I don’t know about other schools, but at Harvard “Fifty-five percent of Harvard College students receive need-based scholarship aid, and the average grant this year is more than $53,000.”
My D had a dream school. Hubby always said ‘if you get in, we’ll figure it out’ . D was number one in her class and got into her dream and quite a few other top schools that made her happy. I was the level headed one that had to explain to D that we can afford x. Everything higher then x was unaffordable by us. She was not thrilled but understood. She looked into loans for her (I refused) and decided she didn’t think it would work. There were still some great options on her list and she is graduating in May from a great school after having an amazing experience. My advice is tell him now what your budget is. The surprises hurt but they get over it. This is real life. You need to be able to afford what you buy, including a college education. Have him help craft his list.
Best of luck.
https://college.harvard.edu/financial-aid/net-price-calculator suggests that no FA at Harvard can start around $265k income, while $53k FA can be gotten around $150k income. Maximum FA of around $69k is found at $65k income and below.
If you are not qualified for need based FA, your household income should be well above $200k. It seems to me that a full tuition should be affordable. Of course, it depends on one’s lifestyle. A McMansion and a few luxury cars will put one in a bind.
I would not let him apply ED (or whatever Ivy’s call it) because of the price.
I would start having a discussion with him…“We can afford to give you $30K (or whatever, perhaps the cost of your public U) a year for college. I know you have been talking about Harvard (or wherever) for ever, but lets keep some things in mind. Harvard has a 5% acceptance rate. Harvard does not give out merit scholarships. So you would have to get a need-based scholarship of $50K. We will also not be signing large student loans above the $5k you can do on your own…because even if you take out the loan, we have to co-sign and we will not be doing that for more than $XK a year (or tell him you won’t be co-signing at all.) So let us know if you need help picking out a variety of schools, including Harvard to apply to. Then when we see where you are admitted to and how much the net cost is, you can figure out what will work best for you.”
Really hznao2004? You have no idea what this family’s financial situation is. There are many families that don’t live in McMansions, have luxury cars, or take fancy vacations that can’t afford $80K per year per kid for college.
It may well be worth talking to a financial adviser to get some idea of where you stand with your retirement and other savings and whether you can afford the COA at top schools. In addition to the federal loans, you can also “lend” your son additional money from your accounts, with the idea that he will pay it back as long as you are comfortable with him paying it back over many years or not at all. You can run the numbers with him - how much will he have to pay each month to cover the federal loans and pay you back over 10 years or so. He may recognize that it is just not worth it.
Applying ED may not be the best idea if you can’t or not sure you can afford the dream school. You are not alone. Many parents, who did their best to save and did not live above their means, find $80K per year too expensive. Your son will not be alone if he chooses an excellent college that will give him lots of merit money.
It’s binding unless you ask for financial aid and the award is insufficient to support attendance, which case you say “Thanks, but no thanks” and apply elsewhere.
Unless money is no object it’s probably a good idea to have a “financial safety school” in mind that isn’t going to break the family’s finances.
Not sure why anyone would think that high college tuition costs can suddenly just be taken out of annual income for those that aren’t in the 1% (ie, most of us). That’s why we have 18 years to save once a child is born! If you wait until they’re applying to suddenly realize it has to be paid for, of course it can’t be done without loans!
Right, you have 18 years to save. Nobody above a $30k annual household income should need financial aid. The median household income $9,733. You should be able to save $20k per for college and still live an above median lifestyle.
Here’s how you do it: you ask/tell your child to reassess their dream of an Ivy League school from undergrad to graduate school. There are any number of fantastic undergrad schools that would welcome, and give large scholarships to, a fantastic candidate. If your child does extremely well, they will likely be able to score reduced tuition to an excellent graduate school, if that’s what they want to do. Honestly, going to an Ivy for undergrad is not all it’s cracked up to be. Grad school is much more important.
@Eeyore123 is this a typo? Median household income “$9,733”?
Lol, on even 48k, maybe $3300/month after taxes, you expect folks to save 1500/month? Even recent grads, with their limited expenses post college (no mortgage, kids, fancy cars, etc,) can’t easily pay back a $300/month student loan.
Top heavy loans, that you can’t afford to repay over 10 or 20 years, are not the answer.
What about families with 2 kids, Eeyore? Just “save” $3500/month?
@thumper1 Nope, the worldwide median household income is $9,733 according to Gallup.
I did this to illustrate a point. Most of the people in the world would think that they would have it easy if they made $30k/year. Just like people in the U.S. who make $30k think about people that make $60K (or 60 vs 100 or 100 vs 150, or etc). The reality is that very few have true economic uncertainty in their life.
I’m not sure using the worldwide average median income is helpful. Each family needs to look at their particular ability to save.
We didn’t have a nickel of colleges savings…big fat $0. It we were both working professionals and could dedicated one income to pay for college. That was always our plan.
If this family is from the U.S. it might be better to compare the average median income alongside the average COL for the U.S.
My kid lived in a third world country as a PC volunteer. Her income per year was far far less than the average you posted. Her cash flow was great, and her cost of living was very very low. Students from her country went to colleges in their country where the cost to attend college was either free or very very modest.
Anyway…back to the OP…who hasn’t returned to this thread since starting it. My personal feeling…if you have run a net price calculator and the school is not affordable, then why apply at all.
You seriously think, worldwide, someone can save 300k on a 10k inome? Dream on. Personally (and apologies for this,) I hate it when CC plays Marie Antoinette, stating anyone can pay those bills, if only they prioritize. No bread? Why not have cake?
How do you even begin to say few live with economic uncertainty? And, LOL!, when folks earning 300k are complaining about costs?
Not aiming for debate, just advocating some understanding.
I agree with thumper that an unaffordable college isn’t realistic. There is NO point in folks encouraging a kid just to be encouraging. It’s often a disservice.
@lookingforward I think we are actually on the same page. My line about economic uncertainty was backwards. It was supposed to say few live without economic uncertainty (I should proofread better). I also hate it when people try to shame others about their prior choices. Like saying full pay should be able to afford unless they made (implied stupid) certain choices. I was just trying to make a somewhat abstruse statement that lots of people in the world could do the same thing to people with low incomes in the U.S. I should know better than to try to do that on the internet. It never works.
I know for my now upper middle class family, it’s complicated. When the kids were born, we were making significantly less money than we make now. We paid daycare and summer care for the kids from about 3 months of age until they turned 13. When the kids were small, daycare ate an enormous amount of our income - so much so that we had to put our retirement plans at work on the back-burner for a long time. When we got raises at work after that, the first priority was getting our retirement savings in order - both of us put all raises into upping our 401K contributions. We did not take a raise ourselves for many years. We put small amounts into kids college savings, but not anywhere near what is actually needed. Fast forward several years - we had not changed our lifestyles much - because there was no great huge increase to what we took home with each paycheck - pretty much all increases had to go into 401K or else we’d have nothing to live on later aside from social security. Our situation is pretty common - it’s only in the last 4 years or so where income increased quite a bit - we’re still somewhat behind in retirement, and we’re still behind the 8 ball on other things things we need to do for house repairs, etc. that we had to postpone while the kids were younger. The calculations for financial aid seem to assume that we’ve been at this income level for a long time - but that is not the case.
I’m sure our situation is not unique - many dual income (and single income) families have to make a decision on whether to prioritize parent retirement income over children’s college needs. Every financial advisor we have talked to said that we did the right thing - retirement first. We have money for the kids to go to school - but Ivy League and other very expensive private schools are not possible, no matter what our FAFSA says.
These conversations are always an eye opener for me.
I raised two kids on less than that, mostly by myself.
I finally got time to sit down and write a response. Our combined annual income at this time is above $350K. We pay about quite a bit of tax and support 7 people with 1 in college and 2 who would start at the same time. We have saved for kids education since they were born, but that saving is not enough for paying 80K/year. We have other saving that we may tap into, but that big a price tag is not an easy decision.
We have told the children we would figure the finances out - but the college cost is scaring us. What are the practical ways kids can earn while they are in a expensive college?