Discovering Affordability

Paying for College
1

As my daughter works on essay analysis for her rising senior year, the question popped up, “Which colleges can I apply?”

Well, we have had some general ideas based on Net Price Calculators, but it’s a good question. What is affordability?

If you’ve browsed my posting history then you’ll see that we are a donut hole family. We make enough money to have to pay a lot for college, and being responsible we’ve saved up, which makes it more expensive. I won’t chase that rabbit down the hole again, but the question of what should our daughter apply to is a good question.

So for a family that lives completely debt free it is important for us to get our children through undergraduate debt free. If they want an expensive grad school then it’s on them. With the undergrad question in play I took on a three pronged approach.

  1. Net Price - Go to each school's NPC and enter the info. For us it's ugly. I don't know how anyone can look at top schools and see the $300k+/4 years starting price and not choke, even with the "generous" financial aid NPCs return. Gotta love that "You qualify for $24,000 in financial aid and only will be responsible for $51,000 per year!" Thanks generic top school for your generosity!
  2. Merit Aid - This is important because the NPC for most of the top schools is just too high even though we've put back 40% our take home pay for college for 7 years! If you aren't asset wealthy, and I mean in the hundreds of thousands of dollars, there's no way to make the NPC work in your favor. It's rigged, but I digress.
  3. AP Credit - Our daughter's high school has a nice selection of AP classes to take. We are fortunate in that sense. I know there are a lot of high schoolers that don't have that option. So I sympathize, but it's part of our equation. We use the AP credit to say, if you want to go to X school, but it's per year cost is above our budget, then maybe use AP credits to get out of a semester or year to keep the total cost in budget.

It dawned on me though, is the AP route doable? There are very generous schools out there where 4s and 5s could reduce school from 4 years to 3, saving substantial money at very elite schools. But practically speaking, is this possible or will unforeseeable events such as class pre-reqs, only offered spring or fall, class full, etc that could derail this and end up forcing a 4th year if you’ve been planning for 3 financially?

I realize that as I write this, our situation is for the mid to upper middle class family with a high performing student that is shooting for the top schools. This student will be competitive for top schools (merit) and has a very difficult/competitive GPA (AP classes).

But maybe this discussion will open the eyes of parents new to the process or hadn’t considered the entire package.

One thing I must say. Our daughter insists on applying to Columbia. She wants to eventually practice law in NYC. I love her drive and passion, but it concerns me. It absolutely fails our affordability test. She’s as competitive as anyone else to get selected and if she does we can’t afford it. I don’t know what to do. There is a scenario where a generous school like Princeton or Stanford accepts her and she could get Columbia to compete, but I’m just as likely to sprout wings and fly too close to the sun.

Anyway, the human factor of desire and dreams could make all this financial planning go to crap.

And to throw more into this discussion, where does UChicago rank on affordability? Is it in the Harvard, Stanford, Princeton scale? Is it more like Yale, Brown, Cornell, Penn? For those wondering, the distinction is that home assets are not used in the first set of financial aid decisions. The exclusion of home equity makes them more affordable for our family.

I wish she’d give up the Columbia dream. Yes, I know the odds, and she does too. But plan for the worst and hope for the best.

Have a great time tearing me apart on this!

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Your daughter is insisting on applying to Columbia but you can’t afford it if she gets accepted? Take a page from Nancy Reagan and just say no. Seriously.

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If you can’t afford to pay for these colleges…many of which don’t have merit aid…then this will be an issue!

4

We were crystal clear about the financial affordability with our kids well before the application cycle. We set our financial parameter and had no issues later. If you can’t afford, then your daughter needs to know that. She can attend an affordable college and shoot for the law school at Columbia.

5

The issue with pre-reqs is a bigger problem for engineering majors and sciences where you really have to have classes in a certain order than in some of the humanities. Not sure about econ. As a pre-law student I know your daughter could have pretty much any major but is more likely to be in the humanities area … what is she thinking at this point?
You probably have seen already that you are more likely to get full AP credit, not just placement, at state schools and less selective private schools. My kids haven’t looked at any of the Ivy schools except Brown, but we have looked at more selective LACs where pretty much across the board you can get AP credit but it won’t count toward your general ed (breadth) requirements.

6

It’s a parental decision as to how much you will spend from your savings, pay out of current income and borrow for your child’s education. Be aware that co-signing for or with your child on a student loan means YOU are borrowing too and the lender has Two People to hit up rather than just one to pay back that loan.

What I have seen often happening with families like yours is that if kid gets into dream college, or a particularly prestigious one, the parents break open that bank and borrow, do just about everything and anything to make it happen. If it’s a school without name recognition, it seems it’s a lot easier to be firm about the cost limitations. Too bad if Little Known Private U is your first choice. If it’s going to cost double big State U cost, not gonna happen.

So that’s where it likely will go with Columbia if your DD is accepted. If you possibly can, you’ll get the money to make it happen. If your assets and income are at s certain point, Columbia isn’t going to give you financial aid. These highly selfctivevschoold do not tend to negotiate price either. They don’t have to do do. And there is no merit money.

Fordham will likely come up with some money, for students who have stats to be in the midstream of Columbia acceptees. And if you are a NY State resident, total cost at s SUNY, sleepaway included will likely be $25k or so. So there you have it.

7

Yes, I know about the Columbia issue. It’s so hard to watch her study for test after test for years and all the extras to then say, your dream school is out. Now to be fair the DREAM is Harvard. But it’s really 1a and 1b with her. Of course these are many people’s dreams and I am in no way stating that she has those choices. It’s just that in all of this analysis, (you should see my spreadsheets), the one chink in the armor is Columbia. I can’t believe that in all the time reading and learning the process on CC that in the end our family may still fall to this classic problem.

Her line of study is Political Science. Yes, I had issues with pre-reqs and availability as an Electrical Engineering student years ago, so that’s why the worry with APs. It is an interesting proposition to look at schools in a 4 v 3 year parameter. It would make the experience tougher since the “easy” classes would be bypassed. I don’t know, would you want to take an essays class or history class again if you didn’t have to? There are a lot of essays I wouldn’t want to write again. My daughter seems to be on the fence on that. She likes the idea of easy classes. I’d like the idea of no class at all even better.

Thanks for your responses.

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Hard to stay firm with one’s daughter, but a firm line must be drawn on the financial front. My wife just mentioned a co-worker talking well north of $100K for his daughter’s wedding. That is what I call “funny” money - lavish spending for one day. At least the ROI for higher ed makes some sense; however, college costs have comparably gotten out of control and one must stay grounded. Limit her to affordable options. The SUNY system is an absolute bargain. I agree with the poster above who said for her to set her sights on Columbia Law - not undergrad.

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RE: Columbia: Just make SURE your daughter knows your budget limit, and that you won’t pay more. Liken college shopping to shopping for a car or a house. You can test-drive a Lamborgini for fun, but you’re actually buying a Toyota. End of story. You can to to an open house at a McMansion for fun, but you’re only putting in an offer on a 1800 square foot bungalow under $xxxxxx. She needs to know that to a large extent that Columbia application is “for fun.”

As for “easy” classes. A college history class – and the requirements for a paper for it – at a decent university quite often will not compare to high school. The A student in high school taking a university-level class may have to struggle to get a C. And frankly, that’s the way it should be. And probably will be at schools the caliber of Columbia or Harvard.

10

Using AP credits to graduate earlier will likely require good planning and no flitting around from major to major.

Can you pay for 3 years of Columbia? 2 years? If so, set that down as the budget limit. Life doesn’t end after undergrad. Grad school is a possibility too.

Ask her what characteristics she likes about Columbia and see if they can be found elsewhere too.

11

For real answer on AP you need to look at each school. One D’s LAC allowed only a max of 3 to exempt classes. Others could be used for placement. D at big state got credit for all hers but they didn’t necessarily help. For instance her major required euro OR us history. She had APs for both plus world but only one counted on her program and then still needed a non-western history. She did get the hours for all so she was two semesters ahead for things like priority on registration times and football tickets but didn’t help her graduated early. She did double major. Maybe with planning she could have shaved off a semester. On each website for schools you are researching check for AP page which should explain how courses count.

You can also dig into department pages. Sometimes they will have a list of courses that will note when taught (every spring, every other fall, etc). If you visit, asking tour guides and current students about availability of classes and how easy it is to get into ones you want is a good idea.

Agree about setting budget expectations… It avoids arguments to just say “you have $x for college “ and then let her do the research and math and reach her conclusions before she applies.

12

Ask her if she really really wants Columbia and why.

If she really really does (and you only have money for 2 years of Columbia with no fin aid), Columbia GS is an option. Would require a year of no schooling before Columbia GS (if she gets in). Credits from elsewhere would have to transfer too.

13

The best way is to start with what you are willing to pay per year for COA. Be up front about that with you D. Tell her she can apply to certain schools and if she gets in that you guys will have to see where the money shakes out. In the meantime find schools that will meet her academic needs and that fall within the financial range you set.

The wildcard at some school is the merit money for some kids. You just don’t know until you apply and get accepted.

14

If she knew right now that Harvard and Columbia were out, would she study one second less for those tests? Would she opt for the regular math instead of the honors math so she could take it easy? I really doubt it. Top students are usually motivated by wanting to learn the material, not because the only reward is Harvard.

My daughter was a good student but not top of the class. She worked hard. I’d often get up on a Sunday morning and find her studying chemistry or math before going off to play lacrosse for the day. None of her teammates did that. She did not go to Harvard but she went to a school she liked and I could afford with merit aid and a lax scholarship, so I guess that part of the hard work paid off too.

15

Let her save Columbia for law school. She should take on the least amount of Debt. Yes, they will ask for your income and assets for law school financial aid so you will not be off the hook. HYS Law only gives need based aid, not merit money. At least she will be able to take out loans in her own name for law school.

If you cannot/will not pay for Columbia, then it has to come off of the list.
Columbia gives a max of 16 credits for AP courses

https://bulletin.engineering.columbia.edu/advanced-placement

16

Also remember that lots of kids want to have a full four year experience and graduate with their friends, even if graduating in 3 years is theoretically feasible. S18 loved UVA and was offered an Echols scholarship which exempts you from all GEs. So he could have used AP credit to graduate in 3 years and save on OOS tuition. But he decided he’d rather stay in-state and have four years at a less expensive college instead, and he’s really glad to have made that decision. It also allows him to do another minor or major and get more involved in ECs, internships, research, etc and be better prepared for grad school or to get a job afterwards.

17

What is your home state?

18

A friend of mine was in a similar dilemma. His daughter wants to go to med school after college. She got into Columbia and the cost was prohibitive It was her dream school. “We don’t offer merit, you make too much money, we’re not flexible” She did, however, get solid merit money from Fordham, and it turns out she’s very happy there. I think that was parental decision. They weren’t going into debt to fund her dreams. Dream schools with 5.1% acceptance rates and zero merit can be the source of heartache for donut-hole families.

It seems simple: you can only send her where you can afford without going into parental or student debt. Human desire is powerful. It mucks things up. Where will you bend to meet that desire? Either she or you will need to take out loans. Are you prepared for her to have heavy debt? Do you, after saving for so long and forking out a significant amount of your current income, want to get a parental loan on top of that?

Sure, let her apply to Harvard and Columbia.

If she also applies to more affordable public ivies (flagship state schools), National universities or excellent Liberal Arts College that offer merit aid, you will have some other options to weigh against the dream.

I think your daughter will probably want to use some AP’s to relieve a little pressure once in a while for transfer credit, but I don’t know if she wants to shave a whole year off her dream school, will she? Also it may not be possible to given core requirements, though I’m no expert in AP transfer.

It sounds like you are great parents with a lovely daughter. I think the sooner you settle in your mind what you can and can’t afford and have that chat with her, the less heartache you’re going to have.

It’s OK not to go to your dream school if means avoiding crippling student or parental debt.

19

Also, why does she want law school and how badly does she want law school?

There’s a lot that money can do for you if you let it grow and compound.
$300K compounding at a conservative 5% a year growth rate becomes $800K in 20 years. Nearly enough to retire if you are frugal/go live somewhere cheap. 2.1M in 40 years. Definitely enough to retire.

I know that I would much rather be a 40 year old who went to No Name Podunk U and has enough to retire or do the work I want (or nothing at all) rather than be a 40 year old wage slave Columbia and pricy JD grad with 6 figure debt being stuck in a job I hate.

20

Columbia will not match Harvard or Stanford’s FA. Only HPS exclude home equity, but all other Ivies do count that.
If your daughter applied to Columbia and gets in (< 5% chance), then are you willing to pay ? Otherwise, don’t let her apply. It is going to be very hard to turn down her dream school ‘after’ getting an acceptance.
I have heard of someone graduate Harvard in 3 years to save money, but this is quite unusual.