ED and financial considerations

Parents Forum
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<p>My D (only child) has a clear first choice college --a realistic reach school where ED seems to almost double admissions chances. She has other reach- near match choices where she feels she could probably be happy We could afford full tuition in the sense that the money is there but if we spent it all it would make a noticeable dent in our retirement savings. The only choice on her list where merit aid seems a realistic possibilty is a college she finds acceptable but definitely less attractive. We have no state residency so a public university isn't available at in-state price. </p>

<p>Would be interested to hear advice from financially savvy parents--should we go with ED?</p>

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<p>I just heard Janice Lieberman address this on The Today Show a week or so ago. She was pretty adamant that parents NOT take deep dips into their retirement savings to pay college tuition. As she put it, there are lots of fine schools out there that your kids will be happy at and lots of scholarships. There are NO scholarships for retirement.</p>

<p>If this is a "realistic" reach for ED is it also realistic for RD so you could assess the impact of merit money on the total $$? Most colleges do not give merit $$ to ED applicants (if they give merit at all), since they do not need to lure these kids to their school.</p>

<p>Also, you might consider looking at the finaid numbers for this school and finding out what the average indebtedness is for a graduating senior. You might consider having your daughter be responsible for loans for this amount or less (whatever seems reasonable to you), so you don't do so much damage to your retirement. It also depends on you and your spouse's current age. If you had DD when you were 16 ;), then you have lots of time to make up the $$ in the retirement account.</p>

3

<p>other ED discussion from this morning some overlapping advice</p>

<p><a href="http://talk.collegeconfidential.com/showthread.php?t=91498%5B/url%5D"&gt;http://talk.collegeconfidential.com/showthread.php?t=91498&lt;/a&gt;&lt;/p>

4

<p>pyewacket, there was a discussion about ED recently: <a href="http://talk.collegeconfidential.com/showthread.php?t=27872%5B/url%5D"&gt;http://talk.collegeconfidential.com/showthread.php?t=27872&lt;/a&gt;&lt;/p>

5

<p>With similar situation, we let S go ED. We're pretty far from retirement age, and we live pretty simply. His school was a major reach, and with a microscopic RD acceptance rate, I just would've felt bad about not giving him the shot, if he was subsequently rejected. But I think that's an individual decision.</p>

6

<p>Which is better--- your kid supporting you when she turns 40 because you've run out of dough, or your kid paying off loans, or compromising on school right now in order for you to fully fund your retirement?</p>

<p>I've got elderly relatives in poor health who were the victims of poor planning and wishful thinking in the financial department so I vote for loans....</p>

7

<p>Hey.....be careful. Some folks will have to retire at a specific age and others can work til they drop. It is so individual on some of these things. Some folks now are worried about pensions which may be gone and others are building it all alone without corporate contribution at all. This whole retirement planning is in flux and for anyone to plan is difficult. Be careful some folks are taking an ugly fruit on these subjects right now.</p>

8

<p>A definitive answer would certainly require more details: your EFC, how your D really feels about each one (especially safeties), school costs, # of matches and safeties on her list etc. etc. etc.</p>

<p>However, if there is a clear first-choice school (not just this month's favorite) that appears to meet the academic and social needs of your D, and there is not a wide variance among the costs of your Ds schools (I'd be surprised if there was. . .schools in similar academic and selectivity groupings tend to have similar costs), I see no reason not to use ED in this case.</p>

<p>Finally, there is no good evidence that schools short-change ED applicants' aid packages. Where this is done it is done to the last group of RD acceptances, kids coming in off waitlists, and transfers, and schools usually admit to doing so.</p>

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<p>Pyewacket - First of all, congratulations! It is a rare honor indeed to be in the position where ED is enough to get a child into one of the super selective schools. Since she is an only child, and since you refer to the worst-canse scenario as a "dent" rather than a "depletion" in your retirement account, I'd like to offer this: </p>

<p>If the ED school is your D's runaway first choice, you have little to lose by having her apply ED. One condition of ED is that the student can afford to attend, so if the FA package is really bad you have an out. (And like reidm says, there is little evidence that schools shortchange FA for ED applicants.) So IMHO don't let the spectre of a poor financial aid package keep you and your D from taking her best shot at her first choice college --- presuming of course, that it is her dream choice.</p>

10

<p>Well, it's hard to know, and depends how much your tolerance for different financial aid packages is. Among the 100%-of-need schools my d. was accepted to, based on the same financial information, the amount of grants varied (over 4 years) by $28,000 (in other words, a full year's costs), and loan expectations varied from $0 to $17,900. In other words, a total variance from lowest to highest of $45,900 - all among 100%-of-need schools. (And ours was not a complicated financial situation - no divorces, trust funds, family businesses, real estate, or expensive homes.)</p>

<p>Would your situation be the same? There is no way to know. Only in hindsight can I say that the $45.9k gap would have make a big difference in our decisionmaking had it come to that. With ED, that decision would never come up.</p>

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<p>Our situation is not so clear cut. First choice school seems to maximize most of what D is looking for </p>

12

<p>I'm sure this has been discussed here on cc - maybe even this thread - but my brain if foggy and weary after plane trip for dropoff:</p>

<p>While ED may be twice the acceptance rate of RD at "the" school, the question is whether <em>your</em> D's chances are twice as high due to ED. I'm referring to the relative strength of the applicant pool in the ED vs. RD rounds. Do you have any info on this for the particular school - if the ED group is a stronger group than the "chances" are not really enhanced; it just looks that way with raw statistics.</p>

<p>Where do her stats stand in relation to the regular pool? Have you found the detailed data that some schools offer wrt % accepted at each of the SAT levels: 1500-1600 =50% accepted, 1400-1500=33% accepted, etc. (old SAT). Looking at it in this way might help you decide how important it really is to give up the opportunity to evaluate financial aid. That is, depending on her stats, she may be "twice" as likely as the general pool to get in anyway.</p>

13

<p>'Our financial situation is also not clear--we won't be homeless or starving in our retirement in any case but four years at $160,000 would mean sacrifices with respect to "extras" in our later lives--we are older rather than younger baby boomer parents."</p>

<p>So, I think you've described the choice fairly. Four years at $160,000 (note, it is probably closer to $190k) vs. four years at $190,000 minus whatever merit aid there is to be had (how much is there?) The difference between $190k and and $150k (figuring on a $10k scholarship each year at school #2) is a lot different than $190k vs. $110k ($20k a year) or $190k vs. $65k (full tuition scholarship, you just pay for room, board, and etc.) In other words, you can actually estimate in actual dollars that to be lost through ED vs. IF a merit scholarship is to be obtained elsewhere, and then ask yourself (and d.) what level of merit aid would make your turn down the #1 school?</p>

<p>The other question is this: retirement funds are not included in most financial aid calculations. Are you still at zero "need" once you take those out of the picture?</p>

14

<p>I don't think you are "foolish" to encourage your daughter to apply ED, just misguided.</p>

<p>Misguided because from your post it is clear that (a) while there is a favorite college, your daughter has others that she might be happy with, and (b) your financial situation is not absolutely certain. </p>

<p>So the real question for you is not whether ED will increase your daughter's "chances" - but whether you want to force your daughter to make an irrevocable choice of colleges in November, or give her the opportunity to continue to explore options until the end of April.</p>

<p>The one thing you know for sure is that ED decreases the range of choice.</p>

<p>Your daughter has a front-runner in her preference list, but it is highly unlikely that she really knows enough about each college to be sure that those preferences will not change over the next several months as she gets to know more about each college, and as she starts to think more deeply about what she wants from a college education. </p>

<p>ED is valuable for students who are absolutely certain that they want one school above all others, and parents who are absolutely certain they can pay. Your post seems to take you out of that category.</p>

<p>I agree with jmmom - the admit rate stats really don't tell the whole story. The problem is that the pool of students may be very different. You may not really be doubling your child's chances, but instead just nudging her into the same applicant pool with a lot of for-sure admits (legacies & athletes). </p>

<p>Just to be clear - I sympathize with you. My daughter has given me a list of 15 colleges now on her list, divided into 3 levels based on preference. The top level includes an Ivy with an ED admit rate twice that of RD. So basically, waiting to apply RD reduces her chances from "extremely unlikely" to "virtually impossible." There is a tremendous parental temptation to want to give my daughter the best shot possible and tell her to go for it.</p>

<p>But I can look at the list of schools my daughter is looking at and see something else very important: she really hasn't made up her mind what she wants. (Her list also includes Tulane & Wellesley -- this is a kid who is toying in her mind with some very different models of what college entails). So I can see that what my kid really needs, on a deep, personal level, is MORE TIME. So there is a conflict within me as well, but the voice of wisdom is saying ...."love thy safety"</p>

15

<p>Calmom--I think that is an unfair assessment. There is no questioning about "forcing" a choice; obviously this would be done with the D as a more than willing partner, at least that's my need.</p>

<p>As much as I would like to believe that ED does not make a difference, I think that this is collective wishful thinking. I know that the 26%ED rate at my S's school looked a lot better than the Rd rate of about 9%. He was not an obvious ED acceptance, not athlete or URm or legacy or hooked. But he got looked at a lot closer.</p>

<p>That, I think, is what Pyewacket is betting on. And i don't think it's foolish or misguided.</p>

16

<p>Pyewacket:</p>

<p>I am of two minds. On the one hand, I, like Quiltguru, have heard over and over that we should take care of our retirement first. So I am concerned about your willingness to "make a dent" into your retirement funds in order to finance your D's education.<br>
On the other hand, I agree with Garland that ED does confer a real advantage to applicants, by showing clear interest in attending, and by affording the applicant a more thorough look at his/her application.
Have you run your financial numbers through an estimator? Would your D qualify for some need-based aid? Would she qualify for some outside scholarship? How much of a dent are you willing to consider?
These are still early days. Take your time to discuss both college choice and finances with your D before making a decision one way or the other.</p>

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<p>Are you not US citizens...or do you live overseas? Why is this?
I always say...if a student or family has questions about an ED application, then probably they should not be filing and ED application. From your posts, it sounds like you would at least like the chance to be able to compare offers made to your child. That is simply not possible with one single choice binding ED acceptance.</p>

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<p>Once I graduate, I'm responsible for paying back my parents the cost for my private college exceeding the sticker price of attending my public state university. I know other students who have similiar arrangements with their parents. A couple parents above mentioned this arrangement but I just wanted to add a student's perspective: most of us <i>want</i> to share the responsibility for financing our education and feel guilty at the thought of depriving our parents of their retirement savings.</p>

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<p>In my previous post, the last word of the first paragraph should be read, not need.</p>

<p>Darn editing limitations.:o</p>

20

<p>I agree with Garland. I think ED was helpful for my D, who was "on the brink." OTOH, she was an athlete. You must remember that a lot of hooked applicants are in the ED round, skewing the % admitted somewhat.</p>