Dollars and Dreams

Parents Forum
1

<p>I want to be able to tell my daughter, "Follow your dreams. You can go to college anywhere your talent will take you."</p>

<p>But the reality is, our EFC is likely to be far more than we can actually pay. We have a relatively high household income--now. But that good income is relatively recent, so we don't have the kind of college savings that that income would suggest we should. We're also struggling to pay off debt acquired during tougher times, when my husband was laid off for an extended period. The bottom line? Our ability to pay is about half of what the financial aid calculators assume it to be. </p>

<p>I'm panicking. I feel like such a failure for not having a big fat college savings fund ready to hand to her. :( She's so excited about college, and I'm so scared that she's going to fall in love with one that we just can't afford.</p>

<p>I've already found great advice here on finding colleges with good merit aid (she's a brainy girl, so her odds are good). But I'm also wracking my brain for every way I can possibly save more and spend less, so that I can squeeze maximum dollars out of my budget for college. </p>

<p>Suggestions, anyone? Here's my list so far:</p>

<p>o Sell my car and get a much older/cheaper one; bank the difference.</p>

<p>o Find a carpool to save on gas.</p>

<p>o Buy clothes at thrift stores.</p>

<p>o Donate plasma for $$$. </p>

<p>o Get a second job part-time.</p>

<p>o No eating out, no movies out. </p>

<p>o Learn to love ramen noodles!</p>

<p>o Cash in part of the retirement fund to pay off debts (and yes, I know this is a very bad idea in the long run).</p>

<p>o Stop giving to charity (my heart aches at this but I can resume after the kids are out of college).</p>

2

<p>Don't forget the kid's part.</p>

<p>Kid takes out unsub stafford every year.
Kid gets campus job.
Kid gets summer job.
Kid gets Christmas job.</p>

<p>IF, and it's a big if, you can have the talk about FA NOW (don't mince words and don't wait)- then there is a good chance y'all can be allies on the merit aid search. If not, then it's unlikely to go well.</p>

<p>Spend 80% of your time looking for financial safeties. Anybody can love ___ (insert fave school here).</p>

3

<p>Curm, as a financial safety, would you consider that to be an expensive school that gives generous money and the kid is well above the 75th percentile? We're looking at one school for which ZS's soph scores are above their 75th percentile and gives substantial money at that level. Would you consider that financial safety or just admission safety?</p>

<p>OP, I'm in the same boat and I have to be honest with you, it didn't work out well for us. Our income doubled-ish two years before my oldest went to college. Prior to that time, my husband made less than 20k per year at his primary job, and after that jump we were getting on our feet. Daughter chose a school that gave about half tuition scholarship and which she'd need to work as Curmudgeon suggested and where she'd end up with about 18-ish in debt and we'd take the same on her behalf in PLUS loans. Well, she got very sick at theend of freshman year and couldn't work at all for months, which set the whole plan off the tracks. Ultimately, for personal and health reasons (and some financial), she's decided to come home to the CUNY to regrop and reprioritize. It has dawned on her that she doesn't want the stress of having to always work or to worry that she might not get a job out of school. I guess my point is to make sure that you have some protection in the event of unexpected events. Sorry to be a downer. Good luck!</p>

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<p>lunitari - If she's a brainy girl she'll get offers of full tuition. Should you decline these in favor of "full pay at dream school" then your entire family will essentially be "performing a high wire act without benefit of safety net." That is, you're wagering on relentless good fortune. Isn't that the principal reason behind our nation's two million foreclosed homes?</p>

5

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<p>zmom, my own definition was a good bit more conservative than that. We looked for schools with specific set standards. As in : If you had these numbers you get this much money. Some folks call them guaranteed scholarships and there is a website with a name similar to that. Two schools we didn't look at (as they are in Texas) that have that type of formulaic scholarships are Southwestern and Baylor. (I haven't checked this year.) Also Texas Tech fit that bill while UT and A+M did not (and she'd never be a T-sip or an Aggie anyway). The College of New Jersey used to be one but I have heard they have tightened up. </p>

<p>Your definition above is what we would have considered "financial matches". By the very nature of the merit aid beast these are schools where the kid is well within the merit pool. Above that we had the category of merit reaches. Schools higher up the selectivity ladder that gave scholarships that would meet our need (pretty big money. 1/2 tuition or better.) but only to kids with the hghest profile. Put a school like Emory, WashU, Scripps in that category. And then the "why not try?" flyers like Duke or JHU (super financial reaches) .</p>

<p>Pick a few from each category and get ready to play the game. It's a wild ride.</p>

6

<p>I would explain your circumstances to your daughter so that she understands the family financial situation now instead of when acceptances start to come through and you may have to say no.</p>

<p>Angry students post here from time to time with strong disagreements over money and parents have to patiently explain the realities that parents have to deal with in running a household.</p>

7

<p>Agreed--be honest with your daughter. My parents told me "we will give you $x,000 for college. If you choose a school that's more expensive, you can take out loans. If you choose a school that's cheaper, we may (at our discretion) give you all or part of what's left over for a car, home, grad school, travel, etc."</p>

<p>The amount they told me wasn't based on their EFC, but on what they honestly thought they could afford, and I respected that--they had 3 more kids after me to help! </p>

<p>It put the decision in my hands, and faced with options ranging from actually getting paid to go to a school (tuition, room, board, fees, and a stipend were covered) to paying $40,000 a year, I felt like I had all the facts to make a good choice. I'm sure your daughter will be able to do the same.</p>

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<p>Do not radically change your lifestyle to pay for kids' colleges. Cutting back on luxuries sounds good, but extremes don't- you deserve a life, too. Remember- NEVER spend your retirement fund or forget to keep funding it. You can pay off a loan, but you can't replace those fund dollars later.</p>

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<p>Op- your first post seemed to focus on how far must you go in debt, or sell your retirement to finance daughters college. Is there a rule somewhere that says a parent is obligated to finance any school, anywhere, at any cost?
Please re-read posts 2 and 7.</p>

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<p>Thanks, all! Just airing these fears is helping me calm down a little. </p>

<p>I have talked with D about this in general terms, i.e. she knows that we don't have a lot of savings and that a school with good merit aid ought to be higher on her list than a similar school without. But I haven't told her a specific figure we can afford per year--in part because we're a two-household family, and I cannot get her dad to tell me what he is willing/able to contribute. I don't doubt for a minute that he'll provide that information when he absolutely HAS to, for the FAFSA. But I've asked and asked to have some clue now, and he is just ignoring me.</p>

<p>Unsub, she's already got a summer job and she knows she'll need a campus job too. Hadn't thought about Christmas work, really, since her summer job has been at a place that's closed in the winter.</p>

<p>NewHope, I think she can realistically expect as much as half tuition from a decent list of solid, good-match schools. But full tuition? We haven't found any good fits that offer hope of a full ride to more than a handful of kids. She could probably get a full ride to some schools where she's <em>grossly</em> overqualified academically, but that seems like a big waste of her potential. </p>

<p>wis75, I couldn't stop funding my retirement plan even if I wanted to--my employer makes it mandatory that employees contribute 3% of their salary to the plan, and they contribute 12% (a pretty amazing benefit for which I am profoundly grateful). But I have questioned whether it'd be worth taking the penalty hit of early withdrawal to be debt-free. </p>

<p>zoosermom, your story is a good cautionary tale for me. I can deal with a somewhat frayed safety net for myself, but not for my daughter. I hope your D recuperates quickly and finds a better balance at CUNY.</p>

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<p>Younghoss, I <em>wish</em> I could tell my daughter she can go anywhere she wants. I don't <em>plan</em> to tell her that, though, because I live in the real world, not Fantasyland. </p>

<p>I'm not planning to sell the house or go on a bread-and-water diet (the ramen was a joke). But I would seriously consider a part-time second job if it would make the difference between a mediocre school and a good one. It's only four years, after all, and it's better than getting into further debt. I managed to finish my degree while working full-time and parenting little kids--what's a few extra hours at a retail job compared to that juggling act?</p>

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<p>OP: our EFC was less than $3K according to the various online calculators, but we found that a number of schools expected us and/or our S to contribute $20+K per year. This appeared to be a result of modest assets (under $25K) in S's name, and real estate that we own in common with family members that we A) cannot sell, and B) cannot borrow against.</p>

<p>A lot depends on the methodology of the institution, and their resources. We recieved FA offers from Pomona and Dartmouth that came close to meeting our EFC. We recieved other offers that left us with over $20K to pay per year: in excess of 60% of our income.</p>

<p>My advice is to apply to schools with large endowments that meet "100% of need" as well as merit money schools and the like. Cast a broad net, be honest with your D about your need, and encourage her to NOT pick a favorite school until the results are in. And don't hesitate to appeal an FA decision.</p>

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<p>Lunitari, you may be surprised that your daughter wants to be your ally here. Why is your part time job a better solution than debt for her? She's 18 and has the rest of her professional life ahead of her.
I'm not suggesting throwing caution to the winds here.... but there are very few big ticket items (house, car) that folks plop down a wad a cash for and walk away. Debt, when used judiciously, is the way to finance a big ticket item.
Make sure you have a range of schools in terms of affordability and admissions; make sure your daughter understands (not in emotional terms, i.e. "we will finance your dreams", but in practical terms, "I can pay X per year, your dad can pay Y") and then you guys can figure it out.</p>

<p>ROTC? Naval Academy? Living at home for a year and attending a local college to bank some savings? Americorps?</p>

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<p>That's a fair question, blossom. And I'm not opposed to her having loans of a reasonable size. That, along with her summer job and part-time campus job, is what I expect her to be able to contribute. But I don't want her graduating with a crippling level of debt. That's no way to start adult life, and I wouldn't be doing right by her to encourage it. My part-time job is a better solution because it keeps the total debt load we're all balancing as low as possible.</p>

<p>But living at home and a local college? No. I'm not crushing her dreams that way. Between merit aid, belt-tightening and creating more income, she is going away to college someplace that she feels good about. Maybe not over-the-moon thrilled, but good.</p>

<p>ROTC and naval academy would be a great solution for some kids, but the worst possible fit for this one. </p>

<p>You're right, though, that she can be my ally in this if I'm straight with her. That'd be easier to do if her dad were straight with ME, though. I can tell her, "I can pay X," but the equation is still unsolved for "Y". Her dad isn't telling. Maybe that's what I <em>really</em> need her to partner with me on--getting that info out of her dad before she has to make her applications!</p>

<p>EDITED TO ADD: How pathetic is it that when my husband told me he'll be out of work as of next week, my first thought was, "Oh, I hope he stays unemployed long enough to make our household income look bad on FAFSA!" I was ashamed of myself immediately, but thankfully I didn't say it out loud.</p>

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<p>lunitari--perhaps if D asks Dad about the expected contribution and explains to him that she's starting to look for affordable options, etc. he might be more forthcoming with info.</p>

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<p>You're probably right, rrah. He is more susceptible to her than to his "ex," that's for sure. </p>

<p>The one thing I do know for sure, since he's still living in the house we bought together many years ago when things were very cheap, is that he is sitting on about $100K of home equity.</p>

17

<p>I'm no psychologist, lawyer or business advisor by profession. Nevertheless, you've asked for our opinions here. I think that you're seeing things from a far more emotional point of view rather than logical.</p>

<p>Not all agree with me, but I see college as an investment. What does one put in, and then expect to reap as a reward? Weigh the cost compared to the expected benefit minus any debt. The investment is the students'. You're right, a big debt after school is crippling, and reduces the graduates standard of living for years- and reducing the standard of living is not the point of selecting a college. Not to say I feel all debt is up to the student, but that any help, time, advice, money, a parent may chip in is a gift- not an obligation. I just fear that in your desire to do all you can for your child(kind) that you may do too much- not only to rob yourself of your life and future, but also to rob the student of learning life lessons. Everyday, adults may choose a Buick rather than a Cadillac. Some may choose a basic Chevy rather than a Buick to make a car analogy. All 3 get buyer to destination, but a buyer must ask- Is one worth the extra money? Do I have that extra money?</p>

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<p>OP, could you should some of your DD's stat so we could gauge how "brainy" she is? Is she going to be a NMF? The reason I am asking is that merit aid at good schools are very competitive. Yes, even a 1/2 tuition is very hard to get.</p>

<p>You said
[quote]
She could probably get a full ride to some schools where she's <em>grossly</em> overqualified academically, but that seems like a big waste of her potential.

[/quote]
.</p>

<p>Don't over look the fact that honor program at top state public school have as good students as the very top private. </p>

<p>Also, if your DD could get into one of those ultra selective schools like PHYS, they offer excellent FA even for otherwise high middle income class families. If I remember correctly, Harvard gives FA to those families whose income is 180K/yr.</p>

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<p>The situation we found ourselves in was: spend 50K/yr. at a top ten universtity that ranked 23rd nationwide in our s's major or a free ride in a highly selective Honors program at a #50ish St university that ranked 13th nationwide in his major.</p>

<p>You'd think it would be a no brainer.</p>

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<p>strategy #1 (much like Maximus001 experience)
Brainy kid concentrates college search on merit aid schools,mostly public with honor colleges.Kid gets ultimate prize of free ride or nearly free ride (done twice in this household) kid finds plenty of like minded students, mentoring opportunities,parents get over the mindset of the college not being "good enough" for the kid,parents don't have to sacrifice lifestyle much at all.</p>