already, I willing to give him/her the benefit of the doubt that he/she knows what their doing.
Or-- make your child MAKE it worth the money.
Forget the pricey sorority. Spend the time she’d be spending shopping for a dress for a formal and get a research assistant job with a professor doing cool and cutting edge stuff. Forget partying on Thursday night in anticipation of the weekend and get a job in St. Louis working with the homeless or with kids who have a parent in prison. Forget Beer Pong and take a strategic foreign language-- Mandarin? Russian? Korean? Arabic?
I am AMAZED at the number of kids I know who spend four years in college like it’s summer camp but with better booze.
We were full pay and told our kids we didn’t care what their GPA’s were, what they majored in, or how “practical” their degrees were. But when else is the Dalai Lama and Madeline Albright going to appear on the same dais to discuss world peace? When a chamber orchestra concert is free with a student ID? When there is either a poetry slam or a gallery opening of a weird ceramics artist or a lecture on assisted suicide going on every single night?
Our full pay/full price colleges were most DEFINITELY worth it because the kids made it so. Great recommendations from professors- not always for class work, usually for outside (one kid helped edit a book- got a nice credit in the “thank you’s” which was sweet). Heard fantastic world leaders, artists, exposed to stuff you won’t have the time or money for later in life (free opera tickets? who gets that?).
If your D didn’t make Brandeis “worth it” that’s on her. Too much great stuff going on both there and in greater Boston not to take advantage of…
OP, are either of your kids planning to attend grad school? If so, who will pay for that? I can’t imagine just a 4-year degree working in today’s economy but could be wrong.
I’ve said this before on a different thread that going into debt to pay for college often seems like a solution to a problem but in four years it will be the problem. While it’s hard to say, many times the kindest thing you can say to your children is NO.
Perhaps I overlooked it, but @Darthdad, is being full pay for both kids going to change your lifestyle in any dramatic way? Will it affect your retirement planning? Will you/your spouse have to work multiple more years than you’d planned? Will you have to take out any loans? If not, then congrats on being in the enviable position of being able to be full pay and allowing your kids to choose the right fit.
No one likes to spend that kind of money, but its ok to choose to drive a Lexus even though a Yugo also has 4 wheels and a horn (do they still make those things?)
OP Its your money. You do whatever you want to do with it. Are you asking strangers here to judge your decision?
@jym626 The better comparison I think would be Honda vs Lexus
“but in four years it MIGHT be the problem.” FIFY, unless of course, you have access to the OP’s income tax returns.
None of us know the OP’s income or expenses, none of us know the OP’s assets or liabilities, if any. No one knows anything about the OP financially. The OP has put one child through college at full pay, and he/she appears to know exactly what’s involved with their 2nd child.
We should all just say “congratulations” and “best of luck to you and your family’s future.” I will.
@jym626: They stopped importing Yugos in 1991, but they actually still made them until 2008. However, in one of those awful things-become-valuable-just-because-they-are-rare scenarios, the U.S. Yugo has held it’s value better than a Lexus! Of course, maybe that just brings us back to exactly what the prestige/value decision is all about: It’s valuable to me partially because I can afford it and not everyone can.
Even though the actual long-term career advantage of a “prestigious” school may be negligible for all but a narrow band of pursuits, the social advantages are probably longer lasting. Let’s be honest, dropping “While I was at Yale I …” grabs more attention in a social situation than “While I was at Community College I …” In fact, I bet if they ran a study at a dating site they would find that, all other factors being equal, having certain high-prestige schools on your dating profile would result in a significantly higher number of requests for dates. They may not do better on the date, but it might get them to the table! While HR departments may be more rational in behavior, University names still serve as subtle cues for social status.
So if the individual feels pride by saying I graduated from “X”, or my child is going to “X”, that may be a value all of it’s own that is completely separate from the “actual” economic value of the education. (Say it enough times over your lifetime, and that extra $100,000 may only actually cost a few dollars per name drop!) Seriously, though: Although I am firmly in the camp of “no” to paying heavily for prestige and “heck no” to borrowing heavily for the same, I do acknowledge that there could be real social value to certain individuals from the investment that is far greater than the economic value we typically debate.
If those of us who don’t choose the route of @Darthdad deny the reality of some social value to the choice, then we are probably being just as self-deceptive of those who do make the choice and try to defend it economically (which, to be fair, DarthDad has not done)
@jerseyparents and @ NashvilletoTexas - I used the yugo analogy (and great car history, NashvilleTexas) in the hypothetical analogy as I didn’t recall seeing what school was the one that gave the big merit aid. While one can assume it was Miami (on the beach) it could possibly have been Barry U or Lynn U or Florida International for all we know, and while probably unlikely, if so, would be on a different caliber than U Miami. And a big scholarship at Miami would put its cost at that of a yugo (intodays dollars- just for arguments sake). A Honda Accord might cost more, and would perhaps be comparable to Miami with a medium sized scholarship vs full pay at Wash U. Cost-wise, a Honda Civic might be closer to Miami with a big scholarship.
I’m a BIG car fan, but that’s a fantastic “pull” on Yugo knowledge and their current values relative to their original cost. I’m impressed. ^:)^
Wow. This is a remarkable statement. Wow.
““but in four years it MIGHT be the problem.” FIFY, unless of course, you have access to the OP’s income tax returns.”
You are correct. I don’t. I didn’t specifically direct this to the OP. I was making a statement in general. The best thing to do is to determine ahead of time how much you as a parent are willing to contribute regardless of your financial status. It doesn’t matter if it’s from savings, current earnings or borrowing. The rest would need to come from the student, be it from scholarships, grants, loans, work etc. Being in the situation where you feel compelled to borrow excessive money to satisfy your child’s wishes is not a good thing. If your child knows what you are committed to ahead of time the question of whether or not he could choose his/her preferred school would be answered almost as soon as the financial aid package was received.
“I sometimes wonder if all of the efforts to land into elite schools is truly ever worth the money? I am neither resentful nor frustrated.”
You won’t REALLY know, since your child can only attend/graduate from one school and therefore you can’t truly compare side-by-side whether she would have done as well/better/worse at directional U for a fraction of the cost.
So don’t wonder. Accept the fact you paid a premium for their education. Could you have saved a bunch of money? Probably. Would that have changed your life significantly? Probably not. So be happy you could afford to pay premium without driving yourself into the poorhouse. Odds are you and your husband are educated, have worked, and are in a good situation financially thanks to that education and work. Spending generously on your own children’s education – to help them gain the same kind of financial stability – is certainly nothing to feel ashamed of. It’s probably what you studied/worked for. Enjoy that aspect of it.
@jym626 & @JerseyParents: Considering the costs, the better comparison would be between a Honda and a Bentley.
I took input from my kids on what they wanted in a school and steered them toward a good value school.
Both DDs ended up going to my “parent pick” …For DD1 it was not the cheapest, but it was an affordable, good value.
For DD 2 she applied there ED and loves it.
I think every family situation is different. It’s great if families can afford $60k+ a year, good for them! Not the case in our household. What bothers me is the kids that take on debt but are stretched so thin it’s unlikely that they will actually be able to graduate because they didn’t look at the four year costs. I have friend that has a daughter that is going to an expensive school on the “Fairy Godmother Plan” She was able to beg and borrow enough money for the first year just, she might be able to do it for the second year but I really doubt she’ll manage past that when he sister starts college.
Oh, and she plans to go to medical school…