No, I didn’t. I always assumed we would be full pay and I would pay for kids’ college education.
I am having financial discussion with D2 now about law school - how much I am going to help out and how much she would need to pay. If all goes well, she may need to decide to go for scholarship school (lower tier) or take out loans for tippy top.
I’ve never seen any statistics showing how many families do or don’t have a pre-application money talk.
From the CC chatter, it seems pretty clear that many families do not.
Some frequent adult posters on CC are in the habit of pointing out the online net price calculators right away at the start of many College Search & Selection threads. Are HS guidance counsellors routinely pointing them out, too? I would hope so.
Before the HS guidance office completes its end of the application process for any college (especially an expensive private or OOS public college), it could request - if not require - a print-out (signed by the parents and student) of the family’s net price estimate. If privacy is a concern, figure out a way to mask the numbers … but do not waste the GC’s time transmitting grades and recommendations without some evidence that the family has estimated its costs (or at least has been informed about the available tools.)
We didn’t give D a firm figure, but we kept her in the loop all along about how much was being contributed to her 529. We let her know what our parameters were, and that some merit aid would be needed. We told her early on that we’ll work on the saving and you work on doing your best to get some merit aid.
Only one of her schools, her highest reach, turned out to be unaffordable because of a high sticker price combined with low merit to her. But by then she had already decided on one of her other picks and all was good!
Thanks to CC, I learned about NPC and how financial aid works when D was a sophomore.I talked to D about college affordability after getting eye popping NPC results on a range of colleges. D always knew we could easily cover in state public colleges and universities. If she decided to attend OOS and/or private colleges/universities, then our limit was $X dollars. Anything above that would be her responsibility. (My parents gave me the same deal.)
For every school ever considered, even briefly, I ran the NPC and entered the results in a spreadsheet. If nothing else, it showed us the incredible range of expected family contribution. I shared this list with D so she could see what colleges thought we could pay, the total college costs her freshman year (assume 5% annual increase), and what we would pay after any estimated FA or merit aid awards (no loans) were granted.
From what I can see, in my area, parents are in denial or just plain ignorant. The high school does nothing proactively. Students and parents often learn far too late in the process, if ever, about merit aid and financial aid. Almost no parent knew about the NPC until I mentioned it. Almost no parent knew how financial aid was decided. It makes March and April very stressful months for unprepared parents and students…
I was lucky to have siblings with older offspring. The oldest entered college in the early 2000’s. The last one graduated college in 2014. I was well aware of college costs from the time D was in preschool. Even with that, we didn’t do a stellar job of saving so we can’t afford spending 250,000-300,000 over four years for college. I can’t imagine how parents without any experience or foreknowledge deal with this part of the college application process.
In the end, D never applied to an instate school, so all her choices are more expensive than if she had gotten into an instate school. But we’re fine with that because they are all affordable by our definition. The idea was not to attend the cheapest school, just one we could pay using just a small portion of savings, income, and no loans.
I know a lot of people who engage in a combination of magical thinking (the financial aid fairy is going to descend and give merit from a need-only school, or give their solid B student applying to a competitive college the tippy top merit award usually given to the 4.0 Val with sky high scores) and denial (there is 16K in a 529 account which is going to pay for two kids for four years each out of state… good luck with that).
So having the conversation- while hugely important- is really only step one. Step two is confronting your own financial demons. If you took out a HELOC to pay for an expensive kitchen renovation, then you don’t have the borrowing capacity you think you have to fund college. If you took a withdrawal from your IRA to finance “the trip of a lifetime” when you turned 50 then you’re going to be paying a penalty AND don’t have the money in there for retirement AND don’t have the money in there for college (not that I am advocating using retirement funds for anything but retirement.)
I’ve been privy to some sad conversations in the last three weeks-- parents who really don’t have a handle on their finances, and these range from upper income folks who seem to spend every penny, down to parents of more modest means who don’t understand how need-based aid works.
So yes- have the conversation. Pick a college list which includes affordable options even if the financial aid fairy doesn’t visit your house. But also get your financial house in order- don’t wave your hands and say “if he gets into Dartmouth we’ll find the money”. Really? In the backyard? What’s the plan here?
I’ve also been privy to some of the “he’s coming home at the end of the year while we figure things out” conversations. Sometimes it’s academic- kid not ready for college. Sometimes it’s medical- and kid needs to be close by. And very often it’s financial- parents sent the kid off without a clue as to where sophomore year’s EFC was coming from. And even a minor bump in the road (literally- a new muffler) meant zero cash in the emergency fund or maxed out credit cards which was the moment of reckoning that little Tommy or Susie needed a year living at home, commuting to the local state college (not our flagship which is not commutable) and working at Old Navy.
Nothing wrong with that- but certainly plan C, not A or B.
I’ve heard from my kid that one of her friends mom was saying out loud how she had to withdraw from her retirement account to pay for SAT prep, not even college cost.
Yes, we had the talk, which was actually more of a statement. “We can give you x/year for undergrad. Please don’t apply to schools that are more expensive unless they’re merit aid schools where you have a real chance at a scholarship.” It was a more generous number than our kids expected, and they were never resentful that it was less than our EFC. They had excellent college options.
When our middle d applied to law schools, she knew that we could help a bit with her living expenses, but that tuition would be on her. She had a strong application cycle with generous merit aid offers. She was also admitted to a top 3 school, which is need-only. We agonized over it, but finally told her we couldn’t co-sign her loans because we didn’t want that level of debt, and we didn’t want it for her, either. She accepted that decision gracefully then, and is VERY grateful for it today.
"…they were never resentful that it was less than our EFC. "
No one in my family ever thought the EFC was a realistic number. Another mind boggling number.
We’ve been very straightforward with our daughter about our financial resources. But there’s so much simply unknown at this point, a year before the financial aid decisions will be made. So many schools say there’s merit aid, grants, oncampus jobs, etc. available to help a student who really wants to attend…so what’s to say at this point? She knows there is no way we can come up with $60K for even one year, much less four. Our annual cash contribution beyond savings will be limited to about $10K. The money in the 529 will get sucked up the first year, I’m assuming. So she’s got to take this into account. She knows, oh, she know.
I agree with the financial demons part. We have gone on only one somewhat expensive vacation over the years, and usually only go away every other year. I know other families who must go away multiple times per year.
Families who make 200K+ yet complain about how much child care costs (“I’m not paying $15 per hour for someone to watch my three children!”. I cannot begin to guess what will happen when college comes along, then again, I think it is most likely CC will be pushed on the children regardless of ability or interests.
Daughter is a junior in high school. We’ve already had the talk. We will probably have it again, just before applications are due, in case she missed something the first time, or in case things change… But it’s something that’s occasionally mentioned during conversations.
@blossom – " the financial aid fairy" is pretty accurate of us! No, we had not talked about costs until this past year., as we just didnt know how much colleges costs.
We toured a college with Jr. D and LOVED it last fall; but when we went over the financials - it was completely out of reach. It was crushing for both of us, and a wake-up call. this forum has helped so much.
Like others, she can apply to favorite colleges besides our safety flagship, knowing that attendance is only possible if the highest merit aid is offered, and grandparents/rich aunt help out. We will not tap retirement savings for college.
i feel slightly embarrassed telling our kids that we havent saved more. we’ve lived frugally (compared to those around us), but have splurged over the years on kids activities.
I don’t trust NPCs, but on the other hand, they are better than nothing.
What galls me is that the EFC calculations are often very far off what people can afford without debt. That is, the expectation is that most families will go into debt to pay for college, and families of more modest means cannot go into debt, so kids are being shut out of certain colleges.
I’ve had the money talk with the kids since first grade. I reminded them that there were no entitlements in the family beyond food and shelter. So there weren’t any surprises when D1 applied to college. Reading CC over the past 2 years has been a reminder that many kids have unrealistic financial expectations and the parents need to be more involved prior to the application process.
We had such a talk about post-college education expenses also. He understands we have a limit. But we still co-signed one of his institution loans and we “promised” his maximum loan amount will not exceed a certain amount.
We started the conversation at the end of 8th grade, focusing on the idea that their efforts would give them more (or fewer) choices when it came to colleges. We were able to communicate how much college would cost and the expectation that they’d work and take out Staffords without having to present a financial statement. We determined at a very early point that we would be in that not-so-sweet spot of being close enough to full pay that the FA fairies would not be dumping magic green bills on us. S1 and S2 have been very, very appreciative of the sacrifices we made (and once they saw the college bills, realized just why they didn’t have cars, a big house and cool electronic toys). That appreciation has not always translated to academic performance, but I hope that they have a good foundation to build their futures.
I spoke at a parents night for juniors one year – these are highly educated parents with tippy-top score kids. Most had no idea that our flagship was over $23k/year and that EFC would generally represent about 30% of income. Shock and awe did not begin to describe their reactions.
I found out my parents were contributing zero just after we unloaded my stuff into the dorm freshman year. Was not going to do that to my kids. Transparency in financial issues may be difficult for us as parents, but our kids deserve to know what’s the real score.
We had the talk in sophomore year, well before the undergrad app process. Since half of our income was dependent on H’s work in the fickle entertainment industry, she needed to be aware that we had x amount saved and we could not depend on next years income or risk mortgaging our future or hers. This sort of constant frank discussion helped her when it was her turn to search and pay for grad school herself. She knows that funding dreams in the arts is a tricky proposition and that you can only depend on the current stream of income and savings, not what you imagine you will have in the future.
I knew more about college financial aid going into the process than do most of my friends and coworkers, but I still didn’t know enough. Thus, I probably didn’t educate my children sufficiently. But they were aware, as they have been for many years, of their father’s employment difficulties (he was unemployed, essentially by choice, for many years when they were in grade school) and the effects on our family’s economic situation, so they knew that whatever happened, paying for college was not going to be easy. And with my older daughter, if I had ended up being more specific, whatever I might have conveyed about specific dollar amounts would have been not very relevant, because my husband was fired (again) in early May of my daughter’s senior year in high school.
Our D is a junior and is looking at several LACs. We are not the standard salaried income family. We have a farm and are self employed and have substantial home equity since we have owned our property for 35 years. There are so many factors when it comes to determining EFC at private colleges. The age of the oldest parent comes into factor and each institution has a different criteria for how your home’s equity plays into their formula. Most private colleges cap it based on your income and it can use anywhere from 1.5X your annual income to 4X your yearly income to when factoring your EFC! Because of our unique situation, we used a college financial consultant to run the numbers for several different schools. We had a number in mind as far as what we could reasonably contribute each year. When the consultant ran the numbers, we found that all of the need based schools that met 100% of need were in our comfort zone. Our income fluctuates and all schools require that you fill out financial aid profiles every year that your child attends, so aid varies from year to year. Our D understands that there is a finite amount that we are willing to contribute every year and that includes spreading out a 529 fund over four years, as well as our yearly earnings. We figured there is no point in having her apply to schools that we cannot afford to send her to. Using a financial consultant to run the numbers gave us the peace of mind to let her know that she can apply to the schools she is interested in.
I had the talk with D at the time applications were selected; I was hoping for merit money. I didn’t anticipate D choosing a school at the very max of the budget, though really I SHOULD have: kids really have no concept of money, much less how much work it takes to pay that bill. I DID make it clear that there is a finite amount of money, and there won’t be a car or spring break money, or any splurges.
I also failed to get any meaningful commitment from the NCP on assisting with expenses. I expected to bear the majority of fixed expenses, but didn’t expect quibbling over paying for healthcare (D is still on his family plan) and phone expenses which he currently covers.
My other surprise is how hard it has been for me to come to terms with D choosing the expensive school over the economical one. Though we’ve mostly lived frugally, I feel I’ve failed somewhere in not communicating to her a proper appreciation for money. I hope it becomes clear to her before she is on her own economically